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news you can trust I **MONDAY 24 SEPTEMBER 2018 I vol. 15, no 146 I N300

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Inside the Rise and Fall of Skye bank CBN revokes license, injects N786bn through new bridge bank Polaris

LOLADE AKINMURELE & HOPE MOSES-ASHIKE

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ow Nigeria’s eight largest lender, Skye bank, went from acquirer to acquiree in the space of three years, having bought Mainstreet bank in 2015 and is now being taken over by the Central bank, is sure to leave many scratching their heads.

Two years after stepping in to replace the chief executive officer, chairman and 10 other directors of Skye bank on July 4 2016, following the lender’s consistent breach of cash and liquidity ratios, the Central bank announced the takeover of Skye Bank Friday.

A bridge bank called Polaris has been licensed as a commercial bank and will now manage Continues on page 55

Inside Heritage Bank support for agriculture and SMEs wins three awards P. 51 Olu Fasan on Monday Trade policy for Nigeria? Focus on exports, not imports

Bridge bank precedent means Skye equity shareholders wiped out

...Page 54

Too Good to Die: A new book on third term project debuts Christopher Akor

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ollowing the continuous denial by former president Olusegun Obasanjo that he did not seek a third term in office and even lamented in his post-presidential memoirs, My Watch, that the third term Continues on page A2

L-R: Mohammed Kari, commissioner for Insurance/CEO, NAICOM; Tolu Odebiyi, chief of staff to the governor of Ogun State; Eddie Efekoha, president, Chartered Insurance Institute of Nigeria (CIIN); Adedotun Aremu Gbadebo, Alake of Egbaland, and Sakiru Oyefeso, deputy president, CIIN, at the opening ceremony of the 2018 Insurance Professionals Forum in Abeokuta, Ogun State.

Drama and intrigues as Osun almost moves to the opposition PDP

How MTN sanction is shaking A Nigeria’s investment community

RAZAQ AYINLA, AKINREMI FEYISIPO, BOLADALE BAMIGBOLA, Osogbo & OWEDE AGBAJILEKE, Abuja

DIPO OLADEHINDE & ENDURANCE OKAFOR

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n the major investment centres around the world, the $8.1 billion sanction on South African phone giant

MTN, the country’s biggest nonoil foreign investor is causing significant discomfort for Nigerians looking to raise foreign capital.

‘After MTN, who is next?’ is the question foreign inves-

tors are asking their Nigerians counterparts seeking for them to bring their money into the country.

Sources have told BusinessContinues on page A2

gainst all odds, the Peoples Democratic Party (PDP) candidate, Ademola Adeleke went ahead to win the 2018 governorship elections in Osun state but with a very narrow margin of 354 votes, forcing the Independent National Electoral Commission (INEC) to declare the poll inconclusive.

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Ahead Q3 earnings, analysts see good, bad, ugly for consumer firms BALA AUGIE

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n a couple of weeks, Nigeria’s equity market will be busy with earnings releases.

Analysts see some consumer goods firms recording earnings growth in the third quarter, albeit margins could continue to slide.

For others the results could be ugly due to the tough and unpredictable macroeconomic environment.

A squeeze on purchasing power and spending from devaluation of the Naira, higher pump price and slow lending to the private sector continues to portend downside risk to consumer firm’s volumes and margin.

Perhaps more worrisome is the risk to gross margins from rising prices of soft commodities in tandem with other commodity prices.

In the quarter ending September, prices of Wheat, Sorghum, Maize, barley, and Cocoa, raw material components used for production, were up 13 percent year on year

(Y/Y), 44 percent y/y, 11 percent y/y, and 2 percent y/y, according to data from Cordros Capital Limited.

Despite the tough and unpredictable macroeconomic environment, analysts at Cordros Capital estimates Nestle Nigeria Plc’s earnings growth at (+86 percent), Unilever Nigeria Plc (+93 percent), and Nigerian Breweries Nigeria Plc (+43 percent), in the third quarter of (Q3) 2018.

The investment house expects Guinness to report profit before tax (PBT) of N560 million, from a loss position in Q2 18, albeit they are less optimistic about Dangote Sugar as they expect the producer of the sweetener to record a 19 percent reduction in net profit in Q3 2018.

“PZ’s June trading statement suggests that trading conditions were yet to improve as at Q1-19E (June-August), hence, it is unlikely that earnings performance (except net finance cost is significantly lower) will be impressive relative to

L-R: Donna Etiebet, head, corporate finance, Babban Gana; Uwa Osa-Oboh, head, corporate development, African Capital Alliance; Tokunboh Ishmael, managing director/co-founder, Alitheia Capital; Innocent Chukwuma, regional director, West Africa, Ford Foundation; Roy Swan, director, mission investments, Ford Foundation, and Kofi Appenteng, chairman, Ford Foundation, at the Impact Investing Alliance of Nigeria dinner and awards in Lagos.

Pic by OlawaleAmoo

FG’s inaction on expired oil leases stokes crises ISAAC ANYAOGU

U 2017 revenue fails to meet target – FG report BUNMI BAILEY

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budget implementationreport released by Federal government of Nigeria has showed that out of the N5.1trillion total revenue expected in 2017 only N2.7trillion revenue was achieved.

The 2017 Budget which was themed “Budget of Recovery and Growth” was the second full year budget by the present Muhamadu Buhari administration.

The report revealed that only 47percent of the targeted revenue was achieved as the government was only able to generate N2.7 trillion in full year 2017.

“The implementation of the budget in 2017 was critically affected by the poor revenue outturn as oil production and exports remained below the Budget estimates while the performance of the economy, though improving, continued to impact negatively on non-oil revenue,” the report stated.

BusinessDay analysis showed that only N1.1 trillion was achieved in oil revenue when compared to the annual projection of N2.1 trillion while N956 billion was achieved in non-oil revenue, out of N1.4 trillion projected.

The report noted that the price of crude oil at the international market averaged $61.4 in the fourth quarter of 2017 yielding an average of $54.3 per barrel in 2017 as the price of crude oil increased by $9.78 per barrel (or 22 percent) above the $44.5 per barrel oil price benchmark for the 2017 Budget.

“This could be attributed to the increase in demand of oil at the world market and the implementation of OPEC agreement to cut down crude oil production. Domestic crude oil production however lagged at an average of 1.89mbpd in December 2017 and 1.95mbpd in the fourth quarter of 2017,” the report explained On the expenditure side, the federal government spent a total of N6.5 trillion out of the projected amount of N7.4 trillion which implies that 87.8 percent was achieved.

The expenditure budget which is broken into four sub groups showed

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that N2.8 trillion was achieved out of N2.9 trillion that was budgeted for recurrent expenditure while N1.4 trillion was realised from N2.2 trillion that was budgeted for capital expenditure. Also, N1.6 trillion was gotten from N1.8 trillion targeted for debt serving and the same amount that was budgeted for statutory transfers was the same that was realised which was N434.4 billion.

Analysis of capital performance for Ministries Department and Agencies (MDAs) as at 12th June, 2018 showed that a total of N1.6 trillion was released and cash backed to MDAs for their 2017 capital projects and programmes.

The sum of N303.46 billion was released in the first batch, N365.35 billion in the second batch, N66.42 billion in the third batch, N19.67 billion in the fourth batch while additional N23.30 billion was released and another N784.94 billion as Authority to Incur Expenditure (AIEs).

“However, only N1.4 trillion was utilized by the MDAs,” the report said.

The Budget implementation office recommended that MDAs should make budgetary provision for financing and maintaining newly completed and utilized projects and programmes to create greater impact and ensure sustainability of such interventions while project funding criteria should be based on measurable M&E confirmed results.

The federal government said the 2017 budget was prepared at a time the Nigerian economy was in recession while the global economy was showing signs of recovery. “The price of oil which is the main source of revenue and foreign exchange for the nation, was also beginning to recover.”

The revenue and expenditure outturn of the Federal Government resulted in a fiscal deficit of N3.8 trillion in 2017. This was N1.4 trillion (or 61.49 percent) above the projected annual deficit of N2.4 trillion.

It was also above the fiscal deficit of N2.1 trillion recorded in 2016 as the deficit was financed to the tune of N2.5 trillion in 2017 which comprised of N1.2 trillion and N1.3 trillion of external and domestic borrowings respectively.

ncertainty continues to cloud the operations of local oil companies in Nigeria as the Federal Government’s inaction on renewing their expired licenses leaves them in a confused state even as the threat of bank foreclosures, bankruptcy and an uncertain future hangs about their operations.

An operator who spoke to BusinessDay said “It is like driving without a license, in a car that is not yours.”

According to the Department of Petroleum Resources report, 53 oil leases comprising Oil Mining Leases (OMLs) and Oil Prospecting Licenses (OPLs) would have expired

by June 2019 but the Nigerian government has not yet taken action to review the licenses leaving a climate of uncertainty over a sector respon-

sible for the bulk of Nigeria’s revenue.

Operators tell BusinessDay that this uncertain climate is putting their businesses at risk as their bankers are threatening foreclosures to recover their loans due to lack of clarity over the future of the assets.

“We are just waiting for anyone to say something, but we have heard nothing,” one operator said in frustration.

According to terms of some of these leases, an expired license reverts back to the government who can either re-award it to the company or call new licensing rounds. A company that keeps investing in fields on which it has no valid lease could see the value lost when government recovers it.

OMLs grants the lessee an exclusive right to prospect, explore, produce and undertake marketing activities in connection with the specified acreage for a period of 20

years. An OPL permits the licensee to conduct more extensive exploration activities and remove and dispose of petroleum discovered while prospecting.

Dorothy Bassey, head of public affairs of the Department of Petroleum Resources could not be reached for comment but the agency has previously said it renewed 16 licenses this year but these were mostly those held by International Oil Companies.

Analysts say this speaks to deeper issues in Nigeria’s oil and gas sector that needs quick reforms.

“If a petroleum sector law were in place, the process of licenses would have been clear as we will know who has the authority to issue them, now investors do not know whether to proceed with the previous regime, or if something else will happen. It

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Nigeria’s food prices to spike as flood hits farmlands ... key agricultural producing states affected ... may lead to surge in imports, smuggling Josephine Okojie & Chinwe Agbeze

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igeria is on the brink of witnessing a spike in food prices as farmlands in key crop producing states are submerged in floods, raising concerns that food supplies will become tighter for its 190million people.

The floods which have submerged rice, wheat, millet, beans and sorghum farms among others is a major threat to the country’s food security and export drive initiative as it is seen to create a surge in imports as well as smuggling.

“This year’s flood has been devastating. It has affected a lot of farmlands across the country and this means we would be having less production of major crops,” Victor Iyama, national president, Federation of Agricultural Commodity Associations of Nigeria (FACAN) told BusinessDay in a response to questions.

“If you add this to the farmersherders clash and the insecurity issues in the country, we are going to see food prices escalating because supply would be unable to meet up with the high demand.

“Imports and smuggling will also increase because we have to feed our 190 million people,” Iyama says.

Recently, more than 10 states have been ravaged by floods which

have caused unprecedented havoc across the country with a possibility of more destruction to come if the rainfall continues.

According to experts, when severe floods occur, farmers’ productivity reduces and they incur huge losses as their crops get submerged beyond levels at which most could thrive. Also, fungal diseases usually become more rampant when extensive flooding overtakes farms.

“The situation is very bad and this would affect our production this year. We are going to experience a food shortage with the havoc the floods are already causing,” AfricanFarmer Mogaji, chief executive officer of X-Ray Farms Consulting said.

“We would see hike in the prices of the staples we are consuming more in the country,” Mogaji said.

Nigeria’s food inflation index in August recorded a marginal increase of 13.5 percent from 13 percent in July, data from the National Bureau of Statistics (NBS) states.

BusinessDay survey of key markets in Lagos metropolis shows that prices of major food items are rising within the last two weeks.

Checks around Mile 12, Oshodi and Boundary markets in Lagos last week Thursday revealed that a big basket of fresh tomatoes, which was sold between N8, 000 and N8, 500 in late August 2018, now goes for

between N9, 500 and N10, 000.

Also, a 50kg bag of rice was sold between N13, 500 and N 14,000 in August now sells between N14,200 and N14, 500. Similarly, a 50kg bag of onions increased to N21, 000 from N15, 000 last week. A basket of ‘Rodo’, a brand of pepper, now sells for N13, 500 as against N12, 500 sold last week.

More so, 25-litres of vegetable oil has risen to N11, 200 from N10, 500 a month ago, while that of palm oil went up to N11, 500, from N13, 000 within the same period.

Also, the price of a 50kg bag of Oloyin beans rose from N18,000 to N20,000, while 50kg bag of garri rose to N9,500 from N9,000 and a bag of melon increased to N115,000 from N112,000 within the same period.

“The effect of the flood on the agricultural sector this year will be very profound and would be a threat to our food security quest. This is because there are no mechanisms in place to manage the risks,” Muda Yusuf, director general, Lagos Chamber of Commerce and Industry (LCCI) tells BusinessDay. The National Meteorological Agency (NiMet) had earlier in the year warned against flooding, stating that 35 states in the country would experience severe flooding on the account of a shift in rainfall pattern caused by climate change.

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Despite higher oil prices, Nigeria’s budget deficit hits new high Endurance Okafor

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igeria has recorded the highest budget deficit in a single year in the 2017 budget. This is despite the fact that the country enjoyed higher oil prices in the year.

The figures compiled from the report published by the Budget Office, the budget office of the federation, revealed that a total of N2.6 trillion, excluding other funding sources, was received to fund the budget in 2017, this is compared against the budget deficit of N3.8 trillion in the same period under review. This was contained in the budget implementation report released by the Budget Office.

The government said that the budget implementation for 2017 was impacted by slow economic growth, which impacted negatively on revenue generated.

“The implementation of the budget in 2017 was critically affected by the poor revenue out turn as oil production and exports remained below the Budget estimates while the performance of the economy, though improving, contin-

ued to impact negatively on non-oil revenue. The price of crude oil at the international market averaged $61.39 in the fourth quarter of 2017 yielding an average of $54.27 per barrel in 2017,” the report read.

Although, for three consecutive quarters, Nigeria economy after exiting its worst recession in two decades in the second quarter of 2017, recorded a consistent and appreciable growth in GDP for the year under review.

The fourth quarter figures released by the nation’s bureau showed that GDP grew by 1.92 per cent year on year compared to 1.4 per cent in third quarter of the same year. A 4.29 per cent increase on quarter on quarter basis while real annual growth rate of 0.83 per cent achieved in the review period was 2.42 percent higher than the -1.58 per cent recorded in 2016.

This growth was linked by economist to the booming oil market resulting from higher prices supported by the increase in Nigeria’s oil production due to the relative peace enjoyed in the oilrich Niger Delta.

Meanwhile, the price of crude oil in 2017 represented an increase of $9.77

per barrel (or 21.96 percent) above the $44.5 per barrel oil price benchmark for the 2017 Budget. Industry experts attributed this to the increase in demand of oil at the world market and the implementation of OPEC agreement to cut down crude oil production.

Nigeria federal government enacted N7.44 trillion (about $24.5 billion) into law as its budget to be implemented in the year under review. But in it, $7.5 billion (about N2.3 trillion was short of revenue target, popularly known as deficit.

This shows about 31 per cent of the entire budget.

A breakdown of the budget report showed that the total inflow of N2.6 trillion indicated a shortfall of N2.4 trillion (or 47.73 percent) below the annual estimate for the period. The revenue however comprises N1.12 trillion (or 47.33 percent) oil revenue and N1.2 trillion (or 52.67 percent) non-oil revenue.

The aggregate revenue receipt for the period was N2.7 trillion (or 53.25 percent) of budget, lower than the annual projection but N622.95 billion (or 35.51 percent) higher than the N1.7 trillion reported in 2016.

On the other hand, the fiscal deficit of N3.8 trillion in 2017 was N1.4 trillion (or 61.49 percent) above the projected annual deficit of N2.3

trillion. It was also above the fiscal deficit of N2.1 trillion recorded in 2016.

The deficit was financed to the tune of N2.5 trillion in

2017. This comprises N1.1 trillion and N1.3 trillion of external and domestic borrowings respectively, the report said.

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Monday 24 September 2018

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Another day of mourning and pain BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

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t the risk of being accused of ingratitude to the Almighty in addition to incurring the wrath of the departed Prince Adedapo Adeniran at the ripe old age of 94, our deep sense of loss is nevertheless overwhelming.

For those who may insist on dragging us to court for what is a purely civil matter, (certainly not criminal) our defence is as robust as it is unassailable. Indeed, our brief is very brief.

Prince Adeniran was indispensable. That attribute led us into a false sense of security – that he would always be here. Besides, he was supernatural. Neither the vicissitudes of life nor his memorable battles in the courtroom over six decades left any dent on him. He kept the scars firmly under wrap except for the occasional salvos in newspapers (especially “The Sun” and “ThisDay”) and of course the volcanic eruptions in his books: “The Futility of The Land Use Decree 1978” and “Nigeria: The Case for Peaceful and Friendly Dissolution” Either of these books could have landed him in detention by the successive military regimes that dominated our nation’s political landscape and monopolised what they curiously described as “The balance of forces”. There was no balance.

All the force was in the gun and the finger on its barrel.

CHINONSO IKEDIASHI Chinonso Ikediashi is Lagos state tech entrepreneur

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lmost every Nigerian that has done a transaction with the government has used Remita before. Yet it is very easy to confuse Remita, the payment gateway, with TSA, the government account domiciled at the Central Bank of Nigeria. Remita facilitates payments into the TSA, it is not the TSA. Also contrary to assumptions by several Nigerians who have used it for payments, it is not owned by government. Remita was created by SystemSpecs Limited, a fully indigenous ICT firm. It had existed before the TSA was implemented and it was adopted by the government because it has the robust infrastructure needed to power the TSA policy. To understand and fully maximize the use of Remita, it is pertinent to put it in proper context as a Fintech product. It is also important to put into proper perspective, the enormity of the entire system called Remita.

Remita is an electronic financial management software with several components, packages, and offerings. It serves as a payment gateway,

If he survived all these brutal military regimes, why would he succumb to death under a benevolent civilian government? There are sufficient grounds for suspicion!!

Indeed, the Inspector-General of Police, Ibrahim Kpotun Idris without any prompting has waded into the issue by raising the red flag of foul play. Besides, he has instructed his very able and amiable deputy, DIG(Chief ) Taiwo Lakanu who is in charge of Operations to get to the bottom of the matter.

Not unexpectedly we have been requested to avail the police of our list of suspects. The old boys of King’s College, Lagos have submitted only one name – St. Gregory’s College Old Boys Association!!

It is not entirely by co-incidence that both Chief Tunji Gomez, another old boy of King’s College died at the age of 90 just a few days before the demise of Prince Adeniran.

Again, the finger of suspicion is pointing in only one direction – St. Gregory’s College Old Boys Association.

It has not gone unnoticed that both Chief Gomez and Prince Adeniran who had very long and distinguished careers at the bar stretching over sixty years were denied the rank of Senior Advocate of Nigeria [SAN] regardless of their unblemished professionalism.

What makes it all the more galling and inexplicable is that it was Prince Adeniran who in 1966 at the National Bar Association Conference held in Port Harcourt proposed the motion that the practice of law which had hitherto been dominated by expatriates should be the exclusive preserve of Nigerians. Alas, the beneficiaries of the Prince’s uncommon vision prefer to subscribe to amnesia.

In addition to being erudite and cerebral, Prince Adeniran thoroughly relished the long-standing rivalry between King’s College (his Alma Mater) and St. Gregory’s

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If the politicians were genuinely committed to serving us, the home of Prince Adeniran should have been their regular rendezvous to avail themselves of a veritable barometer of progress or regression; and calibrate their strategy accordingly

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College. Hence, when he learnt of my candidacy (as the in-coming president) of St. Gregory’s College Old Boys Association), he readily endorsed it!! I remain eternally grateful to him and Chief Ladi Williams SAN who have provided my election campaign with vital legal backbone. The eligibility clause has been crushed under the “Doctrine of Necessity” to enable an old boy of King’s College to contest and win election as President of St Gregory’s College!! That is real progress.

The Chairman of Independent National Electoral Commission [INEC], Professor Mahmood Yakubu has graciously agreed to conduct what he is determined to demonstrate to the rest of the world as a classic “free and fair election” the like of which has never been witnessed in Nigeria.

Vintage stuff.

Prince Adedapo Adeniran had a formidable library of books, photographs and newspaper articles which watered and nourished his fountain

of knowledge in addition to providing the anchor sheet for his wisdom.

He certainly had a soft spot for my grandfather, Dr. J.K. Randle whose exploits in medicine, education, politics and philanthropy were carefully recorded and relished by him. As for my father, Chief J.K. Randle who preceded Prince Adeniran at King’s College, virtually every year at the Annual Thanksgiving (in memory of my dad), the Prince would speak of him fondly and endearingly in superlative terms.

Time and space have conspired to deny us the opportunity to dwell on the special bond between the Prince and my two cousins –John and Afolabi Lardner. Regardless, it would be remiss of us not to acknowledge the uncommon loyalty, exceptional friendship and steadfast devotion of the Prince to the two brothers especially Mr. Harry Afolabi Lardner SAN who was at King’s College with him.

A special chapter would have to be devoted to the role played by Prince Adeniran during a critical period in the sojourn of all three principal characters in London as students and the special bond between Prince Adeniran and H.A. Lardner.

Actually, uncle Harry Afolabi Lardner started off as a science student at “KC” before proceeding to St John’s College, University of Cambridge but eventually ended up at the Bar where he certainly distinguished himself.

For most of his life,Prince Adeniran found contentment and fulfilment living right amongst the people at 134, Bamgbose Street, Lagos in utter disdain of exclusivity in Ikoyi; Lekki; Victoria Island; Banana Island; Snake Island; Peacock Island; Monkey Island; Grasshopper Island; Crocodile Island; Ogogoro Island etc, or anywhere else, apart from his annual summer vacation in London.

From his vantage position he had a ringside seat which enabled him to assess the rot in our nation and the subversion of the dream of our an-

cestors in addition to mortgaging the destiny of future generations whom we have saddled with humongous debts – both local and foreign.

If the politicians were genuinely committed to serving us, the home of Prince Adeniran should have been their regular rendezvous to avail themselves of a veritable barometer of progress or regression; and calibrate their strategy accordingly.

He did not care whether his neighbours were Christians, Moslems or animists. He was well steeped in the traditions and culture of Lagos and his home was strategically located in the “Brazilian Quarters” as the “Eyo”; “Igunnu”; and other masquerades waded past his window/front door. It was with similar enthusiasm and vigour that the “Fanti” broke their stride to pay him well deserved homage.

As the oldest surviving old boy of King’s College, Lagos,he was an inspiration and role model to all of us who shared the same antecedents, credentials, and pedigree with him in the pursuit of justice and merit.

He led a serious and purposeful life to which I am confident his widow Dr. (Mrs.) Florence Abiola Adeniran as well as the children Oyinade and Biodun would attest in their witness statement.

He was also witty and articulate – in Yoruba, English and in Latin (plus a dose of Greek philosophy). His passion was not confined to King’s College or the law. He was profoundly disturbed by the evidence of the prosecution witness – that our nation is on the verge of chaos and Lagos is in the blighted cusp of history, while the suffering masses cannot make sense of our government’s fragile hold on truth.

are recognized and individuals can play unique roles across multifarious combinations. It is also easily integrated with budget, invoicing, accounting and ERP systems.

With the release of the mobile app version for Android and iOS, individuals can send and receive money from the comfort of their phones without having to use multiple bank apps for electronic transactions. The app version of Remita has the tap and pay feature that enables users to pay for products by scanning codes on those products with a mobile phone. With Remita individuals will be able to send and receive money from the comfort of their phones without having to use multiple bank apps for electronic transactions. On one interface, you can carry out transactions making and receiving payments to and from multiple accounts.

Remita has achieved some tremendous results as the TSA’s technology backbone. The TSA system of collecting all government income from all MDAs via one integrated platform has improved fiscal management. It has also increased transparency and accountability in the public sector. Remita, the epayment platform powering the

policy has been very effective. Since 2015 when full implementation of the TSA commenced, Remita has processed over N8.9 trillion for the Federal Government’s TSA and saves the government over $11 million monthly from bank charges that it would have paid without the TSA. Remita has won several awards since inception. In 2012, the payment platform was awarded the ‘Outstanding Public Service Product of the Year’ by Financial Technology Africa Magazine. It was recognised as the ‘Most Outstanding Software Solution at the NITMA awards in 2015. In April 2016, it was declared the ‘Most Efficient e-Revenue Service’ at the CBN Cashless Card Expo. At the Titans Tech Awards in 2016, Remita emerged as ‘Pan-African Software Solution of the Year’. Most recently, SystemSpecs was nominated by the PayTech international awards, London in the ‘Top innovations Category’ for Remita.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

Examining Remita: Beyond TSA payment application, and payment infrastructure. As a payment application, Remita is available as a web and mobile-based solution for individual consumers to make and receive payments via multiple bank accounts. As a payment gateway, Remita facilitates end to end connection for various payment systems. At present, there are several banks in the country, each with its own applications to facilitate electronic transactions for its customers. Things get a bit complex when a customer in one bank is transacting with a customer in another bank. Remita serves as a gateway to facilitate these kinds of transactions. As a payment infrastructure, Remita has been built to carry out integrated financial functions in one seamless system.

This is usually applicable to organizations rather than individuals. For many years as the TSA technology backbone, it has enabled government Ministries, Departments and Agencies(MDAs) to receive revenue more efficiently via a single platform that synchronises payment from multiple sources. Remita is more than a payment software, it also performs Human Resources and Payroll functions. It can help record

and calculate staff allowances, loans, pensions, taxes, overtime allowances and more without hassle.

In May 2018, there was a report in the London Metro, announcing that one of the biggest banks in the world, HSBC has recently launched a mobile app, riding on UK’s Open Banking law which allows its account holders to view account balances from different banks together on a single screen.

Remita had already incorporated this feature a long time ago. This is probably why it was suitable for the TSA in the first place.

The features of the Remita mobile app are innovative and diverse, and they present diverse opportunities.

Its integrated feature means that one can easily know the total amount of money he has in all banks, at a single click. Businesses can manage both invoicing and payment on a single platform with a detailed record of activities. Using Remita, people can automate the rules of transaction and workflow within an organization, creating monitoring and auditing systems. Moreover, the electronic platform synchronises all payment channels. It works with web, POS, mobile wallets, prepaid cards, mobile transfer, etc. Multiple profiles within a single corporate entity using Remita

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

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Politics in Nigeria and the bitter pills of patron-client relationship

FRANCIS IYOHA Professor Iyoha is of the Department of Accounting, Covenant University and Research Fellow, the Institute of Chartered Accountants of Nigeria (ICAN). He wrote viafoiyoha@ican.org.ng

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he insatiable appetite for political office of many political desperadoes who have next to nothing to offer has continued to legitimize the development of the patron-client relationship in the Nigerian political environment. The political patrons who are recognized as financial and political ‘heavyweights’ to whom political clients (political office seekers) go to for help make no empty promises and threats nor any excuses that their hands are too ‘heavy’ to help or their ears ‘too full’ to hear.

In most cases, no earthly power is more powerful than they are.

Once a political client is accepted, the patron ensures that nothing stands in the way of ‘progress’ of the client. But there are both covet and overt costs. Certain conditions must be continually met to sustain the relationship. It

does not matter whether a client is directed to have a ‘bath’ or ‘breakfast’ nude on the third mainland bridge; he must continually show respect and loyalty of uncommon kind; obey any call at any time and render services, no matter how ignoble they might be.

Anytime the patron calls, the client must be seen to be delighted and flattered without being bored and all his troubles, including seeking and winning political positions would be taken to heart by the patron. It is a relationship to which the client must be committed with unflagging zeal and devotion. There is no graduate of gratitude in any patron-client relationship as it is deemed one of a lifetime even though it imposes insults and pains that must be borne.

By now, I guess it should be clear and understandable to political clients in Nigeria that positions gained in a patron-client relationship are sweet as long as the client does not make himself repulsive to the patron. Once he does, he should be ready to have a mouth full of gravel, indigestion as well as loss of sense of manhood.

The client will most certainly not be in a position to retaliate against abuses by the patron in an appropriately asymmetric manner because the battlefield is not a level playing ground. It is often paved in favour of the patron and with personal and bad intentions. In most cases, patrons are terrible human beings and I believe we should have understood that by now in the context of the wind currently

‘

The patron-client relationship in the Nigerian political system has taken deep roots.

The patrons have become indispensable such that without them, nothing goes on. They have crowded out the electorates

’

blowing in many patron-client relationships in the country. We are in a situation where criticisms and appeals run-off patrons like water off a duck’s back. Unfortunately, the clients are not even in any position to launch a charm offensive against their patrons. If caught, the result could be fatal.

The patron-client relationship in the Nigerian political system has taken deep roots. The patrons have become indispensable such that without them, nothing goes on.

They have crowded out the electorates. They decide who does what and who gets what position while the legitimate electorates only go to the polls to legitimize what they (the patrons) have ‘ordained’. The question is: whose interests are

the patrons and their client serving? It is, therefore, not an issue of ‘political war’ between the two main political parties (APC and PDP) but a war between the patrons and the masses while the clients represent the ‘missiles’ used in the encounter. The result of the situation is clear for all to see and it is that collective goods have been ‘privatized’ while the institutional safeguards intended to engender accountability have been castrated. There is large scale moral disengagement, opportunistic lawlessness, corruption in all colours and sustained unscrupulous political arrogance.

The opportunity to partake of the ‘benefits’ promised by patrons is encouraging youths and even the elite middle class to embrace the façade of accountability that has been disseminated and still being disseminated to the masses by those who seek legitimacy for their sordid political interests.

The existence of the patronclient relationship in Nigeria is evil. It has created a mindset in the people that without a patron, one has limited access to political office and a share of what has been described as the ‘national cake.’ It should be drummed to the ears of all political office seekers that patron-client relationship imposes a level of pressure to accumulate and share commonwealth among a few in a way that does not answer to transparency and accountability. If you are a part of the crusade desiring to share the baked and the ‘unbaked’ national cake via patron-client relationship, you are

not fit to lead.

We need politicians who are ready to crusade against the injustice of sharing national resources and opportunities. My admonition, therefore, to those who ride to high political offices on the back of patrons or seek and take refuge in their bosom in times of storm is: be strong, and be of good courage. Enough of those bitter political pills already swallowed.

Do not fear or be dismayed for the people you desire to represent (if you actually earnestly do) will offer their shoulders for you to lean on with a reasonable respite from the lion- type shoulder of patrons.

I encourage you to take solace in the fact that whatever is hot, will eventually turn cold. You need to do your own ‘growing’ and take your destiny in your own hands, no matter the influence of your patrons. The place of self-help cannot be overemphasized. Take, for instance, a Cardinal who had health challenge and requested prayers of the Pope. The Pope prayed earnestly but never-the-less also recommended that the Cardinal took some quinine. As much as he loved the Cardinal, the Pope could not take the quinine for and one-half of the Cardinal. Get on with your own growth right away.

It is dangerous to wait because political situations change, men change, environments change and everything changes. Patrons won’t grow but ground you politically and otherwise.

promote GMOs even before any biosafety law was in place in the country. We are experts at putting the truck ahead of the truck pusher and once on the wrong path we stubbornly refuse to step back, except in rare cases like that of our Nigeria Air. Today, respectable research institutions have bought into the GMO train making it difficult for farmers to know when they are being sold genetically modified cassava, beans or maize. Even if farmers were to know that they are being sold suspect seeds, once the seeds get into the food market, consumers have no way of knowing what is being sold to them. There is no way anyone will label akara, moi moi, ogi, eba or similar foods made from genetically modified seeds. In other words, Nigerians are on the wrong bus already.

Concerned medical doctors and religious bodies and consumer groups have expressed reservations over the pollution of our seeds and foods. The agencies responsible continue to push on in utter contempt of these concerns.

We will proceed to dissect, debate and consider the risks to our health and biodiversity, not just for our sake but for the sake of generations yet unborn. We are concerned that unproven assertions are presented as truths

by GMO promoting agencies

in total disregard of the globally increasing call for ban of cancer-causing herbicides that are already in our markets and will be more extensively used in the cultivation of crops genetically modified to withstand them.

Today we assure our farmers that you have strong allies in the GMO-Free Nigeria alliance and that the struggle to ensure that technofixes are not presented as cure-all in our agricultural sector.

We will stand with you and demand justice for us all.Together we will demand rural infrastructure, storage and processing facilities for farm produce as well as provision of extension officers to share knowledge on agroecological methods of agriculture that is in line with our practices developed over the millennia and is not tied to the apron strings of institutions that are patently neocolonial and unpatriotic.

Farmers do matter and must be listened to.

Send reactions to: comment@businessdayonline.com

Farmers do matter

NNIMMO BASSEY Nnimmo Bassey is Director of Health of Mother Earth Foundation (HOMEF)

F

armers feed the world.

This is an incontrovertible fact. Small scale or family farmers feed the world. This is another incontrovertible fact. This second fact is unfortunately often overlooked.

The willful rejection of the truth that small-scale farmers feed the world has persisted because accepting the truth would compel policy makers to refocus attention where it matters rather than pumping resources into industrial farming that create ecological and social economic problems, and is vastly inefficient when outputs are compared to inputs. We say this because small scale farmers use 30% of arable land and resources and feed 70% of the population while

the exact reverse is the case with industrial farming.

Scare tactics of ever-growing population has been used as an excuse to force the diversion of public funds into private industrial agriculture as well as the introduction of genetically engineered crops into Africa and other parts of the world. Again, the fact that the world currently produces enough food to feed almost double the current population is ignored in the conversations. For Nigeria, our country, we are told that we will have the third largest population by 2050, surpassing the United States of America (USA) among others. In fact, the United Nations projects that the population growth rate in Africa will “at least double” by 2050. Lineal population growth may be possible if African countries do not improve on social indices and if disease, poverty and illiteracy persist. It is time to re-examine the statistical basis of Nigeria’s population otherwise the shame will be on us when we become the most populous nation on earth and the people cannot be found!

Another fact that begs for acceptance is that people are not hungry because there is no food in the world. About 30 percent of food goes to waste. In addition, industrial farming thrives on monocultures and is the major supplier of feedstock, as

expected, for industrial processes.

The assertion that people are not hungry due to lack of food in the market is also buttressed that most of the people that go to bed hungry are actually farmers. This happens because farmers have to sell their produce so as to meet family needs – such as housing, medicals, transportation and school needs of their children.

Farmer to farmer exchanges are vital for the sharing of ideas, farming practices and ways for preserving seeds and our overall biodiversity. Meeting to have dialogues between farmers provides a platform to diagnose the challenges facing small holder farmers as they struggle to meet the food requirements of the population.

Dialogue spaces also provide platforms for examining the quality of seeds available to farmers and the special threats posed by opening of the flood gates to genetically engineered crops into Nigeria.

We continue to demand for a radical revision of the National Biosafety Management Agency (NBMA) Act 2015 and the installation of a neutral Biosafety Regulatory Agency that is totally different from the extremely pro-GMO one currently in place. In fact, today it is hard to distinguish NBMA from National Biotechnology Development Agency (NABDA) – an agency expressly set up to

• Welcome words by Nnimmo Bassey, director of the ecological think tank, Health of Mother Earth Foundation (HOMEF) at Farmers’ Dialogue- Promoting Biosafety in Nigeria – held on 21 September 2018 at Girls Power Initiative hall, Benin City, Nigeria

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Monday 24 September 2018

Contrasting poverty narratives

N

igeria’s government has continued to deny the obvious – that Nigeria is now the poverty capital of the world with over 86 million Nigerians living in extreme poverty and six Nigerians sliding into extreme poverty every minute. Last week, it sought to provide its own narrative to the effect that since coming to power in 2015, it has successfully lifted 10.073 million Nigerians from poverty to prosperity.

The minister of budget and national planning, Udoma Udo Udoma is the latest purveyor of this new narrative. Speaking on arrangements for the 24th Nigerian Economic Summit (NES#24) in Abuja, the minister reeled out the government’s account as follows: Government is feeding 8.98 million school children under the Home Grown School Feeding Programme; supported over 297, 000 poor and vulnerable Nigerians with cash transfer of N5000; successfully disbursed more than 308, 000 loans of N50, 000 and

above under the Government Enterprise and Empowerment Programme (GEEP) and 200, 000 Young Unemployed Graduates Empowered through the N-Power scheme, while over 308, 000 have been selected for consideration for the second bath.

The minister went further to aver that: “To combat hunger and achieve food security, we have raised capital provisions for agriculture from N8.8 billion in 2015 to N149.2 billion in the 2018 budget. Over N82 billion has been disbursed as credit to more than 350, 000 farmers under the Anchor Borrowers’ programme. 14 moribund fertilizer blending plants have been revitalised through the Presidential Fertilizer Initiative (PFI) with a total capacity of 2.3 million metric tons of NPK fertilizer.”

But just as Udoma was reeling government’s facts, the Bill and Melinda Gates Foundation released its 2018 Goalkeepers report which estimates that by 2050, more than 40 percent of the extremely poor people in the world will be living in Nigeria and DR Congo and that Nigerians living in extreme poverty will continue to grow

to 152 million by that time.

Of course, the report situates the reason for such surge on the insufficient investment in human capital that will correspond to the increasing population.

The report was categorical that while more than one billion people in the world have lifted themselves out of the extreme poverty since 2000, “extreme poverty is becoming heavily concentrated in subSaharan African countries”.

“By 2050, that ’s w h ere 86 percent of the extremely poor people in the world are projected to live. The challenge is that within Africa, poverty is concentrating in just a handful of very fast-growing countries. By 2050, for example, more than 40 percent of the extremely poor people in the world will live in just two countries: Democratic Republic of Congo and Nigeria,” the report stated.

Although the Buhari administration has continued to operate in denial of the reality of the growth of extreme poverty in Nigeria, it is clear from the indications and economic indices that Nigerians have never been this poor and des-

perate since independence.

And make no mistake about it, the poverty problem in Nigeria is directly a result of the nebulous and ill-intentioned economic policies the Buhari administration has pursued, which have squeezed enterprises and even more, citizens, have seen their real income more than halved in a twinkle of an eye and prices of food, goods and services skyrocket beyond the reach of most Nigerians.

No serious government that wants to address poverty will at the same time be encouraging or supporting monopolies in food production that always results in higher prices of food for the poor. No wonder an OECD report on Nigeria avers that “Nigerians would save 30% of their income if they bought their food at Indian prices.”

For the countr y to make any progress on poverty alleviation, the government needs to accept the realities on the ground and begin to fashion policies that not only tackle the fundamental reasons why poverty is spreading at an alarming rate, but ensure productivity and competitiveness.

