BusinessDay 25 Apr 2019 by BusinessDay

AMCON denies Supreme Court’s order to pay Bi-Courtney N132bn OLUFIKAYO OWOEYE & OLUWASEGUN OLAKOYENIKAN

ollowing media reports that the Supreme Court ordered the Assets Management Corporation

of Nigeria (AMCON) to pay Bi-Courtney Limited the sum of N132 billion, the management of AMCON has denied any judgment

to that effect. AMCON, in a press release signed by Jude Nwauzor, head, corporate communications, which was made available to BusinessDay, said the ap-

peal before the Supreme Court of Nigeria was only in respect of the leave granted to AMCON by the Court of Appeal to appeal as an interested party and for which the apex court

held that the application ought to have been filed in the FHC first before the Court of Appeal. “This was the sole issue submitted and determined by the Supreme

Court whilst the substantive matter is still with the lower court,” the statement said. According to AMCON, the news reported by a maContinues on page 38

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Buhari endorses Ambode’s infrastructure legacy

Says projects designed to improve citizens’ living standard

JOSHUA BASSEY, Lagos, & TONY AILEMEN, Abuja

resident Muhammadu Buhari on Wednesday scored outgoing Lagos State Governor Akinwumi Ambode high on infrastructure development, saying the governor’s legacy projects would create positive im-

Debut 30-year FGN bond oversubscribed at April auction

WATCH OUT FOR SPECIAL REPORT ON AMBODE’S TENURE – MONDAY

pact on the lives of the citizens. President Buhari, while commissioning key infrastructure projects constructed by the Ambode administration in Lagos, said Continues on page 38

President Muhammadu Buhari (2nd l); Akinwunmi Ambode, governor, Lagos State (l); Babajide Sanwo-Olu, governor-elect, Lagos State (2nd r), and Kayode Fayemi, governor, Ekiti State, during the unveiling of the plaque to commission the newly reconstructed Murtala Muhammed International Airport Road, in Lagos, yesterday.

nvestors keenly contested for the N20 billion 30-year FGN Bond offered by the Debt Management Office (DMO) at the April 2019 FGN Bond Auction. For the first time the DMO introduced the 30year FGN Bond into the market at the April 2019 FGN Bond Auction which held on Wednesday, April 24, 2019. A total subscription of N80.41 billion was Continues on page 38

Inside PFAs, other operators’ revenue affected 30% by fees cut P. 2

Thursday 25 April 2019

BUSINESS DAY

news Reforms fail to lift mining sector as age-old problems bite JOSEPH MAURICE OGU

L-R: Haruna Jalo-Waziri, MD/CEO, Central Securities Clearing System (CSCS) plc; Yinka Sanni, CEO, Stanbic IBTC; Bayo Olugbemi, MD/CEO, First Registrars and Investors Services Limited/director, CSCS plc; Emmanuel Nnorom, group CEO, Heirs Holdings; Ayokunle Adaralegbe, chief risk officer, CSCS plc, and Sola Adeeyo, former director, CSCS plc, at the CSCS Stakeholders’ Evening in Lagos.

n the face of many government policies aimed at reforming the mining sector since its collapse decades ago, several age-old challenges still cage the sector, experts say. Several artisanal miners cannot find finance for expansion and are unable to access intervention funds as the sector remains less attractive to deep-pocket miners. It still contributes less than 1 percent to the gross domestic product, with poor geosciences data and lack of formalisation hurting the sector. Paul Babatunde Ruwase, president, Lagos Chamber of CommerceandIndustry(LCCI), said at the maiden edition of Nigeria Mining and Investment Summit in Lagos that several

reforms and policies have been introduced by the government for the development of the mining sector since 1999, yet no significant breakthrough has been recorded so far. Some of the reforms government had embarked upon include Nigerian Mineral and Mining Act (2007), Nigerian Mineral and Metals Policy (2008), and Roadmap for the Growth and Development of the Nigerian Mining Industry (2016). Others include the expansion in airborne mapping of the country to sharpen knowledge of the mineral endowments, the creation of a modern mining cadaster system, and refinement of tax code, among others.

•Continues online at www.businessday.ng

Nigeria’s cocoa production to fall by Saudi Arabia will not ‘immediately’ ramp 10,000MT over weather, ageing trees up oil output after Iran oil waivers end …move may see Brent prices staying high

…as farmers earn $497m in 2018 Josephine Okojie

igeria’s cocoa production will dip by 10,000 metric tonnes (MT) to 245,000MT in 2018/2019, from 255,000MT recorded in the 2017/2018 season, the International Cocoa Association (ICCO) has predicted. Even though BusinessDay could not immediately access the ICCO report so as to ascertain the reasons for its prediction, industry stakeholders say the predicted decline in the 2018/2019 production could be as a result of extreme weather conditions that could manifest themselves in crop failures, pest and diseases outbreak and degradation of land. “I believe that the ICCO prediction of a lower cocoa output for Nigeria in 2018/2019 season is as a result of weather issues,” Sayina Rima, president, Cocoa Farmers Association, told BusinessDay from his Ikom Farm in Nigeria’s south-south

region. Africa’s most populous nation now ranks fourth in cocoa production, with 255,000MT in the 2017/2018 cocoa season, according to recent data from ICCO. Nigerian farmers earned $497 million from export of cocoa last year. To arrive at this figure, we calculated that the average price of cocoa for 2018 was $2,294 when Nigeria’s production was put at 255,000MT. Nigeria exports 85 percent of its annual cocoa produce. Eighty-five percent of 255,000MT, which is 216,750MT, multiplied by the average price of $2,294 gives $497 million. “Last year, despite that we had a very good midcrop season, floods in the third quarter of the year grossly affected our main crop production,” Rima said. He added that high-yielding lowlands were taken over by last year’s floods which cut the country’s production for the period. The Nigerian Metrological Services (NiMET) earlier in

2019 predicted late onset of rainfall and early cessation of rainfall in most parts of the country. Experts say this would affect the main crop which normally accounts for about 70 percent of Nigeria’s cocoa output while the midcrop accounts for the remaining percentage. Nigeria has two cocoa harvests seasons – the smaller midcrop from April to June and the main crop from October to December. The predicted fall in the country’s 2018/2019 production output may also be as a result of ageing cocoa trees and limited use of pesticides, some experts said. “The preponderance of very old tree stocks with most over 30 years results in low yields often less than 400kg per hectare and vulnerable to pest infestation,” said Peter Aikpokpodion, an expert in cocoa improvement and value chain development. “Limited use of pesticides to control black pod disease at the right time and recommended rates also leads to

severe loss of yield on the farm. A recent field visit shows that the cocoa swollen shoot virus (CSSV) disease, which is a major yield-limiting disease, has become a significant constraint that needs urgent attention,” Aikpokpodion said. Currently, farmers in major cocoa growing regions are harvesting for the midcrop season which has commenced since late March. Experts say there is going to be an increase in production for the midcrop owing to current favourable weather conditions. “With the cocoa pods I have seen across the main growing region, there is going to be an increase in midcrop output compared to last year,” said Robo Adhuze, chief operating officer, Centre for Cocoa Development Initiative. “The rains are falling now and the sun is shining as well for farmers to dry their beans very well. But what the total output would be at the end of the year depends mainly on the main crop season,” Adhuze said.

PFAs, other operators’ revenue affected 30% by fees cut …assets under management hits N8.7trn Modestus Anaesoronye

perators in the nation’s pension industry are currently

experiencing between 15 and 30 percent drop in their monthly revenue follow ing re cent fe es cut implemented in the industry. The operators include www.businessday.ng

Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs) and even the regulator, National Pension Commission (PenCom). The cut was intended

to reduce the fees charged on contributors’ savings and interest income as part of incentives to enhance growth of their Continues on page 38

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DIPO OLADEHINDE

n a move that may see the benchmark of Nigeria’s crude oil Brent prices remaining high, Saudi Arabia on Wednesday announced that it will not rapidly increase oil output in response to United States decision to stop issuing waivers from sanctions for countries buying oil from Iran, although it will respond to customer’s demands for more oil. The announcement is the oil-producing country’s first extended public response to the US decision which came on Monday. “Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” said Saudi’s Energy Minister Khalid Al-Falih at a conference in Riyadh on Wednesday. “We will not increase production preemptively.” On Monday, the United States said it would not renew exemptions on waivers, adding that it would, alongside Saudi Arabia and the United Arab Emirates, ensure there is enough oil supply in the global market as waivers currently granted to Turkey, South Korea, China, Indian, Japan, Greece, Italy and Taiwan are expected to expire May 2. “Our intent is to remain within our voluntary Organization of Petroleum Exporting Countries (OPEC) production limit,” Al-Falih said, adding that Riyadh would “be responsive to our customers, especially those who have been under waivers and those whose waivers have been withdrawn”. @Businessdayng

“We think there will be an uptick in real demand but certainly we are not going to be pre-emptive and increase production,” he said. Al-Falih said Saudi Arabia’s oil production in May was pretty much set with very little variation from the last couple of months. June crude allocations would be decided early next month, he said. The kingdom’s exports in April will be below 7 million barrels per day (bpd), while productionisaround9.8million bpd, Saudi officials have said. The Trump administration said it had also spoken to Saudi Arabia and the UAE about raising production. Officials from the kingdom have privately said they are not keen to accelerate output until they see the impact of the loss of Iranian barrels in the market. Brent crude futures fell on Wednesday, trading at $74.48 per barrel at 4pm Nigerian time, after the International Energy Agency said oil markets were “adequately supplied” and “global spare production capacity remains at comfortable levels”. More than any other country, the situation between international oil players will be a major concern for Nigeria which needs the international oil price to rise and in the worst case, remain steady at any price above the $60 benchmark of the 2019 budget. Last year, Saudi Arabia increased production towards record levels only for the US to then continue issuing allowances to countries such as China and India for Iranian oil purchases, triggering a drop in crude prices.

