Businessday 25 apr 2018 by BusinessDay

Safety concerns, comfort drive uptake in private, chartered jet services ... Number of private jets now over 100 ... Economic rebound, 2019 elections driving demand IFEOMA OKEKE

L-R: Saheed Fijabi, chairman, House Committee on Telecommunications; Lucky Omoluwa, CEO, Pinnacle Communications Limited; Is’haq Modibbo Kawu, director-general, National Broadcasting Commission; Ehiozuwa Johnson Agbonayinma, chairman, House Committee, Nigeria/US Relations Inter parliamentary, and Nick Dixon, founder/CEO, CloudCover Distribution, at the launch of CloudCover Mifi Device in Abuja, yesterday.

NEWS YOU CAN TRUST I **WEDNESDAY 25 APRIL 2018 I VOL. 15, NO 40 I N300

rivate jet operators are dominating the Nigerian skylines as concerns over aviation safety, airport delays and other issues force corporate

executives and high net worth individuals to avoid commercial flights in the country. The number of registered private jets in Nigeria is now over a 100, compared to just about 40 commercial aircraft that are

operational in the country. The growing taste for the use of private and chartered jets is coming amid a gradual rebound in Africa’s largest economy, and general elections due early next year. Corporate executives

See Businessday Market Monitor on page 4

Continues on page 38

Digital cheating rocks WAEC

$496m arms fund: Reps say Buhari has committed an Students go cyber with examination malpractices impeachable offence

Quality of future manpower now doubtful STEPHEN ONYEKWELU

tudents have gone digital in the way they carry out examination malpractices in the country, putting at the risk the future quality of the country’s manpower. Perpetrators of examination malpractices in the country now

embers of the House of Representatives, in a rowdy session on Tuesday, accused President Muhammadu Buhari of committing an impeachable offence over the anticipatory approval granted for the release of total sum of $462 million for procurement of Continues on page 38

Inside

BD INVESTIGATIVE SERIES leverage internet capabilities and websites to increase both reach and sophistication. For as little as N400 ($1.11), the sites send answers to candidates of the on-going West Africa Examination’s (WAEC) Senior Secondary Examination questions for Physics and N300 ($0.83) for Geography. “It is really a sad development. Recently, while I was away on vacation, I got an email from my office that needed imContinues on page 4

KEHINDE AKINTOLA, Abuja

APC convention: Oshiomhole guns for Oyegun’s cap

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L-R: Gladys Talabi, executive director, legal, Globacom; Folu Aderibigbe of Globacom; Li Shaowei, deputy managing director, Huawei Technologies, and Sanjib Roy, regional director, technical, Globacom, at a contract-signing ceremony between the two companies on the construction of Glo 2, a multi-billion naira optic fibre submarine cable in Lagos, yesterday.

New PE opportunities emerge in health care, education P. A7

BUSINESS DAY

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Budget delay slows port business as importers suffer poor sales AMAKA ANAGOR-EWUZIE

he delay in the passage of the nation’s 2018 annual budget has started impacting negatively on port business as shippers now suffer poor sales caused by lack of patronage and shortage of money in circulation. Consequently, seaports are witnessing relatively low ebb in business activities against the earlier expectations that this year will see high port performance, given the fact, it precedes an election year. According to the Nigerian Ports Authority (NPA), daily shipping position report, an average of 30 vessels called on the Lagos Pilotage District on monthly basis, which was a little above an average of 28 vessels that used to call on the Lagos Pilotage District same period in 2017. Reacting, Jonathan Nicole, president, Shippers Association of Lagos State, said in a telephone interview with BusinessDay, that delay in the passage of the nation’s annual budget affects every economic activity in the country including port business. Nicole, who said that shippers

as well as manufacturers make business projections based on the financial status of the economy, added that both the legislative and the executive arms of the government have no reason justifiable to delay budgets. “If budgets are delayed, obviously shippers may not make their imports appropriately because sales will be distorted. On the other hand, sales also will be slowed because there will be no money to buy goods,” Nicole explained. According to him, in the past, budgets were read out on the 1st of January of each year, such that people used to wait by their radio and television sets to listen to the New Year message, which budget was usually the main part of. “A lot of warehouses are now filled up with goods due to lack of sales fuelled by shortage of money in circulation. While some importers intentionally bring in goods, store them in their warehouses and wait for the best times when sales will improve,” Nicole stated. Stating that shippers are not bringing in as much goods as they ought to due to the economic uncertainty around possible changes

in some fiscal policies, Nicole further disclosed that manufacturers bring in raw materials for industries on regular basis and if such was delayed, factories will run out of critical inputs including stock to keep them in business while some may end up closing down. Recent statistics released by the National Bureau of Statistics (NBS), revealed that business activities at Nigerian Ports in 2017 closed at a promising note given a slight increase in the number of ships and their gross registered tonnage. NBS report stated that the ship traffic at the ports recorded a total of 4,175 ocean going vessels with 131,569,821 gross registered tonnage in 2017 as against 4,622 ocean going vessels with 134,2,13,076 gross registered tonnage in 2016. The statistics gave hope that port business in 2018, would do better judging by the fact that there has been stability of naira in the foreign exchange market and that this year is a pre-election year, when political parties are expected to spend more money on election campaign. “Withholding the budget as well as low government spending, has been the reasons for shortage of

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money in circulation, which results in economic stagnation that is currently slowing business activities in the country,” Tony Anakebe, managing director of Gold-Link Investment Limited, a clearing and forwarding company, confirmed. According to him, budget delay has serious implication on businesses because when budget is delayed, importers find it difficult to make good business decision especially as regards the consignment to invest their money on. Anakebe said that new budget most time comes with new fiscal policies, which will either be favourable or unfavourable to importation business. “This is because change in policy may result to some import commodities being considered into the prohibition list or considered for higher import duty or levy, which may have huge cost implication on the already ordered consignment.” “Importers, who do not want to get their fingers burnt by investing on a particular import, stay put from doing any further business, until Federal Government decision is known. Believe it or not, annual budget has a lot to do with the economic situation in the country,” Emma Nwabunwanne, a Lagos-based, importer, told our correspondent.

Eko Atlantic land prices up 16% to $1,690/sqm on FX, infrastructure push CHUKA UROKO

and price in Eko Atlantic City, the expansive new city being developed on land reclaimed from the Atlantic Ocean adjacent to Victoria Island in Lagos, has gone up 16 percent to $1,690/ N612,000 per square metre, up from $1,250 per square metre 12 months ago. At this price, Eko Atlantic land is about 60 percent premium over the average price range of Ikoyi N366,000 / $1,007 per square metre, Banana Island,N397,000 / $1,093 per square metre and Victoria Island, N388,000 / $1,068 per square metre, and about 157 percent premium to Lekki Phase 1 land which currently goes for N238,000 / $656 per square metre. “The new land price in the city is as a result of the re-pricing of the official USD rate from N160/$ to the investor and exporters foreign exchange rate of N360/US$1”, according to a first quarter 2018 real estate market report by MCO Continues on page 38

Digital cheating rocks WAEC... Continued from page 1

mediate attention. The email said my office had just received information about five websites where students can access the WAEC examination questions and answers, 24 hours before the time,” Ronke Soyombo, Director General, Lagos State Office of Education Quality Assurance said during an education convention at the weekend in Lagos. ExamPlaza.com, one of the most brazen sites, advertised its MTN line as 08167593558 for both Physics and Geography, papers scheduled for the week beginning April 23. It runs a bank account with a well-known commercial bank. Patrons are supposed to call for the account number. BusinessDay made four phone calls to the number but was each time asked by voice prompt to wait, the number is being forwarded and the call ended each with ‘the number you have called does not exist, please check the number and dial again’. Truecaller, a mobile app that shows the identity of phone numbers as ‘waec’. However, a call to examcrown. com was successful and the lady who pick-up the call was all business and when the BusinessDay’s reporter requested to know what the process was, posing as a potential client, the lady responded matter-of-factly. “How do you want it, as Whatsapp chat, sms or online access to our website?” the lady asked. BusinessDay reporter opted for the WhatsApp package. The lady retorted “okay send us MTN recharge card PIN for number

of remaining subjects you want answers for and I will send you a pin.” ExamCrown.com claims it is the best site for “runs” on WAEC, JAMB, NECO and other public examinations. Its “Notice Board” says: “Always subscribe for your 2018 WAEC subjects and make 7As and 2Bs with our runz..always pay a day before your exam(evening time). Our runs are 100% trusted. Click here to subscribe for your next subject.” Other WAEC cheat sites are Naijaclass.com, Examcrown.com, Exponet.com, Examsort.com, and Gurus.com. These digital cheat sites have a range of packages depending on whether it is an individual or school they are rendering service to. For direct mobile sms package, the client will receive all answers as text message directly to their phones. The costs vary according subjects; N1, 000 for English Language and Mathematics each; N800 per subject and N600 for practical. This varies from one digital cheat site to another. Similarly, with the Whatsapp package the candidate receives all answers right on Whatsapp and is expected to provide their Whatsapp number. Another package is known as password/link. In this case, the candidate receives all answers right on examplaza.com. A password is created for the subscribers with which to view all answers to the subjects they are interested in. The Very Important Personality (VIP) package combines both the password/link and Whatsapp at a premium of N13,

Vice President Yemi Osinbajo (l); William Kumuyi, general superintendent, Deeper Life Bible Church (r), and his wife, Esther Folashade Kumuyi (2nd r), during the inauguration of the church’s new auditorium in Gbagada, Lagos, yesterday. Pic by Pius Okeosisi

000 for nine subjects. Then there is the school package. With N20, 000, the digital cheat sites take charge of the school by making sure they supply the school answers from 10 different trusted and verified sources. All the answers come at least three hours to the exam. BusinessDay’s interactions with school owners has shown that some WAEC invigilators approach schools and volunteer to assist them carry out examination malpractices. “I was shocked when WAEC invigilators approached me, because I was the head of the school and asked if we were ready, so that they could help our school cheat its way to success. I turned the offer

down,” a school head in Lagos said, on condition that she would not be identified. This trend might not be totally lost on WAEC because on October 19, 2017 the examination body held an exam malpractice summit in Lagos to examine how technology is used to perpetrate this act. “Smart watch, smart ring, spy earpiece bluetooth, scientific calculator live chat, spy glasses, invisible watch, spy camera and smart earpiece/microphone are now being used,” Jonas Redwood Sawyer, professor of Electrical and Electronic Engineering, University of Serra Leone said at the Summit. “Others include bluetooth communication link to handset, smart

contact lens, smart lenses and smart calculator among others.” Nigeria’s Examination Malpractices Act provides as follows; a person guilty of cheating is liable on conviction: in the case of a person under the age of eighteen years, to a fine of N100,000 or imprisonment for a term not exceeding three years or to both such fine and imprisonment. In the case of a principal, teacher, an invigilator, a supervisor, an examiner, or an agent or employee of the examination body concerned with the conduct of an examination, to imprisonment for a term of four years without the option of a fine; and in any other case, to imprisonment for a term of three years without the option of a fine.

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6 BUSINESS DAY NEWS Nigeria got $22bn from Diaspora in 2017 - World Bank … tops remittances to SSA

MICHEAL ANI

igerians in Diaspora sent some $21.9 billion back home in 2017, according to the World Bank in its latest migration and development report. This represents a 12 percent increase when compared with the $19.64 billion it repatriated in 2016, and the highest in subSaharan Africa (SSA) and the fifth highest in the world. “Remittances to low- and middle-income countries rebounded to a record level in 2017 after two consecutive years of decline,” the bank notes. Furthermore, officially recorded remittances to lowand middle-income countries reached $466 billion in 2017, an increase of 8.5 percent over $429 billion in 2016. Global remittances, which include flows to high-income countries, grew 7 percent to $613 billion in 2017, from $573 billion in 2016. The rebound in remittances was driven by growth in Europe, the Russian Federation, and the United States, and the rebound, when valued in US dollars, was helped by higher oil prices and a strengthening of the euro and ruble.

By region, Europe and Central Asia saw the biggest growth last year, jumping by 21 percent to $48 billion in 2017, after three consecutive years of decline, while remittances to SSA accelerated 11.4 percent to $38 billion in2017,supportedbyimproving economic growth in advanced economies and higher oil prices benefiting regional economies. The largest remittance recipients were Nigeria ($21.9bn), Senegal ($2.2bn) and Ghana ($2.2bn). Remittance inflows improved in all regions and the top remittance recipients were India with $69 billion, followed by China $64 billion, the Philippines $33 billion, Mexico $31 billion, Nigeria $22 billion, and Egypt $20 billion. The bank says it expects remittancetocontinuetoincrease in 2018, by 4.1 percent to reach $485 billion. Global remittances are expected to grow 4.6 percent to $642 billion in 2018. The global average cost of sending $200 was 7.1 percent in the first quarter of 2018, more thantwiceashighastheSustainableDevelopmentGoaltargetof 3 percent. SSA remains the most expensive place to send money to, where the average cost is 9.4 percent.

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Q1: Dangote exports 211kt cement to three African countries … sells 4m tons of cement in Nigeria HARRISON EDEH, ABUJA

igeria’s dependence on imported cement can authoritatively be said to be a thing of the past as Dangote Cement for the first quarter expor ted a total of 211 kilotons of cement to Ghana, Togo and Niger. Th e c o mp a ny ’s vo l ume in the Nigeria also increased significantly by 5.3 percent to nearly 4 million tons for the period under review. Announcing its first quarter audited results for the three months ended 31st March 2018 on the floor of the Nigerian Stock Exchange (NSE), Dangote cement’s gross revenue increased by 16 percent, from N208.12 billion in the corresponding period of 2017 to N242.1 billion. The company’s gross profit for the period rose from N120.36 billion to N144.76 billion indicating an increase of 20.30 percent. While Profit before tax rose by 40.2 percent, from N77.32 billion to N108.04 billion, Profit after tax for the period went up by 29 percent, from N55.8 billion to N72.12

billion. A breakdow n of the results indicated that the total volume of cement sales by the Group went up by 2.8 percent to 6.2 million tons with Nigerian volumes up by 5.3 percent to nearly 4.0 million tons. In the reviewed period, Joe Makoju was appointed Group CEO, while Cherie Blair and Mick Davis also joined the Board as Independent Non-Executive Directors. Group CEO, Joe Makoju speaking on the results said: “The first quarter of 2018 has started strongly with substantial increases i n re v e nu e s a n d p ro fitability that drove excellent cash generation across the Group. Despite a slightly slower start to t h e q u a r t e r, N i g e r i a n volumes increased significantly in March and underpin our confidence that 2018 will be a good year for the Group. Across our pan-African operations, higher revenue per tons boosted revenues and increased EBITDA margins, with great potential to improve further when Tanzania switches to gas.”

Wednesday 25 April 2018

Edo tech-based teaching: Pilot teachers applaud scheme … as SUBEB explains selection process

pecial adviser to Edo State governor on Basic Education and acting chairperson, State Universal Basic Education Board (SUBEB), Joan Osa-Oviawe, says teachers in the pilot technology-based teaching method were picked after a rigorous selection process before their deployment to schools for Information Communication Technology (ICT) enabled learning. Speaking with journalists in Benin City, Osa-Oviawe said teachers, who were trained in the first phase of Edo Basic Education Sector Transformation (Edo BEST) programme, were selected from 300 primary schools across the state, noting, “These include teachers who demonstrated competence and ability in deploying new method of classroom management and techniques using the devices.” Some of the teachers that participated in the training applauded the scheme and described it as world class and an opportunity to refresh their skills set. Omonghibo Precious, a teacher from Ujielu Primary School, Ewossa in Igueben Local Government Area, said the training was timely as the education sector was overripe for overhauling, noting, “The scheme will

improve the basic education sector for children.” Ogbeide Sunday from Ogiesomwan Primary School in Uhunmwonde Local Government Area, said the two weeks training afforded him the chance to be part of the transformation of the basic sector of education, saying the scheme would improve teaching and learning outcomes in classrooms. Oriakhi Irene from Iyenuroho Primary School in Ikpoba-Okha Local Government Area, said the scheme had prepared her to contribute to advancing the quality of basic education in the state. Osa-Oviawe said, “At the end of the training session, teachers were shared into three categories. The first category includes those who displayed competence and ability to use the devices for teaching and were given the devices. The second category includes teachers who are yet to master the use of the devices for teaching. This set of teachers will be retrained, at a date to be announced later. “The third category includes teachers who are competent but are the only ones from their schools. They will be merged with other schools where the devices would be deployed for teaching.”

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Waste: Visionscape still challenged by mounting refuse heaps CHUKA UROKO & JOSHUA BASSEY

t would seem that the more Visioscape and its collaborating PSP operators clear the streets of Lagos of piling heaps of waste, the more mountainous the heaps of waste become. Lagos is said to be generating about 13,000 metric tons of waste daily, about the highest in subSahara Africa, posing a huge challenge to the state, and with grave healthimplicationsforthecitizens. Several months after the governmentsealedadealwithVisionscape Sanitation Solution, a municipal waste manager, to collect andmanagedomesticwasteinthe state, not much is seen achieved, as refuse still litter the metropolis, despite the company’s acclaimed efforts at ensuring a cleaner Lagos. But the Visionscape has assured Lagos residents there would be a marked improvement in the next few days, as it will be taking delivery of more trucks to enhance itsperformanceinwastecollection, recallingthatithasdistributedover 8 million garbage bags and over 400,000 garbage bins in the last two months. “What we want from people living in Lagos is to generate your waste, bag your waste and drop them in front of your houses for effective cleaning and to prevent blockage of our drainages and

canals; the garbage bags and bins are meant for the waste generated, sopleaseensurethatthewastesare being packaged and kept at the frontofthehouses,”JohnIrving,the company’s CEO pleaded. ChecksshowthatfromMushin to Alimosho, Ajeromi-Ifelodun to Shomolu, Lagos Island to EtiOsa, the situation is the same. The heaps pile, and the waste manager seemstooslowinresponse,raising questions and concerns about its capacity to tackle the challenge. The Lekki-Ajah environs including major roads such as Addo, Badore and Langbasa have become notorious for waste heaps. In the early weeks of March, the CleanerLagosInitiative(CLI)waste bins were visible at different points on the roads, but collection was not frequent. Most of the bins have beenremovedandnotreturnedas at time of writing, a situation that has led residents to resort to dropping their refuse on the floor. The consequence is that parts oftheroadsareblockedwithwaste now contributing to traffic gridlock alongthataxis.Thesituationiseven worse from the Addo roundabout totheendofLangbasacommunity, where heaps of waste compete for space with roadside sellers. Someresidentsofareassuchas Lawanson,MushinAlimosho,who spoke with BusinessDay, said they were being suffocated by stench emanating from decomposed refuse in their areas. Joy Achum,

a trader in Lawanson, described the situation as embarrassing and unhealthy. “For a town aspiring to be a smartcitytohavesuchheapsalong theroadsisquitedisturbing.Onthe stretch of Ojuelegba-Lawanson road, heaps of refuse are left for days.Thisshouldnotbe.Whatone would have expected to see that garbage cleared on a daily basis. Truth is that waste is generated by minutes and hours, so why would the waste manager now wait for several days before coming to evacuate them,” Timothy Lawal, a resident of Idi-Araba, said. Wale Daramola, a resident of Egbeda in Alimosho, who also spoke with BusinessDay, decried mounting heaps of refuse along Egbeda-Isheri road. Daramola saidthepilingheapswasasadirect consequence of the inadequate capacity in manpower and equipment by Visionscape. He said: “It is clear that the firm (Visionscape) does not have adequate capacity in terms of machinery/equipment and personneltocopethevolumeofwaste generatedinLagosStatedaily.Two thingsIwilladvocate:Splitthestate along the three senatorial districts and engage three major municipal waste managers who should also have the PSP working with them in each of senatorial districts. Alternatively, the government can directlybuyequipmentforthesoas toincreasetheirturn-aroundtime.”

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COMMENT SMALL BUSINESS HANDBOOK

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

ne of the great things happening across Nigeria today is the renewed drive for entrepreneurship, which is spreading like wild fire. Discussions, training and seminars on entrepreneurship are going on almost everywhere. The love for private enterprise has always been a Nigerian thing and many Nigerians have demonstrated that we are endowed with the capacity to think and act in such a way as to create wealth, sustain and multiply it. Nigerian enterprise was already on the world stage prior to the country’s independence in 1960. Apart from the centres for the trade in slaves, many cities across Nigeria were centres of commerce with major trade routes crisscrossing the country long before colonization. Indeed, the British colonialists may be said to have enjoyed some of the fruits of Nigerian enterprise. When Her Majesty the Queen, Elizabeth the 1, visited Nigeria in 1952, it was recorded that she rode in the private car of a Nigerian entrepreneur. The story is that the best car around in the whole of Nigeria at the time and fit for the Queen to ride, was the private Rolls Royce convertible owned by Sir Louis Ojukwu, Nigeria’s

Wednesday 25 April 2018

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Balanced growth and the rising wave of entrepreneurship development foremost entrepreneur, who made millions doing business across Africa and Europe. So Nigerians are not new to the desire to be selfemployed and employers of labour. There has however been a heightened emphasis on self-employment and by extension, the development of relevant skills, especially outside formal education. This new emphasis on entrepreneurship is the result of several factors, including high unemployment caused by the stagnancy of the formal economy; a seeming disconnect between the supply and demand of skills in the labour market and a population growth rate that has cast the country in the mould of a primitive society unable to control its population. For want of a fall guy or scapegoat, the Nigerian educational system has come under heavy fire for allegedly producing unemployable graduates. This argument has been used successfully to fend off criticism, which should rightly fall on government for its inability to expand the economy and provide jobs for the youth. In the process, several reviews of the curricula have been done, which produced even worse outcomes than we probably had. Granted that our educational curriculum, like that of any other country, must be responsive to the realities of the time, no amount of technical competence among graduates can compensate for an economy that makes no effort to implement its own plans and thereby prepare for growth. Availability of high skills will not cure unemployment in an economy that is at best stagnant, with rapid population

...it is important that developing economies do not make massive investment in only one sector of the economy. Doing so will rob them of the synergy, market enlargement and the much needed incentive for the private sector to invest growth. It could actually worsen the situation as highly trained people look for non-existent jobs and begin to settle for menial ones. The Nigerian economy is still in decline, growing at snail speed, despite the consistency of growth over the past few post-recession quarters. This poor growth is due largely to a large population with unreasonably high growth rate of about 3 per cent with the GDP trailing behind at much lower rate. The magnitude of what Nigeria is facing and the calamity ahead becomes more vivid when we reckon that there were only 45million Nigerians as against Britain’s 52 million in 1960, and today we are about 200 million people against Britain’s 66 million. This probably explains why, out of a labour force of 85 million, of whom 25 million have no education and 34 million are either unemployed or underemployed. The Nigerian economy is at moment stagnating at best. When an economy records prolonged periods of slow economic growth with high

unemployment rate as Nigeria currently has, and as happened to the American economy after the Great Depression of the 1930s, economists say it has gone into economic stagnation. We are experiencing that state of affairs. When economies stagnate, many things happen; and most of them are usually very bad things like social discontent and unrest. Of course we have signs of recovery in commodity prices, especially oil, inflation has looked south consistently over the past few months, reserves are rising but investment opportunities are still few and narrowing. The investment in infrastructure by the present administration may be massive but the results may take a little more time to fully crystalize in improved power supply, adequate transportation facilities and security of lives and property. Without these social overhead capital, those budding entrepreneurs, whom we have encouraged to retrain, readapt and innovate, may face a future bigger in frustration than they previously knew, as their preparation meets no opportunities to germinate. This is unhealthy for entrepreneurship and the consequences are probably less contemplable than those of graduate unemployment. We don’t want to come to a situation where the new rising fervour of private enterprise among the youth, and the enthusiasm of the many foundations and institutions supporting it, will be destroyed by a different kind of unemployment – entrepreneur unemployment. As the Estonian International Economist, Ragnar Nurkse, proposed in his Theory of Balanced Develop-

ment, it is important that developing economies do not make massive investment in only one sector of the economy. Doing so will rob them of the synergy, market enlargement and the much needed incentive for the private sector to invest. The budding entrepreneurs we are grooming and releasing to the economy need to be reassured through the resumption of concrete economic growth, that there is a market for the innovations they are training so hard to pioneer in different sectors of the economy. A situation in which April draws to an end without an operational national budget may seem normal but it’s the height of disservice to a nation. This is more so when it is realized that much of the so called appropriated funds will go back to feed the unsustainable lifestyles of leaders. Nigeria is a poor country both in terms of population/natural resources ratio and other indices. It’s a joke on us that as we beg countries and individual philanthropists from abroad to pay our debts and treat our women and children, a few of our leaders live like emperors for doing a job that hardly deserves more than occasional appearance. Balanced investment is the tonic for our entrepreneurial drive will gain traction only when we release the resources currently misallocated to service profligacy and apply them to make optimal investment in critical sectors to create the needed investment opportunities for the growing new generation of investors and risk-takers.

there is no basis for Nigerian Unity it is not the contraption, rather it is the bigotry and exploitative greed that is now part of our DNA that is the cause. Many countries with similar circumstances most notably Singapore and even Australia that was a penal colony have risen beyond the seeming “clutches” of their colonial heritage. So, let’s stop whining about what we cannot change, and start being audacious about what we can. Our common enemy in Nigeria is not the next tribe or the other religion as many ignorant or ill-willed people will like us to believe. The truth is that the Almighty God that about 95% of the country claims to worship is the God of all creations who doesn’t discriminate. So, how discrimination has become a part of our national DNA can only be traced to the fact that we have allowed a twisted version of truth to become pervasive, even “religious” truths are now subject to interpretation and perspective. The truth Is that incompetent, visionless and corrupt leaders leading over-certificated, yet grossly ignorant people has been the greatest source of our problems. These terrible leaders are everywhere – in our Government, Corporates, Faith Institutions,

Families and Schools, and their unbelievablygullible followers are out there too – refusing to think for themselves, swayed by the pettiness of money, ethnic and religious politics and waiting their turn too to get a piece of the national cake – and that is the truth! Even worse is that the whole world knows how morally and ethically impoverished we are, yet we lie to ourselves so much that we think it is okay to continue posturing and grand-standing rather than begin to admit our faults and make the 180-degree changes required. Truth like this is not what we want to hear, as it is a lot easier to blame it on the British or to the tribe or religion that is not yours! Bigotry, corruption, greed, indiscipline, false religiosity, and crass ignorance (in spite of plenty certificates and degrees) are the real bane of Nigeria’s progress. Let’s be audacious enough to tell ourselves the truth, so that we may be indeed be set free by the truth. Also, as we head into electoral season let us try to find leaders who espouse and live out these truths or choose to remain in the clutches of oppression and lies forever!

Send reactions to: comment@businessdayonline.com

The audacity of truth OMAGBITSE BARROW FCA Omagbitse is an Abuja-based Strategy and Innovation Consultant. gbitse@gmail.com @gbitsebarrow

atching the most recent episode of the hit TV Series – “The Fixer” where the lead character Olivia Pope decided to speak the truth about the existence of the Secret Intelligence Agency “B613” reminded me again of cardinal and central Role that truth plays in National re-birth and Transformation. There is no doubt that the “Fixer” would ordinarily seem like the least place to find inspiration about the truth – but as always, I try to keep an open mind, and I am prepared to learn from anywhere and everywhere. Nigerians and our dear country Nigeria will forever be entrapped and in bondage until we all begin to seek, embrace and live out the truth. Unfortunately, we are very far from that destination, as each day Nigerians and our leaders across social,

political, economic and religious spheres of life continue to spin more lies to ensure that we remain entrapped, and the “absoluteness” of truth is now a source of debate for many. Is there absolute truth? Certainly, and I reckon that this is the first of many truths that we all have to recognize – that indeed there are absolutes in this world – that everything cannot just be subjected to the temporalities of how we feel, or what others say, or what most people do, or even what the “environment” forces us to do. I was speaking at an event for training professionals and showed the cover of John Maxwell’s Book – “There is no Such Thing as Business Ethics” and asked the audience to tell me what they thought the point that John Maxwell was making with the title of his book. All the responses I got hovered around – “We should be flexible and consider the environment and what is generally acceptable in making business decisions”. Unbelievable but true, and I imagine that most of my readers even now will agree with them. John Maxwell’s point was the exact opposite – that there is no need to make a distinction between social ethics, religious ethics, business ethics or any type of ethics that there is just

one ethics and that every choice we make whether in family, religion or business should be guided by that absolute – ethics! There are a number of absolute truths that our manipulative leaders and elite will never want the majority of Nigerians to be aware of because such truths have the power of liberating us from the shackles of slavery and oppression that serves the interests of this cabal of leaders that have held sway for the last four decades of our national lives. Clearly there is not enough space to interrogate each of these vicious lies and counter them with the absolute truth, but I will give it my best shot right away, and hopefully build on each one in the weeks ahead. Firstly, and perhaps the most divisive lie that we have been constantly fed is that there is no basis for Nigerian unity due to the fact that we are a contraption of the British Colonialist’s administrative convenience. Sure, we were birthed from administrative inconvenience – and so? Are we the only ones? All countries have had to deal with the question of administrative convenience at one point in their history or the other? How about all the other colonies that have existed and become strong virile independent nations? If there is any reason why

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Wednesday 25 April 2018

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Medicines security and beating malaria

OBI ADIGWE Dr Adigwe holds a Doctorate Degree in Policy and Strategy and is the Chairman of the National World Malaria Day Committee. He can be followed on twitter: @DrAdigwe

his year marks the third consecutive year that I chair the National World Malaria Day Committee on behalf of Dr Okechukwu Akpa, the PMGMAN Chairman. Although some progress has been made, the situation remains dire. Malaria continues to be a serious disease in our region and we still carry an inordinate share of the global disease burden. Findings from a recent study indicated that nine out of ten malaria cases occurred in SubSaharan Africa. Similarly, nine out of ten people who died of the disease were from this part of the world. In the three years that I have chaired the committee, what I have found most interesting is the astonishingly wide range of stakeholders involved in this area. It is based on this experience that an important realisation dawned on me during the 2nd planning committee meeting on the 22nd of March this Year, at the Abia House in Abuja. During that Eureka moment, I found that although the various relevant stakeholders had extremely incongruent motivations for their activities in the sector, only

an ontology that incorporated these disparate perspectives would enable a timely achievement of the goal. Perhaps therefore, this is why this year’s theme is so apt “Ready to beat Malaria: together we can”. The emphasis on the ‘together’ bit stresses the importance of collaborative working, as well as individual responsibilities from various stakeholders. As such, given how deadly malaria is, one of the most important tasks a stakeholder can carry out this year, is an introspective reflection of how they can contribute to beating this scourge. For the purposes of this discourse ‘stakeholder’, does not only refer to healthcare professionals and policy actors, but realistically, everyone who is at risk of the disease. The term also encompasses the millions of individuals, who although are not at risk, work in Malaria, or are passionate about beating the disease. As the Executive Secretary of the PMGMAN, it was therefore natural that my reflection would throw up some of our initiatives (from the Pharma Manufacturers’ perspective) that could help beat malaria. At PMGMAN we conceptualised and have consistently advocated the concept of Medicines’ Security. Simply put, the Medicines’ Security Concept argues that unless a people exert sufficient control over how their medicines and healthcare commodities are produced, sustainable access to relevant, affordable, high quality products cannot be guaranteed in that setting. When this concept is viewed against the incidence and prevalence of malaria, which remains one of the biggest killers in our context, the implications of its potential become clear. In the main, building local capacity in Pharma Manufacturing

...building local capacity in Pharma Manufacturing would guarantee sustainable and predictable supply of safe, affordable and efficacious antimalarials for Nigerians. Adopting this approach would also ensure that the relevant local capacity is developed to match our contextual needs would guarantee sustainable and predictable supply of safe, affordable and efficacious antimalarials for Nigerians. Adopting this approach would also ensure that the relevant local capacity is developed to match our contextual needs. As a nation, this will make us better ready to beat malaria. We have also worked with Government to develop policies to which can further the Malaria fight. In the 2016 Fiscal Policy, Government instituted an import adjustment tax for antimalarials together with three other categories of medicines, for which incontrovertible evidence indicated that local production outstripped national consumption. This landmark policy is one of the most important measures undertaken by Government to support local production of medicines. However, when compared to other countries in our setting, Nigerian Medicines’ Manufacturing has so much more potential, both in terms of ensuring sustainable access to medicines, as well as contributing to national socioeconomic development. Currently, Nigerian manufacturers represent more than a third of all pharma production plants on the continent, and also constitute the biggest cluster of internationally certified

manufacturers in the whole of Africa. Against this backdrop, it is clear that there is a significant and urgent need to prioritise Local Pharma Manufacturing in Nigeria, so as to harness the current untapped potential. This is what will enable a contextual and comprehensive support framework for Nigerian companies that manufacture antimalarials and other lifesaving medicines. One other policy with the potential to impact our goal to beat Malaria is the Executive Order – 003(EO - 003) which came into force on May 18, 2017. In many developing country settings, one of the most effective means of supporting local production of specific commodities such as antimalarials,is by the development of policies that encourage patronage of such products. However, despite mandating all MDAs to ensure that least 40 per cent of their procurement spending is on locally made medicines, evidence suggests that the EO - 003 is not being faithfully implemented. In addition to Government spending, activities by Donor Agencies and Development Partners in relation to malaria programmes need to better fit into the current Administration’s ethos of buying local. It is also necessary for Government to formulate a robust and comprehensive incentive package for the development of the pharmaceutical sector. Strategies that Government can use to stimulate FDI in this area include the granting of tax holidays for Pharma Manufacturers that have made capital investments towards establishing new plants and upgrading existing ones. Tax waivers will also facilitate investment in Pharma research and development. Government must also improve the ease of doing business in the sec-

tor by working with Manufacturers to remove tedious and cumbersome regulatory and bureaucratic bottlenecks. Efforts must be made by all stakeholders to ensure a deliberate prioritisation of Local Pharma Manufacturing, as a means of achieving Medicines’ Security. With respect to malaria, this remains the most efficient and effective strategy for ensuring the highest quality health care for Nigerians. At the same time, adopting this approach will boost other relevant aspects of socioeconomic development, including job creation, capacity building and backward integration of the many sectors that produce pharma sector inputs. PMGMAN on whose representation I Chair this Committee has done its own bit, but is far from resting on its oars. Currently, a significant proportion of Local Manufacturers produce Affordable, High Quality Antimalarials, including ACTs. Members of the Group are however continuously investing in improving various relevant indices. Currently, Local Manufacturers have more than enough capacity to satisfy National consumption, in fact, quite a few have even started exporting to the Continent. The theme selected this year to underpin the World Malaria Day is “Ready to beat Malaria: together we can. This all-encompassing approach represents the most comprehensive and robust approach so far. Going forward, this approach can therefore ensure a widespread and robust engagement of all citizens and relevant stakeholders. This will in turn ensure that malaria receives a sound beating, and gets kicked out from Nigeria for good.

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Lafarge as metaphor for market efficiency

SOLA ONI 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

ni, financial Journalist and Chartered Stockbroker is the CEO, Sofunix Investment and Communications Ltd. It was literally a black Monday for Lafarge Africa Plc. on April 9, 2018 when the famous manufacturer of building components suffered massive sell-off of its shares on the Nigerian Stock Exchange. The investors’ reaction to the company’s disappointing after tax loss of N34.6billion plunged the index of industrial goods sector on the exchange by -3.87 per cent on that fateful day. Quoted on the exchange’s prestigious Premium Board, Lafarge had announced its 2017 financial year result at the weekend before the black day and blamed the unpleasant performance on huge

operational cost as reflected “ in N12.4 billion cost of the evacuation of road under construction at UNICEM and N3.3 billion cost of ASHAKA CEM Kiln precheater projects” among others. Apparently apprehensive of likely negative reaction from the Shareholders, the Company’s Board had recommended a gross dividend of N13.01 billion, translating into N1.50 per share despite its loss in order to calm perceived frayed nerves. Unfortunately, the nervous shareholders could not be assuaged by the cash dividend and consequently embarked on share dumping, an option that they can exercise at any time. This is the meaning of investor sentiment. It may be positive or negative. Shares are priced on the stock market on the strength of a company’s future growth potential. If investors anticipate robust earnings and dividend, they shall demand for the company’s shares and this may elicit upward movement of the share price. As a corollary, once there is perceived uncertainty in the future of a quoted company, investors may dump their shares in order to hedge against massive future losses and this can bring about depreciation of the share price. At the most fundamental, the share price of a listed company on

an organised market is determined by the company’s performance, demand and supply and market hearsay. At a higher analytical level, public information on political, economic and social issues can affect pricing of shares positively or negatively. In a normal market, no person or institution decides a share price. However, if there is a proven case of severe mismatch between demand and supply or evidence of insider abuse (privilege information) that a particular stock price is being manipulated, the management of the stock exchange is obliged to suspend trading on the stock until the problem is addressed in order to protect investment of innocent shareholders and ensure market integrity. The story of Lafarge is not a case of breaching the Nigerian Stock Exchange’s Post Listing Requirements in the area of prompt dissemination of information. It is simply a situation where shareholders expressed dismay at the company’s financial performance. This brings into fore, the relevance of Efficient Market Hypothesis (EMH) despite its limitations. Developed by a joint Nobel Prize Winner in Economics, Eugene Fama in 1970, EMH states that “it is impossible for an investor to outperform the market because all available in-

formation is already built into stock prices”. But the weakness of Fama’s thesis is that celebrated Warren Buffet whose investment strategy is purchase of undervalued stocks had made billions of dollars by beating the market. Similarly, there are skilful portfolio managers that have also recorded track records of beating the market. Market efficiency has three forms: The Weak Form is the one in which stock prices reflect only publicly available past information. This can probably apply to a stock market in its most rudimentary form if it exists. The Semi-Strong Form implies that stock prices reflect both publicly available past and present information. This is the most common form of efficiency as Lafarge Africa’s recent public information on its 2017 financial performance prompted shareholders’ negative reaction. The third variant called Strong Form appears utopian as stock prices are believed to reflect not only past and present public information but hidden information or insider knowledge This is hardly practicable. Antagonists of EMH insist that it lacks quantitative measure of market efficiency, cannot explain excess volatility and price fluctuation is unpredictable. In an ideal form, efficient markets are expected to reflect

all available information, otherwise, investors with privileged information may benefit abnormal returns. In an efficient market, prices are random and unpredictable. A market can become efficient if it is large and liquid and the transaction cost is cheaper than the anticipated profit. In the final analysis, no market can be absolutely efficient or inefficient. However, globally, degree of market efficiency is fast increasing with improvement in Information and Communication Technology (ICT). Information is becoming readily available even in remote areas. But investor psychology is not a rocket science as it is replete with biases. This explains why their reaction to publicly available information about quoted companies can never be the same. In the early 1990s, Nigerian Breweries Plc declared a bonus share of one-for-one. Within one week, the company’s share price depreciated by almost 50 per cent as elated shareholders off-loading their free shares to realise profit. This is normal.

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Wednesday 25 April 2018

EDITORIAL PUBLISHER/CEO

Frank Aigbogun

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

Bashir Ibrahim Hassan

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

The mace mess and threats to democracy

ineteen years into the fourth attempt at civil-democratic governance in Nigeria, major threats are beginning to emerge. Ironically the threats are manifesting in the one place that actually signposts representative government and the essence of democracy: the parliament. All parties must be alert to the dangers and take steps to ensure these the tares do not submerge the flowers. Citizens in particular need to pay attention and engage. The stealing of the mace on April 18 has raised many questions in the public sphere about the security architecture and processes in the National Assembly. Citizens have also worried about the attitude and commitment of the Senators who watched as the thugs strolled in and took the symbol of legislative authority without even a dissenting voice shouting. Then they walked through the strong police and other security establishment of the legislative house without any restraint. The more fundamental concern is for the health of our democracy. Parliament is at the heart of democracy. In our experience, the first thing coup plotters do is to annul parliament. Once they do so, they put a stop to civic representation. Representation is what defines democracy. The legislature plays three significant roles. The first is lawmaking. It makes new laws, changes existing

laws and replaces or repeals obsolete laws. The second is representation, the basis of democracy itself. The legislature represents and articulates the views and wishes of the citizens in decision-making processes. The third is serving as watchdog over Government in the interest of the citizen. In this regard, the legislature oversees the executive to ensure the accountability of the government to the people. The April 18 incident comes against the backdrop of overt and covert contention over the legislature since the commencement of the Buhari administration. That contention has coloured activities in the National Assembly and perceptions of every move. It has been more so with the upper chamber, the Senate. The heist of the mace also came after the decision of the Senate to suspend one of their own for 90 days. It was only on March 12 that the House of Representatives lifted its suspension of Hon Abdulmumin Jibin. Jibrin was in the cold for 17 months in compliance with the order. Evidently, internal and external factors are working to create a Legislature that does not represent the ideal of internal democracy or one that promotes and nurtures the concept of a centre for the free exchange of divergent as well as convergent ideas. Herein lies a grave danger. The National Assembly has 469 members, comprising of 109 senators and 360 representatives. Unfortunately for the Legislature, their conduct and activities have not met popular

expectations of citizens. There is misunderstanding of their roles and disaffection with their conduct. An opaque financial system has led to suspicions and extremely negative perception of the legislature by the Nigerian people. Add to this then incidents such as the shoplifting of the mace and citizens are further dismayed, confused and steadily growing apathetic towards the National Assembly. We share the apprehension and concern particularly for the fate of our democracy. All over Africa, the legislature remains the most underdeveloped of the three arms of government. The United Nations Economic Commission for Africa (UNECA) arrived at this conclusion after a rigorous study of the legislature across Africa. Part of the reason for this poor state of the legislature in the case of Nigeria includes the years of military rule, the instability of the legislature arising from the military interruptions and the lack of capacity. There is also poor institutional memory and culture. Yet, all development agencies and experts assert that achieving good governance requires the existence of a strong, effective and efficient parliament. Consolidation of Nigeria’s democracy would require strengthening of the legislature at federal and state levels. Poor capacity and performance of the legislature is worse at the states where citizens perceive the assemblies as no more than errand agents of the Governors. The mess of the stolen mace should cause the National Assembly to reflect

on its role, its functions, conduct and perception by those it ought to serve. Citizens are worried. Despite many reservations, it is clear that Nigerians prefer a democratic government to the years of locust under military rule. Nigerians do not want to go back there. Citizens also recognise that there is a strong link between democracy and good governance. They have seen evidence in better performance in the provision of infrastructure and other dividends of democracy by each succeeding government since 1999. The progress has been slow, but there is incremental boost as the states in each region, for instance, compete amongst themselves to do the most for their citizens and to establish their governors and governments as best performing. Various instruments of the development agencies to which Nigeria belongs recognise the centrality of the legislature in good governance and development. They range from the Development Framework of NEPAD to the Declaration and the Charter on Democracy, Elections and Governance of the African Union. The National Assembly should lead in consolidating democracy in Nigeria through various practices. These include better internal democracy, promotion of civic education so citizens have basic understanding of the processes of the legislature and can contribute as well as better engagement with citizens such as through a quarterly outreach to all the six geopolitical zones.