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Monday 24 September 2018

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Monday 24 September 2018 In Association With

Brazil’s presidential election

Growing up too early

Jair Bolsonaro, Latin America’s latest menace

Child marriage in Africa

He would make a disastrous president

G

A practice that is hard to eradicate

“

OD is Brazilian,” goes a saying that became the title of a popular film. Brazil’s beauty, natural wealth and music often make it seem uniquely blessed. But these days Brazilians must wonder whether, like the deity in the film, God has gone on holiday. The economy is a disaster, the public finances are under strain and politics are thoroughly rotten. Street crime is rising, too.

Seven Brazilian cities feature in the world’s 20 most violent.

The national elections next month give Brazil the chance to start afresh. Yet if, as seems all too possible, victory goes to Jair Bolsonaro, a right-wing populist, they risk making everything worse. Mr Bolsonaro, whose middle name is Messias, or “Messiah”, promises salvation; in fact, he is a menace to Brazil and to Latin America.

Mr Bolsonaro is the latest in a parade of populists—from Donald Trump in America, to Rodrigo Duterte in the Philippines and a left-right coalition featuring Matteo Salvini in Italy. In Latin America, Andrés Manuel López Obrador, a left-wing firebrand, will take office in Mexico in December. Mr Bolsonaro would be a particularly nasty addition to the club (see Briefing).

Were he to win, it might put the very survival of democracy in Latin America’s largest country at risk.

Populists draw on similar grievances. A failing economy is one— and in Brazil the failure has been catastrophic. In the worst recession in its history, GDP per person shrank by 10% in 2014-16 and has yet to recover. The unemployment rate is 12%. The whiff of elite selfdealing and corruption is another grievance—and in Brazil it is a stench. The interlocking investigations known as Lava Jato (Car Wash) have discredited the entire political class. Scores of politicians are under investigation. Michel Temer, who became Brazil’s president in 2016 after his predecessor, Dilma Rousseff, was impeached on unrelated charges, has avoided trial by the supreme court only because congress voted to spare him.

Luiz Inácio Lula da Silva, another former president, was jailed for corruption and disqualified from running in the election. Brazilians

I

N A dusty village in southern Niger, Fatia holds her daughter close to her breast, smiling, though the baby looks much too large for her. Four years ago she married at the age of 16, she reckons, but she may have been younger. Since then she has had two children.

Three out of four girls in Niger are married before they are 18, giving this poor west African country the world’s highest rate of child marriage. The World

tell pollsters that the words which best sum up their country are “corruption”, “shame” and “disappointment”.

Mr Bolsonaro has exploited their fury brilliantly. Until the Lava Jato scandals, he was an undistinguished seven-term congressman from the state of Rio de Janeiro. He has a long history of being grossly offensive. He said he would not rape a congresswoman because she was “very ugly”; he said he would prefer a dead son to a gay one; and he suggested that people who live in settlements founded by escaped slaves are fat and lazy.

Suddenly that willingness to break taboos is being taken as evidence that he is different from the political hacks in the capital city, Brasília.

To Brazilians desperate to rid themselves of corrupt politicians and murderous drug dealers, Mr Bolsonaro presents himself as a no-nonsense sheriff. An evangelical Christian, he mixes social conservatism with economic liberalism, to which he has recently converted.

His main economic adviser is Paulo Guedes, who was educated at the University of Chicago, a bastion of free-market ideas. He favours the privatisation of all Brazil’s stateowned companies and “brutal” simplification of taxes. Mr Bolsonaro proposes to slash the number of ministries from 29 to 15, and to put generals in charge of some of them.

His formula is winning support.

Polls give him 28% of the vote and

he is the clear front-runner in a crowded field for the first round of the elections on October 7th.

This month he was stabbed in the stomach at a rally, which put him in hospital. That only made him more popular—and shielded him from closer scrutiny by the media and his opponents. If he faces Fernando Haddad, the nominee of Lula’s leftwing Workers’ Party (PT) in the second round at the end of the month, many middle- and upper-class voters, who blame Lula and the PT above all for Brazil’s troubles, could be driven into his arms.

The Pinochet temptation They should not be fooled.

In addition to his illiberal social views, Mr Bolsonaro has a worrying admiration for dictatorship.

He dedicated his vote to impeach Ms Rousseff to the commander of a unit responsible for 500 cases of torture and 40 murders under the military regime, which governed Brazil from 1964 to 1985. Mr Bolsonaro’s running-mate is Hamilton Mourão, a retired general, who last year, while in uniform, mused that the army might intervene to solve Brazil’s problems. Mr Bolsonaro’s answer to crime is, in effect, to kill more criminals—though, in 2016, police killed over 4,000 people.

Latin America has experimented before with mixing authoritarian politics and liberal economics.

Augusto Pinochet, a brutal ruler of Chile between 1973 and 1990,

was advised by the free-marketeer “Chicago boys”. They helped lay the ground for today’s relative prosperity in Chile, but at terrible human and social cost. Brazilians have a fatalism about corruption, summed up in the phrase “rouba, mas faz” (“he steals, but he acts”). They should not fall for Mr Bolsonaro—whose dictum might be “they tortured, but they acted”. Latin America has known all sorts of strongmen, most of them awful. For recent proof, look only to the disasters in Venezuela and Nicaragua.

Mr Bolsonaro might not be able to convert his populism into Pinochet-style dictatorship even if he wanted to. But Brazil’s democracy is still young. Even a flirtation with authoritarianism is worrying. All Brazilian presidents need a coalition in congress to pass legislation. Mr Bolsonaro has few political friends. To govern, he could be driven to degrade politics still further, potentially paving the way for someone still worse.

Instead of falling for the vain promises of a dangerous politician in the hope that he can solve all their problems, Brazilians should realise that the task of healing their democracy and reforming their economy will be neither easy nor quick. Some progress has been made—such as a ban on corporate donations to parties and a freeze on federal spending. A lot more reform is needed. Mr Bolsonaro is not the man to provide it.

Bank says it is one of only a very small number to have seen no reduction in recent years; the rate has even risen slightly. The country’s minimum legal age of marriage for girls is 15, but some brides are as young as nine.

Across Africa child marriage stubbornly persists. Of the roughly 700m women living today who were married before they were 18, 125m are African.

Among poor rural families like Fatia’s the rate has not budged since 1990. The UN Children’s Fund (UNICEF) estimates that, on current trends, almost half the world’s child brides by 2050 will be African.

But some countries have shown they can keep young girls out of wedlock. In Ethiopia, once among Africa’s top five countries for child marriage, the practice has dropped by a third in the past decade, the world’s sharpest decline, says the World Bank. The Continues on page 15

Monday 24 September 2018

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In Association With

Make America Germany Again

The Democratic Party’s left flank has ideas for fixing the country

Some of them have a Mitteleuropa flavour

Continued from page 14

T

UCKER CARLSON, a Fox News host, and Bernie Sanders, a democraticsocialist senator, seldom agree.

Yet on the matter of billionaires supposedly sponging off taxpayer largesse, they are completely simpatico. On September 5th Mr Sanders introduced a bill which would force large firms to pay taxes exactly equal to the amount of safety-net benefits consumed by their employees, including food stamps, housing vouchers and Medicaid. The target of Mr Sanders’s legislation, titled the “Stop Bad Employers by Zeroing Out Subsidies” or “Stop BEZOS” Act, was clear. Attacking Jeff Bezos, the founder and boss of Amazon, is a uniquely bipartisan pastime.

The left of the Democratic Party views him as a latter-day Ebenezer Scrooge. Trump-cheerleaders like Mr Carlson despise him for owning the meddlesome Washington Post. Mainstream economists took a dismal view of the pitch.

Congressional Democrats, especially those eyeing a presidential run in 2020, are awash with bold policy ideas. In addition to Mr Sanders’s pitch, Kamala Harris, a Democratic senator from California, has offered a proposal to give generous tax credits to citizens who spend more than 30% of their incomes on rent. Elizabeth Warren, a progressive senator from Massachusetts, would like to up-end corporate boards by requiring that employees pick 40% of the members.

Start with Mr Sanders’s proposal. The cost of safety-net programmes like food benefits, Medicaid coverage and rental subsidies could easily amount to thousands of dollars per employee. A pitch to charge firms that amount would be a de facto head tax, strongly discouraging

employment. “It’s essentially a tax on hiring low-skill workers, but worse,” says Samuel Hammond of the Niskanen Centre, a think-tank.

“Since eligibility largely varies with children and dependants, it’s actually a tax on firms for hiring lowskill parents.” Companies would have perverse incentives to filter out the applicants they thought likeliest to be on benefits. Because they would be barred by law from asking about welfare status directly, they would probably resort to pernicious stereotypes (such as not hiring a middle-aged black woman without a wedding ring). It would also encourage companies to minimise low-skilled labour as much as possible, hastening automation.

Ro Khanna, a Democrat from Silicon Valley, introduced an identical bill in the House of Representatives. While he concedes that automation is a real worry,

he dismisses the discrimination critique offered by liberal economists. Though discrimination is notoriously difficult to prove in court, high penalties would still encourage firms to behave, Mr Khanna insists. Besides, he says, the point of the bill is to encourage companies to forgo the headache by paying their employees a higher minimum wage. “If you raise to a liveable wage, like $15 an hour, then you’re exempt. But if you’re not going to provide a decent wage, and you’re making trillions of dollars, then you’re going to be on the hook for all the public benefits that you’re consuming,” Mr Khanna says.

The idea that benefits schemes for low-income workers are corporate welfare is mainstream on the far left. Yet it is also quite strange, since it implies that for those at the bottom of the earnings distribution, wages would rise if the safety-net were slashed. “Some people could draw a message from the bill that programmes like SNAP [food stamps] or Medicaid are bad…because they’re fundamentally corporate subsidies,” says Robert Greenstein of the Centre on Budget and Public Priorities, a left-leaning think-tank.

The earned-income tax credit, which operates explicitly as a wage subsidy for working-class families through the tax system, has been helpful in alleviating poverty. Indeed, many—including Mr Sanders—would like to see it expanded.

Similar problems haunt Ms Harris’s daring plan to offer tax credits for those facing high rents.

She would like the federal government to reimburse households for rent that is over 30% of household income. Housing affordability is certainly a growing issue, especially in America’s booming cities. But that is because of constrained supply. Fuelling demand with billions in government cash while housing supply is stuck means that prices will only rise. The winners would

Child marriage in Africa

be landlords, who would pocket most of the vast expenditure.

Ms Harris’s proposal would encourage people to rent flats well beyond their means. Those making less than $25,000 would get 100% of their excess rent subsidised by the government. In San Francisco, the costliest city in America, this means that such a person would pay at most $625 a month, even for a flat costing $4,681 a month. Uncle Sam would kick in the rest. Because the policy abruptly shifts reimbursement rates around cut-off points, those making $75,000 in San Francisco could lose as much as $8,500 of tax credits by making an additional dollar. In cities with high rents, those making up to $125,000 a year, hardly a needy bunch, would qualify for subsidies.

Of all the proposals, Ms Warren’s Accountable Capitalism Act is the least destructive. Some of its provisions—like requiring firms with more than $1bn in revenue to obtain a federal charter and barring executives from selling shares for five years—are relatively modest. Others, like requiring corporations to create a “general public benefit”, seem vague and unenforceable. The most eye-catching proposal, which is for employees to elect 50% of the representatives on corporate boards of directors, seems radical but has been commonplace in Germany since 1976.

Although such a system might not work as well in America, where employees are less likely to remain loyal for years, it is hardly the stuff of revolution.

None of the proposals will become law anytime soon. But they do foreshadow the themes of the next Democratic presidential primary, at a time when the party seems to be in its wildernesswandering stage. Populist policies, such as sticking it to Mr Bezos, subsidising rent and giving more power to workers, are in the ascendant.

government wants to eradicate child marriage entirely by 2025.

Ethiopia offers lessons for other African countries. For one thing, it shows that in religious societies you must win over imams and priests. Guday Emirie of Addis Ababa University notes that in one district a local priest, having been publicly shamed for marrying off his own daughter when she was a child, has since been preaching against the practice. It has now been eliminated in his district.

Conservative imams in Niger, by contrast, often invoke the Prophet’s marriage to a young girl, according to tradition.

After a decade of strong economic growth, Ethiopia’s poverty rate is now half that in Niger, one of the world’s poorest countries.

Many of its people, says Lakshmi Sundaram of Girls Not Brides, an NGO, believe that “child marriage is a way of reducing the number of mouths to feed”, as the bride moves in with another family.

Education is even more vital.

“You generally don’t find a child bride in school,” notes a UNICEF expert in Ethiopia. Its government spends more on education as a proportion of its budget than other African countries.

More than a third of its girls, a big increase, enrol in secondary schools. In Niger the figure is less than a fifth.

Curbing child marriage could lower fertility rates by about a tenth in countries like Niger and Ethiopia. Doing so would immeasurably improve the lives of women like Fatia. On her wedding night, she says she begged her husband not to force himself on her. “He was bigger than me.

It hurt too much,” she says, looking down at her daughter.

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Monday 24 September 2018 In Association With

Demography

Africa’s high birth rate is keeping the continent poor Why the birth rate has been slow to fall

J

OHN MAGUFULI, the president of Tanzania, has strong views about birth control. He does not see the point. In 2016 he announced that state schools would be free, and, as a result, women could throw away their contraceptives. On September 9th this year he told a rally that birth control was a sign of parental laziness. Tanzania must not follow Europe, he went on, where one “side effect” of widespread contraception is a shrinking labour force.

There seems little danger of that. Tanzania’s fertility rate is estimated to be 4.9, implying that the average woman will have that many children. Europe’s rate is 1.6. Tanzania is helping drive a continental baby boom. In 1950 sub-Saharan Africa had just 180m people—a third of Europe’s population. By 2050 it will have 2.2bn—three times as many as Europe. If UN forecasts are right, sub-Saharan Africa will have 4bn people in 2100 (see chart 1).

That is worrying, although not for the old reasons. In “An Essay on the Principle of Population”, published in 1798, Thomas Malthus claimed that the human population was bound to increase faster than the supply of food, leading to catastrophe. Although Malthus is still admired by some, the green revolution rubbished his hypothesis. The fear now is not that countries will run out of food but that a surfeit of babies will retard their development.

Mr Magufuli is right to suggest that Europe has many old

people and could do with more workers to support them. But Tanzania’s many children weigh on its economy, too. Sub-Saharan Africa’s dependency ratio (the population younger than 20 and older than 64 versus the population between those ages) is 129:100, compared with 65:100 in Europe. Sub-Saharan Africa is expected to have a worse dependency ratio than Europe even in 2050.

High fertility can also be seen as a global problem, says Bill Gates, whose foundation (jointly run with his wife, Melinda) will hold a conference next week about the state of the world.

Overall, humanity is becoming wealthier. But because birth rates are so high in the poorest parts of the world’s poorest countries, poverty and sickness are that much harder to eradicate. “Kids are being born exactly in the places” where it is hardest to get schooling, health and other services to them, he explains.

There is nothing inherently African about large families. Botswana’s fertility rate is 2.6, down from 6.6 in 1960. South Africa’s rate is 2.4. And although the UN has a good record of predicting global population growth, it has got fertility projections badly wrong in individual countries. Sudden baby busts in countries like Brazil, Iran and Thailand caught almost everyone out. Could Africa also spring a surprise?

The UN’s demographers project that fertility will fall in every single mainland African country over the next few decades. They just expect a much slower pace of change than Asia or Latin America managed when their families were the same size. It took Asia 20 years, from 1972 to 1992, to go from a fertility rate above five to below three.

Sub-Saharan Africa is expected to complete the same journey in 41 years, ending in 2054. Its fertility rate is not expected to fall below two this century. Because many Africans marry young (see next article) the generations turn over

quickly, leading to fast growth.

The reason the UN expects change to be slow in future is that it has been slow until now.

After stagnating economically in the 1990s, countries like Nigeria and Tanzania grew wealthier in the 2000s. But their fertility rates hardly fell (see chart 2). Nor has urbanisation transformed family life as much as you might expect.

West Africa is much more urban than east Africa, but has a higher fertility rate.

Three things could drastically change the picture, however.

First, more African governments could promote family planning.

Ethiopia, Malawi and Rwanda have done so, and their birth rates are dropping faster than average.

Perhaps the starkest change is in Kenya. Alex Ezeh of the Centre for Global Development, a think-tank in Washington, remembers showing Kenyan politicians evidence that wealthy people both desired and had small families, whereas the poor wanted large families and ended up with even larger ones. The government invested in clinics and propaganda, to some effect. Household surveys show that 53% of married Kenyan women used effective contraception in 2014, up from 32% in 2003.

Kenya’s neighbour, Tanzania, is at least a decade behind.

The second cause for optimism is education. Broadly, the more girls go to school in a country, the lower that country’s birth rate.

This seems to be more than just a correlation: several studies, in Africa and elsewhere, have found that schooling actually depresses fertility. To attend school—even

a lousy school where you barely learn to read—is to gain a little independence and learn about opportunities that your parents had not envisaged for you.

Researchers at the International Institute for Applied Systems Analysis in Austria suggest that Africa’s schools are about to drive a large change. They point out that education spending weakened in some African countries in the 1980s as governments scrambled to cut budget deficits.

Girls’ schooling, which had been increasing, flattened. It is probably not a coincidence that African fertility rates fell little in the 2000s, when that thinly educated cohort reached womanhood. But school enrolments have risen since then.

If education really makes for smaller families, that will soon be apparent.

The third profound change would be stability in the Sahel.

The semi-arid belt that stretches through Burkina Faso, Chad, Mali, Niger, northern Nigeria and Sudan is lawless in parts and universally poor. Child death rates are still shockingly high in places. Partly as a result, and also because women’s power in the Sahel is undermined by widespread polygamy, people still desire many children.

The most recent household survey of Niger, in 2012, found that the average woman thought nine the ideal number.

Progress on all three counts depends mostly on African politicians. It falls to them to create more and better schools, provide security for their people and invest in family planning. They, not foreign observers, need to conclude that their countries would be wealthier if they had rather fewer children. Like so much in Africa, almost everything depends on the quality of government. And that, sadly, is hard to decree.

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How 46th AGM will redefine Nigerian manufacturing sector

ODINAKA ANUDU

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he Manufacturers Association of Nigeria (MAN) is set to hold its 46th annual general meeting (AGM) on September 26 and 27, 2018, in Lagos.

It is a two-day event, which provides an opportunity for experts and chief executives of manufacturing firms in Nigeria to evaluate the performance of their sector in the last one year.

The first day will be an exclusive session for members of MAN. However, there will be an open interactive session between the CEO of Bureau of Public Procurement (BPP), procurement officers of ministries, departments and agencies of government and the manufacturers. There will also be an evening session, which will focus on ‘Port Infrastructure and Access to Credit’. Key government officials such as managing director of Nigeria Ports Authority (NPA); managing director of Nigerian Maritime Administration and Safety Agency (NIMASA); executive secretary/CEO of Nigeria Shippers’ Council (NSC); managing director of Bank of Industry (BOI), and the managing director of Development Bank of Nigeria (DBN) are expected.

The theme for this session is, ‘Promoting Manufacturing through Improved Port Infrastructure and Access to Long-Term Credit Windows’.

Frank Udemba Jacobs, president of MAN, told journalists in Lagos that the second day is the Manufacturers Annual Lecture/Presidential Luncheon, which is a public event. The theme for the Manufacturers Annual Lecture/Presidential Luncheon is, ‘Mainstreaming Policies to Catalyse Industrial Renais-

Frank Jacobs

sance’.

“Our choice of the theme was borne out of the need to appraise the performance of industrial policy initiatives, with a view to ensuring that they are positively aligned to the industrial aspirations and overall economic development agenda of the nation,” Jacobs said.

He disclosed that Muhammadu Buhari, Nigeria’s president, and Nana Addo Dankwa Akufo-Addo, president, Republic of Ghana are expected.

“The association also intends to use the occasion of the annual general meeting to present a vivid picture of the current realities of citing or operating a business concern, especially manufacturing in Nigeria, showcase novel innovations and made-in-Nigeria products as well as collectively agree on workable survival strategies,” Jacobs added.

Ahmed Mansur

Jacobs bows out The AGM will end Frank Jacobs’ four-year tenure.

“I will not end this speech without informing you that I will be completing my fouryear tenure as president of the Manufacturers Association of Nigeria and my successor will commence his tenure as the 10th President of the association for the next four years after the Manufacturers Annual Lecture/ Presidential Luncheon taking place on Day 2 of the AGM,” he said.

No doubt, Jacobs is seen as an erudite and vibrant defender of the real sector.

He met the manufacturing sector at a point when it was reeling under the heavy yoke of recession, characterised by multiple taxation, policy flip-flops and low capacity utilisation, and he ended up revving up capacity utilisation to over 50 percent while

the local input sourcing is today at over 60 percent.

It has not been a rosy tenure, as one of the latest realities he confronted was the state of the foreign exchange market. When oil price dropped significantly, manufacturers were starved of dollars to import inputs.

Firms were on the verge of collapse and Jacobs was always on the receiving end.

Manufacturers dragged him from one side to another, pushing him into clashing with key monetary officials at some point. However, his advocacy prompted the Central Bank of Nigeria (CBN) to create a 40 percent FX window for key, genuine manufacturers.

Through his advocacy, some companies gained pioneer status. He is also instrumental in ensuring that Nigeria’s President did not sign the African Continental Free Trade Area (AfCTA).

Nigeria is not yet part of this treaty and Jacobs warns that the country must be careful not to sign away its future.

Enters Ahmed The next president of MAN is Mansur Ahmed of the Dangote Group.

An engineer by training, Ahmed joined the Dangote Group in 2013. He has a first degree in Mechanical Engineering from Nottingham University (1972) and a Masters degree in Industrial Engineering and Administration from Cranfield Institute of Technology (now Cranfield University 1975) both in the United Kingdom. He also has a post-graduate certificate in Investment Appraisal and Management of the Harvard Institute of International Development.

Ahmed was the pioneer director-general and chief executive officer of the Infrastructure Concession Regula-

tory Commission of Nigeria (ICRC), until his retirement in 2012. He led the Commission to win the Africa Investor PPP Champion of the Year 2010. He was also the DG of the Nigeria Economic Summit Group (NESG), where he led the conceptualisation and development of the PPP policy framework for Nigeria.

He had a successful career at the Nigerian National Petroleum Corporation (NNPC), where he served in various capacities including managing director and chief executive. In addition, he served, at various times, on many national committees including the Nigerian Vision 2010 Committee; the Oil and Gas Sub-Committee of the National Privatisation Council; and the Committee on the Assessment and Monitoring of the Millennium Development Goals (MDGs).

He was also part of the National Economic Management Team that conceptualised, developed, and implemented policies and strategies to attract long-term finance for infrastructure development in Nigeria. The Nigeria Sovereign Wealth Fund, Pension Fund, and Infrastructure Fund are some of the Institutional Funds unlocked for project finance.

He belongs to several professional and board associations including the Nigerian Society of Engineers, Nigerian Institute of Management and the Institute of Directors of Nigeria and he is a non-executive member of the board of directors of several blue-chip companies. He has written many articles (published and unpublished) on a wide range of issues including economic reform, deregulation in the energy sector, corporate governance, and other development issues.

Small-scale manufacturers hurt by poor infrastructure

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mall-scale manufacturers say the state of infrastructure in Nigeria is impeding their growth.

They point at the poor state of power, saying that they spend more on alternative energy now than ever.

Benson Umeh, managing director of a palm oil mill in Imo State, said his community Umuagwo has not had electricity in the last two months, prompting him to buy fuels and diesel

for his generators.

“It is quite expensive to run a small-scale business, especially in the manufacturing sector,” Umeh said.

Annual self-generating capacity in the manufacturing sector is 13,223 megawatts. Expenditure on alternative energy in the sector totalled N117.38 billion in 2017 and N129.95 billion in 2016, the Manufacturers Association of Nigeria (MAN) said. The only reliable railway in Nigeria at the moment is Abuja-Kaduna,

and broadband penetration is just 30 percent.

Ike Ibeabuchi, managing director of a small-scale chemical firm, said energy constitutes 30 to 45 percent of his cost.

“By the time you finish using it, you pay taxes and buy your own water,” Ibeabuchi said.

Poor power supply ranks among the biggest challenges facing Nigerian manufacturers, which also include lack of or limited availability of good transportation systems,

water, credit and high taxes.

Already, the Manufacturers Association of Nigeria, through its recently formed MAN Power Development Company, has signed an agreement with Tower Energy Solution & Systems Limited for the supply of six to 10 megawatts (MW) of electricity to Henry Carr Industrial Cluster in Ikeja, Lagos.

MAN has an agreement with Negris Group for the supply of up to 80 MW of electricity to Odogunyan in Ikorodu industrial cluster.

The organisation is also talking with solar power supply firms in the northern Nigeria, where there is limited gas supply, to enable clusters in Kaduna, Kano and other parts of the north to have incremental power at cheaper rates. Similarly, a negotiation is on the pipeline with Sahara Energy, Geogrid LighTec Limited and other companies for the supply of power to industrial clusters, according to Ibrahim Usman, chairman of MAN Power Develop-

ment Company Limited.

“The idea is to be able to put manufacturers together in clusters and arrange for power, which can be supplied through providers that will engage in power supply through hydro, solar, gas and will remove the cost of manufacturers getting involved in producing their own power, “ said Reginald Odia, chairman of Economic Policy Committee of MAN and director of the MAN Power Development Company.

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REAL SECTOR WATCH How local input sourcing in manufacturing sector impacts farmers

360 degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” said Mauricio Alarcon, CEO of Nestlé Nigeria Plc. Local input sourcing has risen significantly to 60.72 percent in the first half of 2017, from 46.3 percent recorded in the corresponding half of 2016, data from the Manufacturers Association of Nigeria (MAN) show.

D a i r y m a k e r FrieslandCampina WAMCO is sourcing some of its raw milk from farmers in communities in Oyo State.

As of 2017, over 70 farming communities, including 962 women, supply raw milk to FrieslandCampina WAMCO on a daily basis, BusinessDay found.

“The capacity the company has there is even more than what I can supply.

Things have dramatically changed for us dairy farm-

ers,” Mayosore Olatunde Rafiu, CEO of Genius Integrated Farms, one of the milk suppliers in Iseyin, told BusinessDay. Second biggest brewer Guinness Nigeria Plc says then that it is ramping up local use of maize and sorghum sourced from farmers from 43 percent to 87 percent over the next two years.

“Our patronage has increased tremendously from manufacturing companies.

Some of the crops we farm like dry maize were being imported into the country before the foreign exchange crisis. But with the shortage of forex, importers and manufacturers could not bring in dry maize to sell and make profit, so they are now buying from us at large quantity,” said, Abiodun Olorundenro, chief executive officer, Green Vine Farms, said in an earlier interview with BusinessDay. Azeeco International supplies cocoa to Cadbury, Olam, and Bolawole international, BusinessDay found.

Major manufacturers such as De-United Foods and Chikason Group source palm oil from manufacturers, including Presco and Okomu.

Dangote Farms, Savannah Farm and Ikara Processing Plants had off-taker arrangement with tomato farmers. But Dangote tomato plant is currently not in operation owing to high cost of tomato seeds.

a recent Lagos Chamber of Commerce and Industry (LCCI) symposium held in Lagos.

Uwheraka explained that exporters need to get proper information about the needs of each market before going in.

For full year 2017, total exports were N13.598 trillion, 59.47 percent higher than N8.52 trillion in 2016.

Out of N4.69 trillion export done in the first half of 2018, crude oil export stood at N3.58 trillion, accounting for 76.3 per cent of the total exports. Non-oil exports amounted to N1.1 trillion, according to data from the National Bureau of Statistics (NBS).

Low oil price and Niger

Delta militancy sent Nigeria into recession in 2016, with its attendant dollar shortages. Manufacturers and importers were hurt as they scrambled for the greenback to import inputs and products respectively. Nigeria’s economy is vulnerable as oil remains 75 to 90 percent provider of foreign exchange and revenue, despite contributing only 12-14 percent to the Gross Domestic Product. Inflation is dropping but has remained double-digit for at least 20 months.

“The challenges of exporters have to do with quality and exportation of primary products. The quality issues are mainly due to knowledge gap on the part of exporters, dubious practices among ex-

porters and local suppliers, inadequate quality inspection agents, inadequate lab for testing and sometimes unprofessional and dubious inspection agents,” said Bamidele Ayemibo, chairman of Export Group of the LCCI. Ayemibo explained that paperwork in international trade is critical, given that the buyer will likely pay for the goods before receiving them.

Experts stress the need for exporters to understand the market they want to play in. Realities often confront exporters when they get to new markets to discover that their textbook information or knowledge is different from reality.

ODINAKA ANUDU

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igerian farme r s a re i n creasingly smiling to the bank as manufacturers increasingly source more raw materials from them, thereby reducing a huge import bill.

A number of manufacturers now see farmers as their major sources of raw materials.

Nigerian Breweries is substituting barley for sorghum sourced locally from an agriculture-based firm called Psaltery Nigeria Limited.

More than 250,000 farmers spread across several agronomic zones in the North are directly or indirectly involved planting sorghum for the country’s biggest brewer, BusinessDay understands.

Jordi Borrut Bel, managing director of NB, said recently in Lagos that the brewer would raise this from 50 to 60 percent.

“We optimise the cassava value chain in the country by providing industrial quality cassava starch to extract maltose syrup for use in NB’s brewing process,” said Oluyemisi Iranloye, MD/CEO of Psaltery, at a recent visit.

She added that the firm has created a supply chain involving up to 5,000 farm families, which included

more than 2,000 registered and unregistered out grower farm families, marketers, transporters and retail input suppliers.

Nestlé Nigeria is sourcing 80 percent of its maize, sorghum, millet, soya, cassava starh, cocoa powder, palm olein from more than 41, 600 local farmers and processors scattered across the country.

Nestlé Cereals Plan project has over 30,000 farmers who supply 100 percent

of the grain requirement for Golden Morn Maize.

Through its Sorghum and Millet in the Sahel (SMS) project, now called Nestlé Nigeria & IFDC / 2Scale Project Sorghum & Millet, the food and beverage giant has engaged up to 10,671 farmers.

“The Industry has huge needs and we must help farmers improve their yields to meet them. To achieve real success with connecting farmers to industry, a

Improving Nigerian export sector

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he Nigerian export sector is bedevilled by a number of woes. It is a well-known fact that power cost in Nigeria occupies 40 percent of the entire expenditure in agro and manufacturing value chain.

Annual self-generating capacity in the manufacturing sector is 13,223 megawatts. Expenditure on alternative energy in the sector totalled N117.38 billion in 2017 and N129.95 billion in 2016, the Manufacturers Association of Nigeria (MAN) said. The only reliable railway in Nigeria at the moment is Abuja-Kaduna, and broadband penetration is just 30 percent.

These are not good signs

for struggling manufacturers. But beside this, some of the problems are selfinflicted or caused by other internal factors.

For example, a Nigerian businessman exported cans of 35cl malt drink numbering into hundreds of thousands to Kenya. The products were on display in the East African country until they caught the attention of the Kenya Bureau of Standards (KEBS), which subjected them to measurement tests. The products were subsequently found to be 32cl, rather than 35cl. The KEBS withdrew them from the Kenyan market, banning the malt drink—including its supplier—from the country for good.

Also, some Nigerian exporters have been victims of fraudulent freight forwarders who inserted banned substances into their containers during product re-packaging process. There have also been cases where products stayed on containers for one month because the exporter could not get certification from regulatory agencies, exporters say.

The state of Apapa roads and Nigerian ports are also big hiccups.

“Nigerian exporters thank God whenever they are paid at all for their products. This is because products from Nigeria are always downgraded,” Fred Uwheraka, CEO of Frijay Consult Limited, an export firm, said at

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EFG-Hermes targets slot in Nigeria investment banking

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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

NAICOM bar insurers in states where they don’t have branches …to increase offices across Nigeria to 19 Modestus Anaesoronye

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etermined to ensure increased consumer access to insurance services and in line with its market development initiative efforts to deepen penetration, the National Insurance Commission (NAICOM) says it will no longer allow insurers to do business in states where they do not have branch offices beginning from next year.

Consequently, NAICOM is opening before the end of the year 14 new branch offices across the country to add to its existing five regional office making 19.

This is to enable us increase insurance awareness in the grassroots, work closely with the state governments on enforcement of compulsory insurances and also deepen our supervisory roles, Mohammed Kari, commissioner

for Insurance/CEO of the NAICOM said.

Kari who spoke at the 2018 Insurance Industry Professional Forum held in Abeokuta, Ogun State said the commission more than ever before is ready to enforce compulsory insurance by collaborating with the state governments.

“We are going to enable the states earn IGR from insurance services, so that they can work with us to enforce compulsory insurance”.

“Part of the selling point is the fact that it is going to enhance employment initiatives in the states as well as improve their Internally Generated Revenue (IGR) within the law.”

On insurance companies without branch offices in states, Kari said “Even if you are owned by that state government, you will not do business there if you don’t have branch in that state.

We will ensure this happens, Kari stated.

“As a regulator, while

L-R: Olanrewaju Jaiyeola, managing director ; Oba Otudeko, chairman; Yemisi Busari, company secretary, and Obafemi Otudeko, executive director, all of Honeywell Group, during the 9th annual general meeting of the company in Lagos yesterday.

Pic by Pius Okeosisi

we will be transparent in our dealings with the operators, we expect that the operators will be sincere in their dealings. While we

Credit Direct reassures innovation, excellent services

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redit Direct Limited (CDL), a member of FCMB Group Plc and a market leader in the provision of unsecured consumer loans to individuals has again raised the standards in customer experience and employees’ engagement by commissioning its state-of-the-art new head office.

Ladi Balogun, chairman of the Company said during the event “this edifice is another milestone in the history of Credit Direct. It is a reaffirmation of our commitment to raise the bar in the manner in which we operate and the kind of environment in which we provide services. We are excited that within 10 years of the establishment of Credit Direct, the company has added significant value to Nigerians and the country in general’’.

Balogun, who is also the group chief executive of FCMB Group Plc, assured that FCMB Group will continue to invest in projects and initiatives that would develop entrepreneurship. Akinwande Ademosu, managing director of Credit Direct, said, ‘’our story changed the face of the financial services sector, the people we are servicing

today are those not well served (underserved) and unserved by the conventional financial services sector. We believe so much in the future that has been created – from just giving out loans to giving our customers peace of mind’’.

He added that with its wide national reach, robust financial strength, top of the range proprietary technology and dedicated workforce, Credit Direct has translated its offerings into making real positive impacts on the lives of many Nigerians across different socio-economic strata in line with its vision to be the preferred financial services partner in Nigeria and beyond.

As the Company embarks on this new phase of development, its growing variety of innovative products and services are focused on creating exceptional customer experience among its ever-evolving customer base. The pursuit of excellence and commitment to delivering best in class service, even while the firm is domiciled in Nigeria, her product offerings and standard of service delivery are seen to be at par and appealing to any discerning customer

as well as investors, anywhere in the world.

Credit Direct Limited has therefore put together the components for sustainable growth and profitability. The formal inauguration of the new ultramodern corporate headquarters is another indication of the Company’s resolve to remain the preferred partner in her market space while positioning the company for both local and international growth.

Credit Direct Limited, established over 10 years ago, is a non-bank financial services company with operation in 25 States across Nigeria including the Federal Capital Territory– Abuja. The Company which has a staff strength of over 1,000 employees has given out over 1.5million loans worth over N150 billion since it began operations. With an active customer base of over 200,000 individuals in the public and private sectors, Credit Direct is poised to continue leading the Market with its innovative offerings and excellent customer experience, as attested to by its teeming customers.

will be reasonable in our developmental efforts, the operators must be responsible.

According to the Commis-

sion the insurance industry growth drivers include active and informed consumers; technology and low barriers to entry; products specializa-

tion; diversified insurance products; professionalism in service provision and regulatory coordination in compliance with best practice.

Fidelity Pension engages customers for feedback

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idelity Pension Managers Limited has created a forum to enable its customers bring feedback on their experience and challenges with the pension scheme for improved services.

At a recent forum organized for customers and Pension desk officers held in Abuja, the participants were sensitized on updates in the pension industry as well as to discuss and proffer solutions to challenges they face in their day to day activities with Fidelity Pension.

The event brought together Pension desk officers from the public and private sector, participants from Ministries, Departments and Agencies (MDAs) as well as representatives from the National Pension Commission (PenCom).

The occasion was kicked

off with an opening remark from the Amaka Andy-Azike, managing director/CEO of Fidelity Pension during her opening remark welcomed participants and recognized the importance of Pension Desk Officers in relationship management in the pension industry.

The forum, which was largely interactive, included a feedback segment were

comments were made and answers were proffered to numerous questions. Participants were delighted with the program and suggested that it should become a yearly event.

Fidelity Pension Managers is one of the most dynamic Pension Fund Administrators in Nigeria, with an everincreasing network of offices across Nigeria.

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EFG-Hermes targets slot in Nigeria’s investment banking Sobechukwu Eze & Oghogho Edosomwan

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FG-Hermes Holding, an Egyptian financial services company is looking at applying for an investment banking license in Nigeria, from which it intends to expand its business in West Africa after completing acquisition of brokerage and research firm, Primera Africa Securities Ltd in four weeks.

The company wants to use Nigeria as a regional hub to support clients in countries including Ghana and Ivory Coast, Ali Khalpey, chief executive officer of EFG-Hermes’ frontier unit, in an interview with Bloomberg said, “The Nigerian license marks the next phase of growth for the firm seeking to grow in undeveloped markets across Africa and Asia.”

EFG-Her mes bought Primera Africa in July, its second foray into sub-Saharan Africa after obtain-

ing a Kenyan stockbroking license in July 2017 that enables it to extend its operations to Tanzania, Uganda and Rwanda.

“The company’s investment-banking advisory business is targeting multinationals and big local companies as customers,” Kalpey said.

It hopes to conclude the acquisition of Primera in the next four weeks, subject to regulatory approvals and the Lagos-based brokerage firm fulfilling some conditions.

“The company would employ Nigerians in the fields of research, trading and investment banking to establish a strong platform and manage growing volumes of business from the region.”

“We’re very excited about where Nigeria will go. There will be speed bumps along the way but it is a very exciting capital market for us. While investor sentiment toward Nigeria and other emerging and frontier markets has soured in the face of higher U.S. interest rates and uncertainty over a global trade war, many assets remain attractive

L-R: Esther Icha, CSR manager, Seplat; Lucky Obiuwevbi, western assets base manager, Seplat; Lambert Shumbusho, associate general counsel, Seplat; Harriet Ogunbor, safe motherhood beneficiary; Yemisi Lawal of the NPDC; Effiong Okon, operations director, Seplat; Chris Obaseki, representative of the Edo State commissioner of health and director of hospitals services/chief executive, Edo State Hospitals Management Board, and Chioma Nwachuku, general manager, external affairs and communications, Seplat, at the commissioning of the renovated Oben Cottage Hospital in Edo State.

and the mood could change.