•Continues online at www.businessday.ng

Thursday 25 April 2019

BUSINESS DAY

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Thursday 25 April 2019

BUSINESS DAY

news Polaris Bank partners MOJEC on ‘Customer experience to drive digital Malabu Oil scam: Adoke prays court to set aside order for his arrest pre-paid meter roll out transformation in African banking’

olaris Bank has reiterated her commitment to the success of the Meter Acquisition Partners (MAP) Project by ensuring that the acquisition of pre-paid meters by Nigerians is seamless. Managing director/CEO of the bank, Tokunbo Abiru, gave this indication at the signing ceremony of a memorandum of understanding (MoU) with Mojec, a leading meter manufacturing company, at the bank’s headquarters in Lagos on Tuesday. Abiru, who was represented by the executive director, Technology and Services, Innocent Ike, said, “Polaris Bank is pleased to be partnering with Mojec International to support consumers on the meter acquisition scheme; our Bank will be facilitating the acquisition of these meters by granting loans to eligible customers under the Programme.” He applauded the commitment of the regulators and partners in the public electricity value chain towards ensuring that the pre-paid meters are made available and affordable. Giving further insight into

the bank’s involvement in the MAP project, the banker said; “Some of the advantages of using prepaid electricity meter is that it enables consumers determine their level of consumption, manage their cash flow and allocate costs appropriately.” Also speaking, Abdullahi Mohammed, the bank’s executive director, Abuja and Northern Region, assured Nigerians of the readiness of Polaris Bank to “leverage our wide branch network in Abuja and the whole of the Northern region to enable the roll out of the pre-paid meters.” Earlier in their remarks, the Mojec chairperson and managing director, Mojisola Abdul, and Chantelle Abdul, spoke of how supportive Polaris Bank had been to the growth and success of Mojec in over a decade. They noted that with the signing of the MoU, they were confident that Polaris Bank would support Mojec to meet the expectations of Nigerians under its Bank Consumer and Retail Financing Scheme for MAP meter acquisition.

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Hope Moses-Ashike

n the face of the changing banking behaviour of customers, Sola Adeduntan, group managing director/CEO, First Bank of Nigeria Limited and Subsidiaries, says the new era of digital transformation in African banking space will be defined by Customer Experience and User Experience (CX/UX). Speaking at a two-day conference on ‘Future Banking Tech West Africa,’ in Lagos, he said the bank customers of now (as well as future) were seeking real-time interactions and pinpoint accurate, personalised engagements. “The banks that are winning (and will win in the future) are those that are able to deliver on both fronts for the customers through unique capabilities,” Adeduntan said. Africa is projected to experience rapid growth in mobile penetration and smart phone adoption over the next six years... leading to an exciting era of digitisation. The Africa’s population is projected to hit 1.6 billion by 2025 from 1.3 billion in 2018. Mobile subscriber penetration is expected to rise by 51 percent in 2025 from 45 percent. Steven Ambore, head, digital

financial services, Central Bank of Nigeria (CBN), who spoke at the panel session on “Innovation in Regulation – Overcoming Gaps in Rural Banking Strategies,” said the CBN recognised the importance of digital financial services and had strategised to ensure fintech’s adoption by the banking industry. He said for FinTechs to thrive, there is need need to focus on creating the enabling environment, adding that the CBN had instituted strategies toward that. “There is a roadmap for that: introduction of a tradition licensing, trying to understand what FinTech does and its problems, holding round table with stakeholders and others,” Ambore said. Benjamin Tordah-Klu, principal economics officer, ministry of finance, Ghana, said that a proper regulatory framework would be needed for fintech to thrive. He said a lot is being done in the FinTech space, especially in the area of payment. On his part, Damola Atanda, head, Financial Literacy Office, Consumer Protection Department, CBN, said, “we have technology, but the problem is what we do with the technology. We have to make it impact on the people”.

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Felix Omohomhion, Abuja

ormer minister of justice and Attorney General of the Federation, Mohammed Adoke, has approached a FCT High Court to challenge the order that asked he should be arrested for invading trial. The Economic and Financial Crimes Commission (EFCC) had obtained a bench warrant against Adoke, Dan Etete, former minister of petroleum and others for their alleged involvement in shady deals regarding the sale of Malabu Oil. The bench warrant for the arrest of the defendants was sequel to an ex-parte application by the EFCC. Justice Danlami Senchi of the FCT High Court, Jabi, Abuja, had on April 17, 2019, issued an order for the arrest of Adoke, Etete and four others over their complicity in the Malabu Oil scam. The others are Raph Wetzels, Casula Roberto, Pujato Stefeno, and Burrato Sebastiano. However, Adoke in a mo-

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tion ex-parte filed on April 23, by his lawyer Mike Ozekhome, is asking the court to set aside the order for his arrest on the grounds that the court was misled in issuing the order. The motion with number M/5494/19 is also praying the court to strike out the name of Adoke as a defendant in the suit by the Federal Government against Shell Nigeria Exploration Production Company Limited and 10 others. Ozekhome in the ex-parte submitted that the order for Adoke’s arrest was issued in breach of his judgment right to fair hearing as guaranteed by the Constitution, adding that Adoke was neither served with the charge sheet and proof of evidence, nor any other summons in respect of the criminal charge pending before the court. Ozekhome further submitted that the warrant for Adoke’s arrest was issued without jurisdiction and ought to be set aside. No date has been fixed for hearing.

Thursday 25 April 2019

BUSINESS DAY

NEWS

MTN converts to public limited liability company ... takes step towards Nigeria listing Jumoke Akiyode-Lawanson

TN Nigeria has completed its conversion from a private company to a public company (Plc), a legal requirement and key milestone in the preparatory process for the telco’s planned listing by introduction on the Nigerian Stock Exchange (NSE). A public limited company is the legal designation of a limited liability company (LLC) that is offering shares to the general public and has limited liability. MTN’s intended listing on the NSE will create a new telecoms asset class for investors and provide a wider group of Nigerians with a chance to participate in the MTN investment opportunity. Speaking on the conversion, Ferdi Moolman, CEO, MTN Nigeria, said: “Our conversion to a Plc is a major step towards listing by introduction on the NSE in the first half of 2019. It is a reaffirmation of our long-term commitment to expanding investment opportunities for Nigerians, in addition to providing everyday services to them. We look

forward to continuing our engagement with the Security Exchange Commission (SEC) and NSE to take forward the listing process.” MTN had in March this year, released its 2018 full year financial results where it recorded growth above inflation in full service revenue (17.2%) and the addition of nearly 6 million new subscribers to the network. The company announced Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of N453.1 billion and expanded EBITDA margins to 43.6 percent (excluding the CBN resolution amount). The company added 4.5 million active data customers during the year, delivering data revenue growth of 39.3 percent and expanding to 18.7 million the number of people that it connects to the possibilities that the internet provides. Nigeria is one of the largest markets within MTN’s portfolio and central to its growth strategy. The upcoming listing is a key milestone for the MTN group and is part of its commitment to localisation in the markets in which it operates.

OML 30: Delta moves to avert disruption of oil production … communities accuse oil firm of reneging on GMoU Francis Sadhere, Warri

s a proactive step to avert socio-economic hazard of a possible shutdown of over 90,000 barrel per day oil production in Oil Mining Lease (OML) 30, the Delta State government has waded into a faceoff between Heritage Oil Company and over 112 oil-bearing communities in the state. The affected communities had issued a seven-day ultimatum to Heritage Oil Company and its subsidiaries to vacate its territories or face the wrath of the people. But the Delta State Attorney-General and Commissioner for Justice, Peter Mrakpor, on Tuesday, while addressing the delegation of the aggrieved community representatives who paid him a visit, thanked them for not resorting to violence in driving home their demands. He explained the process it took the state government to supervise the negotiation process, which he said was transparent and painstaking, adding that the GMOU was the collective will of all the parties involved. Mrakpor, who expressed sadness over the development, however, assured them that Government would urgently wade into the matter and it would be resolved as soon as possible to forestall breach of the peace in the state and

disruption of oil production. The Justice Commissioner appealed to them to maintain the peace and allow the state government to engage the company and bring all parties to a round table discussion. Earlier, the President General of Ewvreni Community, Victor Ohare, who also doubles as the Chairman of President Generals Forum of OML 30 during a meeting with the Attorney-General and Commissioner for Justice to brief the state government on their grievances with the oil exploration company, accused Heritage Oil of breaching all the terms contained in the GMOU signed between the communities and the oil company. Ohare who led other President Generals to the Attorney-General’s office also accused Heritage Oil and its subsidiaries of using security agencies to intimidate, harass and suppress their genuine agitations. He listed some of the atrocities of the company to include none employment of indigenes and regular disengagements of the few already working in the employ of the company and none payment of scholarship to indigenes of the affected area from 2014 till date. Ohare also accused Heritage Oil of a systemic ploy to phase out its scholarship scheme and vowed to resist the oppressive tendencies of the company. www.businessday.ng

L-R: Onyinyechi Nwosu, brand manger, Molped Sanitary Pads category, Familia Tissues and Papia Tissues categories, Hayat Kimya Nigeria; Ayobami Kalesanwo, assistant brand manager, diapers category; Roseline Abaraonye, marketing manager, Nigeria; Hakan Misri, managing director, Hayat Kimya Nigeria; Yunus Atmaca, group campus and plant manager, Hayat Kimya; Chioma Mgbaramuko, senior brand manager, Diapers Category (Molfix and Bebem), and Motayo Latunji, sales director, Hayat Kimya Nigeria, at the Hayat Kimya Nigeria Limited MOLPED Sanitary Pads and MOLFIX PANTS product launch in Lagos, yesterday. Pic by Olawale Amoo