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Wole Obayomi Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

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Wednesday 25 April 2018

BUSINESS

COMPANIES & MARKETS

DAY

Tantalizer reverses recurring losses with sale of assets

Pg. 14

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

UBA Q1 profit spikes on other comprehensive income BALA AUGIE

nited Bank for Africa (UBA) i s hav i n g a good earnings day. Yes, take it because it is real. The third largest bank in Nigeria, by total assets, deposits and profits, reported solid results, and reaffirmed its earnings forecast as it continues to utilise the resources of shareholders in generating higher profit. For the first three months of the year, UBA’s net income spiked by 46.40 percent to N34.91 billion from N23.88 billion as at March 2017. The N34.91 billion net income beats N30.15 billion estimates of 10 analysts surveyed by BusinessDay. The growth at the bottom line (profit) was largely driven by other comprehensive incomes (OCI) of N11.23 billion in the period under review. OCIs comprise of exchange differences on translation of foreign operations and net fair value gains during the period.

Gross earnings rose by 18.12 percent to N119.36 billion in the period under review as the pan African lender continues to leverage on enhanced customer engagement, improving service quality, speed to market and innovative offerings. Interest income, which contributed 75 percent of gross earnings, grew 17.67 percent to N90.33 billion, driven by interest income on short term government securities when yields where between April and August last year. UBA recorded 14.50 percent growth in non-interest income to N24.01 billion as at March 2018, contributing some 20 of gross earnings, buoyed by strong growth in transaction volumes as well as increased FCY related revenues. The Nigerian lender has turned each Naira in invested in revenue into higher profit as net margin increased to 28.57 percent in the period under review from 22.27 percent the previous year. UBA says it expects im-

provement in customer service and innovative offerings to accelerate market share gain as technology enhancement and investment in people are expected to drive productivity and efficiency gains. UBA loan book shrank as lenders in Africa’s largest economy turn off the tap on lending.

MainOne’s West Africa expansion gets boost with Cote d’Ivoire license JUMOKE AKIYODE-LAWSON

s part of its West Africa expansion, connectivity and data centre solutions, operator MainOne has secured a license to expand national and international connectivity services in Cote d’Ivoire. The C1B license, received from Bruno Koné, the country’s minister for communication, digital economy and postal services, will enable MainOne land its trans-Atlantic submarine cable and build transmission infrastructure in Cote d’Ivoire, to strengthen connectivity, reduce international capacity costs and support wholesale customers, major operators and Internet Service Providers.

Cote d’Ivoire authorities believe that the construction of a fourth cable authorised by the government will improve the international connectivity of the country and will provide a lot more opportunities for the national market while increasing competition. “We have just taken an important step through this authorisation for the improvement of the telecommunication infrastructure of our country, specifically the improvement of international connectivity. MainOne cable will have an impact on price and quality and will strengthen the security of our infrastructure,” said Bruno Koné. The entry of MainOne, an open-access connectivity services provider, will further

democratise the international bandwidth market in Cote d’Ivoire and neighbouring countries and drive down bandwidth costs for local Internet Service Providers, Telcos and indigenous businesses. “Cote d’Ivoire is the largest economy in the West African Economic and Monetary Union (WAEMU) and a very important hub for business and transport in West Africa. The dynamism of the national economy and accelerated development of the digital economy in Cote d’Ivoire as well as its regional leadership makes it a natural hub for the West African region and guided MainOne’s decision to invest in Cote d’Ivoire,” said Funke Opeke, chief executive officer of MainOne.

Loans and advances to bank and customers dipped by 1.70 percent to N2.81 trillion in March 2018, from N2.86 trillion the previous year. Zenith Bank’s loans and advances to customers dipped 25.53 percent to N1.75 trillion in March 2018 from N2.35 trillion the previous year.

Similarly, GTBank ’s loans and advances to customers fell by 6.25 percent to N1.35 trillion in March 2018 2017 from N1.44 trillio as at March 2017. Analysts say a drop in those yields from record highs in August means that 2018 will be more challenging for lenders, despite the positive macro

backdrop. In 2017, UBA successfully raised $500 million, five-year senior unsecured debut Eurobond while it achieved Premium Board listing on the Nigerian Stock Exchange (NSE). UBA’s share price closed at N11.25 as of Monday April 25 2018, valuing it at N384.74 billion.

Open Vector partners Open Banking Nigeria to develop standards Ifeoma Okeke

s part of a global alliance, Open Banking Nigeria has entered a strategic alliance with Open Vector to jointly develop the Open Banking Nigeria Application Programming Interface (API) standards. Open Vector is a strategic change advisory firm specialising in providing Open Banking consulting and implementation services to senior and C-level banking executives worldwide. Speaking on the partnership, Adedeji Olowe, a trustee of Open Banking Nigeria, said the collaboration between Open Vector and Open Banking Nigeria would result in a world class implementation of

Open Banking in the financial industry in Nigeria. “The payments revolution in Nigeria continues at a very exciting pace, but we believe that a common Open Banking API standard will provide a significant boost to payments and financial inclusion. We are excited to collaborate with Open Vector to be able to deliver a world-class implementation of Open Banking to the Nigerian financial industry, ” Olowe commented. Carlos Figueredo, CEO of Open Vector UK, also spoke on the partnership. “We are excited to be embarking on this strategic alliance with Open Banking Nigeria, which is spearheading the opportunities afforded by open banking both nationally and regionally.”

“We firmly believe that this can generate significant socio-economic benefits to Nigeria as well as the broader African region including the opportunity for greater financial inclusion, ” he said. Open Vector is led by Carlos Figueredo, CEO who, together with his team of directors, has conducted senior advisory roles to the Competition & Market Authority (CMA), the United Kingdom regulatory authority behind the Open Banking UK regulation and implementation. Open Banking Nigeria, formed by a group of fintech and banking industry veterans, is a not-for-profit organisation that drives the Open Banking initiatives in Nigeria to extend non-partisan and non-financial API standards for financial services in the country.

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Wednesday 25 April 2018

COMPANIES & MARKETS Tantalizer reverses recurring losses with sale of assets BALA AUGIE

antalizers Plc., Nigeria’s foremost fast food company and the only quoted QSR Company on the Nigeria Stock Exchange have returned to the path of profit, helped by sale of assets. For the year ended December 2017, Tantalizer posted a profit after tax of N443.37 million from a loss position of N1.01 billion lit recorded the previous year. N730.38 million proceeds from the sale of property plants equipment was a major driver of net income as the QSR firm continues to grapple with weak margins, working capital deficiencies and debt burden. Gross margin, a measure of efficiency fell to 15.19 percent in December 2017 from 34.75 percent the previous year. Stiff competition from small restaurant operators that charges lower prices have hindered Tantalizer from benefitting from a price increase in products. Tantalizer has a retained deficit of N3.16 billion as at

December 2017, which means it has been incurring more losses than profit through its existence. The accumulated losses have left the firm with a shareholders fund of N665.53 million. Investors have been reacting to the company’s disappointing results as share price has been stuck at N0.50 since 2014 to drop further to N0.38 as of close of trading on April 20. Tantalizer is optimistic the efficiency of its on-going strategic initiatives aimed at restructuring the business and boost shareholders fund. The results of some of the initiatives have yielded fruit as the company’s total systems revenue (corporate and franchise) has increased by 2.27 percent to N3.73 billion in the period under review. Revenue from franchise increased by 18.87 percent to N1.89 billion in the period under review from N1.59 billion the previous year. Tantalizer is highly geared, which means it has a lot of debt in its capital structure as debt to equity ratio stood at 147.55 percent in the period under

review. Total debt (Both long and short term) stood at N982.98 million in March 2018, which represents 38.62 reduction from N1.60 billion incurred last year. The company has been in discussion with the local banks and IFC for debt restructuring. Tantalizer is endowed with assets and profitability but short of liquidity as its current assets of N1.07 billion cannot cover total current liabilities of N2.78 billion, resulting in a negative working capital of N1.71 billion. Analysts say if something urgent and responsible is not done to correct the liquidity bottlenecks, the firm’s ability to settle future short term obligations could be in jeopardy. Tantalizer’s cost control measures has paid off as cost of sales fell by 8.69 percent to N1.26 billion in December 2017 as against N1.26 billion the previous year. Operating expenses were up 0.72 percent to N1.38 billion in the period under review from N1.37 billion the previous year.

Business Event

Group managing director, Sahara Power Group, Kola Adesina (left), 1st runner up in Sahara Group’s #TheGreenestLoveOfAll Instagram Photo Contest, Temitope Otubusin and head, corporate communications, Sahara Group, Bethel Obioma during the award ceremony for the contest which was organised by Sahara Group to enhance awareness and global collaboration on environmental

L-R: Ade Bajomo, executive director, Access Bank; governor Akinwunmi Ambode; Opunimi Akinkugbe, CEO, Bestman Games Ltd; Ojoma Ochai, director, British Council and Damilola Aloba, director, transaction advisory services, EY Nigeria, at the just concluded Lagos State Tourism Summit. The Lagos State Tourism Masterplan project is being executed by EY Nigeria for Lagos State Government.

LUMOS drives access to solar electricity, woos SMEs Olusola Bello

umos, a leading solar power and off-grid solar home systems provider and pioneers of mobile electricity in Nigeria, has announced a one-month price reduction window on its Lumos Solar Power Systems, in a move to empower micro and small businesses owners and households as part of its commitment to improving the quality of life of Nigerians, through reliable, accessible electricity for all. With this offer, subscribers can now join the service for only N20,000 set-up fee, which already has bundled into it, one full month of mobile electricity subscription. Previously, this would have come to a cost of N36,500. This, it is hoped, will encourage more micro and

small businesses to sign up to the service and start enjoying major significant savings on their power generation expenses compared to fuelling and running a small generator. While subscribers will get to enjoy reliable electricity at the push of a button, they are also afforded one month within which to plan for their next routine monthly subscriptions as the cost of the first month of power has already been factored into the setup fee. Houssam Azem, CEO of Lumos, while speaking at the Nigerian Energy Forum held at the Landmark Centre, Victoria Island, Lagos, said: “Lumos is excited at the chance to stimulate economic growth and improve profitability for micro and small businesses by reducing the entry barrier for them joining our service, and in doing so, unlocking significant

cost savings for them.” “Our field studies show that an average micro business, say a tailor, a mid-sized barbers shop, pharmacy and a small clinic only require power to run basic appliances. It is therefore important that they run those appliances in a profitable manner. When you compare spending N4,500 monthly as subscription to the Lumos Mobile Electricity Service compared to spending somewhere between N12,000 to N20,000 on fuel and minor generator repairs within one month, you can see how easily a small family or business can save betweenN7,500 and N15,500 when powering exactly the same electronic devices: charging mobile phones, lights, plastic blade fans and compliant LED TVs, these are actual facts based on actual happy customers who are using our service.

L-R: Onifade Abideen, higher executive officer (accounts), Consumer Protection Council (CPC); Canon raffle draw winner, John Ayeke, CEO/ chairman Lekki TV; Dorris Umeanagbogu, advert personnel, Lekki TV, and Omotayo Omodia, country manager, Canon Nigeria, at the Canon roadshow reward presentation.

L-R: Ayodeji Oke, retail trade marketing manager NB Plc. Ibadan; Bukola Ahmed, quarter finalist; Segun Nabi, Juju Artiste, and Josiah Akinola , brand manager Goldberg Premium Quality Lager Beer NBPlc, during the presentation of certificate to the participants at the 2018 Ariya Repete Academy in Ibadan.

BUSINESS DAY

Wednesday 25 April 2018

CITYFile 2 students get HOFOWEM’s scholarship

Wife the governor of Lagos State and Founder, Hope for Women in Nigeria Initiative (HOFOWEM), Bolanle Ambode (m); scholarship awardees, Oladunni Akisanmi (r), and Agwu Victory James (l), during the presentation of letters to the beneficiaries of the 2017/2018 scholarship awards, at the HOFOWEM Office, Oregun, Ikeja.

Crime: Uncompleted buildings, dump sites become search target by police JOSHUA BASSEY

ncompleted buildings, hidden spots and dump sites have become search target by police in Lagos State towards checkmating the activities of criminal elements especially against the preparation for the forthcoming 2019 elections. The search would enable the police flush out criminal elements that can easily be engaged as political thugs by desperate politicians as the general elections draw closer. Edgal Imohimi, the Commissioner of Police (CP) in charge of Lagos, said on Monday that the action became neces-

sary, as investigation revealed that criminals have been living and keeping arms and ammunition at different dump sites as well as abandoned lands and buildings in the state. “We have not been paying serious attention to dump sites, abandoned lands and buildings. Intelligence reports show that many criminals live and keep their weapons in these areas. “When we raided Olusosun dump site recently, we arrested over 100 suspected criminals. We also recovered many arms and ammunition and Indian hemp from the place. The dump site covers an area of about 50 acres of land. “We have decided to take over such lands in Lagos as a proactive measure for

violence-free elections in 2019. As part of preparations, we have been having workshops with INEC officials. “We are also studying clips from previous elections in Lagos to identify all the black spots during elections. We advise owners of abandoned lands and buildings within the metropolis to ensure that their facilities are not used by hoodlums. “We call on the public to report to the police any empty land and uncompleted buildings that hoodlums are using as their hideouts to plan for any crime,” Imohimi said. The Olusosun dump site at Ojota had been on fire for about a month, forcing the Lagos State government to seal up all artisans’ shops in the area.

Group drags Okorocha to court over land revocation SABY ELEMBA, Owerri

raders at the International Electronics, Electrical and Automobile Market, (INTEEAMARK) in Imo State have dragged Governor Rochas Okorocha to an Owerri High Court over an alleged arbitrary revocation of a 24-hectare land duly acquired by the group for development of a world-class market in the state. Chairman of the group, Gerald U.S.C. Okorie, a legal practitioner disclosed this in an address he presented to delegates at the 2018 national convention of INTEEAMARK held in Owerri. Okorie regretted that Okorocha whom the group hitherto regarded as a ‘messiah’ that would see to the actualisation of the international market in line with his much touted industrialisation policy “unceremoniously announced that the

land has been revoked” at the time work was about to commence at the site. He stated: “There was no reason given and no attempt was made to explain why. No regard to the terms of memorandum of understanding and lease agreement which his government signed with their eyes wide open. “Today, INTEEAMARK members have gone to court to challenge the injustice. Imo people in particular and the Igbo in general must come together to challenge this injustice. We must not allow it stand. We must not rest until justice is done.” Okorie added that “though we in court, we are not foreclosing a fruitful negotiation geared towards bringing back the land to INTEEAMARK. We look forward to government initiating the discussion notwithstanding that we are in court.” Recalling that both the deed of lease and memorandum of understanding

were accordingly signed in 2013 and 2015 between INTEEAMARK and the state government, Okorie said that contractors were mobilised and about to go to site, building plan approved and thanksgiving service held at the Government House Chapel, Owerri to appreciate the government’s gesture in allocating the land; before the shocker of revocation came. Also, the national coordinator and initiator of the INTEEAMARK project, S.N.I. Ozoemena who went down memory lane, recounted his ordeal and that of other members of the group in the long walk to acquiring the land. He said Okorocha by his latest action has scuttled the timely takeoff of the laudable project. Ozoemena challenged the leadership of the group to explore avenues of reclaiming the land, arguing that Okorocha has no legal authority to deprive the members of their lawful allocation.

wo students, Oladunni Akisanmi (female) and Agwu Victory James (male), have bagged the second edition of the annual university scholarship award of the education endowment fund, of the Hope for Women in Nigeria Initiative (HOFOWEM), pet project of Bolanle Ambode, wife of the governor of Lagos State. Presenting the scholarship at HOFOWEM office, in Oregun, Ambode commended the students for excelling in the selection process and for their brilliant performance in their school certificate examination and the Joint Admission Matriculation Examination (JAMB). “I do not want you to lose focus, but to intensify your effort. This is just the beginning, you need to concentrate on your studies, shun bad peer group influence, be good ambassadors of your families and schools and make us proud too”. She noted that the scholarship aside of funding the education of the bright students, would serve to encourage others that are financially deprived, to pursue their dreams with diligence. She said that “the scholarship scheme was established to encourage indigent but brilliant underprivileged students in public secondary schools in Lagos State, to pursue degree programmes of their choice in any Nigerian higher institution of learning. It is to encourage serious students that being financially deprived is not the end of a dream”. While urging them to continue to pursue their dream and aim at being the best they can be, she hinted that courses supported by the scholarship were those that addressed critical societal issues like engineering, environment, food and security, education and public health among others. Ambode disclosed that the HOFOWEM Education Scholarship Scheme, would continue to fund the tertiary education of indigent brilliant students in Lagos State, in the spirit of the Sustainable Development Goals (SDGs), which specifically called for more scholarships for human capital development.

Rainstorm: Kwara earmarks N131m to renovate schools

wara government has earmarked N131million to renovate 17 schools recently affected by rainstorm across the state. Maryam Garba, the permanent secretary, ministry of education and human capital development, stated this to newsmen on Monday in Ilorin. He said that Governor Abdulfatah Ahmed has approved the immediate repair and replacement of facilities affected by the rainstorm in those schools. “Having presented a detailed analysis of schools affected by the rainstorm in the state, Governor Ahmed has approved that we commence immediate repair and renovation of those schools across the state with a cost implication of N131million. Garba, however, urged corporate organisations, affluent individuals and nongovernmental organisations to join hands with the state government in improving infrastructure in schools. According to her, the government cannot do everything alone. She said that the rainstorm affected some classroom blocks, electricity poles, fences, sports pavilion among others. Among the affected schools are: Queen Elizabeth School, the School for Special Needs, Government Day Secondary School, Adeta and Government Day Secondary School, Adewole – all in Ilorin. Scores of residents were also rendered homeless about two weeks ago when the rainstorm blew off roofs, destroyed buildings, shops and electricity poles. (NAN)

BUSINESS DAY

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BUSINESS DAY

C002D5556

Wednesday 25 April 2018

Politics & Policy

PDP is irredeemable - Gabam

Wednesday 25 April 2018

C002D5556

BUSINESS DAY

2019 Presidency: Atiku takes campaign to Chatham House INNOCENT ODOH, Abuja

ormer Vice President and 2019 Presidential hopeful, Atiku Abubakar, will on Wednesday present a paper on the challenges of the Nigerian economy and the solutions at the Chatham House in London as he prepares to flag off his presidential campaigns. Media aide to Atiku, Paul Ibe, disclosed this to BusinessDay at the weekend, adding that the Turankin Adamawa, will soon inaugurate his media team to commence campaign for the 2019 presidential elections. He stressed that the former vice president has mapped out strategy to unveil the best media outfit for his 2019 elections campaign. According to the aide, Atiku will at the Chatham House have the opportunity to “unveil his plans,analyze the challenges of the Nigerian economy in modern times and find possible solutions to the myriad of crises bedeviling the country.” Atiku according to Ibe will engage the international community to find more endur-

Atiku

ing ways to end the insecurity ravaging parts of the country. Atiku, a former stalwart of the ruling All Progressives Congress (APC), recently dumped the party and returned to his former

party the People’s Democratic Party (PDP) alleging that the APC has failed to deliver the promises it made to the Nigerian people and has equally plunged the Nigerian economy into all

‘W/Africa’s quest for human rights only feasible with political stability, security’ -time low. Atiku had alleged that the APC had derailed from the principles that made him join the party on February 2, 2015saying in a statement that“while other parties have purged themselves of the arbitrariness and unconstitutionality that led to fractionalization, the All Progressives Congress has adopted those same practices and even gone beyond them to institute a regime of a draconian clampdown on all forms of democracy within the party and the government it produced.” Recently the former Vice President was said to have been in consultations with the Nigerian Intervention Movement (NIM) to support his presidential ambition on the platform of the Grand Coalition with over 30 political parties inspired by NIM but the detail of that consultation is still very sketchy. Atiku and others angling to dethrone incumbent President Muhammadu Buhari are said to be a more formidable alliance to ensure President Buhari, who declared his intention to seek election in 2019, to stop the President.

NUP Chair urges W/Africa to redefine politics for economic development INNOCENT ODOH, Abuja

he National Chairman of the National Unity Pa r t y ( N U P ) , P e r r y Opara, has urged West African politicians to be more committed in their resolve to develop the sub-region economically to reduce the suffering of the people. O p a ra, w h o w a s re c e nt l y elected the President of revived West African Association of Political Parties (WAAPP), said during his inauguration in Abuja that he will mobilize the people to lead the change. Speaking on the theme “Peaceful Elections: Panacea for Economic Development in West Africa,” he said the motive is to discuss how to hold peaceful elections in West Africa and in Nigeria because if anything goes wrong in Nigeria, Nigerian refugees will overwhelm other countries in West Africa warning such development will be a disaster. Opara, who took the mantle and supported by Henry Lartey, from Ghana was elected as the

Secretar y, however, assured that he will work assiduously to deepen democracy in West Africa. The Commandant of the Peace Corps of Nigeria, Dickson Akor, who gave a lead presentation on

Perry Opara

the “Role of the Nigerian Youth, Media and Security Agencies as it concerns the 2019 General election,” warned that there is palpable apprehensions about the sanctity and conduct of the general elections and their out-

come, adding that this is coming from the fact that some politicians of different persuasions are already heating up the polity with their unguarded utterances, which sometimes borders on desperation. Speaking a representative Akor said: “With the present realities, the role of the youth needs to be reexamined in the light of the threat to our nationhood posed by the desperation of our political class as the nation inches closer to 2019. “Considering the nation’s history of electoral violence and irregularities, there is the urgent need to increase the awareness among the youths, in becoming the defenders of the electoral process rather than its destroyers,” he said. He charged the youth to resist all attempt to use them by desperate politicians to foment trouble, rig elections or engage in any activity that could lead to the dismemberment of Nigeria even as he tasked them to elect a credible and competent candidates with track record of character.

est Africa’s quest to promote respect for human rights and the rule of law can only be successful in an atmosphere devoid of insecurity and political crises, Mali’s Minister of Human Rights, Madam Kadidia Sangare Coulibaly has said. The minister said while closing the four -day international conference of the ECOWAS Community Court of Justice in Bamako, Mali at the weekend, stressing that it is compelling ‘to win the war’ against the crises in some part of the region in order to pave way for the emergence of a political environment conducive to the demands of human rights and the rule of law. A statement issued by the media officer of the ECOWAS Community Court of Justice, Ovadje Elohor, noted that the minister also spoke of the need for ‘intense’ collaboration between the Court and national courts as well as Member States in order resolve the perennial problem of the non-enforcement of the decisions of the ECOWAS court. The theme of the conference was ‘Protection of Human Rights: A factor for peace building in West Africa.’ She said that such collaboration was desirable in resolving the vexed issue of enforcement by Member States who are obliged under the extant Community regulations to enforce such decisions for the purpose of improving public confidence in the court as a regional resort for the protection of their human rights. The minister characterized the preponderance of human rights cases in the ECOWAS court as evidence of the disposition by citizens for recognition and human dignity taking advantage of its peculiar mechanism that allows citizens direct access without the exhaustion of local remedies, the statement said. “When decisions are delivered and implemented, it will contribute to West Africa’s case law development and a regime of human rights peculiar to the region,” the minister said, noting that it would also advance community law in the spirit of the region’s overarching objective of cooperation and integration. Furthermore, she urged ECOWAS Member States to domesticate the international legal instruments relating to the protection of Internally Displaced Persons in order to establish a regional framework for protecting the interest of the 2 million persons displaced in the region. In order to improve citizen access to the court and ensure ‘effective justice’, the minister called for the creation of a legal aid scheme for indigent citizens who could otherwise not access the court for redress and the creation of an appellate chamber to handle appeals for decisions of the court.

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The insanity of looters’ protest against sane governance: The Kogi example DUROJAIYE HASSAN

he Ocean of confusion created by the advent of social media, the readiness of the conventional media to be used as a derogatory pawn, the desperation of the political class to intimidate and harass the truth and the unfortunate gun-to-thehead of facts; have combined to create a centrifugal force against the laudable leadership in Kogi State. As a state, we weren’t without our problems. Both the leaders and the followers were guilty of wrong choices. From an incompetent leadership to an unprepared leadership, the citizens continued to make wrong choices. The roads government is constructing now, the hospitals government is building, the school projects across the state and many more would have been put in place in the era of boom. But rather than hold the leaders down to the balcony of accountability, we hailed them on as they used 90percent of the resources to build their private businesses and the remaining 10percent to arm our youth against our population. We hailed the benevolent ignoramuses, blowing up the future that has come! Also, the leaders of yesteryears in the state knew they had no meaningful achievement to sustain their avarice for power, hence, the resort to ethnic jingoism to perpetrate their political perfidies and set the people against one another. It worked for a while and while it lasted, the state was balkanised along ethnic banks. It

Yahaya Bello

was a case of poor people fighting one another, a bait of the political manipulators. Our roads were derelict. Our hospitals were ‘hospitalised’. Our schools were testaments of monstrosities and wicked neglect. And they say we shouldn’t refer to the past. They kept reminding us that Governor Yahaya Bello knew the enormity of the task ahead of him. We can’t forget the past. If we do, the future will be worse. We need to constantly remind ourselves of where we are coming from. How our children were sitting on the floor to learn while their leaders’ hotels were built with glasses in Abuja. We need to remind them

how their son was Governor for nine years, yet, his village has no electricity. We need to remind them GYB is not taking half of what they were taking and yet he has done more for the people. The past is a guide to the future, a guard against the hawks of destinies, a gourd of reference to the maladies of misadministration, a sound reminder of where we can be when united as a people. The advent of Governor Bello has redrawn the sharing formula for the big “elephant”. It is no more for the few oligarchs who see themselves as the gods of the land, but for the good and welfare of the people. He is rebuilding the

damages done by past leaders who never saw a future giant in Kogi. He is rebuilding our infrastructure that was left to rot. He is constructing roads, hospitals, schools, water facilities and many other social infrastructures to better the living condition of the people. The angst of the elites is the failure of GYB to patronize them and share the allocations to them or use state resources to pay staff of their private hotels or private radio stations. If he were to be doing these, he would be seen to be the “best” Governor ever. He is the “worst” Governor ever because he has stopped children from sitting on the floor to learn by providing the right environment and facilities for learning. He is a “Pharoah” because he has stopped the syphoning of revenue generated by repositioning the KGIRS to generate more revenue for the development of the state. He is a “coronated” Governor because he has given good roads and electricity which they refused to give their own people. He is “politically naïve” because he decided to stop the multi-million-naira monthly fraud in the civil service and pensions through a thorough verification exercise. He “doesn’t pay salaries” because those found to be unmerited beneficiaries and ghost names were removed from the payrolls. As mighty as the pen is, truth is mightier. It takes a revolution to confront the Kogi Cabal. They have fought with everything and sponsored spurious reports to discredit the State Government. But the young and focused Governor has remained undaunted. Just as we didn’t suffer the maladministra-

tion of the past immediately, the remedies of the present may take time to yield fruits. Meanwhile, the low-hanging fruits are already in our hands. Road projects are going on across the state. Our tertiary institutions are witnessing awesome transformation. Medicare has received a boost as government is providing the right equipment and incentives. A diagnostic centre project which was abandoned has been turned to a world-class facility which will be commissioned later this year. It was remodeled, repackaged, expanded to become the best in the country. GYB Model schools are going on in all the Wards in the state. Water provision has been a top priority. Agriculture has been thrust at the center of his economic diversification agenda. We are the biggest producers of cashew and cassava today. The Indigent Fund has been established to cater for people with health challenges in the state. The Omi Dam Project and similar ones in Osara, Ibaji and Bassa have helped to engage thousands of our youth. They were given guns in the past but this government is giving them jobs. With the Health Plus Initiative, he has dragged down the maternal mortality rate in Kogi State. There is no doubt that the ongoing reforms in Kogi will survive the elite’s conspiracy to take the state to the dark days. Even the critics cannot deny the excellent performance of the Governor in the area of securing the state. He is not only looking at saving lives, but sharing prosperity through the New Direction Agenda. Kogi will get there.

Senate invasion, Fulani killings: Anxiety grips Int’l community over 2019 elections INNOCENT ODOH, Abuja

ollowing last Wednesday’s invasion of the Nigerian Senate by a group of suspected thugs, who carted away the mace during plenary session, anxiety has gripped foreign missions in Nigeria over the 2019 elections as signs emerge that the general elections may trigger violence that could truncate democracy anddestabilise the country. A source from one of the African missions in the country confirmed this to BusinessDay at the weekend, stressing that the foreign missions following intelligence reports are apprehensive, due to the behaviour of the Nigerian politicians especially as they heat up the polity with unguarded and hate-filled

utterances. The source added that the pervasive killings allegedly perpetrated by the Fulani herdsmen appear to be another prelude to anarchy. The source added that the belligerent attitudes of the main opposition party, the People’s Democratic Party (PDP) and the ruling All Progressives Congress (APC) towards the election coupled with the division of Nigerians along regional, ethnic and religious lines may well spell trouble during the election especially the presidential election. “We are worried that the Nigerian politicians are in their belligerent dispositions, which depict some threatening situation especially now that there are widespread and unchecked killings across the country by armed gangs who may be re-

cruited to cause mayhem. If the hallowed chamber of the Senate can be invaded by hoodlums who took away its symbol of authority in full glare of security agencies almost unchallenged and up till now the hoodlums’ have not been uncovered, then the situation is really disturbing’’ the source said. Reacting to the killings across the country, another source from one of the European missions, who preferred anonymity, told BusinessDay that his country and many others in Nigeria are worried about the elections following intelligence reports that some foreign mercenaries have allegedly invaded the country to cause mayhem if certain candidates are not elected. Incumbent President Muhammadu Buhari, has declared

his intention to seek reelection in 2019, under the platform of the APC, but he is facing unprecedented opposition from different quarters, who are bent on unseating him over what they claimed are his multiple failures. Buhari is also accused of clannishness and nepotism following his alleged lopsided appointment favouring his Fulani kinsmen and people from northern Nigeria. Buhari’s former colleagues in the Nigerian Army and former leaders have also shown overt intentions to stop him from clinching the coveted seat in 2019. Former President Olusegun Obasanjo and former military President Ibrahim Babangida in separate letters severely criticised Buhari over his poor handling of the economy and

his inability to curb the killings allegedly perpetrated by the Fulani herdsmen. And recently another prominent Nigerian and a former Chief of Army Staff, Theophilus Danjuma, accused the military of colluding with the killer herdsmen, which is seen as a direct indictment on President Muhammadu Buhari. Danjuma has allegedly threatened to deploy resources to depose President Buhari. There are other coalition of political parties and political movements such as Obasanjo’s inspired Coalition for Nigeria Movement (CNM), the Nigeria Intervention Movement (NIM), the Red Card Movement among others, who are committed to dislodging the APC and Buhari in 2019.

Wednesday 25 April 2018

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Politics & Policy

PDP is irredeemable - Gabam Shehu Gabam is the national secretary, Social Democratic Party (SDP). In this interview with OWEDE AGBAJILEKE, the former chieftain of the People’s Democratic Party (PDP), speaks on why he left the main opposition party and his decision to pitch tent with the Social Democratic Party (SDP) ahead of the 2019 general election. Excerpts: What informed your decision to join the SDP having participated in the reconciliation process after the PDP National Convention? irst, I must say that the choice of the Bayelsa State Governor, Seriake Dickson as chairman of the reconciliation committee was apt. He is a very dedicated and committed man who loves his party. He is very sincere and forthright. He took up the role with absolute commitment and determination to see if something could be done about the friction in party which was obvious and deep. In fairness to him, we did interface with him. He knew the grievances beforehand. They were not new to him. What we said before the Convention were facts. The press covered all the fundamental issues that we raised, warning that there will be consequences if the Convention was short of the required standard. We had said so before at the aborted Convention which resulted in the parallel Convention in Abuja. There were consequences which led to the birth of the national caretaker committee. So last December’s Convention was absolutely developed to be a rigging Convention. What happened at the Convention ground was against the rules of a proper Convention. It was a mark of complex by people who felt defeated already so they had to manipulate and shortchange the core values that are known for the conduct of convention in any political party. We had stated that this Convention must be transparent. There must be a show of remorse, a departure from the old ways of doing things. We provided leadership for 16years and we couldn’t conduct a Convention that will elect principal officers of the party through due process and the laws that established the Convention. You can imagine serving governors going around distributing Unity List at the venue of the Convention and they knew that international community was watching. We all knew the European Union had urged for free and fair elections. They knew that we had a ruling government in place that we were hoping to defeat. They knew we were defeated because of rascality, arrogance, disregard for rules and regulations. They also knew that after we lost the 2015 election, a committee was established and headed by the Deputy Senate President, who went round the county to find out why we actually lost election. The committee went round the six geopolitical zones on a fact-finding mission. The report was brought back to the party, the National Executive Committee (NEC) approved it. I was an eyewitness and participant. Thereafter,

this is my family home. Having fought for this party from the onset as one of the young founding fathers, how does it feel to be edged out of the party by two governors? They didn’t edge me out of the party. I have to tell myself the bitter truth. I am a politician; I didn’t join politics because I am a blind person, or because I have no vision or ambition. As young as I am I have my own ambition. I want to reach the peak of my career like any other person. And if you belong to a movement that retards development of vision, I have no business being there. It is not a religious organisation. It is not a church or a mosque.

Gabam

as if that was not enough another committee was constituted called strategic committee and inter-party affairs headed by Professor Jerry Gana. I participated in three committees. I was over-stretched and we generated the best ideas and advise on how the system can be restructured. People on the committee came and worked voluntarily, nobody gave us a dime. We invested our time and resources to make sure we gave the party the best that any human can give. Our recommendations on how to remodel and restructure the party were well accepted. The NEC also approved it. But again it was jettisoned. At the Convention, there was no single semblance that everything that was generated by the committees was imbibed. There was no sign of remorse. PDP wasn’t built by people who were shortsighted. It was built by great visionary leaders and politicians who during the dark days of military regime damned the consequences and formed a formidable national party. I am happy that what they did gave this country democratic stability for 16 years. It revolutionised the political space and sparked massive technological and infrastructural development. But, of course, along the line some rascality manifested in the party. People assumed office and felt nobody could talk to them, the abuse of the party became entrenched. The basic structure of the party was abandoned by so-called contact men from outside the party structure. If you remember we had parallel structures by late Sunday Awoniyi. We even had a parallel

office opened at Jabi. That was when the whole crisis started. We had subsequent ones. Not too long ago, we saw great personalities of the party move out to join the APC as a result of impunity. Yet, with all this consequences, and all the fact findings we did, collected and imputed in a document, some group of people still felt that they must have their way... Does that mean you did not accept the reconciliation process at any time? It is not about accepting the reconciliation, it’s about the facts. I have told you that Dickson is one of the gifts PDP has. He is a very committed member of the party, forthright and courageous, but have they given him the opportunity? He started the reconciliation but from nowhere they went to constitute another

There is no one with capacity to redeem PDP right now, the people that have the capacity to do so have all left and I can tell you that we are some of those who have the capacity

reconciliation committee, ignoring or forgetting there is an existing one. They reconstituted a reconciliation committee, perhaps to debase him despite his being a governor. If you don’t want him to do the job why then did you give him the job. If you make him a chairman of reconciliation committee hands-off and allow him to do his job. There are some of us that are above board we have seen this thing right from our childhood. And we have learnt to be honest and sincere with ourselves. When we were building PDP we built it with absolute sincerity and commitment to this nation, no other factor was considered. The enhancement of Nigeria’s protection of lives and property, the participation of every minute tribe in this country were the ideals behind PDP. We wanted a viable country, we didn’t factor in individuals or parochial interests, otherwise the founding fathers will say they should be the first beneficiaries of whatever slot that comes to the party. A typical example is the sacrifice that was made by the Late Alex Ekwueme. But when he died, the party was reminded even to go and condole the family. What kind of people are we? Are we normal human beings? The answer is no. I was not a liability to PDP rather PDP was a liability to me. I have invested my time and resources to build this party I fought Ali Sheriff because of my commitment to PDP. I was not benefiting anything from the party. I wasn’t given any federal appointment or contract. I challenge anybody to go and check. But because I was youngest founding father of the party, the youngest in the midst of G-7, I felt

So what you are saying is that you have explored all the avenues for reconciliation in PDP? We have explored all of avenues to redeem PDP, and I am saying all avenues as documented. We have appeared in all media organizations in the world trying to defend this party at all cost, not at the cost of the party but at our own. There is no media programme in which I defended PDP that I was paid for. I did it simply because I love the party passionately. I am more of an investor in PDP than most of them. Perhaps, only the founding fathers of the party have made more investments in PDP than me. If I was looking for money I would have gone to APC. But I am a disciplined person. We were trained to build institutions. If you build institutions, you may not benefit from it immediately but future generations will benefit from it. Those who built PDP are not benefiting from it today. Those benefiting are not founders of the party. So if the founders didn’t sacrifice for the party where would we be by now? Who would have restored democracy back to the system? Are you saying PDP is irredeemable? Yes, PDP is irredeemable. You can quote me anywhere. There is no one with capacity to redeem PDP right now. The people that have the capacity to do so have all left. And I can tell you that we are some of those who have the capacity. We have the capacity to deal with any issue with any individual. I am not reducing anybody but I can tell you that if at this material time the political colossus like Professor Jerry Gana, who is the custodian of the power and oratory the party, who has ideas flowing like water and a commitment to defend the party at all cost, has left the party then it tells a lot. Another political juggernaut, Professor Tunde Adeniran, took the PDP to the South-west. Can you have one Continues on page 20

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Politics & Policy

Nigeria’s security architecture under Buhari very dysfunctional - Moghalu

in the land in February, assured that if he is elected President in 2019, national security of Nigeria will be completely overhauled and brought into the 21st century standard. He has promised to declare for the political party under which platform he will run in May.

On how he would take such drastic measures judging by vested interests in the system, the 55-year-old Anambra-born technocrat noted that a leader requires courage and should not be intimidated by vested interests. “As a leader, one of your duties is to address challenges successfully. When I was Deputy Governor of Central Bank of Nigeria (CBN) we reformed the banking sector completely and fundamentally despite the vested interest there. Vested interest should not intimidate a leader,” he said. He added that Nigeria should be restructured along the geo-political zones for stability and prosperity, which is part of the national security that will be improved in a restructured Nigeria. The former United Nations staff lamented the low human capital component of the Nigerian economic adding that he will employ the abundant human resources in the country to transform Nigeria’s human capital. “The secret of the wealth of nations lies in what we call productive knowledge the more knowledgeable and skilled the workers are in any economy, the more productive that economy is

and the more competitive. For you to have productive knowledge, which is what brings competitive economy, which creates economic opportunity to manufacture complex products in order to have an economy that is diversified, that depends on the quality of the human capital that you have. If you have the right type of human capital, you are tackling the economic challenges from its root. “So when you educate people with productive knowledge you can leave the rest for them because with that knowledge they can take care of themselves. You don’t need the state to do everything, just create an enabling environment for them and they will create the jobs by themselves. “Nigerians are very dynamic and very innovative; this country could easily be one of the wealthiest countries in the world if we have the right type of political leaders. But we have the type of political leaders who are not even thinking at this level. They are just there for power, for money and all sorts of base agenda, ethnicity and religion. They are not really focusing on what really matters, which is the welfare of the average Nigerian,” he said.