“Confidence in Nigeria was further dented by the dispute with wireless carrier MTN Group Ltd., which was

SIFAX Group, partners Bayelsa State on aviation, maritime development AMAKA ANAGOR-EWUZIE

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h e Baye l s a St at e government and the SIFAX Group are perfecting plans to collaboratively develop the state’s aviation and maritime potentials.

This was the outcome of the working visit of the top management team of the Bayelsa Investment Promotion Agency (BIPA) led by Patience RanamiAbah, its director general and Godwin Konyefa, managing director of Bayelsa Properties & Investment Company to SIFAX Group.

The team toured facilities of the company’s subsidiaries at Skyway Aviation Handling Company Limited (SAHCOL), Ports & Cargo Handling Services Limited, SIFAX Off Dock Nigeria Limited and SIFAX Haulage and Logistics Limited.

Patience RanamiAbah said the aim of the visit was to collaborate with SIFAX Group in the development of the huge business potentials in the state, adding that the SAHCOL’s team had earlier visited the state to inspect its

new cargo airport.

“After the visit of SAHCOL team to Bayelsa, we were invited to take a firsthand tour of the facilities of the company. Before the cargo airport begins operations, we want to get things right. With our visit today, we are marveled at the excellent business operations of the company. We do not want to build any kind of warehouse neither indulge in any shady operations of the airport, we want SIFAX Group to come with their technical expertise in the development of Bayelsa State,” she said.

On his own part, Godwin Konyefa, who expressed satisfaction with the facilities and operations of SIFAX Group, commended the company for its level of investment and expertise, which he said, would be beneficial to Bayelsa state.

“After the tour of SAHCOL, we found out that the right partner we have been looking for is SIFAX Group. They have all it takes to develop the newly-built Bayelsa Airport.

We also want to engage them in the development of the deep seaport located in Agge.

The seaport with a natural draft of 13 meters, is aimed at boosting business activities in the state,” he said.

According to him, the state is challenged at the homegrown logistics solutions that SIFAX Group has in its arsenal.

“We are engaging the company in varied business options that will be mutually benefitting to both the government and the company.”

Ezekiel Ajewole, executive director and senior special assistant to Taiwo Afolabi, Group executive vice chairman, SIFAX Group thanked the team for deeming it fit to choose SIFAX Group as a business partner in the development plan of the state.

He assured that the company’s business model and vision are well aligned with that of the state and noted that the people of Bayelsa will be happy to have SIFAX Group on board.

Mike Owope, executive director, Finance, assured the team that SIFAX Group had the wherewithal to boost the development of Bayelsa with innovative business solutions tailored towards the development of the state.

accused by the central bank of illegally repatriating $8.1 billion out of the country and a separate claim for back taxes of $2 billion.

The stock market, down more than 15 percent this year, could rebound after elections planned for the first quarter. The yields on

Nigerian Treasury bills also need to come down to spur more investors into equities.” Khalpey added.

The Cairo-based company sees opportunities for investors in Nigeria’s consumer goods industries and banks as the economy recovered from a 2016 contraction, Its top three picks in the nation’s banks are First Bank Holdings, Zenith Bank and Guaranty Trust Bank based on their management teams, balance sheet and capital strength.

EFG Hermes was founded in 1984, and currently operates in the United Arab Emirates, Saudi Arabia, Jordan, Kuwait, Omar, and Pakistan.

The company has 880 staff and manages $2.4 billion worth of assets.

Results for the half year ended June 2018 show revenue increased by 14 percent from 2.2 billion EGP to 2.5 billion EGP. However, its Profit after tax fell from 765 million EGP to 479 million EGP, a decrease of 37 percent when compared to the same period last year.

Access Bank, others urge for gender equality in business institutions HOPE MOSES-ASHIKE

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ccess Bank plc has called on the manufacturing sector alongside other sectors of the economy to embrace gender equality.

Herbert Wigwe, group managing director/CEO, made the call at the Nigerian Sustainable Banking Principle (NSBP) Gender Empowerment Session organised by Access Bank in Lagos.

“Institutions have to think of ways to support female gender. I will urge you all, let us get people in manufacturing, other fields to basically embrace what is good for the entire world, which is gender equality”, Wigwe said while welcoming participants.

The Central Bank of Nigeria (CBN) and the bankers committee had, 12 years ago, adopted the NSBP aimed at integrating environmental and social policies into decision making processes in deposit money banks and other financial institutions.

Wigwe was concerned that

since the adoption of the NSBP, there are still several institutions that have not attained the level of compliance that expected particular as it pertains to gender equality.

“We are to ensure that we place women where they truly should be, for me, it is something that we will extremely be glad to have”, Wigwe added.

Speaking at the forum, Chizoba Mojekwu, director, human resources department, CBN, said organisations are still largely patriarchal and regulations are not working. “That is what we know because if regulations were working, there is a regulation of a minimum of 30 percent on the board why is it not happening in some organisations”, Mojekwu queried.

“So my view is that we are dealing with a major transformational issue more than a technical challenge and that is an adaptive challenge.”

“We should also talk about hiring blind people and people with auditory and physically challenged so it is important we drive conversations that are holding women back

in organisations, she added.”

Ibukun Awosika, chairman, board of directors, First Bank of Nigeria Limited, who also spoke at the forum said it is really about understanding and educating the populace, the workforce and the leaders in the different environment and then being deliberate about creating an enabling environment not just by words but by actions in real terms.

“It is possible for girls to work from home as long as they can deliver value. While doing this they are encouraging family support and organisational support and as a country, being deliberate in understanding that helping our women find space to express themselves and their values is also creating margin for us as a country”, Awosika said.

Bolaji Agbede, head, human resources, Access Bank, said it is important to create enabling environment for women to be recruited, retained and promoted in the workplace or as entrepreneurs or as leaders in the financial sector.

Monday 24 September 2018

BUSINESS

COMPANIES & MARKETS

DAY

25

Business Event

TE SubCom to extend MainOne cable system to francophone region

T

E Connectivity Ltd, company and an industry pioneer in undersea communications technology has announced that it has secured a contract from leading connectivity and data center solutions provider, MainOne to extend its active submarine cable system into West Africa’s francophone region with two additional branches connecting Senegal (Dakar) and Cote D’Ivoire (Abidjan).

T h e s e n e w b ra n c h e s will connect to MainOne’s 7,000km cable system, which extends from Portugal to Nigeria, and will inject new technology that upgrades the system to a potential capacity of 10TBps by November 2019 when the subsea system becomes operational.

With this development, MainOne will have landing points in five markets – Nigeria, Ghana, Senegal, Cote D’Ivoire and Portugal, in addition to Cameroon. A cluster of francophone countries in West Africa that are experiencing an increased demand for

advanced telecom services including Burkina Faso, Mali, and Mauritania will also benefit from these extensions into Cote D’Ivoire and Senegal.

“MainOne continues to lead the current digital transformation of the region by ushering in affordable connectivity to drive economic development. Our objective remains focused on bridging the digital divide between West Africa and the rest of the world. We have, and will continue to, invest significantly in projects to accelerate broadband access to help local businesses address the challenges they face procuring capacity at competitive rates.

This extension of our subsea cable to Senegal and Cote D’Ivoire will further open up their international bandwidth markets, drive down costs and ultimately boost the economic and commercial development of the region,” said Kazeem Oladepo, MainOne’s regional executive for West Africa.

“These MainOne enhancements bring two additional connectivity options to this rapidly growing region,”

said Debbie Brask, vice president, project management of TE SubCom. “MainOne has also selected SubCom’s industry leading WSS ROADM technology to achieve dynamic capacity management in fulfilling the region’s burgeoning demand.”

The new branches will be equipped with TE SubCom’s WSS ROADM technology that allows MainOne and its partners to match the capacity in each branch to the market need, thus optimizing cable utilization. SubCom will light the new branches with Ciena’s transmission equipment, which enables this flexibility and higher capacity.

It is also an industry first for the deployment of undersea spectrum-sharing in Africa.

The MainOne Submarine Cable System links West Africa with Europe, bringing ultra-fast broadband in the region. It runs from Seixal in Portugal to Lagos in Nigeria.

The system first went live in July 2010, becoming the first privately-owned subsea cable to bring open-access broadband capacity in West Africa.

L-R: Bello Azeez, chief audit executive, FBNQuest Merchant Bank; Yinka Tiamiyu, chairman, Association of Chief Audit Executives of Bank in Nigeria (ACAEBIN); Funke Feyisitan Ladimeji, head, technology & operations, FBNQuest Merchant Bank; and Uduak N. Udoh, 1st vice chairman, ACAEBIN, at the 40th quarterly general meeting of the Association of Chief Audit Executives of Bank in Nigeria hosted by FBNQuest Merchant Bank.

L-R: Samuel Asiyanbola , manager, technology advisory, KPMG; Ochanya Dan-Ugo, chief risk officer, Unified Payments; David Isiavwe, chief audit executive ,Union Bank of Nigeria Plc ; Bharat Soni, chief information security officer, GTB, and Tokunbo Martins , director, other financial institutions ,CBN, at the KPMG’s Cyber Security Roundtable in Lagos.

Pic by Pius Okeosisi

C. Woermann links business success to quality standards SEYI JOHN SALAU

C

.Woermann (Nigeria) Ltd has restated its commitment to always provide genuine and reliable products to its customers as it marks its 50 years of business operation in Nigeria.

Over the past five decades, the company has provided support for Nigerian businesses by supplying technical equipment and services to support the automobile industry in Nigeria.

Founded in 1968, C. Woermann (Nigeria) Ltd. A technical supply and service company, provides Nigerian businesses and dealerships with high quality technical equipment by well-known German, European and international manufacturers such as Stihl, Liqui Moly, Makita, Mann filters, Deutz, and Beta tools.

Klaus Okunowski, manag-

ing director of C.Woermann Nigeria said the company’s business existence in Nigeria was sustained by suppliers, loyal customers and dedicated employees.

“As a company, we are proud to have achieved significant successes in Nigeria since 1968 even in light of the several ups and downs in the economy. We have consistently provided Nigerian businesses and dealers with high quality technical equipment from reputable international equipment manufacturing companies across Europe,” said Okunowski.

According to him, C. Woermann Nigeria renders after sales service workshop that has been supportive to its customers, “… training center where we train staff of our clients on how best to use our products.” Okunowski said.

Okunowski attributed the sustained success of the company to the company’s

policy of supplying only quality and genuine products.

“The support of our suppliers around the world, the unflinching loyalty of our clientele nationwide and the commitment of our hardworking staff has kept us going, helping us achieve all the milestones that we have recorded in spite of the challenges,” he concludes.

Dennis Kannan, head automotive department, C.Woermann Nigeria, said the company will continue to make relevant improvements, while providing solution-driven equipment and services for its clients.

“As we reflect on our successes, we intend to constantly rethink our processes, systems and approaches in line with trends in technological advancement globally. We are open to opportunities that will constantly and continuously add value to our customers for their social and economic development,” said Kannan.

L-R: Temitope Oguntokun, head, sustainability and brand, Lafarge Africa Plc; Adeola Awogbenu, executive director, Ovie Brume Foundation; Bunmi Oteju, director, SUBEB Lagos State, and Folashade Ambrose-Medebem, director communication public affairs, sustainability and development, Lafarge Africa plc, at the press conference to announce the 5th national literacy competition in Lagos.

Pic by Olawale Amoo

L-R: Nike Olobayo, human resources/administration manager, C.Woermann Nigeria Limited; Klaus Okunoski, managing director; Dettev Woermann, director, and Segun Olaniyi, financial controller, during a media briefing to mark the company 50th golden jubilee, in Lagos.

26

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This is M NEY A daily guide to your Personal Finance

Monday 24 September 2018

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

Are you 58 with no savings?

N

igeria celebrates 58 years of independence next week.

Sadly, we have not met our own expectations as a nation or attained the financial stability and security that we desire.

What does 58 mean to you? Are you 58 with little in the way of savings and investments? Can you see where 30 or more years of life can be funded? Will your children be willing and able to support the lifestyle you have grown accustomed to? Sadly, many people approaching the traditional retirement age cannot afford to retire.

There is no magic wand to wave and wish away the problem. Time is a fundamental part of successful investing and you have lost time. However, all is not lost; the good news is that there are concrete steps that you can take to help you along the journey to financial security. Here are some tips for late-starters: Spend less than you earn If you’ve been living a lifestyle dependent on that fat check that keeps coming in month after month, you will have to exercise the willpower to make the transition successfully.

Set aside the retirement calculator; it can make you despair as it shows you just how far behind you are. Instead, track your expenses to see where you are overspending and begin to cut back on things you don’t

need. The real key to financial security is to spend less than you earn.

Keep working It may be that the numbers simply don’t add up.

If you are physically able to keep working, then there is nothing wrong with doing so. The traditional retirement age of 55 or 60 is for many “retirees” the start of a new and fulfilling phase in a new career or business.

A few more years of earning well into your sixties and beyond can make a huge difference to your nest egg. It gives you time to accumulate and invest additional funds for retirement. If you aren’t able to work full time, a part time job or an at-home side business can help

to stretch long-term finances. The ultimate aim should be to work because you want to, and not because you have to. There is another benefit; there is a study that found, that people who worked longer, lived longer!

Can you generate additional income?

Explore opportunities that can supplement your main income. What do you love to do that you are very good at? You have worked for decades; you have skills and talents, some that you have never used or leveraged on.

Perhaps you headed HR or accounts at a major conglomerate; you enjoyed world-class best practice training and have deep knowledge and experience. You should be able to use these skills on a consulting basis in your own time and on your own terms.

Have you thought of downsizing?

Must you still live in an expansive, expensive house even when all your children have left home, or can you let out some space?

Can you sell your large home and buy something smaller to free up cash?

You may also release equity from your property, but remember that there is still interest to pay; if you default you could lose your home.

Can you relocate to an idyllic, calmer city that has lower living costs?

We have all accumulated far too much stuff.

To extract extra cash con-

sider selling some of your possessions that you don’t need and don’t ever use.

Be careful of consumer debt If yu are dependent on your credit card to buy consumables and regularly carry forward a balance, then you are only enriching the financial institutions and digging a hole in your nest egg. Plan to rid yourself of or at least reduce your high interest debt and free up your money to start to work for you.

Pay yourself first Prioritize saving before you pay your bills; it is a powerful saving habit.

Your pension cannot keep you in comfort so try to automate additional savings to grow your nest egg. Remember, though, that you cannot achieve much by just putting all your money in savings; it just won’t be enough.

Generate passive income Give more focus to investing in assets that can appreciate in value and generate passive income.

Property is one of the most dependable assets. When carefully selected and acquired with professional guidance, it is a great source of passive rental income.

The stock market has a good long-term track record, and many successful investors have built significant wealth earning regular income from dividends.

Here is a word of caution about desperately trying to play catch up. Investing aggressively to earn higher

Focus on preventive care measures including regular exercise, rest, a healthy diet and your annual medical check up to keep festering problems from becoming chronic gains may seem like a reasonable strategy, but be careful. At this stage you must protect yourself from the significant losses that the stock market inevitably suffers from time to time.

Don’t put all your eggs in one basket; focus on saving and investing in a diversified portfolio and maintaining a reasonable balance between growth and safety in your retirement portfolio.

Peer pressure exists even in your 50’s and beyond.

Even this far into life, there is peer pressure. You see your contemporaries living well in comfort and wealth and look at yourself wondering what went wrong. Don’t dwell on it; stay focused on your goals; you don’t know their story.

If you try to keep up and over-extend yourself by living in a neighborhood that you cannot afford because you lived there when you were a company director, you will go broke.

Perhaps your company paid for First Class tickets for international travel for you. That was your company; this is you approaching retirement. You can still afford to go on holiday but don’t spend excessively unless you have built assets that can fund it.

In an intensely materialistic society like ours, many feel pressured to dip into their meager retirement funds just to keep up appearances. This is one of the surest and quickest ways to financial ruin. You cannot afford this in your later years.

Pay attention to your health Healthcare is a very expensive part of life, and even more so as we age. Be

conscious of taking care of your physical and mental health. Focus on preventive care measures including regular exercise, rest, a healthy diet and your annual medical check up to keep festering problems from becoming chronic.

Don’t neglect your insurance; ideally this should have been in place for decades but there are plans available even if you are just starting.

Seek professional advice Whilst you must ultimately take responsibility for your financial future, a financial advisor will review your specific situation, taking into account your risk tolerance, financial status, your goals and your family situation, and help you develop an appropriate plan.

Stay positive As you go through life, there will inevitably be challenging times and you must be prepared to adjust your lifestyle and spending habits as appropriate to make up for the lost years of saving and investing.

Lamenting the past, paralyses you and you don’t have any more time to waste. You may have close to a third of life to go so you do need to start taking action right away to achieve the financial security that you deserve.

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.

For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 24 September 2018

C002D5556

BUSINESS DAY

27

Access Bank Rateswatch Market Analysis and Outlook: September 21 - September 28, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.50

Q2 2018 — lower by 0.45% compared to 1.95% in Q1 2018

Broad Money Supply (M2) (N’ trillion)

24.97

Increased by 0.63% in July 2018 from N24.81 trillion in June’ 2018

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion) Inflation rate (%) (y-o-y) Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor) External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

22.26 1.82 11.23 14 14 (+2/-5) 44.94 76.44 1.67

Decreased by 0.09% in July 2018 from N22.28 trillion in June’ 2018 Decreased by 3.99% in July 2018 from N1.90 trillion in June’ 2018 Increased to 11.23% in August’ 2018 from 11.14% in July’ 2018 Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9% September 19, 2018 figure — a decrease of 1.50% from September start September 21, 2018 figure— an increase of 2.33% from the prior week July 2018 figure — an increase of 4% from June 2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr)

Friday

Friday

21/09/18

14/09/18

32,540.17 11.88

32,248.78 11.77

Volume (bn)

0.52

0.21

Value (N’bn)

10.58

3.80

MONEY MARKET NIBOR Tenor

Global In the UK, inflation rates rose to 2.7% in August 2018 from 2.5% in July. The Office of the National Statistics reported that it is the highest rate of inflation seen in the past six months and was majorly driven by the rise in the prices of transport, recreation, culture and food & alcoholic beverages. Month-on-month inflation rate also edged upwards to 0.7% from 0.4% in July. Annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, increased to 2.1% in August, from 1.9% in the preceding month. Elsewhere in Japan, the Statistics Bureau of Japan reported that consumer price index climbed to 1.3% year-on-year in August 2018 from 0.9% in July.

It is the highest rate seen since February and came on the back of higher prices seen in food and cost of transportation. Core inflation rate, which excludes fresh food, climbed to 0.9% from 0.8% in the previous two months. In a separate development, the Central Bank of Brazil left its key interest rate unchanged at th 6.5% on 19 September 2018. It however hinted at gradually raising rates if the outlook worsens, mentioning how the upcoming presidential vote is weighing on the monetary policy. The bank also said in its policy statement that “Stimulus will begin to be removed gradually if the outlook for inflation at the relevant horizon for the conduct of monetary policy and/or its balance of risks worsen.”

Friday Rate

Friday Rate

(%)

(%)

21/09/18

14/09/18

Change(%)

Indicators

21/09/18

Energy 0.90 Crude Oil $/bbl) 0.90 Natural Gas ($/MMBtu) Agriculture 145.85 Cocoa ($/MT) Coffee ($/lb.)

178.40 Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Change Silver ($/t oz.)

(Basis Point) Copper ($/lb.)

1-week Change

YTD Change

(%)

(%)

78.22 2.95

2.33 4.98

21.35 (3.47)

2202.00 99.80 78.22 11.71 521.50

(4.55) (0.60) (4.07) (3.54) 4.09

13.74 (23.35) 0.93 (23.61) 20.30

1205.49 14.35 278.85

(0.05) 0.91 4.18

(8.51) (16.52) (14.93)

4.0000

10.3300

(633)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

4.7500 5.0000 11.8826

11.0800 11.7500 15.0134

(633) (675) (313)

Tenor

90 Days

13.6165

15.2241

(161)

1 Mnth 3 Mnths

11.02 0.00

13.90 0.00

(288) 0

6 Mnths 9 Mnths 12 Mnths

12.97 13.36 14.55

13.86 14.12 14.67

(89) (77) (13)

OBB

FOREIGN EXCHANGE MARKET Market

Friday

Friday

1 Month

(N/$)

(N/$)

Rate (N/$)

14/09/18

21/08/18

21/09/18 Official (N) Inter-Bank (N)

306.30 360.37

306.25 359.40

306.10 354.12

BDC (N) Parallel (N)

362.50 361.00

362.00 361.00

361.00 360.00

Friday

Change

(%)

(%)

(Basis Point)

21/09/18

14/09/18

3-Year 5-Year

0.00 14.75

0.00 15.24

0 (49)

7-Year 10-Year 20-Year

15.16 15.00 15.36

15.23 15.19 15.45

(7) (19) (8)

Indicators

Index

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

(Basis Point)

14/09/18

Friday

Friday

Change

(%)

(%)

(Basis Point)

21/09/18

14/09/18

2,619.89

2,606.36

0.52

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr)

8.47 5.33

8.42 5.30

0.52 0.55

YTD return (%) YTD return (%)(US $)

6.65 -48.83

6.10 -49.35

0.55 0.52

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

91 Day

6217.066

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Change

(%)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

AVERAGE YIELDS Friday

Friday

(%) 21/09/18

BOND MARKET Tenor

Friday

Rate (%) 11

Date 12-Sept-2018

182 Day

4002.523

12.3

12-Sept-2018

364 Day

126085.442

13.5

12-Sept-2018

Domestic Recently published data by the National Bureau of Statistics (NBS) indicates that Nigeria's foreign debt stood at $22.08 billion, while the domestic debt portfolio was recorded at N15.63 trillion at the end of the first half of 2018. The NBS in its report on Nigerian Domestic and Foreign Debt (Q2 2018), showed that $10.88 billion was multilateral; $274.98 million was bilateral (AFD) and another $2.12 billion bilateral from the Exim Bank of China, JICA, India and KFW, while $8.80 billion was commercial. According to the report, Lagos state has the highest foreign debt profile among the thirty-six states and the FCT accounting for 34.17% while Edo (6.57%), Kaduna (5.48%), Cross River (4.56%) and Bauchi (3.18%) followed closely. Similarly, a breakdown of the total domestic debt portfolio of states shows that Lagos State also tops other states, accounting for 14.88%, while Anambra had the least debt in the category with a share of 0.08%. In another development, the foreign trade report by the NBS revealed that the total value of Nigeria's merchandise trade was N6.5bn in the second quarter of 2018. This was an 8.89% decline from the figure recorded in Q1'2018 (N7.21bn) and a 14.56% (N5.73bn) growth from Q2'2017. The decline in trade was as a result of contraction in both imports and exports in the quarter under review. Total Imports value was N2.11trn in Q2'2018, -16.3% lower than Q1'2018 (N2.52 trn) and - 19.9%% lower than Q1'2017 (N2.63trn). Total export value amounted to N4.46 trn in Q2'2018, representing a decline of -4.9% over Q1'2018 (N4.69trn) and a growth of 43.8% over Q2'2017 (N3.10trn). The trade balance in Q2'2018 was a surplus of N2.36trn, which is an 8.36% increase from the figure in Q1'2018 (N2.17trn) and a 399.82% increase from the figure in Q1'2017 (N471.48 bn). Major export trading partners for the quarter were India (16.19%), Netherlands (10.25%), Spain (9.55%), South Africa (8.06%), and U.S.A (6.87%). While top import trading partners were China (25.28%), Netherlands (8.59%), Belgium (8.11%), India (6.88%), and U.S.A (6.72%).

Stock Market The losing streak on the Nigerian Stock Exchange, NSE, was halted last week as the bulls dominated on the bourse. At the close of

trading last week, the All share Index, ASI, appreciated by 0.9% to 32540.17 points from 32248.78 points a week prior. Similarly, Market Capitalization rose by 0.9% to N11.88 trillion from N11.77 trillion the previous week. The turnaround was largely driven by bargain hunting in bellwether counters. This week we anticipate a continuation of buying sentiment.

Money Market Market rates moderated last week as liquidity was boosted due to inflow from Paris Club refund of about N450 billion and Open Market Operations (OMO) maturity of N345 billion.

Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates declined to 4% and 4.75% from 10.33% and 11.08% respectively the previous week. Longer dated placements did likewise as the Call, 30-day and 90-day NIBOR closed lower at 5%, 11.88% and 13.62% from 11.75%, 15.01% and 15.22% the previous week. This week, liquidity is expected to remain buoyant as a result of expected Retail Secondary Market Intervention Sales (SMIS) refund and OMO maturity of N260 billion.

Foreign Exchange Market Last week, the naira exchange rate to the dollar remained stable at the parallel market at N361/$. In contrast, at interbank window and the official market, the naira depreciated slightly by 0.27% and 0.02% respectively to close at N360.37/$ and N306.30/$ from N359.40/$ and N306.25/$ in that order, despite the apex bank's foreign currency liquidity injection during the week. This week, the naira is expected to remain around current levels due to the apex bank's consistent market interventions.

Bond Market Average bond yields declined in the week ended September 21, 2018. This was majorly due to increased customer demand, supported by reinvestment of coupons on existing bond. Yields on the five-, seven-, ten- and twenty-year debt papers settled lower at 14.75%, 15.16%, 15.00% and 15.36% from 15.24%, 15.23%, 15.19% and 15.45% respectively the previous week. The Access Bank Bond index rose by 13.53 points to close at 2619.89 points from 2606.36 points the previous week. This week bond yield direction will be determined the outcome of CBN Monetary Policy Committee meeting and Bond Auction expected to hold this week.

Commodities Oil prices climbed last week after a US government report revealed a weekly fall in crude supplies, the fifth weekly decline in a row.

Accordingly, Nigeria's benchmark crude, Bonny light, rose $1.78 or 2.3% to $78.22 per barrel.

Meanwhile, precious metals prices were skittish as the market digested emerging geopolitical developments and economic data.

Gold dropped 0.05% to $1205.49 an ounce, while Silver on the other hand rose 0.9% to $14.35 an ounce. This week, oil prices are likely to find support from expectations for further declines in exports from Iran, ahead of the implementation of U.S. oil sanctions on the country in November. For precious metals, prices will be influenced by outcome of the US Fed Federal Open Market Committee two-day meeting set to conclude on September 26.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Sept’18 Oct’18

Nov’18

Exchange Rate (Official) (N/$)

360

361

361

Inflation Rate (%)

11.30

11.32

11.45

Crude Oil Price (US$/Barrel)

76.75

77.00

78.00

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

28

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Monday 24 September 2018

PHOTOSPLASH Impact Investing Alliance of Nigeria Awards and Dinner in Lagos Picture by Olawale Amoo

L-R: Roy Swan, director, mission investments, Ford Foundation; Eva Kouka, program officer, and Xavier De Souza Briggs, vice president/inclusive economies and markets.

R-L: Ifeoma Malo, CEO, Clean Technology Hub; Innocent Chukwuma, regional West Africa, Ford Foundation; Nneka Eze, partner/Nigeria country director, Dalberg, Kofi Appenteng, chair of the board, Ford Foundation.

Adeyemi Dipeolu, special adviser to the president on economic matters, office of the vice president (l), Yemi Cardoso.

Uwa Osa-Oboh, head, corporate development, African Capital Alliance (l), with Afolabi Oladele, executive director.

Frank Aigbogun, publisher/CEO, BusinessDay, presenting IIAN impact investor of the year award to Donna Etiebet, head, corporate finance, Babban Gana.

Uwa Osa-Oboh, head, corporate development, African Capital Alliance, presenting IIAN impact investor of the year award to Tokunboh Ishmael, managing director/co-founder, Alitheia Capital.

Adesuwa Ighile; Joy Ehinor, both are Ford Foundation, and Wana Wana.

L-R: Afolabi Oladele, executive director, African Capital Alliance; Femi Ajibola, MD/CEO, New Nigeria Foundation, and Layide Adesanya, deputy director, New Nigeria Foundation.

Monday 24 September 2018

C002D5556

BUSINESS DAY

29

PHOTOSPLASH 2018 Impact Investing Alliance of Nigeria convening, with the theme, ‘Accelerating Impact Investing in Nigeria: Lessons and Opportunities’ in Lagos Picture by Olawale Amoo

Innocent Chukwuma, regional director West Africa, Ford Foundation, giving his welcome address.

Adeyemi Dipeolu, special adviser to the president on economic matters, office of the vice president, representing Vice President Yemi Osinbajo, giving his opening remark.

Okechukwu Enelamah, minister, industry, trade, and investment, giving his keynote address.

L-R: Afolabi Oladele, executive partner, African Capital Alliance; Henrietta Onwuegbuzie, project director, Impact Investing Policy Intiative, Lagos Business School; Dick Kramer, chairman, African Capital Alliance, and Toyin Adegbite-Moore, executive director, West Africa Region, African Venture Philanthropy Alliance.

L-R: Frank Aigbogun, publisher/CEO, BusinessDay; Akintunde Oyebode, CEO, Lagos State Employment Trust Fund (LSETF); Toyin Adeniji, executive director, micro enterprises, Bank of Industry; Abdu Muktar, director, industrial and trade development, African Development Bank, and Tokunboh Ishmael, managing director/co-founder, Alitheia Capital.

Tajudeen Ahmed of BUA (l), with Akintunde Oyebode, CEO, LSETF.

L-R: Vikas Bali, CEO, Intellecap; Roy Swan, director, mission investments, Ford Foundation; Henrietta Onwuegbuzie, project director, Impact Investing Policy Intiative, Lagos Business School; Nneka Eze, partner/Nigeria country director, Dalberg, Meghan Curran, West Africa director, Acumen

Larry Umunna, country director (l), with Ayokanmi Ayuba, deputy country director, Techno Serves Nigeria.

Sapna Shah of Nova Star Ventures (l), with Simisola Nwogugu, executive director, Junior Achievement Nigeria.

L-R: Justyna Sitarska, Bureau chief, polish investment & trade agency; Adaeze Usoh, principal, corporate finance, Babban Gona, and Lia Nicholson, partner, monitoring and operations, Kiva

30

BUSINESS DAY

Monday 24 September 2018

CityFile

FG inaugurates projects in C’ River community MIKE ABANG, Calabar

U

sani Usani, the minister of Niger Delta Affairs, has inaugurated a community town hall and a solar-powered water projects at Ishibori and Abakpa communities in Ogoja local government area of Cross River.

Marshall Gundu, the director of press in the ministry of Niger Delta Affairs, quoted the Usani as saying that the projects were in line with the Federal Government’s resolve to improve the welfare of the people at the grassroots.

“Every government has the responsibility to serve the society and we are doing so without any partisanship.

We are spreading projects in various constituencies in the Niger Delta region according to their needs and availability of resources’’.

Usani said that government’s efforts in Ogoja land were not limited to the town hall and a solar-powered borehole alone, adding that several other people-oriented projects were being handled by the ministry.

According to him, some

ongoing inner road projects undertaken by the Niger Delta Development Commission (NDDC) in Ogoja local government area will soon be completed and inaugurated for the use of the people.

The minister charged the people of Ishibori and Abakpa communities and Ogoja land in general and the entire people of the Niger Delta region to remain law abiding citizens.

He also urged them to make effective use of the projects in their localities and ensure the security of the facilities, as this will encourage the government to do more.

On his, Aminu Aliyu, the permanent secretary in the ministry, said that social welfare and community engagements were critical components of the Federal Government’s Economic Recovery and Growth Plan (ERGP).

Aliyu, who was represented by Lauren Braide, director of community development and education in the ministry, said that attention was given to the provision of community facilities.

He said that this was due to their far-reaching impacts on citizens’ participation in governance.

Flood submerges Otuoke-Onuebum road in Bayelsa SAMUEL ESE with agency report

O

tuoke-Onuebum road in Ogbia local government area of Bayelsa has been taken over by flood, forcing vehicles to divert through Elebele road, a longer distance.

Otuoke is the home town of former President Goodluck Jonathan.

A staff of the Federal University Otuoke (FUO), Clever Ogbodi, said on Friday that passengers were paying N400 instead of N250 from Otuoke to Yenagoa. Ogbogi appealed to the Bayelsa government to come to the aid of the community for the sake of FUO students, who are directly affected.

“This was how it happened in October 2012 when flood took over the whole community; up till now, there is no proper preventive measure put

in place by the government.

We have been expecting the government to come up with necessary measures to mitigate future occurrence, but it is a matter of regret that such measures are not in place.

“I am calling on all relevant authorities to look into the matter because we cannot be experiencing this terrible situation every year,” he said.

Also commenting, Azibator Omonibo, a passenger, wondered why the situation remained the same even after the interventionfundthatwasgiven to the state in 2012 to tackle it.

Omonibo expressed concern over the suffering of the people and urged the government to live up to its responsibility of preventing flooding and rehabilitate the road.

A taxi driver plying the road, Kalawole Adebutu, said that the road was already in a bad shape before the flooding.

NAPTIP arrests Sweden based Nigerian, 2 others

N

ational Agency for the Prohibition of Trafficking in Persons (NAPTIP) has arrested a Nigerian based in Sweden for allegedly buying a two month old baby.

The NAPTIP’s director of investigation and monitoring, Josiah Emerole explained that the case involved a 43-year=old Stephany Bassey who lives in Sweden. He said that NAPTIP was notified of the case by the officers of the Intelligence and International Cooperation (IICU), adding that the suspect was nabbed after she was handed over by the Embassy of Sweden in Nigeria.

“The suspect went to the

Embassy to procure travel documents for a two month old baby boy whom she claimed was her child.

“She claimed to have become pregnant for her husband in Sweden but that medical examinations could not detect the pregnancy over there.

“Then she was advised to return home to Uyo, Akwa Ibom State where the pregnancy will be detected and she will be assisted to deliver safely.

“According to her, on her return, the baby was detected by a midwife in Uyo and that due to too much fat in her body, scan and other medical examinations did not detect the baby therein,” he explained.

A flooded street at Bale at Ajegunle lkorodu on Friday.

NAN

Human trafficking: Edo taskforce nabs pastor ... as victim narrates sad experience in Russia JOSHUA BASSEY

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suspected human trafficker and general overseer of Mega Charismatic Fire Ministry, has been nabbed by the Edo State Taskforce Against Human Trafficking (ETAHT) alongside his accomplice for conniving with a sponsor in Russia to traffic a 22-year-old female victim from the state.

It was gathered that the prime suspect, one Pastor Marvelous Odalo, founder of the church, reportedly worked with a ‘Madam’ in Russia to traffic the girl.

He was arrested following a tip-off from the girl (name withheld), who has since returned from Russia. She claimed that she and her sister were deceived and fell for the antics of the pastor and his accomplice.

Narrating her ordeal,

the victim said her problem commenced after she agreed to go to Europe and her madam’s mother took her to the pastor’s church for oath-taking. “The pastor asked me to stand on top of a white handkerchief and N1000 note on the altar. He asked me to repeat what he was saying and that if I refuse to pay my madam, something bad will happen to me,” she said.

Continuing, she said “I was asked to pay $50,000, which is N17, 850, 000.

They told me that I was going to meet a woman who is pregnant in Russian and I will assist her with domestic chores. They said I will also be working as a stylist in her saloon.

I will pay them that amount since the work is thriving there. I never knew that the lady was neither pregnant nor married.

When I got there, it was a different ball game. I was forced to engage in prosti-

tution in Russia which I resisted. I rejected it and told them I will rather go home than sell my body to satisfy one greedy woman.”

She said that in the heat of the scuffle with her assailants, she met a Nigerian in Russia, who introduced her to the senior special assistant to Governor Godwin Obaseki, on anti-human trafficking issues, Solomon Okoduwa, who eventually took the matter up in Nigeria.

“Ever since I came back, the so-called madam has been threatening my life that I must pay her the money she spent. I want to appreciate Edo State government which joined to facilitate my return.

They have to also assist me, first, to stop the continuous threat of my madam and secondly, to help me to settle down and start up a business to enable me earn a decent living,” she said.

The victim said many girls were still in Russia, who do not have the opportunity to come back home. “They are suffering, working in cold and risking their lives,” she added.

Okoduwu, who facilitated the arrest, said the pastor and another woman who is an accomplice have been handed over to the men and officers of special investigation unit attached to the Government House to crack down on traffickers.

Okoduwa said the victim was trafficked three months after Oba Ewuare II invoked curses on human traffickers and neutralised the oath of secrecy. He assured that the victim was free and nothing would happen to her or any other victim, who escapes their snares. He said he was acting in line with Governor Obaseki’s directive to receive, protect and reintegrate victims of human trafficking.

Customs intercepts 49 vehicles in zone B

T

he Nigeria Customs Service Strike Force has intercepte d 49 vehicles and other contrabands with duty paid value of N126.8 million in zone B. Abdullahi Kirawa, a deputy controller of Customs and national coordinator of the strike force, who addressed journalists on the seizures in Kaduna, at the weekend, said the

items were impounded between August 3 and September 20, 2018 within the Kaduna axis.

According to Kirawa, other contrabands seized include 13, 983 bags of rice, 3, 983 jerry cans of vegetable oil, 456 bales of second hand clothing, 70 bags of sugar and 50 cartons of spaghetti among others.

He said the seizures were made following tip-

offs from patriotic Nigerians just as he acknowledged the role of citizens’ engagement in checking smuggling in the zone.

He assured that the service would not relent in its efforts to end smuggling in the country for the good of the economy and national growth.

“Strike force officers and men will not relent in this effort of ensuring that die-hard smugglers are

arrested and prosecuted to serve as deterrent to others,” the coordinator said.

Kirawa explained that the strike force set up by the Controller General has the mandate to ensure effective suppression of smuggling to facilitate increase revenue to government.

He therefore urged Nigerians to ensure that they conduct their businesses within the ambit of the law.