Africa to see continued investment in oil, gas over next 5yrs - Standard Bank Modestus Anaesoronye

frica is likely to experience continued investment in oil and gas over the next three to five years as the stabilisation of crude prices above $60 a barrel, coupled with the continent’s rapidly expanding population, lure both major and independent oil producers to one of the world’s last remaining energy investment frontiers, Standard Bank says. A string of successful exploration projects over the last decade has seen the number of African countries with proven oil and gas reserves rise to 28, thanks to new discoveries in Ghana, Niger, Mozambique, Uganda, Kenya, Senegal, Mauritania and South Africa. The investment required to bring these countries on stream will add further impetus to Africa’s oil consumption, which at 4 million barrels a day already significantly exceeds the continent’s 2.1 million barrels of daily refinery output, according to Standard Bank. “An expanding population, rapid urbanisation and accelerating economic growth are causing

the gap between Africa’s demand for gas and petroleum products, and its ability to supply them, to incrementally widen over time,” Dele Kuti, head of Oil and Gas for Standard Bank Group, says. “This will serve to attract further investment from both major and independent oil producers, which in itself will exert further pressure on the demand side of the equation as the resulting infrastructure investment in refineries, roads, pipelines and housing drives energy consumption,” Kuti states. Africa’s oil and gas sector is once again attracting investment from exploration companies and refiners followingaprolongedbreaksparkedbya slumpinoilpricesthatsawcrudedrop to below $30 a barrel in early 2016. An improvement in oil prices, which Kuti says are expected to average between $60 and $70 a barrel over the next three to five years, are attracting greater interest in the continent, which is seeing a population boom that will likely see the number of people double to 2.5 billion by 2050, according to UN projections. The BP 2019 Energy Outlook

says Africa is 6% of global energy demand by 2040. In 2018, the International Energy Agency (IEA) projected global energy demand would grow by more than 24 percent to 2040, requiring more than $2 trillion a year in investment to bring new energy supply on stream. Given Africa’s burgeoning population and economic growth, it is likely that a portion of this investment will be directed towards the continent’s relatively untapped energy market. “All of this investment activity will in turn spur demand for lending, deal structuring and transacting capabilities across the continent,” says Kuti. “Institutions with deep knowledge of the continent stand to benefit from those initiatives.” Standard Bank is one of the largest oil and gas lenders in sub-Saharan Africa given its on-the-ground presence in 20 countries across the continent. It’s Corporate and Investment Banking (CIB) division has a deep specialisation in Africa’s natural resources sector, where it has built up an enviable track record across the full spectrum of the min-

ing, oil and gas value chain. These capabilities range from investment banking and advisory services to foreign exchange and commodities trading as well as the provision of working capital, cash management and forex solutions. Some of the deals Standard Bank has been involved in during the last three years include the provision of $225 million towards a $2 billion facility for Petrobras O&G BV in Nigeria; $175 million of a US$2.5 billion loan to Tullow Oil for Pan African expansion; provision of $136 million of a $1.5 billion facility for Kosmos Energy in Ghana, served as joint book -runner for the US$750 million Vivo IPO, US$75 million to Coral LNG in which Standard Bank was the only African Bank at financial close as well as supported in US$ 1.8 billion worth of trade flows relating to fuel / refined product imports into sub-Saharan Africa. Last year Standard Bank also provided US$80 million in reserve-based lending to Svenska Petroleum Exploration; $136.5 million to Kosmos Energy Ghana, and $40 million to Eland Oil & Gas in Nigeria.

How to ‘Doubble’ your investment - Sterling Bank

terling Bank plc recently launched a new online investment portal known as Doubble with the aim of meeting the investment needs of individuals during their active phase (18 – 65 years). Doubble is an automated investment platform that allows an individual in active workforce to invest at his convenience and get back up to 100 percent returns over a period. With Doubble, an individual can choose to invest either in one contribution (a lump sum) or periodic contributions with investment options available in Naira and Dollars and opt for a monthly pay-out or lump sum based on the preferred investment variant. An investment analyst, Benjamin Oluwaduro, says the introduction of the new investment product is very timely as investors are in dire need of diverse investment options

in the financial services sector. He says it will also assuage the concerns of retirees and individuals who are looking for reliable returns on their investments in a bid to take care of their future financial obligations. Oluwaduro says unlike equity, which does not guarantee reliable and fixed returns on investment, with Doubble, an investor is certain about the level of returns to expect at the end of the day. With Doubble, also comes the freedom to choose, a customer can invest for duration of 36 months or 60 months with all payouts remitted monthly to the beneficiary of their choice in equal instalments. Doubble as an investment product can also be used as an annuity that guarantees monthly payment to beneficiaries at regular intervals over a specified duration.

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The platform’s flexibility will allow the customer to select other beneficiaries for payout such as children, spouse or parents while customers can access loans at concessionary rates if they require quick funds but still want to keep their contracts running. Doubble target option allows the beneficiary to set and achieve target amounts in Naira or Dollar over a period while voluntary additional contributions can be made into the investment account apart from the regular contributions based on the initial set date as well as multiple plans purchased. There are several benefits attached to Doubble. Beneficiaries can access loan facilities against their Doubble balance while also providing the option of choosing a different beneficiary other than the investor.

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It also empowers the customer to plan towards future consistent cash outflows such as payment for utilities, monthly upkeep and payment for mortgages and applications can be done immediately and a future convenient date selected for the contract to commence. There are several investment plans under the new product such as Doubble 3, Doubble 5, Doubble 10 and Doubble Lump Sum. One of the major features of the new platform is that it allows individuals to practice delayed enjoyment by saving now and reaping the benefits in double term later. Oluwaduro commends Sterling Bank for the laudable initiative of Doubble and enjoins other financial service providers to come up with innovative products for the benefit of their customers.

Thursday 25 April 2019

BUSINESS DAY

comment is free

comment A golden opportunity for a growing continent

Send 800word comments to comment@businessday.ng

Haley Lowry

y the end of this century, our planet will host another four billion people. Three billion of them will be born in Africa. That’s another three billion people with the associated increase in demand for food, water and energy. Rising to the challenge of these needs presents a daunting task. However considered from a different lens - it’s another three billion people with hopes, aspirations and dreams. Humanity, on a vast scale, has the potential to take – yet it also has the power to create. Plastic was created a century ago. It is one of the most groundbreaking material solutions in humanity’s history, transforming modern life. Food is kept fresher for longer. We can protect delicate, life-giving devices and medicines, even when they’re shipped to remote areas to deliver care. Plastic is fundamental to infrastructure, electricity networks and telecommunications that connect our communities and help power our homes. Supporting our growing population will demand we take advantage of such benefits: yet today we’re at risk of allowing an incredible invention to damage

our planet and threaten the precious resources that we’re going to need to sustain us in years to come. Research from the Ocean Conservancy shows that nearly 80 per cent of plastic waste in the ocean begins as litter on land, the vast majority of which travels to the sea by rivers. One study estimates that over 90 per cent of plastic in the ocean comes from 10 major rivers around the world – eight in Asia, and two in Africa. This poor waste management is not just an environmental disaster, it has major safety implications too. Take Ghana, where open drains fill with litter, hindering water flow and leading to flooding. The result? A proposed plastics ban in 2015 due to a flood-related national disaster in which 200 people died and 46,370 people were affected. The response was understandable – but is it a long term solution? Are we demonising a material that brings so many benefits, and could be crucial in terms of sustaining a growing population in the future? See the value, protect the environment, generate economic growth Here in Africa we have a fantastic opportunity to make plastic a vital part of our burgeoning circular economy. We have an enviable passion for development which is already transforming our societies – so why not harness this and create an international blueprint for how successful circular economies can thrive, with plastic as an obvious example? If we consider the potential economic value that can be derived from plastics post-use, throwing it away may be equivalent to physically throwing Africa’s money away too. And we simply cannot afford to let that happen.

At Dow, we believe that plastics are simply too valuable to go to waste. For example, we are active in ensuring that all plastics we sell into packaging applications have a market after they are used, through application development, new material designs, partnerships, and investments. That commitment is built on a clear set of beliefs on how plastics can be used sustainably: first, we don’t support the over-use of plastic or over-packaging. Plastic should only be used when it offers the lowest environmental impact (through its life cycle for that application). Even where plastic is the best material for the job, as little of it should be used as possible. And when it is the best material for the job, as little of it should be used as possible. Secondly: no plastic should end up in the environment. If plastic retains value through its life-span, in future it will be too valuable to be lost to the environment. But we also believe we have a responsibility today to help to clean up plastic that has entered our land and marine environment. As a result, we are putting investment and action into three key areas: ensuring no plastics get into the environment; delivering circular economy solutions and increasing impact through partnerships. We are approaching these key pillars in a variety of ways, through innovation to enhance the recyclability of plastics, through awareness and education campaigns, and by ensuring there is an end market for recycled material. And all of this is happening right now, right here, in Africa. Innovation through collaboration Take the remarkable, African-led

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Here in Africa we have a fantastic opportunity to make plastic a vital part of our burgeoning circular economy

combination of education, engagement and clean-up branded Project Butterfly: an initiative created by Dow to raise awareness of the devastating impact of littering and poor waste management in Africa. Working with local communities, association Plastics SA and grassroots NGOs in Kenya, Nigeria and South Africa, the project shows not only how vital it is to keep local environments litter-free, but demonstrates the value of recycling - transforming ordinary waste into something new. Such important, collaborative initiatives encourage us all to look closely at the entire lifecycle of the impact of plastics and drive improvements across the value chain. Fundamental to this is driving down plastic waste in all its forms from initial production through to end of life – and valuing its role in helping to reduce waste in other value chains along the way. Initiatives such as the Dow-led Pack Studios are already reaping rewards in Africa, where we are working with partners to create new solutions for plastic packaging, focusing on design and re-use: down-gauging, light-weighting, resource efficiency and recyclability. This includes offering technology and materials to accelerate easy to recycle packaging designs as well as the use of compatibilisers to enhance postconsumer recyclables. These are all essential elements of more sustainable plastics design Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ Haley Lowry is the Global Sustainability & End Use Marketing Director, Dow Packaging and Specialty Plastics