Nigeria was provided with options. Because PDP has better programmes that accommodated all shades of opinions, PDP was accepted. Today we have similar circumstances. APC is in dilemma and PDP is down on its knees. So there is need for a platform that can rescue the country once again. And simply because we don’t want to be accused of being over ambitious or looking for money, we decided not to go to APC. We decided to look for a platform that will be acceptable to all Nigerians. We didn’t say we will go and register our own party. We have all it takes to register a political party. But we decided to put the nation and the people first. So we looked at all the political parties, read through their manifestos and programmes. We also looked at their history, credibility and experience. Luckily enough, SDP was still in existence.

Unfortunately NRC has gone under. But in the course of our research, it is on record that no registered party in the history of Nigeria got massive votes from all Nigerians irrespective of tribe or religion, like the SDP. We also saw that the party produced a President and Vice President from the same religion which is unique in the history of Nigeria. Nigerians didn’t look at the religious and ethnic dichotomy or parochial and sectional issues when it voted for the party. The party had built capacity, policies and programmes that were accepted by all diversities. Everybody felt a sense of belonging in that party. And we asked ourselves some very salient questions like can we rig this party? Can we remodel it? Can we discuss with the leadership of the party? Were the former managers of the party willing to accept this need to rejig the

party? To all these questions the answer is yes. So we went into open consultations. The discussions were wonderful. I must thank Chief Olu Falae. He is one of the few rare nationalists that we can find today, somebody that is willing to step down and leave his position in the interest of the party. We have never found him resistant at all. The entire structure of SDP was willing to step down for experienced and competent people to come into the party and move it forward. It is very rare to find them in any political party. So we must thank them for putting the country first. They could have said no after seeing the powerful people that are coming into the party and insisted on continuing to run the party. But they conceded to superior issues. You hardly find this. So, I thank Olu Falae and his team for providing leadership and that sense of nationalism.

INNOCENT ODOH, Abuja

residential hopeful, Kingsley Moghalu has described the Nigerian security system under President Muhammadu Buhari as very dysfunctional following the incessant killings across the country allegedly perpetrated by the rampaging Fulani herdsmen. Moghalu, a professor of international business and economics, told BusinessDay in chat on Monday that Nigeria also has a very flawed concept of National Security, stressing that if he is elected president he would embark on massive overhaul of Nigeria’s security agencies including police reforms that will include state police. “First of all the concept of National Security in Nigeria is not sophisticated, it has not kept up with trends in the modern world. So the concept needs to be holistic. We should think of national security from several angles; including the economic angle, the military angle, safety of communities, the border control, and immigration, including the question of violence being the monopoly of the state and why there are so many

Moghalu

groups in Nigeria today that bear arms. “This is an indication of a failing state where you have competing armed groups. For example if you have herdsmen carrying AK 47 all over the place is that a feature of a normal country? If you look at the interplay of

the various security forces and their relationships, you can see that in this governmental it is completely dysfunctional. Many of them are at war with one another so how can they secure the citizens?” Moghalu, who declared to run for the highest office

PDP is irredeemable - Gabam Continued from page 19

person that can replace him in the PDP today? None, I challenge any person in PDP. Who is that person that has the commitment and acumen of Adeniran in the PDP? So it is not about personal or parochial issues but personal interest. The country is tearing apart politically and we need a rescue team. And we have come as a rescue team to salvage the country. Are you worried by the interpretations arising from your defection such that some people feel because your candidate lost out at the convention, you then decided to leave the party? These are infantile interpretations. I didn’t steal or commit any crime. I can’t be worried about people’s perception. I am worried about who I am as a human being. God made me who I am. We put them in

offices. I have not gone to any governor or minister to beg for any favour throughout my life, even when we formed the party. I have never done that. I am a principled person. I stand by what I believe in. It is God that gives and takes power. What is critical for any citizen or politician is to do something that will protect the system, don’t be part of a group that will undermine the system because you don’t know who will come in. The successor generation of the party derailed. The younger generations betrayed the older generations in the PDP because there were no tutoring systems. People who didn’t know the core values of PDP came into the party. They didn’t know the core fundamentals of the party so they came in with greed and selfish ambition which are the things that derailed the party. Part of what affected the PDP convention

was presidential ambition of aspirants. What do you mean by presidential ambition of aspirants? Everybody was positioning to have the structure of the party at the Convention. They all wanted to be president, including those that can’t even mention that they want to be president. Some people mortgaged the Convention because they want to be president. So why did you choose the SDP? In 1999, when the country was stranded, a group of few people came together and decided to dare the consequences of the military regime and they started a movement that led to the formation of a political party. That party was formed and it rescued Nigeria. Three political parties, PDP, AD and APP (later ANPP) were formed.

Wednesday 25 April 2018

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BUSINESS DAY

C002D5556

Wednesday 25 April 2018

In association with

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Napier grass creates N2.1trn market opportunity for growers ...yield at par with Kenya, Botswana ...addresses farmers-herders conflicts JOSEPHINE OKOJIE

igerian Napier growers can tap into the opportunity of the country’s N2.1 trillion grass market in the face of the prolong conflicts between farmers and herders in Nigeria which has continued to impede development and economic growth. To tap from this huge opportunity in the production of Napier grass, A&Z Integrated Farms and Sahel Capital are collaborating to create clusters for farmers to grow the fodder crop commercially. “ The potential for Napier cultivation is huge as the market is there for it and the yield per hectare is high, at 150 tons per hectare and grows in 45 days,” Celestine Ayok, consultant, Convention on Business Integrity said in a telephone response to questions. “It will help address the issue of the farmers and herders conflicts as pastoralists can now settle down with their herds of cattle where fodder crop and water are available and this is what is happening in Laduga Grazing Reserves in Kachia local government area in Kaduna state,” Ayok said. According to Ayok, a herd of cattle weighs between 250-300kg and consumes between 15 to 20 kg of Napier grass daily at the cost of N15 per kg. This means that a herd of cattle consumes N300 worth of grass per day, indicating that Nigeria’s 19.5 million cattle population consumes N5.8 billion worth of grass daily.

Uche Unigwe, sales director, Nigerian Breweries; Ebere Maduakor; Keneth Maduakor, chairman, Ken Maduakor Group Limited and Jordi Borrut Bel, managing director, Nigerian Breweries at the Nigerian Breweries distributor Award held in Lagos recently.

Converting this to yearly, it consumes N5.8 billion multiply by 365 days gives N2.14 trillion market value of Napier grass production in Nigeria. For cultivation, the country needs to grow Napier on 2,600 hectares of land daily to feed its 19.5 million cattle population. Nigeria’s yield per hectare of the fodder crop is at par with Kenya, Botswana, Indian, and Sri Lankan that have all used Napier to develop their cattle industry through ranching methods. “The opportunities are massive in the Napier grass cultivation. It has a high bio mass which is the main attraction and used in major countries of the world in their

cattle production,” Muhammadu Abubakar, managing director, L &Z Integrated Farms Limited and who also owns milk collection centre in Kano said. “It is a perennial grass as it has the ability to grow very fast. The only disadvantage of the crop is that it does not have a good drought characteristic. “ It h a s h i g h l y n u t r i t i o u s properties that are very good for cattle and help them increase their milk production. We are collaborating with Sahel Capital to start cultivating the grass commercially by recruiting farmers which we would group in clusters to grow the crop,” Abubakar said. He noted that the partnership

will also provide the farmers with pastoralists as off takers from them, while creating beneficial relationships between the farmers and the herders. According to a 2011 National Agr icultural Sample Sur ve y, Nigeria’s cattle population is put at 19.5 million. “The country has one of the lowest yields per cattle milk production of 0.5 to 1.5 litres on an average while other African country’s like Kenya and Botswana have an average of 6 litres per cattle,” Soji Apampa, chief executive officer, Convention on Business Integrity told BusinessDay in an exclusive interview. “The opportunity is enormous as the grass grows only in 45 days and

can be cut off and re grown again in another 45 days. The planting methods are quite easy as u can grow the stem. Nigeria’s cattle breed is only good for meat production and not milk and that is why our yields are low. But with Napier grass, herders can increase their cattle milk.” Hussaina Makun, researcher at the National Animal Production Research Institute (NAPRI) said that Napier grass has similar characteristics with sugar cane, adding that the fodder crop grows well in river line areas and under irrigation. “Napier grass is highly rich in soluble carbohydrates which quickly produce energy that the cattle requires in milk production and this is why it is helping in increasing cattle’s milk production,” Makun said. “The limitation to the Napier grass is that it requires a lot of water to grow well and there is limited water supply especially in the northern region where the pastoralists mainly reside,” she added. Stakeholders noted that the only disadvantage in the cultivation of Napier grass is the high rate of insecurity in the country. They stated that the inability of growers to protect their Napier farmland means loss of investments as rampaging herdsmen can destroy it with their herds of cattle. They call on the government to provide adequate security on lives and properties as cost of production for the fodder will increase if growers invest in fencing of farmlands. “Government need to provide security so that growers would not lose their investments,” said Ayok.

CFIL launches first agric radio to promote agribusiness BUNMI BAILEY

orporate Far mers International limited (CFIL) has launched the first of its kind 24 hours ‘agrotainment’ radio to promote Nigeria’s agribusiness growth and development. According to CFIL , the agrotainment radio is a mobile app established to create a wider and larger platform for the country’s agribusiness industry globally and aimed at providing avenue for farmers to connect and be educated. “We are using this platform so that farmer’s voice can be heard around the world. Also, it links

sellers of agricultural products in the country and Africa to the buyers globally and provide an opportunity for farmers to get first-hand

information on sponsors or grants for their agricultural projects,” Alabi Akinwale, managing partner, CFIL said while addressing journalists

during the official launch. “This 24/7 agric radio is strictly and proudly made by Nigerians,” Akinwale said.

Prince Ade Ajayi, national coordinator, CFIL said that the mobile app is one of the best innovations that comes out of the CFIL and that the app is a radio in your pocket and that the app is tilled towards the youths who are the next generation of farmers. “The United Nations secretary endorsed this app and they are so much in love with it. The major target of this new innovation is the younger generation who are seeking to start a career in agriculture and the app is user friendly, fun and easy to download,” Ajayi said “You can start downloading it on Google store and also go to our website to know more about that app,” Ajayi further said.

Wednesday 25 April 2018

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BUSINESS DAY

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GCP21, IITA call for support in transforming Africa’s cassava production BUNMI BAILEY

h e G l o b a l C a s s av a Partnership for the 21st Century (GCP21) and International Institute of Tropical Agriculture (IITA) have called on policy makers, donors and the international community to support all efforts that will bring about cassava transformation on the continent. In spite of the huge role cassava is playing in food security and poverty alleviation in Africa, its yield per hectare has remained low at an average of 9 ton per hectare, which has continue to limit the crop potential in helping to achieve food security on the continent. Claude Fauquet, director of Global Cassava Partnership (GCP21), said that the African continent needed about 30 tonnes per hectare of cassava by 2050 from the current nine tonnes per hectare if it would attain food security. Fauquet argued that to reverse the current trajectory of low yield per hectare on the continent would demand deliberate steps including greater investment in research and innovations, provisions of a favorable

L-R: Claude Fauquet, director, GCP21; Malachy Akoroda, director designate, GCP21 and Kathy Lopez, head of communications, IITA during a press conference in Lagos recently.

policy framework, accessibility of loans to farmers at single digit rates, and mechanization across the value chain. “Africa needs transformation in the cultivation of cassava; otherwise, there will be a major food problem

by 2050 if cassava remains less than 10 tonnes per hectare. We need to change the yield of cassava. Cassava is grown in 106 countries, Africa is 55 per cent while Latin America and Asia grows 12 and 33 per cent respectively,” he said.

Edo, Elephant Group collaborate on cassava production …NCGA installs interim chairman GODFREY OFURUM, Benin

do State Government and Elephant Group, a Lagos based firm have partnered on the cultivation of a 300 hectares of cassava farm in each of the three senatorial zones of the state. The initiative is in line with the state government’s policy to diversify Edo’s economy, through a g r i c u l t u re, w h i c h i t h a s a comparative advantage. BusinessDay gathered that the three farms, which will be used as a pilot phase project, would be located close to three cassava processing factories in the zones, namely Lentus Foods, for Edo South

senatorial zone, Idaewor Farms for Edo North and Amidal Investments for Edo Central. Meanwhile, Donatus Imaghodor, managing director, Lentus Foods, a cassava flour processing firm, has been installed, as the interim chairman of the Nigerian Cassava Growers Association (NCGA), Edo State Chapter. This is following the demise of Mariam Iluogba, the former chairman, who died in December, 2017. Also, Igbuan P. Ilofuan, was inaugurated, as the interim secretary of the association. Sylvester Ironde, national secretary, NCGA, conducted the inauguration at the quarterly general meeting of the Edo State chapter of the association, held

recently in Benin. He urged the 18 Local Government chapters to elect their executives, to assist the state executive in the smooth administration of the association. I m a g h o d o r, t h a n k e d t h e members for selecting him to lead the association and promised not to disappoint them, but appealed to members to work for the success of the association. He explained that he is in touch with many international and national agencies that are willing to invest in cassava. He stated that the executive and some members of the association will meet with the commissioner of Agriculture, Lands and Survey, to work out areas of collaboration between it and the state. “Equally, the association will meet with the local government chairmen that would be elected for land to set up NCGA farms and micro processing centres, close to the farms, thereby helping the local governments to create jobs for the people and develop local communities in fulfilment of the State Governor’s 200,000 jobs creation. He commended members that had repaid their Bank of Agriculture (BoA) loan, under the Cassava Bread Fund and appealed to those that are yet to pay back to do so to enable those on the waiting list to also access the loan.

According to him, Africa needs to scale out proven technologies including the recommendations on weed control being developed by the Cassava Weed Management Project, improved cassava varieties, and best-bet agronomic practices such

as appropriate fertilizer application. Fauquet said while technologies existed to transform cassava, not many policy makers were aware of such technologies, adding that the forthcoming Global Conference on Cassava with the theme: ‘Cassava Transformation in Africa’ was a unique opportunity that would create an environment for exchange of technical, scientific, agricultural, industrial and economic information. He stated that 300 participants including policymakers, scientists, farmers, processors, end users, researchers, the private sector, and donor agencies would be participating in the conference on 11-15 June 2018. Also speaking, Malachy Akoroda director designate of GCP21 noted that the conference would provide an opportunity for African countries to tap the best, current, and most innovative technologies that would transform cassava value chains across Africa. Akoroda said that the conference will attract investors from Brazil and others heavy wigs in the Cassava value chains would also focus on technology, access to finance and market.

Expert calls for effective monitoring of agric budget VICTORIA NNAKIAIKE, Lokoja

ift Omoniwa, right partner, Action Aid has called for the effective monitoring of agricultural budgets to aid agricultural production in the country. Omoniwa who doubles as the executive director of Kogi based Participation Initiative for Behavioural Change in Development (PIBCID) recently in Kogi called on Journalists and Civil Society Organisations (CSOs) to play critical roles in budget monitoring, tracking and advocacy to aid agricultural production especially for smallholder farmers. T h e p ro g ra m m e m a n a g e r regretted that agriculture used to account for 40 percent of the Gross Domestic Product of the country but had dropped to 23 percent aggravating concerns and poverty trap among smallholder farmers. According to her, this was due to a myriad of challenges including foremost, access to credit facilities and farm inputs facing farmers especially the small holder women farmers, adding that while allocation to agriculture sector has continued to dwindle and hardly meet the Maputo declaration of 10 per cent per cent of national

budgets, implementation had constituted a great challenge. She said the call for monitoring and tracking of budget implementation had become imperative with journalists and Civil Society Organisations utilizing the Freedom of Information Bill to source information from MDAs. She emphasized that sustained tracking of agriculture sector budgets would greatly reduce corruption in the sector, adding that tracking would equally put duty bearers on their toes and make them more transparent and accountable in their dealings. Omoniwa also disclosed that ActionAid had recently organised a two-days Media Training on Agriculture Budgeting Monitoring, Tracking and Advocacy at Goshen City, Auta-Baleffi, Nasarawa State to enable adequate publicity.

BUSINESS DAY

Wednesday 25 April 2018

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Declining yields on securities: Need for banks to grow risk-weighted assets Stories by HOPE MOSES-ASHIKE

igerian banks must grow riskweighted assets to hedge against the impact of declining yields on securities, if they must remain profitable in 2018. “For two years, Nigerian banks have had an easy time, earning good income on riskfree government-backed, Naira-denominated securities. That era is drawing to a close as T-bill rates fall. Asset yields are trending south, and it is almost impossible to re-price liabilities to match. So, banks must either find other sources of income or face an average 15 percent drop in their Profits Before Tax expectation for 2018. For the banks to replace the portion of income threatened by declining yields on securities, they must grow risk-weighted assets. This means a 6-12 percent rise in customer loans in 2018,” Guy Czartoryski, head of Research, Coronation Merchant Bank Group said.

Interest on securities represented 30 percent of total gross interest earned in nine months of 2017, averaged across Nigerian banks rated by Fitch Ratings, compared with 23 percent in the same period in 2016. Coronation Research, a subsidiary of Coronation Merchant Bank Group recently released its 2018 Forecast for Nigerian Banks report, which clearly stated that the ability to support risk asset

creation in the real sector will differentiate winners from losers in the Nigerian banking industry over the next three years. While the quality of asset in the industry is generally improving, the firm believes the best capitalized banks will move well ahead of their competitors. The report categorizes banks into three tiers; Group A, Group B and Group C. Banks in Group A, being the

most well capitalized, have the biggest opportunity to increase consumer lending. According to the report, Group A includes Zenith Bank, GT Bank and Stanbic IBTC, which have the ability to significantly expand their loan books by 69 percent, 82 percent and 182 percent respectively. Group B, including UBA, Access Bank and Fidelity Bank, have moderate capital levels and some ability to expand loans books but

may also pursue tier II capital raise in the form of long-term subordinated debt. Group C, including FBNH, Diamond Bank and Sterling Bank, in the short to medium term have limited ability to expand their loans books and will most likely focus on dealing with capital issues and might attempt to raise long term capital from the capital market. According to Coronation Research, “if equity markets are sufficiently strong, some banks might attempt equity capital increases (Tier-I) this year. However, currently we have market valuations so low as to make equity capital dilute the interest of existing shareholders. So, the preferred capital-raising route is likely to be long-term subordinated debt (Tier-II). We expect market share in customer lending to flow from banks in Group C towards those in Group A. With banks in Group B we see some, but perhaps not significant, market share gains.” Leaving capital raising aside, 2018 presents a golden opportunity for the stronger

banks to expand loan books and gain market share. Nigerian banks are coming off a low base: lending (when adjusted for currency depreciation) has hardly grown over two years, but the economic conditions look good for renewed loan growth. Loan growth, over the last two years, has been far from impressive and understandably so, since banks have remained cautious as they have grappled with the effects of oil price volatility and its impacts on their loan books. Even though we believe the underlying pressure on loan assets is getting lighter, there is still IFRS 9 to contend with. “We expect a one-off uptick in impairment charges this year, given that banks will start reporting using IFRS 9 this quarter. With oil prices largely stable and our optimistic economic outlook for 2018, we view the risk to banks’ oil portfolios as significantly reduced. Also, the stability in the foreign exchange market, coupled with renewed economic growth, significantly mitigates the risks associated with the trading and manufacturing sectors of the economy”.

Keystone, Heritage connect customers to life-changing cash rewards

n partnership with CeLD Innovations, Keystone Bank plc and Heritage Bank plc, last week introduced a new product known as CashToken, a consumer electronic reward system, into the Nigerian financial markets. The CashToken is an electronic reward and celebratory gift commodity, which costs only N30.00 is aimed at making every patronage or celebratory gift a life-changing cash opportunity. Speaking at the launching ceremony, Jude Monye, Executive Director of Heritage Bank said CeLD is a very innovative organisation that is committed to bringing new innovation to the Nigeria’s economy to enable discerning companies to reward their customers. “We are at Heritage Bank

believe in it, because we believe in trail blazing, which is our forte and our forte is innovation,” Monye said. The new innovative product, CashToken, which was formally launched in Lagos on Thursday April 19, 2018 at a conference tagged “500 Top CEOs Conference – Unleashing The Age of Hyper Consumer Centricity, is an electronic reward and celebratory gift commodity which costs only N30. The initiative according to CeLD creates an avenue for every customer in Nigeria to have an opportunity for lifechanging cash rewards every Friday night at the National CashToken draws, to be monitored by Alexander Forbes and audited by Deloitte. The product is designed to optimize customer loyalty investment for business, celebratory

gift value optimization and public emotional equity for government. According to Obeahon Ohiwerei, group managing director/ Chief Executive Officer of Keystone Bank, “At Keystone Bank, our vision as we begin our trajectory towards industry leadership is the enablement of new possibilities tied to our customer’s innermost desires as we connect our customers to a new era of Hyper Consumer Centricity; where every patronage of our bank is a life changing opportunity.” “And so, the establishment of the World’s First Cash Reward as-a-Service Platform by CeLD is indeed not only most commendable but worthy of strategic support of forward looking businesses; hence the support of the Board of

Obeahon Ohiwerei, group managing director/ Chief Executive Officer, Keystone Bank

Directors and management of Keystone Bank Limited.” “We have also taken a decision to partner with CeLD to adopt this ground-breaking product, ‘The CashToken’ as a Keystone Bank Customer Loyalty Reward Commodity. We believe every patronage

of the bank should be a true life changing-opportunity with guaranteed cash for insurance, pension or savings.” “We therefore call on all industry leaders, business owners, governments and the celebratory gift industry to join us as we project this great African Innovation to the world stage. We believe that One to Three Billion people will receive CashTokens in five years across the world.’’ Ohiwerei concluded. Also speaking at the launch, Leo Stan Ekeh, Chairman of Zinox Technologies Limited said that products like CeLD are the kind of empowerment that today’s startups earnestly require. “CashToken is the miracle of the 21st Century, and it’s an innovation that makes business faster, and is transparent. It is an innovation that will

bring growth to the economy of the country.” Ekeh added. Lai Labode, Founder/ CEO of CeLD Innovations said the company is the world’s first cash reward as a service company which has established a robust technology and business model that herald a new era of hyper consumer centricity. He said they are pioneering a performance based system designed to optimise consumer loyalty investments for businesses, celebratory gift value optimization and public emotional equity for government. Labode said about N20 billion would be offered in the next three years of full operation of the fund; which is managed by Vetiva Capital Management, Nigerian Stockbrokers Limited and First Ally Capital.

Wednesday 25 April 2018

C002D5556

BUSINESS DAY

E-mail: insurancetoday@businessdayonline.com

Leading insurance companies in Nigeria... Stories by Modestus Anaesoronye

usinessDay, Nigeria’s premier financial & business newspaper is publishing an exclusive report on leading insurance companies in Nigeria, come next week Wednesday, 2nd May 2018. Nigerian insurance industry has evolved over the years helping businesses and institu-

Edwin Igbiti, MD/CEO

tions to manage their risks and remain alive, without which a lot of them would have gone under as a result of calamities associated with business ventures, caused by both human and natural sources. The insurance industry at the end of 2016 financial paid out claims amounting to N110 billion, which is no mean feat when you consider the challenges associated with accessing fund for business, as well as associated

Kunle Ahmed, MD/CEO

high interest rates. The special report is aimed at providing market insight on the Industry, as well as promoting the activities of players that have contributed significantly to advancing and deepening insurance industry in the country. It will also show what makes these companies big and leaders in the market, looking at capacity, product and services as well as those behind these firms. Watch out for it...

Muhammed Kari, commissioner for insurance/CEO NAICOM

Val Ojumah, MD/CEO

Jide Orimolade, MD/CEO

Swiss Re to insure up to $500m credit risk on IFC loans

wiss Re Corporate Solutions, the commercial insurance arm of global reinsurer Swiss Re, has partnered with the International Finance Corporation (IFC) to expand a “pioneering platform” by $500 million, supporting greater investments designed to modernise infrastructure in emerging markets. Under the agreement, Swiss Re will insure a portion of the credit

risk on loans IFC makes through its Managed Co-Lending Portfolio Program (MCPP), providing risk coverage up to $500 million. According to an announcement the involvement of Swiss Re takes the platform’s total capacity to $7 billion, which enables the IFC to improve power, water, transport and telecommunications in developing markets. Head of Credit & Special Lines at Swiss Re Corporate Solutions,

Andreas Hillebrand, commented: “We are pleased to support this IFC initiative, which will help release much-needed capital into emerging markets to support tomorrow’s resilient societies and economies. “Furthermore, by strengthening our relationship with the IFC, we will be able to further expand our wellestablished trade and infrastructure finance platform and increase the diversity of our emerging market portfolio.”

FBN General sustains growth, records 60 % growth in premium

BN General Insurance has once again demonstrated its resilience and consistent growth in the insurance industry, posting a healthy financial statement for the year ended, 31 December, 2017 as approved by the National Insurance Commission, NAICOM. The company grossed a premium of N3.51 billion up by an impressive year-on-year growth of 60 percent from N2.2 billion in 2016 while its claims expenses also rose by 180 percent from N270million to N756

million. Profit before Tax (PBT) closed at N322 million, also representing a year-on-year growth rate of 66 percent. This profitable growth, the statement said, was partly driven by improved asset and investment portfolio management resulting in an investment income growth of 112 percent. In his comments, Bode Opadokun, MD/CEO, FBN General Insurance, said: “2017 was the year we consolidated on the strategic restructuring across key business

functions. This has inspired a profitable performance exemplified by our total assets recording an appreciable growth of 27 percent at yearend from N6.06 billion achieved in 2016 to N7.72 billionin 2017. With our strategic marketing drive and the support of our dedicated staff, we are hopeful of sustaining our growth in 2018.” FBN General Insurance is a wholly owned subsidiary of FBNInsurance Limited, an FBNHoldings company associated with the Sanlam Group SA

Oye Hassan-Odukale, MD/CEO

AXA Mansard launches MyAXA mobile app to enhance service delivery

XA Mansard Insurance Plc, a member of the AXA Group and global leader in insurance and asset management, has announced the launch of a revolutionary application in the Nigerian non-banking financial services industry called MyAXA mobile app. The application is designed to bring value to the life experiences of its users by providing a more convenient way to purchase and manage their AXA Mansard product plans. MyAXA app is an improvement from other apps as subscribers can carry out transactions, buy products and book hospital appointments whenever they want. The app is designed for iPhone and Android devices and is available for free download on the App Store for IOS users and Play Store for Android users respectively. Speaking on the app, Bayo Adesanya, chief digital officer at

AXA Mansard, noted that “Mobile technology has changed the daily routine of millions of Nigerians by significantly influencing how they receive information. The population of mobile phone users in the country keeps growing so organisations are increasingly leveraging on this trend by creating platforms where consumers manage their product plans on the go.” Adesanya also noted that “MyAXA app enables subscribers to perform various activities which include purchase of insurance packages; real time claims initiation and tracking; locating hospitals and ordering prescription refills.” Other possibilities on the app include making contribution to funds; liquidating investments as well as checking balances on Retirement Savings Accounts. “The app is secure, all payment information is strictly confidential and global security standards have been employed to protect users’ information” he added.

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BUSINESS DAY

C002D5556

Wednesday 25 April 2018

E-mail: insurancetoday@businessdayonline.com

L-R: Bola Omole, controller IT, Research & Statistics; Eddie Efekoha, chairman and Yetunde Ilori, directorgeneral, all of the Nigerian Insurers Association(NIA) during the chairman’s interactive session with the press in Lagos.

L-R: Dare Adenuga, product manager, Motor Insurance, Ensure Insurance; Ejim Shadrach, 15 percent No Claims Cashback recipient and Omobolade Odanye, product manager Life, Ensure Insurance during cheque presentation at Ensure office in Lagos.

Insurers bet on KPMG to resolve tax burdens, harmonise 10-years development plan Stories by Modestus Anaesoronye

f f o r t s g e a re d towards reducing unnecessary and multiple tax burdens placed on insurance companies operations by section 16(2) (a) of the Companies Income Tax Act (CITA), are beginning to yield result. This taxation analysts believe has undermined the insurance sectors capability to pay dividend to shareholders, improve profitability and achieve expected growth. They also believe that taxation on insurance premium, commission to brokers and agents, as well as

claims and management expenses amounts to multiple taxation, and lacks merit when compared with other markets. With KPMG professional services, the industry has begun to get the listening ear of the Federal Inland Revenue Services, which has temporarily suspended that section of the law pending when a final amendment in made in the CITA. Besides that, KPMG is also working with the industry to harmonise a 10 – year old development plan that will expedite growth in the insurance industry. Eddie Efekoha, chairman of the Nigerian Insurers Association (NIA) who

disclosed progress made on the controversial law said “In the last few weeks, we were all witnesses to the invasion of member companies by tax agents of the FIRS in furtherance of the enforcement of section 16 of CITA 2007 as amended.” “We are delighted to report that through our s t ra t e g i c e n g a g e m e n t initiatives and with the understanding reached, members are now relieved from the heavy tax burden imposed on our memberinsurance companies by the law.” “Our target is to seek amendment of the necessary tax laws to avoid multiple taxation which affects what accrues to

Universal Insurance names Paulinus Offorzor as ED-Technical

niversal Insurance Plc has announced the appointment of Paulinus Offorzor as the executive director, Technical Operations of the company following the confirmation by the National Insurance Commission (NAICOM). The appointment came on the backdrop of the NAICOM’s directive that insurers should have an executive director in charge of technical operations by which the Board of Directors had forwarded his name to NAICOM as the nominee for the position. Prior to his new appointment Offorzor was the deputy general manager,Technical & Enterprise Risk Management of the Company. Speaking on the appointment recently Ben Ujoatuonu, the managing

director/CEO of the company confirmed the appointment says the Company has been able to comply with the provision of a guideline from the NAICOM. Offorzor is a graduate of insurance from The Institute of Management and Technology, Enugu. He equally holds a Bach-

Paulinus Offorzor

elor’s Degree in Economics (B.Sc. (Hons) from Imo State University, Owerri and a Masters in Business Administration (MBA) majoring in Insurance and Risk Management from Esut Business School. He is also an Associate Member of several professional bodies including Chartered Insurance Institute of Nigeria (ACII), The Certified Pension Institute of Nigeria (CPIN) and Chartered Institute of Administration (CIA) He started his insurance career with Intercontinental Assurance Co Ltd in 1995 and has worked in several other companies within the insurance industry before joining Universal Insurance Plc as the Head (Technical & Enterprise Risk Management) Paulinus was the General Manager / Chief Executive Officer Generation Insurance Brokers Limited.

our stakeholders. We need to tackle it to enable us to make profit and remain in business. We are also working with the firm of KPMG on the taxation issue.” On the development plan, Efekoha stated that the Association was working with KPMG to develop a 10-year transformation roadmap for the industry. “These roadmaps together with similar works by other arms of industry are undergoing harmonisation under the auspices of the Insurers Committee.” He strongly believes that the implementation of this plan when concluded soon would bring about the much-awaited growth to the insurance industry.

NIA set to commence development of 7-story secretariat complex

he Nigerian Insurers Association (NIA) has concluded plans to commence the construction of its proposed 7-storey Tower for the new secretariat. Meanwhile, the Association has raised from among its members over N500 million for take-off of the construction. Eddie Efekoha, chairman said the Association is sourcing funding for the building project through compulsory levy on member companies and soft loans to ensure immediate commencement of the project which is expected to be completed in a period of two years.

Ensure rewards more customers in Cashback Campaign

nsure Insurance Plc has launched its cashback campaign to guarantee that customers get something more out of their insurance. This campaign builds upon an initiative by the firm two years ago to reward customers who report no claim for 24 months in a row. The payout is 15 percent of all the premiums paid by the customer over the past two-year period. The first set of beneficiaries have received their cashback, and one of the recipients,. Abimbola Jinadu, received a cheque of N101,666 which amounts to 15 percent of her total premium over the last 24 months. In all, 45 Ensure Customers have received cashback reward between February and March 2018. Oreva Okunu, one of the cashback recipients, enthused: “It was so nice meeting you guys. Such a wonderful group of trailblazers with great innovative and disruptive spirit. We love your marketing strategy and we would definitely be with Ensure for years to come”. Owolabi Salami of Ensure Insurance disclosed that the scheme was initiated following an extensive market research on what customers requirefrom their insurer. “Consumers want to know what happens if nothing happens. So when we launched our redesigned comprehensive motor insurance policies in 2016”, explained Salami, “We promised that if no claim is reported over the next 24 months, we will give back 15 percent of the premium paid by

the customer. The Cashback campaign which we launched this February is a statement that here at Ensure,we talk the talk and then we walk the walk”. Highlighting the significance of the campaign, Tonte Ikiriko, chief marketing officer, Ensure Insurance hinted that the objective of this campaign is to increase the already abysmal consumer confidence in the insurance industry and also create transparency in our product offering. “People are generally wary of insurance products and see fine print of policy document as clever ways to evade payment of claims by insurers. Insurers have the responsibility to fix this negative impression by creating value for our customers”. Dare Adenuga, product manager for Ensure Motor brand, attested that by placing them first, the firm aims to deliver added value to its customer. Patrons can enjoy towing benefits after an accident, 15 percent discount for female drivers and male drivers aged 45 years or older. Customers may also spread premium payment over 6 months in equal installments. Ensure Insurance is changing the way insurance works for Nigerians. The company prides itself in absolute transparency and commitment to outstanding service delivery. The firm offers simple and affordable insurance plans for Motor, Education, Home, SMEs and Corporate Businesses which are designed to protect the assets of individuals and guarantee real value for money.

Wednesday 25 April 2018

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Pension Today

BUSINESS DAY

In Association with

‘Enlightenment remains strong focus to sustain achievements in pension reform’ The Pension Fund Operators Association of Nigeria (PenOp) recently elected a new executive team with Ronke Adedeji, managing director/CEO, Leadway Pensure PFA emerging as president. The new executive team in this interview shares their vision and expectations for the nation’s pension industry. Excerpts: You have just been elected the new executive of PenOp.What is your vision for this body and the pension industry? e are fortunate that over the years we have been able to build a solid foundation both as an industry and an association. The industry has proved itself that it is here to stay. Even though we have our challenges, but reasonably we have made some progress. The pastexecutiveshad built a strong foundation upon which we are going to continue, so, we are looking to build on what they have done. So, enlightenment remains a strong focus. Despite what has been achieved, there is still a lot of wrong perception and lack of information in the public. So, for us, that is a major concern. So, we are going to continue to talk about the scheme,its benefits, achievements and challenges facing us. If you look at Nigeria, and where we are coming from, you will see that the CPS has made a lot of difference in people’s life and sometimes this is underestimated. Today, you have people who have got huge savings, whereas ordinarily they would not have had a savings for retirement. Another issue we are also going to look at is how to project the pension industry in the financial service sector. It is a significant part of the financial sector, and so we want to continue to project our presence, increase our visibility and drive initiatives. Very often, we see thingscrossto our door step, all those issues are going to be properly addressed. You hear discussions around,what are you doing with this fund?There are always discussions around infrastructure, you hear various

versions of what this money should be doing, and all that. But also remember that we have fiduciary responsibility to our clients. It is not for the money to be used anyhow, so we cannot do things anyhow. So,we must make sure that there is a systematic, structured and well thought out way of using the money for the benefit of our clients. Other initiatives will also come up this year, including alternative asset classes as well asinfrastructure investment, that will also enable us improve returns on investment for our clients. We will also continue to improve on our relationship with PenCom. Thank God we have a good regulator, so we will continue to ensure that loopholes that exist in the system are closed and the industry is moved to the next level in terms of service delivery and efficiency. You mentioned about challenges. One which is dear to contributors is the transfer window.How prepared is your association to drive and see that this comes to pass? It is a burning issue and I think what has been the challenge is the issue of biometrics. We are optimistic that it will be resolved very soon. I think the government has issued instruction that everybody should consolidate in terms of identification and there is work going on in that regard. I think we have a meeting soon that will set the platform for further discussion about the transfer window. I see progress in that area shortly. There are pending issues including the Minimum Pension Guarantee (MPG) that was supposed to have been instituted, as well as mortgage from pension, what is the association going to do about these? On the MPG, one of the key

R-L:Wale Odutola, head of Branding; Dapo Akisanya, head of Technical; Susan Oranye, executive secretary, Aderonke Adedeji, new president; Akeeb Akinola, vice president; Chinedu Ekeocha, treasurer and Hamza Bokki, head of Legal & Regulatory Commission, all of the Pension Fund Operators Association of Nigeria after election of new Executive Committee in Lagos.

requirements is that government must be making a certain contribution as well, but that is one of the challenges we have faced. But on the Pension Protection Fund, that has started receiving funding from the operators. I think this is the second year since we started marking contributions to that effect, while we expect government to also start making its own counterpart funding. But when that will start, I cannot be able to say right now. But it’s something we are also keen to see happen, and we are speaking with PenCom to help persuade government to ensure it comes to pass. On the issue of mortgage financing, PenCom is poised to ensure that this is done having given us a draft guideline. However, what has occurred is that at the government side, they have one or two other initiatives, which to them has become a priority.So, for example, there is something called Family Homes Fund, which

RC634453

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

the ministry of finance was promoting something last year , which suggest that there may be need to suspendimplementation of the 25 percent contribution for mortgagein the mean time. So, right now, most of the emphasis is on the family homes fund. However, we are still continuing discussion with stakeholders in the mortgage industry even if we do not continue with that provision in the guideline, to see how else as an industry we can support a thriving mortgage industry to provide affordable housing to our contributors. Hopefully, this year we will make significant progress and members of the public will start to see impact. There is huge potentialfor pension penetration at the State level, what has PenOp done in terms of creating awareness and engaging the States? With the states, the truth is that it is a long and pain staking process. Sometime last

year, PenCom and PenOp had a joint committee that was going round the States. Work is going on, but like I said, it’s long and pain staking. For lot of States, you cannot go in and get a yes for an answer. It literally does take years to talk to the executive, labor, and the various stakeholders. There is a process that is ongoing, and we are doing that jointly with PenCom and I believe that will continue. The States are at different stages of implementation, but the good thing about it is that some progresses are being made. As body how do you address issue of ethical practice and corporate governance failures amongst your members? Well, I am not very clear as to what issues you are talking about. But, I will give a general answer, may be if it is in terms of payment to retirees. When it is payment to retirees, there could be some issues. May be if the account is not funded in the first place,

you will find that the retiree is totally dissatisfied. It is his PFA as far as heis concerned that is responsible for his nonpayment. It is possible that there are other various issues, but as a self regulatory body, there is a lot of collaboration within ourselves. In the event that we find specific House erring, the first point of call is the regulator. But before it gets to the regulator, if brought to us, either as the Exco or a body we reach out and speak to the specific houses. Sometimes also, PenCom may be privy to the information we don’t have because they go inand do inspection. But as a body, we work together, we cooperate,we collaborate and alsoare able to interactand exchange information. For example, if you go to the field and find may be agent of another PFA having misssold, such information always come back, and among the CEO’s, these things are resolved. For instance, I have had a situation whereby my staff reported a matter to me and I took it up with the CEO of the other PFA. They investigated it and it was dealt with. There is that level of collaboration between us. If I may ask, is the micro pension initiative dead? No. it cannot die. We will not let it die. For us as an industry, it is a very important aspect of the business because it is where growth is going to come and we are very anxious to see it happen. Just look at it very well, until we start covering the informal sector very deeply the growth we are looking for may not come, so it’s an important aspect of the business we are looking forward to. Just like the issue with transfer window, micro pensions will require that issues around identification is gotten right first of all.