BUSINESS DAY

Monday 24 September 2018

31

Live @ the Stock exchange Prices for Securities Traded as of Friday 21 September 2018

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 235,762.97 8.15 1.88 61,521,437 UNITED BANK FOR AFRICA PLC 273,595.37 8.00 2.56 66,144,880 653,047.07 20.80 0.73 82,467,991 ZENITH BANK PLC 210,134,308 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 308,699.52 8.60 1.18 6,708,637 6,708,637 216,842,945

BUILDING MATERIALS DANGOTE CEMENT PLC 3,493,304.02 205.00 -2.38 762,363 LAFARGE AFRICA PLC. 203,825.56 23.50 3.30 1,188,066 1,950,429 1,950,429

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 366,012.52 622.00 3.67 52,102 52,102 52,102 218,845,476 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 50,110 73,451.07 77.00 - 16,018 OKOMU OIL PALM PLC. PRESCO PLC 60,000.00 60.00 - 24,588 90,716 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 15,025 15,025 105,741

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,085.39 0.41 - 12,650 206.25 0.53 - 6,168 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 0 51,216.47 1.26 0.80 8,761,909 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 33,999.30 11.80 6.31 994,441 9,775,168 9,775,168

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 63,923 165.00 6.60 - 0 ROADS NIG PLC. 63,923 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,417.27 1.70 - 464,366 464,366 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 24,014.43 9.00 - 200 UPDC REAL ESTATE INVESTMENT TRUST 200 528,489

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,701.62 1.75 - 166,386 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 GUINNESS NIG PLC 192,753.69 88.00 - 83,452 INTERNATIONAL BREWERIES PLC. 266,041.93 30.95 3.17 1,977,072 NIGERIAN BREW. PLC. 743,711.89 93.00 4.49 2,314,572 4,541,482 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 37,000.00 7.40 - 978,988 DANGOTE SUGAR REFINERY PLC 176,400.00 14.70 - 263,050 FLOUR MILLS NIG. PLC. 82,007.59 20.00 -0.50 591,236 HONEYWELL FLOUR MILL PLC 11,102.28 1.40 2.94 1,513,686 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 77,035 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 NASCON ALLIED INDUSTRIES PLC 49,014.61 18.50 - 15,261 UNION DICON SALT PLC. 3,676.41 13.45 - 0 3,439,256 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 16,997.73 9.05 -3.72 440,004 NESTLE NIGERIA PLC. 1,109,718.75 1,400.00 1.41 283,140 723,144 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 4 VITAFOAM NIG PLC. 3,439.82 3.30 - 256,992 256,996 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 8.00 554,946 UNILEVER NIGERIA PLC. 247,035.23 43.00 - 146,468 701,414 9,662,292

BANKING DIAMOND BANK PLC 28,255.67 1.22 -2.40 2,663,633 ECOBANK TRANSNATIONAL INCORPORATED 330,291.92 18.00 -2.70 262,758 FIDELITY BANK PLC 47,808.42 1.65 -0.60 4,584,318 GUARANTY TRUST BANK PLC. 1,021,261.92 34.70 2.06 208,540,533 JAIZ BANK PLC 16,499.98 0.56 9.80 12,152,086 SKYE BANK PLC 10,687.83 0.77 4.05 2,931,537 STERLING BANK PLC. 41,746.11 1.45 - 3,478,535 UNION BANK NIG.PLC. 168,900.37 5.80 - 83,314 11,221.76 0.96 9.09 409,599 UNITY BANK PLC 21,987.45 0.57 -5.00 21,152,134 WEMA BANK PLC. 256,258,447 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 AIICO INSURANCE PLC. 5,613.47 0.81 -1.23 666,526 AXAMANSARD INSURANCE PLC 19,530.00 1.86 -9.71 1,113,730 2,100.00 0.30 - 16,650 CONSOLIDATED HALLMARK INSURANCE PLC CONTINENTAL REINSURANCE PLC 15,040.48 1.45 - 12,615 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 575,650 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 LASACO ASSURANCE PLC. 2,270.26 0.31 -6.06 322,800 LAW UNION AND ROCK INS. PLC. 2,835.58 0.66 - 47,066 LINKAGE ASSURANCE PLC 5,120.00 0.64 - 747,500 MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 - 645,930 NEM INSURANCE PLC 15,841.51 3.00 -2.91 260,651 NIGER INSURANCE PLC 2,399.24 0.31 - 9,292 PRESTIGE ASSURANCE PLC 2,023.23 0.53 -5.36 203,767 REGENCY ASSURANCE PLC 1,733.88 0.26 - 115,000 2,001.80 0.24 - 1,238,236 SOVEREIGN TRUST INSURANCE PLC STACO INSURANCE PLC 4,483.72 0.48 - 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 4,195,535 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 368,190 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 25,000 UNIVERSAL INSURANCE PLC 3,680.00 0.23 - 0 VERITAS KAPITAL ASSURANCE PLC 3,605.33 0.26 - 110,230 WAPIC INSURANCE PLC 5,353.10 0.40 8.11 5,056,847 15,731,215 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 NPF MICROFINANCE BANK PLC 3,567.15 1.56 - 146,731 146,731

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 5,922.05 1.42 - 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 2,949.22 3.02 - 0 UNION HOMES SAVINGS AND LOANS PLC. 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,900.00 3.95 1.28 590,925 CUSTODIAN INVESTMENT PLC 32,938.44 5.60 - 9,200 660.00 0.44 - 0 DEAP CAPITAL MANAGEMENT & TRUST PLC 34,852.77 1.76 -0.56 2,420,776 FCMB GROUP PLC. NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 1,234.89 0.24 - 4,452 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 424,774.33 42.00 - 46,818 17,760.00 2.96 0.34 2,420,618 UNITED CAPITAL PLC VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 5,492,789 277,629,182

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,350.19 0.38 - 88,924 88,924 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 - 1,324 16,323.71 13.65 - 116,088 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,303.00 2.35 - 171,219 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,070.43 0.62 - 260 556.71 3.62 - 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 411.96 1.90 - 800 289,691 378,615

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 96,500 96,500 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 NCR (NIGERIA) PLC. 680.40 6.30 - 17,383 TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 17,383 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 36 36 113,919

BUILDING MATERIALS BERGER PAINTS PLC 1,999.78 6.90 - 6,245 CAP PLC 19,845.00 28.35 - 8,424 29,783.26 23.70 - 17,810 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 780.83 0.37 8.82 300,000 361.24 0.68 - 0 MEYER PLC. 2,356.44 2.97 - 25,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,279.20 10.40 - 0 357,479 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 CUTIX PLC. 3,610.71 4.10 - 147,446 147,446 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 86,632 GREIF NIGERIA PLC 388.02 9.10 - 0 86,632 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 591,557

CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 50,000 50,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 50,000 50,000 100,000

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,503.05 0.24 4.35 1,436,898 1,436,898 INTEGRATED OIL AND GAS SERVICES OANDO PLC 63,400.20 5.10 -2.86 1,906,781 1,906,781 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,546.55 179.00 - 2,818 CONOIL PLC 15,197.55 21.90 - 75,824 ETERNA PLC. 8,150.90 6.25 - 60,200 FORTE OIL PLC. 28,003.34 21.50 -4.44 767,679 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 115 TOTAL NIGERIA PLC. 64,407.29 189.70 - 4,572 911,208 4,254,887

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,652.74 4.50 - 500 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 3 503 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 IKEJA HOTEL PLC 4,718.87 2.27 - 900 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 TRANSCORP HOTELS PLC 51,302.73 6.75 - 1,758 2,658 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 LEARN AFRICA PLC 848.60 1.10 - 55,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1,665

Volume

32

BUSINESS DAY

Stocks

Currencies

Commodities

C002D5556

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

P.E

SHORT TAKES $22.1 bn

ECONOMY

Consumer goods firms’ debt to equity ratio continues to improve since 2016

The National Bureau of Statistics (NBS), yesterday, said that Nigeria’s foreign debt at the end of the first half of 2018 (H1’18) stood at $22.08 billion. This represents a 17 percent rise over the $18.9 billion recorded at the end of 2017. The breakdown, according to NBS foreign and domestic debt report for second quarter 2018 (Q2’18), shows that foreign borrowings amounting to $10.88 billion were from multilateral agencies, $274.98 million from bilateral (AFD) and another $2.12 billion bilateral from the Exim Bank of China, JICA, India and KFW, while $8.80 billion was commercial debt.

BALA AUGIE

C

onsumer goods firms have cut their long term debt to equity ratio for the seven quarters running in the second quarter of (Q2) 2018, from an all-time high as at the last quarter of 2016, when a recession hindered them from meeting obligations to banks and suppliers.

The debt to equity ratio of NSE Consumer Index fell to 39.46 percent in the second quarter of 2018 from an all-time high of 81.15 percent recorded as at the fourth quarter of 2016.

Further analysis shows the ratio has been improving throughout 2017, thanks to the introduction of the Investors and Exporters’ (I and R) window by the central bankthat saw a significant improvement in the foreign exchange market. The relative ease in the foreign exchange market that year gave companies the leeway to access dollars to pay suppliers, import raw materials and equipment for production purposes.

Debt to equity ratio improved to 64.97 percent as at full year 2017, from 78.48 percent recorded in the first quarter 2017.

The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-on-year growth reaching 1.9 percent in the final three months of 2017.

Firms tend to cut debt after a period of recession, which means they will be in a position to grow revenue and pay interest on money borrowed from banks.

The cumulative inter-

Monday 24 September 2018

N17.16bn

est coverage ratio of 12 consumer goods firms tracked by BusinessDay stood at 7.33 times operating profit as at June 2018.

In other words, they have enough profit from operating activities can cover all interest expenses.

Also, the reduction of interest expenses help boost return on equity (ROE) as firms is able to utilize the resources of

shareholders in generating higher profit.

The (ROE) for consumer goods companies in the second quarter of this year was 20.39 percent, though lower than 22.27 percent recorded in the corresponding period of last year, is the highest since the third quarter of 2015.

Analysts attribute the reduction in the amount

of debt in the capital structure of firms to an aggressive leveraging of their balance sheet.

“It is because some of them have paid down their borrowings. Unilever Nigeria Plc, UACN Nigeria Plc, and Guinness Nigeria plc paid down their debt” said Tajudeen Ibrahim, head of research at Chapel Hill Denham Ltd. Flour Mills Nigeria Plc

raised N39.90 billion, as the proceeds were used to pay down some of the company’s outstanding short-term debt in order to reduce its finance costs, which have increased significantly in recent times.

The Nigeria’s millers’ debt to equity ratio increased to 57.95 percent in the period under review from 51.83 percent the previous year. Total loans (long and short term) increased by 13.36 percent to N151.05 billion. Finance costs dipped by 30.54 percent to N6.20 billion in the period under review from N8.92 billion the previous year.

Unilever Nigeria Plc floated rights issue of N58.85 billion in 2017 as finance cost reduced by 89.61 percent to N169.41 million in June 2018 from N1.63 billion.

Guinness Nigeria’s rights issue of N40 billion, floated in 2017, is responsible for a reduction of parent company Diageo loan and other borrowing while net finance charge reduced by 32 percent.

The Nigerian National Petroleum Corporation (NNPC), has recorded trading surplus of N17.16billion in April, 2018. NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, who made this known in a statement, yesterday said the development was part of the highlight of the Corporation’s Monthly Financial and Operations Report for the review period. The report, which is the 33rd edition since NNPC commenced the monthly publication of its financial and operations data as part of efforts to instill a culture of transparency and keep stakeholders, and the general public informed of its activities, indicated a N5.43billion improvement representing 46.29 per cent on the trading surplus recorded in the previous month of March, 2018.

N714.81 bn The Federation Account Allocation Committee (FAAC) disbursed the sum of N714.81bn to the three tiers of government in August 2018 from the revenue generated in July 2018.

The amount disbursed comprised of N597.97bn from the Statutory Account, N79.81bn from Valued Added Tax (VAT), N12bn additional distribution funds from NNPC and N25.03bn FOREX distribution.

Federal government received a total of N298.29bn from the N714.81bn. States received a total of N183.77bn and Local governments received N138.96bn.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: SAMUEL IDUH )

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Email the BMI team patrick.atuanya@businessdayonline.com

Monday 24 September 2018

C002D5556

BUSINESS DAY

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Markets Intelligence ECONOMY

AIICO, NEM have highest ROE among listed peers

...NEM, Mansard has most attractive valuations BALA AUGIE

A

IICO Insurance Plc, and N.E.M Insurance Plc have utilized the resources of owners in generating higher profits than any other insurer listed on the Nigeria Stock Exchange (NSE).

Additionally, investors value the stocks of AXA Mansard Insurance Plc and N.E.M Insurance more than peers as they continue to consolidate on innovative products with a view to increasing their share of the market.

The return on equity (ROE) is a measure of profitability paramount to investors and shareholders of bank stocks because it measures how many naira of profit a company generates with each naira of shareholders’ equity.

The cumulative average ROE of 21 firms under our universe fell to 4.08 percent in June 2018 from 5.28 percent as at June 2017.

Despite industry deteriorating efficiency level, AIICO’s ROE increased to 14.85 percent in June 2018 from 9.37 percent the previous year; the growth in the insurer’s profit was largely driven by gains in foreign exchange transaction in the period under review, which helped compensate for the underwriting loss.

NEM’s ROE increased to 14.05 percent in June 2018 from 12.80 percent the previous year.

The insurers high efficiency ratio is accompanied by high valuations as its shares are trading at 1.67 times book value.

NEM has maintained double digit growth in premium income and profit while a combined ratio less than 100 validates an efficient underwriting capacity amid a tough and unpredictable macroeconomic environment.

The Price to Book ratio or P/B ratio is a multiple that compares the current market price of a company to its book value (shareholder’s

equity).

A ratio less than one means a firm is undervalued or trading below its intrinsic value.

“Investors will place more premiums on firms that are more efficient .It is what you are

able to return on assets that matters to investors,” said Ayodeji Ebo, managing director and chief executive officer of Afrinvest Securities Limited.

While AXA Mansard’s ROE fell to 7.21 percent in the period under review from 10.46

percent the previous year, the most capitalized insurer shares are trading at a P/B ratio of 1.06 times.

Aside the big two (AIICO and NEM), other firms are grappling with low valuations and their stocks undervalued as share price trade less than N1.

Analysts attribute low valuations to the cyclicality of the industry, that is, the occurrences of claims result in underwriting losses, and hence book value will reduce.

An expert who spoke with Markets and Intelligence in the condition of anonymity said that cyclicality is attributable to firms in Europe, Asia, and the United States that operate in environment susceptible to catastrophic events.

He added that Nigerian insurers have low valuations because they do not have track record of dividend payment and even when they pay the pay outs are abysmally poor to allure investors.

Continental Reinsurance, Mutual Benefits, Sovereign Trust Insurance, Law Union and Rock, LASCO, Prestige Assurance, Wapic Insurance, and Linkage Assurance, trades at a P/B of 0.71x, 0.27x,0.38x,0.45x,0.29x,0.39x,0.2 9x, and 0.256x.

The profit position of 80 percent of insurers under our coverage has dwindled, as they have turned less of Naira invested in sales into higher profit.

The cumulative net income of 21 insurers reduced by 6.27 percent to N11.53 billion in June 2018 from N12.43 billion as at June 2017.

Drilling down the figures shows Linkage Assurance suffered the sharpest fall at the bottom line as net income declined by 78.58 percent to N493.76 million while ROE fell to 2.41 percent in June 2018 from 11.52 percent as at June 2017.

Buharinomics is bad for all NSE indexes except Banks …Banking index up 30 percent since October 2015, others flat or negative EMEKA UCHEAGA

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he banking index seems to be the only index on the Nigerian Stock Exchange that has benefited from Buharinomics in the last 3 years. Since October 2015, the banking index has returned 30 percent while the consumer goods index returned only 1 percent. The rest of the indexes posted negative returns. The insurance index returned -11 percent, the industrial index returned -15 percent and the oil and gas index returned -33 percent.

In the last week of September, President Muhamadu Buhari finally submitted the long awaited list of his ministerial nominees to form his cabinet after a six month delay. However since the formation of the government, economic growth has disappointed over the past three years leaving the only beneficiaries of the current administration to be banks.

The slow economic growth has hurt the performance of companies in the industrial and consumer goods space as consumer spending has been pegged back since the oil price crash in 2014. Banks on the other hand have benefitted from the rise in interest rate during the period as the monetary policy rate was increased from 12 percent to 14 percent in 2016 to combat rising inflation. As inflation surged, so did treasury yields.

Index performance since October 02 2015

According to analysts, most banks have increased asset allocations to Treasury bills in the last few years which have helped increase their profitability. The earnings per share of companies in the banking index increased by an average of 30 percent between 2015 and mid-2018, showing that the 30 percent rise in the index points backed by fundamentals and in exact proportion with their earnings performance.

Consumer goods companies have also

seen their earnings per share rise by around 55 percent, share price performance has remained flattish as the consumer goods index is only up 1 percent during that period.

The industrial index and oil and gas index were the worst performers by earnings and share price appreciation as their stocks declined considerably due to significant erosion of profits in these companies. Most of the companies in both

indexes struggled to maintain profitability due to the oil price crash, naira devaluation and foreign exchange illiquidity that made 2015 and 2016 very difficult for most of the firms.

As oil prices have rebounded, so also as exchange rate become more stable leading to better earnings performance in these companies.

Insurance companies grew their dividends by around 132 percent as earnings per share grew by 13 percent. However, the dividend growth was not enough to bring about positive returns on the share prices of the insurers after many of them saw their stocks decline during the recession in 2016 and early this year after NSE removed the price floor of 50 kobo per share.

The next four years will be very interesting for the performance of the indexes as analysts opine that the winner of the upcoming election will determine if the economic fortunes of the country will improve or not. HSBC, one of the largest banks in Europe forecasts that if President Buhari wins a second term, economic growth in Nigeria could remain poor for the foreseeable future. At least now that investors know how the indexes performs under a Buhari’s administration, it is unlikely that there will be any surprises over the next four years if Buhari wins the election in 2019.

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Special focus on the recapitlisation of the Insurance Industry

Tier Based Insurance regime offers buffers against unforeseen shocks– NAICOM Boss The Tier Based Minimum Solvency Capital Regime announced National Insurance Commission (NAICOM) announced in February 2018 has caused agitations in the industry ahead of its official takeoff in January next year. In this interview, MOHAMMED KARI, Commissioner for Insurance and Chief Executive Officer, NAICOM explained the imperatives of this new policy, among other issues. He spoke exclusively to a BusinessDay team comprising MODESTUS ANASORONYE, ONYINYE NWACHUKWU and CONRAD OMODIAGBE.

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ell us about this new Tier Based Minimum Solvency Capital Regime introduced by the Commission and why it is needed in the insurance industry.

The Insurance industry is at a crossroads at this point between failure and survival. Recapitalization occurred in this industry 13 years ago in 2005 and took about two years for consolidations and mergers to be finalized, and to this day we are still having issues with most of the deals brokered back then. Taking this into consideration and the rapid change in the economy over time, from the drop in Naira value, to the global financial crisis recorded in 2008, we explained at a retreat in February at Abeokuta, a need to reassess the industry against a deteriorating economy. This led to a panel constituting of 9 major operators coming to a conclusion that there is no way out with regards to our industry and so the Tier Based Minimum Solvency Capital Regime was introduced on the 25th of July, 2018. Built off the Risk-Based Supervision programme which has 3 components; regulatory guidelines, corporate governance and capital, the Tier Based Minimum Solvency Capital is a risk based model that uses an insurance company’s financial capacity to determine what role it will play in the industry. It ideally creates a minimum capacity requirement of entry into the market, but the level of operation will be decided by the company’s risk management board after their available capital base is crucially examined. It runs on 3 tiers, with each tier specifying a certain capital requirement based on the risk classification. Companies are not restricted to one tier and can operate at different levels provided they meet the requirements needed.

What are the three levels in this new structure and the capital requirement for each insurance type; life, non-life and composite insurance, under each tier?

Mohammed Kari

We have three tiers for each category; Tier 1, Tier 2 and Tier 3, with the third tier requiring the least amount of capital. For life companies, a N2 billion minimum capital solvency is required for Tier 3 which comprises of health, individual and miscellaneous insurances. Tier 2 on the other hand records a 50 percent increase over existing requirement capital with a minimum of N3 billion which covers all Tier 3 and group life assurance.

Tier 1 under life, sees a 200 percent increase in existing capital with a new minimum capital of N6 billion which can be used to cover Tier 2 risks and

annuity. Non-Life maintains N3 billion for Tier 3 which covers motor accidents, fire accidents, general accidents, engineering, agriculture and miscellaneous insurance. Tier 2 covers marine, engineering, bond credit guarantee, suretyship insurance and all of Tier 3 risks, with a capital level of N4.5 million. Finally, Tier 1 covers oil and gas, aviation and Tier 2 risks with N9 billion. Composite companies record a N5 billion minimum solvency capital for all of Tier 3 comprising of life and non-life. Tier 2 experiences a 50 percent increase to N7.5 billion, while Tier 1 rises by 200 percent to

N15 billion for life and non-life risks.

Can you speak to the gains anticipated in the new era in terms of the industry as well as the insured?

As a regulator we can’t shy away from our responsibility of protecting shareholders, the consumers, the operators and the economy as a whole.

Since the announcement of the model, we have noticed that consumers and investors are happy. This stems from the fact that majority of investors before now rarely got value for their investment but this policy

goes to change that and restore confidence to the industry. The model will cater to the insured by ensuring discipline on the part of the insurers, allowing them focus on their financial strength, which will in turn result in improved settlement of claims and give consumers an idea of the insurance operator they are working with.

It will also lead to voluntary mergers and acquisitions, as some operators willing to combine forces to attain a certain tier can work together, which strengthens the industry through a boost in capital base. We are trying Continues on page 38

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Tier Based Insurance regime offers...

Continued from page 37

to ensure through this policy, that the industry has some shock absorbers in place in case we encounter another scenario like the 2008 financial crisis.

It is not practical for everyone to do everything.

The tier you find yourself does not necessarily matter, as application of resources and proper targeting of the insurers efforts plays a bigger role. One of the biggest insurers in the industry, who I’m not going to name when deconstructed, makes about 85 percent of its premium from tier 3 businesses with just 15 percent from tier 1. This goes to show that when you create a niche for your company regardless of the tier you find yourself, you can be successful. The best part is that most of the businesses in tier 2 and 3 are smaller so you don’t need to reinsure, because all the cases can’t happen at the same time, but one air crash can kill a whole industry like we saw with Dana. If you’re operating in a lower tier, one thousand claims might not shake you and it could even be settled from an expense account. Once you can gain enough capital to meet the required solvency level of the tier in question then you can operate in that tier, with the option of retaining your businesses in the previous tier you operated.

The policy was initially to kick off on the 1st of January 2019 but the commission brought it forward to 1st October 2018 which has shocked insurers.

Can you explain the shift and what this means?

First off, this programme is a component of what started all the way back in 2005, it is not new. Having explained the pillars of Risk Based Supervision which has capital structure as one of its pillars, we are just completing the

three pillars. It has always been in the works and we have been discussing with operators for over a year and we’ve had members of the international community give talks on each of these pillars, so I repeat it is not new.

Remember that all insurance treaties and big polices are renewed on the 1st of January and the financial year also runs from January to December, thus this policy will officially kick off in January but we obviously can’t announce it on the 31st of December. Therefore October to December is a transitory period to prepare, and the beauty of it is since you’ll know where you are in October based on the assessment of your 2017 books, it is easier to arrange treaties ahead of 2019 and avoid taking in new policies that are above your Tier as you won’t have a license to service it in January. The policy has been implemented slowly over time because when you bring up your treaty, by law you should submit it to the commission for our approval ahead of January and when they do we’ve been banning those who aren’t qualified to run a particular class because of their poor solvency, which are all part of regulatory controls ensuring the company’s survival.

Operators understand these concepts but some are being mischievous and misinforming people. Even if you have the minimum capital level regardless of your tier, when you go below a certain level, we will require that you inject capital within a certain time period or you will be downgraded.

Major insurers especially those who fall within the 2nd and 3rd tiers have gone as far as threatening legal action if the take-off date isn’t reversed by the end of September. What is the Commission’s stance on this allega-

tion and threat?

We are not surprised about the reactions of the insurance industry, it is conventional of us to resist change and that convention is what has kept the industry where it is today.

Addressing some of these agitations, we have forums where we constantly relate with them on issues but then most times when asked what their challenges are, they shy away from answering, preferring to go behind and talking to third parties about it which isn’t fair. This I believe stems from fear of the unknown and a desire to remain in a category they’re used to and get accounts that half of the time they can’t retain, just so they can have access to their commission. As of this moment, we haven’t been served papers from the court and have only heard about this from the media.

However, court cases don’t stop regulations, they might cause hiccups but in the end the regulator must carry out their job. Regulations have always been carried out, restricting companies from taking more than they can handle, the difference with this is that we went public in a bid to help people understand the bracket of operation. Those who resist change, often time gets swept away.

A few companies are at a stage where they can underwrite insurance in the oil and gas sector, but also trying to avoid exposing so much of their capital in that sector. But, the policy states that companies can get reinsurance treaty to enable them participate even at a higher level. How does this work?

It works in this way, reissuance treaty doesn’t expose the underwriter to any risk although he retains a certain portion on his net account and the excess of it goes to the insurer

dependent on the reinsurance made. Now as a player involved in reinsurance, every kobo collected is protected by his treaty, so he will only share in the profits made as he accepts only his reinsurance commission not caring about his net account. We don’t want this and it’s unhealthy for the industry. Take a typical reinsurance treaty in Nigeria, analyze it and you will see that the originating insurer who claims the reinsurance, always makes his policy subservient to the reinsurer which shouldn’t be. The reinsurance treaty is based on the original policy but they’re unaware of this, signing off anything handed by the reinsurer. Our concern is that these treaties are carried out by reinsurers who you didn’t license or regulate, but they insure assets in our jurisdiction and we have to protect these assets.

We don’t want foreign companies operating here like we have no regulator and it is imperative that buying and selling of insurance must be done by companies licensed by us, which we stated in the brokers guideline. We believe that intermediaries just like underwriters, need to be reconstructed too.

Sir, can you briefly share your industry experience and the principles and believes that have brought you this far?

Next year God willing in December, I will be 40 years in this industry. The principles of my life has always been expressed through the way I do my things, as I’ve always believed in the concept of doing it right, and it would work. Long before I was a regulator, I led my companies on that basis. I have avoided cutting corners in business and that’s why I’m still here, I ensure that as a regulator we do what we’re doing well.

Insurance is my life and I’m deeply passionate about it.

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Tier based requirement to provide safety net for shareholders, operators, economy - Kari

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he Tier Based Minimum Solvency Capital Regime is to provide safety net for shareholders, operators and the economy, Mohammed Kari, Commissioner for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM) told BusinessDay in a recent interview in Abuja.

Kari, who allayed fears of all stakeholders, expressed optimism that the new policy will restore confidence into the industry.

“As a regulator we can’t shy away from our responsibility of protecting shareholders, the consumers, the operators and the economy as a whole.

“Since the announcement of the model, we have noticed that consumers and investors are happy. This stems from the fact that majority of investors before now rarely got value for their investment but this policy goes to change that and restore confidence to the industry.

“The model will cater to the insured by ensuring discipline on the part of the insurers, allowing them focus on their financial strength, which will in turn result in improved settlement of claims and give consumers an idea of the insurance operator they are working with.

“It will also lead to voluntary mergers and acquisitions, as some operators willing to combine forces to attain a certain tier can work together, which strengthens the industry through a boost in capital base.

“We are trying to ensure through this policy, that the industry has some shock absorbers in place in case we encounter another scenario like the 2008 financial crisis.

“It is not practical for everyone to do everything. The tier you find yourself does not necessarily matter, as application of resources and proper targeting of the insurers efforts plays a bigger role. One of the biggest insurers in the industry, who I’m not going to name when deconstructed, makes about 85 percent of its premium from tier 3 businesses with just 15 percent from tier 1.

“This goes to show that when you create a niche for your company regardless of the tier you find yourself, you can be successful. The best part is that most of the businesses in tier 2 and 3 are smaller so you don’t need to reinsure, because all the cases can’t happen at the same time, but one air crash can kill a whole industry like we saw with Dana.

“If you’re operating in a lower tier, one thousand claims might not shake you and it could even be settled from an expense account. Once you can gain enough capital to meet the required solvency level of the tier in question then you can operate in that tier, with the option of retaining your businesses in the previous tier you operated,” the NAICOM chief said.

Under the new arrangement, the least amount of capital for life companies, the sum of “N2 billion minimum capital solvency is required for Tier 3 which comprises of health, individual and miscellaneous insurances.

“Tier 2 on the other hand re-

cords a 50 percent increase over existing requirement capital with a minimum of N3 billion which covers all Tier 3 and group life assurance. Tier 1 under life, sees a 200 percent increase in existing capital with a new minimum capital of N6 billion which can be used to cover Tier 2 risks and annuity.

“Non-Life maintains N3 billion for Tier 3 which covers motor accidents, fire accidents, general accidents, engineering, agriculture and miscellaneous

insurance. Tier 2 covers marine, engineering, bond credit guarantee, suretyship insurance and all of Tier 3 risks, with a capital level of N4.5 million. Finally, Tier 1 covers oil and gas, aviation and Tier 2 risks with N9 billion. Composite companies record a N5 billion minimum solvency capital for all of Tier 3 comprising of life and non-life.

Tier 2 experiences a 50 percent increase to N7.5 billion, while Tier 1 rises by 200 percent to N15

billion for life and non-life risks.”

According to him, all the insurance companies have between October and December as transitory period to prepare for the new policy.

“The beauty of it is that since you’ll know where you are in October based on the assessment of your 2017 books, it is easier to arrange treaties ahead of 2019 and avoid taking in new policies that are above your Tier as you won’t have a license to service it

in January.

“The policy has been implemented slowly over time because when you bring up your treaty, by law you should submit it to the commission for our approval ahead of January and when they do we’ve been banning those who aren’t qualified to run a particular class because of their poor solvency, which are all part of regulatory controls ensuring the company’s survival.

“Operators understand these

concepts but some are being mischievous and misinforming people. Even if you have the minimum capital level regardless of your tier, when you go below a certain level, we will require that you inject capital within a certain time period or you will be downgraded,” Kari observed.

He maintained that the new policy also provides ample opportunity for intermediaries such as underwriters to be reconstructed.

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In association with

Macaulay Atasie: Entrepreneur, manager, business coach Macaulay Atasie is the managing director/chief executive officer of Nextzon Business Services Limited, a management consulting and enterprise development company that transforms businesses into successful entities in the markets they operate in.

Atasie has worked in Accenture and as the chief executive officer of HEIRS Alliance Limited. He specialises in assisting the micro, small and medium enterprises (MSMEs) to scale through hurdles, having already worked with over 400 of them.

The Abia State-born entrepreneur supervised the disbursement of Oxfam’s $100m to high-impact SMEs in Nigeria three to four years ago. Atasie spoke at a breakfast meeting held last Wednesday by the Nigerian-American Chamber of Commerce (NACC). Start-Up Digest Editor, ODINAKA ANUDU, was there to capture his thoughts.

“We have been around. We have gone through the teething problems of running a business.

We have seen how SMEs struggle.

So, we will continue to try to expand,” Atasie said, while introducing Nextzon.

To Atasie, two critical points are indispensable for the growth of Nigerian MSMEs: Clustering and export. He believes that these are two main doors through which Nigerian MSMEs can enter into the hall of prosperity.

“The rest of the world has a major demand for Nigerian standardised products,” he said.

Atasie said export was an opportunity that Nigerian MSMEs were not yet exploiting maximally.

“Our economy is large but people are poor. So we cannot produce good quality products because the people cannot afford to pay for them locally. Convert my salaries into dollars and you see it is nothing. So why are SMEs in Nigeria trying to sell to Nigerians when these products cannot be paid for? Since many people cannot afford good, quality products, some producers cut corners to give them low quality goods.

“But there is a market out there that can afford to pay for highquality products. We can indeed export our products and services, but these must be high quality goods. As we expand our scale in the export market, we begin to pay

Macaulay Atasie

our people well, because someone will pay for the high quality. So, my take is that the export market remains our hope to ever to increase the quality of what we produce here,” he argued.

On clustering, Atasie advised entrepreneurs and start-ups to cluster together to enable the unit costs of their products to drop.

“How did China become a sig-

nificantly successful entity? China leveraged their low cost of labour to produce things that you and I use today: the mobile phones, mobile components, and the dress we wear. In 1970s, made-in-China products were seen as scraps. But there was a deliberate attempt to leverage their population of low-cost personnel. They brought businesses together, which is what

How Fate Foundation plans to build capacity of MSMEs

F

ate Foundation, Nigeria’s leading not-forprofit organisation promoting entrepreneurial development in the country will be equipping operators of micro, small and medium enterprise (MSMEs) with the needed skills to upscale their businesses as it hold its annual conference.

T h e c o n f e re n c e w i t h t h e themed: ‘Building for Scale’ will create the platform MSMEs entrepreneurs to learn from entrepreneurial leaders and influencers, while also having the opportunity to network and connect with each other.

“This year, MSMEs will benefit from our line-up of experienced entrepreneurial leaders

and industry experts who will be speaking at the conference,” Adenike Adeyemi, executive director, FATE Foundation said in a statement made available to BusinessDay. “This year’s syndicate sessions will focus on: Building a Successful Business in the Creative Space; Digital Strategies to take your Business to the Next Level; Opening Up New Frontier with Franchising; and Manufacturing: Turning your Business into a Manufacturing Giant,” Adeyemi said.

“Consulting bar will be available at the conference while several entrepreneurs will have opportunity to exhibit their products and services. This is as an extension of the monthly FATE Consulting Clinic, where our alumni business men and women

the country had the capacity and the resources to make what it consumed.

“We have a low cost advantage.

In 2007, we set up a leather processing factory in Aba. The shoe makers in Aba would use scissors to cut their leather, but we set up the process of using machines to do that. When we started that, there were all sorts of interests, including from the World Bank.

My vision was that made-in-Aba shoes should stop being shoddy and that Aba would produce two percent of world market. I was looking at 420 million pairs of shoes each year. That is a lot of money. We have low labour and capacity to produce shoes. That is beginning to attract attention.

Vision, scale and quality are opportunities for us,” he elucidated.

He stressed the need for Nigerian institutions to help entrepreneurs to prosper.

“The other one is the institutional void. Institutions help to bring businesses to a reasonable level. But in our place, you provide your own schools, security and water. But therein lies an opportunity as well. Our cost structure must be right, which is why I see our labour cost as right. So we must be ready for the international market and we need to model what we do. We must have scale, which is what I call volume,” he added.

NixxHash Communications to boost SMEs capacity through social media JOSEPHINE OKOJIE

...set to hold annual conference JOSEPHINE OKOJIE

is called clustering. If you go to China, you see a lot of businesses doing the same thing. That is why their unit costs are lowest in the world. If we can pull things together, we can do better,” he said.

The entrepreneur further argued that clustering enabled firms to scale their production, which would in turn enable them to access huge credit.

“This will help us when we are going to the US or the UK to ask for funding. When we get there, we will show them a massive stretch of cassava farm. If you go to Chicago, you will drive for hours and you will still see corn farms. This is what clustering does. All of them came together to create a competitive advantage.”

Atasie said his job was to help people see the possibilities and dream big.

He believes that entrepreneurs need to have technical know-how.

“To run a good business is not easy. You will learn how to manage your books, your partners and other things. Business is about the balance sheet. Know-how is critical in managing a business,” he explained.

He further said that SMEs needed to standardise their products and services, adding that the export market provided a good opportunity for that.

For him, import substitution remained an opportunity because

can have one-on-one access to expert advisory support for a period of 30 minutes each,” she further said.

She added that given the success of the organisations monthly consulting advisory, Fate Foundation will be inviting specific institutions that are relevant to MSMEs in the areas of tax, finance, digital marketing strategy, communication, law and Human Resource among others.

Expected to give the key note addresses are Cosmas Maduka, president and CEO, Coscharis Group and Bolanle AustenPeters, founder and CEO, Terra Kulture.

The conference is schedule to hold at the Shell Hall, Muson Centre, Lagos on Wednesday, September 26, 2018 by 9am.

N

ix xHash Communication, a multimedia agency has concluded plans to host its maiden digital training to boost the capacity of Small and Medium Enterprises (SMEs) in Ikorodu area of Lagos.

T he training, which is slated for Thursday, 27 September, is expected to improve the skills of entrepreneurs through social media channels.

Adenike Fagbemi, convener of the training, said the training is tagged, ‘Boost your business with social media’, a specialised initiative designed for business owners where they will be groomed on tips to help boost their brands viability online.

Fagbemi said, the training would be accommodating no fewer than 90 businesses within the environs with the aim of improving brand management hence making Ikorodu the hub of online

businesses.

She said the training cut across improving online visibility of businesses using social media tools and platforms, upgrade entrepreneurs ways of writing engaging contents that will attract customers to their businesses.

Start-Up Digest Team ODINAKA ANUDU Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Angel James Joel Samson Graphics

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Meet Moyosade Ademiluyi, brain behind Sisiadire Designs Moyosade Ademiluyi is the CEO of Sisiadire Designs, a Lagos-based fashion brand. Ademiluyi is a student currently studying Agricultural Economics at Obafemi Awolowo University, Ile-Ife. The young entrepreneur, who has built her brand on creating ‘adire’ fabrics designs, sits down in an interview with BUNMI BAILEY to discuss her business and how she combines studies with school.

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Tell us about your business. isiadire designs is a first choice fashion brand that is aimed at raising the standards of the Nigerian textile industry, producing quality apparels, especially for teenagers and young adults. We allow people to order and get custom-designed and dyed clothing of any type. We make use of modern trends in garment-making, adapting these techniques in the making designs.

We produce different kinds of things such as bags, t-shirts, socks, and ties, among others, with the use of ‘adire’ (textile is the indigodyed cloth made in south-western Nigeria). Our social media handles are @sisiadire_designs on IG Sisiadiredesigns on Facebook.

How did you come about the tie and dye business?

After my secondary school education, university wasn’t coming through and I wasn’t keen to sit at home doing nothing. I was looking for anything to do to keep me busy and to also discover myself. I was learning hairdressing and makeup, but I couldn’t continue learning so I stopped. I was still looking for what to do when suddenly, the

garment-making, experimentation and practice, imaginative mind and creative hands are the skills you need. You need tools, fabrics, dye, twine and chemicals.

Who are your customers, and do you have plans for expansion?

Our customers are young adults and teenagers because of the modern touch we add to adire, but we’re looking at reaching a larger audience by supplying to fabric wholesalers and retailers outlets.

Yes, we’ve plans for expansion.

Moyosade Ademiluyi

idea of tye and dye crossed my mind. It wasn’t really popular and I loved being unique and doing what people weren’t really open to. I started searching online for people doing it and asking if they could tutor me. I didn’t find any until I came across Arewa and like they say, the rest is now history.

I started with a sum of N5,000 and today I can say my business is worth more than what I started with by far.

How much capital did you start with, and how big can you say you are now?

What skills and tools are necessary for your kind of business?

Effective use of modern skills in

Is tie and dye business lucrative?

The tie and dye industry is lucrative because it’s not really crowded.

Why, in your opinion, do most start-ups fail?

I think most start-ups fail because there’s no market need for their products. Some are getting outcompeted; others could be that their products lack market traction.

Some experts believe that there is enough money for start-ups but that some of you are not prepared to get it. Do you agree to this?

No, I do not agree. Most of the time, some of us do not get money to fund our businesses because there is a lot of competition and someone has to win. I am of the

opinion that a lot of young people are doing so much to get funds for their businesses.

Do you have any mentor in the tie and dye industry? If yes, who are they? If no,why not?

Yes, I do have mentors and they are Arewa Tobiloba Adesanya of Adireworld and Erma Duncan, founder of ilovetocreate.com What challenges are you facing in your business?

One of the major challenges is awareness. People do not really know what adire is about and those that do, think it is old- fashioned. Another challenge is that some people do not want to get made-in-Nigeria products; they prefer made-in- China.

How can the challenges you listed be tackled?