On Lagos satellite cities’ initiative

RASAK MUSBAU

ecently, a 1000-hectare modern satellite city in the Epe-Ibeju Lekki axis was launched by the Lagos State government. The idea of the new city, named Alaro Satellite City, was conceived to alleviate the city centres from the pressure of enormous growth. Specifically, Alaro City is situated on the Lekki-Epe Expressway for ease of transportation to Lagos Island or towards other parts of the country. It is directly across from the proposed Lekki-Epe International Airport, near the Deep Sea and Container Port, it is one hour drive from Victoria Island and one hour drive from LagosIbadan Expressway. The logic of this laudable initiative of the State government could be better understood from the new research that postulated that if Nigeria’s population continues to grow and people move to cities at the same rate as now, Lagos could become the world’s largest metropolis, home to 85 or 100 million in the next 50 years. This is why the state government policies are focusing on today and the future. Observably, unlike Ogba, Surulere, Lagos Island and Maryland, in view of their locations, presently Epe/ Ibeju-Lekki are not really

densely populated, but every discerning mind will agree that the whole of Epe division has the potentials to play a significant economic role in the near future. One can also say same of Ikorodu and Badagry divisions of the State. Lagos was caught in the web of some unpalatable features such as difficulty in waste management, human health concerns, traffic congestions, deteriorating and aging infrastructures among others, largely because it has developed independently of the efforts of city planners, through unstructured urbanism. Hence, going for satellite cities with required infrastructural investment is a good planning tool to partially decongest the metropolis and precipitate a rise in property valuations in the projected new towns. From a land use perspective, satellite cities and urban infill de¬¬vel¬¬opment are the best ways to accommodate population growth while preserving open space and farmland. The alternative is urban sprawl. Of course living in the planned Alaro Satellite Town is not everyone’s cup of tea. Billed as the most ambitious, strategic and grand project in recent history, the $250 million Alaro Satellite City, situated at the northwestern part of Lekki Free Trade Zone (FTZ) is a government well-planned project that would not only open up the Epe corridor, but would transform its economic landscape by providing jobs, reducing poverty and contributing significantly to socio-economic development of the state, especially in terms of the gross domestic product (GDP) of the state, and the country in general. The project, a partnership involving the North West Quadrant Development Company (NWQDC), Rendeavour (Africa’s acclaimed largest urban land developer) and Lagos State, is projected to create over 200,000 jobs as well as housing schemes for all the major

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projects within the zone. Alaro Satellite City is a mixed-income, city-scale development and a premium industrial, logistics, housing and leisure location, complemented by high quality commercial office complexes, homes, schools, healthcare facilities, hotels, entertainment centre and 150 hectares of parks and open spaces. In averting future chaotic traffic jams within this corridor and avoid similar incidences such as is being experienced in the Apapa axis, government have initiated the process of constructing the 7th Axial Road from the Lekki Deep Sea Port, en route the FTZ to the Sagamu/Benin Expressway. The design for the construction of a 50-hectare truck park within the Lekki/Epe corridor is also in progress. Critics of new cities may argue or be looking at high cost involve in it. But everyone in the State and Nigeria in general should know that the cost of urban sprawl is higher, with hidden costs like traffic congestion, and the cost of pollution, in the cost/benefit analyses. With the world population expected to surpass 9 billion by 2050, infill development alone will not come close to meeting future housing needs. A limited number of new medium-size and large cities makes sense in countries with extreme housing shortages like Nigeria. The highlights of the sprawling satellite project include secure land title with certificate of occupancy, designated mixed use development such as residential, industrial, commercial, social like schools, health and recreational amenities. Others are industrial plot sizes from 5,000 sqm, residential plot sizes from 500 sqm, industrial grade roads, street lighting, and drainage system, pedestrian walkways, jogging and cycling trails, power, gas, water, sewerage connections and ICT. There are also significant areas of green spaces to ensure no resident or worker is more than five minutes away from a

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park or green space. Naturally, there would be a perceived disadvantage for those using their home in the satellite town to travel to their workplace in the central city. Also, buying a home in a satellite town can lead to a sense of isolation and general dissatisfaction if the location does not feature the kind of social life and entertainment that would be seen as necessary lifestyle. This should be a perceived disadvantage that people who can think outside the box must turn to advantage. Or who says Epe cannot be turned into entertainment capital of Lagos? The sure available relief from city-related stress and cheaper property rates in Epe should motivate movement to Alaro Satellite City and environs. Migrant populations need to also know that Lagos and dividend of good governance therein is not limited to Ikeja, Yaba, Surulere, Agege, Ogba, Maryland, Apapa, Festac, Iyana Ipaja and Magodo etc Cheeringly, Lagos State Development Plan has made it a must for government to perform it own responsibility of reducing the pressure on city centres, it is left to residents and new entrants into the state to see opportunities and grab it with both hands. Alaro satellite city and more of it can accommodate more people and thus form new clusters of industries, commerce and logistics, and become new economic growth points. Lagos has resources, population and development plan that accommodate such. Therefore, as government is finding ways to attract more investments, sufficient industries and jobs to the satellite city, Lagosians should embrace the initiative and engage in creating thinking to benefit maximally from the project. Musbau is of Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja

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Thursday 25 April 2019

BUSINESS DAY

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comment Nigeria’s potemkin virus

David Hundeyin

n 2016, during a brand activation in Ekwulobia, Anambra State, I took a trip to the nearby town of Nanka to visit my friend from university who was in the country to bury his father. I had heard a few stories about an Igbo obsession with building “at home”, but this was the first time I got to see it first-hand. Nanka was not what I expected at all. Instead of your typical rustic Nigerian village with naked kids running around and a chorus of chicken and goat sounds, it looked like a fairly modern town. Most of the houses were storey buildings with satellite dishes hanging out and a surprising amount of Mercedes Benz and BMW vehicles littered everywhere. At the centre of Nanka was a palatial Catholic church and an impressive-looking Catholic school. There was just one problem – there didn’t seem to be any young people. Everyone seemed to either be a student attending the school or a retiree. Those around my age like my friend, were only visiting, and we all left together. Having buried his father, my friend went back to Manchester and returned to Nanka two years later for his traditional wedding. Being a born and bred Lagosian, the similarity of our situations did not strike me until a few weeks ago while I was driving through Ogudu GRA, the neighbourhood I grew up in. Like so

many other oil boom-era developments in Lagos, it is filled with symbols of the heady 70s and 80s when people first moved in. Most houses in the area are like my family house – an 8-bedroom monstrosity built across two and a half plots complete with a 35kva generator, a 1000 litre diesel tank, three-step water filtration system, and four underground and overhead tanks to service the 5 children and two parents who once lived there in our very own semi-independent Republic of Hundeyin. These days, the 5 kids are spread out across three continents, and the story is the same with most of our neighbours. Ogudu GRA is now populated almost exclusively by retirees and workers coming in to several converted business premises. The demographic of mid-30s to late-40s professionals I grew up seeing everyday has all but vanished. If you like, you can still make an inquiry about renting a flat there, but the N1.5 million average annual rent would probably discourage you. Where are all the young people? The term ‘Demographic Death’ typically conjures up images of Japan and its problem of low birth rates and an ageing workforce. Nigeria, a country where fully 75% of the country is under 40 years of age seems like an odd place to talk about such a thing. Yet the reality is that when we talk about Nigeria’s real estate market or its property ladder, young middle class professionals are conspicuously absent. Of course there are a few exceptions, such as those working with oil majors but by and large, the wage-driven gentrification of places like San Francisco’s Bay Area and Lewisham in London by young professionals is not taking place anywhere in Nigeria. Young people simply have no economic presence in Nigeria, which means Nigeria’s mid-

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dle class is not expanding in line with Nigeria’s population. According to the laws of economics we were taught in school, low demand alongside steady or increasing supply should lead to lower pricing. Nigeria obviously operates by a different set of economic rules. Real estate prices continue to trend artificially upward, driven by nothing but speculation and simple hope. In a country where fully 100 million people live in absolute poverty, with 6 people falling into poverty every minute, real estate values continue to go up with no supporting economic rationale to account for this whatsoever. N180,000 a month net of taxes is considered a well above-average monthly wage in Lagos, but the majority of rental listings anywhere outside of an absolute slum simply do not reflect this reality. Developers keep marketing sleek N2m rentals and furiously tearing down old buildings to put up these overpriced ‘luxury’ developments, but the jobs to support this gentrification simply do not exist. Nigeria: A real life potemkin village Nigeria’s real estate market is a microcosm of the country as a whole. It is one big potemkin village – a construction whose entire purpose is to present a situation as better than it actually is.We are obsessed with building and acquiring property without really having a plan or strategy, both on a micro scale and on a macro scale. On a micro level, whether it was my friend’s dad in Nanka or my aunty in Badagry, the message to us is the same – build, build, build! Why? For whom? At what cost? Who cares? Just build! On a macro level, developers and governments ignore vast areas of existing inland and waterfront real estate, choosing instead to repeatedly execute the technological marvel of reclaiming

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Without young professionals with significant disposable income, there is no middle class. Without a middle class, nobody can sell overpriced cement

land from water bodies for no discernible reason whatsoever.Eko Atlantic this year, Orange Island the next, Third Mainland Courts the year after. Why do we do it? Because… land! A feko’le! It doesn’t have to make sense, just build! Build! Build! Overpriced, ‘luxury’ developments keep sprouting everywhere from Abonema to Yaba, only to stand empty, apparently waiting for a time when general prosperity will make them a real option. In the meantime, since I am determined not to cough out the best part of a million naira at once for a decent flat on Lagos Mainland, I am stuck house-hunting. The few services offering monthly rental facilities turn up their nose at my N70,000 monthly budget because they are only available on the Island, you know? If I am interested in the Island, that will be just N230,000 per month, because you know, that is totally how real-life middle class Nigerians in 2019 spend money that they actually work for. Despite my relatively privileged status, Nigeria’s real estate market apparently has nothing for me, which then begs the question: who exactly is it for? Late-stage bubble economics In 2017, I had the opportunity to listen to some sobering insights from a former banker with access to some interesting CBN data. According to him, after taking into account the number of bank accounts receiving a cash inflow of up to N200,000 a month and some other parameters, it is safe to say that Nigeria has an addressable market of only about 5 million people for the purpose of buying anything other than necessities. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Exploiting consumers’ ignorance in testing product viability

OSA VICTOR OBAYAGBONA

ccording to Time Magazine, “In an era of super-size and SUVs, some goods are actually getting smaller. Manufacturers are quietly trimming the content of their packaged products - from yogurt and ice-cream to laundry detergent and diapers - and often they aren’t dropping prices to match.” This tactic is not new, but because of the sagging economy and more cost-conscious consumers, many manufacturers are now downsizing their products more aggressively to maintain their profit margin. From about 2004 to date, there has been a drastic change in the manufacturing sector of the Nigerian economy also. Manufacturers of most household items have introduced new products and re-launched old ones to strategically position themselves for better sales. Most of these involve changes in brand logos, brand name, etc., and at times it entails a total change in marketing strategy and in the advert theme. Often, all these manoeuvres are superficial in order to mislead the unguided end user. The unfortunate thing is that most consum-

ers do not notice that weights and measures have changed - a few grams or meters. Consequently, consumers end up spending more for less. A clear example can be seen from most of our brewers, who are involved in re-branding most of their existing products in the guise of repositioning to fit new market trends. In their various rebranding, what do we notice? Smaller and more attractive containers/bottles. What is the implication? The content has been automatically affected by the smallness of the containers. Some re-launch products that were practically not acceptable to the consumer when they first came out. Apart from few manufacturers that slightly increased content, majority reduced content by systematically and attractively reducing the container. Consumers therefore have less quantity, maybe the same quality, and same price, or at times pay higher price for less quantity. What a rip-off! There is no exception with soap and detergent manufacturers. You notice in this industry the same soap, may be also, same quality, coming in smaller form being launched and re-launched in order to deceive the final end user. The toothpaste manufacturers are also involved in this unwholesome act. Toothpaste that should have been forgotten for not being what was claimed is re-launch into the market, even at a higher price. The juice manufacturers also share in this chicanery. Attractive fruit juices come in different attractive packs with less content. The unsuspecting end user never cares to measure or weigh it to confirm its content.