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

28 BUSINESS DAY

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Wednesday 25 April 2018

INTERVIEW ‘Stocks will not be as bullish as they were last year’ JOHNSON CHUKWU, CEO of Cowry Assets Management Limited, sees Nigerian commercial banks moving away from lending to public sectors to lending to the private sectors. In this interview with BusinessDay’s ENDURANCE OKAFOR, Chukwu outlines factors that would lead to this shift and how banks can strategise to benefit from it. Excerpts:

hat is your view on the Nigeria’s capital market performance, considering it was the third best performing stocks in the world in 2017? Market is still positive year-to-date (YTD), about seven percent, although at some point in January, the market recorded about 18 percent YTD gain. The most important thing is that the appreciation of last year is now a base level, and as such, the same level of appreciation is not expected with the current year (due to base effect), as the price is relatively high. It is overly optimistic to think the market performance of this year will be the same of last year’s because once one is building from last year’s closing prices, any incremental growth in price will not have the same magnitude when the increase of base was lower. We have to be aware that this is an election period. As such, the stocks will not be as bullish as they were last year. Although the market is still positive, which is a good thing, to be among the top three gainers in the world this year may not be possible. This is owing to the forthcoming election and also due to the high base of the previous year. Although there is positive outlook on both the economy and the capital market, as major economic indicators are on the positive trajectory, the International Monetary Fund (IMF) projects 2.1 percent economic growth. Purchasing Manager’s Index (PMI) is expanding positively, inflation moderated further to 13.34 in March, on a balance, the economy is looking good. What other policies should the government implement to help spur growth in the capital market and the economy at large? The key thing is liberalisation. The introduction of the Investors’ & Exporters’ window was a further liberalisation of the FX market. This implies that, when some sectors are liberalised and are devised with appropriate regulatory framework, it will increase business activities in such sectors and there will be improvement in not just the capital market but also in the general economy. A typical example is allowing the exchange rates to be determined based on prevailing market circumstances in the FX window. This increased investors’ confidence and as such led to flow of capital into the country. Similarly, if a part like the transport sector is liberalised, it will be able to attract developmental capital, which will contribute to capital market activities. Yields on treasury bills are declining, resulting from the government’s plan to reduce domestic debt and increase foreign debt at a ratio of 60/40 percent respectively. What is your take on the areas the banks and other institutions

can channel their investments in order to generate revenue? I think what the banks should do is to review their strategies by moving away from FGN bonds and identify growth credit customers and lend to them. They have already started doing it, as seen in February, where there is 28 percent increase in the private sector loan. With improved liquidity, the banks will have no other choice than to look for credit loans borrowers and lend to them, as this will even stimulate economic activities. So clearly, I see banks moving away from lending to public sectors and lending to the private sectors.

I think what the banks should do is to review their strategies by moving away from FGN bonds and identify growth credit customers and lend to them

What has made Cowry Asset Management stand out among its peers and what is the company doing differently to contribute to the market? What we do is provision of superior services at lower cost. Cowry Asset is able to provide services at a higher standard and higher quality at a minimum cost. What are the economic risks the country may face in the nearest future? Political risk is a major factor that will have effect on Africa’s largest economy, considering election is forthcoming. Nigeria is still an oil dependent economy, so if oil prices should reverse its current position, it will really have a negative effect on the external sector, which will have an effect on the domestic sectors. Another important thing is the sustenance of peace in the oil-rich Niger Delta. The fourth item is the menace of the herdsmen. If we do not arrest that issue, it could have effect on the north-central region and particularly on food production, in terms of destruction on agricultural produce, and this could hike food inflation rate, unemployment and others. Finally, we have the Boko Haram insurgency. The point basically is to deal with insecurity issues in the country. That is,

maintenance of the relative peace in the Niger Delta, resolving the issues of insecurity in the north central and north east, with regards to herdsmen attack and the Boko Haram insurgency. This should be resolved as quickly as possible to prevent further loss of lives, to prevent food inflation and to prevent further increase in unemployment rate in the country. What is your outlook for the economic performance of the country? The IMF says it expects Nigeria’s economic growth to continue to pick up in 2018 to 2.1 per cent, driven by the full-year impact of more access to foreign exchange and higher oil production. If Nigeria maintains a stable political environment with regards to the forthcoming election, and oil prices remains good, I think we should be able to grow above and even better than the projection by IMF. Considering in the fourth quarter of last year, the Gross Domestic Product (GDP) grew by 1.9 percent, and overall year, it grew by 0.83 percent. This is despite the fact that in the first quarter of last year, the country was still in recession. Inflation will come down further, but in the last quarter of this year, there may be reversal trajectory of inflation in Africa’s most populous nation, as election activities will set in.

BUSINESS DAY

C002D5556

Wednesday 25 April 2018

Nigeria, GE committed on narrow gauge talks Page 31

Rio wears new look, new attitude

Dunlop Zone unveils TDG purchase package

Page 30

PAN renews offensive on fake parts …Embarks on 10-days genuine parts exhibition Stories by MIKE OCHONMA

n what could be described in the industry as a novelty among the gladiators operating within the automotive market space, PAN Nigeria Limited is presently running a weeklong exhibition designed to further highlight and propagate the strategic importance of genuine automotive spare parts among individual and fleet owners of Peugeot brands. The 10-day event is presently ongoing within the Plot 1144 Kakuri Industrial Layout premises of Kaduna headquarters the over four decades company. The historic event taking place within our 800 square metre floor provided a very good platform for PAN Nigeria Limited, the assemblers of Peugeot brand of vehicles to showcase its range of auto spare parts at its maiden edition. While providing an insight during his welcome address into the rationale behind the exhibition, Ibrahim Boyi, managing director and chief executive of PAN Nigeria Limited, reiterated PAN’s leadership in the local automobile industry. He stated that the Peugoet brand of vehicles running on Nigerian roads have played a fundamental role in nation building and understanding the need for performance and support in after sales service, where every Peugeot vehicle is supported and backed-up with complete spare parts that also comes with warranty. According to the PAN chief executive, it is a campaign to dislodge fake and substandard spare parts market with regimental price control to ensure lowest cost of vehicle ownership.

He described the fair as an expo of PAN hidden treasures of over six thousand spare parts, ranging from the classic 504 brand new engine to the latest Peugeot 3008 that won over 40 global awards. In his part, Bawo Omagbitse, general manager in charge of sales and strategy, described the fair as a national campaign for pervasive use of genuine spare parts, a push for national acceptability of originality and drive for standardization of trade practices from PAN perspective. He described the spare parts event as brand specific exhibition. According to the Kaduna Sector commander of Federal Road Safety Commission (FRSC) represented at the event by Galadanchi, the sector operation commander, he commended the organisers, stating, that it is first of its kind in his over 20 years experience in the commission. ‘’It is ‘work for humanity’ considering how many lives are lost annually on Nigerian roads due to fake and tokumbo parts. He urged Nigerians to buy genuine parts from accredited dealers to safe life’’. The FRSC official said. Haroun Malami, Head of Corporate Communications of the company, PAN Nigeria Limited has been assembling vehicles in the country since

1975. While the event lasted, PAN welcomed large number of Peugeot enthusiast, spare parts dealers, FRSC officials, members of Kaduna state Chambers of Trade and Commerce, other relevant stakeholders to a unique experience that offers visitors ambience of a world class arena, fashioned in ten bou-

tique cubicles and wellmanned by friendly attendants all branded in Peugeot outfit. It would be recalled that the Peugeot 301 sedan has won back-toback; the Nigeria Auto Journalists Association awards Car-Of-The-Year (COTY) for two years in a row in 2016 & 2017. The spare parts fairwill end this weekend.

L-R: Ibrahim Boyi, MD/CEO, Juma’at Alio-Oluwafuyi, executive director in charge of finance, Augustine Okolo, GM; industrial and Bawo Omagbitse, GM; sales & strategy, all of PAN Nigeria Limited, putting heads together to ensure standardization of trade practices, which has remained the hallmark of Peugeot brand.

Mandilas top serviceman scoops Toyota Award serially

he 2017 Toyota Nigeria dealers’ award must have come and gone, but feelers of what transpired at the event is still making the rounds. Investigations reveal that while there are contenders in the different categories of the dealers award which are not made public due to what could be described as strategic, Mandilas Motors, one of the leading dealers of the Toyota apart from cartering away most of the awards also produced Matthew Ibe as one of the outstading individual winners during the historic event. Matthew Ibe has won Toyota Nigeria Awards within the short time of joining the company in July 2013 and to date has clinched the prestigious Toyota Best Dealer Service Manager and Best Dealer Service team of year 2014, 2015, 2016 and 2017 respectively. A Master of Business Administration (MBA) and Post Graduate Diploma (PGD) in Business Administration from the Enugu State University of Science & Technology (ESUT) Enugu, he is a graduate of motor industry management from the renowned Institute of the Motor Industry of England. He is a registered engineer with the engineering registration board England and Institute of Road Transport Engineers London. He also has a professional certificate in marketing from the Chartered Institute of Marketing London. Also in his continued and determined drive for excellence, he increased the global elite club of Toyota Motor Corporation (TMC) from one international KODAWARI Certified Work-

shop to four internationally Certified Workshops. Thus repositioning the company’s after sales service offering and marketability within the competitive environment. Though, these feats were not easy to come by given the 11 network branches of the company which is the highest in the entire Toyota dealership nationwide, they were achieved through hard work, customer centeredness and team spirit, knowing that customers are the reason why we are in business. Onuama has over 25 years industrial working experiences in the automotive and allied industry and is currently the Head of After Sales Service operations and management at Mandilas Enterprises Limited (Motors Division).

Matthew Ibe

Before joining Mandilas Motors, Matthew Ibe was the general manager/ head of business at GEAKS Ltd, marketing manager at Hyundai Motors Nigeria, commercial/brand manager at CFAO Group and senior manager at Anambra Motor Manufacturing Company Limited (ANAMMCO) Enugu respectively.

30 BUSINESS DAY

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Wednesday 25 April 2018

Dunlop Zone unveils TDG purchase package

Rio wears new look, new attitude …Perfect fit for urban driving, says automaker MIKE OCHONMA

he fourth-generation Kia Rio, as Kia’s global bestseller, has been completely redesigned and re-engineered to exceed the expectations of all car enthusiasts across the globe. This time around, the new Rio has arrived in an even more compelling package with enhanced aesthetics and functionality. It has been redesigned for a more dramatic and distinctive look, boasting sleek, straight lines and sophisticated interior. The bestselling model also delivers a powerful driving experience with responsive and engaging handling. The unveiling of the all-new 2018 Kia Rio marked the exciting premiere of the new wave of sub-compact car in Nigeria. Among the most anticipated vehicles for the 2018 model year, the all-new Kia Rio definitely stands out. Making its grand debut at the 2017 New York International Auto Show, the all-new Rio sedan is slightly bigger in size than its predecessor and is certainly sleeker with more balanced ride characteristics. Considering its enhanced technology and performance along with tremendous value, it is not surprising that the car is already gaining widespread attention in the subcompact market. The pleasing proportions mask its diminutive dimensions, avoiding

the vaguely bubble-top look of many compact cars. The car has a higher ground clearance, wider and longer, the wheels have been pushed farther toward the corners, and the windshield has been made more upright. The overall effect makes it the bestlooking vehicle in its segment. Inside, it has also been upgraded and feels very solidly built. The redesigned dash and gauge cluster looks upscale as well, so even though this is a budget-priced car, it doesn’t feel cheap. The interior presents itself better than cars costing more. Additional sound insulation, a redesigned suspension, and revised steering help, too, making the new Rio feel buttoned-down and solid on the road. At speed on the freeway, the car has the sense of the weight of a larger vehicle, but when the road gets twisty, it reveals a planted sportiness. It’s a subcompact car where nothing feels flimsy or like a design afterthought. From the ground up, the 2018 Rio is a solid car that just happens to be very small. The intelligently designed dashboard and center console, along with a windshield that has fewer rakes, help the Rio feel surprisingly roomy on the inside. Rear-seat headroom is another surprise, as a 6-foot passenger sits upright comfortably, even as rear legroom has grown 2 inches from the previous model. Front seats are comfortable, ac-

commodating and wide enough to give most drivers plenty of breathing room. The seat feels a little lower and sportier than many subcompacts. Thanks to a lowered window line, outward visibility is excellent, while the steering wheel also has plenty of telescoping range, something taller drivers will greatly appreciate.In terms of ride and handling, the new model remains the sportiest offering in the segment. Powered by a naturally aspirated 1.4-liter gasoline direct-injected fourcylinder engine pumping out Max, it comes with a the Power (ps/rpm) of 100/6,000 and 123/6,300 Max and torque (kg•m/rpm) with a six-speed automatic transmission, driving the front wheels. The Rio has adopted Kia’s current design language -- overseen by ex-Audi designer Peter Schreyer -- along with a brash look that is distinctive and upscale. A smoothshifting 6-speed automatic transmission effortlessly transfers the engine’s torque to the wheels, offers quick, smooth shifts and gear ratios matched to the engine’s torque curve. For utility, the Rio sedan offers 13.7 cubic feet of cargo room. Perfect fit for urban driving, it is ideally suited to urban driving; the new Rio has become decidedly more sophisticated and athletic for driver enjoyment. The little Rio has always been compact enough for urban parking on crowded streets, and so is the redesigned Rio.

Lagos-Badagry road traffic robbery heightens

nless there are concerted efforts by the top management of the Lagos state government to bring sanity to the Lagos-Badagry axis in terms of traffic gridlock, motorists will continue to count their loses in terms of huge revenue loss to hours in traffic and dreaded attack by criminal elements. Almost on daily basis between the hours of 5pm and 11 pm when there is high traffic, motorists are subjected to all forms of criminal attacks ranging from physical assault and smashing of their windscreens. Some of the blind spots along the corridor is the stretch between Festac town first gate all

through to Alakija (Festac 3rd gate) where any passerby are greeted with debris of broken windscreens on the road. The situation is further worsened by the epileptic lighting up of the finished portions of the road under construction which starts from Mile 2 and the glar-

ing absence of security men on patrol. The Lagos state governmet under governor Akinwumi Ambode pumped huge sums of money on the procurement of vehicles and motor bikes for police patrol, including the the Lagos State Neighbourhood Corps, yet their impacts is yet to be seen.

rue to its vision of being “Africa’s most admired Technology driven tyre distribution company.” Tyre Express has introduced what it called the “Tyre Damage Guarantee” (TDG) in collaboration with Prestige Assurance plc for the first time in Nigeria. Under this arrangement, every purchase of any passenger or sport utility vehicle ‘SUV’ tyres at any Tyre Express Nigeria Limited fitment centres countrywide, automatically qualifies for the tyre damage guarantee package. Giving details of the offer, Govind Ram, chief executive officer of the group said “We will remain at the forefront of introducing innovative services that benefit our customers across all countries where we operate and in keeping with our promise of “customer first” we bring to Nigerians for the very first time a hassle-free drive with our “Tyre Damage Guarantee” offering. Balla Swamy, managing director and chief executive officer of Prestige Assurance Plc, while launching the new special contingency policy stated that the “Tyre Protection Insurance Policy” is unique and first

cles used for private or personal use only. Vehicles used for commercial purposes like taxis, damfo buses, vans and Pick-up vehicles are excluded from this cover. In terms of length of time, th coverage and costs, TDG is free of charge for the first year, but can be extended for a second year at a pre-set cost as advised by your customer service agent. The additional cover can be purchased at the same time as the tyre purchase or at any time within the first year. Meanwhile, the newly unveiled Tyre Express Nigeria Limited, has promised to deliver the best services and products to motorists in the country, beginning with its flagship tyre center on Akin Adesola street, Victoria Island, Lagos. The company is the authorised distributors of Dunlop, Sumitomo and Pirelli brands in the country. The company which comes into the Nigerian market with ‘Over 150 + man years of experience in the tyre industry’ says that motorists stand to gain superlative Service & Technical support because of its “ability to resolve technical matters promptly with is highly trained and experience staff at its state of the art fitment

of its kind in Nigeria, which is aimed at giving the vehicle owners a peace of mind against the damage of tyres due to various unforeseen reasons. Moreover, the partnership with Tyre Express Nigeria Ltd will definitely give a value-added service and enhance the satisfaction of the mutual customers in the process of carrying out the business and serving the community. This Tyre Damage Guarantee protects the owner of the vehicle, from paying for any repairs or replacement of tyres damaged by road hazards, including but not limited to rocks, broken glass, nails, kerbs and potholes. In case of replacement, customers only have to pay for the tread you’ve used, so said, Gautam Singh Ghai Executive Director of Tyre Express Nigeria Limited. The guarantee is valid for vehi-

centres. Prestige Assurance Plc, a subsidiary of The New India Assurance Company Ltd, Mumbai, India is operating in Nigeria for over 65 years and remain as leading general insurance company cater to protect the financial assets of the people of this great country. Prestige Assurance is known for its Technical knowhow and stability in Nigerian Insurance Market. It has proved beyond doubt in honouring the commitments by prompt settlement of claims. The insurance firm handled the Dana air crash in 2012 by successfully handling the compensation of the legal liability claims of passengers, crew and ground damages. Despite harsh economic conditions, the company carries highest solvency marge of 3times over its liability with a strong Capital base and qualified manpower.

Wednesday 25 April 2018

C002D5556

BUSINESS DAY

Local and global rail news as it breaks

Nigeria, GE committed on narrow gauge talks Stories by MIKE OCHONMA

or the umpteenth time, the federal government of Nigeria has declared it will longer fund the nation’s age-long narrow gauge rail lines across the country. This follows the disclosure of Rotimi Amaechi, the Minister of Transportation. It would be recalled that sometime ago, the federal government had concessioned the narrow gauge railway to General Electric (GE) who would invest over $2.7 billion into the system that would traverse the entire country. Under the originally agreed terms, GE, is expected to inject 20 locomotives and 200 wagons into the western line in the first phase of the preliminary agreement, which will span 12 months and take these to 100 and 1,000, respectively, after taking over the entire networks (both Western and Eastern lines). “First, they will start partial rehabilitation and put coaches on the narrow gauge so that Nigerians can begin to use narrow gauge,’’ The government had proposed in the budget proposal for 2018, to complete the ongoing Itakpe –Ajaokuta-Warri-Aladja Railway Project which commenced 32 years ago. He said the government also proposed for the counterpart funding that would be required as its contribution for the financing of Ibadan-Kano rail project and the Nigerian Coastal line project, from Lagos to Calabar. This was one of the high points of Amaechi while defending the ministry’s 2018 budget before the Joint House of Repre-

sentatives Committees on Land Transport, Maritime Safety and Administration, Ports, Harbour and Water-Ways and Aviation on Thursday in Abuja. The minister disclosed that government is settling for the Public Private Partnership (PPP) arrangement where GE is expected to fund it with $ 2.7 billion and manage it for a certain number of years. In his confirmation after the meeting, Rotimi Amaechi said, “We are not funding the narrow gauge. If they bring the money, there is no need for the federal government to put its money in the project because we are expected to sign the agreement in America in the next couple of weeks. The Federal Minstry of Transportation (FMoT) sought and got President’s Muhammadu Buhari’s approval to source financiers for various rail projects for development such as the Kano-Katsina-Jibiya to Maradi in Niger Republic.

Eyo Ekpo, GE’s executive in charge of business development, (Transportation, Nigeria) said that the consortium is still “actively engaged in negotiations with the Federal Ministry of Transportation” and looks forward to finalising the terms of a long-term concession agreement for the national narrow gauge rail system. The federal government had in May last year, agreed to put the concessioned terms between both parties to the strictest test by taking it through Transaction Advisers, charged with the task of identifying all the intricacies and complexities tied to the deal and make sure it is dispensed with to the last details. On two occasions, General Electric (GE) was said to be favoured to roll out operations on the 1,100 kilometres LagosKano narrow gauge track, one of its concessioned networks. But on both occasions, it failed. The first time was in May, while the second was December 2017.

The greatest gain of this transaction it is believed, is that continuous rehabilitation of the narrow gauge network will no longer be government’s headache. Outside Lagos-Kano route, which include Lagos, Abeokuta, Ibadan, Ilorin, Kano, Funtua, Zaria, and Kaura-Namoda, the GE will also take over the Port Harcourt-Maiduguri route, which include Port Harcourt, Aba, Umuahia, Enugu, Makurdi, Jos, Gombe and Bauchi to Borno State. In the expectation of the minster, the rehabilitation of the two corridors will help stimulate export potential. “The narrow gauge will essentially encourage freight movement. We have over 30 million tons worth of freight on the Lagos-Kano route for which presently we are moving slightly above 1000 tons. While the Port-Harcourt-Maiduguri route is currently moving nothing, we are anticipating 11 million tons on that route,” he said.

Ugandan SGR project makes slow progress

elays in constructing the final section of Kenya’s standard-gauge railway (SGR) to the Ugandan border are having a knock-on effect on Uganda’s plan to build its own 1724km standard-gauge network. The 472km first phase of the Kenyan project from Mombasa to Nairobi was completed on May 31, 2017. The 490km second phase from Nairobi via Kisumu to Malaba on the Ugandan border is divided into three sub-phases: Phase 2A Nairobi - Naivasha (120km), which is under construction at an estimated cost of $US 1.5bn, while the phase 2B Naivasha - Kisumu (262km) for which funding is being sought,

Railway industry to advance new roadmap towards Fourth Industrial Revolution

and phase 2C Kisumu - Malaba (107km). According to Ugandan press reports, the completion of feasibility studies and funding ap-

proval for Phase 2C could be two to three years away while Kenya focuses on Phases 2A and 2B. And despite Uganda’s Ministry of Works & Transport signing an

EPC/turnkey contract with China Harbour Engineering (CHEC) in February 2017 for the $US 2.3bn 273km Malaba - Tororo - Kampala project, progress has been slow. In particular, the project has been affected by delays in releasing funds to compensate people occupying land on the new railway alignment. So far land around 100km has been acquired. In the meantime, the Ugandan government is planning to upgrade part of the national metre-gauge network now that the concession with Rift Valley Railways has finally been terminated. Indeed, on March 8, Uganda’s president, Mr Yoweri Museveni, pledged to revive the Kampala Kasese line.

he International Heavy Haul Association (IHHA) has commissioned a study to provide a global strategic view of Heavy Haul 4.0, and attempt to visualise the heavy haul railway of the future The ‘Development of the Heavy Haul Vision in the Fourth Industrial Revolution’ study, which will be conducted by IHHA member organisations, will attempt to unpack what the future will look like in terms of the skills of the future. The skills of the future include customer experience, operations, rolling stock, infrastructure, energy and environment, information and human capital skills. The outcome of the study will be shared and discussed at the next IHHA conference to be held in Narvik, Norway, in June 2019. The Fourth Industrial Revolution is characterised by artificial intelligence, automation, threedimensional printing, real-time monitoring, and big data analyt-

ics and digital solutions. Speaking at the 100-year celebration of the Russian Railway Research Institute, Transnet Freight Rail Capital Planning GM and IHHA chairperson Brian Monakali on Wednesday said the study provides the industry with a unique opportunity “to up its game” and set out on a new path of sustainable growth. It is for this reason, he noted, that the theme of the June 2019 IHHA Conference is “Heavy Haul 4.0 – Achieving Breakthrough Performance Levels”. The IHHA is dedicated to the pursuit of excellence in heavy haul railway operations, engineering, maintenance and technology. This is done through hosting technical conferences and specialist technical sessions, training workshops, and the publishing of text books on railway best practice. Monakali lamented that difficult economic conditions have forced heavy haul operators around the world to concentrate on a drive to lower operating costs, boost productivity and drive efficiency through a range of innovations. Many of these innovations are of a technical nature, he said, which is perhaps only to be expected for organisations such as IHHA, with a long record in engineering and technology.

BUSINESS DAY

Wednesday 25 April 2018

C002D5556

Financial Inclusion

& INNOVATION

Supported by:

Financial Inclusion in Nigeria: One step forward, two steps back IBUKUN TAIWO & OLAYINKA DAVID-WEST

he global financial inclusion ecosystem was buzzing with excitement last week with the publication of The World Bank’s Global Findex report at The World Bank/IMF Spring Meetings. The world has made progress since 2014 when the last Global FIndex Report was published - 69 percent of the world’s adult population now have access to a bank account. However, the report shows that Nigeria’s financial inclusion journey has suffered another setback. Of the 1.7 billion adults currently unbanked globally, 4 percent are Nigerian (roughly 68 million). As at today, financial inclusion in Nigeria stands at 39.7 percent, a drop from from 44.4 percent in 2014. This essentially means that the number of adults with access to accounts has declined, a trend that aligns with the demand-side study released by Enhancing Financial Innovation & Access (EFInA) in 2016. These two studies confirm that our efforts towards improving access to financial services are yet to produce the desired outcomes. If Nigeria is to reach the target of 80 percent financial inclusion by 2020, the results of these studies serve as feedback and a clarion call for a review of our financial inclusion strategies. This post highlights some of the key World Bank’s Global Findex findings about Nigeria and our thoughts. Nigeria, according to the Global Findex Report The World Bank considers an individual financially included provided they have access to a bank account or digital wallet. While access to digital wallet (mobile money) accounts increased to 5.6 percent from 2.3 percent in 2014; access to bank accounts dropped from 44.2 percent in 2014 to 39.4 percent in 2017. The most significant change in the banking industry within that period was the February 2014 introduction of the bank verification number (BVN) warranting the unique identification of all bank account holders. As of April 2018, BVN enrolment exceeded 32 million; with established linkage to over 51 million

bank accounts. With the deliberate efforts of the Central Bank to provide alternate financial access methods, the introduction of mobile wallet framework and other complementary regulatory directives have more than doubled mobile money account ownership which now stands at 5.6 percent from 2.3 percent in 2014. The report also highlighted the huge gender gap in access to financial services - the rate of decline in financial access among women is almost double that of men. Female access dropped to 27.3 percent from 34.0 percent and male to 51.4 percent from 54.4 percent in the same period. The report suggests that “any effort to increase overall account ownership in [Nigeria] needs to prioritize financial inclusion for women.” Regarding domestic remittances, 23.5 percent of the respondents have sent or received money through an account. This is followed by 18.6 percent who use cash and 8.2 percent who go through an over the counter (OTC) service. While 62 percent

of the respondents engaged in savings, only 20.6 percent saved at a financial institution, a further decline from the 27.1 percent in 2014 and 25.4 percent using a savings club or other third party. Likewise, of the 39.6 percent of the respondents who borrowed money, only 5.3 percent of these were from a financial institution; the lion share of 28.3 percent came from family and friends. From the Global Findex re-

The introduction of mobile wallet framework and other complementary regulatory directives have more than doubled mobile money account ownership which now stands at 5.6 percent from 2.3 percent in 2014

sults, it is evident that we need to stop the bleed in many areas. Despite the reported financial inclusion decline, the savings and credit activity numbers are indicative of financially active Nigerian adults, albeit using more informal channels like cash remittances and credit from family and friends and savings with savings clubs or a third party. The positive rise in the adoption of mobile money accounts is a good indicator and should be capitalised upon. The focus on gender-based products needs reinforcement to support gender equality (SDG 5) and other sustainable development goals. Even though accountbased remittances are the most popular, cash instead of OTC (agent) services is still a dominant choice. How can OTC remittances be enhanced? While the popularity and convenience of savings clubs and other third party collectors are not easily replaceable, how can these services be better managed? Finally, how do we improve access to formal credit? Do we

need alternative credit analysis systems that can better assess the potential risks of the underbanked and unbanked? As technology continues to grow and diffuse at a rapid clip across the world, it enables cheaper and more convenient ways of delivering financial services to the world. Innovative digital technologies have flipped the banking model upside down and sideways, allowing providers to break out of the brick and mortar system in order to reach the unbanked. However, even as this report has revealed the progress we’ve made (or lack of ), we have to be bolder and more strategic in planning and executing future inclusion drives. The attainment of financial inclusion targets also requires moving it up higher on our priority lists - locally and at the national level.

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

Wednesday 25 April 2018

C002D5556

Financial Inclusion

& INNOVATION

BUSINESS DAY

Supported by:

How Nigerian banks can expand financial inclusion using Mavrodi model MICHEAL ANI

n late 2015, a financial tsunami disguised to the undiscerning as ‘God’s blessing’ hit Nigeria. Nigerians embraced in their millions the Mavrodi Melnikova Mavrodi (MMM) Global Scheme so called the Mavrodi Mundial Moneybox but more popularly known as MMM, despite decry by government regulated agencies/ bodies like the central bank and even the Securities and Exchange Commission (SEC) on the menace the scheme might cause to the unassuming public. For most who got involved, the Ponzi scheme was an amazing opportunity to get rich quick. Finally, there was a financial level playing field for all – rich and poor alike, as “Investors” got the same percentage return on investment within the same maturity period with no bias or discrimination for who had more or less money. Whatever your investment, you got an unbelievable thirty to fifty percent return within thirty days. Simply amazing! Despite disclaimer on the site, that the scheme is neither a business, nor an investment platform and thus do not support participants to participate using borrowed money. The greed in the heart of Nigerians who participated could however not be controlled, as some went ahead to borrow money in the name of investing it into the scheme. Some invested their school fees, while some put in their house rents. A poor man could invest his borrowed (or fundraised) N15,000 (about $40) and in just thirty days without doing anything at all have between N19,500 to N22,500 ($54 to $62) which he could reinvest. This was like a sure lottery of some sort. And so, many people, mostly the poor and unemployed, invested in the scheme. It was estimated that about two million Nigerians signed up to the Ponzi scheme. As a matter of fact, between June and December 2016 alone, Nigerians invested over N28.7 billion (over $79 million) in MMM, according to the Nigeria Electronic Fraud Forum, NeFF. The beauty and the fun benefited by participants who “invested” continued, until the scheme crashed around the later end of 2016. On December 14 2016, participants of the scheme who logged into the MMM website to Get help (GH) as it was called from the money they provided as help (PH), noticed that their matured Mavro(Money) where frozen by the scheme in the name of the scheme closing for the year ended but will reopen on the 14 of January the following fear(2017) The total amount of money that was lost by Nigerians who participated in the scheme stood at N11.9 billion ($33 million), according to data from NeFF. The architects of the scam were nowhere to be found. Many cried. A number died. The losses were grave as many are yet to recover the pains the scheme

inflicted on them. No wonder news of the demise of the MMM mastermind, Sergei Mavrodi, came to many bitter Nigerians as very pleasant news, as if vengeance had been served. People took to social media to celebrate his demise as though it meant a release of their lost monies. While Hurricane Mavrodi spelled doom for many, there is at least one positive discovery that came out of the sad situation that not many might have paid attention to. And no, it is not about controlling greed or some moral hogwash about karma being king. I think those lessons are quite clear. The Mavrodi case presents an exposition into the untapped possibilities of financial inclusion in Nigeria. Imagine the penetration and “success” the scheme (MMM) had especially with the poor. Banks and financial institutions have been struggling to penetrate this demographic for years, with millions of dollars running into marketing expenses and products development alongside thousands of working hours down the line. However, inspight of these efforts, market penetration to bottom of the pyramid is still disappointingly low. They have been unable to crack the market penetration code for poor people. MMM on the other hand, cracked this code so well that they did not even need any advert or any form of publicity. The sheer organic spread of the scheme was nothing short of pandemic. It was totally viral. Below are some of the lessons that financial service providers can learn from MMM about financial inclusion: Use of Language: The communication for MMM was very easy. “Invest an amount and in thirty days you get a return of thirty”. Easy! No stories, no financial jargons. No man/woman in suit and tie using fancy words on you. Just simple and precise. To effectively include and engage the poor in financial services, their language has to be spoken. Financial institutions need to speak

not just the dialect of the target group but also engage with them at the most basic level. There must be no complications or ambiguity in communicating what the financial product does. Ditch the suit and tie, go to where the customers are and engage without trying to sell them a product. Understand their business/work and develop a product that truly eases things up for them. Simplicity: Registering for the scheme was so easy; as it registration could be done in two minutes or less. Registration was as simple as opening a social media account. There is a simple form and the website loads in just over one second. Talk about ease. Convenience plays a huge role in investment. Make it easy for people (especially the poor, women and youths) to enrol in financial investment programmes or services. Banks make customers fill a bunch of forms for them to make an investment that will probably yield only 3 -7 percent interest a year. However, with MMM where “customers” made 30 – 50 percent of their investment a month, registration took less than two minutes. I guess this sits well with other dichotomies of life. Promotion/Adverts: MMM relied on the most successful form of advertising – word of mouth. I don’t think I ever saw an MMM ad but I also don’t think I could count the number of persons that invited me to join MMM both by word of mouth and through numerous WhatsApp messages. It became a trusted platform absolutely in spite of all the warnings the Central Bank and other financial regulators and pundits spewed. Why? People heard about it from family, friends and relatives who were beneficiaries. They saw the proof of its legitimacy. The Central Bank of Nigeria and all the other doomsayers could shove it for all they cared. If my sister says it works then it works. That’s power financial institutions need to tap into. Create really good and beneficial products and

engage the core stakeholders (customers). If the product is as good as you claim, it won’t take long to spread like wildfire. Support: MMM had a very effective support system. Users created WhatsApp groups in their thousands to support members. Individuals who invited people to join the platform were available for calls at any time of the day. The support system was solid. Users supported each other because they knew that the support was necessary for them to cash out. Conventional banks have customers wait about 15 minutes on the line before they can even speak to an agent using their own airtime. It is either that or you send email or you do the traditional bank walk in. All these stressful and inconvenient methods no longer cut it. Banks need to learn from the MMM support framework and employ it for good. Reliable Product : As earlier mentioned, one of the biggest reasons for the massive MMM subscription was the proof of profit. People could clearly see the benefits of the scheme. The product was reliable, at least in its early days. Banks need to create financial products and solutions that truly work with tangible proofs and testimonials that aren’t told by employees but narrated and shared by customers and beneficiaries leading to the kind of organic and viral growth that MMM had. Incentivize: MMM had an interesting model in that both existing and new members benefited from someone joining. So everyone smiles to the bank. These meant customers were actively looking to bring others into the scheme because they knew their profit sort of depended on it. So the introducer and the introduced gained. The same can apply to financial products by financial institutions. Financial service providers need to stop being lazy and put their creative thinking hats on to create genuinely beneficial products for both customers and operators. For example, Zoto, an app that leverages Nigeria’s mobile revolu-

tion to facilitate anytime, anywhere payments was launched in mid2015 and grew to over one million users in two years. Apart from the fact that the app actually works, I argue that the incentives provided on the platform account for its growth. At the initial stage, referrers got a thousand naira for up to twenty people that registered on the platform using their referral code. That immediately made the app popular among young people and students. A similar model is applicable to the millions of bankable Nigerians that have no access to the types of formal financial services delivered by regulated financial institutions. If the potential customers see that a financial product benefits them for enrolling as well as for inviting others, they will embrace it. Actual Inclusivity: Arguably the biggest lesson from the MMM scheme is the non-discriminatory model. Do you know that the MMM registration form has no space for sex/gender, current income or religion? I guess, to Mavrodi, that was not important, everyone is equal. The simple registration form did not care to know people’s economic status or income. Those conditions that conventional financial service providers won’t compromise on didn’t matter to them. Yet the platform traded over one hundred million dollars in its less than two year’s lifespan. While data is important, MMM showed us that everyone matters: male and female; rich and poor; young and old; believer or atheist. People just want their financial needs met in an easy manner. The Ponzi scheme dealt a terrible financial blow to many families and individuals who lost to the scam. However, it also exposed the fact that people, including the poor, are looking for investment opportunities. Everyone wants to manage and grow their money. It showed us that financial institutions need to get more creative to solve the problem of financial exclusion. According to Unite d Na tions Capital Development Fund (UNCDF), financial inclusion is positioned prominently as an enabler of other developmental goals in the 2030 Sustainable Development Goals, where it is featured as a target in eight of the seventeen goals. These include SDG1, on eradicating poverty; SDG 2 on ending hunger, achieving food security and promoting sustainable agriculture; SDG 3 on profiting health and well-being; SDG 5 on achieving gender equality and economic empowerment of women; SDG 8 on promoting economic growth and jobs; SDG 9 on supporting industry, innovation, and infrastructure; and SDG 10 on reducing inequality. Additionally, in SDG 17 on strengthening the means of implementation there is an implicit role for greater financial inclusion through greater savings mobilization for investment and consumption that can spur growth.

BUSINESS DAY

SHIPPING

C002D5556

LOGISTICS

Wednesday 25 April 2018

MARITIME e-COMMERCE

Manufacturers list multiple govt agencies, bad roads as setbacks at ports Stories by UZOAMAKA ANAGOR-EWUZIE

iven the role played by delays in cargo clearance at the ports on the operating cost of many industries in Nigeria, the Manufacturers Association of Nigeria (MAN), have said that the presence of multiple government agencies has added to the high cost of doing business at the ports for manufacturers. They say that the bad state of the roads leading to the nation’s two major seaports, Apapa and Tin-Can Island ports, create serious traffic gridlock along the Apapa port axis that cause delay in the movement of cleared consignment out of the ports. Speaking at the MAN Ikeja Branch 2018 breakfast meeting for managing directors and CEOs, Paul Usoro, guest speaker, who presented a paper on the Federal Government Policies on Ease of Doing Business in Nigeria, said that the multiple number of agencies that are involved in cargo clearance at the ports, creates delay for manufacturers, who depend on import to

bring in their raw materials for production. Usoro also blamed the bad state of the roads leading to the seaports for the delay manufacturers encounter while taking delivery of their consignment from the ports. “The recent World Bank Ease of Doing Business report of 2017, ranked Nigeria 169 places out of the 190 countries on the index. This is not a very favourable condition for the economy,” Usoro said. Research shows that manufacturers and other

importers, who make use of the seaports pay dearly as demurrage to shipping companies for not returning the empty containers as and when due. They also pay hugely as storage charges to terminal owners for occupying space at the terminal and for converting the port terminals, which supposed to be a transit point, into warehouses. But, according to Usoro, the roads leading to the ports in Apapa have become very bad due to the country’s poor maintenance culture.

“This is because the government unnecessarily allowed the Apapa corridor to get very bad before considering repairing the roads. “For the past two weeks, getting our containers out of the ports and returning the empties back to the ports, have been very difficult for the manufacturers. We urged MAN to do something about the situation because we cannot continue pay service providers for the delays that were not caused by us,” another manufacturer, who did not give his name, com-

Nigeria to lead in building a sustainable global maritime economy - Jadesimi

my Jadesimi, managing director of the Lagos Deep Offshore Logistics Base (LADOL), has expressed belief that Nigeria will take a lead in creating a sustainable global maritime economy. According to her, countries like Nigeria only needs radical changes in business development to build a sustainable world through the maritime and other sectors of the economy. Jadesimi stated this while speaking on a high level panel at the ‘Blue Economy and Maritime Industry,’ roundtable, which took place last week at the Commonwealth Business Forum in London. “Only radical changes in business and development will create a sustainable world, which is why countries like Nigeria will take a lead in creating a

sustainable global maritime economy,” she said. According to Jadesimi, there is a global agreement that there is need to move towards a more sustainable world. Though, high growth low-income countries like Nigeria have strong business and social incentives to immediately make the radi-

Amy Jadesimi

cal changes that are needed to create a prosperous and sustainable world. “On the other hand, low growth, high-income countries are only able to make incremental changes, which are insufficient.” “The development of LADOL is an example of how high growth low-in-

come countries can excel by focusing on sustainability as a business opportunityLADOL built a Port Facility and Industrial Free Zone out of a disused land in Apapa Port. She said that the promoters of LADOL have now created the largest shipyard in West Africa, which is also the only fully integrated logistics base. LADOL facility is currently being used for the integration of the Egina Floating, Production, Storage and Offloading (FPSO) oil production platform, owed by the Total Exploration and Production Company. Jadesimi however called for the private sector in Nigeria to seize the opportunity and sustainably build infrastructure, facilities and industries because that will yield the highest return to investors, local society and the global economy at large.

plained. In her view, Vicky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), said that Nigeria will continue to rank poorly on the global Ease of Doing Business Index until critical infrastructural deficits are addressed by government especially in the port area. Haastrup said that most of the indices used by the World Bank to measure the Ease of Doing Business in 190 countries of the world, are still begging for gov-

ernment attention in the country. While commending the present government for its determination to improve on the country’s Ease of Doing Business ranking, she said that the infrastructural gap bedevilng Nigeria can be addressed within a mediumterm framework, if government so desires. “On trading across borders; our cargo clearing processes are still primitive. Customs checks are duplicated; they follow manual procedure that is too laborious. There are also too many government agencies involved in cargo examination at the port and land border posts. All of these slow down trade and add to the cost of doing business,” she said. Jonathan Nicole, president, Shippers Association of Lagos State, also confirmed that the poor condition of the access roads into Apapa and Tin-Can Island ports, have been a major challenge to doing business at the ports. This, according to him, has been pushing up the cost of doing business for shippers and manufacturers, whose goods and raw materials spend days and weeks before getting to their warehouses.

Firm to honour outstanding maritime personalities, companies

he VITAL Values Limited (VVL) has perfected plans to honour outstanding maritime personalities, companies in its maiden Annual Nigeria Maritime Awards (ANMA) 2018, in collaboration with the Shipping Correspondents Association of Nigeria (SCAN). The award, which is slated for July 27, 2018 will celebrate and appreciate individuals and agencies that have set a mark in the Nigerian maritime industry in the year 2017. According to the firm, the awardees will be selected among individuals and agencies, whose actions were in line with the value addition philosophy and have impacted positively on the growth and development of the Nigerian economy. The award, which is the first of its kind, will witness the gathering of managing directors/CEOs of leading maritime agencies, outstand-

ing maritime practitioners, ship-owners and leading freight forwarding and clearing agents in the country. The award is themed: ‘ANMA 2018; ‘Positioning the Maritime Sector for Challenges of Global Competitiveness,’ which was carefully selected based on the evolving nature of the Nigerian maritime sector since the ports were concessioned in 2006. “With about 853 kilometers of Atlantic coastline and an Exclusive Economic Zone (EEZ) covering a total area of approximately 315,950 square kilometers, including a vast network of navigable and potentially navigable rivers, lakes and creeks, which traverses more than 3000 kilometers of inland waterways; much credence should be given to individuals and agencies who have been saddled with the responsibility to manage this enormous and vast national resources,” the VVL said.