There is a need to create more awareness, enlighten people and help them see that more can be done with adire beyond the cliché we all know. I believe that if people who are involved in making made-in-Nigeria products add more value, and if people would buy from them, the industry will grow bigger.

Why I became an edupreneur Adekanye Bamiyo is the proprietress of Glorious Light Academy in Ilorin, Kwara State. Bamiyo is an architect with a passion for children. In this interview with SIKIRAT SHEHU, the entrepreneur reveals what motivated her to set up the school and why she injected N1.4 million into it recently despite economic challenges.

Tell us about Glorious Light Academy. he school started fully in 2016 with a crèche.

Initially, I was taking care of just a child, but today, we have about 80 children. Both kindergarten and crèche were approved by the Ministry of Education under the Women’s Affairs Commission, Kwara State.

I started with a lady and after sometime, I discovered we were getting it right. So, I had to resign from my work to be able to concentrate and be fully on ground.

For now, I have about 11 qualified teachers.

However, it has been quite challenging because it is not easy dealing with children of different backgrounds and coping with their parents.

ground for it, we are doing it together.

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Tell us about yourself and what motivated you into teaching?

I am an architect by profession, but naturally, I have a passion for children. I have a second degree in Architecture from Kwara Poly and

How will you juxtapose architecture and school business?

Architecture is preferable to school affairs because, up till now, we are still investing. We cannot talk of profit now because whatever comes in from the other end is going into the school, as we are still funding it from the proceeds of our careers.

We are financing and sponsoring the school, so, to compare the two, architecture is more profitable than school investment. It is all about passion; it is like a ministry and we keep injecting funds into it.

Adekanye Bamiyo

University of Jos, Plateau State.

I was a practising architect, but I am not fully into it now. I have had a special affection for children from my youth age. I love seeing them around me.

So, when I graduated, there

was no time as I was busy with my career. Despite this, it was still on my mind. When I married, my husband aligned with me and my ambition. Today, we are both involved in the business.

Although, he is not fully on

How much have you spent so far?

Between last term and now, we have invested up to N1.4 million into the school from another purse— not from the school purse.

As of now, the school has not produced one-thirds of that as profit.

We started in our own residence with a sitting room. Later, we moved to dining and took a

room. After sometime, we increased to two rooms. At some point, the place was not conducive again because people kept bringing their wards to us. God provided a big building that we are using now for the school. Already, we have reached primary five.

Everything is in God’s hands.

The kind of vision we have and mission we are pursuing, we want our students to be able to stand anywhere among other children, which is what drives us to go extra mile to put so many things in place.

We expose them to things that are beyond their levels— from crèche to primary five.

What are your plans for future?

By the grace of God, we are planning to maintain the standards and as well as keep upgrading the school for a greater height.

My advice to women is that they should be prayerful, rely on God and be hard-working because it pays when you have something doing. It may not be much but it is better than staying idle.

BUSINESS DAY

Monday 24 September 2018

45

Start-Up Digest

Positioning Nigerian MSMEs for global competitiveness through standardisation ODINAKA ANUDU

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ikipedia defines s t a n dardisation as the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organisations and governments.

Standardisation enables firms to compete favourably in both local and international markets. Standardisation, as it relates to Nigerian micro, small and medium enterprises (MSMEs), was discussed at the September Breakfast Meeting organised by the Nigerian-American Chamber of Commerce (NACC) last Wednesday.

Dikko Umaru Radda, director-general of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), was the guest speaker. Radda explained that standards facilitated business interaction, enabling companies to comply with relevant laws and regulations, speeding up the introduction of innovative products to market , and providing interoperability between new and existing products, services and processes.

Radda said there were clear, tangible benefits for using standards.

“MSMEs can use es-

L-R: Monday Ewans, director, Enterprise, Development and Promotion, SMEDAN; Oluwatoyin Akomolafe, president, Nigerian-American Chamber of Commerce; and Macauley Atasie, managing director, Nextzon Business Services Limited at the NACC September breakfast meeting held in Lagos on 19th September

tablished standards in the development of new products in order to reduce the resources spent on research and development and improve their ability to innovate,” Radda, who was represented by Monday Evans, director of Enterpriese, Development and Promotion at SMEDAN, said.

“And by proving that they conform to standards, they can win new customers and retain existing ones by demonstrating the qual-

ity of products,” he said.

He pointed out that regulators and policy makers could make standards work for MSMEs by building their capacity on standards, strengthening their technical infrastructure and improving governance at home to facilitate border crossing.

Oluyemisi Ogundipe, vice president, South West zone of the African Women’s Entrepreneurship Programme (AWEP), said MSMEs must understand that quality was

indispensable.

“Standards make you more efficient. Few weeks ago, there were 339 standards approved. How will the MSMEs make sense of these? Standards are not the first thing many businesses think, but we are saying that they should be.”

On her part, Ola Brown, founder and chief executive of Flying Doctors Nigeria, said Nigeria must grow the MSME sector to lift the majority of people out of the poverty line.

Brown pointed out that there were ‘evil forces’ militating against MSMEs in the country.

“One is the issue of multiple taxation. If you look at the taxes by the Federal Inland Revenue Service, Lagos Inland Revenue Service and the rest, you will discover that by the time you pay all of them, you have nothing left,” Brown said.

She said the monetary policy rate (MPR) was so high, pushing a number of entrepreneurs into cash crunch. The MPR is often set by the Central Bank of Nigeria and is currently 14 percent. It is the benchmark interest rate, meaning that it determines that trajectory of interest rates in an economy.

B ro w n s t re s s e d t h e need to cut this to enable entrepreneurs have access to cheap funds.

“What we did in relation to taxes was to move to free trade zones. It enabled us to cut down on these taxes,” she disclosed, advising other small businesses to do so.

B ro w n s t re s s e d t h e need for entrepreneurs to better engage and manage people.

Solomon Aderoju, chairman, Nigerian Association of Small and Medium Scale Enterprises (NASME), Lagos State chapter, stressed the need for standards to be seamless as well as cost-and

time-effective.

Macaulay Atasie, managing director/chief executive officer of Nextzon Business Services Limited, said it was important for MSMEs to cluster together and explore export opportunities.

“The rest of the world has a major demand for Nigerian standardised products,” he said.

Oluwatoyin Akomolafe, president, Nigerian-American Chamber of Commerce, said MSMEs in the countr y struggled with a number of problems, prominent of which was non-availability of funds.

“Most SMEs operate in a manner that inhibits them from accessing funds from most financial institutions that see them as high risk.

Some of the limiting factors include: poor planning and management, lack of a proper structure, and low capacity building utilisation, among others,” Akomolafe said. “ T h e a d v a nt a g e s o f SMEs to any country are definitely obvious. These include: contribution to the economy in terms of increase in output of goods and services; generation of jobs, particularly in the rapidly growing service sector; offering a medium for shrinking disparities in income; and developing a collection of skilled and semi-skilled workforce as a foundation for imminent industrial expansion.”

How Roedl & Partner instilled entrepreneurship skills in leaders of NFPOs ODINAKA ANUDU

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he leaders of not-forprofit organisations (NFPOs) were hosted at the recent edition of the ‘Business Unusual Seminar’ with Wole Oluyemi on Saturday, 15th September, 2018 at the Conference Hall of the Nigerian-German Business Association in Lagos. The seminar was attended by business professionals and stakeholders in the not-for-profit sector.

Roedl & Partner, the organisers of the seminar, is a Lagos-based multi-disciplinary advisory firm that provides accounting, tax, advisory and company secretarial services to ambitious organisations, including NFPOs. Business Unusual Seminar was conceived out of a desire to equip corporate

leaders and managers with the requisite knowledge in leading successful organizations in the Nigerian business environment.

The seminar kicked-off at with registrations and breakfast for attendees. The first session of the seminar featured an overview of the Nigerian social sector, and the regulatory, legal and tax environment. Wole Oluyemi, the lead speaker, compared the model of not-for-profit organisations with that of forprofit organisations, thus elucidating the similarities and differences in the legal and regulatory frameworks. According to him, “a challenge with many Nigerian NFPOs is that they don’t have a strong business model and structure that has the capability of earning donor confidence.”

The seminar also emphasised the roles and re-

sponsibilities of the trustees of NFPOs, the functions of the governing council and executive committees, in addition to the tax requirements and exposures for NF-

POs. The general erroneous assumption that NFPOs do not have any tax obligation was discussed and explained in details.

Wole Oluyemi concluded

the seminar with a focus on Financial Management for Non-profit organisations using several real life examples to buttress his points, prior to the extensive and rigor-

Some of the participants pose for a photo with Wole Oluyemi after the event.

Photo credit: Roedl & Partner

ous discussions on the two case studies that were used to recap on the various key learnings from the seminar.

One of the participants at the seminar, said that the “Business Unusual Seminar is similar to an MBA Class, but cheaper”. Another participant said, “the session was great and lively and interactive, and there is a need to promote this seminar to involve more NGOs in Nigeria”.

Wole Oluyemi, the lead speaker at the seminar, is a chartered accountant and business advisor, with special interests in SME businesses, strategy, finance and tax. He is also a doctoral researcher at Cranfield University (UK) with research focus on corporate political strategy. He can be reached at @WoleOluyemiCo on Instagram, Twitter and FaceBook.

46

BUSINESS DAY Harvard Business Review

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MondayMorning

Monday 17 September 2018

In association with

Is office politics a white man’s game?

MICHELLE KING

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ove it or hate it, office politics is an inevitable part of organizational life. While the link between political skill and career success is firmly established, there is a problem: Office politics doesn’t work for everyone in the same way.

Although current research investigating gender or ethnic differences in political skill is limited, researchers Pamela Perrewé and Debra Nelson argue that women often overlook the importance of office politics and rely on task accomplishment as the primary means of advancing their careers.

Many women are reluctant to engage with it, or even see it as distasteful. Some people have called women and racial minorities “politically naïve” for avoiding politics, and have argued that training and mentoring initia-

tives are necessary to help women see the value in office politics and learn to play the game.

This argument, however, is built on the assumption that women and minorities lack the political skills needed to navigate organizational life. Recent research does not support this idea.

If the issue isn’t a lack of skill, then why are women and racial minorities less engaged in office politics?

Unpacking this issue is critical given the established link between political skill and career advancement.

SAME GAME, DIFFERENT BENEFITS Dominant groups in organizations generally set the standards for behavior within their workplaces, and as Caucasian men hold most leadership positions today, it can be argued that they set the norms for political behavior at work. It seems even if women and racial minori-

ties engage in political behaviors, they may not benefit from them in the same way that white men do.

THE POLITICAL DOUBLE BIND A key reason for this is

that for women and minorities, engaging in political behaviors means engaging in behaviors that are not their own. For example, a key political skill is drawing attention to your accom-

plishments, but women are expected to be humble, communal and self-effacing.

Research has found women who engage in office politics often consider it emotionally draining, and anecdotal evidence suggests that women may even reject leadership roles because of their dislike of office politics.

Future research needs to investigate whether this holds true for minority groups as well as white men, as we may find that office politics is really an outdated game that no one wants to play.

Given the challenges that organizational politics creates for women and racial minorities, perhaps we should stop implementing programs aimed at improving political skill — since it doesn’t seem the problem is a lack of skill — and instead focus on creating environments that support individuals engaging in a diverse range of behaviors.

One barrier to creating a more equitable system for everyone may be the leaders in charge today. These leaders not only set the political norms but also help create and maintain the political environment that favors them at the disadvantage of everyone else.

Creating cooperative work environments is one way to fix this, but that can only be achieved if today’s existing leaders are willing to give up the game.

(Michelle King leads UN Women’s Integrated Strategy for Innovation and Global Innovation Coalition for Change. David Denyer is Professor of Leadership and Organizational Change at Cranfield School of Management.)

Make sure everyone on your team sees learning as part of their job KRISTI HEDGES

T

o create a culture that encourages employee growth, managers need to make learning an expectation — not an option. Managers need to encourage continual learning with supportive behaviors that, in turn, will shape their company culture.

— BE A VOCAL ROLE MODEL. Managers should frame learning as a growth opportunity, not as a quid pro quo for promotion.If you talk about learning as being enjoyable, you set a playful tone that encourages people to be adaptively authentic — and open to trying new behaviors.

— CELEBRATE

GROWTH AND LEAN INTO FAILURE. If you want your team to be excited about and find purpose in their work, encourage them to be

curious and experiment.

A successful learning environment celebrates growth for growth’s sake.

You can also support learning by not hiding

failures. One technology company I advise began instituting mandatory post-mortems for all of its product releases and major programs, no mat-

ter the results.

— MAKE IT EASY FOR PEOPLE. People usually take on development opportunities on top of their regular workload, so the easier you can make it for them to find the right program, the better. When someone is attending a program, lighten their workload to reduce stress and allow them to be present.

And make it easy for participants to apply the learning. It’s more valuable to let people apply what they’ve learned to their own projects first.

This gives them the opportunity to determine what lessons are relevant before sharing them with the rest of the team.

(C) (2017) Harvard Business Review. Distributed by New York Times Syndicate

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Visit any of our designated branches nationwide for your following invisible trade transactions: School Fees Pilgrimage & Other Travel Allowances (PTA and BTA) Medical Allowances

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— FOSTER NEW EXPERIENCES. Research shows that to be inspired, we need to transcend current thought and become aware of new or better possibilities. As the adage goes, if you keep doing what you’ve always done, you’ll get what you’ve always gotten.

Frontline managers have the largest and most immediate influence. If you’re a manager who wants to grow your team, demonstrate that you’re committed to growth yourself.

(Kristi Hedges is a senior leadership coach who specializes in executive communications.)

Monday 24 September 2018

Harvard Business Review

C002D5556

MondayMorning

BUSINESS DAY

47

In association with

Why supervisors envy their employees MICHELLE K. DUFFY AND BENNETT J. TEPPER

D

espite distinct advantages, supervisors are not immune to feeling downward envy — that is, envy of the employees they oversee. This is especially true when a subordinate has strong social skills, demonstrates leadership potential, develops close relationships with senior management or is seen as a source of innovative ideas.

Little has been studied about this phenomenon, and specifically how that emotion is expressed in the workplace. Our research addresses this gap. We conducted two studies of

supervisor-subordinate relationships involving employees of two companies in China; one is a management consulting company and the other a natural gas company.

We found that when supervisory leaders experienced downward envy toward subordinates they saw as competent but cold — that is, capable workers with a more aloof attitude — the leaders were more likely to use abusive supervision to try and close the gap between themselves and their subordinates.

But if a supervisor envied an employee they considered warm and competent, that supervisor was far more likely to reduce the perceived gap by raising themselves up, not by pushing that employee down.

sion, those negative responses are not an inevitable outcome.

For leaders, putting assumptions about envied others to the test can transform a natural emotion from a source of injury to a source of personal improvement, and ultimately, organizational success.

These findings have several practical implications for organizations.

Evidence suggests that people who feel envied often hide their positive qualities and avoid

appearing too successful. But our research indicates that employees shouldn’t hide their talents: Rather, taking a warmer, more cooperative approach may have

a far more protective effect.

Second, they can help business leaders understand that while downward envy can be linked with abusive supervi-

(Lingtao Yu is an assistant professor at the UBC Sauder School of Business. Michelle K. Duffy is the Vernon Heath chair at the Carlson School of Management. Bennett J. Tepper is the Abramowitz Memorial professor and chair of the department of management and human resources at Ohio State University’s Fisher College of Business.)

Why Bcc-ing the boss is a bad practice DAVID DE CREMER, JACK MCGUIRE AND TESSA HAESEVOETS

tions.

An effective solution could be to rewrite an email to personally address a team supervisor. Such an email could be framed as an update and would achieve the administrative goals of Bcc-ing — to keep the supervisor up to date — without alienating the rest of the team.

E

mail continues to be one of the most common ways people communicate at work, and one of the most common ways people miscommunicate at work. The Cc and Bcc functions can corrode trust and cloud intentions. To explore how senders and recipients interpret the use of these tools, we conducted a series of five experimental studies in which a total of 694 working adults participated.

In our first study, we wanted to explore how people perceive the use of Bcc relative to the use of Cc. Participants were presented with either one of two work-related situations that described a situation in which their co-worker sent the participant an email including their supervisor in either Bcc or Cc. Participants then had to evaluate the work situation presented on a

number of measures. This study revealed that people consider Bcc-ing a supervisor to be less moral, more secretive and more intimidating than Cc-ing a supervisor.

In a second study, we set out to uncover the reasons people choose to use Bcc in the first place. Most frequently cited were “administrative reasons,” or a desire not to share the

contact information of the supervisor.

In two subsequent studies, we tested whether these two administrative explanations would soften recipients’ negative perceptions of the sender. The results of these two studies showed that the use of Bcc (compared to the use of the more-transparent Cc function) made recipients evaluate the sender as less

moral — and less fit to be the team leader. Somewhat surprisingly, our results revealed that when the sender retroactively mentioned either of these two “administrative” reasons for using Bcc, recipients’ negative perceptions did notsoften.

To be sure, situations do exist where, for the interest of the team or the organization, an email has to

be shared with someone higher up without the other recipients knowing. We conducted a final study to address situations like these. Our results found that people significantly prefer forwarding emails to Bcc-ing, and also perceive forwarding emails to be less harmful, even though recipients continue to perceive the sender as having immoral inten-

Brought to you courtesy of First Bank Nigeria

(David De Cremer is a professor at the Judge Business School, Cambridge, and a visiting professor at Peking University HSBC Business School. Jack McGuire is the experimental lab manager at the Cambridge Experimental and Behavioral Economics Group and research assistant at Judge Business School. Tessa Haesevoets is a postdoctoral researcher at Ghent University, Belgium.)

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Monday 24 September 2018

LegalPerspectives With Odunayo Oyasiji What you need to know about ex parte applications and orders

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he recent developments in the country/judiciary make it necessary to examine what an ex parte application is all about. Of recent, a popular company that an ex parte order was granted against was reported to have said that it will not obey the order as the court did not hear its own side before granting the said order.

Also, the Chief Judge of the Federal High Court (Justice Abdul Abdu-Kafarati) recently barred Federal High Court judges from granting ex parte orders with regards to election matters (as the election year is just few months away).

An ex parte application usually involves only one party- the party that files it. It is usually brought before the court for the said party to be heard without the presence of the party against whom an ex parte order is being sought.

Niki Tobi (JSC) in his book ‘The Nigerian Judge’ defines an ex-parte application as “proceedings brought on behalf of one interested party without notice to, and in the absence of the other party.

This means that the application for interim injunction brought ex-parte is heard by trial judges in the absence of the adverse party”. Nnaemeka –Agu (JSC) in delivering the lead judgement in the case of Kotoye V CBN [1989] 1 NWLR pt. 98 gives a detailed explanation of an ex parte application when he stated that “by their very nature injunctions granted on ex parte applications can only be properly interim in nature. They are made, without notice to the other side, to keep matters in status quo to a named date, usually not more than a few days, or until the Respondent can be put on notice. The rationale of an order made on such an application is that delay to be caused by proceeding in the ordinary way by putting the other side on notice would or might cause such an irretrievable or serious mischief. Such injunctions are for cases of real urgency. The emphasis is on ‘real’.”

Is this not against the principle of fair hearing?- Audi Alteram Parterm (which means that both side must be heard)

and Nemo Judex in Causua (which means that one cannot be a judge in his own case).

The answer is no. Uwais (JSC) in the case of 7-Up Bottling Company Limited V Abiola & Sons Limited (1995) 3 NWLR (Pt.383) noted that “there is no doubt that the right of fair hearing under the constitution is synonymous with the criminal law rule of natural justice …in both civil and criminal proceedings, there are certain steps to be taken which are incidental or preliminary to the substantive case, such steps include, motion for directions, interim or interlocutory injunction. It is in respect of such cases that the provision are made in court rules to enable the party differed to make ex-parte applications… if the Supreme Court can dispose of an applications under S. 213 (4) of the 1979. Constitution, without oral hearing of the application, then I see nothing wrong or unconstitutional for a trial court to deal with an exparte motion under its rule”.

It must be noted that the court at the stage of ex parte application is not going to delve into the merit of the case. The application is usually brought to seek a temporary order of court in a situation where irreparable damage or harm will occur if the other party is put on notice. It is usually used in urgent matters. Examples of such situation where ex parte order is

usually granted are – where property is involved (to preserve the property), a spouse who is being physically abused can seek an order restraining the alleged abuser. The order is granted pending the time when the court will hear both parties. The Supreme Court of Nigeria in the case of Leedo Presidential Motel Ltd. v. Bank of the North, (1998) 7 SCNJ 328 at 353 stated two circumstances where an application ex parte can be made. The circumstances are – when the interest of the adverse party will not be affected (e.g. applications for leave to serve processes by substituted means) and when time is of essence (this symbolises urgent situations where things can go wrong if an order is not granted without the other party being heard). Ex parte orders are usually meant to last for few days. The other party is expected to be put on notice before the expiration period of the order. The party seeking an ex parte order is expected to make full disclosure on the matter. Failure to do so will serve as a ground to set aside the order when the failure comes to the notice of the court.

Before an ex parte order is granted, the party seeking the order must show to the court that he has a legal right which is to be protected by law, that the situation is really urgent (that is why the affidavit in some situations

is usually tagged ‘affidavit of urgency’), he must show that irreparable damage will be done if the court fails to intervene by granting the order and the applicant must show that there is a prima facie case (i.e. that on the basis of what is before the court there is a good legal claim). Furthermore, the applicant must undertake to compensate or indemnify the other party for any damage suffered should the substantive suit turn out to be frivolous or vexatious.

Balance of convenience must also be shown – the applicant must show to the court that he will suffer injury or damage if the application is denied.

The possibility of the abuse of the process (ex parte) is high and that is the reason why courts are often reluctant to grant ex parte orders. There have been instances of conflicting ex parte orders from the same court (but different judicial divisions). Ex parte orders had also been granted in situations where they ought not to be granted. An example of such situation is in the case of Honeywell Flour Mills Plc V Ecobank Nigeria Limited (2016) LPELR – 40221 (CA) the Federal High Court granted ex parte orders freezing the assets of Honeywell Flour Mills Plc. Honeywell approached the court for the ex parte order to be set aside as the order is adverse to the guiding statute.

The court instead of setting

aside the order decided to vary the order to allow the company have access to some of its fund.

The company being dissatisfied with this approached the Court of Appeal. It was argued before the Court of Appeal that by virtue of Order 4 of the Companies Winding Rules 2010 interim asset freezing orders are not to be granted ex parte i.e. without the presence of the other party. The Court of Appeal in delivering its judgement in favour of Honeywell stated that “the grant of interim orders of injunction by the lower court, particularly Orders no (1) and No (3) (whether varied or not) without any notice to the appellant thereby affording it the opportunity to be heard on a matter that seeks to paralyze and immobilise a functional and ongoing corporate organization is an exercise of discretion too extreme and injudicious to be allowed to subsist given the negative socioeconomic impact it will have not only on the appellant but on its employees and society at large”.

It must be pointed out that the fact that an order was granted without hearing the other side does not take away its veracity. It is an order of court and it must be obeyed. A party that is aggrieved can approach the court for the order to be set aside provided it has genuine grounds. Therefore, disregarding an order of court on the basis that it was granted without hearing both sides will make the disobedient party to be liable for contempt of court.

In conclusion, ex parte applications are meant for situations that demands real urgency –where irreparable loss or damage will be done if an order is not granted in the absence of the other party.

Therefore, it is an essential part of our justice system. However, in granting ex parte orders, the court must tread with caution so as not to grant orders based on frivolous applications and thereby occasioning injustice.

The integrity of the judiciary must be preserved and as such the court must be careful not to grant contradictory ex parte orders. Ex parte orders are granted with the aim of doing justice and therefore should not be turned to an instrument of confusion and injustice.

Monday 24 September 2018

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NBS to spend $3.5m on poverty statistics survey

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unde Adebisi, the national coordinator, Nigeria Living Standard Survey (NLSS), says the National Bureau of Statistics (NBS) will spend $3.5million in carrying out the living standard survey.

Adebisi said that the grant by the World Bank would be disbursed to the NBS through the National social Safety Net Coordinating Office (NASSCO).

According to him, the first trench of the disbursement has been done and the field work for the project would commence on September 27.

The NLSS aims to measure the level of poverty and welfare of citizens at the national and sub-national levels of government. The survey when completed would inform government in addressing the impact of its policies and programmes.

According to Adebisi, about 320 staff comprised of the World Bank, the NBS, monitors and trainees would be used in carrying out the project.

Speaking, Yemi Kale, the Statistician General of the Federation, said the survey

was supposed to be done every five years but was not done in 2014 due to funding and logistics challenges.

Kale noted that the project would take 12 months to be completed but some indicators of the survey would be published quarterly.

He said the bureau had taken critical quality assurance measures to ensure it got accurate statistics from respondents in the country.

On the proposed census of agriculture products, Kale said:” we are going to every farmland, weather crop or livestock and capturing it on a map.

“And by the time we finish this survey, we will know where every single farmland is; the name of the farm, what it is growing, the size of the land will be on a map. This data is important to the country; it is not the usual one size fits all.

“You have to understand what each farm is growing, what their particular challenges are and from that information, agencies like the ministry of agriculture can now take targeted policy and decision rather than general policies.

86% of world’s poor will live in Sub-Saharan Africa by 2050 – Gates ISAAC ANYAOGU

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ill Gates, American business magnate and philanthropist is urging the world to invest in human capital development in Sub Saharan Africa, a continent, with only 14 percent of the world’s population but is currently responsible for 24 percent of new births and on track to have 86 percent of the world’s poor by 2050.

In a conference call with journalists from around the world, Gates said, “The particular challenge of the population growth in Africa leads to a simple idea that the world should help Africa invest in its human capital, and that means both the health and the education of this young generation coming up in Africa.”

While this may be a simple enough notion, African leaders with shoestring budgets for education lend themselves to criticism of prioritising presidential mansions over schools. In 2018, Nigeria is spending N605.8 billion which is 7.03 percent of the N8.6 trillion budget on education. This is a far cry from the United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) 26 percent recommendation.

Gates said investments in

human capital development will have big impacts on the continent.

“And if those investments are made in the right way, you get two kind of amazing effects. One is those kids are able to contribute fully and drive a lot of economic growth, and then further, the patterns of behaviour on a voluntary basis would be that the level of population growth would actually diminish, just like it has in so many other countries,” said Gates.

This idea forms the centrepiece of the Bill and Melinda Gates Foundation 2018 Goalkeepers report, which measures the world’s progress on achieving the sustainable development goals. The report sounded the alarm that extreme poverty is becoming heavily concentrated in subSaharan African countries.

“The challenge is that within Africa, poverty is concentrating in just a handful of very fast-growing countries. By 2050, for example, more than 40 percent of the extremely poor people in the world will live in just two countries: Democratic Republic of the Congo and Nigeria. Even within these countries, poverty is concentrating in certain areas,” the report said.

49 News

BUSINESS DAY

Respect will of Osun people, Atiku warns INEC Innocent Odoh, Abuja

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ollowing the declaration of the governorship election in Osun State as inconclusive by the Independent National Electoral Commission (INEC) Atiku Abubakar, a former vice president and presidential aspirant of the Peoples Democratic Party (PDP), has warned the electoral body to “resist the attempt to be used to truncate the will of the people of Osun State, who voted for the PDP candidate in last Saturday’s governorship election.”

INEC on Sunday declared the election as inconclusive and announced Thursday, September 27 as a date for a run off. Before this decision, the candidate of the PDP, Ademola Adeleke secured a total of 254,698 while Gboyega Oyetola, the All Progressives Party (APC) candidate trailed with 254,345. So the PDP used a margin of 353 votes to top the APC. In a statement issued on Sunday by his presidential campaign organisation, Atiku said “the people of Osun State have freely given their mandate to Senator

Ademola Adeleke and the Peoples Democratic Party, and I urge the Independent National Electoral Commission to resist any and every temptation to be used to tamper with the will of the people of Osun State.”

Atiku warned that “the attempt by the All Progressives Congress to snatch victory from the jaws of defeat will be resisted with every legitimate and democratic means.”

The PDP presidential aspirant further noted that he was in Osun on Wednesday September 19, 2018 and saw firsthand the love the people of Osun have for Senator Adeleke and the PDP. He said that he told people of Osun that their years of underdevelopment and backwardness will end with the election of Senator Adeleke and the PDP, adding that he stands by that promise.

“As I said in my statement condemning the police invitation to Senator Ademola Adeleke last Wednesday, I stand with him and the people of Osun. In good times and bad times, the PDP and I will always be with Senator Adeleke and the good people of Osun.

50

BUSINESS DAY

Monday 24 September 2018

Live @ The Exchanges Unlisted shares on NASD OTC Securities Exchange continue to rise …CSCS, Niger Delta Exploration & Production, others drive record 17.53% gain Iheanyi Nwachukwu

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he official index of the NASD OTC Securities Exchange, tagged the Unlisted Shares Index (USI) has continued a steady recovery that started at the beginning of 2018.

As at close of trade on September 21, 2018, the market capitalisation was N473.05 billion, which is 17.53percent higher than when market opened in January at N402.51 billion, representing N70.54billion increase.

The NASD OTC Securities Exchange has admitted 38 securities.

The market for unlisted securities has 244 Registered Brokers and 130 Participating Institutions (PIs). The quarterly changes in market capitalisation show the firstquarter (Q1) recorded gain of 11.61percent; Q2 declined by 1.83percent; while in Q3 to September 21, 2018 the market has risen by 7.23percent.

As the market approaches end of Q3’ 2018, the top five gainers this year are led by Central Securities Clearing System Plc which has risen from N7.15 as at January 3, 2018 to N13.53 as at September 21, 2018, representing 89percent increase.

Likewise, Niger Delta Exploration & Production Plc which has increased within same period from N123.01 to N170, up 38percent; and Trustbond Mortgage Bank Plc which is now priced at 79kobo from 60kobo at the beginning of this year, which represents 32percent increase.

Also, Industrial and General Insurance Plc which opened this year at 6kobo has increased to 7kobo, up 17percent; while Friesland Campina Wamco Nigeria Plc that was priced at N140.05 at the beginning of this year has risen to N150, up 7percent.

“It is anticipated that the reawakening of economic activities which is expected to be sustained in 2018 will buoy market

activities as this will increase the performance of many businesses in the OTC Market space and reignite investor interest.

“With increased awareness of the OTC Market and the support of the SEC to provide the regulatory framework required to grow the fledgling OTC space, we are optimistic that these will in no distant time yield the much awaited results”, Olutola Mobolurin, chairman, Board of Directors, NASD Plc said on July 11 while presenting the 2017 annual reports and financial statements of the Exchange to shareholders at the 5th Annual General Meeting.

“Our vision remains to be the hub of first call for capital formation in West Africa. In line with this, in 2018, we look forward to: Full operation of the NASDeP which we believe will significantly deepen the reach and contribution of the capital market to the nation’s growth; strategic partnership with partners both inside and out of the capital market; collaboration with other markets across Africa and beyond; improving customer service and strengthening the resilience and competitiveness of Nigeria’s financial markets; working closely with Nigeria’s financial technology industry - greatly changing the dynamic of the capital market; continually improving trade technology to provide a scalable and appropriate platform for price discovery and capital mobilisation”, Bola Ajomale, Managing Director/CEO, NASD Plc also said at the meeting in July this year.

NASD brings together all stakeholders in capital flows to a common environment where interactions are safe, efficient, transparent and appropriately priced.

Operators in that market environment include issuers of equity and fixed income instruments, institutional and individual investors, a growing pool of accredited Authorised Traders and their Participating Institutions, Set-

tlement banks, Clearing systems, private equity and venture capital firms with a view to increasing liquidity in the unquoted segment of the long term funding market.

The NASD OTC market facilitates transactions through two independent trading platforms. First is the leased trading platform which is a platform

recently acquired by the Nigerian Stock Exchange (NSE) from Nasdaq OMX. This platform allows for multilateral trading and continuous transaction reporting.

NASD leased the trading platform from the NSE and all Participating Institutions are given access to trade on this segment of the mar-

ket. Clearing is provided by the Central Securities Clearing System while settlement is done by six appointed Settlement banks for NASD OTC transactions.

Second trading platform is “BITS” which is a bi-lateral inter-dealer trading system proprietary to the NASD which allows trades to be con-

ducted and consummated between select Participating Institutions.

This web based platform allows brokers to interact from all corners of the world. Originally BITS was used to trade equities in all unquoted public companies, but increasingly it has become a platform for other asset classes.

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Nigeria says reviewing ERGP after targets fall short LOLADE AKINMURELE

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igeria is reviewing the performance of a national economic plan (Economic Recovery and Growth Plan) that was supposed to stimulate economic growth and create jobs in an economy trying to find its feet after slumping to its first recession in a quarter of a century.

The growth plan, unveiled February 2017, set out targets for key macroeconomic indices for the four years through 2020, but actual performance has now underwhelmed for the second year running.

The trend casts a cloud over how Africa’s most populous nation and now poverty capital of the worldhaving overtaken India as home to the largest number of poor people- will grow inclusively and create sufficient jobs for its mainly youthful population.

“We set up a committee last week to do an assessment of the plan,” Adey-

emi Dipeolu, the special assistant to the president on economic matters told Business Day. “At the end of that assessment, we will know areas where we have done well or poorly and then we can improve,” Dipeolu said, without providing further details on when the evaluation would be completed.

The team is said to comprise public and private sector players.

The ERGP had been criticised by investors and business leaders for being bereft of well-articulated and detailed steps that will draw the line between wishful thinking and actionable ambition.

That led many to dismiss the plan as being overly optimistic and improbable.

“Unless the ERGP becomes a plan that details actions to be taken rather than just setting targets, it may not be taken seriously by the private sector that ought to drive it,” said Ayo Teriba, an economist and CEO of Lagos-based advisory firm, Economic Associates.

“That means it could

fail to have the desired impact and would struggle to meet whatever targets,” Teriba said.

Some of the targets set in the plan include GDP growth of 2.2 percent and 4.8 percent in 2017 and 2018 respectively. In reality, however, the economy grew 0.8 percent in 2017 and looks set to flunk the 2018 target.

In the first half of the year, the economy expanded by 1.7 percent and must now grow by around 3 percent in the third and fourth quarter to keep up with the 4.8 percent target in the ERGP. Furthermore, GDP per capita in Nigeria is forecast by the International Monetary Fund (IMF) to fall for eight straight years (20152022), contradicting the government’s expectations for a steady rise from $2,542 in 2017, $2,640 in 2018, $2,731 in 2019 and $2,854 in 2020.

In actual terms, GDP per capita has fallen four years straight, having gone from $3,268 in 2014 to $2,763 in 2015 and $2,207 in 2016. In 2017, income per capita fell by 10.7 per cent to $1,994.

Heritage Bank support for agriculture and SMEs wins three awards

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eritage Bank Plc has been named the “Best SME Bank Nigeria 2018” by Capital Finance International (CFI.co) and “Agriculture Bank of the Year 2018” by the Nigeria Agriculture Awards (MAA).

Also, the bank was awarded the Best CIBN Chapter of the Year 2018.

The best chapter in terms of member’s mobilisation and participation as well as sponsorship of the Institute programmes.

The bank, which prides itself as the country’s most innovative bank, won the prestigious awards in recognition of its leadership position in delivering development and growth of the Agricultural sector and Small and Medium Enterprises.

CFI is an esteemed print journal reporting on business, economics and finance, headquartered in London. The award is based on recommendations and voting from CFI Partners such as the World Bank, IMF, WTO, UN and IFC. Whilst, the NAA is an annual event powered by AgroNigeria aimed at recognising and rewarding men, women, businesses and institutions who have contributed to Nigeria’s re-emergence as a veritable force in agriculture.

Also, Heritage bank won “For Sustainable Transaction of the Year in Agri-

culture” in the inaugural Nigeria Sustainable Banking Award convened by the Central Bank of Nigeria.

“We are highly honoured to be awarded by renowned organisations and regulators as one of the most supportive financial institutions to the agriculture and SME industries, which are key sectors of the economy and this validates the hard work and success story of the bank to create, preserve and transfer wealth across generations” Managing Director/Chief Executive Officer, Heritage Bank, Ifie Sekibo, said in a statement released by the bank.

Sekibo assured that Heritage Bank has been on the driving seat of the agricultural and SME financing revolution and will continue to compliment the efforts of the CBN by making funds available to both individuals and corporate organisations in their efforts to increase output in both sectors.

He, however, noted that the bank would support the drive for cash crop commodities that would boost Nigeria’s foreign exchange earnings, which the President Mohammad Buhari’s administration has always been encouraging given the dangers the continuous reliance on imported food items pose to its efforts to create jobs as well as develop and diversify the economy.

Sekibo also assured that

the bank would continue to make farming profitable to stakeholders and attractive to the youth, as Heritage Bank has taken the front seat in financing critical agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara.

“The award is in recognition of what we are doing with youths in the SME sector and Biase Plantations Limited, a subsidiary of Wilmar International in supporting oil palm industry and Triton Aqua Africa Limited involved in aquaculture and reforestation projects” Sekibo explained.

The CFI.co judging panel notes disclosed that Heritage Bank was particularly recognised for its strong presence and determination to stay in close proximity to small and medium sized enterprises (SMEs) segment and customers – one of most buoyant parts of the market – and perhaps one of its most important as well.

According to the panel, , the bank stands to benefit from the Nigerian government’s recent decision to improve the business climate for small entrepreneurs.

“The bank also keeps a leading edge over the competition by embracing innovation and advances in technology to offer customers an experience not matched elsewhere.

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Drama and intrigues as Osun almost moves...

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Ahead of the election, Adeleke had been summoned by the police,

had his educational qualifications questioned and missed a vital debate.

However, he still won at the end of the day but ended up not being declared a governor. Perhaps that may still happen before the week runs out.

INEC’s returning officer in the Osun election, Joseph Fuape, a Professor, concluded the announcement of election results at 11 a.m. on Sunday but went on an unexplained recess, which kept voters in the state in tense mood as speculations mounted that INEC was under pressure to manipulate the final results.

In the results announced, Ademola Adeleke of PDP polled 254,698 votes; Gboyega Oyetola of APC polled 254,345 votes; Iyiola Omisore of SDP scored 128,049 votes; Moshood Adeoti of ADP polled 49,742 votes and Fatai Akinbade of ADC had 7,681 votes.

But INEC’s returning officer also declared that the total cancelled votes were 3,498 spreading across four local government areas out of 30 local government areas of the state which include; Osogbo and Orolu in Osun central senatorial district as well as Ife North and South in Osun east senatorial district.

Addressing a press conference after the declaration of re-run poll at INEC office in Osogbo on Sunday, Solomon Soyebi, INEC national commissioner, noted that the total cancelled votes were more than the winning margin between PDP and APC of 353 votes.

Based on the fact the cancelled results exceeded the margin of victory, the electoral act and election guidelines

by INEC required that the elections be declared inconclusive.