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A glaring item, which most below-average consumers use often, is our regular candle. The current candlestick in the market is thinner and burns faster, and at the end you can’t even find the wax. Compare this with candlesticks of the 70s and 80s, and you will understand that this new trend is frightening. What about the tobacco industry? Cigarette smokers can tell that a stick of cigarette burns faster than what it used to be; although, this can be pardonable because health experts often warn about the dangers of smoking. Our electronics these days come with attractive scientific devices that most people cannot operate efficiently. A slight surge in the source of power supply burns it out. Who is at loss? The end user. Are we seeing what I am seeing? The most annoying of this trickery is perpetrated by our motor vehicle manufacturers. New models of cars are sleekly and attractive to all. They are faster than the old models, with more electronically controlled devices, and above all, more expensive. But have you taken note that they are less safe? In the 70s to 80s, when there was head-tohead collision, drivers and passengers could still be safe, because then cars were made of steel. Today, what do we have? A slight collision results in the car being squeezed like a can of juice, resulting in the disablement or death of the occupants. Why? Because modern vehicles are mostly made of more fibre in order to increase its speed and reduce weight; the lighter a car is, the faster it moves and burns more fuel. These cars are more expensive, but less safe, what an irony. We all know that steel is more expensive, heavier and safer than fibre.

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The ongoing crisis with Boeing 777 Max is a clear instance being discussed here. At the end of the year, manufacturers declare huge profits after tax at the expense of the unprotected consumers. You then see shareholders smiling to their banks, and in turn use the supposed profits gained in buying same product at which they are short-changed. The irony in life, you may say. For the manufacturers, it is good to boost sales and reposition your brands in the eyes of the consumers in this ever-widening competitive market, but making consumers an experimental tool to testing the viability of your products by exploiting their ignorance is criminal. “Consumers really don’t have in their mind that they have to check the net weight or net count every time they buy something. It’s perfect consumer scam when consumers don’t know that they have been taken in,” said Edgar Dworsky, founder of Consumers Advocacy website. Consumers today, due to the severity of the economic situation, are becoming more conscious of Shrinkflation, producers’ dubious strategy of reducing product quantity through repacking and other gimmicks while retaining price, or at times, increasing price slightly. This increasing consumer awareness makes it vital for producers who have been shortchanging their customers to have a rethink and devise cost-savings approaches that would reduce pressure on their margins and still offer end users value for money. Osa Victor Obayagbona is assistant News Editor, BusinessDay

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Thursday 25 April 2019

BUSINESS DAY

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Leadership is behavior Positive Growth with Babs

Babs OlugbemI

oday is the second and concluding part of last week’s article titled ‘beyond influence and result, leadership is behaviour’ All leaders want to influence their followers and produce results. The results are either short-term with or without links to the long term objectives of the company or sustainable results which meets the expectations of the stakeholders all the time. Daniela (a pseudo name) recently changed her role from being a Director of one of the top fast moving consumer goods (FMCG) companies to be the Country Director of a new company in a different sector. The new company is like a start-up but with enormous potential to match competition. Daniela wants me as her executive coach to discuss and guide her on how to establish footprints in the company focusing on bottom-line results and market share. She read last week’s article, and she wondered if what I wrote is relevant to her as the start-up director for her new employer. Given her previous experience and level in the FMCG industry, she has both the technical competence and relationship skill to influence and achieve results. Her new role is an opportunity to make things right at the beginning, go beyond

influence and achievement by ensuring that the behaviours of her team leaders are in sync with and towards the objectives of the company. When the foundation is right in terms of attitude or culture of the organisation, achieving a sustainable result through and with quality products or services will be a pleasurable ride. What should be Daniela’s priority as a leader? Is it influence, result or behaviour? The foundation for leadership influence and result is behaviour. A leader is the one who knows the way of the appropriate behaviour that set his or her team on fire (influence) to get the work done for the expected outcome (results) with bye products of self-fulfilment of the team members and commitment to the process and the brand that connects the team. The last paragraph is what the rest of this page will be on with a focus on business entities, though the principles can be applied to any organisation, be it political, voluntary or institutional. What connects or disconnect the team, breed commitment or lack of it to the common objectives and foster the loyalty or disloyalty to the brand is the culture of the company. I have defined culture as the attitude and behaviours allowed and exhibited by the company’s leadership. For Daniela, the starting point is ensuring the culture allowed and exhibited by her inner circle aligns with the business objectives concerning the customers and the market. Behaviour that gets a market share but violates the relationship with the customers or consumers will erode the brand and its power to attract repeated patronages in the future. For example, if the internal competition among your regional sales teams leaves the customers to wonder if the company is orderly or not, then the behaviour of secretly selling

to the customers of another region by one of your teams is internal cut-throat competition. Internal cut-throat competition is a behaviour that is synonymous to the fight between two brothers which helps the strangers reaps the harvests. The behaviour that achieves results but violates the core values of the company, or the processes meant to support the vision or mission of the business will endanger the entire company if allowed to thrive. The rampant harmful behaviour in the workplace is the use of vulgar or abusive languages by the supervisors or leaders. The question is what to do to a person who is achieving results but with no respect for the value and the culture of the organisation. I have been asked this question time without numbers, and my answer is without repentance. For example, a leader that uses vulgar words on his team will deflate the team members’ emotions. The implication of negative emotions in the workplace is the creation of a toxic environment with disengaged staff waiting for the next offers to exit and becoming competitors to the company. I have advised companies to exit people who are not changing the behaviour that is anti-culture and against the core values after receiving private coaching to mend their practices with the culture of the company. My position is with no respect for the results they are delivering. It is highly probable that the results they are given are rooted with personal egoism and will never be sustainable after their exit from the company. It is; therefore, better to lose a disoriented leader and his result for a moment than to create a lousy workplace which takes longer time to cure than achieving positive results. To Daniela, she should not tolerate the use of abusive languages in the name of

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The behaviour that achieves results but violates the core values of the company… will endanger the entire company if allowed to thrive

achieving the result. The most dangerous effect of celebrating achievements without value for the culture is the tendency for the upcoming leaders to emulate the style of manipulating or abusing people to get temporarily but not sustainable results for the company. Where self-fulfilment and commitment of the goose that should lay the golden eggs for the company is destroyed, the influence and the results of the leaders will be a mirage and an achievement that will be eclipsed within a short period. Therefore, the starting point for Daniela is to ensure the accomplishment of the company’s objectives without destroying the commitment and fulfilment of her team and the culture of the company. She must entrench a result or performance oriented culture which harbours selfrespects for all the team members and fairness by punishing with people who are either not contributing to the result or are achieving results with destructive processes or behaviour. The most important behaviour that guarantees the combination of influence, result and the creation of the best place to work is respect for people. Leaders that respect his or her people will do all that is practicable to ensure changes in policies that are inhibiting the performance of his or her team, and give them the appropriate supports knowing that the outcome of the teams’ efforts is his or her result. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

Importance of public and multimodal transportation systems in Nigeria

Festus Okotie

he role of Public Transportation is to provide people and services with mobility that fosters employment, education, retail, health, recreational facilities, communities’ facilities and other necessary basic structures that keeps life going. Public Transportation includes the use of trains, buses, ferries, taxis and airlines. This moves people towards a more sustainable future, the more trips that are done by public transport, the less the number of trips that are done by private vehicles, leading to road sustenance, less congestion on the roads and a more efficient transportation systems. Some of the benefits of better public transportation systems are as follows: It provides an alternative to reliance on the motor vehicle, reduces traffic congestion and travel times. It also provides economic opportunities, reduces harmful pollution and improves air quality, provide benefits to individuals and communities. Public transportation is a form of collection and distribution process. The shape and form of public transport networks generally reflects the level of frequency of where people want to travel to and from, which is very pivotal to the need for different transportation modes such as Railway,

buses, ferries, airlines and pipeline transport which optimizes efficiency in society. The best form of transportation management is the multimodal transport concept which is recognized as one of the most important components of global logistics in Nigeria and other global economies for which Nigeria fully approves. For instance, the enactment of the 2003 Nigeria Cabotage Act, development of Inland Container Depot, dredging of River Niger as well as seaports terminal, concessioning, railway reinvestment and reforms are major evidence of the commitment of the Nigeria governments towards the realization of multimodal transport in the country. Notwithstanding, multimodal transport operation in Nigeria is still largely being impaired and under developed, because of the following factors, lack of guaranteed schedules services, lack of cargo information systems, lack of modern cargo handling equipment and methods, poor roads, no rail links to the ports and poor state of transport infrastructure across the nation. Transportation and trades are inextricably linked in such a way that efficient transport services are a prerequisite to successful trading. Nigeria like all other developing economies of the world needs to encourage multimodal transport development by ensuring it is private sector driven. Government should therefore limit its primary roles to regulation and coordination of the activities of the diverse stakeholders in the sector, otherwise government bureaucracy and delays would discourage and constrain the private investors from investing in the development of infrastructures that would accelerate the development of multimodal transport operations in Nigeria. Government and its agencies should play the role of multimodal transport facilitator thereby partnering private investor in this