Wednesday 25 April 2018

C002D5556

BUSINESS DAY

Tax Issues

Tax treaties are at a crossroads ALEX POSTMA

he principal purpose test is the most pronounced restriction of treaties through the OECD multilateral instrument. For a large part of the Western world, the first week of January and especially 6 January, a day called Epiphany in the English language, is associated with the story of the three kings and the burning of Christmas trees. It’s reminiscent of how large corporate legal entity structures are sometimes jokingly referred to as Christmas trees. These corporate trees have developed over the years as corporations expand into new products and services and into new jurisdictions. And for many reasons — such as liability protection, local requirements for doing business, etc. — it has been com-

mon for groups to form new legal entities for new business ventures. The expansion of the forest (to continue the metaphor) was supported by a proliferation of tax treaties in the last decades, creating a tax framework to mitigate the adverse impact of double taxation on cross-border operations and facilitating the build of global value chain infrastructures. In some cases, it became a tax treaty network where some jurisdictions negotiated access to more favorable source country/residence country tax rates compared with other jurisdictions. And it’s fair to acknowledge that some multinational corporations at that time considered such potential treaty benefits as a factor when deciding on their platforms for foreign investments. Claiming treaty benefits The Organisation for Economic Co-operation and Development (OECD) has been trying to confirm that

treaty benefits are claimed legitimately through the anti-base erosion and profit shifting (BEPS) framework. In response, governments are beginning to implement recommendations to restrict access to treaties through the so-called multilateral instrument (MLI). The MLI is an instrument signed by an increasing number of jurisdictions that amends the treaties between these jurisdictions upon ratification by the countries. This ratification is likely to happen in 2018 for many and in 2019 for most participating jurisdictions.

The most pronounced restriction of treaties is the so-called principal purpose test (PPT), which essentially excludes an entity from treaty access if it is reasonable to conclude that obtaining access to the treaty was one of the principal purposes for establishing the transaction with that entity. Such a conclusion is inherently subjective and raises a few questions: Are we testing for intent or for substance? And when exactly do we test? In the year that the arrangement is put in place or in the year the taxpayer is

CITN TaxBits: Still on VAIDS and removal of interest waiver Introduction

hen Acting President, Prof. Yemi Osinbajo, signed the Executive order that ushered in the Voluntary Assets and Income Declaration Scheme, in June; 2017, it promised waiver of interest and penalties, among other sweeteners in the course of the programme. These waivers are considered the best yet by any tax amnesty programme anywhere in the world as the government has only requested for what should ordinarily have been paid over to its coffers, in terms of taxes. This is analogous to a wealth manager who has only indicated interest in collecting his principal leaving interest and other default charges on transactions of mutual interest. The whole idea was to make the tax package juicy enough for tax defaulters to come forward and make their declaration in as honest and complete way as possible further to their call to civic action as provided by Section 24(f ) of the 1999 Con-

stitution of the Federal Republic of Nigeria, as amended. The Waiver The Acting President declared a waiver of penalty and interest, immunity from tax prosecution and tax audit. This is together with opportunity to stagger the payment of tax liabilities over a 3-year period. However, actual implementation seem to suggest removal of interest forbearance beyond December; 2017. To the discerning tax planner and tax defaulter, a cloud of uncertainty has been thrown around

heeding to wise counsel to key into the programme considering the fact that he cannot be assured that the clear words of the Acting President is the bond between the government and her Citizens during the period of the tax amnesty. Such conditions of uncertainty also provides basis for asking if government can indeed be trusted. The Way Forward The clear and unambiguous words of the executive order need to be carried out to the letter. It is also curious to imagine that an order that carries force, like it were

law, could be overturned without no clear authority or instrument which is being used to do so. More would need to be done in order to vary the order, which is supposed to last for 9 months ending March 31, 2018. Conclusion Efforts to get the nation’s tax to GDP ratio to appreciable levels by government are commendable. This must however be deliberately planned, balanced and fair devoid of knee jerk approach which appear rush through and focused on quick wins over those that endure overtime.

looking for treaty benefits? The bottom line The bottom line is that it is not clear and likely a combination of all of these elements. Furthermore, different jurisdictions may take different perspectives (although some jurisdictions may find these perspectives limited by local or regional rules, for instance in the European Union, where the European Court of Justice has restricted the application of anti-avoidance to cases that are “wholly artificial”). So it is not an exaggeration to say that the PPT test puts the onus for robust documentation addressing all possible angles largely on the taxpayer. The introduction of the PPT happens at a critical crossroad of tax reform in various jurisdictions, including the US and Japan, and implementation of the antitax avoidance directives in the EU. It also comes as additional provisions of the MLI are rolled out and the

world prepares for the effects of Brexit. So, what is a multinational enterprise to do? Just as businesses work to comply with new OECD guidelines for transfer pricing documentation, they should also rethink possible consolidation of people functions in fewer entities. And in a fashion it urges taxpayers to choose direction and execute the necessary reorganizations now, because post-PPT reorganizations may not enjoy the same levels of treaty protection they have today. In other words, it’s time to take the ornaments and lights off the tree and trim some of the branches. It should come as no epiphany to realize that in the new environment, a smaller tax footprint that is more closely aligned with business activity is more prudent. Alex Postma is EY Global International Tax Services Leader

Small business owners say lack of information makes tax compliance tough STEPHEN ONYEKWELU

mall business owners are complaining that tax compliance is becoming a major challenge because they do not have any single online platform where they can access information about the various tax remittances as small businesses. “Iamsincerelystunnedbecause each time I visit the Federal Inland RevenueServices(FIRS)websiteIdo not find all the requite information I needinordertobeuptodatewithmy tax liabilities. The next thing I find is that, a taxman comes to tell me I am in breach for haven missed a deadline and this applies to my friends too, who run businesses” Majiri Otobo, CEO KuiCare, a Nigerian naturalhairproductsmanufacturing company said. Otobo represents a number of othersmallbusinessownerswhosay they need more accessible information in order to take on their various tax liabilities efficiently. A small business is defined as an independent business with fewer than 300 employees, 97 percent of businesses in Nigeria, where the ownerisusuallythemanager.Itoperates in one or very few locations. It is not dominant in its field, and serves only a small market. According to the Central Bank of Nigeria, Micro, Small and Medium Enterprises (MSMEs) in Nigeria are defined as per their asset base and number of staff employed. The criteria are an asset base between N5 million and N500 million, and staff strength between 11 and 300 employees. Small companies outnumber large companies by a wide margin in Nigeria and employ a lot more people. They are also a large source of tax revenue for government and need better attention.While they are the driver of innovation and competition in many economic sectors, they are also the highest employer of labour when aggregated. The total number of MSME’s is putatapproximately74millionbusi-

nesses, which constitute 84 percent of the labour force, 50 percent of Gross Domestic Product (GDP) and 7 percent export. To assist small and medium size businesses better understand their tax burden, below are some of the taxes for small business in Nigeria. Business taxes are not just about income taxes. Just like people in general,businessesmustpayseveral different kinds of taxes. If you are just starting your business, you need to know what taxes you are subjected to paying. Income tax All businesses must pay tax on their income. This means that a business must pay tax on the profit of the business. How that tax is paid dependsontheformofthebusiness. Small businesses (sole proprietors and single-member Limited LiabilityCompanies)ownerspaytaxes ontheirpersonalincometaxreturns. Company Income Tax (CIT) is payable only to the federal government. State governments collect income taxes of individuals and unincorporated entities, while local governments are only allowed to collect levies and rates but not income tax. Self-employment tax Self-employment tax is a type of tax primarily for individuals who work for themselves. Self-employment taxes are paid by sole proprietors and partners based on the income of the business. Because business owners are not employees, thereisnopaytowithholdthesetaxes from, so self-employment tax is the alternative. LLC owners also must also pay self-employmenttax.Ownersofcorporationswhoworkasemployeesdo nothavetopayself-employmenttax. Sales tax Sales tax also known as Value Added Tax (VAT) is required to be collectedbymerchantsinmoststates and paid to the state department of revenue. Specific products and services are sales-tax eligible and money must be collected and paid, and reports must be completed on a regular basis.

36 BUSINESS DAY

Wednesday 25 April 2018

Leadership SHAPING PEOPLE INTO A TEAM

Know your customers’ ‘jobs to be done’ CLAYTON M. CHRISTENSEN

or as long as we can remember, innovation has been a top priority — and a top frustration — for leaders. In a recent McKinsey poll, 84% of global executives reported that innovation was extremely important to their growth strategies, but a startling 94% were dissatisfied with their organizations’ innovation performance. Most people would agree that the vast majority of innovations fall far short of ambitions. On paper, this makes no sense. Never have businesses known more about their customers. Thanks to the big data revolution, companies now can collect and analyze an enormous variety and volume of customer information, at unprecedented speed. Many firms have established structured innovation processes and brought in highly skilled talent to run them. But for most of them, innovation is still painfully hit-or-miss. What has gone so wrong? The fundamental problem is that most of the masses of customer data that companies create is structured to show correlations: This customer looks like that one, or 68% of customers say they prefer version A to version B. While it’s exciting to find patterns in the numbers, they don’t mean that one thing actually caused another. After decades of watching great companies fail, we’ve come to the conclusion that the focus on correlation — and on knowing more and more about customers — is taking firms in the wrong direction. Instead they need to home in on the progress that the customer is trying to make in a given circumstance — what the customer hopes to accomplish. This is what we’ve come to call “the job to be done.”

When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, the next time we’re confronted with the same job, we tend to hire that product again. And if it does a crummy job, we “fire” it and look for an alternative. Jobsto-be-done theory transforms our understanding of customer choice in a way that no amount of data ever could, because it gets at the causal driver behind a purchase. The Business of Moving Lives A decade ago, Bob Moesta, an innovation consultant, was charged with helping bolster sales of new condominiums for a Detroit-area building company. The company had targeted downsizers — retirees looking to move out of the family home and divorced single parents. The units got lots of traffic, but few visits ended up converting to sales. It was easy to speculate about reasons for poor sales. But instead of examining those factors, Moesta set out to learn from the people who had bought units what job they were hiring the condominiums to do. The conversations revealed an unusual clue: the dining room table.

Prospective customers repeatedly told the company they wanted a big living room, a large second bedroom for visitors and a breakfast bar to make entertaining easy and casual; they didn’t need a formal dining room. And yet, in Moesta’s conversations with actual buyers, the dining room table came up repeatedly. “People kept saying, ‘As soon as I figured out what to do with my dining room table, then I was free to move,’” reports Moesta. He and his colleagues couldn’t understand why the dining room table was such a big deal. But as Moesta sat at his own dining room table with his family over Christmas, he suddenly understood. Every birthday was spent around that table. Every holiday. The table represented family. What was stopping buyers from making the decision to move, he hypothesized, was the anxiety that came with giving up something that had profound meaning. That realization helped Moesta and his team begin to grasp the struggle potential homebuyers faced. “I went in thinking we were in the business of new-home con-

struction,” he recalls. “But I realized we were in the business of moving lives.” With this understanding of the job to be done, dozens of small but important changes were made to the offering. The architect managed to create space in the units for a dining room table by reducing the size of the second bedroom. The company also focused on easing the anxiety of the move itself: It provided moving services, two years’ worth of storage and a sorting room within the condo development where new owners could take their time making decisions about what to discard. The insight into the job the customers needed done allowed the company to differentiate its offering in ways competitors weren’t likely to copy. The new perspective changed everything. Getting a Handle on the Job to Be Done Successful innovations help consumers to solve problems — to make the progress they need to, while addressing any anxieties that might be holding them back. Here

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

are some principles to keep in mind: — “Job” is shorthand for what an individual really seeks to accomplish in a given circumstance. Consider the experience a person is trying to create. What the condo buyers sought was to transition into a new life, in the specific circumstance of downsizing. — The circumstances are more important than customer characteristics, product attributes, new technologies or trends. Before they understood the underlying job, the developers focused on trying to make the condo units ideal. But when they saw innovation through the lens of the customers’ circumstances, the competitive playing field looked totally different. — Good innovations solve problems that formerly had only inadequate solutions — or no solution. Prospective condo buyers were looking for simpler lives without the hassles of homeownership. But to get that, they thought, they had to endure the stress of selling their current homes. It was only when given an option that addressed all the relevant criteria that shoppers became buyers. Jobs are never simply about function — they have powerful social and emotional dimensions. Creating space in the condo for a dining room table reduced a very real anxiety that prospective buyers had. Reducing their stress made a catalytic difference. (Clayton M. Christensen is a professor at Harvard Business School. Taddy Hall is a principal with the Cambridge Group and the leader of Nielsen’s Breakthrough Innovation Project. Karen Dillon is the former editor of Harvard Business Review. David S. Duncan is a senior partner at Innosight. They are co-authors of the forthcoming “Competing Against Luck: The Story of Innovation and Customer Choice.”)

Wednesday 25 April 2018

Indigenous contractors commend FG for transparent, stress-free payment at works ministry

inister of power, works and housing, Babatunde Fashola, was on Monday presented an award of recognition by the Association of Indigenous Construction Contractors of Nigeria (AICCON) for the regular payment of Federal Government construction contractors in the last one and a half years. In response to the award, Fashola described the development as one of the pointers to the Change philosophy of the administration. President of AICCON, Lekan Osifeso, who led the Association on a courtesy visit and presentation to the minister, said the award was in recognition and appreciation of the fact that for the first time in many years, the contractors were getting paid after submission of their invoices without having to lobby anybody or come to the ministry to canvass for it. In his brief remarks before the presentation, Osifeso said, “There is none of our members working with the Federal Ministry of Works, for the first time in a very long time, who did not receive at least two

payments last year and none of us came to the ministry to talk to anybody or lobby anybody. So, in that respect, sir, we think you deserve an award and recognition.” Receiving the award, Fashola, who thanked the Association for the gesture, expressed delight that some people appreciate the “modest” contributions the ministry was making in rebuilding the country, adding that while the gesture showed that there were right-thinking and wellmeaning Nigerians who value service, it also challenged the team to do more. The minister, who handed the recognition plaque to the permanent secretary, works and housing, Mohammed Bukar, noted that every member of the team had a role to play in the work being done. “Our sense here is to build a team and show that Change means something. So, this is one of the things that Change means to us; that contractors don’t need to lobby our government to get paid for the work that they have done and we will continue to do more of that,” he said.

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37 NEWS

BUSINESS DAY

APC convention: Oshiomohle guns for Oyegun’s cap INIOBONG IWOK

mmediate past Governor of Edo state, Adams Oshiomohle, has emerged as the frontrunner for the national Chairmanship of the ruling All Progressive Congress, (APC). This is coming after President Muhmmadu Buhari had at a national executive committee meeting of the party rejected a one year tenure enlongation plan for the party’s executives, while endorsing fresh elections in the may14th national convention. However, despite opposition from top party leaders, incumbent Chairman Chief John Odie-Oyegun, is strongly in the race and a favourite among several Governors of the APC who recently endorsed him. Oyegun, assumed the position four years ago through the assistant of the national leader of the party, Asiwaju Bola Ahmed Tinubu, who truncated the Chairmanship

dream of one of its founding leader, Chief Tom Ikimi in the process. There was also the candidate of former cross river state Governor, Clement Ebri, but who reportedly stepped down from the race to support Oshiomohle. Ebri had ruled Cross River state form 1992-1993. Meanwhile, former labour leader, Adams Oshiomohle’s is seen as the most likely candidate to replace Odigie-Oyegun, after reconciling with Asiwaju Bola Tinubu, who had not hidden his opposition to the tenure enlongation scheme for the Odgie-Oyegun-led executive. Oshiomohle, candidacy have in recent time been receiving endorsement and support from several chapters of the party, including the South-South APC who recently threw their weight behind the former President of the Nigerian Labour Congress, (NLC). South-South Zonal vice chairman, Ntufam Eta, told

journalist after the executives members meeting recently in Benin that majority of members were fully in support of Oshiomohle’s candidacy and would vote for him in the convention. However, Oshiomohle’s endorsement by the SouthSouth chapter of the party became controversial yesterday after, another group in another meeting denied backing any candidate for the chairmanship of the party chapter. In a communiqué released and signed by four state chairmen for and on behalf of delegates of four states out of six namely Davis Ibiamu Ikanya of Rivers State, Etim John of Cross River, Amadu Attai of Akwa Ibom State and Joseph Fafi of Bayelsa State, the group said it had decided against supporting any candidate for the chairman race, while advocating for an open contest. However, sources close to Oyegun’s camp hinted that having clocked 79 Oyegun may not seek re-election

largely because of his age. Speaking on the convention, Fouad Oki a Deputy Chairman of APC in Lagos, said it was rather early to decide who would win, stressing that the party would only begin the sale of forms on Monday. Fouad, however added that it was obvious that the incumbent chairman would not win re-election because he has lost the support of the party. “I cannot comment on that form now let them go and buy as the party would start selling forms as from on Monday, and until then we can’t say. But it is obvious that the incumbent would lose because we all know he did not do well,” Fouad said. However, a politician and political analysts, Yemi Farounbi, said who would emerge the winner depended on the backing the candidate had, while stressing that the Odie –Oyegun may have lost out due to his poor performance in office and tenure enlongation desire.

MoneyGram, Worldreader partner to boost literacy in Nigeria

oneyGram Foundation, Worldreader and students and teachers from Maiyegun Community School recently celebrated the distribution of 261 e-readers to three schools in Nigeria. Each ereader, loaded with 150 culturally relevant books, provides students with access to digital books that support the development of reading skills. “Illiteracy is a major barrier to academic success in Nigeria. We arehonoredtoworkhandinhand withWorldreader,aninternational NGO that provides innovative, technology-based solutions to overcoming these educational barriers. Thanks to the e-readers we distributed today, children in Nigeria will have an equal opportunity to learn and redesign theirfuture,”PatrickAppiah,MoneyGram’s regional head of West Africa, said in a statement. Three schools in Nigeria received 261 e-readers, loaded with 150 e-books each. Over 2,000

students in grades 4 to 6 will be able to improve their reading thanks to the use of state-of-theart technology in classrooms. As part of the project, teachers from various schools participated in a dedicated training on how to use the e-readers and integrate them into structured activities performed during classes. “Worldreader is thrilled to be expanding digital reading programs in schools and libraries in Nigeria in partnership with MoneyGram Foundation,” Carol Williams, West Africa director, Worldreader,said.“Nigeriaisakey countryfortheexpansionofWorldreader’sdigitalreadingprograms asthereisdemandandinterestfor interventions that can use context appropriate technology solutions and books.” The statement said that to date,theFoundationhasawarded over $260,000 in grants towards building infrastructure, supporting technology, and promoting literacy in West Africa.

Disease control agency says it is winning Lassa fever war ANTHONIA OBOKOH

new report issued by the Nigeria Centre for Disease Control (NCDC) seems to suggest that the country is turning the corner on the scourge of Lassa fever, as it has recorded the lowest number of cases in the last seven days since the beginning of the outbreak. After more than 100 deaths and almost 416+ confirmed infections, Nigeria in April recorded a sharp decline in the spread of Lassa fever. “Only one new confirmed case with no new death of Lassa fever was reported in the Edo State in the reporting week 16 (April 16-22, 2018). This is the lowest weekly case count since the first week of January 2018,”

the NCDC said in its situation report released Tuesday. The report stated that from January 1 to April 22, 2018, a total of 1865 suspected cases had been reported from 21 states. Of these, 416+ were confirmed positive, nine are probable, 1439 are negative (not a case), and one awaiting laboratory results (pending). This year’s epidemic is Nigeria’s largest on record, with confirmed cases in January and February alone exceeding the total number reported in the whole of 2017. “Since the onset of the 2018 outbreak, there have been 105 deaths in confirmed cases, nine in probable cases. Case Fatality Rate in confirmed cases is 25.2 percent,” the report noted.

L-R: Tomoyuki Yamakawa, director, Africa division, North East/West Africa, Panasonic; Suraj Rupani, promoter, Panaserv Nigeria; Hiroyuki Shibutani, head, Africa division, Panasonic; Mochi Masaaki, general manager, product planning group, Panasonic, and Dipendu Goon, head, Nigeria representative office, Africa division, Panasonic, at the launch of new Panasonic shower cooling, aerowings air conditioners in Lagos, yesterday. Pic by Olawale Amoo

Libya returnees protest against activities of taskforce, bank IDRIS UMAR MOMOH, BENIN

embers of Libya returnees in Edo State, in a protest, have called for immediate disbandment of members of Taskforce Against Human TraffickingandIllegalMigrationbythe stategovernmentandreconstitute a new body to run its affair. The protesters armed with placard of different inscriptions also called for the immediate withdrawal of case instituted against one of the returnees, Jude Ikhuenobe,bythechairmanofthe taskforce, Yinka Omorogbe, who is also the state attorney-general and commissioner of justice. ThereturneessaidIkhuenobe was unlawfully arrested by the taskforce on March 9, 2018, at the National Museum ground for ventilatinghisangeroverthecom-

mittee selective empowerment to some members. The spokesperson for the protesters, Amawu Osariemen, said they want the state government to investigate the alleged selective empowermentbythecommittee. Osariemen said the protest was occasioned by the alleged systematic delay and diversion of payment of stipend to themselves and their cronies to the detriment of the returnees. They alleged that some of the returnees were given N1.040 million as empowerment package, while others were given a paltry N2,800,respectively,aftertraining. They however demanded to know the yardstick used in measuring the level of “suffering returnees” that made some have bigger amount than others. They also accused the management of Heritage Bank of

complicity with the members of the taskforce in defrauding them. “Sir, the payment of monthly stipend that you have approved for the Edo returnees and training is highly commendable. But, we want to use this medium to drawyour attention to some of the fraudulent activities by members ofthetaskforceinconnivancewith staffandmanagementofHeritage Bank to short-change some of our memberswhoarebeneficiaryand divert it to their personal gain. “We the returnees have lost confidence in staff and management of Heritage Bank because they have be programmed and compromisedtostealourmoney. They have collected N1,100 from us without our knowledge and permission. The money should be refunded to us immediately. “Mr. Governor, if you multiply N1,100 by3,165personsitwillgive

you N3,818,760 million. This is what the bank has stolen from the suffering returnees in the midst of pains and hunger in the society,” they said. Reacting to the allegations raised by the protesters, Solomon Okoduwa, senior special adviser to the governor on the taskforce, described the allegations as untrue. Okoduwa said, “We are not giving selective empowerment to any member of the Libya returnees. We give equal empowerment to all of them. The empowerment is in phases, and we are definitely going to get to all of them. Those protesting should exercise patience, as the empowerment is a continuous one. “Those protesting are not properly informed. They should have asked questions before embarking on the protest.”

38 BUSINESS DAY NEWS $496m arms fund: Reps say Buhari has... Continued from page 1

Super Tucano Aircraft from the United States Government. The aggrieved opposition lawmakers, including a number of All Progressive Congress (APC) reps, alleged that President Buhari’s action is an impeachable offence. The law makers made their feelings known when a letter titled: ‘Supplementary input to the 2018 Appropriation bill: Purchase of Super Tucano Aircraft from the United States Government,’ dated 13th April, 2018 was read on the floor. In the letter Buhari disclosed that $1 billion was approved by the State Governors at the Federal Economic Council on 14th December, 2017 where a resolution was passed to buy arms to equip the security agencies in the country. “With the Council approving that up to $1 billion may be released and utilized from the Excess Crude Account to address the situation. Subsequent upon this approval, we are preparing a comprehensive schedule of all the requirements for each of the security services for presentation to the National Assembly for consideration. He explained that Nigeria had been in discussions with the US government for a number of years for the purchase of the Super Tucano Aircraft under a direct government-to-government arrangement, adding that the US government recently granted the

approval with a deadline within which part payment must be made otherwise the contract would elapse. “In expectation that the National Assembly would have no objection to the purchase of this highly specialized Aircraft, which is critical to national security, I granted anticipatory approval for the release of $496,374,470. This was paid directly to the Treasury of the United States Government. “I am therefore writing, seeking approval of this House for the sum of $496,374,470 (equivalent to N151,394,421,335) to be included in the 2018 Appropriation bill, which the National Assembly is currently finalizing. “The balance of the requirements for critical operational equipment is still being collated from different security services, and will be presented in the form of a supplementary Appropriation bill, in due course,” Bihari said in the two-page letter. He also informed the House that the Minister of Defence and other appropriate officers will be available to provide further details as may be required by the Lower Chamber. However, the ‘anticipatory approval’ granted by the President generated a heated debate as some aggrieved lawmakers described Buhari’s action as an impeachable offence and breach of the provisions of the 1999 Constitution (as amended).

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Kingsley Chinda, chairman, House Committee on Public Accounts who raised a point of order, argued that “there’s nowhere in our laws that talk about anticipatory approval, that’s the content of the letter Mr Speaker just read. “Last week, we asked our committee on ethics to look at the issue, but clearly Mr President has now said that it has been expended.” “Is this National Assembly a rubber stamp? (Members shouted no). Let’s even say there’s something like anticipatory approval, what if we fail to approve?” “This is an impeachable offence. There’s no misconduct that’s bigger than this kind of action. There’s no country that will tolerate this. I think this is an indication of what has been happening.” “I urge that we begin impeachment process on Mr President based on this offence,” the River State lawmaker proposed. On his part, Ali Madaki (APCKano) who cited the provisions of Section 1 of the 1999 Constitution observed that the content of the constitution shall be binding on everybody, and that any other law inconsistent with it is null and void. “So, I believe that even if our rules say so, this constitution overrides that.” On his part, Shehu Garba who warned the House not to trivialize the issue at hand, maintained that all the Parliamentarians have sworn oath to defend the Constitution, hence should leave no stone unturned to commence the impeachment process.

L-R: Godwin Onoro, executive director, finance and operations; Rilwan Belo-Osagie, chairman, board of directors; Morohunke Bammeke, MD/CEO, and Abdulahi Aliyu, executive director, all of Pensions Alliance Limited (PAL Pensions), at the annual general meeting of the company in Lagos, yesterday.

Safety concerns, comfort drive uptake in private... Continued from page 1

and politicians often seek to bypass dealing with delays in regular commercial airlines, as they crisscross the country doing deals because there are many situations in which time is more valuable than money for them. Currently there are 36 private jet operators in the country, half of this number is state owned and the other half are owned by individuals and corporate companies, BusinessDay has learnt. There is also an increasing number of foreign registered aircraft in Nigeria at present. On the other hand, Nigeria currently has seven commercial airlines operating scheduled flights including: AirPeace, Arik Air, Medview, Dana Air, Azman, Overland and Aero Contractors. AirPeace has about 14 operational aircraft, Arik operates 10 aircraft, Medview has two aircraft, Dana air has three aircraft, Azman three, Overland five, and Aero Contractors three, making a total of 40 aircraft.

“We are beginning to see more private jets coming in and out of Nigeria. The ease of doing business, stability in government and the coming elections are factors leading to increase in private jet operations in Nigeria,” Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, an aviation support group told BusinessDay. “In addition to these factors, there are foreign direct investment in manufacturing and influx of developmental organisations such as United Nations International Children’s Fund (UNICEF) the US AIDs amongst others.” Ojuri explained that commercial airlines have continued to lose traffic as a result of poor customer service and flight cancellations and delays. African World Airline, a regional airline of Ghanaian origin has recorded 98 percent of on-time departures and they have cleared the traffic between Lagos and Accra, adding that the airline now goes to Liberia, Sierra Leone but Medview has suspended its operations to these routes.

The high number of private and chartered jets operating in the country and innovations introduced in their operations has also forced down prices in that segment of the aviation market, making it possible for more midlevel corporate executives to use their services. BusinessDay’s checks show that the cost of flying a business jet which shuttles the Lagos, Abuja, Port Harcourt route, costs about N70,000 (about $200) a seat, while on a commercial airline, it cost between 25,000 to N35,000. A recent visit by BusinessDay to ExecuJet Africa situated at the Murtala Muhammed International Airport, offering maintenance, charter and aircraft management services showed display of various charter and private jets numbering above 50. Twenty-two private jets reportedly landed in Kano for the wedding ceremony of Africa’s richest man Aliko Dangote’s daughter which took place on March 24, 2018. Harold Okwa, Managing Director of Jetseta, a Nigerian based private jet provider told BusinessDay that the turnover for private jet operations in Nigeria is in billions

He also argued that the House should not sweep aside the issue of N460 million fuel subsidy being spent by the present administration every day without the approval of the National Assembly. He said it

Wednesday 25 April 2018

further confirms the level of impunity being perpetuated by Buhari’s government.

•Continues online at www.businessdayonline.com

Eko Atlantic land prices up 16% to $1,690/sqm... Continued from page 4

Real Estate. The city has also seen substantial infrastructure and development such as the Eko Boulevard and electricity on the business district roads. Construction work continues within the City with the Azuri Peninsula mixed-use residential development located in the Marina district beginning to take shape and other residential and office developments also gradually moving from planning to construction stage. The significant increase in land price at the city when other highbrow locations are still struggling with falling and stable prices, in some cases, means the city is a compelling investment destination for investors who have the patience and long term view of the market. As a brand new city Eko Atlantic remains prime real estate investors’ toast. South Energyx Nigeria Limited, developers of the city, has created 10 million square metres of prime real-estate on which office and residential developments are breaking ground. The Business District alone will have approximately 650,000 square metres of gross lettable area (GLA) to offer the market. Thomas Mundy, director, Research and Strategy Sub-Saharan Africa (SSA) at Jones Lang LaSale (JLL), says the significant overhang of office space in the Lagos market is a mere perception, stressing that “while this reasoning may be true in the short term, it remains mere perception.” Upon completion, Eko Atlantic will be home to 500,000 residents with an expected commuter volume of approximately 300,000 people. What this means to a savvy investor is that there are limitless opportunities to tap from as diverse businesses will be berthing in the city and will be creating jobs and attracting ancillary industries that will also create more jobs and offer more services. of naira per annum. According to Okwa, nowadays flying in a private jet is no longer a luxury but a tool to increase productivity levels and this new understanding of what private aviation brings to the table has allowed the market to boom and therefore generate the capacity to meet this increase in demand. “This rise caught the eyes of the government in the past, which years ago removed import duties on new jets, has opted to not specify a time restriction for foreign aircraft in Nigeria and has invested in the soon-to-be-opened terminal in Abuja (although this is currently facing some delays). He explained that this has seen local companies like Jetseta rise to the occasion and service the local demand through a mobile app that seamlessly connects travellers to private aviation providers at attractive fares worldwide, on the go. He added that major customers of private jets range from CEOs, diplomats, sports personalities, entertainment celebrities, political figures, NGO aid workers amongst others. Most of these customers have

Similarly, Lekki Phase 1 core land, particularly leading off Admiralty Way, is now at a premium and no longer readily available for purchase on the open market. “This can only put a premium on price values and demand has already led to an increase in land reclamation at the bottom of Freedom Way, leading to new developments including Orange Island, Periwinkle Island, Imperial City, Gracefield Island and others yet to come”, notes Munachi Okoye, managing director, MCO Real Estate. Overall, prices in the market have remained stable over the last year, showing an average growth rate of only 3 per cent across the board with Lekki Phase 1 showing the greatest percentage increase of 10 per cent and Ikoyi falling in value by 8 per cent over the same period. According to the report, the commercial office segment of the market has continued to suffer low occupancies of about 50 per cent through Q1 2018. This was brought about by an overhang of new space coupled with low demand in a weak economy, leading to a paucity of occupiers ready to take up new space. Rents have stabilised, but demand pressures are neutralised by an overhang of new space still feeding into the market through 2018 and into 2019. New entrants to the market will include Kingsway Tower with gross lettable area of 13,317 square metres, Alliance Place, 6,670 square metres, Madina Tower, 8,300 square metres, and Cornerstone Tower, 12,000 square metres. There are also others putting an additional 64,000 square metres onto the market which is approximately 12 per cent of existing stock. Class A office rents have fallen by about 20 per cent over the past three years to stand at about US$750 per square metre, down from $1,000 per square metre while Class B rents hover in the region of and US$400 per square metre. one thing in common; they are “time poor”. In most cases they need to get to remote parts of the country/ continent, and would not readily be able to do this in their schedules with commercial air flight options. Apart from companies and organisations like Jetseta, both corporate and religious leaders are known to have private jets in the country. Some of the people that have been reported to own their own private jets include; David Oyedepo, founder of Faith Tabernacle, Aliko Dangote, Nigerian business magnate, investor, and owner of the Dangote Group; Mike Adenuga, Nigerian billionaire businessman. Folorunsho Alakija, Nigerian businesswoman and Ayo Oritsejafor, presiding pastor of Word of Life Bible Church, amongst others. A source close to the Nigerian civil aviation authority (NCAA) told BusinessDay that some of the owners of these private jets do not register them in their names, and most of those who do, use them for commercial purposes, but this is against the regulations of the NCAA.

Wednesday 25 April 2018

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39 NEWS

BUSINESS DAY

FG mulls higher tariff to discourage importation of rickety vehicles …wants Nigerians to utilise NADDC’s vehicle emission centres HARRISON EDEH, Abuja

orried by increasing air pollution in the country, and high effect of sulphur oxide emission on the environment, the Federal Government on Tuesday revealed plans to increase tariff on importation of rickety and older vehicles. Apart from addressing concerns of health hazards associated with importation of such kind of vehicles, the government said, discouraging such kind of vehicle would also create room for car dealers and Nigerians to look inward to patronise locally made vehicles, while promoting the nation’s automotive policy. Usman Jibril, minister of state for environment, represented by Usman Ahmed Shehu, permanent secretary in the ministry, who gave the information at a national workshop on ‘Low Sulphur Fuels and Global Fuel Economy Initiative in Nigeria,’ said preparations were underway for the Federal Executive Council (FEC) to get a memo to that effect. He said, “What we have tried to do currently is working towards reduction of importation of Sulphur Diesel from 3000MP to 50MP at the first instance. “We have given the import-

ers of refined petroleum products 3-4 years waiver so that they could prepare for that quality of petroleum products. We are going to submit Memo to this effect to the FEC for approval to be implemented by the Federal Ministry of Environment and the Nigeria National Petroleum Corporation,” he said. Speaking further on efforts aimed at reducing sulphur on petroleum products imported into Nigeria and the West African sub-region, the United Nation’s Environment representative at the event, Jane Akumu, said there were already high-level discussions with the Netherlands and Belgium on reviewing fuel standards imported into Nigeria and other West African sub-region to reduce emission. “One of the things we are trying to promote at the United Nation’s environment is to address bulk of import of petroleum and ensure they are highly standardised. “We are also working at the international level with the Netherlands, Belgium, where lots of storage facilities for the fuel that comes into West Africa is stored. They have African specific fuel quality. They blend and put in all sorts of things for maximum profits, because the laws here are a bit relaxed.

Lagos earns N103bn IGR in 3 months JOSHUA BASSEY

agos State remains strong in internally generated revenue (IGR), netting N103.476 billion in the first quarter of 2018. Although the amount is higher than N96.7 earned in corresponding period in 2017, showing year-on-year increase in the IGR, it is however short of the projected N150 billion going by the N50 billion monthly IGR target in the state’s 2018 budget size of N1.04 trillion. Also, total revenue received within the period - January to March 2018, according to figures released on Tuesday, stood at N142 billion, higher than over N124 billion earned in 2017. According to Olusegun Banjo, commissioner for economic planning and budget, of the N103 billion IGR, the Lagos Inland Revenue Service (LIRS) raked in N84.192 billion, which accounted for 59 percent of total revenue earned in the first quarter. Banjo, who released the figures to State House correspondents at a media briefing in Ikeja, said the performances showed that measures adopted by the government to shore up its revenues including deployment of technology and plugging of leakages were yielding results. “LIRS generated N84.192 billion in first quarter of 2018, which accounted for 81 percent of the TIGR and 59 percent of the TR, compared to N74.547 billion in 2017, which translates to 77 percent of TIGR and 60 percent of TR. He explained further: “The performance of LIRS in first

quarter of 2018 is N9.645 billion more in absolute terms. Federal transfers contributed N38.481 billion compared to N27.364 billion within the same period in 2017. “The breakdown of the federal transfers showed that Statutory Allocation contributed N13.868 billion while Value Added Tax (VAT) accounted for N24.483 billion during the period under review.” The commissioner further showed that Capital Expenditure (CAPEX) performance in the first quarter stood at N93.011 billion, as against N46.742 billion within the same period in 2017. “As at the end of first quarter 2018, the capital: recurrent ratio closed at 57:43, as against 39:61 recorded same time in 2017. Similarly under Recurrent Expenditure, personnel costs performance of N24.688 billion was higher, compared to N23.962 billion for the same period prior year, while the total overhead cost runs at 39.566 billion in first quarter 2018 against N43.91 billion in 2017,” he said. Banjo who, however, admitted that the opposition to the increased rates of Land Use Charge (LUC) introduced earlier in the year, would impact total revenue projections of the state, explained that government would make for the slash in the LUC rates, from other sources. He nevertheless noted that the 2018 budget performance in terms of revenue in the first quarter “is a pointer to the fact that efforts geared towards tighter control of overhead is beginning to yield fruitful results even though more needs to be done in this area.”

L-R: Adeyinka Jafojo, company secretary; Omobola Johnson, chairman, and Wole Oshin, group managing director, all of Custodian and Allied plc, at the 23rd annual general meeting of the company in Lagos, yesterday. Pic by Olawale Amoo

Connectivity to penetrate Nigeria’s hinterlands with Glo2 submarine cable JUMOKE AKIYODE-LAWANSON

lobacom may resolve the deficiency in last mile infrastr ucture which is hindering the expected broadband penetration levels with its plans to land a second high capacity fiber-optic cable – Glo2 submarine cable in southern Nigeria, carrying the voice and data traffic from the hinterlands and aggregating the traffic in Lagos. The company revealed this plan at the signing of a memorandum of understanding (MOU) with Huawei technologies for the construction of the Glo 2 cable in Lagos yesterday, April 24, 2018. The Glo-2 is proposed to provide the national fibre infrastructure to move bandwidth capacity across the length and breadth of the country, as it is the first submarine cable to land outside Lagos State, servicing oil producing communities in the southern region of Nigeria by giving them direct fibre connectivity through which they can reach their on shore

points and offices in other countries. Sanji Roy, regional technical director, Globacom said that the “Glo 2 submarine cable will provide the much needed bandwidth and redundancy for terrestrial fiber network against the menace of fiber cuts.” “This opens a lot of opportunities; we can even make Nigeria a hub for international traffic for both voice and data through the terrestrial backbone network,” Roy said. The 850KM (kilometre) of undersea cable with max capacity of 12tb (terabit) per second will contain three fibre pairs which are – Express; connecting Lagos to southern Nigeria with terrestrial extension to existing terrestrial backbone, the Omnibus 1; with eight Branching Units (BU)to offshore oil stations and communities and the Omnibus 3; with two switchable BU southward Africa. “Internet of Things (IoT) is a distinct possibility with this first submarine cable to land outside Lagos, as it will enable real-time visibility of oil and gas assets of industry

stakeholders, resulting in better utilisation of assets and maximising returns,” Roy said. The decision to land another submarine cable to provide high capacity connection to oil communities is counted as a move in the right direction, as industry stakeholders have in the past, harped on the need to roll out more national cable infrastructure to connect the hinterlands which will subsequently drive down cost of voice and data services across the country and help in achieving the milestones set in the National Broadband Plan (NBP). “There is very limited network of these international cables and the lack of national cable infrastructure is stalling efforts to deepen broadband penetration as there is very little or no transport to the hinterland,” Lanre Ajayi, past President of Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay last year. Li Shaowei, Deputy Managing Director, Huawei said that the company is completely capable of providing

infrastructure for the submarine cable. “Huawei is a leading technology company that has been developing cutting edge solutions for several years. Together with our customers, we have built over 1,500 cable technologies in the world and we have had a long standing partnership0 with Globacom, having upgraded its Glo1 submarine cable,” Shaowei said. Nigeria currently has five active submarine cables – the SAT-3 cable that links countries along the west coast of Africa to one another and on to Europe and Asia, Glo-1 cable, which links countries along the west coast of Africa to each other and on to the United Kingdom, MainOne links to the west coast of Africa and on to Portugal, MTN’s West African Cable System (WACS) and ACE cable that connects the west coast of Africa to France and South Africa. Folu Aderibigbe of Globacom said that enterprise customers are welcome to buy capacity from Glo 2 which should be completed and landed in the nearest future.