Soyebi, who highlighted that three polling units were affected in Orolu with 393, 387 and 167 votes respectively; two units were affected in Ife South with 812 and 502 respectively; one polling unit in Ife North with 353 votes and one polling unit was affected in Osogbo with 884 votes.

While fixing next Thursday 27 September 2018 as the date for the re-run election in the seven polling units, Soyebi noted that the Osun state governorship election “is clearly, one of the most keenly contested elections in the country in recent times.”

He assured the electorate in the affected areas that INEC would mobilise officers, electoral materials as well as security agencies to the affected polling units for hitch-free re-run election, affirming that the best INEC could do when the result margin of two leading contestants is below the cancelled votes, is to call for re-rerun poll.

“I can tell you that where the situation we have at hand occurs, the declaration of winner cannot be made, there will be a re-run in accordance with extant law and INEC guidelines.”

However, some aggrieved members of the PDP on Sunday stormed head office of INEC in Osogbo, to protest of the alleged manipulation of votes by the electoral body.

The PDP members, who were prevented from gaining entry, said that PDP votes in Ayedaade local

government was reduced by 1,000, while over 2,000 votes were added to the figure got by the ruling All Progressives Congress (APC) in Olorunda local government.

Despite heavy downpour and the presence of the heavily armed security agents, the protesters chanted different songs, condemning alleged plan to manipulate the process in favour of APC. The PDP protest seem to have been justified as a staff member of INEC in Ayedaade local government area, Salawu Mutiu Kolawole, was caught removing result of the election for the local government pasted at Saint Peters Primary School, Gbonga.

Salawu said he was directed to remove the result by an electoral officer, buthegotcaughtintheprocessbysome men keeping watch on the premises.

The result of the Ayedaade local government became contentious when the figure got by PDP at the local government collation center was allegedly reduced by almost 1,000 when the figure of the local government was announced at INEC Office.

The result pasted at LG collation centre, PDP got 10, 836 while APC got 10, 861 votes.

However, when the result of the LG was read by the INEC Returning Officer at the State Collation Centre, the figure given as the total votes scored by the PDP was 9,836 while APC got the same 10,861 votes.

Even Churches were affected by the drama of the election in the state, as attendance at church services was low, as many people stayed at home to monitor the results announcement through television and radio sets.

In some churches visited, many seats were unoccupied. There were also minimal vehicular movements in Osogbo, Osun state capital.

When asked about the poor attendants at church, an Osogbo based clergy, Alfred Oladiipo, said “many people stayed back, I believe because of the election results they want to monitor.”

“It is not a good sign about how we treat salvation and issues connected to it. We will continue to plead for mercy from God”, he said.

Not surprisingly, the PDP has rejected the results declared by INEC. In a statement on Sunday, 23 September, the party insisted that the process was conclusive and that its candidate, Ademola Adeleke, should be immediately declared winner by INEC, having met the requirements of the 1999 Constitution (as amended).

Relying on Section 179 (2) (a)(b) of the 1999 Constitution, the party submitted that the declaration of the election as inconclusive by INEC is a ‘sordid robbery’ of the franchise of the people of Osun State, who participated in the election.

The section provides that: “A candidate for an election to the office of Governor of a State shall be deemed to have been duly elected where, there being two or more candidates - (a) he has the highest number of votes cast at the election; and (b) he has not less than one-quarter of all the votes cast in each of at least twothirds of all the local government areas in the State”.

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Ahead Q3 earnings, analysts see good...

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recent past quarters,” said analysts at Cordros.

Consumer goods firms in Africa’s largest economy and oil producer were one of the best performers on the Nigerian All Stock Exchange All

Share Index (NSE) and All Share Index (ASI) in 2017.

Thiswaslargelydue to the introduction of a new foreign exchange regime that eased the flow of foreign currency, plus a hike in the price of products, which added impetus to sales.

But sluggish economic growth

Monday 24 September 2018

Stanbic RSA fund total asset up 25.6% on Investment Securities CYNTHIA IKWUETOGHU

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tanbic Ibtc Retirement Saving Account (RSA) fund posted a growth of 25.6 percent in total assets for the year-ended 31st December 2017, showing positive performance across all financial indices.

According to the results, the growth in its total asset to N1.95 trillion from N1.56 trillion in 2016 was due to an increase in investment securities. Investment at fair value grew by 80.7 percent to N557.98 billion and investments at redemption value grew by 9.7 percent to N1.32 trillion in 2017.

Fund price also increased by 17.1 percent (also known as return on investment) to N3.57 as compared with N3.05 in 2016. Return on investment (ROI) is a performance measure which indicates how much money or profit is made on an investment as a percentage of the cost of the investment.

Inflation-adjusted return which reveals the return on an investment after removing the effects of inflation stood at 0.55 percent. The Compound Annual Growth Rate (CAGR) for three years came in at 12.44 percent.

Removing the effects of inflation from ROI allows the investor to see the true earning potential of the security without external economic forces.

Employer and employee contribution increased by 4.9 percent and 45.1 percent to N127.73 billion and N139.97 billion in full year (FY) 2017 from N121.81 billion and N96.49 billion in 2016 respectively.

As a result of the increase in both employer and employee’s contribution, total contributions rose by 22.6 percent to N267.69 billion.

Whereas, other income declined by 49.6 percent.

The RSA fund manager paid more benefits to its employees during the

year as benefits paid grew by 57.5 percent to N149.29 billion in 2017 from N94.79 billion in the previous year.

Asset management fees grew by 23.5 percent to N37.84 billion and the increase in net assets for the year rose to N393.41 billion. Hence, Stanbic Ibtc reportednetassetsavailableforbenefits at the end of the year at N1.93 trillion.

Furthermore, expense ratio which measures how much of a fund’s assets are used for administrative and other operating expenses stood at 1.96 percent.

Theoretically, a good expense ratio is generally considered to be around 0.5 to 0.75 percent, while an expense ratio above 1.5 percent is considered as high.

Stanbic Ibtc Pension Mangers Limited is a subsidiary of Stanbic Ibtc Holdings Plc. The pension manager is a licensed Pension Fund Administrator (PFA) and was incorporated on the 19th of May, 2004.

L-R: Sani Mashi, director-general, Nigerian Meteorological Agency (NiMet); Petteri Taalas, secretary-general, World Meteorological Organization (WMO), and Olukunle Bangbose, representative of minister of foreign affairs, displaying signed MoU between WMO and ministry of foreign affairs in Abuja.

Bridge bank precedent means Skye equity shareholders wiped out kye bank closed on Friday with a market capitalization of N10.6 billion, up 4.05 percent to the delight of shareholders. But by Monday, news of the revocation of Skye Bank’s banking licence and indefinite suspension of shares from trading at the Nigerian Stock Exchange (NSE) will be enough to turn those smiles to tears.

After trading hours on Friday, the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation set up a bridge bank called Polaris Bank to commence operations as a commercial bank on Monday and assume the assets and liabilities of Skye Bank. While CBN has assured depositors that their funds are safe, the same assurance was not given to shareholders who stand to lose big as their stock which traded at 77 kobo per share on Friday goes to zero once the suspension is lifted on its shares.

We know from past bridges banks how shareholders wealth is completely obliterated after the bank is taken over by the monetary

authority and put in the possession of a bridge bank to return the bank to profitability and selloff the newly structured bank to interested buyers.

The last time bridge banks were set up to perform this function was in 2011. The Bridge Banks are Enterprise Bank Limited which assumed assets of Spring Bank, Keystone Bank Limited assumed assets of Bank PHB, and MainStreet Bank Limited to assumed assets of Afribank.

Shareholders in Spring bank, Bank PHB and Afribank lost all control of the company as their shareholdings were diluted out of existence. They all got nothing from the new buyers as the funds were used to settle existing liabilities in the banks which had made them both illiquid and insolvent. As the shareholders of the three banks got nothing, so also may be the fate of Skye Bank shareholders.

However, what is most surprising about the trade is the acquirer. Godwin Emefiele, CBN governor and Umaru Ibrahim, managing director/ CEO, NDIC said the bridge is being done by AMCON through the capitalisation of N786 billion to return the

bank to soundness and profitability.

But it seems like AMCON itself needs a lifeline just as much as Skye does.

AMCON 2017 financial report shows that the company had a negative book value of N3.95 trillion and only N882 billion in assets. How the company that with negative equity of N3.95 trillion will save another bank (Skye Bank) with a negative equity of N730 billion (as at June 2017) completely defies economic wisdom unless CBN first injects the N786 billion into AMCON which can then be used to acquire Skye Bank. By so doing, the total liabilities in AMCON will increase to N5.55 trillion and the negative equity will expand to N4.7 trillion. Fortunately for AMCON, CBN is the sole creditor of the company so all this mechanics can work without protests from any external creditor.

By Monday, Skye bank customers will be able to walk into Polaris and conduct their regular banking transactions but shareholders will have to say finalgoodbyetowhatwastaggeda“systemically important bank” by the CBN. Theimplosionwillcostshareholdersall N10.6 billion in market capitalization when the share prices hit zero.

since the start of the year, higher commodity prices, bad roads, and inability to pass on higher cost of production to the final consumer are responsible for record drop in revenue since the economic downturn of 2016.

The NSE Consumer Goods Index has shed -23.78 percent ytd, according to data from Bloomberg terminal.

The cumulative revenue of the 12

largest firms tracked by BusinessDay dipped by 4.8 percent to N748.45 billion in June 2018 from N786.78 billion the previous year; the worst results in two years.

Combined average gross profit margins of the 12 firms fell to 12.90 percent in the period under review from 13.33 percent the previous year as lower sales and rising input costs

undermined profitability.

Taju Ibrahim, head of research at Chapel Hill Denham Ltd said that the market could see a constrain in volumes for confectionery makers like Dangote Sugar, brought on by smuggling of goods into the country.

Emeka Ucheaga

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NEWS

The Week Ahead: Ambode-Tinubu rift to end, financials selloff on Skye, bond yields remain stable Emeka Ucheaga Politics Incumbent Governors to pressure State parties to conduct indirect primaries ast week, APC gave states freedom to select either direct or indirect primary elections to select party candidates for public office. We expect that incumbent governors will seize the advantage to pressure States into using the indirect primary method which they somehow believe will give them a winning advantage.

How the maths adds up that delegates and party leaders will prefer seating public office holders more than aspirants while members will rather choose aspirants is something that only the politicians can explain.

Ambode to reach a compromise with Tinubu The rift between Governor Akinwunmi Ambode and his supposed political godfather, APC Chieftain, Bola Tinubu should finally come to an end during the week as the date for the Lagos APC primary election draws closer.

Following interventions by other political leaders around the country and the “supposed” desperation of the governor to remain in power,

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we expect that the seating governor will come to a mutually benefitting arrangement with Tinubu which will help him secure his seat in government by winning the primaries and the election next year.

Political campaign heats up around the country After billions have been spent purchasing nomination forms from political parties in the country, we expect that funds will now start flowing to campaign committees in order to galvanise awareness and secure the buy-in of voters. Campaigns will heat up as the opposition party, PDP attempts to unseat the ruling party APC in the states around the country. The economy may be struggling to grow, but we don’t expect it to affect campaign spending this year at all.

Markets Financials to slide as Skye licence is revoked by CBN Bank stocks will suffer yet another bout of negative sentiment from investors after the license of heavily indebted Skye bank was revoked by the Central Bank of Nigeria last Friday.

The leaders in the decline as expected will be Skye Bank as shareholders rush for the exit to salvage any amount of money they can. Lack of liquidity should send the stock crashing at least 50 percent

Inside the Rise and Fall of Skye...

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the bank’s assets.

CBN Governor Godwin Emefiele and Umaru Ibrahim,

managing director of NDIC said a N786 billion facility will be injected into the bank by the Asset Management Corporation of Nigeria (AMCON) and that the bridge bank-Polaris will commence operations Monday.

How AMCON will fund the capital injection remains a mystery to analysts, given that the bad bank set up to bail out distressed banks, had a negative book value of N3.95 trillion by the end of 2017, according to its financial statement.

“We wish to assure all depositors that under this arrangement,theirdepositsshallremain safe and that normal banking services shall continue in the new bank on Monday, September, 2018 to enable customers to transact their businesses seamlessly,” Emefiele said.

Depositors are unlikely to lose their funds as they are covered by the Nigeria Deposit Insurance Corporation (NDIC) and the CBN’s planned cash injection can cover up for any run on the bank by customers.

The biggest losers however are equity investors who may have now lost about N10.6 billion, given that the bank had a market capitalisation of N10.6 billion at close of trading Friday.

Skye bank is up 60 percent year to date and was up 4.1 percent Friday as investors piled cash into the struggling bank

despite obvious signs of trouble.

“Investors probably did not think it would be a bridge bank solution,” Wale Okunrinboye, head of research at Sigma Pensions said.

Emefiele said the stock of Skye bank will be temporarily suspended pending discussions with NDIC, NSE and SEC. Skye bank has no outstanding local or foreign bonds.

CBN governor, Emefiele, said the result of CBN examinations and forensic audit of the bank revealed that Skye bank needed urgent recapitalization, without giving a specific amount.

In July 4 2016, the CBN took a regulatory action against the bank that led to resignation of the directors of the bank and the constitution of a new board appointed by the regulator.

BusinessDay learnt that the new board then engaged KPMG and PWC to carry out a forensic audit in order to ascertain the state of affairs and financial position of the struggling bank which last filed a financial statement in 2015.

The audit report which was seen by BusinessDay over the weekend showed that the bank had a negative capital position of N690 billion as of December 2016. The amount then worsened some 5.8 percent to N730 billion as of June 2017.

The numbers contradicted the bank’s 2015 financial statements, which indicated a loss of N42 billion and erosion of capital to the same value.

“The major reasons for this

during the opening days of the week.

The contagion effect is expected to spread across bank stocks in the market.

Stock Market to erase last week gains as banks selloff push index lower In recent times, far too many weeks have ended on a sad note for investors but last week wasn’t one of them.

However, the gains from last week may be threatened this week as banks stocks which account for 5 of the top 10 most capitalized firms in the market come under attack due to a contagion effect originating at Skye Bank. If banks share prices drop precipitously, then the stock market may shed more points than it gained last week.

Fixed income yields to remain stable during the week The press release on the MTN CCI saga by CBN during the week is expected to calm the nerves of foreign investors who may have been thinking of exiting Nigerian securities due to regulatory risk. We do not expect any further heightening in political uncertainty during the week nor do we see further selloffs in bonds due to the small increase in inflation rate. We foresee a fairly stable fixed income market during the week with FGN Bond yields remaining around 15 percent. position are impairment of loans to the tune of N529 billion and transactions in suspense to the tune of N280 billion, relating to balance sheet and profit and loss manipulations from 2006 to 2016, and direct and apparently fraudulent cash withdrawals by certain individuals,” the document signed by the bank’s Chairman, Muhammad Ahmad, Group managing director/CEO, Adetokunbo Abiru and company secretary, Babatunde Osibodu, read.

On receiving the report from the forensic audit, the bank’s board set up a special Investigation Committee to look into circumstances surrounding the N280 billion in “suspense”.

This was in order to identify possibility of recoveries and to recommend appropriate sanctions against culpable individuals.

The amount was linked to some N29.5 billion spent in acquiring Mainstream bank in addition to a purchase price of N126 billion, manipulation of the bank’s accounts, and some N7 billion disbursed to individuals and corporates without due process.

Thebank’sthenChiefFinancialOfficer(CFO),PiusOlaoyein response to the audit by PWC and KPMG, said the unreconciled debits in Skye Bank’s balance sheet dated back to 2006 and profitability, liquidity and capitalratiosweremanagedona monthbymonthbasisthroughout the year, with contributions from various departments.

“The head of risk would identify the obligors to be managed to mask their loans which were going bad,” ac-

Ogbonnaya Onu (r), minister of science and technology, with Bitrus Nabasu, permanent secretary of the ministry, during the minister’s meeting with directors-general of agencies under the ministry’s supervision in Abuja on Friday. NAN

BusinessDay 2018 Banking Awards holds October Uju Ikedionu

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ctivities have reached the final stage as the BusinessDay Annual Banking Awards will hold October in Lagos. The prestigious event which has become a platform where those who matter in the nation’s financial industry converge was introduced to recognise excellence and innovation in banking. The annual awards are a product of collaboration between BusinessDay Research and Intelligence Unit (BRIU) and BusinessDay Conferences and Events department.

In this year’s awards, different awards categories will be up for grabs of which the most prestigious are the Bank of the Year and the Bank CEO of the Year award categories.

Other award categories are the Merchant Bank of the Year, Mortgage Bank of the Year, Microfinance Bank of cording to Olaoye. “The bank would then arrange to fund the customer’s account by routing the funds through third parties, so that it would appear as if the accounts were performing, when in reality they were not,” Olaoye said.

On the N126 billion acquisition of Mainstreet bank, Olaoye saiditwasfinancedbyfreefunds of N80 billion, but the balance of N46 billion had to be funded, with some N15billion of depositors funds forming a part.

According to Olaoye, the GMD, Treasurer, CFO, and head of strategy were in on the project to disguise the true picture of the bank’s accounts.

Former CFO, Kunle Adedigba said as part of the audit process that the bank has operated two books of accounts since inception, when in order to disguise the capital shortfall of some N6 billion, deposits were supressed and netted off against assets.

“Everyone in top management (at least the executives) knew this was going on,” Adedigba said.

Kolade Ojo-Osagie, the bank’s treasurer since 2010 said the GMD periodically instructed him to move some funds to Abuja, as he explained the N28 billion cash withdrawn showing in head office suspense pertaining to the Mainstreet bank acquisition.

“Many of the payments were to people who were

the Year, Investment Bank of the Year, Asset Manager of the Year, Best Bank in SME Financing, Agric Lending & Support, Best Bank in Retail Banking and the Best Bank in Corporate Banking.

The parameters for the Bank of the Year 2018 include the availability of financial results and analyst presentations on banks’ websites, loans growth, profit after tax (PAT), growth in deposits, capital adequacy ratio (CAR), non-performing loans ratio, liquidity ratio, return on average assets, return on average equity, non-interest income (NIM), cost to income ratio, dividend payment and percentage of women in workforce (management).

For the Bank CEO of the Year category, we considered the following parameters; PAT growth, fines paid for contraventions, Percentage of total complaints resolved in 2017, weight of agric loans, weight of

manufacturing loans, weight of construction and real estate loans, employment creation in 2017 and value added.

For the Merchant Bank of the Year award category, criteria used included interest income, PAT growth, loans growth, growth in deposits, profit margin and percentage of women in workforce (management) while Asset Manager of the Year category were further sub grouped into equity funds, money market funds, bond funds, fixed income funds and mixed funds.

Other categories of awards evaluated the impact of innovations and the adoption of new technologies to improve customer experiences in the banking industry.

In the last edition which was held in 2017, Zenith Bank won the bank of the Year award category. Other winners include Fidelity Bank, Sterling Bank and FCMB, Access Bank and Union Bank.

helping with the Mainstreet bank acquisition.”

Former GMD, Timothy Oguntayo, who held the post from April 2014 to July 2016 denied any wrongdoings.

Oguntayo said he was unaware of balance sheet management but admitted to paying lobbying fees to “several influential individuals,” which had “become necessary because some issues arose after payment of the purchase price in October 2014.”

“Firstly, the CEO refused to hand over and secondly, there were several petitions objecting the bank taking over.

The bank had to engage some friendly senators and other influential people to help lobby and ensure regulatory approval,” Oguntayo said in an interview with the auditors.

The bank’s GMD between 2006 and 2010, Akinsola Akinfemiwa said he had “no real information” about what went into the suspense accounts.

Most of the time, he had not been involved in the nittygritty of the accounts.

Both GMDs denied knowledge of the bank’s dual reporting system which had come to light after the audit.

Kehinde Durosinmi Etti, GMD between 2010 and 2014 said he was dumbfounded when after assuming office was briefed by the CFO of the unreconciled items held in suspense accounts.

In what seemed to indict Akinfemiwa, Etti said he “immediately drew a line under the previous practice of doctoring figures and stated reporting figures as they were.”

He said he didn’t raise an alarm with regulators because he wanted to get to the bottom of this first, and by the time he was leaving, the board had set up a committee to look into the matter, but he wasn’t privy to the report of the board which came after he had left.

Nigerian lenders struggled to make money and extend credit with unpaid loans on the increase in an economy that slipped into its first full-year recession in 25 years in 2016, hurt by the plunge in oil prices and a lack of foreign investors.

Improved oil prices and production have however helped lift the economy from recession in the second quarter of 2017, with banks benefitting.

Skye Bank has failed to report annual earnings for 2015 after it combined its operations in June 2015 with Mainstreet Bank Ltd., which was rescued by regulators during Nigeria’s banking crisis of 2009.

Analysts say it’s a big indictment for the CBN that it sanctioned the acquisition of Mainstreet bank by Skye bank despite the latter being in dire capital straits.

•Continues online at www.businessdayonline.com

Monday 24 September 2018

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FG’s inaction on expired oil leases stokes...

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won’t be easy to divest, clearly this is not the best of times due to the uncertainty,” said Chuks Nwani, an energy lawyer.

A review of the DPR 2016 report indicates that not only are expired leases not being renewed, licenses that are already in advanced stages of negotiation have been abandoned.

For instance Essar E&P Limited has requested for extension of exploration phase of PSC for OPL 226 which expired in August 2015, the but no action has been taken.

In the case of OPL 227, operated

by Express Petroleum & Gas Co Ltd/ Petroleum Prospects International Limited which expired since 2013, the operators were granted a two-

year extension that expired in 2015.

Since then not much has been done, the technical partner Addax has pulled out and the company has applied for another two year extension but the DPR is yet to renew the lease.

I think this is another area where the government has failed to demonstrate its readiness to deal with issues before they become sticky,” said Nwani.

However, Ayodele Oni, partner at Bloomfield law firm and an energy lawyer says it has become a practice to typically wait for two years to renew these leases.

“The usual practice I have seen regarding the renewal of oil mining leases is renewal two or three years after expiration, even though the

dates of the renewal are then backdated,” Oni said.

Oni agrees that it is difficult to make investment decisions because an operator does not have clarity over the fate of the lease.

“The uncertainty will make further investments in connection with the specific oil mining lease difficult,” said Oni. While oil leases are not being renewed promptly, two years after the idea for a licensing round was first muted by this government, the process has not even commenced.

Four months after the Petroleum Industry Governance Bill (PIGB) was passed into law, the president refused assent. National oil and gas policies proposed by the ministry of petroleum are yet to become fully operational.

L-R: Francis Okoye, faculty, Lagos Business School; Uchenna Uzo, director, MBA, Lagos Business School; Chris Ogbechie, professor of strategy, Lagos Business School; Lilian Uwaeme, director, custom executive education, Lagos Business School, and Marius Ungerer, associate professor, organisation strategy, University of Stellenbosch Business School, Johannesburg, during the graduation ceremony marking the International EMBA Week at the Lagos Business School.

How MTN sanction is shaking Nigeria’s...

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Day of how a major one billion dollar deal was almost undone at

the last minute due to concerns over the MTN sanctioned. The deal was eventually done with Nigerian banks having to provide extra guarantees to make it happen.

BusinessDay has also been told of how a major investment firm has also been forced to cancel a major investment road show in London after it was told that investors would not really be interested.

This was based on the experience of another investment road show organized by another investor where most of the attendees were more interested in asking questions about the MTN sanction than about the investment opportunities in the country.

A fund manager who preferred not be quoted because of the industry he operates in said “with this kind of development, the regulator is not encouraging foreign investment and I think the MTN Nigeria issue has strong potential in discouraging foreign investors into the country.”

“The regulators should have thought about the implications before making such pronouncement after just fining MTN $1billion in 2016.

What foreign investors hear and think is what they will base their investment decisions on,” the fund manager said.

An investment banker who responded to BusinessDay in relation to how the MTN saga may be affecting investment inflow into the country said the issue might have delayed one of their ongoing transactions.

“We had a potential investors we are in talk with and was in the process

of striking the deal but the investor had since paused till further notice. We think this may be as a result of the MTN issues,” the Investment banker said.

Analysts say attacks on Businesses in the country is making a mockery of Nigeria’s hunt for foreign investments as investors question the government’s commitment to economic freedom and free markets.

Rafiq Raji¸ Chief Economist at MicroAfrintel Investment said even though the political situation is more restraining, the MTN development sums up investors’ resolve not to go into risky ventures in Nigeria until after the election.

“Ordinarily, whether the MTN issue occurred or not, people were already taking precautions, even Dangote decided to suspend its London IPO mainly because of the forth coming election,” Raji told BusinessDay. Greg Davies of boutique investment house Cratos Capital in Johannesburg wonders why this wasn’t brought to MTN’s attention years ago. “You just can’t do business in an environment where these type of things are going to happen.”

Three international banks and one local bank involved in the payments were also fined.

Last week Buhari’s office, seemingly piqued by a critical HSBC, research note written in July, accused the lender of laundering $100 million of former dictator Sani Abacha’s loot.

The companies all deny wrongdoing.

“This smells like a central bank that is not independent from a government that has big fiscal issues,” said Byron Lotter, an analyst at Vestact in Johannesburg.

“This is another huge step back-

wards for Nigeria.”

Critics say the government is repeatedly trying to demonize private investors who have invested billions in the country and employ thousands of Nigerians.

With three-year government bonds yielding about 13.26 percent, Nigeria still has its fans.

However, the country is not immune to broader jitters affecting emerging markets.

Portfolio inflows slowed to $4.1 billion in the second quarter, from $4.6 billion in the previous three months. Similarly, the accumulation of foreign exchange that saw central bank reserves leap from $25 billion at the start of 2017 to $47 billion in July have come to an abrupt halt as Crude oil still brings in 85 percent of Nigeria’s export revenue.

The foreign direct investment (FDI) picture is even more alarming.

Over the last three years, foreign investment in Nigeria’s telecommunications sector has been going southwards.

This is in spite of the country’s repeated clamour for investors to drive her broadband project.

While the Nigerian Communications Commission (NCC) had earlier in April put total investments in the sector in the last 17 years at $70 billion, data from the country’s statistics agency, National Bureau of Statistics (NBS), showed consistent drop in foreign investment inflow to the sector.

For instance, figures by NBS for the second quarter indicated that capital importation into the sector declined by 87 per cent in the quarter as the total investment inflow to the sector between April and June stood at $11.12 million which was a sharp decline compared with $87.25 million recorded between

Monday 24 September 2018

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was “one of the greatest misrepresentations I suffered in office

as the president of Nigeria”, two good lawyers – Chidi Odinkalu, a professor and former Chair of Nigeria’s Human Rights Commission and Ayisha Osori, a writer and budding politician – have undertaken the task of subjecting Obasanjo’s claim to scrutiny.

The result is a new book “Too Good to Die: Third Term and the Myth of the Indispensable Man in Africa”. The book is explosive in many ways: it not only lays out “a chronology of events, all the details and actors related and connected to the third term agenda,” it also reviewed “the impact of the third term agenda on politics and institutions” in Nigeria and laid bare the ‘military god-complex’ where soldiers have hijacked politics and governance in Nigeria since 1966 and continue to dominate the political terrain whether in and out of uniform, usually exploiting Nigeria’s fault-lines and promising to fight corruption.

They researched thoroughly, consulted public and private documents, spoke to key actors, and very importantly, went down history lane to demonstrate how the ‘military god-complex works and, importantly, Obasanjo’s tendencies to cling to power even if he always projects an image of an African statesman, quite different from his contemporaries who do not want to relinquish power after completing their terms.

It was the Spanish-American philosopher, George Santayana, who said that those who disregard history are doomed to repeat it. Many times over, we have disregarded our history, made the same mistakes over time and have suffered similar consequences. Yet, we make no attempt as a country to take our history seriously. We have even tactically banned the learning of history from January and March this year.

The first quarter figure of 2018, however, represented a 54 per cent drop in investment when compared with the previous figure recorded in fourth quarter 2017.

According to NBS foreign capital inflow into the oil and gas industry declined by $60.77 million to $24.85 million in the second quarter of 2018, compared to $85.62 million recorded in the first quarter of 2018.

However, no reason was given for the sharp drop in foreign capital inflow into the oil and gas industry, but analysts had consistently blamed the decline in investment on uncertainty in the industry, following the delay in the assent of the Petroleum Industry Governance Bill (PIGB), and the nonpassage of the remaining variants of the Petroleum Industry Bill (PIB).

Also, energy experts had disclosed that investors are sceptical about investing in the nation’s petroleum industry as a result of the uncertainty trailing the forthcoming general election.

Data already shows that Nigeria is losing out to its African peers as a destination for Foreign Direct Investment (FDI), according to state statistics agency, the National Bureau of Statistics (NBS), FDI inflows to Nigeria fell to $981.7 million in 2017, less than a third of South Africa’s $3.2 billion FDI inflow and seven times less than the $7.4 billion flows mustered by Egypt.

Ghana, the second largest economy in West Africa that is the size of Lagos in population terms, attracted $3 billion, the chief of the Ghanaian Investment Promotion Commission said at the Africa Singapore Business Forum last Month.

The market uncertainty caused by the fines will likely significantly hurt

our schools so that the younger generation are incapacitated and denied the tools with which to change and reorder our decadent society.

But much more pernicious is the penchant in these climes to re-write history to suit our whimsical cravings.

Obasanjo, eternally fixated with his place in history but equally incapable of behaving the statesman he always craves, have sought to distance himself from the failed third term agenda and has gone ahead to write his version of history. Yet it was the same Obasanjo that reportedly said to his deputy, Atiku Abubakar: “I left power twenty years ago, I left Mubarak in office, I left Mugabe in office, I left Eyadema in office, I left Umar Bongo, and even Paul Biya and I came back and they are still in power; and I just did 8 years and you are asking me to go; why?”

Odinkalu and Osori have refused to allow Obasanjo get away with the re-writing of history – And Nigerians – both now and in the future – should be grateful for this effort to correct history. They set out to puncture the very reason why Obasanjo has a lot of appeal both in Nigeria and the rest of the world – that he voluntarily relinquished power in 1979. As they narrated, “Unknown to Nigerians, however, while the public dispute over the winner of the 1979 election raged before the Supreme Court, General Obasanjo as military Head of State “did crave continuation in power but was dissuaded by General TY Danjuma and others who controlled the battalions.” They traced the origin of the third term project to what many Nigerians have known about Obasanjo – ego, personal vendetta, mainly against Atiku Abubakar and the “the institutional hubris of propagating the belief that only members of the military could govern Nigeria.”

BusinessDay will be serialising the book for three days, starting from Tuesday. both foreign and local investment inflows into the banking and telecommunication sectors, analysts say.

Both sectors are engines for growth in most developing countries and are systematically important to the Nigerian economy.

The financing taps may now be temporarily shut for the two sectors which received a total of $306 million in foreign investments in Q2, putting their economic performance in the second half of the year at risk.

Apparently in a bid to reduce the negative fallout from the MTN saga, the CBN last Wednesday said it is working with the Deposit Money Banks (DMBs) and MTN Nigeria to arrive at equitable solution over sanctions it recently imposed on four banks and MTN. In a statement signed by Isaac Okorafor, director, corporate communications, the CBN said the recent sanctions on the banks…were not in any way designed to restrict access to investor returns.

“We wish to restate that the CBN will continue to welcome foreign investments and investors. In response to the recent regulatory actions, the Banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution,” the statement said.

As a military ruler in the 1980s, Muhammadu Buhari deployed troops with bullwhips to counter the chaos at Nigeria’s bus stations through War against Indiscipline (WAI).

As elected president, approaches to investment in the African country are only slightly less blunt. Buhari, who faces re-election next year, has picked a bad time to bash foreign investors, analysts say.

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CBN revises cheque standard, NICPAS, ...sets implementation from February 1, 2019 Hope Moses-Moses-Ashike

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he Central Bank of Nigeria (CBN) has revised the Nigerian Cheque Standard (NCS) and the Nigerian Cheque Printers Accreditation Scheme (NICPAS) and set the implementation date at February 1, 2019.

The NCS and NICPAS were introduced in 2006 by the CBN to increase the efficiency and safety in the Nigerian cheque clearing system.

In a circular, released at the weekend by CBN, the new and old standard shall run concurrently for one and half years, after which the old standard would be phased out.

The circular to all deposit money banks, accredited cheque printers/personalisers and the Nigeria InterBank Settlement System (NIBSS), signed by Dipo Fatokun, director, banking and payments system department, stated that all cheques ordered after Au-

gust 1, 2019, must conform to the new standard.

The CBN says by August 1, 2020, only cheques that conform to the new standard shall be allowed in the automated cheque clearing system.

The circular states that personalisers that wish to personalise cheques in line with the new standard must seek for and be credited by the CBN. “A procedure for appeal is contained in the new standard. In the event that the printer/personaliser, feels that decision of the decision MTIC panel to reject and application, deny accreditation or withdraw/ terminate accreditation is not justified, an appeal may be lodged”, the circular reads.

However, membership of the scheme has been enlarged and is now open to entities - deposit money banks, accredited cheque printers/personalisers (mandatory), and advisors (optional) that are invited to be members by the CBN.

BoI discusses Nigerian industries at UN summit

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lukayode Pitan, CEO, Bank of Industry (BOI), will be joining an international community of leaders from the business, government and civil society at the two-hour United Nations (UN) Global Compact CEO Roundtable to discuss strides and progress towards achieving the global goals for a better world by 2030.

The roundtable, scheduled for New York, will also mark the 70th anniversary of the Universal Declaration of Human Rights, and will be attended by Michelle Bachelet, the newly appointed High Commissioner for Human Rights, with special remarks from Amina J. Mohammed, UN’s deputy secretary-general, Participants in the event, which has as theme “closing the inequality gap- human rights as a driver for successful business”, will discuss the most pressing gaps and most significant opportunities for global business to contribute to greater sustainability and equality throughout the world.

The conversations will centre on the UN’s Sustainable Development Goals (SDG) programme, which addresses

Nigeria to adopt world’s first Women in finance host induction 7nm process mobile phone toceremony JUMOKE AKIYODE-LAWANSON

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igeria is set to be one of the early adopters of the world’s first 7nm process mobile phone system on a chip (SoC), as Huawei Technologies has taken the lead in terms of cutting edge technology with its Kirin 980 - powered Mateseries devices scheduled to arrive in Nigeria by early 2019.

The system on a chip is a circuit that integrates all components of a computer or other electronic systems onto a single chip and the device is the world’s first cortexA76 architecture chipset, the world’s first dual NPU design, and the world’s first chipset to support LTE Cat.21.

Giving a keynote address titled “The Ultimate Power of Mobile AI”, at the recently concluded IFA 2018 in Berlin, Germany, Richard Yu, CEO, Huawei consumer business group introduced the Kirin 980, the system on a chip that will bring about the next evolution of mobile Artificial Intelligence (AI).

As the world’s first commercial SoC manufactured with Taiwan Semiconductor Manufacturer Company’s (TSMC) 7nm process, Kirin 980 combines best-in-class performance, efficiency, connectivity features, and Dual NPU AI processing power.

“Last year, we showed the

world the potential of OnDevice AI with the Kirin 970, and this year, we’ve designed an all-round powerhouse that not only features outstanding AI capabilities, but also brings cutting-edge raw performance to consumers,” Yu said.

“Equipped with all-new Central Processing Unit (CPU), Graphics Processing Unit (GPU) and Dual Neural network Processing Unit (NPU), the Kirin 980 is the ultimate engine to power nextgeneration productivity and entertainment applications,” he added.

The cutting edge TSMC 7nm process technology enables Kirin 980 to pack 6.9 billion transistors within a 1cm2 die size, 1.6 times of the previous generation. Compared to the 10nm process, the 7nm process delivers 20 percent improved SoC performance and 40 percent improved SoC power efficiency.

The Kirin 980 is also the first SoC to embed CortexA76 based cores, which are 75 percent more powerful and 58 percent more efficient compared to their previous generation. The Kirin CPU subsystem uses an intelligent Flex-scheduling mechanism that creates a 3-level energy efficiency architecture consisting of two super-big cores based on Cortex-A76, two big cores based on Cortex-A76, and four little cores Cortex-A55.

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omen in Finance ng (WIFng), an advocacy, development and networking platform for women in the Nigerian financial sector is plans to host its third quarter lunch, as well as induction ceremony.

The event will have in attendance Governor Nyesom Wike of Rivers State, and his wife, as well as state commissioner for finance who have been invited as hosts and special guest, respectively.

The keynote speech, according to the organisers, will be delivered by Chii Akporji, the executive director - corporate strategy and planning, Nigeria Mortgage Refinance Company, on the topic “The financial empowerment of women as a tool for economic development.”

The event, which holds September 26, 2018 in Port Harcourt, will also feature the induction of new WIFng members in line with the mission to advance the cause of women, pursue financial inclusion and financial literacy for women, and promote gender parity in the country.

key global challenges including those related to poverty, inequality, climate change, environmental degradation, prosperity, and peace & justice. Globally, labour productivity has increased and unemployment rates have decreased significantly over the past two decades, with the proportion of the world’s workers and their families living below the poverty line on less than US$1.90 per day having declined from 26.9 per cent to 9.2 per cent in 2017.

In taking part in the global roundtable, Pitan said “the Bank of Industry’s various programmes are hinged on the goal of advancing human rights in all of our practices”.

These goals, according to him, are strongly aligned to the UN’s Sustainable Development Goals (SDG), particularly SDG 1: ending poverty in all its forms everywhere.

He believes that through job creation, the promotion of enterprises from micros, to small and medium enterprises, to large industries, businesses and institutions can work together towards the creation of a decent quality of life for all Nigerians and people all over the world.

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NNPC urges oil workers to shelve strike HARRISON EDEH, Abuja

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aikanti Baru, group managing director of the Nigerian National Petroleum Corporation (NNPC), has urged oil workers under the auspices of the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), to halt their planned industrial action.

The oil workers are currently considering industrial action over a labour dispute involving the management of Chevron Nigeria Limited (CNL), a multi-national oil company operating in Nigeria, and its staff.

Ndu Ughamadu, NNPC group general manager, public affairs division, in a statement on Sunday, said the corporation was working with other stakeholders to resolve the issue raised by the leadership of the oil industry unions with Chevron management.

The unions had recently called on the National Assembly, the Federal Ministry of Petroleum Resources, the NNPC, the Department of State Services (DSS), to in-

tervene in a brewing impasse between CNL and its staff in Nigeria over the company’s disclosure that the contracts with all its manpower services providers would expire by the end of October 2018.

The industry unions last Wednesday put its members on red alert fearing the new manpower services contracts may not serve the interests its members.

While thanking the oil workers for their exemplary conduct and show of support through the years, the NNPC management appealed to the unions not to do anything that would disrupt the industrial harmony that has pervaded the sector, saying the gains of recent past, if care is not taken, can be frittered away inadvertently.

Baru expressed optimism that the current dispute would soon be amicably settled.