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regards, as well as creating the enabling environment for investments, this will boost efficiency of Nigerian transport and logistics sector and would then be able to utilize some of the huge benefits of technological innovation and advancement in the global multimodal transport systems, such as the use of modern cargo handling equipment, communication technology, modern security systems, bimodal vehicles such as containers and barges and also by means of piggyback of the system. In the present situation of our transportation systems, Global Logistics organisations would find it difficult collaborating with the Nigerian Railway Corporation, let alone with the Inland Waterway Authority and other associated agencies in the transportation sector because of the huge advancements and difference between modern day transportation and our nation’s deplorable transportation systems. Global economies and organisations have achieved a very significant progress as a result of adopting and fully implementing well structured multimodal systems and would find it difficult to collaborate with our present system as a result of the poor antecedents, bottlenecks and corrupt systems embedded within our transportation sector in managing and maximising business opportunities in the past, most developed economies do not compromise, are well structured ,have put in the right people in the right positions in the management of their transportation systems and have the right infrastructures in place to run government businesses efficiently to boost the economy of their various nations. Most Global Logistics organisations would be more comfortable dealing with a private transport organisations as compared to government agencies, as practiced currently in developed nations. We as a nation must begin to show more determination willingness, commitment

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and transparency towards a total overhauling and transformation of the transportation sector through a holistic and inclusive privatization of the transportation sector in order for us to maximise the benefits of multimodal transportation systems which would definitely impact positively on our trade, economic systems and create more value to our economy. The way forward for the speedy growth of our transportation systems is for the Nigerian government to allow the private sector to drive the course of the expected growth and development in terms of productivity, infrastructures, service delivery, explore modern day marketing strategies, skills, trainings and optimization of the entire operational network within the transportation sector, while government remains at the background monitoring and coordinating the activities of the private players and investors within the industry. If the above steps are taken seriously with determination and total commitment, our nation’s trade, transportation sector and economy will experience tremendous growth and development which will create massive job opportunities, improvement of our GDP, prosperity, stability and create alternative diversification areas for our economy from the current total reliance in the oil sector and we will start benefiting from the inherent potentials of multimodal transport operations, which are on time cargo delivery, door to door movement of cargo, reduction of cargo handling cost, cheaper overall transportation costs across all the modes, reduction of delays and congestion within the system, increased safety, reliability of cargoes and people arriving at their destination at the actual stipulated time. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Thursday 25 April 2019

BUSINESS DAY

Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Crisis of basic education in Nigeria

n 1999, the Nigerian government introduced the Universal Basic Education, as a reform programme to provide 9 year free and qualitative primary and junior secondary education to all Nigerian children. The thinking behind the programme was that no Nigerian child, no matter the location and socio-economic status of the parents, should be denied qualitative basic education. By 1990 primary school enrolment was put at 86 percent, but enrolment dropped to a mere 25 percent by the time the children reached secondary school. Education infrastructure was also decaying without any attention being paid to it by policy makers. The federal minister of education, in 1997, on a nationwide tour of the country’s schools stated that “the basic infrastructure in schools such as classrooms, laboratories, workshops, sporting facilities, equipment, libraries were in a state of total decay. The physical condition of most schools was reported to be pathetic.” Consequently, the government set about creating structures to overcome the dearth of facilities and cre-

ate a robust infrastructure to support basic education. It created the Universal Basic Education Commission (UBEC) to promote uniform, qualitative and functional basic education as well as coordinate all aspect of the programme implementation, and also set up an intervention fund to be accessed by states upon providing their matching grants. Although the programme ran into legal difficulties soon after, it effectively took off in 2004 upon the signing into law of the UBE Act. Results have been mixed. Although there has been noticeable improvement in enrolment since the beginning of UBE, the results have been limited and Nigeria’s educational system still rates poorly in most international rankings. In fact, the failure of states to place a high premium on basic education has found vent in their refusal to access intervention fund from the Universal Basic Education Commission (UBEC).According to the agency, as at August 31, 2018, a whopping N51b was not accessed by states, while as at same date, only 13 of the 36 states and Abuja accessed the 2017 UBE matching grants totaling N18, 008, 804, 569.70. In fact, as politics take cen-

tre stage, stakeholders are worried that the UBEC intervention fund not accessed could jump to over N80b as things may take a while to settle down. For now, some states may be concerned with draining their treasuries to fund election, and it might take a while to stabilise their economies, post-election. UBEC is an intervention and regulatory agency saddled with the task of promoting uniform, qualitative and functional basic education, as well as, coordinating all aspects of Universal Basic Education (UBE) programme implementation. As at 2015, Nigeria ranked 103 out of 118 countries in UNESCO’s Education for All (EFA) Development Index, which takes into account universal primary education, adult literacy, quality of education and gender parity. As a plus UNESCO’s review found that enrolment at primary and junior secondary schools had greatly increased since 2000. However, transition and completion rates remained below 70 percent. But Nigeria’s out of school children remains a huge challenge. A survey conducted by UNICEF and the Nigerian government shows that Nigeria has the highest number of out of school in the world at 13.2 million, an

increase from the 10.5 million children a decade ago. This is not to mention the huge infrastructure deficit and depreciating teacher quality plaguing most of the schools in Nigeria. Even with the grim statistics above, a trend has emerged where states fail to access the UBE intervention funds because they could not afford to make their matching grants, and those that access the funds either mismanage them or divert them to other uses aside improving basic education in their states. Feelers from UBEC suggests that as at August 2018, about N51 billion was not accessed by states, while only 13 of the country’s 36 states and Abuja accessed the 2017 UBE matching grants totaling N18, 008, 804, 569.70. This is very sad. No country in the world has been known to develop without developing its human capital. But in Nigeria, despite the efforts made to promote education, some states are showing that educating their people is not their priority. We propose a review of the UBE Act to make it compulsory for states to pay their matching grants, outlaw the mismanagement and or diversion of UBE funds and provide for stiff penalties for violators.

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

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Thursday 24 April 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Huawei boasts of revenue surge in firstever quarterly results Pg. 14

BANKING

UBA grows most profit among peers on interest income surge SEGUN ADAMS & ISRAEL ODUBOLA

an-African financial services provider, United Bank for Africa (Plc) recorded the biggest profit growth among peers in the first quarter of 2019, excluding Access Bank due to consolidation effect which skyrocketed profit by 86 percent, and First Bank, that is yet to release its Q1 results. Net income for the bank grew by 21 percent to N28.66 billion from N23.74 billion in corresponding quarter of 2017. The result was on the back of a double digit growth in interest income on financial assets at fair value through profit or loss to N96.89 billion in the review period. Net interest income which is the difference between the interest gained and interest paid by UBA rose 9.58 percent from N58.68 billion in the first quarter of 2018 to N53.55 billion in 2019. UBA also saw significant improvement in its net fee and commission income which increased to N16.76 billion, 11.73 percent more than N14.996 it posted for first quarter 2018. Despite an 8.76 percent decline in net trading and foreign

exchange income, the bank’s other operating income increased at a faster rate to buoy the gains in net fee and commission, and grow UBA’s total net non-interest income by 7 percent in the quarter. Net operating income after impairment loss on loans and receivables rose by 7.75 percent to

N81.998 billion for the first three months of 2019, driven by a 7.94 increment in operating income while Net impairment loss on loans and receivables increased 17.88 percent with allowance from credit loss to customers and banks fuelling the uptick. Total operating expense for the bank rose by 4.56 percent to

N51.94 billion; however, profit before tax grew 13 percent to N30.17 billion in the first quarter of 2019 compared to N26.56 billion in the same period last year. Owing to the bank’s ability to drive growth, its profit after tax surged 21 percent as UBA raked in N28.664 billion compared to N23.736 billion in first quarter

2018, consequently resulting 22.73 percent appreciation in earnings per share to 82 kobo in the review quarter. Analysis of the lender’s balance sheet showed considerable improvement in total assets. UBA gained 4.73 percent value in aggregate assets to N5.11 trillion in the first three months of 2019 on the back of appreciation in cash & bank balance, investment securities and property & equipment. The lender’s total liabilities settled at N4.57 trillion in the review quarter, indicating 4.58 percent increase over N4.37 trillion reported a year ago, triggered by elevated customer deposits, other and subordinated liabilities. Shares of UBA gained 3.01 percent after Tuesday’s trading (April 23) to N6.80, outperforming the All Share index and NSE banking index that shed 0.03 percent and 0.44 percent respectively. UBA is a financial services group in Sub-Saharan Africa with presence in Africa, United Kingdom, United States and France. The lender offers range of banking, pension fund custody and other financial services to customers in retail, corporate and commercial segments of African market.

INDUSTRIAL GOODS

Berger Paint upbeat after 20% growth in net income DAVID IBIDAPO

hares of Berger paint resumed trading after the Easter break on a positive note as prices reversed by 1.19 percent on the release of its first quarter results for the period 2019. This is however after the stock recorded its third biggest fall last week by 9.19 percent a day before the Easter break on investor’s bargain hunting after prices hit its year to date highest level at N9.25. Data collated from the Q1 financial statement of Berger Paint released Tuesday on the Nigerian stock exchange (NSE) market, showed a 20 percent growth in the company’s bottom line. This was on the back of the company’s cost efficiency during the period under review despite a marginal decline in revenue by 1.08 percent. Profit for the period stood at N84.43 million against N70.11 million recorded in Q1 2018. This improved the company’s profit margin to 11 percent from 9 percent recorded in Q1 2018. During the period, cost of

sales improved by 10 percent to N416.63 million against N461.78 million in 2018. This impacted on total cost recorded during the period. Total cost amounted to N689.05 million a decline by 8 percent in Q1 2019 to include Cost of sales, selling/distribution expenses and administrative cost. Meanwhile, Berger paint incurred a whooping N4.4 million finance cost which eroded about 89 percent of its finance income of N4.96 million during the period. This saw net finance income dip 88 percent to N528 thousand from N4.36 million made in Q1 2018. As at the end of trading on Tuesday, share price of Berger Paint stood at N8.50 returning N28.98 million to investors. Year to date (YTD) analysis show that stock is currently down 1.16 percent. Also, the stock has lost 4.55 percent of its value returning negative to investors. As reported by the company’s financial, earning per share grew 20 percent to 29 kobo from 24 kobo.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Thursday 24 April 2019