NIMASA warns Nigerians against indiscriminate Concerns mount over Olusosun dumpsite dumping of waste on ocean harmful impact on health

… calls for sustainable use of ocean resources rine litter directly impacted on AMAKA ANAGOR-EWUZIE ocean life, marine habitats, human health, and navigational igerian Maritime Ad- safety with potential impacts ministration and Safety on socio-economic developAgency (NIMASA) has ment of nations. called on Nigerians to make This, according to Petersustainable use of the ocean side, necessitated the Agency resources by ensuring cleaner to collaborate with the United ocean and avoid indiscrimi- Nations Environment Pronate dumping of waste on gramme (UNEP) Global Partthe sea. nership Action (GPA) in 2015 A statement signed by Isi- to carry out a scientific study chei Osamgbi, head, corporate on marine litter challenge in communications of NIMASA, Nigeria, thereby culminating said the agency also inaugu- to the development of the rated Marine Litter Marshals to national action plan on maassist in ridding the oceans of rine litter and its campaign unwanted waste materials that concept. could cause environmental Peterside, who used the degradation and impede safety opportunity to charge the marof navigation on the nation’s shals to go to the ports, coastterritorial waters. lines and littoral communities Dakuku Peterside, director- to enlighten the people on general of NIMASA, said dur- the need to maintain cleaner ing the inauguration ceremony oceans, enjoined the marshals in Lagos Tuesday that the state to also keep watch and ensure of the ocean influenced eco- that the right thing is done so nomic state of the country. that Nigerian ecosystem can Peterside stated that, mabe preserved.

oncerns have continued to mount over the harmful impact of the burning Olusosun dumpsite on the health condition of Lagos residents. The dumpsite has been burning ceaseless for over 30 days, despite the bouts of heavy rainfall in the state. But the state government is not folding its arms, as Adebola Shabi, special adviser to the governor on the Cleaner Lagos Initiative (CLI), said recently that far reaching changes had been made in the CLI as part of efforts to beat waste problems in the state. High on the list of actions is the focus on the infrastructure required to manage waste effectively and prevent more dumpsites like the Olusosun, which will be under the purview of Visionscape Sanitation Solutions. The special adviser underscored the need for infrastructure development, stressing that this was the permanent solution to the problems of dumpsite fires

and unsanitary waste disposal. Already, there are three transfer loading stations in the state, under the purview of Visionscape and there is plan by the government to build more. Also, under Visionscape’s management is the landfill site at Epe. The company has begun the remediation of the space and the construction of the first engineered landfill and Eco Park in West Africa. The landfill at Epe and several others billed to be constructed across the state are said to be the best solutions to the problems of disposal in the state. Authorities of Visionscape explained in a statement in Lagos that an Eco Park was being built to feature several waste processing facilities including a materials recovery facility, an anaerobic digestion plant for energy generation, a tyre recycling facility among others. The landfill will be completely engineered using the most innovative technologies to ensure environmental protection.

Wednesday 25 April 2018

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FINANCIAL TIMES

Chasing Hillary: On the road with a cloistered, would-be president

Woodford’s Patient Capital Trust reports disappointing year

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World Business Newspaper

Seoul looks to learn from mistakes of past Korea summits Critics say aid secured by Pyongyang at previous talks was diverted to weapons SONG JUNG-A

riday’s meeting between South Korea’s President Moon Jae-in and North Korea’s supreme leader Kim Jong Un will mark the culmination of whirlwind diplomacy that has taken the two neighbours from the edge of war to openly discussing peace in just four months. But as Mr Moon moves to secure a deal to establish permanent peace on the peninsula, he is also wary of repeating past mistakes of his two liberal predecessors who held meetings with the late North Korean leader Kim Jong Il. The previous two summits, which focused more broadly on ending conflict and expanding economic exchanges, were both held in Pyongyang in 2000 and 2007 and generated a host of economic and military agreements that resulted in little headway. “The past summits were highly symbolic with their agreements poorly executed. The key now is how to implement any agreement to come out of this week’s meeting,” says Park Jung-jin, a professor at Kyungnam University in South Korea. Experts say it is a sign of progress that this week’s summit will be held in the truce village of Panmunjom — a neutral venue in the demilitarised zone separating the two Koreas — but they also say the third summit will be more complex than the previous meetings. Paring back Pyongyang’s nuclear programme has become a priority for Seoul and Washington, given that North Korea has a proven nuclear capability and inter-continental ballistic missiles that could threaten the US mainland. “We are in a different world now. North Korea now has nuclear weapons, posing a much bigger security threat. The stakes are much higher for everyone now,” says Kim Tae-woo, former head of the Korea Institute for National

Unification. Mapping the history of the Korean peninsula After the countries’ first summit in June 2000, South Korea’s then president Kim Dae-jung won a Nobel Peace Prize for his “Sunshine policy” of engagement with the North. During a threeday visit to Pyongyang, he and North Korean dictator Kim Jong Il agreed to move towards a permanent peace on the Korean peninsula, promote reunification and expand humanitarian and economic exchanges. The unprecedented meeting led to a series of reunions of families separated by the Korean war and the establishment in 2004 of a joint factory complex in North Korea’s border town of Kaesong. However, the achievement was later tarnished by the revelations that Seoul paid $500m to Pyongyang to secure the meeting. In 2007, another liberal South Korean president Roh Moo-hyun extended his predecessor’s engagement policy and walked across the heavily fortified border en route to meet Kim Jong-il. The meeting took place amid a flurry of diplomacy to implement a deal under which Pyongyang had agreed to give up its nuclear programme in return for huge economic and energy aid and improved external relations. The summit generated an eightpoint agreement, with the two leaders pledging to replace the Korean war armistice with a permanent peace regime, and to establish a joint fishing area along the disputed western sea border to prevent bloody naval clashes. But the agreement, which came in the final months of Mr Roh’s term, made little headway after conservative presidents took over in Seoul, adopting a harder line against Pyongyang, which responded with a string of nuclear and missile tests. Mr Moon, now president, was Mr Roh’s chief-of-staff at the time and was involved in the 2007 inter-Korean talks.

EU damps hopes of bespoke post-Brexit financial deal for UK Brussels official says City of London faces ‘clear limits’ in access to Europe markets CAROLINE BINHAM AND JIM BRUNSDEN

he EU’s top financial services official has told the City of London of “clear limits” to its European market access after Brexit and warned that trading opportunities would be linked to Britain’s willingness to stick to EU rules. Valdis Dombrovskis, vice-president of the European Commission responsible for financial regulation, damped hopes that a bespoke

financial services agreement might be struck for the UK as part of Brexit. He echoed recent warnings from the EU that UK-based firms would need to rely on the same arrangements used by companies in the US, Singapore and other non-EU financial centres. That system, known as equivalence, removes some regulatory hurdles for foreign financial service companies if Brussels believes they Continues on page A4

South Korean president Kim Dae-jung (left) with North Korean leader Kim Jong Il at the two countries’ first summit in 2000 © Getty

KPMG faces shareholder protests over GE and Wells Fargo audits Investor advisory groups call for US titans of banking and industry to end historic audit relationships ALISTAIR GRAY AND ED CROOKS

PMG is this week facing the prospect of a rebellion from shareholders in two of its oldest and highest profile clients, Wells Fargo and General Electric, over its role auditing the beleaguered companies. The two titans of US industry and banking are facing calls to end their decades-old audit relationships with the firm. Professional services firms that are now part of KPMG have audited Wells since 1931 and GE since 1909. Last year it collected a combined total of almost $200m in fees from the two blue-chip groups. However, KPMG’s role has come under the spotlight at Wells and GE, both of which have been laid low by a series of mishaps. Fake accounts and other scandals at Wells, run by chief executive Tim Sloan, have cost the California-based company its status as the world’s most valuable bank. GE shares have lost half

their value in the past year over financial difficulties including a need to prop up reserves over unexpected insurance liabilities. Both companies are under investigation by regulators. Glass Lewis, the shareholder advisory service, has recommended that investors in Wells vote against retaining KPMG as the bank’s auditor. At GE, both Glass Lewis and ISS, another adviser, have called for a vote to replace it. GE shareholders should reject the reappointment of KPMG “in light of several ongoing concerns” including Securities and Exchange Commission investigations and the firm’s “extremely long tenure”, Glass Lewis argued. Of KPMG’s relationship with Wells Fargo, Glass Lewis said: “While cognisant that an auditor is not expected to inspect every instance of potential fraud at a company, we believe that this unique case warrants additional scrutiny.” Shareholders in US companies, whose votes are not binding, rarely

rebel over audit contracts. Support levels were higher than 90 per cent at all but four of the past 1,500 meetings at S&P 500 companies, according to ISS Analytics. Yet the influence of ISS and Glass Lewis makes such a revolt a possibility at Wells and GE this week. KPMG declined to comment. Protests by bank workers and consumer activists are expected at Wells’ annual meeting in Des Moines, Iowa, on Tuesday. The gathering comes a year after a fiery meeting in Florida, when shareholders cast almost half their votes against the re-election of some of the bank’s directors. Thousands of Wells employees under pressure to hit sales targets signed up customers for services they knew nothing about. Since then, Wells has been embroiled in further problems. Last week, regulators slapped a $1bn fine on the bank over mortgage fees, unwanted car insurance and other compliance failures.

The 30 minutes that have an outsized role in US stock trading An increasing concentration of volumes from 3.30pm to 4pm is causing concern ROBIN WIGGLESWORTH

he increasing concentration of buying and selling of US stocks in the final 30 minutes of the day has some investors calling for a shorter trading period to help limit the market’s growing operational risk. A seismic shift towards exchange traded funds and other index-tracking investment vehicles has heightened the importance of the last half-hour of the US trading day, from 3.30 to 4pm, when these passive funds typically conduct most of their activity to accurately match their benchmarks. That has prompted traditional active managers to conduct more of their trading during this window to benefit from greater market “liquidity”. “This dynamic is a pretty big story,” said Bob Minicus, head of global equity trading at Fidelity. “We view the close as an opportunity. As more volumes migrate towards the close, we will follow it.” Some traders and investors com-

plain that the funnelling of activity into the last half-hour of the day — which comprises nearly a quarter of all US stock trading — is sucking liquidity away from the middle of the day, when making large trades can now have a noticeable market impact. Indeed, what traders refer to as the “liquidity smile” formed by the pattern of trading volumes has recently become more pronounced and turned it into a “liquidity smirk” due to the lopsided importance of the 3.30-4pm trading window. Some now fret that, with so much money sloshing around in a small window, it increases the risks of market mishaps. “A lot of trading is concentrated in a very narrow period of time,” said Marco Pirondini, head of US equities at Amundi Pioneer Asset Management. “It can be a very big technical problem. I would love regulators to start to think about this before there’s a problem, rather than after one.” Sucking more liquidity away from midday trading heightens the risk of making markets more prone to vola-

tility around lunchtime. The share of US stock trading that happens between noon and 2pm has dipped from more than 23 per cent a decade ago to about 20 per cent, according to Credit Suisse. Given the clear trajectory of the trend, more midday volatility could start to become more apparent in the coming years. “It’s become a self-fulfilling prophecy. The liquidity feeds on itself,” said Todd Lopez, head of electronic trading for the Americas at UBS. “The concentration around the close is likely to accelerate as more people try to minimise their market impact.” There have already been some examples that the thinner midday trading can cause problems, most notably the “flash crash” of 2010, when the US stock market suddenly swooned at 2.45pm. While the blame fell primarily on a badly executed order by a big asset manager that was exacerbated by high-frequency trading, some experts say the severity was worsened by the thinner earlyafternoon liquidity.

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NATIONAL

Angola hires banks for dollar bond sale Fresh debt-raising comes after African nation secures IMF backing for reforms KATE ALLEN

ngola has hired banks for its first international bond sale since securing IMF support for a programme of economic reforms earlier this month. The southern African nation will hold a series of investor meetings in the US and Europe this week to promote the sale of a new 10-year,

dollar-denominated bond. It will be Angola’s first international debt sale in nearly a year; it sold $379m of 10-year paper last May. Angola has hired Goldman Sachs, Deutsche Bank and ICBC as lead managers and bookrunners on the deal. The banks will also seek to canvass investor feedback on whether there is appetite for a longer-dated tranche.

Earlier this month the IMF backed the economic reform plan introduced by Angola’s new president João Lourenço, who wants to open the country up to foreign investment and diversify away from oil. The IMF said at the time that it did not think a debt restructuring was necessary in Angola; instead it supported the Angolan govern-

ment’s plan to extend debt maturities, according to a Reuters report. Since he was inaugurated last autumn Mr Lourenço has sought to dismantle the economic and political legacy of his predecessor, José Eduardo dos Santos, who ruled Angola for 38 years. Angola scrapped its dollar peg in January as it grappled with an economic crisis triggered by lower

oil prices. Ninety-five per cent of Angola’s foreign earnings come from petrodollars. The IMF recently warned that African nations risk slipping back into a debt crisis and urged them to raise taxes to provide more scope for paying the interest costs on their borrowings. Angola is rated B2 by Moody’s and B by Fitch.

EU damps hopes of bespoke post-Brexit financial...

Irish government and Apple reach deal on back taxes

Continued from page A3

Tech giant will start paying €13bn after Brussels ruling on illegal aid

are well supervised by their home country authorities. The access rights can be withdrawn at short notice and only cover parts of the financial sector. Equivalence was “not ideal and has its shortcomings” but was “one of the probable ways for Britain,” Mr Dombrovskis told an audience of London bankers on Tuesday. The system was “only possible if there is close convergence of rules and supervision”, he said. “If the EU and a third country should happen to go different ways, the conditions for equivalence would fall. This means equivalence may be changed or withdrawn.” Mr Dombrovskis’s remarks are a further blow to UK efforts to secure a wide-ranging and stable access regime for financial services after Brexit. While Theresa May, UK prime minister, has acknowledged that Britain would not get to keep its prized financial services “passport” after Brexit, she has called for a “permanent” system that would be “reliable for businesses” and deal with any rule divergences in a “proportionate” way. UK regulators have also pushed the idea of “super-equivalence” or “equivalence of outcomes”, where British companies could retain access to the single market as long as UK and EU regulations were broadly similar in their objectives, rather than being identical on paper. Speaking at the same conference Andrew Bailey, head of the UK’s Financial Conduct Authority, argued that equivalence was “the second best solution” and that the two sides should aim for broader trust in each other’s regulatory standards. “The current EU equivalence regime does not best suit any of the parties going forward,” Mr Bailey said. “Mutual recognition . . . would be the better way to establish the steady state between the UK and the EU in future.” This was “eminently achievable”, he added. Catherine McGuinness, policy chairman of the City of London Corporation, said equivalence did not “take into account the deep level of integration which global markets need”. “Notice periods as short as 30 days under the current equivalency framework do not give firms in the UK or the EU the certainty or clarity they need in order to continue doing business,” she said. “Only a bilateral deal would sufficiently cover the breadth of two-way financial services that are traded daily.”

ARTHUR BEESLEY

Hillary Clinton on the campaign trail in Miami, October, 2016 © Doug Mills/The New York Times/ eyevine

Chasing Hillary: On the road with a cloistered, would-be president Amy Chozick’s book reveals how the Clinton team believed Trump’s run was ‘a gift from heaven’ EDWARD LUCE

hen she was at college in the late 1960s, Hillary Clinton would sign off her letters with “Me — the world’s saddest word”. Judging by Amy Chozick’s account of Clinton’s 2016 campaign for the White House, her outlook altered little in half a century. Each morning one of Clinton’s aides would announce her mood. Much like the Iowan winter, it was rarely bright. “Crabby with a chance of outburst,” writes Chozick sardonically. Perhaps she should have written: “Invisible to the naked eye.” In contrast to normal practice, the press travelled on a separate plane, which was usually shunned by Clinton’s media staff. Clinton met her press corps for just one social get-together in the whole presidential campaign. Chozick, who was the New York Times’ travelling reporter, thought of Clinton’s quest as a “death march to victory”. A more prescient metaphor was offered by Matthew Dowd, a Republican consultant, who spotted Donald Trump’s menace early on. “Hillary has built a large tanker ship and she’s about to confront Somali pirates,” he told Chozick eight months before polling day. Nobody on Hillary’s campaign

saw the pirates coming. They relied on their turnout models — and the numbers could not lie. They pointed to a comfortable victory. Who was to blame? If you ask Clinton’s people, the New York Times’ coverage would come high up on the list — below Vladimir Putin, James Comey and Bernie Sanders but higher than Trump. This seems overblown. But Chozick, whose prose can be as lethal as that of Maureen Dowd, her newspaper’s most Clintonphobic columnist, generated oceans of anguish. The relationship between the Clintons and America’s leading newspaper was “weighed down by old grudges and fresh grievances,” writes Chozick. Before Clinton formally entered the race, her aides kept up the pretence that she was still mulling her options. “She is just a private citizen,” they told Chozick when turning down interview requests. When the big day finally arrived, Clinton botched it badly. Her staff also mauled the expectations game. They put it about that Clinton’s launch would be “nothing short of poetry”. It did not even meet the standards of decent prose. Clinton said she would fight for “everyday Americans”, a coinage that prompted wide mockery. Instead of poetry, “we got a corporate catchphrase delivered in a cheery video that might

as well have been a Pottery Barn ad,” writes Chozick. Having been secretary of state for four years, and a cloistered would-bepresident after that, Clinton had failed to see what had happened to America since she last ran in 2008. Middle America’s angst had gone beyond economic insecurity. There had been an opioid epidemic, which seemed to take Clinton by surprise. In place of hope and change, the political mood had turned to “hate and castrate”, in the words of Obama’s former campaign manager. Her campaign agonised over the linguistic challenge of what to call America’s middle class, which seemed like an outdated term. They bypassed the substance. The product was barely distinguishable from the fictional President Selina Meyer in the television satire Veep, whose slogan was: “Continuity with change.” Soon afterwards it emerged that Clinton had kept a private email account. That broke government rules and raised all the old fears about the Clintons’ obsessive secrecy. In a vain effort to contain the fallout, Clinton held a press conference at the UN in New York. She spoke against the backdrop of a tapestry reproduction of Picasso’s Guernica, which loomed behind her in a bloody metaphor that no journalist could resist.

Vincent Bolloré in French police custody after Africa probe Billionaire detained as part of bribery investigation HARRIET AGNEW

rench billionaire Vincent Bolloré has been placed in police custody in Nanterre, a suburb in the west of Paris, as part of an investigation into “bribing foreign public officials” in Africa, according to a person familiar with the investigation. The investigation relates to his family holding company Bolloré Group, whose African subsidiary claims to be the largest transport and logistics operator in Africa, according to its website. News of Mr Bolloré’s arrest was first reported by Le Monde newspaper, which said that it relates to the

conditions for obtaining two of the 16 container terminals that Bolloré Group operates in Africa. These two containers terminals, one in Lomé, Togo, the other in Conakry, Guinea, were obtained by Bolloré Group in 2010, Le Monde said. A statement from Bolloré Group on Tuesday said that it is being investigated over invoices for communications services in Guinea and Togo during 2009 and 2010. The statement said: “The Bolloré Group formally denies that its subsidiary company SDV Africa has committed irregularities. The services relating to this invoicing were carried out in full transparency.”

A spokesman for Vivendi declined to comment. Mr Bolloré could not be directly reached for comment. Shares in Bolloré Group dropped over 4 per cent while shares in Vivendi were down as much as 1.4 per cent. Last week Mr Bolloré, 67, stunned investors at the annual general meeting of global media company Vivendi when he abruptly stepped down as chairman of Vivendi’s supervisory board. His son Yannick, 38, was appointed to take over from him as chairman. In 2017 Vivendi bought out communications company Havas from the Bolloré Group. The younger Mr Bolloré is chairman and chief executive of Havas.

pple will start paying €13bn in back taxes to the Irish government from May in a move that comes 19 months after Brussels ruled that the tech giant received a quartercentury of illegal aid from Dublin through a tax scheme unavailable to other groups. The start of the tax repayments follows an agreement between the Irish government and Apple to set up an escrow account to hold the money pending their appeals in Europe’s highest court against the ruling from Margrethe Vestager, EU competition commissioner. “This is a very, very significant day now in terms of dealing with this issue,” said Paschal Donohoe, Irish finance minister. Mr Donohoe told reporters he will sign a legal agreement today with Apple to set up the escrow. The full recovery will be completed by the end of September, he said. “This is the largest recovery fund of its kind ever to be established and, due to the complexity of such, together with our duty to comply with EU procurement rules, it has taken some time to get to this point.” Frustrated at delays in collecting the money after its ruling in August 2016, the commission took Dublin to court October to force recovery of the money from Apple. Mr Donohoe said he spoke on Tuesday with Ms Vestager about the agreement with Apple.

US 10-year bond yield rises above 3% for first time since 2014 Focus in market on whether benchmark will rise further and into a higher range

ADAM SAMSON

he yield on US 10-year government debt, a crucial benchmark for global financial markets, rose above 3 per cent for the first time since early 2014, extending its hefty rise in 2018 as investors looked at a sustained period of economic growth and as the Federal Reserve removed crisis-era stimulus. In morning trading in New York, the 10-year Treasury yield reached 3.003 per cent, up from Monday’s close of 2.973 per cent, according to Tradeweb data. Bond yields rise when prices fall. Alan Ruskin, strategist at Deutsche Bank, said investors were focused on whether the test of 3 per cent would spur further selling and push the 10-year yield higher and into a new range above the 3 per cent threshold. The US government 10-year note yield is a benchmark for mortgages and corporate borrowing and has climbed from around 2.40 per cent since the start of the year. The recent rise in oil above $70 a barrel and firmer metal prices have fanned worries about inflation accelerating. Market-based measures of inflation expectations have climbed to their highest level in four years, helping drive the selling seen in the cash Treasury market.

Wednesday 25 April 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Woodford’s Patient Capital Trust reports disappointing year News comes day after sharp fall in valuation at one of fund’s biggest investments KATE BEIOLEY

ity fund manager Neil Woodford has reported falls in the share price and net asset value of his £626m investment trust, just one day after bad news on a drug development caused a sharp fall in the value of one of its biggest investments. According to annual results published on Tuesday, shares in Mr Woodford’s Patient Capital Trust fell by 7.2 per cent in the 12 months to December 2017 — from 91p to 84.45p. The trust’s net asset value per share dropped 2 per cent, following losses at companies it has invested in. Allied Minds, which wrote down seven of its subsidiaries last year amounting to $146m, caused the trust a loss of £22.8m over the year. Circassia, which suffered a failure in a cat allergy drug trial in 2016, resulted in a £24.9m loss. Between 31 December 2016 and 2017 assets in the trust fell from £771.1m to £755.3m. Net assets have fallen further since to £673.9m, according to data provider Morningstar. Meanwhile on Monday, Prothena, which is one-third owned by Mr Woodford’s company — lost two-thirds of its market value, after revealing it had halted development of its leading drug — which is designed to treat amyloidosis, a group of diseases caused by a build-up of abnormal proteins — because of clinical trial failures. Mr Woodford said on Tuesday: “Our ambition for [the trust] has been to help early-stage businesses fulfil their potential through the provision of appropriately

long-term capital and working with them to deliver commercial success. “Clearly not all investments we’ve made have developed in the direction initially envisaged. That is the nature of investing in earlierstage, higher-risk businesses.” Of the 73 stocks the trust holds, 54 are unlisted. But investors have grown impatient for results. Since its launch on 21 April 2015, shares in the trust have fallen 25 per cent from their issue price of 100p and last month sunk to a record low of 73p. Mr Woodford on Tuesday defended his portfolio, pointing to successes including online-only estate agency Purple Bricks: the company floated at 100p in December 2015 buts its shares are worth 337p today. Shares in Woodford Patient Capital Trust fell by 10.9 per cent in response to the Prothena news. As much as 17 per cent of the trust’s assets were invested in Prothena in late 2016. Mr Woodford has also suffered losses in his flagship Woodford Equity Income Fund and Income Focus Fund, as well as investor redemptions. Between May 2017 and February this year, Mr Woodford’s flagship fund had lost almost a fifth of its assets. Assets were at £6.7bn by the end of Monday. Mr Woodford has also has a cash call from Capita, Britain’s biggest outsourcing company, which is 10 per cent owned by Woodford funds. On Monday, Capita launched a three-for-two £701m rights issue fully underwritten by Citigroup and Goldman Sachs. Mr Woodford will need more than £70m to fund his share of the cash call.

Wall Street slips as tech eyes longest losing streak since December MAMTA BADKAR

all Street gave up its gains and turned negative in latemorning trade, dragged down by declines in materials and technology stocks The S&P 500 fell 0.2 per cent to 2,664.77, reversing an earlier gain of as much as 0.5 per cent. Materials stocks were the biggest decliners, down 1 per cent, while the S&P 500 information technology sector declined 0.8 per cent, down for its fifth straight day and on track for its longest losing streak since December. Meanwhile, the telecoms sector was up for the second consecutive day, leading the benchmark S&P with a 1.2 per cent gain, while utilities were close behind with an 0.8 per cent rise. The decline in tech has been linked to concerns about demand for Apple’s smartphones following a warnings from supplier Taiwan Semiconductor Manufacturing. The moves also

come after a 3.5 per cent drop in shares of Google parent Alphabet, whose better-than-expected quarterly revenues were shrugged off as Wall Street focused on a rise in costs that drove a contraction in its profit margins. Despite Alphabet’s disappointment, John Butters, analyst at FactSet, noted that the blended net profit margin for the S&P 500 is 11.1 per cent — the highest since FactSet began tracking the data in 2008. Blended figures combine companies that have reported results along with estimated figures for companies that have not. In fixed income markets all eyes were on the 10-year yield. Earlier, it fleetingly passed the 3 per cent level for the first time since January 2014 as concerns about inflation cropped up yet again and sparked chatter about the Federal Reserve lifting interest rates more than three times this year. Meanwhile, the dollar index, a gauge of the buck against a basket of peers, was little changed at 90.90.

Neil Woodford: ‘That is the nature of investing in earlier-stage, higher-risk businesses’

US 10-year Treasury yield briefly pushes above 3% Stocks give up early gains, Brent oil back above $75 a barrel MICHAEL HUNTER AND STEPHEN SMITH

hat you need to know • US 10-year Treasury yield briefly tops 3% for first time since 2014 • Brent crude back around $75 a barrel • US stocks turn cautious, European equity indices weaken • Earnings season continues to set tone • Dollar consolidating after five days of gains “For now, oil prices are still relatively low but history suggests we keep a close eye on them,” says Joseph LaVorgna, chief economist of the Americas at Natixis. “Rising energy prices act as a tax on US consumers. Following the dissolution of the Bretton Woods fixed exchange rate system in 1971, every recession in the US has been preceded by high and rising oil prices.” Hot topic The 10-year Treasury yield briefly topped the 3 per cent level for the first time in four years on Tuesday while US stocks are edging higher as hopes for the earnings season and easing geopolitical tension sets a cautiously optimistic tone to trade. The yield on the benchmark US bond, which moves inversely to its

price, touched 3.003 per cent, according to Tradeweb data, before inching back to 2.9902 per cent, up 1.7 basis points on the day. Two-year US yields are setting new decade highs, climbing 2bp to 2.49 per cent. “Markets may be focusing too much on the 10-year yields,” said Alan Ruskin of Deutsche Bank. “When the 10-year was last at 3.03 per cent in 2014, the two-year and five-year yields were trading at 0.4 per cent and 1.75 per cent respectively. The overall US yield structure is substantially higher now than in 2014.” With Brent crude oil trading around $75 a barrel, investors will be on the watch for signs of further upwards inflationary pressures. Equities Wall Street has given back opening gains following the latest push higher for yields, with the S&P 500 flat at 2,671 after earlier rising to 2,683.55. The Dow Jones Industrial Average is off 0.1 per cent while the tech-heavy Nasdaq Composite is 0.4 per cent softer. However, some support has come from forecast-beating results from the likes of Caterpillar and United Technologies, although the tech sector has been unsettled by a 4.5 per cent drop for shares in Alphabet amid worries about rising costs at Google’s parent company.

European bourses have lost their early momentum with Frankfurt’s Xetra Dax down 0.3 per cent, having earlier reached a 10-week high. London’s FTSE 100 is climbing 0.2 per cent while the Europe-wide Stoxx 600 is down 0.2 per cent. A fifth fall in successive months in April for the German business confidence gauge the Ifo index pointed to some investor concerns over economic growth. “April’s disappointing Ifo survey added to signs that the German economy is slowing but not as sharply as recent hard data imply,” said Jennifer McKeown of Capital Economics. “This is further cause for caution ahead of the ECB’s meeting this Thursday and we doubt that the Bank will alter its dovish forward guidance.” There was a stronger showing in Asia after Monday’s weaker trading. Mainland China’s CSI 300 jumped 2 per cent and Tokyo’s Topix added 1.1 per cent. Forex and rates The dollar appeared to largely brush off the latest increase in US yields, with the DXY dollar index down 0.1 per cent from Monday’s threemonth high and the euro up 0.1 per cent at $1.2221. But the greenback is up 0.4 per cent against the yen at ¥109.13.

CSR: Mikano donates relive materials to less privilege, marks 25

ikano, Nigeria diesel and gas plant manufacturer has reiterated its commitment to deepen its corporate social investment as an integral part of its business policy. Mikano recently marks 25 years of business in Nigeria by visiting and donating relive materials to the less privilege, as it promised to strive to positively impact the lives of people in its host communities. Misaa Hermes, Head of marketing, Mikano International, as part of activities to mark Mikano’s 25th year anniversary led the management team visited Bethesda Home for the Blind, a vocational training centre in Lagos. According Hermes, by extending and supporting the societies and communities, Mikano will continue to add values to the economic and social development of the Nigerian people. “We have started making our contribution towards the growth of the school as part of our anniversary

and we hope to do more. It would be of note that Mikano int ltd has also implemented various other social responsibility initiatives that support the Nigerian students, Nigerian police force and disadvantaged members of the society,” Hermes stated. The journey started in 1993 when Mikano was incorporated with the objectives of undertaking the business of sales, servicing, maintenance, overhauling and rental of diesel and gas power generating sets. Hermes opined that, “With over 25 years of operation and existence in Nigeria, Mikano International Limited is truly recognised as a distinguished solution provider with an extensive portfolio in power generation, steel fabrication, electrical and lighting infrastructures, Hyundai construction equipment and forklifts and real construction business in Nigeria and Africa as a whole”. Chioma Ohakwe, Proprietress,

Bethesda Home of the blind, thanked the Mikano management team for their kind gesture towards the school which is an opportunity for the students to showcase their talents and skills before the visitors. “You have taken time out to ensure that we are part of the beneficiary of your corporate social responsibility and that is commendable. By visiting the school, you have kept smiles on the students face because they are always elated whenever they have visitors around and this allows the school to note that we still exist”. “Bethesda home for the blind is a school where we train both boys and girls. The motto of the school is ability in disability. A lot of our students here are trained in craft making, music,” said Ohakwe as she solicits for more supports for the school to help it overcome some of tits challenges with irregular power supply and ease of movement.

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PRIVATEEQUITY & FUNDRAISING Wednesday 25 April 2018

New PE opportunities emerge in health care, education … As AVCA private equity conference opens LOLADE AKINMURELE

igh profile keynote speakers, panellists, and investors opened the African Private Equity and Venture Capital Association’s (AVCA) 15th annual conference in top-performing North African economy, Morocco, on Monday. The conference is hosting the top 600 private equity leaders, who manage over $US1.3 trillion in assets, as they discuss the key trends shaping Africa’s investment landscape in 2018 and beyond at this year’s Marrakech gathering in Morocco. Lamia Boutaleb, Secretary of State to the Minister of Tourism, Air Transport, Crafts and the Social Economy, Kingdom of Morocco gave a keynote speech on private equity opportunities in the tourism sector, before taking part in a conversation where she heralded the progress of Morocco and underlined the positive outlook for investment in the country. Morrocco is Africa’s biggest tourism destination, with tourism receipts topping $7 billion in 2017. The industry is Morocco’s top hard-currency earner and accounts for 10 percent of its economy. The Moroccan economy grew by an estimated 4.4 percent in 2017, second only to Egypt, which grew 5 percent, according to data compiled by BusinessDay. Brahim Benjelloun-Touimi, Group Executive Managing Director, BMCE Bank of Africa also remarked that “there are opportunities to be leveraged in sectors such as education and healthcare, which previously were not in the spotlight.” A panel with Albert Alsina, Founder and CEO, Mediterrania Capital Partners and Ziad Oueslati, Managing Director and CoFounder, AfricInvest, discussed North Africa’s growing stability, with the latter highlighting that “North Africa has had some turbulent years but investor confidence has been restored and the region has become increasingly appealing.”

In an interview with Nigel Wellings, Partner, Clifford Chance and Murray Grant, Managing Director, Head of Intermediated Equity, CDC Group highlighted the company’s focus on supporting businesses that are commercially successful and have a powerful development impact through the creation of jobs. He also stressed that “job creation and sustainability must be at the heart of investing in Africa.” On a panel session focused on the power sector, Wale Shonibare, Director, Energy Financial Solutions, Policy and Regulation, African Development Bank (AfDB), commented that Africans “need to be able to trade energy across countries and prioritise on building connections and power pools.” This served as an important prelude to the upcoming AfDB’s closed door roundtable on the Facility for Energy Inclusion (FEI) programme. The FEI programme aims to finance small-scale energy projects with the objectives of aggregating capital, structuring bankable projects and accelerating delivery with a view to increase access to clean energy across Africa. A panel with Patrice Backer, Chief Investment Officer, AFIG Funds and John Opubor, Managing Partner, Coronation Capital discussed their sourcing strategy for companies with great potential, while a session with Sébastien Boyé, Chief Investment Officer, Investisseur & Partenaires focused on private equity

PE WORD OF THE WEEK Seed Investor These are institutional investors who deploy capital into very early-stage of start-up companies, they are considered a subset of venture capitalists.

in fragile and conflict-affected situations. In a keynote inter view, Boutheina Ben Yaghlane Ben Slimane, General Manager of La Caisse des Dépôts et Consignations underlined that “African pension funds are vital for supporting SMEs, which are a key driver of growth in Tunisia.” This led to a wider discussion on the importance of the pension funds in Africa, and how other deposit funds like CDC Tunisia are leveraging long-term investment opportunities for diversification and attractive returns. Michelle Kathryn Essomé, Chief Executive Officer, AVCA, said “AVCA’s landmark annual global gathering comes at a time of consistent private equity deal activity and demonstrates that there is confidence in African private equity despite challenges in previous years. We believe in the power of private capital, and we will continue to serve as the catalyst and voice for PE in Africa. Africa is the most exciting and attractive frontier and emerging market in the world.” This year’s event is sponsored by leading investors and industry players across different geographies including Adenia Partners, LEX, AFIG Funds, African Capital Alliance, African Development Bank, Africa Finance Corporation, African Infrastructure Investment Managers, Africa Legal Network, AfricInvest, Amethis, Asoko Insight, Àrgentil Capital Management, Casablanca Finance Authority, CDC Group, Clifford Chance, Coronation Capital, Development Partners International, DLA Piper; FMO, Goodwell Investments, International Finance Corporation, L.E.K Consulting, Mediterrania Capital, TNP, Udo Udoma & Belo-Osagie, and Verod Capital.

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Nigeria draws $70 million investment from AfDB and EIB he private sector is poised to get a boost from the planned $70 million (N21.4 billion) investment from African Development Bank (AfDB) and European Investment Bank (EIB). Over the years, access to cheap capital has been a major pain for most business in Nigeria, however the country may see a soft facelift as AfDB and EIB readies a $70 million investment in the Development Bank of Nigeria (DBN), created in 2016 to strengthen lending to SMEs. EIB finalized a $20-million equity stake in the new financing institution, alongside $50-million equity participation from the African Development Bank, according to a statement from the European Union Delegation to Nigeria released to journalists at the 2018 Spring Meetings in Washington DC.

generation and output diversification; nevertheless, there has been under-performance of these businesses and this has undermined their contribution to economic growth,” said Stefan Nalletamby, Director of Financial Sector Development Department at the African Development Bank. “Among the issues affecting their performance, the shortage of finance, particularly investment finance, occupies a very central position. Nigeria’s DBN is expected to contribute to mobilizing significant long-term financing to an important yet underserved sector with high development potential,” said Nalletamby. “The European Union is committed to supporting privatesector investment in Nigeria, the new backing for the Development Bank of Nigeria by both the European Investment Bank, the bank of the European Union and the African Development Bank, with

“This new private sector investment is crucial in creating jobs and enabling business expand and reduce limited access to long-term financing holding back economic growth,however EIB is pleased to support the DBN to strengthen private-sector investment in Africa’s largest economy,” said Ambroise Fayolle, Vice-President of EIB. Tony Okpanachi, Managing Director of DBN said with this partnership DBN can overcome the funding gap in the small and medium scale enterprises space and help businesses unlock opportunities across Nigeria. “DBN’s ambition is strengthened by the financial and technical support of international partners, including EIB and AfDB; the new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private-sector investment across Africa and around the world where other financing options are inadequate or absent,” said Okpanachi in a press statement. Currently, new investment essential for companies to expand and create jobs is hindered by limited access to commercial banks. The DBN estimates that only 5 per cent of the 37 million entrepreneurs and small businesses in Nigeria that contribute about 50 per cent of GDP can access credit in the financial system. “Private sector businesses are critical to the development of the Nigerian economy as they possess huge potential for employment

13 EU member state shareholders, will make a clear contribution to tackling the lack of access to credit by entrepreneurs and businesses across the country,” Ketil Karlsen, Head of the European Union Delegation to Nigeria and the Economic Community of West African States (ECOWAS) said. Karlsen added, “With more investment, we hope to promote a vibrant economy and stimulate growth, employment and increase opportunities, especially for youth. Despite playing a crucial role in economic growth and poverty reduction, Small and Medium Scale Enterprises (MSME’s) are collectively, the largest employers in many low-income countries including Nigeria, yet their viability is being threatened by lack of access to risk-management tools such as savings, insurance and credit facilities. Indeed, their growth is often stifled by restricted access to credit, equity and payments services. In line with addressing the major financial challenges facing MSME’s in Nigeria, DBN was conceived in 2015 with the principal mission of increasing financial inclusion and improving access to fiancé. DBN’s main aim as stated on its website is “to alleviate financing constraints faced by MSMEs and small Corporates in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.”

DIPO OLADEHINDE

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

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

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People & Perspectives Newcomer investors flood Nigeria venture capital market OLUBUNMI ABAYOMI-OLUKUNLE AND ADEKUNLE ADEWALE, partners at Nigeria-based venture capital and private equity advisory law firm, Balogun Harold, have observed a steady increase in the number of Africa-focused venture capital funds, corporate VC, accelerators, private equity firms implementing growth strategies and other early-stage investors who set up shop in Nigeria in 2017. Both (ABAYOMI-OLUKUNLE AND ADEWALE) are of the opinion that growing investor confidence and a positive economic outlook make a compelling case for a robust year ahead for Venture Capital-led Mergers and Acquisitions in Africa’s largest economy. Their insightful views and projections for 2018 are outlined below by BusinessDay’s Private equity and Fundraising editor, LOLADE AKINMURELE. enforceability of prior existing rights, is a key diligence point and follow-on investors must have a clear view of where there economic and control rights lie or how these rights interact vis-a-vis the rights of an undocumented investor from the outset. There are also significant implications for tech founders as failure to close a deal may unduly complicate, delay or abort follow-on financing. As a general rule, investors who are keen on a particular target should ensure that term-sheets are drafted with sufficient detail and certainty to provide a soft landing in the event that a dispute as to enforceability arises.

t Can Only Get Better And It Will.