Meanwhile, the NNPC has allayed the concerns of motorists and other consumers of petroleum products over possible hiccups in supply in parts of the country due to the oil workers’ ultimatum, assuring that NNPC holds adequate storage of petroleum products across the country to take care of the national demand.

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AMCON can’t recover N5.4trn debt without judicial support, says Kafarati JOSHUA BASSEY

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damu Abdu Kafarati, the Chief Judge of Federal High Court, Abuja division, has said that judges in Nigeria needed to support the recovery efforts of Asset Management Corporation of Nigeria (AMCON).

Kafarati, made the observation at the National Judicial Institute (NJI), Abuja when he addressed federal high court judges at an interactive session involving NJI, AMCON and federal high court judges.

Describing the task by AMCON to recover over N5 trillion from debtors as a national assignment, the judge said that it requires the supported of all stakeholders especially the judiciary.

He highlighted the crisis that would have hit the Nigerian economy if government did not establish AMCON, saying the coming into be-

Restructuring key to Nigeria’s unity, says Umeh Emmanuel Ndukuba, Awka

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he senator representing Anambra Central in the upper legislative chamber of the national assembly, Victor Umeh says restructuring Nigeria will strengthen its unity.

Umeh spoke with newsmen in Awka, the Anambra State capital, after declaring intention to seek re-election into the senate on the platform of All Progressives Grand Alliance (APGA).

He said ``if Nigeria is restructured, every group will be part of developing its territory.’’ According to him, what the country needs is true `fiscal federalism’ with each state in the geo-political zones in control of its God-given resources.

The senator observed that what was keeping Nigeria together was the money being shared in Abuja, which had crippled progress and prevented each zone from looking inward.

He stressed that since majority of Nigerians wanted restructuring, any president who emerged in the 2019 general elections with a promise to restructure Nigeria, should keep faith with the masses.

The lawmaker said that the national assembly was doing everything possible to make laws for the good governance of Nigeria, and fully supportive of the executive arm of the government.

ing of the corporation saved the banks in Nigeria. Kafarati noted that it was necessary for the judicial processes to aid the corporation in the task of recovering the outstanding debt “because AMCON also borrowed money to rescue the banks.”

He said: “My lords, banks are drivers of the economy as they supply its oxygen. That is why during the 2008/2009 financial crisis in Nigeria (partly triggered by global financial crisis, and partly by domestic activities), government intervened to support the banks by bailing them out in order to allow the fi-

nancial system to continue functioning.

In the absence of government intervention in the banks through the vehicle, which AMCON provided, a number of banks in the country would have failed thereby inhibiting banks from playing their crucial roles in the economy like payment of services to households and companies extension of credits, savings accounts and financial insurance among others.”

Kafarati further said, that the interruption to the critical service that banks provide, and the likely loss of confidence in the system that

would have followed, would have led to widespread disruption and ultimate collapse of the financial system in Nigeria.

“AMCON was thus created in 2010 as the most important step towards resolving non-performing loans in the banks. This was effected through the injection of capital into the ailing banks in consideration for equity. Recognising the grave systemic risk posed by high level of bad debts otherwise known as non-performing loans, AMCON was set up to manage the assets transferred to it with a view to maximizing

their value through eventual sale or orderly liquidation.”

Re-emphasising the need for the judiciary to collaborate with the corporation to recover every outstanding debt, he argued that with the purchase of the NPLs, AMCON, it was expected to maximize the value of asset recoveries and minimize costs to taxpayers.

He reminded the judges that this mandate can be accomplished effectively because the AMCON Act conferred ‘special powers’ to the corporation in its debt recovery drive. In enforcing its powers, he added that

AMCON has an obligation to complement the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) in their mandates respecting financial system stability in Nigeria.

According to him, the totality of the conceptual, functional and jurisprudential implications of the establishment of AMCON is that despite the universal financial crisis of 2008/2009, Nigeria was insulated from the collapse of any bank, a run on the banks or notably, the need to withhold depositor’s funds.

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How direct primary could salvage Nigeria’s electoral system Iniobong Iwok

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ecently the National Executive Committee (NEC) of Nigeria’s ruling All Progressives Congress (APC) adopted direct primary method to elect its Presidential candidate, while also saying that gubernatorial and candidates for other positions in some State chapters across the country should also be elected through the same method but subject to the approval of the party leaders.

The direct method according to the party’s national chairman, Adams Oshiomole, is the best way of conducting the primaries and eliminating disagreement which have traced recent primaries elections of the party while also instituting democracy in the APC. The party adopted the direct primary to conduct the Osun gubernatorial election primary in September which was won

by Gboyega Oyetola under controversial circum-

stances.

Since the advent of the Fourth Republic in 1999, political parties in Nigeria elect their candidates through the indirect method. The indirect primary allows party delegates, party leaders and political appointees of the party to choose the party candidates. However, the methods have become increasingly controversial in recent time and have also led to rancour among party members and leaders, while also fuelling money politics in the country.

Analysts have argued that the method also encourage bribery and other forms of inducement of delegates by aspirants, which on many occasions have ended in enthroning wrong candidates, who may have spent more than any other aspirant on delegates.

What is direct primary?

In direct primary, cardcarrying party members will participate in the process of nominating the flag-bearer of the party. It is believed to be the most acceptable and demo-

Adams Oshiomhole, APC, chairman

cratic way of conducting primary election which would eliminate rancour among party members and aspirants.

However, over the years, in many politi-

cal parties in Nigeria, a consensus arrangement, which is a situation where the aspirants decide among themselves to allow one of them to become the candidate with-

out any vote seem to be most pronounced.

However, several APC state chapters except for a few such as; Kano, Lagos, Niger, Bayelsa have ruled out adopting the direct

method to conduct gubernatorial election primary, while others have ruled out adopting the method in their states to conduct any categories of elections primaries.

The method has also been received with scepticism among APC faithful, some party chieftains have equally kickedagainst the method, arguing that if implemented, it would denied them the services of its experience members.

However, analysts, have predicted that the direct method if implemented, could help check the growing influence of money and god-fatherism in the nation’s electoral system, stressing that it could also confer power and a voice to party members rather than a few delegates.

Amidst the chaos which have characterised the political party primaries in recent times, political observers have said that the success of the direct method in the APC could perhaps serve as a pointer for other political parties in Nigeria.

NUPENG, PENGASSAN accuse Chevron Osun: PDP rejects INEC declaration of election as inconclusive LASG reiterates commitment to chise of the people of Osun Abuja of circumventing contract guidelines OWEDE AGBAJILEKE, State, who participated in the youth empowerment he Peoples Demo- election.

JOSHUA BASSEY

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he Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Association (PENGASSAN) have expressed concern over the way the management of Chevron was executing the end of M15 and H15 contracts, accusing the oil company of circumventing extant Nigerian labour laws in the process.

The two oil workers’ unions, in a joint statement signed by Lumumba Okugbawa, general secretary of PENGASSAN, and Adamu Song, general secretary, NUPENG, alleged that the manner Chevron executing the M15 and H15 contracts “is laced with hidden plans and intentions to unilaterally sack thousands of contract workers in spite of the ongoing intervention of Federal Ministry of Labour and Employment as well as the established labour contract staffing guidelines in the oil and gas industry.”

According to the unions, while Chevron has decided to close M-15 and H-15 contracts by October 31, 2018, it is disturbing to see the new contractors being engaged by Chevron

management and whose labour contract will take effect on November 1, 2018, to start advertising all jobs, in spite of clear provision for “roll over” of the existing workers on the jobs, consequent upon which large numbers of the current workforce are most likely to be abruptly thrown into the labour market in their own country.

“The leaderships of the two unions in the oil and gas industry see such arrangement as cruel, callous and by all standards an affront on the Nigerian constituted authority and industry extant rules.

“It has now become quite glaring that Chevron management is flippantly overstretching the good intentions of the two unions to entrench peaceful and harmonious industrial relations particularly at a critical time like this when the country is approaching an election year.

Without mincing words, we are deeply bothered by the claims by Chevron management that their action of sacking Nigerian workers is a directive from National Petroleum Investment Management Services (NAPPIMS) and the Nigeria Contents Monitoring and Development Board (NCMDB).

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cratic Party (PDP) has rejected the declaration of the Independent National Electoral Commission (INEC) of the Osun governorship election as inconclusive.

The PDP insists that the process was conclusive and that its candidate, Ademola Adeleke, should be immediately declared winner by INEC, having met the requirements of the 1999 constitution (as amended).

Relying on section 179 (2) (a) (b) of the 1999 constitution, the party submitted that the declaration of the election as inconclusive by INEC was a sordid robbery of the fran-

The section provides that: “A candidate for an election to the office of Governor of a State shall be deemed to have been duly elected where, there being two or more candidates - (a) he has the highest number of votes cast at the election; and (b) he has not less than one-quarter of all the votes cast in each of at least twothirds of all the local government areas in the State”.

In the keenly contested governorship election, PDP candidate, Ademola Adeleke had garnered 254,698 votes to lead that of the All Progressives Congress (APC), Gboyega Oyetola, who polled 254,345 votes.

ICAN conference to focus on Nigeria’s sustainable development KELECHI EWUZIE

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dvancing Nigeria’s sustainable development agenda among other economic issues, will take centre stage at the 48th Annual Accountants’ Conference organised by the Institute of Chartered Accountants of Nigeria (ICAN) The conference will bring experts and economic professionals to discuss the benefits of sustainable development to the nation. The theme of the conference scheduled for Monday, October 1to Friday, October 5, 2018 in Abuja is “securing our shared future: A collective responsibility.” It is expected to be declared opened by President

Muhammadu Buhari.

According to ICAN the theme is specifically chosen having realised that Nigeria is richly endowed with human and natural resources which have not been optimally leveraged to achieve sustainable development set out by its founding fathers.

Bunmi Owolabi, senior manager, Corporate Communications and Marketing of ICAN, in a statement, said the conference will among other areas, examine securing our shared future: Avoiding the tragedy of the commons” which will be delivered by Rachel Grimes, president, International Federation of Accountants (IFAC).

JONH SALAU

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overnor Akinwunmi Ambode has reiterated the commitment of Lagos State government to empowerment initiatives aimed at empowering the youth in Lagos.

Ambode gave the commitment at the 6th Lagos State University Students’ Union (LASUSU) conference held at the weekend with the theme “preparedness for leadership: A prerequisite for the Nigerian youth.”

“As a government, we’re committed to coming alongside our youth by providing them with opportunities to gain skills, knowledge, and information that will set them on the path to success,” said Ambode.

Ambode, who was represented by Obafela Bank-Olemoh, his special adviser on education, the governor said the state will continue investment in tertiary institutions with the aim of producing students who will excel in various spheres of life. “LASU is currently the only stateowned university that produces dental surgeons in Nigeria,” said Ambode.

Speaking on the theme of the conference, Ambode said there was no

leadership without responsibility. “The call to leadership is not a call to self-fulfillment, but a call to duty. A true leader recognises that the power, clout, and access he or she has been granted by virtue of their position, should be used not for selfish gain, but for the betterment of society.”

The governor urged the students to prepare themselves for leadership by investing in their education and leadership to be a valuable contributor to their communities.

Olanrewaju Fagbohun, the vice chancellor of LASU said the institution has experienced some remarkable changes over the last two years, stating that LASU is now a reference point in leadership.

“The last two years has been quite interesting for me as the vice chancellor because of the way our students have been conducting themselves.

When we started, what we did was to involve our students in the governance of the university. We were having regular meetings with them in terms of breakfast meetings and also involved them in committees because we strongly believe that you do not shelve them in their absence,” he said.

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PDP supporters protest, celebrate as INEC officer arrested for alleged malpractices RAZAQ AYINLA & BOLADALE BAMIGBOLA, Osogbo

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ome aggrieved members of the People’s Democratic Party (PDP) yesterday stormed the head office of INEC in Osogbo, in protest of the alleged manipulation of votes by the electoral body.

The members, who were prevented from gaining entry, said that PDP votes in Ayedaade local government was reduced by 1,000, also alleged that over 2,000 votes were added to the figure got by the ruling All Progressives Congress (APC) in Olorunda local government.

Despite heavy downpour and the presence of the heavily armed security agents, the protesters re-

mained undaunted and chanted different songs, condemning alleged plan to manipulate the process in favour of APC. Meanwhile, a staff member of INEC in Ayedaade local government area, Salawu Mutiu Kolawole, who was caught removing result of the election for the local government pasted at Saint Peters Primary School, Gbongan has been arrested by the police.

Salawu said he was directed to remove the result by an Electoral Officer, and he got caught in the process by some men keeping watch on the premises.

The result of the Ayedaade local government became contentious when the figure got by PDP at the local government collation center was allegedly reduced by almost 1,000 when the figure

Ademola Adeleke

of the LG was announced at INEC Office.

On the result pasted at LG collation centre, PDP got 10, 836 while APC got 10, 861 votes.

However, when the result

Osun inconclusive poll: PDP says INEC pre-planned gimmick to save APC RAZAQ AYINLA & BOLADALE BAMIGBOLA, Osogbo

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eople’s Democratic Party (PDP), Osun state chapter, on Sunday condemned the decision of INEC not to declare its candidate as winner of the governorship election, despite fulfilling all stipulated constitutional and legal requirements.

Addressing newsmen at the Adeleke’s Ede country home on Sunday, PDP chairman in Osun state, Soji Adagunodo, said Nigerian Constitution is clear on requirements to be declared winner of a governorship election.

Adagunodo said: “For the sake of clarity, Section 172 subsection 2 of the constitution is quoted below: (2) A candidate for an election to the office of Governor of a State shall be deemed to have been duly elected where, there being two or more candidates -

“(a) he has the highest number of votes cast at the election; and (b) he has not less than one-quarter of all the votes cast in each of at least two-thirds of all the local government areas in the State. “(3) In default of a candidate duly elected in accordance with subsection (2) of this section there shall be a second election in accordance with subsection (4) of this section at which the only candidates shall be “(a) the candidate who secured the highest number of votes cast at the election; and (b) one among the remaining candidates who secured a majority of votes in the highest number of local government areas in the State, so however that where there are more than one candidate with a majority of votes in the highest number of local government areas, the candidate among them with the next highest total of votes

cast at the election shall be the second candidate.

(4) In default of a candidate duly elected under subsection (2) of this section, the Independent National Electoral Commission shall within seven days of the result of the election held under that subsection, arrange for an election between the two candidates and a candidate at such election shall be deemed to have been duly elected to the office of Governor of a State if - (a) he has a majority of the votes cast at the election; and (b) he has not less than one-quarter of the votes cast.” The PDP chairman noted that despite clearly stated position of the Constitution on the matter, INEC “ignored the law and decided to serve partisan interest of the APC.” The party insisted that the outcome of the poll, was preplanned and orchestrated by INEC in collaboration with the APC.

of the LG was read by the INEC Returning Officer at the State Collation Centre, the figure given as the total votes scored by the PDP in the LG was 9,836 while APC got the same 10,861 votes.

Across the state, attendants at church services was conspicuously reduced, as many people stayed at home to monitor through television and radio sets the result of the poll.

In some churches visited, many seats were unoccupied. There was also minimal vehicular movements in Osogbo, Osun state capital.

When asked about the poor attendants at churches, an Osogbo based clergy, Pastor Alfred Oladiipo, said “many people stayed back, I believe because of the election results they want to monitor.

“Many people also came for services. It is not a good sign about how we treat salvation and issues connecting to it. We will continue to plead for mercy from God”, he concluded.

Monday 24 September 2018

Osun 2018: APC says inconclusive poll saves Osun from evil BOLADALE BAMIGBOLA, Osogbo

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sun State chapter of the All Progress i v e s C o n g re s s (APC) yesterday said that the stalemate in the governorship poll saved Osun State from evil.

The party, in a statement signed by Kunle Oyatomi, its spokesperson, said: “Osun has been miraculously saved from the savage jaws of the evil that could have befallen it, if the monstrosity, called the PDP had won the election.”

The statement reads: “It was the limit that corrupt money could go to buy up an election. Now that Osun has been given a second chance to escape from the calamity it almost fell into, the people of Osogbo, Orolu, Ife South and Ife North now have the enormous task to save the state from predator-politicians.”

It therefore, called on all citizens in the polling areas where rerun election would be held to sacrifice everything they can to win the state for APC.

INEC’s inconclusive result in Osun election thwarts celebration by PDP members op members of the Peoples Democratic Party (PDP) were already in a mood to celebrate the victory of their party in the Osun governorship election before the Independent National Electoral Commission (INEC) returned its inclusive verdict.

Among those who had expressed joy over the outcome of the election before the result was official released were Senate President, Abubakar Bukola Saraki, the governor of Sokoto State, Aminu Tambuwal and Governor Udom Emmanuel of Akwa Ibom State.

Speaking in Uyo, the Akwa Ibom State capital during a celebration to mark the 31th anniversary of the creation of Akwa Ibom State, Saraki had said the result of the Osun election would serve as a referendum of the All Progressives Congress (APC)

administration in the country adding that it would be a verdict that the ruling party to be sent parking in next year’s general election.

“The Osun State governorship election which PDP has won, is a clear manifestation of the wish of Nigerians and love for PDP. Governor Emmanuel will win his second term election just as PDP will take over Nigeria in 2019 election.”

In the same vein, Tambuwal who spoke few minutes before the election result was officially announced said the result meant the rejection of the APC at the centre by Nigerians and urged the electorate to vote for PDP in the general elections.

He warned against vote buying saying that if the voters were to be approached with money by APC, they should rather collect the money but still vote for PDP. Similarly Governor Udom

Emmanuel also alluded to the expected victory of the PDP in the Osun election elections saying PDP is the party to beat in the coming elections as Nigerians have rejected the APC. But with the result declared inconclusive, the victory party which would have followed the comments by the PDP chieftains was put on hold.

The Senate President who described Governor Udom as a man of integrity adding that the governor is a good example of a tested and trusted leader who is committed to the welfare of the people.

“My beloved people of Akwa Ibom, I celebrate with you on this great occasion of your Statehood. You’re blessed to have a leader with integrity. Governor Udom Emmanuel is a good example of a tested and trusted leader committed to the welfare of his people,’’ he said.

mittee to work out modalities for disbursement of the funds was to ensure transparency and accountability.

He noted that the involvement of relevant stakeholders in the process was to ensure that no category of workers retired or serving is shortchanged. He reiterated the resolve of his administration to commit 80 percent of the total funds to payment of salary

arrears, pensions and gratuity while the remaining 20 percent would be used to service overdrafts taken by the Benue State government. Governor Ortom also commended the PDP in Osun State for taking the lead in the governorship election which was later declared inclusive by Independent National Electoral Commission (INEC).

Governor Ortom says the conduct of the Osun election

reflects the resolve of many Nigerians to reject impunity and give their mandate to PDP in the 2019 elections.

He also commends the people of Osun State for the peaceful manner they conducted themselves during the polls.

The Governor urges them to sustain their support for PDP and complete the good work they have started when the rerun election comes.

ANIEFIOK UDONQUAK, Uyo

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Ortom screened, expresses confidence ahead of polls ...as he commends Osun PDP voters BENJAMIN AGESAN, Makurdi

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enue State Governor, Samuel Ortom has expressed optimism over the victory of Peoples Democratic Party (PDP) in next year’s general election and commends the Peoples Democratic Party, PDP in Osun State for taking the lead in the governorship

election which was later declared inclusive by Independent National Electoral Commission (INEC).

The governor who was interacting with correspondents on arrival in Makurdi after his successful screening by PDP in Abuja, said the party would parade credible candidates who could give the country the desired leadership.

He expressed confidence

in his nomination as candidate of the PDP by delegates during the forthcoming party primaries.

Governor Ortom said that based on his wide consultations with relevant stakeholders and delegates, he was trusting in God that his victory was already assured.

On the recent receipt of Paris Club refund, the Governor said setting up of a com-

Monday 24 September 2018

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Comprehensive coverage of Nation’s capital

Niger Delta leaders, ex-Agitators seek direction on alignment ahead of 2019 elections CONRAD OMODIAGBE, Abuja

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eaders representing ex agitators of the Niger Delta region enlisted in the first phase of the Presidential Amnesty Programme have asked for reassurance and directions on the right moves to make ahead of the upcoming 2019 polls.

Speaking with the Special Adviser to the President on Niger Delta, Charles Dokubo, the team of 31 phase one leaders was led by Reuben Wilson, to consult with the special adviser on the political alignment of the Niger Delta people for 2019.

While appreciating the efforts of the current Buhari led administration in empowering the participants of the amnesty programme and the Niger Delta region as a whole, Wilson also spoke on the tense political atmosphere and the myriad of shifts in alliance.

This, he stated prompted the decision to meet with the Special Adviser, who is the leader of the programme to gauge his opinion and also receive directives on the next line of action in terms of where the Niger Delta community should throw their support.

“We are here to get directive from you; we are here to know where we will dance to and to know your mind. We are here to get everything about this forthcoming election from you so that the leaders under this programme will know what to do. Even though most of us here have been pressured by some groups to dance right or left, but we still believe we have a leader who is overseeing this programme and before we take a decision, we have to hear from you,” he said.

While expressing concerns bordering on neglect on the part of political aspirants once success has been achieved, he also seemed optimistic that it will not be

the case this time around saying: “Even if the leaders and followers have been abandoned after working tirelessly for previous governments during elections, we believe it is necessary to hear from you.

“We pray that if you say we should dance to left or right, we will not be abandoned again because it is not easy for people to struggle, others win and those that suffered will remain the same. We pray that you will speak to us wisely so that we will understand.”

Addressing the group, Dokubo reiterated the reliability and commitment of this government to the development of the Niger Delta region.

He also spoke on the importance of the region making the right moves by supporting and working towards returning this administra-

tion into power, come 2019.

“I want all of us to think deep and fast on what we will benefit if our people do not support this administration and bring back President Buhari; the alternative will be too ghastly to even contemplate. This programme is on and for me, this government has been so reliable; we just have a little hitch in the releases, but the support of this government for the programme is enormous.”

Dokubo also warned the group against accepting enticing political deals that might be detrimental to the region in the future, “They can tell you all sorts and promise you heaven on earth but let us be focused and move this programme to higher heights and achieve all that we have set for ourselves and make the Niger Delta great again.

“I will not fail you. These

are political times and there is temptation. There are people parading themselves as leaders. They will come and seek your opinion, tell you they will do better, but be wise,” he advised.

The Special Adviser also called for focus with regards to the 2019 polls, asking the group to trust this government and view it as its own. ”I am now making a political plea because you said you want to know where you can lean or move. For me, even if I don’t announce it to you, I come from an academic background, but I was appointed by a government. I will fight hard for this administration. As you go home to you camps, let us do all that it takes to return this government so that our own areas can be at the centre and benefit from it. It is the only way to sustain this programme,” he stated further.

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udu Ogbeh, Minister of Agriculture and Rural Development has beckoned on farmers across the country to take advantage of the proposed privatisation of Bank of Agriculture (BoA) shares.

Ogbeh who disclosed this during a stakeholders’ meeting with Rice Farmers Association of Nigeria (RIFAN) in Abuja, disclosed that 30 percent of the equity would be reserved for interested farmers.

“Let us make the BOA

STELLA ENENCHE, Abuja

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he Nigerian College of Aviation Technology (NCAT), Zaria, has advanced talks with state governments over indigent students who are interested in picking up professional career in aviation.

Abdulsalam Muhammed, NCAT Rector who made this known in Abuja at the Second Annual Seminar of the Abuja Transport and Aviation Correspondent Association (ATACA), with the theme: ‘Financing and developing transport infrastructure in Nigeria: Opportunities and threats’, said discussions have commenced on how to identify those students concerned.

He said that aviation training was the most costly among professions, adding that NCAT courses were being subsidized by the government because of its costly nature.

Muhammed said NCAT had acquired a Boeing 737 simulator to be installed in 2019, adding that the simulator would enhance the capability of its flying school.

According to him, Nigerian pilots have been spending millions of dollars to get the B737 type rating abroad.

The rector said the suspension of the national carrier project was not the end of the project, adding that the decisively was to ensure proper planning and implementation.

In his remarks, Akin Olateru, Commissioner, Accident Investigation Bureau (AIB), observed that the Bureau has

done a lot in recent time to release accident reports.

Olateru who was represented by Tunji Oketunbi, AIB’s General Manager, Public Affairs, explained that the Bureau’s accident laboratory had been revived and functional.

He said that AIB had raised the capacity of its investigators through manpower development.

He also commended the Federal Government for giving adequate support to the bureau to be able to fulfill its mandate.

On his part, Chidi Iwarah, acting Director General, Infrastructure Concession Regulatory Commission (ICRC), said that good transport infrastructure system was needed to provide access to employment, health, education and services.

Iwarah added that that adequate transport infrastructure would also help to alleviate regional inequality and fosters national integration.

According to him, it also increases access to markets and links local, regional, national and international markets; and promote economic development by increasing access to labour and physical resources thus facilitating the realization of our country’s, comparative and competitive advantages.

“The different Transport modes (road, rail, maritime, air and waterways) have specific features and advantages.

“The overall efficiency and effectiveness of the transport system depends on the development of these modes and their interfacing and integration,” he said.

ICPC recovers N7.5m TETFUND grant from Kadpoly lecturers CYNTHIA EGBOBOH, Abuja

L-R: Garba Baba-Gambo, FCT Social Safety Net coordinator; Lazarus Gaza, director, human resource, FCTA; Elegbede Irene Adebola, focal person, FCT Home Growing Feeding Programme, and Kola Solomon, representing the national coordinator, National Cash Transfer Office (NCTO), during the Step Down Training and Orientation of the Cash Transfer Facilitators (CTFs) in Abuja. Pic by Tunde Adeniyi

FG parleys rice farmers on privatization of Bank of Agriculture CYNTHIA EGBOBOH, Abuja

Aviation: NCAT partners state governments on student career advancement

become the farmers’ bank then we can discuss interest rates and take control of agriculture because even the nine percent offered us still has to go down but the bank has to survive.

If you borrow, try and pay back and if there are issues that make you to fail, please let us know,” the Minister urged.

He also unveiled the present administration’s plans toward reducing the price of local rice across the country, in order to make it competitive and attract high patronage.

He said that the govern-

ment has set up a fund to support both the farmers, millers and marketers to bring down the price of rice because we are concerned about the cost of rice for the Nigerian family.

“Every country in the world supports agriculture whether they call it subsidy or support. It is exactly the same thing. We are happy that the CBN has agreed to bring down interest rates on agric and manufacturing to one digit.

“We want our people to feed well and feed cheaply but these things have to be managed carefully be-

cause we are dealing with public funds,” the Minister stressed.

Speaking on the way forward for farmers attacked by flood, Ogbeh said they will make available varieties of rice that are flood tolerant.

“We have taken into account the suggestions by farmers that we should look for varieties of rice that are flood tolerant, will activate our contacts and research institutes to see what we can do quickly and we accept the commitments you have made as RIFAN.”

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he Independent Corrupt Practices and Other Related Offences Commission (ICPC), has recovered N7.5 million TETFUND grant from 11 lecturers of the Kaduna Polytechnic.

In a statement signed by the commission, the said money was part of the Tertiary Education Trust Fund (TETFUND) grant released to the school between 2010 and 2017 for staff capacity development through local and international trainings which were scheduled to hold in Nigeria and three other countries, including the United States of America, Greece, and United Arab Emirates.

The statement shows that ICPC, through its North West Zonal office which coordinated the investigation on the utilization of TETFUND grants in the institution, found that the lecturers collected as much as N1.39 million while others collected between N149, 000 and N1, 337,000 under the Academic Staff Training and Development Project and failed to attend the trainings despite having

received monies.

In the statement, Musa Abubakar, Acting Chairman of the Commission, handing over the recovered funds to Garba Nabayi, KadPoly’s Bursar assured that ICPC would ensure tertiary institutions in the country stop the misuse of TETFUND and other grants.

Abubakar stated that the investigation of the utilization of TETFUND grants was being carried out in 27 other tertiary institutions in the North-West geopolitical zone of the country to make sure that all grants were properlyused,addingthatthose found wanting of misuse of the grant would be prosecuted.

He said: “Carting away of public funds is one of the things ICPC is fighting. Nonutilization of fund given to lecturers is a crime and lecturers as role models, are to show good behavioural conduct to their students. Beneficiaries of such grant must ensure they go for the training because ICPC will not only recover such funds but will prosecute anybody found culpable”.

He noted that the exercise would spread to institutions in other geo-political zones in the course of time.

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PHOTOSPLASH

Presentation of Laughter in the Mirror, a collection of editorial cartoons by Mike Asukwo

Picture by Pius Okeosisi

Imo Itsueli (left) and Mike Asukwo, author / chief cartoonist BusinessDay

L-R; Donald Duke, former governor of Cross River State; Tajudeen Ahmed , general manager, Bua Group, Frank Aigbogun , publisher/CEO, Businessday; Mike Asukwo, and Juliet Aigbogun, wife of the publisher.

L-R Franklin Oyekusile, CEO, Pictureque Studio Limited ; Olu Tikolo, vice president, business development, KIA; Mike Asukwo, and, Tajudeen Ahmed , general manager, Bua Group.

Donald Duke, former governor of Cross River State; Frank Aigbogun , publisher/CEO, Businessday, and Mike Asukwo,

L- R: Etta Eyo, and Mike Asukwo

Tarek Babbal; Tolu Aderemi; Mike Asukwo, Ayham Saadi.

L-R Tajudeen Ahmed , general manager, Bua Group, Donald Duke, former governor of Cross River State ; Mike Asukwo, Juliet Aigbogun, wife of the publisher and Frank Aigbogun , publisher/CEO, Businessday.

Etta Eyo, Mike Asukwu, Olufemi Arosanyin of IHS and Tajudeen Ahmed , general manager, Bua Group

L-R :Itoro Clement-Isong; Clement Isong and Juliet Aigbogun.

L-R Obinna Emenyenu, Mike Asukwo, Anthony Osae-Brown, editor BusinessDay; Ronke Bamgboye, and Osagie Ogunbor, head of corporate communications, Lafarge.

Adeola Ajewole, GM , adverts; Linda Ochugbua, digital manager and Adeola Obisesan, manager, human resources , all of BusinessDay.

L-R Dapo Otunla of IHS, Mike Asukwo, and Emeka Ifeanyi , finance manager , BusinessDay

Monday 24 September 2018

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FINANCIAL TIMES Apollo criticised for scale of fees to affiliate life insurer

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World Business Newspaper

Corbyn resists pressure for second EU Brexit referendum

Poll suggests 86% of grassroots Labour members want a ‘People’s Vote’ JIM PICKARD

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eremy Corbyn is resisting pressure to back a second EU referendum despite a new poll of Labour members suggesting that 86 per cent of grassroots members want a so-called “People’s Vote”.

Mr Corbyn told the BBC Andrew Marr show that Brexit would be debated during Labour’s annual conference in Liverpool but added: “Our preference is for a general election and then we can negotiate our future relationship with Europe.”

On Tuesday, delegates will get the chance to vote on a Brexit motion, but the wording – to be agreed on Sunday by the party’s “conference arrangements committee” – is unlikely to offer a binary choice on a second referendum.

Some commentators suggested over the weekend that Mr Corbyn appeared to be warming to the idea of a People’s Vote.

Instead, the motion is expected to say that while a second referendum is a possibility the priority is forcing a general election. “Let’s see what comes out of conference,” said Mr Corbyn. “There will be a clear vote in conference but we’ll see what comes out of all the compositing meetings going on.”

The poll by YouGov, published on Saturday evening, suggested that only 8 per cent of the grassroots members are opposed to a “People’s Vote”. The poll of 1,054 Labour members found that a sweeping majority believed that Brexit would make it harder to end austerity, weaken workers’ rights, dilute environmental protections and make children worse off than their parents. An overwhelming 91 per cent to 3 per cent thought Brexit would damage the economy.

Tom Watson, the deputy leader of the Labour party – who is at odds with Mr Corbyn – pointedly said that both he and Mr Corbyn were elected by party members in 2015 to reflect the views of ordinary members. “So if the people’s party decide they want the people to have a final say on the deal, we have to respect the view of our members,” he said.

But John McDonnell, shadow chancellor, warned on Saturday that re-running arguments about

Britain’s EU membership could stoke xenophobia and re-energise the UK Independence Party.

On Sunday, thousands of delegates are set to march through Liverpool to call for a People’s Vote, in a symbol of growing defiance against Mr Corbyn over the issue.

David Lammy, a prominent former minister, will say that a fresh vote on Brexit would be “not only the right thing to do for jobs, public services and the future of our young people” but also the best way to get a radical Labour government.

Labour is meanwhile seeking to change the subject away from Brexit by rolling out an array of radical domestic policies.

Mr Corbyn announced that the next Labour government would force all companies with at least 250 staff to give up a third of seats on their boards to employee representatives who would be elected by the workforce. Theresa May, the prime minister, proposed two years ago that each company should have workers on boards, but has since watered down the proposal so companies can instead assign a non-executive director to represent staff.

Labour also announced that it would tax second homes through a new national levy equivalent to double the current rate of council tax.

The money raised from that policy will be earmarked for councils to help homeless families with children in temporary accommodation. The party suggested that up to 174,000 homes could be hit with the levy, raising an estimated £560m a year.

Separately the party’s “national executive committee”, which met on Saturday, has ruled out automatic reselection contests for MPs, a policy proposed by pro-Corbyn pressure group Momentum. Instead the NEC came up with a compromise under which the threshold for triggering a contest has been cut from 50 per cent to 33 per cent of branches.

The group waved through a compromise over changes to the rules governing Labour leadership contests, so that anyone seeking the leadership in future will require nominations from 10 per cent of MPs plus 5 per cent of constituency Labour parties or 5 per cent of trade unions. At present they just need backing from 10 per cent of MPs.

US to set up $60bn agency to counter China in developing world Reboot of commercial lending to emerging nations in face of Beijing ‘economic warfare’ DAVID PILLING

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he US is preparing to create an agency that can invest up to $60bn in the developing world in an effort to counter what some in Washington describe as China’s use of debt to wage “economic warfare”.

In what observers say is the big-

gest shake-up of US commercial lending to developing countries in 50 years, the Overseas Private Investment Corporation will be folded into the new agency and allowed to invest in equity. At present Opic can invest only in debt, putting it at a disadvantage to European development finance Continues on page A14

Jeremy Corbyn: ‘Our preference is for a general election and then we can negotiate our future relationship with Europe’ © Charlie Bibby/FT

Comcast wins auction for Sky with £30.6bn bid Murdoch’s Fox and Walt Disney beaten in a deal that will redraw global media landscape MATTHEW GARRAHAN

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omcast has triumphed over 21st Century Fox and Walt Disney in the auction for Sky with a £30.6bn bid in a deal that will redraw the global media landscape.

Comcast’s £17.28 a share bid beat a rival £15.67 a share bid from Fox, which was backed by Disney, and came in the third and final round of an auction when each bidder was asked to make their best offer for the broadcaster.

The Comcast offer values Sky at almost £4bn more than the DisneyFox bid and was recommended to shareholders by Sky’s independent committee, which was set up to evaluate the takeover bids. It brings an end to Rupert Murdoch’s long association with Sky, which he founded in 1989, and which ushered in the pay-TV era in the UK. The competing bidders had circled each other warily on a day when the fate of Britain’s largest pay-TV player was to be decided. In the first two rounds, when bidders were able to respond to rival bids, they each edged up their initial offers “by pennies”, according to one person close to the process. This was to ensure that they were able to deliver their best offer in a sealed, final round bid.

But the Disney-Fox side surprised those involved in the pro-

cess with their final £15.67 a share offer. “Disney wanted it but they weren’t going to overpay,” one person briefed on the process said.

Another told the FT: “Comcast just paid $3bn more than they had to.”

The auction put Sky at the centre of a high-stakes poker game between the world’s two largest media groups.

Disney and Comcast, which owns NBC Universal, have sparred this year in a tussle for Rupert Murdoch’s Fox empire. In the summer Disney prevailed with a bid for Fox’s entertainment businesses, including its Hollywood movie studio, cable channels and Star of India, that valued them at $71.3bn not including debt. The assets included Fox’s 39 per cent stake in Sky — which means Disney will be able to recoup about $15bn if, as expected, it sells its Sky shares to Comcast.

With operations in Germany, Italy, Austria and Ireland, as well as the UK, Sky has 23m subscribers and will give Comcast a powerful launch pad for new digital services in an era increasingly shaped by streaming providers such as Netflix and Amazon.

“This is a great day for Comcast,” Brian Roberts, Comcast’s chief executive, said in a statement. “Sky is a wonderful company with a great platform, tremendous brand and accomplished management team.

This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.”

Disney declined to comment on the auction but Fox said in a statement that it was “considering its options” regarding the 39 per cent stake in Sky and “would make a further announcement in due course”.

The conclusion of the auction brings to an end one of the UK’s longest running takeover battles.

It started in December 2016 when Mr Murdoch’s Fox group made a £10.75 a share offer for Sky that valued it at £18.4bn.

With the tabloid newspaper phone-hacking scandal and the behaviour of some journalists at Murdoch newspapers still fresh in people’s minds, the UK government was under pressure to ensure that a sale of Sky did not hand Mr Murdoch more influence of the UK’s media market. A lengthy regulatory review process then followed.

Ofcom, the UK’s media watchdog, and then the Competition and Markets Authority scrutinised the Fox offer. But with the regulatory review process dragging on, Mr Murdoch stunned his rivals last November when he revealed plans to break up his media empire, selling most of his entertainment assets, including his movie studio and portfolio of cable channels, to Walt Disney.

France business chief warns Macron on public spending Progress needed to boost economy has been too slow, says Medef president HARRIET AGNEW

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he new head of France’s largest employers’ federation has warned that the country faces the “mother of all battles” to cut public spending and urged President Emmanuel Macron to accelerate process to kick-start the economy.

“We’ve been living on heavy public spending for years and it’s a very addictive drug,” Geoffroy Roux de Bézieux, who took over as Medef president in July, told the Financial Times in an interview.

“Like any drug you have to separate from [it] slowly, but the first year [of Macron’s presidency] has been not enough. We need to accelerate that pace.”

At 56.4 per cent of GDP, France’s public spending is the highest in the EU. During his election campaign, Mr Macron promised to slash the level to 52 per cent by 2022, while cutting

France’s budget deficit to below the EU’s 3 per cent target and slashing unemployment.

Mr Macron has pledged €60bn of savings over five years but so far has gone easy on public spending cuts — which would mean taking on the powerful civil service unions, which represent a fifth of the workforce.

Mr Roux de Bézieux welcomed the pro-business measures enacted during Mr Macron’s first year, pointing to an overhaul of France’s wealth tax, introduction of a flat tax on dividends and reform of the sclerotic labour market, including a cap on damages that courts can award for unfair dismissal.

But he warned that further tax cuts were not possible without reducing spending. “The fight over taxation in France is not over,” said Mr Roux de Bézieux. “But if we don’t reduce public spending then there is no way, while

respecting the European commitment on the budget deficit, that we could reduce tax. So the mother of all battles is the reduction of public spending.”