BUSINESS DAY

COMPANIES&MARKETS TECHNOLOGY PETROCHEMICALS

Huawei boasts of revenue surge in first-ever quarterly results SEGUN ADAMS

u a w e i , Chinese technology giant, revealed it has realised 39 percent more revenue in the first quarter of 2019, a brilliant start to the year in which it says would see large-scale 5G deployment around the world and provide unprecedented growth for its carrier business group. Revenue in the first quarter of 2019, it claimed, hit $27 billion or 179.7 billion CNY (Chinese Yuan) as 59 million smartphones were shipped out in the same period. The information provided was selective and did not include Huawei’s net profit ; however, the company claimed its netmargin improved marginally at 8 per cent, compared to Q1 2018. The privately-held technology company which is one of the world’s largest telecommunications equipment maker and a major rival to Samsung and Apple in the smartphone market has until now been

discreet with its quarterly figure although it has always made available its annual financial report. Huawei’s impressive performance in the first three months of 2019 has followed a 25 per cent surge in its annual profit despite its spate with the United States over claims of espionage, theft of technology and engagements with Iran, amid the US-China trade war. The United States alleged that Huawei was making it possible for the Chinese government to spy on other countries through the manufacturer’s equipment and it resulted in a backlash from some countries, threatening the company’s business and bringing its activities under security scrutiny. Notwithstanding, Huawei claims it has signed 40 commercial contracts for 5G with leading global carriers and had shipped more than 70,000 5G base stations to markets around the world as at the end of March 2019. The revolutionary 5th generation communica-

tions technology is close to the epicentre of a global power struggle between Washington and Beijing. The novel technology would not only change the speed of communications exponentially but could also easily be adapted to warfare especially in guiding drones, missiles and warcraft, stoking USA’s fear of China’s ambition. Huawei repeatedly refuted claims of the United States that it was pushing Beijing’s agenda. Huawei says its 5G technology lays the groundwork for a truly connected world and would contribute immensely to the internet of things (IoT) and the digital experience of consumers significantly. Last year Huawei grew its revenue by 19.5 per cent to $107.4 billion or 721 billion CNY. Consumer Business grew by 45 per cent and was the largest contributing segment to its turnover at 48.4 per cent. Huawei’s carrier business, its second largest revenue source in 2018, declined by 1.3 per cent while Enterprise business grew 23.8 per cent.

Agusto & Co assigns Nova Merchant Bank “BBB” rating BALA AUGIE

igeria’s first credit Rating Agency and a pan African leader in credit reports, Agusto & Co. limited whose strong credibility presence and ratings are globally accepted in Nigeria and across the globe has just assigned a ‘Bbb-‘ rating to Nova Merchant Bank Limited. The rating assigned to Nova Merchant Bank Limited (‘NovaMBL’ or ‘the Bank’) reflects its strong capitalization ratios, acceptable asset quality and strong liquidity profile. The rating takes into cognizance the Bank’s limited financial track record, though it is led by an experienced management team. The subdued macroeconomic environment and its attendant impact on the banking industry is also a rating concern.

The Nigerian banking industry continues to display resilience despite various headwinds that militate against its performance. To protect margins and remain profitable, operators are leveraging technology to boost electronic banking services, thereby increasing inflow of low-cost liabilities and improving transactional banking income. Digitalization is also driving efficiency by lowering cost of service and extending banking services to a wider pool of Nigerians. The merchant banking segment is not exempted from the digitalization evolution. Operators in this space are also using technology to attract retail funds through their asset management subsidiaries. This moderates funding cost which is typically higher than commercial banks due to regulatory

restrictions. Although merchant banks have a low market share of the Industry’s assets at 0.22%, the segment has expanded over the last few years, with five licensed operators as at FYE2018 from a nil position in 2012. Merchant banks are competing efficiently by taking advantage of a wide range of financial services conferred by the license. Such services include investment banking, corporate finance, asset management, advisory, wealth management, capital markets and securities & trading activities. Going forward, as the economy opens up, we see opportunities for capital raising, mergers & acquisitions and corporate financing which merchant banks can leverage to grow market share and render good returns to shareholders.

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Habiba Abubakar, Territory lead - West, ENYO Retail and Supply (2nd l); Abayomi Awobokun, CEO, ENYO Retail and Supply (2nd r), and station personnel of the Station Personnel understudy program (S-PUP) during the Annual Sales Summit, 2019 in Lagos.

INDUSTRIAL GOODS

Chemical and Allied Product sees colourful 2018 on improved earnings SEGUN ADAMS

hemical and Allied Products (CAP) Plc, an indigenous paint manufacturer and subsidiary of United Africa Company of Nigeria, amid a challenging macroeconomic environment posted an impressive scorecard for full year 2018 to grow its top-line and bottom-line. Gross profit grew 15 percent to N3.73 billion in 2018 compared to N3.25 billion in the preceding year. The improvement was on the back of a faster pace of expansion in its sales to N7.76 billion in 2018, 9.15 percent more than its 2017 figures, while cost of sales grew 4.41 percent to N4.03billion in the period under review. CAP, the owner of popular Dulux and Caplux paint brand, generates revenue from sales of paints and application of paint. Turnover from sales of its paint product, which contributes more than 90 percent to revenue, rose year on year by 10 percent to N7.76 billion although its services segment slowed in the review period. Gross margin improved as CAP was able to retain 48.04 percent of its revenue in 2018 compared to N45.68 percent in the year before. The margin is a measure of profitability, comparing revenue with cost of production. CAP attributes its top-line performance to the adoption of various cost reduction initiatives and improved efficiencies. ‘’This was achieved through products’ reformulation and vendor-managed inventory initiatives,’’ a note attached to its 2018 results read. An increase in selling and distribution expenses of 18 percent and a near double-digit rise in administrative expenses coupled with a 20 percent drop in other income was not enough to weigh on the manufacturer’s operating profit which saw a 16 percent growth to N2.29 billion in 2018. Consequently, operating margin improved from 27.77 percent in 2017 to 29.43 percent in 2018. The improvement implies CAP made more profit on a naira of sales, after paying for

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variable costs of production but before paying interest and tax. Net finance income grew 51.74 percent to N312 million in 2018, after a decline in finance cost by about 30 percent and a 44 percent growth in finance income. Interest cost for the paint manufacturer fell by 81 percent in the year. Appreciation in CAP net fi-

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nance income buoyed the company’s performance to grow profit before tax by 17 percent, amassing N2.597 billion in 2018 compared to N2.181 in 2017. In 2018, CAP recorded a 16.76 percent decline in tax expenses to N568 million and grew Net income from N1.499 billion in 2017 to N2.029 billion in 2018.

Thursday 25 April 2019

BUSINESS DAY

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Thursday 24 April 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

ENERGY

Government agencies urged to stem sale of obsolete performance engine oils FRANK UZUEGBUNAM

elevant government agencies have been called upon to urgently intervene in stemming the sale of obsolete performance engine oils that have been flooding the Nigerian market for decades. Chika Ikenga, Group Managing Director, Eunisell Group, made this call recently in Lagos in a statement. According to Ikenga, the intervention will protect companies currently using engine oils for modern vehicles with standards applicable to trucks and cars manufactured as far back as the 1970s. He said that most agencies’ management are unaware that their decision to cut operating costs by purchasing cheap, obsolete oils for their fleets, has consequences – there are ‘hidden’ costs on not only their bottom line, but also on environmental and infrastructural

degradation. Ikenga stressed that companies can easily avoid incurring millions of naira annually on vehicle maintenance and repairs – It is simple – using obsolete service oils causes increased engine wear, catalyst poisoning and particulate filter blocking as well as increased piston deposits, degradation of low and high temperature properties and increased sootrelated viscosity. The costs on environmental and infrastructural degradation are even more staggering. “Without realising it, companies’ efforts to save money results in increased expenditure. This is tantamount to the popular axiom, ‘penny wise, pound foolish. This is entirely preventable.” Ikenga, a chemist by profession, highlighted the environmental and health damage to include pollution, by way of increased Sulphur emissions

from poor engine performance, affecting all strata of society with asthma and other chest ailments; oil leaks penetrating ground water, which in turn degrades available water supply, oil deposits in ground, fire hazards, reduced soil quality for agriculture and smoky engines’ reducing visibility, which portends danger to road users, increasing accident rates. He called on the government to embark on a massive campaign to create awareness by educating fleet owners, mechanics and the industry, to raise vehicle industry standards, and adhere to the internationally recognised American Petroleum Institute (API) guidelines. Eunisell Groups’ operations formally commenced in 1996. The company is the leading additives and transport Chemicals Company in Nigeria supplying products solutions to a wide base of customers operating throughout Africa.

L – R: Shuaib Abubakar, senior manager, media management, MTN; Chinyelu Onochie, senior manager, go-to-market, MTN; Ezinwanyi Eziihe, winner of MyMTN App Challenge, and Praiz, MTN brand ambassador, at the presentation of prizes to winners of MyMTN App Challenge.

INVESTMENT

Lulu Group eyes investment in Nigeria to set up logistic hub MICHAEL ANI

ulu Group International---a UAE-based retail firm, plans on setting up a sourcing and logistics facility in Nigeria to enable it export local agricultural produce to its various operations across the GCC, India and Far East, an Arabian business paper reported. The plan by the firm to secure an investment in Africa’s second largest economy stem from a meeting between Nigerian President Muhammadu Buhari and Yusuff Ali MA, chairman of Lulu Group during the Annual Investment

Summit being held in Dubai. According to the paper, Buhari, 76, was quoted telling Ali: “Come to Nigeria and prosper and have handsome returns on your investments, within the shortest possible time.” Yusuff Ali who also briefed the Nigerian President about Lulu’s activities, expressed interest to work with Nigerian farmers to promote local produce and to ensure food security. “We are also interested to sign contract farming deals with local farmers and entrepreneurs to help supply fresh vegetables and fruits to our hypermarkets worldwide,” said Ali.

Lulu currently has similar facilities in other African markets such as South Africa and Egypt which makes it farmilia with the terrain, the paper noted. A high level team of Lulu is expected to visit Nigeria soon for further discussion with authorities. “Discussions were held to invest in Nigeria’s retail sector by Lulu Group and more importantly to invest in local agricultural products and help to market them worldwide will be extremely beneficial for the local farmers”, said Geoffrey Onyeama, Nigerian Foreign Minister after the meeting.

L-R: Olufunmilayo Ogunbodede, brand manager, Goldberg; Maria Shadeko, senior brand, Goldberg and Life; Olamide Adedeji, Goldberg brand ambassador, and Omotunde Adenusi, portfolio manager, mainstream brands, Nigerian Breweries, at the official announcement of Olamide as brand ambassador for Goldberg.