The early-stage/venture capital market in Nigeria is still largely, a buyer’s market and we suspect that this trend will persist through 2018. However, there are two important factors that are driving a market shift on the sell-side. Tech founders are now more familiar with the VC model and with the commercial expectations of VC investors. The resulting alignment of interest is critical and good for the market because it means deals should close faster and exits can be pursued more vigorously. However, this increasing familiarity is also driving new questions around whether or not VC is a good fit for the market. Tech founders still have significant concerns around losing control of their companies or been unduly pressured by VC investors. In a number of cases, such suspicion has led to deal fractures and in some cases, driven founders to consider more strategic investments. Increasingly, tech founders are asking to see more value-add and not just ‘cash’. The other trend driving a market shift is the steady increase in the number of Africa-focused venture capital funds, corporate VC, accelerators, private equity firms implementing growth strategies and other earlystage investors who set up shop in Nigeria in 2017. We find that newcomer investors tend to offer more flexible control and economic terms. This strategy will inevitably intensify competition for early stage deals in 2018. Keeping good relationships within the ecosystem is now more important than ever as word spreads very fast about greedy VCs. Inevitably, incumbents will have to rethink prevalent deal origination and investment strategies to remain competitive in a market that is increasingly flush with earlystage capital. Market trends are also shifting from the traditional sectors like software outsourcing, e-commerce, fintech, micro-lending and edutech to sectors like entertainment, renewable energy, agriculture, digital media & marketing technology, consumer goods and travel. Significant opportunities are also opening up with late-stage companies, with very experienced founders and strong cash histories, as these companies warm up to VC investments, cutting USD5-10 million cheques. This is a solid area for deal origination at the moment. We

100k will block USD 3m

Olubunmi Abayomi-Olukunle

find that there is vast potential in non-tech companies, with strong cash flows, looking to use VC financing to ‘go tech’ and scale their businesses. Fintech is of particular interest. We expect that the intense competition driven by lowering transaction fees should make pooling resources, by way of mergers or strategic acquisition offers from banks or foreign payment companies, a viable growth strategy for fintech in 2018. Although, the Nigerian venture capital market is still behind newer venture capital markets, like India, (especially, in terms of global VC presence, available exit opportunities and sophistication of the governing legal framework), the Nigerian venture capital market is fast evolving and holds a lot of promise for investors who take time to understand the peculiar risks and structure around these risks with support from competent counsel. Relative to any period before now, it has never been this easy for technology founders to access financial support and far more founders are now pioneering far more disruptive ideas across different sectors. Contrary to what we have seen in some foreign legal media outlets, the five legal frameworks applicable locally are largely favourable to VC investment, to a large extent. VCs and other early-stage investors looking at investing in Nigerian companies can expect to secure legal rights which are standard for similar investments in more developed venture capital markets. Typical protective terms which

include tranching, preferential equity terms, veto rights, antidilution protection, forced liquidation, redemption and transferability of shares are recognised and ordinarily enforceable under Nigerian corporate law. In 2017, we were privileged to advice on a number of early-stage deals, ranging from seed investments to Series A investments and also helped set up a number of venture capital funds looking to attract institutional limited partners, which are based in Nigeria. We reflect on that experience and now share a mix of expectations, reflections, feedback and deal insights. The paperwork still matters A good number of the early-stage investments in Nigeria’s technology space are never ‘closed’ in a sense that guarantees the rights of investors and ensures that those rights are enforceable. More often than not, an earlystage investor will merely sign a term sheet but omit to execute definitive agreements. In other scenarios, parties actually proceed to execute the definitive agreements but fail to observe standard closing procedures. Failure to ‘close the deal’, remains largely an investor risk, especially existing investors, because there is no certainty as of now, on the enforceability of the rights of an investor who invests solely on the basis of a term sheet or fails to follow through with key closing procedures. The situation is also bad for the existing investors because, existing investors will most likely be negotiating from a weaker position in a follow-on round. For follow-on investors, issues around prior financing and the

Tech founders, who have set their minds on raising VC financing must structure specifically for VC financing from the outset. We find that a number of structures in place are illprepared for the realities of venture capital investment. This can complicate later-stage financing in many ways. One of such complications which we have seen is where existing investors in a Nigerian company, object to flipping their shares for the shares of a holding company in a follow-on investment. We find that a number of the local early-stage investors tend to follow a long term, strategic pattern to investing. This strategy will often coincide with, even the standard financial investment strategies of VCs. The key concerns for existing investors are usually around tax liability in a foreign jurisdiction, unfamiliarity with legal framework of an offshore jurisdiction and avoidable reporting obligations. In practice, the more sophisticated investors in the prospective portfolio company will, on this account, attempt to block a followon investment which has offshore incorporation provisioning or other seemingly unfavourable provisions. Situations like these can be particularly frustrating and fatal for founders especially when one considers that Nigerian corporate law allows any shareholder to bring an action to restrain a company by way of injunction or declaration from carrying out any act or omission that will affect the shareholder’s individual rights as a shareholder. VC is relatively predictable and continuing chain of events. By the time a tech company raises a Series B financing, there are already other investors at the table who have received a set of rights in Series A or Series Seeds financing and these rights will need to be

taken into account when negotiating the terms of Series B. The scenario plays out with subsequent series. In sum, it is very possible for founders alongside their counsel to envisage and accurately plan for the eventualities of VC financing, from the beginning. Founders, who simply register a company without any thought around financing issues and shareholder strategy, will definitely battle avoidable financing and shareholder issues later on. Whilst DIY approaches may be useful for certain types of businesses, one area of law that is still not ready for DIY is investment and securities law. Other than the fact that this is a fairly complex area of law, every deal/company is different and often calls for a different approach and strategy. Diligence is still the mother of good fortune Depending on the stage where a business is, there may not be too many data points available initially, from a diligence perspective. However, one data point that isn’t an easy variable is regulation. Technology reacts with the law in unprecedented ways and regulation as a diligence focus in Nigeria can be particularly complicated by a number of local factors, which include the fact that (a) a good number of laws are not actively enforced and can therefore easily fall through the cracks (b) the country operates a federal system where the legislative power of the federal government and the state often coincide, resulting in intergovernmental litigation and uncertainty as to the applicable framework in some cases. (c) there is competition for regulatory relevance, a trend which will often trigger over-regulation. We find evidence of due diligence failures on the point of regulation, especially with early-stage investors. Granted that, prior to external financing, many early-stage companies may not be able to bear the cost of regulatory compliance in terms of the time and money required and bearing in mind that offshore holding structures are of limited use in mitigating regulatory and or compliance risk, each investor in a round and their counsel must sufficiently diligence regulatory issues well enough (regardless of the stage of the portfolio company or the perceived sophistication of a lead investor in a financing round) and ahead of time, to accurately understand the exposure, if any and to put a portfolio company on the path of compliance, post-financing up on till exit.

…to be continued next week

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 25 April 2018

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POWER

Pushing for a synchronised West African electricity market

Page 5

finance people appointments

L-R: Tauhida Zayyah- Isa Ahmed, ExxonMobil; Dayo Ojo, CEO, Caritas Communications; Judith Blay, manager Community Relations, Petroleum Commission Ghana; Matthew Sele-Epiri, chairman KEFFS Rural Development Foundation & Dapo Ayoola, CEO, Sub-Sahara Africa Upstream Oil and Gas Summit & Exhibition at the firm’s summit in Abuja recently.

Debrief

Petroleum Club commends passage of PIGB

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OPEC weekly basket price DAY

PRICE

20/4/18

69.5

13/4/18

67.66

6/4/18

65.11

30/3/18

66.45

23/3/18

65.08 Source: OPEC

June sales: Nigeria, Angola crude oil cargoes thrive FRANK UZUEGBUNAM

s June crude export plans begin to emerge, Nigerian and Angolan stocks seem to be thriving. Seven cargoes of Qua Iboe, including one deferred from May have surfaced. Two April-loading of Qua cargoes were also deferred to May, putting its total at eight, just above the June level on a barrelper-day basis. Loading plans also showed four Erha, Amenam and Akpo cargoes, one Yoho and two Usan.

The plans also included six cargoes of Agbami and Escravos and five cargoes of Brass River, though not all were full sized. Little other trading surfaced despite a backlog of roughly 20 cargoes from the May loading plan. Several more June loading plans surfaced, but key grades Bonny Light and Forcados were still pending. Bonny loadings will rise to 195,000 barrels per day (bpd), from 169,000 bpd in May, while Forcados will increase to 298,000 bpd, up from 283,000 bpd. Traders said a cargo of Qua Iboe had traded at a premium of

roughly $1 per barrel versus dated Brent, but further details were not available. Vitol had won a tender to supply India’s IOC with two cargoes of crude oil. The tender sought oil loading June 21-30. The grades were not immediately clear. Sonangol sold a June-loading cargo and finished its allocations. Spot trading activity was subdued while the market awaited more loading programmes and digested offers from Sonangol’s June export plan. The Angola state oil company had sold a cargo of June-loading

Saturno, and was offering several others, traders said. The firm had three Dalia, and one cargo each of Hungo, Olombendo, Pazflor and Sangos. A total of 11-12 cargoes went to term buyers, though further details were not immediately available. A handful of May loading Angolan cargoes were also still available. Sonangol was also offering three Dalia cargoes at dated Brent minus $1.50 per barrel, one cargo of Olombendo at dated Brent plus $1.40, Girassol at Brent plus $1.20 and a cargo each of Hungo and Sangos at 40 cent discounts.

02 BUSINESS DAY WEST AFRICA Outlook West Africa: High prices undermining West African bunker fuel demand

unker fuel demand at West African ports such as Lome and Dakar has been waning over recent months due mainly to high prices, sources said. “WAF market is totally dead,” a local supplier said, adding that demand in the region had been weak since January. There were mixed view among market participants over the reasons for the falling demand, with some buyers attributing it to high port prices. “We are optimizing where to bunker and try to take as little as possible in WAF due to pricing,” one buyer said. Prices have been high recently due to tight availability and rising Brent and Gasoil futures. “I think bunker prices are market reflecting, also tighter availabilities in WAF,” a buyer in the region said. A local supplier at the ports, however, said availability was fine. Marine gasoil prices

at Lome and Dakar hit multi-year highs towards the start of April and have been rising ever since. Platts assessed MGO at Lome at $710/mt delivered and for Dakar at $705/ mt ex-wharf, the highest respectively since October 2016, when the Lome MGO assessment began, and June 23, 2015. Fuel oil 380 CST at Lome followed a similar trend, hitting an all-time high when it was

assessed at $442/mt, its highest since the assessment began in October 2016. Other market sources suggest that the demand respite is temporary due to a quiet period in the fishing industry. “There is a little bit of a quiet period in the fishing industry. Demand is not there,” a source said, noting this lull typically begins around Easter as fish populations are given a chance

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to recover. Pserimos, a Suezmax, was heard to be loading April 23 from Ust-Luga, bound for West Africa, carrying fuel oil. Market sources expect this to not actually enter a port in the region, due to the cost, and believe is likely to be shipped to offshore, floating storage. Lower crude exports from Angola recently could also be a contributing factor to the lack of bunker demand in the West African ports, with fewer ships required to take the crude away. In particular, demand for West African crudes from the regular Asian consumer markets, India and China, have been weaker over the last month, sources said, with loading programs taking longer to clear. This has pressured West African crude grades over the last month with price differentials for sweet heavy Angolan grades hit particularly hard of late, seen falling to 10 month lows.

Angola: Angola opens bids for Cobalt’s former oil blocks

ngola’s state-run oil firm Sonangol is inviting bids for stakes in two offshore oil blocks in Africa’s second-largest crude producer, Sonangol said. Angola is facing a gradual decline in oil output as aging fields become less productive, pressing its provisional June oil exports to a seven-year low. Sonangol said in a statement that it was inviting bids for part of its stakes in blocks 21/09 and 20/11. It said it would share information on those

blocks with investors via “data showrooms” in Luanda and Houston. Development on the blocks had been complicated by a dispute between Sonangol and US oil company Cobalt International Energy, which until recently was the operator of the blocks and owned a 40 percent stake in them. After a deal to sell the licences to Sonangol for $1.75 billion collapsed in 2016, Cobalt last year took the company to international arbitration over its failure to extend licence

deadlines, which Cobalt said “negatively impacted” its search for another buyer. Cobalt, which filed for bankruptcy protection

Wednesday 25 April 2018

last year, at the time said it did not plan any “material investment” in the blocks until the dispute was resolved, effectively putting a hold on development. Sonangol announced in December 2017 that it had reached a settlement with Cobalt in which it would pay $150 million by February 23 and a further $350 million by July 1. In its 2016 results, Cobalt said it had made seven discoveries in the blocks with a total of 750 million gross barrels of oil equivalent.

Algeria: Eni plans investments in Algeria worth billions in next three years

ni plans “billions” of investments in Algeria over the next three years, the company’s CEO said, as the Italian energy firm said it had agreed to extend its partnership with Algerian state firm Sonatrach. “We need to invest more because Algeria still has a lot of gas,” Eni CEO Claudio Descalzi told an energy conference in the western Algerian city of Oran, adding that Eni was eyeing the OPEC member’s offshore holdings. “Offshore is very interesting in Algeria, we are working on it. But we did not get blocks yet,” Descalzi said. Last year, Eni invested $600 million in Algeria and imported 11 billion cubic metres of gas from the North African country, Descalzi said. The Italian government, which controls Eni, is keen to turn Italy into a Southern European gas hub capable of moving African supplies from Algeria and Libya and future flows from Azerbaijan into Europe. Italy’s gas imports have tipped away from Algeria towards Russia

in recent years as Algerian production has stagnated. Sonatrach has struggled to attract foreign investment, a position that CEO Abdelmoumen Ould Kadour is trying to reverse. One delayed Algerian gas field was brought online last year with three more expected to start producing this year, lifting annual gas output of 94 billion cubic metres by 9 billion cubic metres. In a statement released earlier, Eni said it had signed new deals with Sonatrach and that the launch of an exploration and development programme in Algeria’s Berkine basin would be “particularly important”. The programme would lead to the production of new gas reserves using existing infrastructure, Eni said. “The renewed collaboration between our companies, enshrined in today’s agreements, allows Eni to make a further important step forward in a key country like Algeria and to consolidate further our strategic partnership with Sonatrach,” Descalzi said in the statement.

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gas

BUSINESS DAY

WEST AFRICA

ENERGY intelligence

Brief Cameroon: First LNG cargo from Cameroon’s floating LNG plant faces delay to month-end

he first cargo of LNG from Cameroon’s floating LNG project could be delayed until the end of April after the timetable for the maiden delivery was pushed back, a spokesman for project partner Perenco said. Production from the 1.2 million mt/year facility, the Hilli Episeyo, anchored offshore the West African country has already been much delayed. First output

had been expected to start in the second quarter of 2017. Cameroon LNG was one of only two new supply projects that had been set to start up in the first half of this year, after Cove Point in the US, with other new production facilities due online later in 2018. “The first cargo has slipped by a few weeks,” a Perenco spokesman said. Perenco and its partners, Cameroon’s stateowned Societe Nationale des Hydrocarbures and Golar LNG, took the final investment decision on the facility in November 2015. The FID coincided with a deal with Gazprom Marketing & Trading to buy all of the LNG to be produced from the project over its eight-year life.

GIIGNL: Global LNG imports up 10 percent in 2017, tightening risk in the mid-term

lobal LNG imports in 2017 increased by nearly 10 percent, the highest annual growth rate since 2010, reaching 289.8 million mt, while expectations of an LNG surplus failed to materialize as rising imports into China contributed to balancing the market, an industry report showed. Given significant demand growth prospects and the recent slow-down in FIDs, the risk of a potential tightening of demand and supply must not be minimized for the medium term, the International Group of LNG Import-

ers’ 2018 report showed. Spot LNG import, defined by GIIGNL as LNG deliveries which occurred less than three months from the transaction date, reached approximately 20 percent of total volumes delivered in 2017, representing about 59 million mt of LNG. Spot imports were facilitated by LNG contracts with destination flexibility, by increased contracts for portfolio trade and by the growing volumes handled by traders. Asia received about 60 percent of spot LNG (35.4 million mt), followed by Europe (9.0 million mt), the Americas (8.6 million mt) and the Middle East (5.5 million mt). The largest growth in spot imports came from China and South Korea, which imported 21 percent and 22 percent, respectively, of their LNG supplies on a spot basis last year.

Time to stretch the frontiers of gas potential in Nigeria KELECHI EWUZIE

igeria, despite having a high share of proven gas reserves, continues to experience a case of underfunding in the gas sector. Figures show that Nigeria has the ninth largest gas reserves in the world, estimated at 182 trillion cubic feet, which represents the significant majority of natural gas when compared globally. Statistics also indicate that Nigeria remains very strong in terms of gas production as despite the upturn in global crude oil price which is gradually picking up. The country currently produces 7 billion scf per day, 43 percent of production is either re-injected or flared without any commercial benefit. Nigeria is endowed with abundant gas resources and the sector holds huge potentials for

unprecedented growth, industry close watchers have opined. They however observe that the existing legal and regulatory framework needs provide robust technical and commercial framework for gas to achieve the desired commercial potential. Those who know in the gas sector observe that a lack of investment financing is one of the major barriers to expanding gas capacity. According to them, “Increasing domestic production over the short/medium term would require high capital investment from explorers, which looks unlikely given the current economic volatility in the upstream industry. As one of the largest natural gas province in the world, Industry close observers opine that the quantum value gain from the combine price increase and the demand from industrial sector will outstrip LNG which will remain constrained by new sup-

plies into the global market from unconvential gas. “The solution to this is simple and not in any way complicated, a local gas market without government interference in pricing will definitely be attractive to investors”, they said. Industry analysts further maintain that as an enabler, the gas sector framework will entrench transparency, efficiency, fairness and non-discriminatory access to gas transportation networks. They opine that the Federal government requires the right strategy to develop gas reserves in country and fashion out how to transport gas for use in power projects and industrial processes in Nigeria. “Natural gas is a cleaner, less expensive fuel compared to liquid fuels and offers significant economic and environmental benefits for the country”. They added. Ibe Kachikwu, minister of state for petroleum resources at different gas

engagement events said that government policy interventions aspires to among other things; move the economy to become a predominantly gas operated; diversify the gas supply options within Nigeria to ensure security of supply; extend gas penetration in the domestic market in order to facilitate the growth of the electric power, agricultural and industrial sectors. According to him, federal government intervention would gain a presence for Nigerian gas in international markets; operate a gas industry with a clear division of roles between private and public sectors; end and commercialise gas flaring and address environmental issues. Industry closer watchers in the gas industry are optimistic that this renewed government efforts to ensure the creation of a market drive gas industry to minimise the environmental footprint of gas exploration and production is a welcome development.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Pushing for a synchronised West African electricity market KELECHI EWUZIE

chieving the desired improvement in electricity supplies to the West Africa region is a challenge that governments in the region have grappled with for decades. The burden of electricity supply in West Africa is such that while some countries have no access to power, those who seem to have access to electricity are consistently battling with excruciating power interruptions. West Africa needs to significantly improve its electricity supply in order to enhance energy access for its growing population and provide the means for

economic growth. It is in line with a search for solution that experts who know in the power sector has advocated for a strategic synchronisation in the regional electricity market to boost effective distribution of electricity. They observe that with synchronisation, it means that all the electricity that is generated across the sub-region would have to be synchronised so that from Nigeria to Cote d’Ivoire, we can have the same power frequency. It enabled West Africa Power Pool (WAPP) and the rest of the country to synchronise their power to that level says Usman Gur Mohammed, Managing Director, Transmission Company of Nigeria (TCN) He said the vision of the regional electricity

market is also to provide energy security so that if tomorrow, Nigeria has a problem of gas supply, it can import energy from Ghana or Burkina Faso depending on which has cheaper source of energy. We are also not building transmission lines for just five to 10 years; it is something that should last for 100 years to boost electricity trade. Industry close watchers observed that with strategic working of WAPP, it will improve the collection capacities of distribution firms by forming mechanisms that will guarantee payment like this synchronisation. The purpose of WAPP is to enable trade between Nigeria and other countries. Trade creates jobs; if there is a Generation Company (GenCo)

in Nigeria that sells power to Benin Republic, that company will create jobs for Nigeria. It is also creating business for our country because the company that is selling energy in Benin Republic will also be able to make profit. According to a World Bank report, the project will help reduce the cost of electricity supply at the utility level for smaller West African countries like Liberia and Sierra Leone and increase the amount of electricity traded among all the participating countries. It will also help increase the technical integration of the WAPP network. Developing appropriate policies and financing mechanisms for crossborder projects remain a key challenge, particularly for encouraging private sector investors. WAPP is working with World Bank and other financiers to develop workable models for crossborder project finance and regulation on priority projects, along with ways to increase capacity of institutions responsible to support delivery. Analysts opines that the WAPP Master Plan provides the overall strategy and framework for preparing and implementing all WAPP priority projects tailored to the conditions in the West African energy market. They pointed out that the updated Master Plan will allow the various agents in the electricity sector to have a global, clear, and coherent view of the future development of the electricity generation and transmission infrastructure in West Africa.

Wednesday 25 April 2018

power

Ghana: Siemens to support Ghana upscale energy capacity

ngineering company, Siemens Ghana, has held an Industrial Customer Workshop under the theme, “Electricity as a catalyst for growth,” to showcase Siemens technology and solutions available to spur sustainable development in the energy sector.

Edmund Acheampong, Country Manager of Siemens Ghana, said with 165 years of excellence in innovation and technology, the company has the tried and tested technology which can be leveraged to maximize Ghana’s energy sector.

Over the past two years, Siemens has invested in various sectors of the Ghanaian economy. Already, Siemens has added 330 megawatts of installed capacity to the national grid and is working with Rotan Energy, an energy consortium, to develop “efficient and environmentally friendly” 260 megawatts of thermal power. The workshop he said provided the opportunity for engaging conversations on some pertinent issues around sustainable energy generation for Ghana. “Converting waste into energy, renewable energy, small scale power generation, digitalization for Oil and Gas and efficient Energy Management, are essential topics that must be addressed as part of the energy value chain to ensure reliable, affordable and sustainable power generation to fuel our economy,” he said.

South Africa: Roggeveld Wind Farm reaches financial close

outh African project developer, G7 Renewable Energies has announced that the Roggeveld Wind Farm will start construction after having recently reached financial close. The developer initiated development of the Roggeveld Wind Farm in 2009. Kilian Hagemann, co-founder and managing director emphasised that “with Roggeveld, we have proven G7’s abilities to develop the most competitive wind farms on the subcontinent by optimising all siting and technical aspects.” The 147MW wind farm is situated in the Karoo on the boundary between the Western and Northern Cape provinces. The renewable energy project signed its power purchase agreement with the South African Minister of Energy, Jeff Radebe, un-

der the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). “We welcome that this internationally acclaimed renewable energy program has now been decisively reinvigorated by the Minister and the South African government,” Hagemann added. Roggeveld is scheduled to reach commercial operations in April 2021 and will generate about 613GWh of electricity per year, enough to satisfy the needs of roughly 49,200 households.

Wednesday 25 April 2018

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POLICY

BUSINESS DAY

Post-Privatisation conflicts & disputes in Nigerian electricity supply industry OLA ALOKOLARO

he frailties of the nascent Nigerian Electricity Supply Industry (NESI) is gradually coming to the fore with the recent lawsuit filed by the power generating companies (Gencos) against the Federal Government and the regulator Nigeria Electricity Regulatory Commission (NERC) alleging discriminatory practices and the ever looming threat of force majeure declaration by the successor distribution companies (Discos) in the face of increased or new regulation. Conflicts and disputes and the need for re-negotiation of long-term energy contracts are not uncommon particularly where there is a dearth of institutions that can credibly enforce such contracts. In the electricity sector, this situation can be further exacerbated where the market design is inadequate or regulation is incomplete as can be said of the NESI. There is therefore need for the redesigning of the NESI to create robust institutional and regulatory framework that will stem the tide of conflicts and disputes and avoid the collapse of the sector. Regulation in the electricity sector is usually complex both from a technical and economic stand point and for the NESI it is no different. The ongoing challenges of the NESI can be attributed to the fact that some aspects of the regulatory framework were either not in place at the time of privatization or lacked sufficient detail. This lack of clarity or omission have become potential sources of conflict and disputes amongst market participants in the NESI. Below are some of the areas of potential conflict and disputes. Market Structure Issues Eligible Customers: In 2017, The Federal Government issued a directive to the NERC permitting certain categories of customers (“Eligible Customers”) to purchase power directly from a licensee other than a Disco. Following this directive the Discos issued notices of force majeure, claiming that the declaration was premature and inconsistent with the pre-conditions established by the EPSRA. They were also of the view that regulation and governance of the sector had become inconsistent. Discrimination against Generat-

ing Companies: The successor Gencos recently filed a suit at the Federal High Court against the major institutions governing the sector including but not limited to the Federal Ministry of Power, Works and Housing (FMPWH), Nigerian Bulk Electricity Trading Company (NBET), Bureau of Public Enterprises (BPE), the Central Bank of Nigeria (CBN) and two new entrants to the NESI, Azura IPP and Accugas, alleging discriminatory practices based on the World Bank Partial Risk Guarantees (PRG) backed by a Federal Government sovereign guarantee granted to the new entrants. The PRG and sovereign guarantee ensures that the new participants are fully paid for services rendered to the NESI irrespective of ongoing market liquidity issues while, the NESI continues to owe debts to gas suppliers and Gencos who are paid irregularly and in an indeterminable manner. Exclusivity of Concession Areas: The privatization of the Distcos was along geographical or franchise areas which hitherto the Distcos thought were exclusive to them. However with the introduction of the Eligible Customer regime, the regulator has categorically stated that the franchise areas are not exclusive and given that different regulatory treatment may be applicable (e.g. Eligible Customer Regime, Independent Distribution Network Operators and differential regulated prices) in the franchise areas, there exists the likelihood of conflicts and disputes amongst the participants operating in the franchise area. Regulatory issues Tarrifs: The NESI pricing framework is governed by the Multi-yearTariff Order (MYTO) system introduced to set tariffs for consumers

over a 15 year period (2008 – 2023). This system is to be subject to minor reviews twice a year based on factors such as the rate of inflation, gas prices, foreign exchange rates and daily generation capacity. Major reviews of the tariff system are to be conducted every five (5) years to reassess the methodology and add further inputs to the existing model. Post privatization in 2014, there was a minor review based on the major changes in the variables used for tariff assessment. This resulted in the introduction of MYTO 2.1 for the period 2015 – 2018. Further amendment was made by NERC to MYTO 2.1 to increase the price of electricity by an average of 43 percent across all Discos franchises. Since its introduction in 2016, the amended MYTO Rule has remained unchanged despite the devaluation of the Naira which ordinarily should form the basis for a minor review. This potentially is an area of conflict and/or dispute for the Discos as it threatens the financial viability of the Discos. Given the number of potential areas of conflict, the institutional framework for the prompt settlement of conflicts and dispute is required. The following are the institutions charged with conflict and dispute resolution for the NESI: Conflict resolution institutions in NESI NERC: Under the EPSRA, NERC is mandated to act as a quasi-judicial body to hear any dispute between market participants save for where the dispute relates to a question of law, which then has to be reserved for the decision of the High Court as is evident with the suit of the Gencos discussed above. In furtherance to this provision, and pursuant to the Market Rules, NERC has set up a Dis-

pute Resolution Panel (DRP) made up of engineers, economists and legal practitioners to resolve disputes amongst market participants. The DRP resolves disputes arising out of the operations of the Market Rules and the Grid Code between and amongst market participants in the NESI and the modes of dispute resolution employed includes mediation conciliation and arbitration. Whilst mediation and conciliation are effective in the resolution of conflicts in the NESI, a review of the ESPRA does not provide comfort as to arbitration being an effective tool for dispute resolution in the sector. It is not clear from the reading of s.49 and 50 of the Act whether or not a review of the final decision of an arbitral panel can be undertaken by the courts particularly, if the basis for the review ispremised on one of the grounds on which an arbitral award may be challenged under the Arbitration and Conciliation Act (i.e. allegation of fraud). Furthermore, it is also unclear how arbitral awards issued by a NERC appointed arbitral panel can be enforced particularly, where such awards have a monetary element without need for recourse to the courts. High Court: The High court’s role in the resolution of disputes in NESI is meant to be supervisory to that of NERC allowing for market participants dissatisfied with NERC’s resolution of a matter on a point of law to approach the court for a review. The proceedings before the High Court are adversarial in nature allowing each litigant to lead evidence before a single judge. The ESPRA does not stipulate whether the court with jurisdiction is the State High Court or the Federal High Court and neither is it clear under the ESPRA whether a right of appeal exists from the decision of the High court to the Court of Appeal and in turn the Supreme Court or whether the decision of the High Court in reviewing such point of law is final and binding on NERC and the participants. Disputes in the electricity sector are often extremely technical in nature, and therefore require an independent and welltrained judiciary to provide fair and technically balanced decisions. Nigerian judges may not be versed in economics or engineering and their formal education may be restricted to the field of law and any training in economics or engineering is like-

ly to have been informal and thus limited. The lack of clarity in the law and the likely lack of knowledge of all the requisite components of the sector, coupled with the slow pace at which cases are processed and resolved, allows for opportunistic behavior by sector participants which ultimately leads to conflicts and disputes thereby creating an inefficient sector. With the potential sources of conflicts and disputes and the weaknesses of conflict resolution institutions, there is a dire need to strengthen the institutional framework for the sector which is one of the objectives of the Power Sector Reform Programme (PSRP) that will hopefully ensure the swift resolution of disputes. To this end, the PSRP must address the limitations of the Nigerian Judicial System (duration in concluding matters and lack of adequate knowledge of the technicalities of the power sector) by designing and implementing entities (i.e. Conciliation & Arbitration Commissions) that can dispense with disputes and renegotiations in the sector within a reasonable time frame. These entities should be able to deal with contractual disputes between licencees and the government/regulator within a relatively short time frame. Membership of any conciliation commission should be limited to appointed members of the disputing parties with a jointly chosen third member as opposed to any imposed member by NERC. This would inhibit any incentive to renegotiate by the parties as any settlement reached would have been based on the agreement of the parties representatives. The Arbitration Commission’s award should be final and binding on the parties and not be subject to the possibility of a review by the High Court or Federal High Court. In addition, the membership of both conciliation and arbitration commissions must not overlap as the qualities required of members of each commission are markedly different. In conclusion without the reformation of the institutional frameworks for conflict resolution in the NESI, the sector will continue to be beleaguered with the calls for renegotiation of contracts and disputes amongst market participants. OLA ALOKOLARO works at Advocaat Law Practice. E-mail: ola.alokolaro@advocaat-law.com

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WEST AFRICA

ENERGY intelligence Brief CAPEX among world’s largest oil, gas firms to rise to just under $500b in 2018

apital expenditure (CAPEX) among the world’s largest oil and gas companies is due to increase 11.5 percent year-on-year (y-o-y) in 2018 to just under $500 billion, according to oil and gas analysts at BMI Research. “Capital spending among the world’s largest oil and gas companies is set for double digit growth in 2018, with our latest CAPEX guidance collection indicating an 11.5 percent y-o-y increase,” the analysts said in a brief research note. “Our previous analysis, from September 2017, had expected a 4 .3 percent rise in spending in 2018,” the analysts added. BMI said the near $44 billion upward revision to its outlook has largely

been driven by national oil companies, particularly in Asia, but also in the Middle East and Latin America. “In general, more confidence behind the health of the oil market and better oil prices have supported spending plans across companies globally,” BMI analysts said in the research note. “With oil prices having held above $60 per barrel for much of Q4 17 and Q1 18, companies have received more revenue and will have more projects on their books within a viable investment level,” the analysts added. BMI highlighted that the number of final investment decisions taken in the first four months of 2018 was already substantially higher than 2017 and 2016.

Wednesday 25 April 2018

finance people appointments

Petroleum Club commends passage of PIGB

he Petroleum Club Lagos, brought together stakeholders in the oil and gas industry for a holistic discussions on the recent passage of the Petroleum Industry Governance Bill (PIGB) in addition to x-raying the remaining three bills; Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and Petroleum Host Community Bill (PHCB) which will complement the PIGB to ensure an all-inclusive reform of the petroleum industry. Accordingly, Petroleum Club thought it appropriate to have all round discussions on the 4 bills especially with the aim of shedding more light on the remaining 3 bills. “The passage of the PIGB was a good job. You cannot have a perfect document. But I think, by and large, what is in the PIGB is quite commendable, and we would like to support the work they have done - the fact that they have tried to move this as quickly as possible,” said Godswill Ihetu, Chairman, The Petroleum Club, Lagos. On the inclusion of Petroleum Equalisation Fund in the PIGB, he said, “The question is: Are we going to deregulate? If we are going to deregulate, then the PEF becomes a little bit redundant. The issue of deregulating the downstream is not easy; we have been dancing around it. We are now

L-R: Wumi lledare (President of the Nigerian Association for Energy Economics, NAEE); Adeyemi Akisanya ( principal partner, Adeyemi Akisanya & Associates; Godswill Ihetu, chairman , The Petroleum Club, Lagos; Emmanual Egbogah, chairman, Emerald Energy Resources Limited; Osten Olorunsola, former director, Department of Petroleum Resources & Adeoye Adefulu, Engery Partner, managing editor, PetroleumIndustryBill.com at the recent workshop on PIGB by the Petroleum Club, Lagos.

paying subsidy and we are paying subsidy because the crude oil price, which is a big element of the price, has gone up.” In March 2018, the PIGB successfully ended its legislative journey in both chambers of the national assembly and now on its way to President Buhari for assent. It will be recalled that the journey towards a new reform of the petroleum industry which was supposed to take the sector to greater heights commenced in year 2000. The objective of the reform was to ensure that the management of the coun-

try’s petroleum resources was in line with global best practices. According to Ihetu, “the process has encountered one obstacle or the other. The continued delays of the passage of the Petroleum Industry Bill (PIB), as the policy reform document came to be known, created a climate of policy uncertainty in the management of the petroleum sector in Nigeria. This lack of policy clarity has led to a reduced level of new investments which went elsewhere. In addition, regulations were weak and outdated and

needed to be strengthened and updated. Hopefully, this new PIB, when it becomes law, will address these shortcomings”. One of the reasons for the delay in passing the Petroleum industry bill was the sheer size of the document. However, the 8th National Assembly decided to break up the document into four sections, namely: the Petroleum Industry Governance Bill (PIGB), the Petroleum Industry Administration Bill (PIAB), the Petroleum Industry Fiscal Bill), the Petroleum Host Communities Bill (PHCB).

the summit with NOSDRA, John George Igoche, commended the Rivers State Government for providing the enabling platform to have the summit he says will go a long way to highlight the proactive initiatives that will help to prevent oil spills and ameliorate the adverse effects on the environment.

George also added that the Governors of all the oil producing states of the Niger Delta, including the host governor are expected to attend, with their commissioners of environment; the Minister of Environment is also expected as Special Guest of Honour to declare the summit open with a keynote address.

NOSDRA partners with CIMAC for Oil Spill Summit 2018

rom Thursday 24 to 25 May 2018,at Obi Wali Conference Centre in Port Harcourt the Rivers State capital stakeholders will come together to exchange ideas with NOSDRA on the sensitization on oil spill incidents, response and management in oil producing areas in the Niger Delta.

NOSDRA will use the summit to enlarge awareness of its role and create enlightenment on the techniques to be applied by operators in the industry if and when these incidents occur. The preventive measures and remediation efforts will be highlighted in technical papers to be presented

by experts at the two day summit. Participants will have the opportunity to showcase their contribution to NOSDRA’s determination to maintain a zero tolerance for oil spills in oil producing communities and the observance by operators in the industry of environmental protection

mandates. The summit is coming at a time when global interest in best practices are being demanded of all those companies who are engaged in the exploration and processing activities in the Niger Delta in particular. The MD/CEO of CIMAC ASSOCIATES, joint partners organising

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Wednesday 25 April 2018

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marketinsight

Oil recovers after sliding on Trump tweet criticising OPEC

il prices edged up, stabilizing after an earlier slide driven by US President Donald Trump’s criticism of OPEC’s role in pushing up global oil prices. Brent crude oil futures gained 28 cents, or 0.4 percent, to settle at $74.06 per barrel. West Texas Intermediate crude futures for delivery in June, the most active US contract, were up 7 cents at $68.40. The May WTI contract, which expired, gained 9 cents, or 0.1 percent, to settle at $68.38. “Looks like OPEC is at it again,” Trump tweeted. “With record amounts of oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be ac-

cepted!” Since early 2017, the Organization of the Petroleum Exporting Countries and its allies have curbed

output in the hopes of eliminating a global oil glut. OPEC Secretary-General Mohammad Barkin-

do said that the organisation does not have a price objective, but that it is working to restore stability to oil markets. Earlier, both Brent and WTI hit their highest levels since November 2014, at $74.75 and $69.56 per barrel respectively, buoyed by geopolitical risk and a tightening market. For the week, both benchmarks gained over 1 percent. The United States has until May 12 to decide whether it will leave the Iran nuclear deal, which would further tighten global supplies. US drillers added oil rigs for the third consecutive week in the week to April 20 bringing the total count to 820, the highest since March 2015, according to General Electric’s Baker Hughes energy services firm.

Higher oil prices could start to weigh on demand

urrent strength in oil prices could lead to a slight fall in demand, Total CEO Patrick Pouyanne said, adding the oil market remained uncertain and volatile despite stronger fundamentals. Pouyanne, speaking at the International Oil Summit in Paris, also said an oil price around $50-$60/b were more preferable to a company like Total as it made the oil major “superefficient”. Total can compete better than its peers at those price levels, he said, adding that was another reason why “I do not want more than $60/b but if it goes higher, I will take it”. Pouyanne said those higher prices could hit oil demand growth. “Do not underestimate

the higher price impact on demand...the outlook remains uncertain despite higher prices and a tighter market,” he said, adding the oil industry should be a “little bit careful” on wanting higher prices as the main characteristics of the current market was volatility. According to recent reports, Saudi Arabia has

said it would be happy to see crude rise to $80/b or even $100/b, and will not seek to alter the current OPEC-led production deal, which has further supported oil prices. “I do not think there is a stable price. It is quite clear that there is a shift in market. A big driver of demand was low prices. That is a lesson and we should not forget that,” Pouyanne said. Pouyanne also said the industry needed to be vigilant on the elasticity of oil demand growth and the decision by the International Maritime Organization to lower sulfur levels is likely to weigh on oil demand. “Around 2 million b/d of high sulfur residue fuel oil will have to find a home. And 1 million b/d of gasoil and low sulfur fuel oil and

vacuum gasoil could be absorbed in the bunker fuel market,” he said. “This will have an impact on the market. Demand will be under pressure.” Total has fared well since the oil price crash that started mid-2014 compared with some of its competitors, and Pouyanne said one reason was the strength of its downstream sector along with its cost discipline. Pouyanne said Total will stick to its strengths, which involves investing in oil and gas plays that are big and have low operating costs. He said it will continue to invest in the Middle East and North Africa despite those being risk-prone frontiers as “this is where you find the most competitive barrels”.

BUSINESS DAY

OPEC Flakes More countries needed in OPEC, Non-OPEC pact

urther oil producers need to join Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers in curbing supply, UAE oil minister Suhail Mohamed Al Mazrouei said. “OPEC members and non-OPEC producers over-delivered on the supply cuts they promised. But we must include further countries in the pact,” Al Mazrouei said. OPEC members, Russia and other non-OPEC producers have reduced output since January 2017 aiming to reduce inventories and support prices. The pact runs until the end of this year, and an OPEC meeting in June in

Vienna will see participants decide their next course of action. Al Mazrouei also renewed a call for an increase in investment in the industry to keep up with rising demand. “The oil sector needs billions of US dollars in investments, not the hundreds of millions we are seeing right now,” he said.

OPEC to review oil output cut deal, consider extension at June meeting

PEC’s next planned meeting in June will be a chance to review its oil production cut agreement, but the producer group will continue with cuts through 2018, Kuwait’s oil minister Bakheet al-Rashidi said. While it will be discussed in June, a decision on whether to extend the deal into 2019, would be taken later this year, Rashidi told reporters on the sidelines of the Kuwait Oil and Gas Summit. OPEC, which along with 10 non-OPEC allies led by Russia, is in the midst of a 1.8 million b/d production cut agreement, aimed at drawing down crude oil inventory levels and creating market stability, so that upstream investment

can occur to meet the projected increases in demand. Saudi Arabia and Russia are leading discussions on extending the OPEC/non-OPEC coalition’s alliance. OPEC secretary general Mohammed Barkindo, who was speaking at the same event, added that OECD commercial crude oil inventories had fallen to less than 50 million barrels over the fiveyear average, compared to around 340 million barrels in 2014.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 25 April 2018

talking points

In association with

World Earth Day: Time for a new engagement with plastics ISAAC ANYAOGU

pril 22, every year allows the world an opportunity to reflect on how human activities is affecting the planet. This year, leaders across the world voiced solidarity over protection and preservation of the earth, with emphasis on reduction of plastic use and adopting a sustainable lifestyle. Earth Day was first celebrated in the United States in 1970, the idea of commemorating such a day was proposed by Gaylord Nelson, a US senator from Wisconsin. Nelson, had witnessed the devastation caused by an enormous oil spill in Santa Barbara, California in 1969 and felt a need to change the situation. It is important that this year’s theme focuses on plastics, one of the products from crude oil refining process. This is because it constitutes a serious threat to the planet’s marine life. Scientists say plastics can take over 500 years to be degraded. The energy sector is seen as one of the world’s most polluting industries with activities such as gas flaring and oil spills wreaking havoc on the planet. According to Earth Day Network, this year’s Earth Day is dedicated to spreading awareness about the pollution caused by plastic and the need to eventually end its use. The Earth Day went global by the 1990s and is now celebrated by at least 192 countries. The organisers this year, have been providing information and inspiration needed to fundamentally change human attitude and behavior about plastics. The campaign is leading a grassroots movement to support the adoption of a global framework to regulate plastic pollution; educating, mobilising and activating citizens across the globe to demand that governments

and corporations control and clean up plastic pollution. It is also striving to educate people worldwide to take personal responsibility for plastic pollution by choosing to reject, reduce, reuse and recycle plastics, and promote local government regulatory and other efforts to tackle plastic pollution. Around the world, over 40 countries have restricted, banned, or taxed the use of plastic bags. Rwanda, stands proudly as the most successful. A new visitor to this remarkable African country, at the Kigali airport is greeted with a large sign reading, “Use of non-biodegradable polythene bags is prohibited”. By 2020, Rwanda hopes to become plastic free. Meanwhile, Africa’s biggest economy is yet to articulate a sensible policy on managing

wastes from the energy sector. Nigeria currently flares 700MMscf/d of gas at 178 flare sites across the country. This is equivalent to the amount of gas it currently uses in power production. Every month, the state-owned oil firm, the Nigerian National Petroleum Corporation (NNPC) releases figures for oil spills, some are the activities of vandals, others are operational faults from oil companies. Insane volumes of plastics are manufactured, consumed and disposed with little regulation in Nigeria. This is not surprising or unexpected; excellence is rarely regarded as moral precept in the country and policy makers, it seems, benchmark against mediocrity. Excessive use of plastics is having a detrimental effect

on the country, blocking drainages and exacerbating flooding, yet there is no conscious attempt to educate the populace about its dangers. On the occasion of this year’s Earth Day, there were not many activities to mark the event. Half the cabinet is junketing in the United States and the United Kingdom and safe for some international organisations, it went barely unnoticed. Nigeria has not demonstrated enough seriousness to tackle the environmental challenges from its economic activities. To build a sustainable future, the country must go beyond symbolic days to make speeches about issues but there needs to be a holistic articulation of the issues and pragmatic policy to tackle the challenges.