Mr Roux de Bézieux — a serial entrepreneur and former president of CroissancePlus, France’s main association for growth businesses — presented himself as the candidate representing digital transformation and new technologies during his bid for the top Medef job. He believes France needs to embrace technology to slash costs and improve the efficiency of public services.

Mr Macron’s recent healthcare reforms include a pledge to improve online appointment booking services to cut administrative costs, while his anti-poverty strategy, announced earlier this month, will use technology to simplify and consolidate the benefits system.

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NATIONAL NEWS

US to set up $60bn agency to counter...

Revolut seeks to hedge Brexit risk with Luxembourg licence

Continued from page A13 institutions (DFIs).

Ray Washburne, president and chief executive of Opic, told the FT that China – by using what he called “loan-to-own programmes” – was “creating countries that have the shackles of debt around them”.

That amounted to “economic warfare”, he said.

By more than doubling Opic’s lending ceiling to $60bn and allowing it to invest in equity, he said, it would be put on “an equal footing with other DFIs”.

Riva Levinson, president of KRL, a Washington-based emerging markets consultancy, said she hoped legislation could be passed by the Senate before midterm elections in November. “This is the first real attempt to recognise that the US needs to support its companies in the commercial battlefield in the developing world,” she said. “Because China is taking it all.”

The Better Utilization of Investments Leading to Development act (Build Act), which passed the House in August, has bipartisan support, including from close allies of President Donald Trump such as Wilbur Ross, secretary of commerce.

Opic will be folded into the new agency, called the International Development Finance Corporation. The arrangement has been sold to the president, as spearheading private-sector investment and countering China’s so-called debt diplomacy, while making a profit for the US taxpayer, according to those involved in talks.

“Opic started out being viewed as corporate welfare and within a year the office of management and budget was giving it an extra $30bn,” said Ms Levinson. “It’s a blueprint of how to get things done in Trump’s Washington.”

In August, 16 senators wrote to Steven Mnuchin, US Treasury secretary, complaining that the International Monetary Fund was bailing out countries that had got into trouble because of what they called “predatory Chinese infrastructure financing”.

The letter expressed concern that Chinese lending to Djibouti in the Horn of Africa could enable Beijing to take control of the country’s container port. Last year, Beijing opened its first overseas military base in Djibouti on the Red Sea. “The Chinese are all stateowned enterprises and it’s part of their foreign policy to go in and control things for the benefit of the Chinese state,” said Mr Washburne.

Some recipient countries have also begun to question Chinese lending practices. In June, Malaysia suspended $22bn of China-backed projects while it reviewed financing terms.

In Africa, some citizens’ groups have said Chinese deals favour corrupt officials more than the state.

“The Chinese have an edge with the African political elites, but not so much with the people,” said Kwasi Prempeh, executive director of the Center for Democratic Development in Ghana. “African elites are doing business with them because there’s not a lot of transparency. But at the popular level, the Chinese cannot muster the soft power of the west.”

Monday 24 September 2018

Fast-growing fintech company predicts London’s role as a financial centre could fade MARTIN ARNOLD

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Solar energy array in Senegal

Africa needs China’s help to embrace a low-carbon future Beijing can offer hope to the continent but debt is a cause for concern NGOZI OKONJO-IWEALA

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t the Forum for ChinaAfrica Cooperation in Beijing in early September, Chinese President Xi Jinping pledged $60bn to African nations, giving China and Africa an important opportunity to build a lasting partnership for a sustainable future.

China’s pledge includes new credit lines, foreign aid, and special funds for development financing and financing imports.

China is already Africa’s largest trading partner and source of infrastructure finance, but last week it strengthened its commitment to the region with a new finance package.

China’s offer, consolidated with the reassurance of Mr Xi’s “five no” approach to China’s relations with Africa, gives African countries and the African Union an opportunity to work with China to seize the initiative to establish a strong and sustainable development path.

The new investments should be used to establish a network of clean, resilient infrastructure, like solar and wind farms, such as we have in Morocco, Burkina Faso and Kenya, and sustainable public transportation projects like in Ethiopia, Rwanda and Nigeria.

The concern about Africa’s ris-

ing debt profile is real. According to the IMF, sub-Saharan Africa’s debt to GDP ratio has risen from 26.3 per cent in 2009 to 48.1 per cent today. This ratio is far higher and in dangerous territory for a handful of countries. Whilst Chinese debt may not be the biggest contributor to this, African countries need to seek a good balance of concessional loans, grants and foreign direct investment, individually and collectively to sustain their development. China is open to this.

During my time as Finance Minister of Nigeria (2011-2015), China worked with us to get a balanced package of assistance that has helped build the light rail system in Abuja and four new airport terminals in Lagos, Port Harcourt, Kano and Abuja, among other projects. Directing Chinese assistance to build sustainable regional infrastructure projects that can unlock the continent’s vast potential is key.

Two thirds of the continent’s infrastructure is yet to be built and Africa can lead with clean, low-carbon sustainable infrastructure. This approach can lay the foundation for a new growth story, one that creates millions of jobs for our youth, one with efficient and liveable cities, restoration of degraded agricultural lands including a halt to defor-

estation, and clean energy and water resources.

A new report from the Global Commission on the Economy and Climate, which I co-chair, has found that bold climate action could yield economic benefits worth $26tn between now and 2030. Bold climate action could also generate more than 65m new low-carbon jobs in 2030, equivalent to the entire workforces of the UK and Egypt today combined.

These benefits would extend to countries big and small, including those in Africa. Tthis is supported by other research by the Global Commission focusing on Uganda.

This found that green growth approaches could increase the country’s GDP by around 10 per cent compared to business-asusual by 2040, while also reducing greenhouse gas emissions by 28 per cent.

But this opportunity does have a shelf life, which is why we must act quickly and decisively.

From 2000 to 2017, the Chinese government, banks, and contractors provided $136bn in loans to African countries. More recently, China’s investments in Africa have become a focal point of its Belt and Road Initiative, which supports roads, railways, ports, and other infrastructure projects across almost 70 countries, including some in Africa.

Record profits for Europe’s private banks Strong markets boost groups but McKinsey questions ability to sustain growth CHRIS FLOOD

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rofits for European private banks surged to an all-time high last year, a flattering result that masked continuing difficulties in winning business and controlling costs for wealth managers that serve some of the world’s richest people.

Selling investment products and services to the world’s growing number of millionaires is a lucrative business that generated record profits of €15.4bn in 2017 for 111 private banks in western Europe, an annual increase of 14.1 per cent, according to McKinsey, the consultancy.

UBS, the largest player globally, reported that adjusted pre-tax profits for its non-US wealth opera-

tions rose 15 per cent to just under SFr2.8bn (€2.49bn) in 2017.

It has set a target of 10 to 15 per cent annual profit growth over the next three years after combining US and international wealth operations into a single unit at the start of 2018.

A key aim of the reorganisation is to improve the stubbornly high cost-to-income ratio of the enlarged wealth division to help UBS compete against rivals including BNY Mellon, Bank of America, Morgan Stanley and Credit Suisse.

The pool of profits generated by western European private banks has increased by about a quarter (€3.1bn) over five years with most of the growth due to the strong performance of financial markets.

In contrast, new business inflows of €1.4bn have provided less than half

the industry’s profit growth since the start of 2013.

Sébastien Lacroix, leader of McKinsey’s European private banking practice, said the reliance on favourable market performance raised questions about the industry’s ability to sustain profits growth.

“Private banks need to get back in the driver’s seat. They need to redouble their efforts to build new inflows and to exert greater control over growth in the cost base,” said Mr Lacroix.

McKinsey’s survey, published on Monday, noted that divergence between the performance of large players, those with assets of more than €30bn, and private banking arms of universal banks, has increased compared with the results achieved by smaller rivals.

he UK’s fastest-growing financial technology company has applied for a licence in Luxembourg to cope with the potential disruption of Brexit.

Revolut, the digital payments company that has almost tripled its customers to 2.8m in a year, plans to set up an office in Luxembourg and is in talks with the country’s regulators about how many staff it needs there.

“It takes us six months to get an emoney licence and so we have applied for one in Luxembourg – just to be on the safe side,” said Nikolay Storonsky, the Russian-born co-founder and chief executive of Revolut.

The British government has promised to defend Britain’s position as a global fintech hub. However, some executives in the sector have warned that Brexit could undermine its attractiveness, especially if it technology specialists become harder to hire in the UK. Mr Storonsky said he had no plans to leave London, adding “I love it here”.

But he predicted the UK capital would fade as a financial centre because “more banks will cut back as they make less money, they are squeezed by regulation and face competition from fintechs”.

Revolut met UK regulators last year about applying for a banking licence but instead it decided to apply for one in Lithuania, partly to avoid the disruption of Brexit.

Mr Storonsky, who created the company in 2015 after working for Lehman Brothers and Credit Suisse, said he expected Lithuania to grant its banking licence next month.

But he added that it could still be many months before the company secured the necessary authorisations in each EU country to “passport” from Lithuania across the rest of the bloc.

Revolut launched three years ago in a crowded field of British pre-paid card operators seeking to disrupt traditional banks by offering cheap cross-border payments.

It quickly diversified into cryptocurrencies, insurance and smallbusiness services and earlier this year it raised $250m from investors that valued it at $1.7bn.

According to its recently filed annual report, the company’s revenues increased more than fivefold to £12.8m last year, while its pre-tax losses more than doubled to £14.8m.

Its net cash generated from operating activities was a negative £33.3m last year, but Mr Storonsky said it started to break even on a monthly operational basis earlier this year.

Mr Storonsky said Revolut “has shown no signs of slowing down” and it now has close to 3m users who do $3bn of transactions a month.

He predicted its revenues would quadruple this year after it signed up 80,000 people for its new metal card, offering extra services such as travel insurance and additional cash withdrawals for £12.99 a month.

This week, Mr Storonsky will visit Tokyo to announce plans for launching its services there later this year, which could make Japan its first Asian market. The company also plans to expand in the US, Canada, Australia, New Zealand, Singapore and Hong Kong.

Monday 24 September 2018

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FINANCIAL TIMES

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COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Apollo criticised for scale of fees to affiliate life insurer Allegation made by former employee of buyout group in newly disclosed documents MARK VANDEVELDE AND SUJEET INDAP

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pollo Global Management has been criticised by a former employee for the scale of asset management fees charged to a life insurance company it helped create in the wake of the financial crisis.

The allegation was made by Imran Siddiqui, a former senior managing director at Apollo who left last year, according to newly disclosed documents.

Mr Siddiqui, who has also worked at Goldman Sachs, repeatedly clashed with the private equity group over the “risk profile” and high fees he said Apollo was imposing on life assurance affiliate Athene Holding, his lawyer told a secretive arbitration panel.

Athene, founded in 2009, has amassed a $100bn investment portfolio, making it one of Apollo’s biggest clients. Athene paid Apollo more than $400m in 2017 to decide which assets to buy, according to the insurance company’s latest accounts.

Compared with a typical insurance company, Athene invests less of its portfolio in corporate and government debt, and more of it in assets such as mortgage-backed securities, according to an investor presentation the company gave last week. Critics worry about how such products would perform in a downturn, but Athene says it is “safer and stronger than some perceive”.

The insurer also helped the buyout group to become a heavyweight in the corporate lending and credit markets

from which banks were forced to flee after the financial crisis.

Apparent tensions within Apollo about the size of the fees from Athene have come to light because of a bitter clash between the private equity group and Mr Siddiqui over his new insurance venture, Caldera Holdings.

The dispute has sparked courtroom battles in New York and Bermuda that have escalated to include Apollo’s billionaire founder Leon Black.

Apollo claimed in a January arbitration proceeding that Mr Siddiqui had violated his non-compete clause by setting up a new insurance company with a former Athene executive, Stephen Cernich. Mr Siddiqui handed back a large portion of his stake in Apollo investment funds to settle the claims.

His claims about Apollo’s fees and the risk profile it allegedly imposes on Athene were also removed from a second arbitration case when he escalated his legal action in New York, meaning the assertions have yet to be tested in court.

Apollo is demanding another $300m, alleging that Mr Siddiqui has misused Apollo’s confidential information since reaching the settlement.

The group also wants Mr Siddiqui to be banned from competing with Athene to buy an unnamed insurance company, which people close to the situation have identified as American Equity Investment Life. The Iowa retirement annuities specialist, whose market capitalisation exceeds $3bn, said in May it had put itself up for sale and has attracted a number of bidders.

Oil producers decide against further rise in output Trump had called for Opec to take action to cool prices near $80 a barrel ANJLI RAVAL

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he world’s biggest oil producers led by Saudi Arabia and Russia have decided against an additional rise in output, despite calls from US President Donald Trump for further action to cool prices near $80 a barrel.

“The OPEC monopoly must get prices down!” Mr Trump wrote on Twitter on Thursday.

Opec countries and their allies are meeting in Algeria to discuss output policy to offset the impact of a drop in Iranian oil exports. US sanctions on Tehran’s energy industry, which are due to come into effect in November, are beginning to restrict supplies.

“I do not influence prices,” Saudi Arabia’s energy minister Khalid Al Falih told reporters in Algiers ahead of a meeting of energy officials, which is separate from the twiceyearly formal ministerial gatherings.

A fall in Iranian barrels, as buyers cut purchases for fear of US financial penalties, has boosted the price of international oil benchmark Brent crude. It has also prompted Mr Trump to blast the cartel, with US officials anxious about the potential effect on domestic fuel prices ahead of midterm elections in November.

Mr Falih added on Sunday that he believed the oil market was “adequately supplied”.

Global oil producers including Opec, Russia and other allies outside the cartel agreed in late 2016 to cut supplies by 1.8m barrels a day to bring the market back into balance after a multiyear downturn.

But supply was cut by more than intended, after unexpected falls in Venezuelan output and disruptions elsewhere, so in June producers agreed to an increase to make up for the cuts that went beyond what was agreed in 2016.

Oman’s oil minister Mohammed Al-Rumhy and his Kuwaiti counterpart Bakhit Al-Rashidi told reporters on Sunday that further action beyond what was agreed in June was not required.

Oil traders and energy sector analysts have raised questions about how big the drop in Iranian supply will be and how much big producer nations will be able to raise supply to compensate.

Although Saudi Arabia said after the ministerial meeting in June that the global oil market should expect a 1m barrel a day increase in the coming weeks and months, increases have fallen short of this level.

“We can produce significantly more than we are producing today if there is demand,” Mr Falih said, adding that the kingdom had sufficient spare output capacity. “The biggest issue is not with the producing countries, it’s with the refiners, it’s with the demand.”

Lawyers for Apollo and founder Leon Black (above) have asked the court to dimiss the case, arguing Caldera failed to adequately describe the allegedly defamatory statements, or any other conduct that could give rise to liability © Bloomberg

Legal settlement brings card issuers scant relief Main battle over rules imposed on merchants begins next year ROBERT ARMSTRONG

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s president of a family business – a chain of 34 gas stations and convenience stores in Northern California, under the Rotten Robbie brand – Tom Robinson negotiates with a lot of suppliers. “If I buy insurance, fuel, vehicles, I buy them from somebody,” and can shop around for a good deal, he says.

Not so with the credit cards he accepts as payment from many of his customers.

He likes taking plastic. His corner of retail is brutally competitive and anything that makes it easier for customers to pay is welcome.

But he does not like that the fee he pays to the card issuing banks – “a large expense” – is non-negotiable.

Rules from card networks Visa, MasterCard and American Express “put a barrier to dealing with the people that impact you”, he said, and do not give him the option of favouring certain cards. “I can’t say, ‘I’d give you a better deal if you use this or that card.’”

Mr Robinson’s concerns received a measure of vindication last week, with the settlement of a long-running class action lawsuit against the card networks and a group of large banks. If the court approves the settlement, up to $6.2bn will be distributed to the plaintiffs – including, potentially, Mr Robinson.

That sum may look large, but in the context of the amount spent on cards and the fees merchants pay, it is remarkably small. US consumers spent $3.4tn using credit cards in 2017, 50 per cent more than five years ago, according to the Nilson Report. That in turn generated $74bn in swipe or “interchange” fees, paid by merchants to the card issuing banks, implying that the average fee was over 2 per cent of transaction value.

Visa and MasterCard, in turn, take a smaller transaction-based fee from the banks. (The case is somewhat different with American Express, which acts as its own bank.)

If, as the plaintiffs to the law-

suits suggest, all these fees are kept artificially high by anti-competitive practices, a one-time payment of $6.2 billion is a tiny fraction of what is at stake.

If interchange fees were driven down to levels seen in Europe and Australia – where they are capped under half a per cent by regulation– tens of billions in annual bank revenue would disappear, and Visa and MasterCard would in turn get less from the banks.

And so, far from being ended by last’s week’s settlement, the crucial phase of the legal fight, over the legality of rules imposed on merchants by the card networks and the banks, begins in earnest next year.

Lawyers for the plaintiffs argue that, by providing guidelines for the fees that banks charge merchants, the card networks have colluded to fix prices, and then entrenched those prices with unfair rules – such as the “honour all cards” rule, which requires merchants taking any of a networks’ cards to take all of them.

Infrastructure funds make bold bet as investor demand runs on Two new products are aiming to raise a combined $40bn from yield-hungry institutions PETER SMITH AND JUDITH EVANS

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wo asset managers are vying to raise $20bn each for what will be the world’s biggest unlisted infrastructure funds, as institutional investors plough ever larger sums of capital into assets that form the backbone of the global economy.

Toronto-based Brookfield Asset Management, which manages $285bn of assets, plans to fundraise for a mammoth $20bn vehicle in the coming months after exhausting all the cash from its $14bn Brookfield Infrastructure III fund, raised in 2016.

New York-based Global Infrastructure Partners, meanwhile, which concluded fundraising for a record-setting $15.8bn fund only last year, is further ahead and is expected to complete its $20bn fundraising in early 2019.

Two people briefed on the situation said initial commitments for Brookfield’s latest fund already suggests it will reach its $20bn target. A third person said GIP, major-

ity owner of Gatwick airport, was also on track to raise $20bn. Both companies declined to comment.

Jonathan White, UK head of infrastructure at KPMG, said the sector was being driven by the decarbonisation of the energy sector and creation of renewable energy facilities; the need to refresh existing infrastructure such as roads, ports and pipelines; and urbanisation in developing nations from Brazil to China.

“Infrastructure has been an investment success story in the last 10 years. It has produced attractive returns when compared to bonds and equities when measured on a risk-adjusted basis,” he said.

The infrastructure sector reached a record $450bn of assets under management at the end of 2017, according to Preqin. However, the data firm added that deal volumes had declined this year because of high pricing in the sector.

Brookfield, which can also make infrastructure investments directly via its $15.4bn listed vehicle, continues to pursue largescale assets such as the $2bn East

West gas pipeline in India. It is nearing a deal to buy the 1,400-km pipeline from a company controlled by the billionaire Mukesh Ambani.

KKR, the New York-based private equity group, closed a $7.4bn infrastructure fund this month, while Blackstone, the world’s largest real estate investor, raised $5bn for an infrastructure fund earlier this year.

Blackstone has a $40bn longterm goal for the fund, its first dedicated to the sector, with Saudi Arabia’s Public Investment Fund matching every dollar raised for the vehicle.

Investors have poured into the fast-growing infrastructure asset class, which promises long-term income streams with higher yields than bonds.

Brookfield’s 10-year record in infrastructure is helping to lure investors, said one of the people briefed on its plans. Typically twothirds of existing investors “roll over” into new products, while about 35 per cent are new, the person added.

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Monday 24 September 2018

ANALYSIS

FT

China’s relentless export machine moves up the value chain Mid-range manufacturing push improves the Chinese position as trade war intensifies

Investors ignore human rights at their peril From land grabs to illegal labour, civil liberties issues should matter to investors JENNIFER THOMPSON

T TOM HANCOCK

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t Sany Group’s factory on the outskirts of Shanghai, there is little sign of a trade war involving the world’s two biggest

economies.

With 500 workers and 200 robots welding and screwing steel parts into place, the facility can produce up to 50 excavators every day, each weighing 20 tonnes. Outside, 200 yellow diggers wait to be transported to a port 30 minutes’ drive away, their hydraulic arms covered in blue fabric sleeves to prevent rusting in the salty sea air.

One of China’s biggest manufacturers of heavy equipment, Sany exports more than 40 per cent of the factory’s production — contributing to its exports worth $1.2bn last year, mainly to emerging markets in Asia and Latin America. The group shows no signs of slowing down, with Sany aiming to increase international sales by 30 per cent this year.

The success of companies such as Sany is part of the relentless march of China’s export sector, even as tariffs and counter-tariffs between the US and China cast a shadow over the global trading system.

In the decade since the financial crisis, China’s export sector has proved remarkably resilient. After overtaking Germany as the world’s top exporter of goods in 2009, Chinese exports have grown at an average of 5 per cent a year to $2.26tn in 2017, compared with annual global export growth below 2 per cent.

China’s share of manufacturing exports expanded to 18 per cent from 12 per cent during the past decade — adding to gains made after China’s 2001 entry to the WTO which accelerated the decline of manufacturing employment in developed countries.

One study from the US National Bureau of Economic Research blamed Chinese imports for 2m-2.4m US job losses in the decade to 2012.

Sany’s booming sales also reveal something important about the trade war and the competition between the US and China. Officials in President Donald Trump’s administration have focused on Chinese advances in high-tech areas such as artificial intelligence and robotics to justify their use of tariffs.

Yet in the short term, the bigger threat to industry in the US and other developed economies comes from the rapid increase in Chinese exports of medium-level technology, such as vehicles and their parts, electrical machinery and the sort of construction machinery that Sany produces. It is in products such as these — rather than high-tech goods — that Chinese companies are swiftly winning market share.

“Chinese companies are aban-

doning low-end goods to move to middle-range goods, it’s actually a very fast change,” says Xu Bin, a professor at the China Europe International Business School. “I estimate the net effect of US tariffs will be such that it speeds up the upgrading.

Chinese companies may be forced to upgrade their product line in order to offset the negative effects.”

China is the now dominant producer in medium high-tech industries, with its global share nearly tripling in the past decade to 32 per cent, according to the US National Science Board, surpassing the US in the late 2000s and the EU this decade.

Most of that growth has come from privately owned Chinese companies such as Sany. China’s share of global bulldozer exports has grown to nearly 10 per cent from just 2 per cent a decade ago, and the company is taking on Japan’s Komatsu in global markets.

“Sany’s product quality and performance has reached Japan’s, and our service is even better than theirs, so we are very competitive in southeast Asian countries,” says Zhou Wanchun, head of overseas sales.

“The price of excavators is higher than Korean products, so we are not just competing on price.”

Its fortunes highlight another trend — the share of Chinese exports going to countries outside the OECD club of developed economies has risen from 43 to 48 per cent over the past decade.

Sany also reflects that much of China’s move up the value chain has been in capital goods — goods used to make other goods — and components, rather than consumer products. Its share of global exports in electrical transformers and their components, which are crucial to power grids, has doubled to 20 per cent in the past decade.

JDMachine in the eastern city of Ningbo exports machines used to make air-conditioning units for cars to automotive parts makers in Europe and the US, generating more than $100m in foreign sales last year. It entered the market a decade ago after taking on the staff of a British company that had gone bust.

The industry began moving to China after the financial crisis, says Mark Forster, a manager at JDMachine. “Technologically, the machines are better than those we used to make in the UK,” he adds.

The shift by Chinese companies into more sophisticated capital goods has altered trade between China and developed countries.

Over the past decade, telecommunications and transportation equipment and auto parts have grown as a proportion of China’s exports to the US, while the share of textiles and footwear has shrunk.

China’s share of the global capital goods market rose from about 5 per cent to 20 per cent between 2007 and 2016, according to the World Bank.

Consumer goods have played a role, too. Chinese white goods producers such as Midea, TCL and Hisense have increased their market share overseas and exported a combined $15bn-worth of consumer electronics in 2016, according to Chinese customs.

Some economists see the rise up the value chain as a near inevitable result of competition. “Once an economy gets to produce electric generators, say, or motor vehicles, labour productivity in that industry is placed on an automatic upward trajectory,” according to Harvard economist Dani Rodrik. “The trick is to get a toehold in these automatic convergence industries and to expand domestic employment in them.”

Average wages in China’s manufacturing sector have more than tripled in the past decade, putting them above Brazil and Mexico and forcing companies to increase productivity.

Rather than groundbreaking innovations, Chinese companies have become adept at incremental improvements. According to Dan Breznitz, an innovation researcher at the University of Toronto, they are good at making “new versions, often simpler, cheaper and more efficient, of technologies and products … after they are invented and marketed elsewhere.”

China’s investment boom after the financial crisis enabled producers of industrial goods to hugely expand domestic production, increasing economies of scale. Manufacturers have upgraded through acquisitions of foreign technology. Sany acquired German concrete pumpmaker Putzmeister for €360m in 2012. Multibillion-dollar deals for western manufacturers include Midea’s €4.5bn deal for German robot-maker Kuka the same year.

There has also been technology transfer by developed-world companies — and technology theft. About 20 per cent of US companies say they have been asked to transfer technology to China — often when they set up joint ventures in the country, according to a US-China business council survey last year. Several of China’s top exporters have faced lawsuits over patent violations.

Multinationals have also played a big role in the growing sophistication of China’s exports. About 43 per cent of China’s exports came from foreigninvested companies last year, according to official statistics. The figures are higher for high-tech products such as laptops and smartphones, and for large companies. Thirteen of China’s top 20 exporting companies are foreign-owned, according to Chinese customs.

wo of Europe’s biggest investors made headlines for all the wrong reasons in 2013 despite being keen to emphasise their commitment to responsible investment.

Norway’s oil fund and Dutch pension fund ABP, and its administrator APG, were taken to task over their stakes in Posco, a South Korean steelmaker building a plant in India.

The scheme would have forcibly displaced 20,000 locals, according to a claim by non-governmental organisations, which filed complaints with the OECD. For the two investors, respectively the largest sovereign wealth fund and Europe’s largest retirement scheme, the affair was an awkward reminder that human rights should concern shareholders, even those with minority stakes.

Norges Bank Investment Management, which manages the assets of the oil fund, was officially rebuked by the Norwegian contact point for the OECD, which enforces the guidelines of the Paris-based organisation.

panies that do business in countries with poor civil liberties, such as Myanmar.

The line between human rights abuse and poor labour practice is blurred, given the vulnerability of workers in the poorest countries.

Infringements, though, can pose a huge risk to the reputation of companies involved.

Poor management of risk related to child labour “may be linked to a general lack of risk oversight”, a report by data provider MSCI said last year.

The study did not offer evidence of malpractice but listed close to 60 groups that had faced allegations of directly employing underage workers or engaging suppliers that use child labour. The collapse in 2013 of the Rana Plaza building in Bangladesh, which killed more than 1,100 people, prompted criticism of western retailers who sourced products from the development’s five factories.

“We view these types of risks within supply chains as really pronounced,” said Diandra Soobiah, head of responsible investment at Nest, the UK’s £3.8bn state-backed

A protest against the Posco plans in New Delhi in 2013

The judgment said it did not have “any strategy on how to react if it becomes aware of human rights risks related to companies in which NBIM is invested, apart from child labour violations”.

The Dutch contact point dealt with the APG complaint and concluded that the group had complied with the guidelines. As a result of the case, APG agreed to continue its engagement efforts with Posco on behalf of the ABP pension fund. Posco backed out of the project last year according to local media. The group did not respond to a request for comment.

Human rights are the principles that encompass elements such as the eradication of slave labour, the right to decent working conditions and equal pay, and the protection of property rights, all set out in the 30 articles of the UN’s Universal Declaration of Human Rights.

The issue is coming into sharper focus for investors, which in part reflects a desire to be seen as good citizens. There is recognition, too, that ignoring these issues could have a financial cost because of lower share prices or litigation — or even projects being shelved.

Human rights concerns touch every industry but prominent areas of risk include land disputes in the mining, oil and agriculture sectors, the treatment of workers in large retailers’ supply chains and com-

workplace pension scheme. “Boards need to be on top of these kinds of risks.”

Concern over human rights and labour are among top ESG concerns, according to Leon Kamhi, head of responsibility at Hermes Investment Management.

“Climate change is right at the top of the list, human rights and labour rights come quite closely behind,” he said.

New technologies, business models and the use of zero-hours contracts, which do not guarantee workers a minimum number of hours, mean these risks are multiplying.

Fund managers at EdenTree Investment Management, a £2.8bn group that focuses on responsible investment, consider human rights in their stock selection process, including workers’ rights in companies that operate in the gig economy.

Groups such as Deliveroo and Uber have attracted controversy over their reluctance to treat workers as employees, giving them benefits such as sick pay and holiday pay.

“We’re not wholly opposed to the gig economy [but] we would very strongly look at the business model,” said Neville White, head of research into sustainable and responsible investment at EdenTree. He decided not to invest in Amazon over concerns about working practices at the ecommerce group.

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Insight Trade policy for Nigeria? Focus on exports, not imports GLOBAL PERSPECTIVES

OLU FASAN Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

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ecently, the Nigerian Office for Trade Negotiations (NOTN) launched a “nation-wide” call for inputs into what it dubbed “A 21st century trade policy for Nigeria”, with the strapline: “A welfare and prosperity trade agenda that works for all”.In other words, the NOTN wants to preparea trade policy for Nigeriaand is inviting Nigerians to contribute to that process.

This should, of course, be welcomed. For far too long Nigeria has taken ad hoc trade decisions without a coherent trade policy, leading to criticism, perfectly justified, that its trade regime is opaque and unpredictable. This is due, in large part, to the lack of inter-ministerial coordination necessary to reach consensus on policy preferences. Bureaucratic politics can, of course, hinder policy-making. A few years ago, a director in the then federal ministry of commerce told me, during a visit to the ministry, that a trade policy document produced in 2001 wasabandoned because of “disagreements among the relevant ministries as to the appropriate policies”. Surely, trade policy is one of such policy issues that can’t be addressed without a Government-wide approach, given its cross-cutting impacts. Thus, NOTN should be commended for attempting to overcome these challenges with a bold initiative to prepare a trade policy for Nigeria.

But here is the substantive issue. If Nigeria wants to develop a modern trade policy that ensures the welfare and prosperity of the people, what should it look like?

In other words, what kind of trade policy should Nigeria have? But before we address that normative question, it’s important, first of all, to establish the positive point that, looked at from the policymaker’s perspective, trade policy is an intellectual or ideational, issue. In other words, it’s about the ideas that policy makers and politicians have. As the economics Nobel prize winner Paul Krugman puts it, “If top government officials are strongly committed to a particular economic doctrine, the commitment inevitably sets the tone for policy-making”. So, if we are talking about whattrade policy Nigeria will have, rather than should have, we must recognise that the policy choice or preference cannot exist outside the conceptual frameworks, or the individual cognition, of the policymakers and the politicians.

What, then, are the views of Nigerian key government officials and politicians on trade?

Well, the DG of NOTN and Nigeria’s chief trade negotiator, Ambassador Chiedu Osakwe,

who is leading the process of preparing a trade policy for Nigeria, is an economic liberal.

He believes in trade openness, albeit with necessary rules-based safeguards. The trade minister, Dr Okechukwu Enelamah, is also a liberal and reformer, who is at the forefront of improving the business environment in Nigeria and is particularly committed to trade facilitation. Both the minister and the chief trade negotiator were responsible for the successful conclusion of the negotiations on the African Continental Free Trade Area (AfCFTA). With both of them responsible for developing Nigeria’s trade policy, we should expect, based on Krugman’s formulation, a liberal trade policy. Or shouldn’t we? Well, don’t hold your breath fortrade policy is a divisive issue in Nigeria, even across the government.

And, sadly, the protectionist forces are in control. Surely, when it comes to trade policy in Nigeria, Gresham’s Law is in force: bad ideas are driving out good!

And, of course, leading those bad ideas is President Buhari himself. Indeed, I once wrote a column, titled “Why Buhari’s economic ideas are bad”. President Buhari, to be sure, is a mercantilist, who detests imports.

He once said, for instance, that “Under my watch, we will grow what we eat and consume what we make”. That’s the warped language of self-sufficiency, but no country can be self-sufficient, otherwise there is no such thing as comparative advantage. In one Budget speech, he said that “the underlying philosophy” of his government’s economic recovery strategy is to use trade policy instruments “to promote import substitution”. President Buhari has refused, at least at the time of writing this, to sign the AfCFTA agreement because he wants to protect Nigeria’simportcompeting industries from foreign competition. He argues that

imports cause unemployment in Nigeria, which betrays a failure to understand that unemployment is largely a macroeconomic problem, with tariffs, a microeconomic tool, contributing little to it. So,with a president that has nailed his protectionist colours to the mast so profoundly, what trade policy do you expect Nigeria to have?

Last year, the World Trade Organisation conducted Nigeria’s fifth Trade Policy Review. The result confirms Nigeria as a protectionist country. Nigeria maintains high tariff rates and imposes numerous additional duties and charges on imports; keepslongstanding import prohibition lists, including the infamous list of 41 categoriesof imports banned from access to foreign exchange; and imposes local content re-

quirements, in addition to several other non-tariff barriers.

Truth is, if Nigeria was applying to join the WTO today, it would need radical, far-reaching reforms to scale through therigorous accession process. The fact that WTO members sent 270 advance written questions to Nigeria ahead of the trade policy review shows how concerned the country’s trading partners are about its trade policy regime.

‘

Import-substitution and export-orientation are mutually exclusive; the policies you need to achieve the former are different from, and contradictory to, those you need to achieve the latter. To achieve importsubstitution, you need protectionist policies, the kinds that Nigeria currently pursues; but to achieve export-orientation, you need open and liberal trade and economic policies

,

But farmore worrying, in terms of policy outcomes, is the WTO’s conclusion that all the protectionist measures “have more significantly reduced exports than imports”, adding: “and the importance of trade for Nigeria has decreased, with a trade (in goods and services) to GDP ratio of 21.1% in 2015, down from 52.8% in 2011”.

Which brings me to the question: imports or exports, which

should be Nigeria’s main concern? This question is important because of the confusion in government circles. Very often, President Buhari and his officials talk about import substitution being Nigeria’s trade policy goal. But, at the same time, there is a lot of talk about export promotion. Segun Awolowo, the chief executive of the Nigerian Export Promotion Council, has been doing a good job talking up Nigeria’s non-oil export potentials. In fact, he once said that Nigeria has “over 100 globally export-ready commodities” waiting to be produced and projected that Nigeria could earn “$100bn annually from non-oil exports”.

But here lies the policy confusion. Import-substitution and export-orientation are mutually exclusive; the policies you need

to achieve the former are different from, and contradictory to, those you need to achieve the latter.

To achieve import-substitution, you need protectionist policies, the kinds that Nigeria currently pursues; but to achieve exportorientation, you need open and liberal trade and economic policies. The first sign that a country is export-oriented is its trade openness. But Nigeria is too fixatedon import restrictionsto be export-oriented.

This, of course, reflects a complete failure to understand that imports and exports are the flip side of the same coin, and that restrictions on imports act as restrictions on exports. This is known as the Lerner symmetry theorem, which says that when you restrict imports, particularly of raw materials, you raise production costs in industries that use them, and hamper their ability to compete and export.

Secondly, protectionism creates an anti-export bias. Why would any company bother to produce for the export markets when they have a protected domestic market? Yet, as the saying goes, “industries that can compete globally will thrive locally”. But industries can only compete globally if 1) they operate in an enabling environment and 2) they face competitive pressures.

The role of any government, therefore, is to create an enabling business environment and to expose their industries to fair international competition.

Now, this may seem controversial, but as Paul Krugman rightly pointed out in his superb book Pop Internationalism, the primary purpose of international trade is imports. It is to enable a country’s people and industries to enjoy the three benefits of trade, namely choice, quality and price: choice, to be able to buy from a variety of products anywhere in the world; quality, to have access to the best quality products globally; and price, to be able to buy products at the cheapest prices globally. This combination of choice, quality and price is what increases the welfare and prosperity of the people, and the productivity of industries, which, for instance, can access not only the best quality and cheapest inputs but also take advantage of the diffusion of technologies and ideas. A country that is restricting imports and says it wants to tackle poverty or raise the productivity of its industries is, therefore, misguided.

Butimports have to be paid for, and that’s where exports come in. Furthermore, being able to sell to people of other countries not only increases the revenues of a company, it also boosts its productivity and international competitiveness. So, exports matter.

Yet, as I argued above, you cannot promote exports with protectionist tools, not least because that could lead to tit-for-tat retaliation from your trading partners, who can restrict your own exports.

But, more importantly, because, according to the Lerner symmetry theorem shows, a tax or restriction on imports is a tax or restriction on exports.

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

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Fascinating business facts

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$500m

unisia has received a $500 million loan to support capable of helping the north African country to ease some of its budgetary and foreign exchange challenges. The disbursement raised Tunisia’s foreign exchange reserves to the equivalent of 78 days of imports, up from the equivalent of 68 days seen in recent weeks.

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16%

ngry Kenyans who have been accusing President Uhuru Kenyatta of forcing them to dig deeper into their pockets to pay new taxes while the government presides over wastage of its revenue through theft and corruption now have something to smile about.Kenyatta hurriedly signed a new finance bill into law cutting in half a new fuel tax that had led to public anger and strikes but stopping short of demands to scrap or delay it. The government, under pressure to hit IMF-mandated fiscal deficit targets, had pushed up transport and fuel prices when a 16 percent value-added tax (VAT) on all petroleum products entered into force on Sept. 1.

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$3.5bn

outh AfricanPresident Cyril Ramaphosa plans to reallocate about $3.5 billion of the national budget, set up a new infrastructure fund and implement a range of other measures to revive the country’s failing economy that’s mired in recession. The reforms, which include new rules for the mining industry and less onerous visa requirements, will be implemented immediately and funded from within the current fiscal framework, Ramaphosa said at a briefing in Pretoria. Africa’s most industrialized economy contracted in the first and second quarters and the central bank projects just 0.7 percent growth this year.

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$9.4bn

ambia’s vice president has dismissed criticism of the country’s rapidly growing debt calling it a smear campaign to force the government from power. The southern African country’s external borrowing has nearly doubled since the end of 2014 to $9.4 billion, with the International Monetary Fundsaying it’s at high risk of debt distress. The World Bank on Thursday urged the government to recognize “the enormity of the problems.”

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0.3%

all Street extended its record march on Friday, buoyed by strong investor inflows and ahead of a shake-up of key S&P 500 sectors and the expiry of option contracts. In mid-morning trading in New York, the S&P 500 was up 0.3 per cent at 2,938, after touching a record intraday high of 2,940.91 shortly after the open. The Dow Jones Industrial Average also rose 0.3 per cent to a fresh all-time peak. The US stock market’s march to record highs was driven by investors shrugging off trade tensions and rising interest rates, and focusing on the strong growth outlook for the US economy. As the third quarter comes to an end, investors also widely expect another round of double-digit earnings growth to be reported by companies.

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