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NEWS YOU CAN TRUST I WEDNESDAY 25 APRIL 2018

Opinion

#Lazy Nigerian who? OPEYEMI AGBAJE opeyemiagbaje@rtcadvisory.com

n Wednesday April 18, 2018, some thugs invaded the Senate Chambers in Abuja, seized its symbol of authority-the mace, and escaped from the National Assembly premises. I have visited the Senate on a few occasions and I have an idea of the level of security checks anyone would have to endure before entry and exit therefrom. The next day, the Nigerian Police returned the mace to the Senate claiming to have recovered it from a spot under a flyover close to the Abuja city gate! The Senate, its House of Representatives counterpart and the media all understood the gravity of what had just occurred! THISDAY Newspapers titled its front page report on April 19, “Disbelief, Outrage over Theft of Mace, Attempted Coup in Senate” opening the report thus, “There was widespread disbelief and outrage in the country yesterday when

thugs believed to have been led by Ovie Omo-Agege, the senator representing Delta Central Senatorial District in the Senate and a member of the ruling All Progressives Congress (APC) stormed the Senate and carted away its mace…”Omo-Agege is the “pro-Buhari Senator” who was suspended by his colleagues for the manner of his opposition to the National Assembly’s attempt to change the sequence of elections in 2019, which the presidency opposes and vetoed. Many analysts discern a link between the election sequence matter and the attempt to intimidate and overawe the Senate, and truncate its proceedings! President Buhari is not known to have made any comment on the issue! While Nigerians were trying to absorb the implications of this shocking development, the president who was away in London made comments same Wednesday which precipitated another huge controversy-Buhari said in relation to the country over which he presides, “…more than 60 percent of the population is below 30. A lot of them haven’t been to school and they are claiming, you

know, that Nigeria has been an oil-producing country and therefore they should sit down and do nothing, and get housing, healthcare, education free…” In response to Buhari’s unfortunate remarks, twitter hashtags#LazyNigerianYouths and #LazyNigerianPresident emerged with young Nigerians rejecting the notion they are lazy, and affirming they were working hard against significant odds erected by Buhari and his generation of failed Nigerian leaders! Some sycophants around the president and paid and unpaid hacks of the “Buhari Media Office” tried unsuccessfully to mitigate the damage-the English dictionary meanings of Buhari’s words indeed translates to “lazy”… and worse-uneducated; idle and indolent; irresponsible and with an unrealistic and undeserved sense of entitlement. Our president was speaking on European soil where the average young person gets benefits far in excess of what any Nigerian youth could imagine, except those of Buhari’s generation who got state sponsored education and jobs,and have lived on the Nigerian state since the early 1960s! My tweet of Friday April 20, 2018 was typical of the reaction, “Actually Buhari was describing himself-he didn’t

get a good education and has no certificate; he’s lived on the Nigerian state all his life; he doesn’t like work; and he’s fixated on Nigeria’s oil…” In truth, Buhari has not presented evidence of completing secondary school-in all the elections he contested, including in 2015 he tendered affidavits to INEC and has declined to perform the simple task of providing his school certificate; since he joined the army in 1961, he has been a “ward” of the Nigerian state and served in multiple states as military governor, as Minister of Petroleum and Chairman of NNPC board under illegal military regimes; he was himself an unconstitutional military head of state; he was Chairman of Petroleum Trust Fund (PTF) under the despotic and thieving dictator, Abacha; and is now back as civilian president. In his current position, he insisted on retaining the oil minister portfolio and installed his Chief of Staff as member of NNPC board! Buhari has a long and well-deserved reputation of abdicating administrative duties to other persons, whether as a military officer, politician or chief executive. That trait is also evident in his current tenure! What should be really worrying to Nigerians and

our foreign “partners” is not the answer Buhari gave, but the questions he was asked (!) which raise concerns around his faculties of comprehension, reason and lucidity - I have carefully reviewed the video and it is not clear how his comment related to questions centering on development of the North-East and the African Continental Free Trade Zone (FTZ). Some commentators have noted that perhaps it was the word “free” in FTZ that set our president off! However talking Nigeria down has been a perennial Buhari attitude since he took office and perhaps reveal his real bias and resentment of not just our enterprising and vocal youth, but indeed our educated, middle class, Westernized populace and our secular constitutional democracy. Having seemingly squandered goodwill of most youths, he may also have an incentive to discredit that constituency! In any normal society, there would be no possibility of re-electing Buhari, but then Nigeria has strange politicians and a peculiar elite! I expressed my views in this regard on WhatsApp last weekend, “Any country in which its elites consider re-electing a president like Buhari just as thousands

of citizens are murdered across the country with not a single person arrested; a president who cannot make an intelligent conversation on any policy or global issue with other global leaders; a president whose EFCC and DSS engage in open confrontation; a regime which crippled the economy and relies on cyclical movements in oil prices as its sole economic lever; a regime under which 10 million jobs are lost; and key accusations against top officials are treated with levity; just as the regime appears complicit in the invasion of its senate by thugs and seizure of mace…such a country is in serious trouble, that is if it isn’t doomed. May God protect Nigeria from these type of elite who condone crass incompetence and even mass murder because of contracts, appointments or even possibility of appointments or contracts, or because someone is a fellow church member…God really has to save Nigeria!” There certainly are some persons sitting idle and living off Nigeria’s oil, and it’s not our youth! I pray our elite,marginalized youth and suffering masses will rise up and rescue this troubled nation.

Listening to the North, again (2) CHIDO NWAKANMA Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@gmail.com.

he North is a significant part of Nigeria by every measure. It occupies the largest portion of the geographical space. Excluding the derivation revenues to certain states, states in Northern Nigeria combined get a sizeable share of federally distributable revenue. The North also accounts for a disproportionate share of the woes of Nigeria. To hear the elite of the North say it, however, other parties, persons and forces are responsible for the problems of the region. They externalise and blame the

other, rather than frontally tackle the issues that face them. Whether it is in fronting dubious scholarship such as the one by the fellow giving Bayero University a bad name or in casting aspersions, the elite of the North play the ostrich. Yet because of the size and impact of the North, all of Nigeria must pay particular attention to this region. In the current political dispensation, the North holds all the levers of power, from executive through legislative to security. Northern Nigeria is the main theatre for the anomie in the land. The North deserves the concern and interest of all of us. We who must do what we can to prod, encourage, cajole if necessary, so the North can get its act together. It is thus uplifting to read of positive action on the matter of drug addiction by the citizens and youth of Kano, as captured by the NonGovernment Organisation Nigeria Health Watch. The Federation of Muslim Women Association of Nigeria (FOMWAN) and the Youth

Awareness Forum Against Drug Addiction are doing a yeoman’s job tackling the epidemic of drug abuse in Kano. They have received no help from the elite of the state or region in person or as organised entities such as State Governments and socio-cultural groups. Kano is the epicentre of the youth drug abuse challenge in Nigeria. The youth of Kano abuse various substances in search of a high to enable them deal with the socio-economic challenges arising from the lack of opportunities. Kano used to be one of the major centres of industrial activity in Nigeria. The huge textile mills and several manufacturing firms are now hollowed out. Jobs are few, very few and declining in relation to the population. The young of Kano abuse prescription and over-thecounter drugs. They drink codeine, Tramadol, Rohypnol and Lexotan. They sniff glue, gum and methylated spirits. They abuse various local substances, some that would make you cringe.

The Senate estimates that youth in Kano and Jigawa states consume three million bottles of codeine daily. It has also contributed policy direction in the fight with the passage of the Mental Health and Substance Abuse Bill. The National Drug Law Enforcement Agency reports that Kano has a high 37% drug abuse rate, the highest in the country. On its part, the Federal Ministry of Health has set up the Codeine Control and Other Related Matters Working Group. FOMWAN has been in the communities for 11 years now fighting the scourge. Its approach involves engagement, encouragement, counselling and treatment. They avoid shaming but provide a welcoming environment so the young people learn to trust and then to drop the harmful habits. There are interesting narratives about some of the former addicts such as Bello Yunusa Adali who now leads an anti-drug abuse advocacy group in Kwannar Dala, Kano. Bello previously imbibed four bot-

tles of codeine daily plus a cocktail of other drugs. Abubakar Shuaibu Maitumaki formed the Youth Awareness Forum Against Drug Addiction in 2012. He brings lived experience to the task of weaning the young of Kano off the harmful medications. He is doing his best in the fight, raising awareness and providing rehab services. According to Nigeria Health Watch, “FOMWAN and YAFODA are two small organizations taking the fight against prescription substance abuse right into the heart of the most affected parts of Kano state using strong community-based approaches. The question arises therefore as to why their efforts haven’t been heard by substance-abuse interveners and regulatory bodies especially outside Kano. This may be due to the two groups’ reluctance to have media engagements. In the case of FOMWAN, a track record of rehabilitated addicts has not been established. Funding is also a

challenge that both groups are facing. Right now they tax themselves to provide the funds they need to rehabilitate drug abusers. “Both groups however seem to have clear plans for the future; FOMWAN is in the process of establishing a standard counselling Centre in Kano in the second quarter of 2018 and YAFODA plans to expand their activities to the 19 northern states by the year 2020. Despite the challenges these two organizations face, they are providing effective local alternatives in the persistent fight against drug abuse in Nigeria through their community-focused approaches that identify, engage, counsel and rehabilitate those suffering from drug addiction.” Efforts such as these by FOMWAN and YAFODA should get the support of the elite of the North, their state governments and the rest of Nigeria. These positive steps are miles removed from the baiting and xenophobic nonscholarship and other efforts at blaming others. Kudos to FOMWAN and YAFODA.

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

BUSINESS DAY

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

...the CEOs that added N1.96 trillion in market value... TELIAT SULE

eading a company and creating value depends on many skills that are hard to measureâ&#x20AC;&#x201D;strategic vision, authenticity, long-term planning. Investors aren't the only stakeholders that need tending to; the best-run companies connect effectively with customers, employees, and the communities where they operate. All that stops at the feet of CEOs, who must be everything their company's stakeholders want of them. On April 26, at our Annual Awards & Dinner, BusinessDay will honour the Top 25 CEOs who delivered the most value to stakeholders and contributed to the stellar performance recorded by the Nigerian capital market in 2017. Last year, listed stocks gained N4.36 trillion in market capitalisation, a development that made the Nigerian capital market one of the best in the world. Interestingly, the 25 CEOs that will be celebrated accounted for over 45 percent of the success recorded on the NSE. That means they added some N1.96 trillion to market value in 2017.

The Top 25 CEOs of quoted companies on the NSE Awards was introduced to celebrate the CEOs who contributed to the success of the Nigerian capital market by adding significant value to shareholders' investment. Parameters used in the selection of the winners include share price appreciation and sustainable growth in each company's Profit after Tax (PAT). Since its introduction, the annual awards have become the capital market bellwether used in identifying the top-performing Chief Executive Officers and stocks on the Nigerian Stock Exchange (NSE). It is to this end that we celebrate the individuals who have contributed to the success recorded by their companies and the Nigerian economy in general. Dignitaries expected at this year's event include Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema, as well as the Executive Governor of Ogun State, Senator Ibikunle Amosun.

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Oscar Onyema: Celebrating a Symbol of Transparency and Transformation

takeholders in the nation’s capital market are unanimous in their assessment of Oscar Onyema’s reign at the Nigerian Stock Exchange (NSE) as unique because

of three notable qualities: transparency, transformation, and promotion of seamless cross border access between the NSE and other notable exchanges in the world. His policies aimed at promoting transparency at the Exchange have made the Nigerian bourse unattractive to rogue traders while timeliness in information disclosure by listed companies has bolstered investors’ confidence locally and internationally. The NSE is now deeper and broader with the introduction of many products such as derivatives, exchange traded products, bonds, Sukuk which have further increased market participation and financial inclusion. The enhancement of cross border access

Champion of the year by the HR People Magazine and in

is ensuring that stocks could be listed on the NSE as well as

2015, was named by Forbes magazine as one of the Top 10

other notable exchanges such as the London Stock Exchange,

Most Powerful Men in Africa. In the preceding year, Abuja

Johannesburg Stock Exchange, among others.

Chambers of Commerce awarded him with the Most Innova-

He left no one in doubt about his mission to take the NSE to

tive CEO of the Year 2014 accolade. Same year he received the

a greater height when upon assumption of office as the Chief

national honour of Officer of the Order of the Niger (“OON”)

Executive Officer of the Nigerian Stock Exchange (NSE) in

from the Federal Government of Nigeria.

April 2011, he launched a ‘Transformation Agenda’ to retool

He is the Chairman of Central Securities Clearing System

the NSE into a globally competitive exchange. His effort as an

(CSCS) Plc, the clearing house for the Nigerian capital market

agent of change in restoring and growing investors’ confidence

and President of the African Securities Exchanges Associa-

is assisting in advancing Nigeria’s capital markets towards a

tion. Onyema also serves on the boards of all subsidiaries of

path of sustainable growth and development.

The Exchange. He has served as a Council member of Char-

On the regional level, Onyema continues to play an influen-

tered Institute of Stockbrokers (CIS); Global Agenda Council

tial role in the highest decision making echelons of the West

member of World Economic Forum (WEF); board member of

African Capital Market Integration Council (“WACMIC”) and

FMDQ OTC Plc and National Pension Commission of Nigeria

the African Securities Exchanges Association (“ASEA”). He

(PENCOM).

is currently the President of the ASEA and was the immedi-

Prior to relocating to Nigeria, he served as Senior Vice Presi-

ate past Chairman and current Member of WACMIC, were

dent and Chief Administrative Officer at American Stock

he works to integrate various securities markets in the West

Exchange (Amex), which he joined in 2001. He was the first

African sub-region. His passion for increased investment

person of colour to hold that position. He also ran the NYSE

flows in emerging markets has established him as a thought

Amex equity business after the merger of NYSE Euronext and

leader within financial markets around the world. The NSE

Amex in 2008, which he helped position as a premier market

under his watch champions the development of Africa’s global

for small and mid-cap securities.

financial markets.

Onyema is an alumnus of Harvard Business School having

Onyema’s remarkable achievements continue to make the

completed its Advanced Management Program. He has an

headlines, as he recently received the Professional Excellence

MBA from Baruch College, New York and BSc from Obafemi

Award - Capital Market Category, from the Business Hallmark

Awolowo University, Ile-Ife. He is a fellow of the Institute of

People of the Year Awards. He was also named the 2016 HR

Directors (“IoD”) Nigeria.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Access Bank Plc Share Price Appreciation in 2017:

78% Amount added to market capitalisation:

N112.24bn

Zenith Bank Plc Share Price Appreciation in 2017:

73.8% Amount added to market capitalisation:

N239.56bn

Herbert Wigwe GMD/CEO

Peter Amangbo Herbert Wigwe was appointed as the Group Managing Direc-

GMD/CEO

tor/CEO effective January 1, 2014.He left Guaranty Trust as an Executive Director to co-lead the transformation of Access

Peter Amangbo is the Group Managing Director/CEO of

Bank Plc in March 2002 as Deputy Managing Director. Wigwe

Zenith Bank Plc. Prior to his appointment, Amangbo has

started his professional career with Coopers and Lybrand As-

been an Executive Director of the bank since 2005 and has

sociates, an international firm of Chartered Accountants. He

over twenty four (24) years cognate banking experience all

spent over 10 years at Guaranty Trust Bank where he managed

of which has been with Zenith Bank. He worked previously

several portfolios including financial institutions, corporate

with PriceWaterHouse (now PriceWaterHouseCoopers) as a

and Multinationals. He holds a B.Sc. degree in Accounting

Senior Consultant in the Financial Services Group.He holds a

from the University of Nigeria, Nsukka; a master's degree

B.Eng. Degree (Electrical and Electronics Engineering) from

in Banking and International Finance from the University

University of Benin and an MBA from the University of War-

College of North Wales and another master's degree in Fi-

wick, Coventry in the United Kingdom. He is a Fellow of the

nancial Economics from the University of London. Wigwe is

Institute of Chartered Accountants of Nigeria (FCA). He has

an alumnus of Harvard Business School Executive Manage-

attended the Advanced Management Programme at INSEAD,

ment Programme and a Fellow of the Institute of Chartered

France and Wharton Graduate School of Business, USA.

Accountants of Nigeria (ICAN).

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

United Bank for Africa (UBA) Plc

Diamond Bank Plc

Share Price Appreciation in 2017:

128.9%

Share Price Appreciation in 2017:

Amount added to market capitalisation:

70.5%

N142.94bn

Amount added to market capitalisation:

N14.36bn Uzoma Dozie GMD/CEO

Uzoma Dozie was unanimously appointed by the Board as the Group Managing Director/Chief Executive Officer of Diamond Bank Plc effective from November 1, 2014. His appointment was approved by the Central Bank of Nigeria in December 2014.Dozie started his banking career in the commercial banking unit at Guaranty Trust Bank Plc where he worked for some years and later moved to Citizens International Bank

Kennedy Uzoka GMD/CEO

Limited where he worked in the Oil and Gas Division. He joined Diamond Bank Limited as a Manager and the head of the bank's oil and gas unit. He was at a time head, financial control, then retail banking where he spear-headed the

Kennedy Uzoka is the General Managing Director/ CEO of

introduction of lifestyle-changing retail products. Dozie was

UBA. He has had a lengthy career at the bank, which over the

the Executive Director in charge of Lagos businesses between

course of two decades has seen him at the helm of a number of

2011 and 2013 until his appointment as a Deputy Managing

critical departments. Prior to his appointment as GMD/CEO he

Director in April 2013.

was the Deputy Managing Director and CEO of UBA Africa. A

Uzoma Dozie graduated in 1991 with a Bachelor of Science

keen adaptor of technology and modernity, Uzoka has super-

degree in Chemistry from the University of Reading, Berkshire,

vised two strategic support functions in the bank: Information

England. He obtained a Master of Science degree in Chemical

Technology and E-Banking. Most recently, he spearheaded the

Research from University College, University of London in

Customer Focused revolution in the bank which has created a

1992 and an MBA with specialisation in finance, from Impe-

fully digital, 24/7 user friendly experience that aims to anticipate

rial College Management School, London in 1998. He also

and fulfil our customerâ&#x20AC;&#x2122;s expectations.

attended the Program for Management Development at the

Uzoka is the holder of a BSc in Mechanical Engineering from

Harvard Business School, Boston, Massachusetts, USA.

the University of Benin an MBA from the University of Lagos and an AMP from Harvard Business School.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Guaranty Trust Bank Plc Share Price Appreciation in 2017:

65% Amount added to market capitalisation:

N492.68bn

Nestle Nigeria Plc Share Price Appreciation in 2017:

92.1% Amount added to market capitalisation:

N293.4bn

Segun Agbaje GMD/CEO

Mauricio ALARCÓN MD/CEO

Segun Agbaje was as the Managing Director/Chief Executive Officer GT Bank on June 22, 2011. With over (25) twenty-five

Mauricio ALARCÓN is the Managing Director and Chief Ex-

years investment and international banking experience,

ecutive of Nestlé Nigeria Plc. He joined Nestlé Mexico in 1999

Agbaje is involved in the general management of the Bank’s

where he held various roles in sales and marketing before

day-to-day operations and has earned a reputation as a truly

his transfer to the Strategic Business Unit in Switzerland as

accomplished and highly respected professional within the

Marketing Advisor. In 2004, he became the Marketing Lead

West Africa sub-region, given his diverse experience in the

for Nestlé’s Movenpick Ice Cream brand, and in 2007, the

financial services industry. Agbaje possesses a deep under-

Managing Director of the Ice Cream Business unit in Australia.

standing of the Nigerian business environment having initi-

In 2010 he moved to Egypt as Business Executive Manager for

ated and led the execution of large, innovative and complex

Nestlé’s Ice Cream Business in North Africa.

transactions in financial advisory, structured and project fi-

Before his recent role, ALARCÓN was the Managing Director

nance, balance sheet restructuring and debt and equity capital

of Nestlé Cote d’Ivoire from 2014, and in 2016 became the

raising in several sectors of the Nigerian economy notably oil

Managing Director of the Atlantic Cluster comprising Côte

and gas, energy, telecommunications, financial services and

d’Ivoire, Sénégal, Guinea, Guinea Bissau, Gambia, Maurita-

manufacturing industries.

nia and Cape Verde. An engineer by profession, ALARCÓN

He is an alumnus of the Harvard Business School and holds a

started his career in an industrial group and then worked in

Bachelor of Science in Accounting and a Masters in Business

the banking sector in Mexico before joining Nestlé.

Administration from the University of San Francisco, USA.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Stanbic IBTC Holdings Plc Share Price Appreciation in 2017:

176.7% Amount added to market capitalisation:

N233bn

Flour Mills of Nigeria Plc Share Price Appreciation in 2017:

56.8% Amount added to market capitalisation:

N10.34bn

Paul Gbededo Yinka Sanni Chief Executive

Yinka Sanni serves as Chief Executive of Stanbic IBTC Holdings and previously served as the Chief Executive at Stanbic IBTC Bank and IBTC Pension Managers Limited (IBTC Pensions). He has extensive experience in credit and marketing, corporate finance, asset management and stockbroking and has been involved in a number of landmark capital market transactions. He is also a Fellow of the Chartered Institute of Stockbrokers of Nigeria. Yinka has a B.Agric. (Hons.), Agricultural Economics from the University of Nigeria, Nsukka, an MBA from the Obafemi Awolowo University and has gone through the Harvard Business School's Advanced Management Programme.

GMD/CEO

Paul Gbededo, a Fellow of the Polymer Institute of Nigeria and Managing Director of FMN’s Agro-Allied Business, was appointed the Group Managing Director / Chief Executive Officer of Flour Mills on 1st April, 2013. Paul has over 30 years career with FMN Group started at Nigerian Bag Manufacturing Company Plc (1982 – 1998), where he acquired extensive experience serving in various managerial positions as process control manager, production manager, general Manager Production and became the first Nigerian Production Director in 1993. Paul, best known for his pioneering role in fertilizer, pasta and rice, joined Flour Mills in 1998 as General Manager/ Director in charge of fertilizer operations, pioneering development of the product, “Golden Fertilizer” the first choice of Nigerian farmers. Paul was educated at the Polytechnic of North London UK where he obtained Graduateship of Plastic and Rubber Institute and Associateship of National College of Rubber Technology in 1980, and holds MSc. Degree in Polymer Technology (1981) of Loughborough University of Technology, UK.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

FBN Holdings Plc Share Price Appreciation in 2017:

Ecobank Transnational Incorporated (ETI) Plc

162.7%

Share Price Appreciation in 2017:

Amount added to market capitalisation:

N62.82bn

65.4% Amount added to market capitalisation:

N27.54bn

Urum Kalu (UK) Eke GMD/CEO

Urum Kalu (UK) Eke assumed office as Group Managing Director, FBN Holdings Plc. on January 1, 2016. He joined the Board of First Bank of Nigeria Limited in 2011 as Executive Director, Public Sector South and until his appointment as GMD of FBNHoldings, he was Executive Director, South at FirstBank. UK Eke is a seasoned banker with deep financial services experience spanning diverse areas including risk management, consulting, taxation, process engineering, capital market operations and business assurance. He began his

Ade Ayeyemi Group Chief Executive Officer

career with the professional firm of Deloitte Haskins & Sells International where he rose to a Senior Audit Consultant prior

Ade Ayeyemi was appointed Group Chief Executive Officer

to joining Diamond Bank Plc. where he worked for 19 years

of Ecobank in June 2015 and assumed office on September

and became Executive Director, Regional Businesses, Lagos &

1, 2015. He is an experienced banker, who before joining

West. UK Eke has over 30 years of professional experience and

Ecobank, had a long and successful career with Citigroup,

he brings his wealth of knowledge to the Boards of a number

where he was CEO of Citigroup’s sub-Saharan Africa divi-

of institutions where he serves as Non-Executive Director

sion based in Johannesburg. Ade is an accounting graduate

including FBN Bank (UK) Limited, First Pension Custodian

of the University of Ife, now Obafemi Awolowo University,

Limited and Financial Institutions Training Centre (FITC). He

Ile-Ife, Nigeria, where he earned a Bachelor of Science degree

holds a first degree in Political Science from the University of

with First Class Honours. He also studied at the University of

Lagos and an MBA in Project Management Technology from

London and is an alumnus of the Harvard Business School’s

the Federal University of Technology, Owerri. A philanthro-

Advanced Management Programme. A Chartered Accountant,

pist and a respected business administrator, UK Eke is a Paul

he is also a trained UNIX Administrator and Network Oper-

Harris Fellow of The Rotary Club International, a Fellow of the

ating Systems Manager. His many interests include business

Institute of Management Consultants, Fellow of the Institute

strategy, economics, process engineering and technology.

of Chartered Accountants of Nigeria and recipient of Nigeria’s National Honor of Member of the Order of the Federal Republic (MFR). He is happily married with children.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Fidelity Bank Plc

African Prudential Plc

Share Price Appreciation in 2017:

192.9%

Share Price Appreciation in 2017:

Amount added to market capitalisation:

38.4%

N46.94bn

Amount added to market capitalisation:

N2.62bn Peter O. Ashade MD/CEO

Peter is an astute investment banker with close to 3 decades’ cognate experience in Nigeria’s money and capital market. He joined UBA Registrars Ltd (now Africa Prudential Plc) in 2006 as Managing Director/CEO and led the transformation of the business from a subsidiary of UBA Plc to the only listed Registrars’ company on the Nigerian Stock Exchange achieving over 8000% growth in profitability within 8 years.

Nnamdi J. Okonkwo

He championed disruptive innovation in the registrars’ busi-

MD/CEO

ness in Nigeria pioneering many e-products and successfully implemented a major diversification strategy for the business.

Nnamdi Okonkwo joined Fidelity Bank in 2012 as Executive Director in charge of the bank’s businesses in Southern Nigeria, a position he held until January 1, 2014 when he was appointed Managing Director/CEO of Fidelity Bank. Before he joined Fidelity Bank, he worked in other financial institutions including the United Bank for Africa (UBA) Plc where he held various managerial and leadership positions including regional bank head in Lagos, Regional Director, Federal Capital Territory Abuja; project director, and head of corporate banking and multinational corporate division. The high point of his career in UBA came when he was appointed Managing Director/CEO of UBA Ghana and later elevated to Regional CEO of the bank’s West Africa Monetary Zone covering Ghana, Liberia and Sierra Leone. Nnamdi obtained a first degree in Agricultural Economics from the University of Benin. He holds an MBA in Banking and Finance from Enugu State University of Technology, Nigeria. In addition, he is also a graduate of the Advanced Management Programme of INSEAD Business School, Fontainebleau, France.

Prior to joining Africa Prudential Plc, Peter was the founding CEO of Great Africa Registrars Limited (Now Meristem Registrars & probate Services Limited), Assistant Registrar at First Registrars & Investors Services Ltd and Account Manager at Union Bank Plc (Registrars Department [Now GTL Registrars Ltd]). Peter has diverse academic and professional background: • MBA, Marketing • MSc, Finance • Fellow, Institute of Chartered Accountants of Nigeria • Fellow, Chartered Institute of Bankers • Fellow, Institute of Capital Market RegistrarsAssociate, Chartered Institute of Taxation of Nigeria • Associate, Institute of Directors He is an alumnus of the prestigious Lagos Business School (CEP, LBS). He is currently: • Treasurer, Institute of Capital Market Registrars (ICMR) • 1st Vice Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Lagos Branch.

BUSINESS DAY

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A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

C & I Leasing Plc

NASCON Allied Industries Plc

Share Price Appreciation in 2017:

158%

117.7%

Amount added to market capitalisation:

N10.76bn

N2.12bn Andrew Otike-Odibi MD/CEO

Andrew Ifuneyachukwu Otike-Odibi is a double Alumnus of the University of Benin, with an MBA and a Bachelorâ&#x20AC;&#x2122;s Degree in Accounting. He commenced his career in 1991 with the Chartered Accounting Firm; Godfrey Ikomi then moved to the international Consulting practice of Ernst and Young in 1992. In 1993 He switched to a banking opportunity with Diamond

Paul Farrer

Bank and in only 2 years his outstanding performance iso-

Managing Director

lated him as the best option for the position of Port Harcourt Branch manager. In 1999 Andrew resumed with C & I Leasing PLC - the foremost

Paul joined NASCON as Managing Director in 2015, having

brand for Consumer Leasing and Business support services-

previously been the Chief Operating Officer and Group Ex-

as the Port Harcourt Branch Manager and the same outstand-

ecutive Director of Food Concepts Plc. His experience in the

ing qualities distinguished him on every task assigned.

foods business spans 20 years in the South and West African

Today he is the Managing Director of C & I Leasing PLC; a

markets; in international companies such as TGI Fridays

business which is heavily relied upon by several multinational

(Americana Group), Steers Holdings â&#x20AC;&#x201C; Debonairs Pizza, Fa-

and indigenous corporate organizations in various sectors of

mous Brands and Innscor International. He is an alumnus of

the Nigerian economy including Oil and Gas, Banking, FMCG

East London Technical College, South Africa.

and Telecommunications. C & I Leasing PLC supports all these organizations offering services in Manpower Outsourcing, Fleet Management, Marine Operations and Telematics. He is a Fellow of the Chartered Institute of Accountants of Nigeria, a sports aficionado and a volunteer with several Christian and charity organizations. He is happily married with 3 Children.

BUSINESS DAY

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A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Berger Paints Plc Share Price Appreciation in 2017:

Cement Company of Northern Nigeria (CCNN) Plc

32.7%

Share Price Appreciation in 2017:

Amount added to market capitalisation:

N605.73m

90% Amount added to market capitalisation:

N1.14bn

Peter Bababunmi Folikwe

Ibrahim Aminu

MD/CEO

Folikwe was appointed as the MD/CEO on the 10th of March

Ibrahim Aminun joined Cement Company of Northern Nige-

2015. He has over 24 years of experience in Marketing, Sales/

ria (CCNN) Plc, Sokoto, in January, 2010 as an Assistant Direc-

Distribution and General Management; having worked in a

torâ&#x20AC;&#x201C;Finance and later promoted to Finance Director. He was

number of top-rated companies in Nigeria across a number of

appointed into the Board as Executive Director â&#x20AC;&#x201C; Finance, in

sectors in varied capacities. He brings with him, a great depth

May 2013. He became the MD/CEO of Cement Company of

of knowledge and experience in manufacturing, telecommu-

Northern Nigeria PLC on June 1, 2016. He started his working

nications and FMCG environments.

career at First Bank Nigeria Regional Office in Ibadan where he

He holds a Bachelor of Science (Hons) degree in Marketing

served under the NYSC scheme. He has over two and half de-

from the University of Nigeria, Nsukka, and Masters in Busi-

cades working experience in various organisations including;

ness Administration (MBA) from the University of Benin. A

Federal Civil Service Commission, Lagos; Nigeria Universal

Fellow of the Institute of Direct Marketing, Folikwe is alos a

Bank, Kaduna; Nigerian Security Printing and Minting Com-

Member of the Nigeria Institute of Marketing, an alumnus of

pany Ltd, Lagos/ Abuja; Nigerian Telecommunications Ltd,

Lagos Business School and Cranfield University Bedford, UK.

Abuja; Suburban Telecoms, Abuja: BUA Flour Mills, Lagos. Born on 14th July, 1968, he obtained his B.Sc. degree in Accounting from Ahmadu Bello University, Zaria, in 1990. He is also a member of the Institute of Chartered Accountants of Nigeria (ICAN) and a fellow of Association of Chartered Certified Accountants (ACCA, UK). Aminu also holds an MBA from Usmanu Danfodiyo University, Sokoto.

BUSINESS DAY

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Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Dangote Sugar Refinery Plc Share Price Appreciation in 2017:

227.3% Amount added to market capitalisation:

N84.60bn

Abdullahi A. Sule Ag. Group Managing Director

Dangote Flour Mills Plc Share Price Appreciation in 2017:

185.9% Amount added to market capitalisation:

N9.50bn

Thabo Mabe GROUP CEO

Abdullahi Sule is the acting Group Managing Director of

Thabo Mabe who is the current Group Chief Executive Officer

Dangote Sugar Refinery Plc. He has over 30 years experience

of DFM Plc was born 27th August 1963 in South Africa. He

in the oil & gas sector in the USA and Nigeria, steel produc-

holds a BSC in Chemistry from Fort Hare University in South

tion, machine shop operations and the sugar industry both

Africa. He started his working career in Unilever Plc where

in Nigeria and the United States of America. Before he joined

he served in various capacities with practical involvement in

Dangote Sugar, he was the MD/CEO of African Petroleum (AP)

manufacturing production, sales and other spheres of work

Plc, and Sadiq Petroleum Nigeria Limited.

in the Company. He held various leadership positions until

He holds a BSc. in Mechanical Engineering and a Masterâ&#x20AC;&#x2122;s

he rose to become the CEO of Unilever Nigeria Plc.

degree in Industrial Technology from Indiana State University,

He headed the multinational company for over 4 years leading

United States.

to its tremendous transformation which has been sustained till date. He joined the services of Dangote Flour Mills Plc on 1st July, 2014 as the Group Chief Executive Officer and a director on the Board of the Company with his vast experience which spans over years.

BUSINESS DAY

C002D5556

Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

May & Baker Nigeria Plc

Eterna Plc

Share Price Appreciation in 2017:

176%

31%

Amount added to market capitalisation:

N1.42bn

N1.03bn Mahmud Tukur MD/CEO Mahmud Tukur is a joint-honours graduate of Accounting & Management from the Business School of the University of Wales College, Cardiff. He has a solid track record of business success, well-developed organisational and leadership skills. He has over 23 yearsâ&#x20AC;&#x2122; experience in the Oil & Gas and Maritime sectors covering Oil services, Upstream, Downstream, Shipping and Terminal Operations. He began his career with Sirpi-Alusteel Construction&Interoil Services Group in Port-Harcourt, Rivers State where he was involved in several strategic national projects including NLNG. He served as the MD/CEO of Daddo Maritime Services Limited, a foremost indigenous maritime services company.

Nnamdi Okafor MD/CEO

Mahmud was the founder and pioneer Managing Director IGPES which evolved to be a major EPC contractor to the IOCâ&#x20AC;&#x2122;s operating in Nigeria. He is the Vice Chairman of Eco-Marine Group, a shipping

Nnamdi Okafor joined May & Baker in 1985. He was appointed as the Managing Director /CEO on February 1, 2011. Before then he was the Executive Director/General Manager, Foods Division, Ota, with responsibility for the operations of the food processing division of the company. Okafor holds a Bachelor of Pharmacy (Honours) degree from the University of Ife, IleIfe (now Obafemi Awolowo University, Ife) as well as Master of Business Administration (MBA) in Marketing from ESUT Business School, Lagos. He is a Fellow of the Pharmaceutical Society of Nigeria, Member of the Nigerian Institute of Management and an alumnus of the Lagos Business School.

line and Terminal Operator with operations across West Africa and a Non-Executive Director of Independent Energy Limited (IEL), an indigenous Oil Exploration and Production Company. Mahmud serves as an Independent Non-Executive Director (INED) on the Board of Bourbon Offshore, the global leader in the provision of offshore logistics services to Oil Exploration and Production Companies. Bourbon is publicly quoted on the Euronext (Paris). He is a recipient of the National Honour of Officer of The Order of The Mono, (OOM) of the Republic of Togo. He is a Fellow of the Chartered Institute of Shipping in Nigeria and a former member of the Governing Council of the Nigerian Chamber of Shipping. In addition to several Nigerian Languages, Mahmud speaks French fluently. He is a keen follower of sports and enjoys watching football and rugby in his spare time.

BUSINESS DAY

C002D5556

Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

NEM Insurance Plc Share Price Appreciation in 2017:

58.1% Amount added to market capitalisation:

N739.27m

Tope Smart GMD/CEO

Tope Smart is the group managing director and chief executive officer of NEM Insurance Plc. A seasoned underwriter and marketer, he started his insurance career with the firm of Everyman Insurance Brokers, Abuja in 1987. The management of the company later discovered the abundance of talent in him and was recommended to head the Abuja branch of the firm but he left for Nigerian-French Insurance Company Limited in 1989 in order to widen his experience. He became the Managing Director/Chief Executive Officer of the new NEM Insurance Plc after the recapitalisation exercise in 2007. Tope Smart, an insurance graduate and an award winner from the University of Lagos (1987), is also an Associate of the Chartered Insurance Institute, London (ACII) 1990 and the Chartered Insurance Institute of Nigeria (ACIIN) 1991. He holds a Masters Degree in Business Administration from the University of Nigeria, Nsukka 2000.

Fidson Healthcare Plc Share Price Appreciation in 2017:

189.1% Amount added to market capitalisation:

N1.61bn

Fidelis Ayebae CEO

Fidelis Ayebae is the Founder and Pioneer Chief Executive Officer at Fidson Healthcare Limited. He started the company in 1995 after working in various capacities in a number of organizations, including Citibank Limited. He transformation agenda over the years has succeeded in placing Fidson on the global stage. Ayebae graduated from the Mainland Institute of Technology in 1976 with a Diploma in Civil Engineering. He obtained Advanced Diploma in Business Administration from the University of Lagos in 1999. He is an Associate of the Chartered Institute of Administration and also a member of the Nigeria Institute of Management. He is also the Chairman and Director of many other companies. He has attended many courses, both locally and internationally including banking operation, organisation development skills, and selling skills, among others.

BUSINESS DAY

C002D5556

Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Honeywell Flour Mills Plc Share Price Appreciation in 2017:

61.5% Amount added to market capitalisation:

N1.98bn

Okomu Oil Plc Share Price Appreciation in 2017:

68.5% Amount added to market capitalisation:

N29.77bn

G.D Hefer, PhD Olanrewaju Jaiyeola

MD/CEO

MD/CEO Graham Hefer is the Managing Director of Okomu Oil Plc. Before joining Okomu Oil Palm as managing director, he Olanrewaju Jaiyeola was appointed to the board of directors

worked for 15 years in the cotton industry in Southern and

as the Managing Director designate on October 2nd 2013.

Central Africa where he was a shareholder in a number of

Few months later, he was later appointed as the Managing

cotton ginneries. He once worked as a lecturer and research

Director/CEO of Honeywell Flour Mills Plc on April 1st 2014.

fellow at the University of Natal then moved on to work as an

Before his latest assignment and owing to his versatility after

agricultural director at Tongaat Cotton Limited. Hefer was

holding various accounting and finance positions, Jaiyeola

an executive director at Noordelike Sentrale katoen (PTY)

was deployed to head the sales function in 2004. Following

South Africa. He is one of the rare CEOs that have transited

excellent results delivered by him since joining the sale func-

from the academic world into the business world. He has a

tions, he was promoted to the position of the Director, Sale

Masters of Science degree and Doctor of Philosophy (PhD)

Operations in August 2007. He had his professional accoun-

in Agriculture.

tancy training with the international firm of Messrs. Akintola Williams & Co and became a chartered accountant in 1990. He acquired relevant accounting experience in reputable organisations before joining the Honeywell Group in 1993. Jaiyeola obtained a Bachelorâ&#x20AC;&#x2122;s degree in Mathematics and Statistics from Obafemi Awolowo University, Ile-Ife, Nigeria in 1986.

BUSINESS DAY

C002D5556

Wednesday 25 April 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Linkage Assurance Plc Share Price Appreciation in 2017:

Pius Apere is the MD/CEO of Linkage Assurance Plc. In 2011

32%

he assumed the position of Managing Director of Achor Ac-

Amount added to market capitalisation:

Assurance Plc as Deputy Managing Director. Earlier, he had

N1.28bn

worked as an actuarial analyst for Lloyds Banking Group

tuarial Services Limited in London before joining Linkage

(HBOs), in Bristol, United Kingdom from 2008-2010 and with Ernst & Young in London from 2010-2011. He was the Life Manager at Unity Life & Insurance Company in Nigeria from 1989-1991. He was Consulting Partner at Chike Oyeka & Co (Actuarial Consultants) Nigeria from 1991-1992 and worked as the Head of Life Insurance Department at Cornerstone Insurance Company in Nigeria in 1992. Apere holds a B.Sc from the University of Lagos, M.Sc and PhD in Actuarial Science from CASS Business School, City University in London. He is a Fellow of Institute of Insurance, London. He worked at Ajibola Ogunshola & Co (Actuarial &

Pius Apere, PhD

Financial Consultants) in Nigeria from 1986-1989.

MD/CEO

BUSINESS DAY

...the CEOs that added N1.96 trillion in market value...