TECHNOLOGY

CIPS tasks businesses on supply chain digitalisation to enhance service delivery AMAKA ANAGOR-EWUZIE

igitalisation has taken the center stage in the world today and there is need for businesses to act very fast in order to deliver efficient services to customers, Chartered Institute of Procurement and Supply (CIPS), has said. To do that, companies and government need an enabler and building blocks that would help them to deliver increasing value to customers. The enablers include Cloud Computing, Data Analytics, Cognitive Insight, Block Chain technology, and others. Part of the building blocks to digitalise the supply chain is Cloud Computing, which provides a platform where there would be collaboration between all the partners instead of ‘silo mechanism’

where the supplier will be sitting down somewhere without being visibile to each other partners in the chain, Ifeanyi Ojoh, Global Category manager – technology, Union Bank Plc, said while making presentation on Supply Chain Digitalisation (transformation projects already executed. “For instance, the logistics problem in the just concluded general elections could have been resolved with technology, starting from planning and voting stages. So, there is need for technology to take center stage in logistics and warehousing. These things are already happening around the world judging by what Amazon is doing today. One can actually order things from Amazon and it will be delivered within a shortest possible time,” he said. Ojoh also pointed at Data www.businessday.ng

analytics, which can be used to power smart decisions that will enable private and public sector as well as individuals to respond rapidly to changing business mode. “It can be use to power predictive insight that enables one to predict what will happen next. “There is Cognitive insight, which is being able to take the decision on your behalf. So, when you are not there, there could be different trigger points that could change throughout the supply chain and it will enable the supply chain to remain agile and resilient. “Block chain technology is a distributor lager that warehouses information on everything happening on the supply chain. It engenders trust and transparency needed in driving today’s business,” Ojoh said.

Olayinka Akindayomi, service director, Children’s Developmental Centre (CDC), Opeoluwa Akinola; member of Dayonmi Love Foundation; Isiaka Lawal, ccorporate communications, Promasidor Nigeria Limited, and Olubukunola Ojo, member of Dayonmi Love Foundation, at the meeting with the team of Promasidor Nigeria Limited, CDC and the Foundation, a cooperative group of parents of children with disabilities on the We Too Can Grow scheme in Abeokuta, Ogun State recently.

The joyous sub dealers, Borire Mary, owner of His Grace Communication and Chinoso Nnaji, owner of Thaneboh Nig Ltd receiving their car rewards from itel Nigeria Channel Manager and Brand Manager, Henry Do and Kevin Zhang respectively.

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Thursday 23 April 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open 12 – 04–19)

31,924.51 29,560.47

N11.103 trillion

29,560.47

Week close (18 – 04–19)

30,086.31

N11.301trillion

2,163.63

Year Open

2,241.37

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

1,332.80

803.13

117.39

653.54

284.46

2,143.00

1,151.40

1,131.36

809.63

1,324.04 1,351.59

378.38

1,368.51

386.23

120.26

690.82

278.43

2,202.13

1,156.66

1,144.89

0.46

1.20

1,456.29

Percentage change (WoW)

1.78

0.72

2.68

0.81

Percentage change (YTD)

-4.28

-1.43

-4.95

1.99

2.08 -4.63

2.07 -3.19

2.44

5.70

-2.12

-4.92

-7.753

-7.87

2.76 -1.42

-6.56

-5.18

Nestle, Dangote Flour, Access Bank, 30 other stocks boost market …investors gained almost N200billion last week Iheanyi Nwachukwu

he trading week to April 18 was good for investors in the shares of Nestle Nigeria Plc, Dangote Flour Mills Plc and that of Access Plc, among others. The market closed the review four-day trading week with almost N200billion gain. No fewer than thirty-three (33) equities appreciated in price during the review week, lower than thirty-five (35) in the preceding week. Thirty-three (33) equities depreciated in price, higher than 31 equities of the preceding week, while 101 equities remained unchanged, same as in the preceding week. As the Nigerian Bourse continues to recover lost ground, analysts believe that with the release of positive first-quarter (Q1) earnings and as investors begin to regain confidence in the market, market players will continue to take positions in value counters. “In our opinion, prices at current level still present opportunities for medium to long term investors”, research analysts at Lagos-based Vetiva Capital Management said in their April 23 note. The Nigerian Stock Exchange

L-R: Ed Ubong, MD, Shell Nigeria Gas & NGA council member; Audrey Joe-Ezigbo, president, Nigerian Gas Association and ED, Falcon Corporation Limited; Yemi Famori, general manager, Gas Portfolio Shell Petroleum Development Company; John Kadiri, commercial manager, Gas & Power Operations Shell Petroleum Development Company of Nigeria, at the Nigerian Gas Association Business Forum 2019, which held recently in Lagos.

(NSE) All-Share Index (ASI) appreciated by 1.78percent to close the week at 30,086.31 points, from preceding week’s low of 29,560.47 points while the value of listed equities increased from N11.103 trillion to N11.301 trillion. All other indices finished higher with the exception of the NSE Oil/Gas Index that depreciated by

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2.12percent. In their investment views for this week, analysts at United Capital Plc said, “How the market holds up last week’s bullishness is left to see. That said, earnings season could very well be the catalyst for an upside breakout if performance surprise positively.” Chams Plc was the highest

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advancer from 28kobo to 36kobo, after its share price increased from 8kobo or 28.57percent. First Aluminum Nigeria Plc followed after increasing from 32kobo to 41kobo, adding 9kobo or 28.13percent. Dangote Flour Mills Plc share price increased from N8.40 to N10.70, adding N2.30 or 27.38percent. Access Bank Plc

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went up from N5.95 to N6.85, adding 90kobo or 15.13percent. Aiico Insurance Plc share price rose from 68kobo to 75kobo, adding 7kobo or 10.29percent. Also, The Initiates Plc was on the top advancers list from 73kobo to 80kobo, adding 7kobo or 9.59percent. The share price of Livestock Feeds Plc increased from 55kobo to 60kobo, after adding 5kobo or 9.09percent. Cadbury Nigeria Plc increased from N10.10 to N11, gaining 90kobo or 8.91percent. Nestle Nigeria Plc rallied from N1,456 to N1580, moving up by N124 or 8.52percent. Consolidated Hallmark Insurance Plc, moved up from 24 kobo to 26kobo, up by 2kobo or 8.33percent. The market opened for four trading days last week as the Federal Government declared Friday April 19, 2019 (Good Friday) and Monday April 22, 2019 (Easter Monday) Public Holidays to mark the end of the End of the Lenten season and Easter celebrations. Meanwhile, a total turnover of 988.692 million shares worth N11.432billion in 13,596 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.770 billion shares valued at N15.264 billion that exchanged hands the preceding week in 17,015 deals.

Thursday 25 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment View

Investor’s Square

Equities kick-off the pre-Easter week on the front foot

he Nigerian equity market closed bullish ahead of Easter festivities, putting to halt the five-consecutive w/w losing streak as investors hunted for bargains on badly beaten stocks amid a flurry of Q1-19 earnings results, especially from the Banks. Consequently, the NSEASI index rose +1.8percent week-on-week (w/w) to close above the 30,000-points market threshold at 30,086.3 points. As a result, market capitalization expanded by a whopping N197.5billion to end at N11.3trillion while YTD returns improved to -4.3percent. Activity level was mixed as average value traded declined by -18.6percent to N2.5billion, possibly due to fewer trading sessions in the previous week, while the average volume of stocks traded rose +76.7percent to 625million units. Performance across the

sectors was largely bullish as four of the six sectors under our coverage closed in the green territory. The Consumer Goods (+5.7percent) sector led gainers for the week, buoyed by increased buying interest in NESTLE (+8.5percent) and NB (+8percent) – the two most capitalized tickers of the subindex. Similarly, the Banking (+2.1percent) sector also closed bullish on the backdrop of a buying spree in ACCESS (+15.1percent). The Insurance ( + 2 . 4 p e rc e nt ) , Ba n k i n g (+2.1percent) and Industrial (+0.5percent) sectors also trended northwards as investors increased their position in AIICO (+10.3percent), ACCESS (+15.1percent), ZENITH (+2.2percent), and CCNN (+6.3percent). On the flip side, Oil & Gas (-2.1percent) sector was the lone loser for the week, dragged by price declines in SEPLAT (-3.4percent) and OANDO (-2percent). In terms of earnings release, Last week marked

the beginning of the Q1-19 earnings season. However, investors reacted to FBNH’s FY-18 result (Revenue down 2percent to N585.9billion; PAT up 31.4percent to 59.7billion) published in the prior Friday. Access Bank Plc (Revenue up 16.4percent to N160.1billion; PAT u p 8 6 . 1 p e rc e nt t o N41.1billion) also submitted its first post-merger Q1-19 result alongside Guaranty Trust Bank Plc (Revenue up 1.2percent to N110.3billion; PAT u p 1 0 . 4 p e rc e nt t o 49.3billion) and Zenith Bank Plc (Revenue down 6.5percent to N158.1billion; PAT up 6.7percent to N50.2billion) which both released their Q1-19 earnings result also. Inve s t o r s e nt i m e nt s a s measured by market breadth which was upbeat at 1.9x (52 stocks advanced against 28 decliners). How the market holds up last week’s bullishness is left to see. That said, earnings

season could very well be the catalyst for an upside breakout if performance surprise positively. Money Market : Weak liquidity guides sentiments The narrative for the holidayshortened week was similar to that of the preceding week as market players were constrained by tight system liquidity levels. Liquidity levels opened the week short and deteriorated further due to CBN’s weekly $210.0mn wholesale FX funding on Monday. Consequently, average interbank funding rates (Open Buy Back and Overnight rates) spiked 20.5percent from last Friday to close Monday at 41.4percent. The shortfall in liquidity levels prompted some banks to stay active at CBN’s Standing Lending Facility (SLF) to satisfy their funding needs throughout the week. Additionally, the CBN held off from floating any OMO auction for the s e cond consecutive week, allowing

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inflows that hit the system on Thursday - OMO maturity (N106.8bn) and FGN2037 Bond Coupon payments (N32.7billion) – to ease overall liquidity pressures. In all, average interbank funding rates closed the week lower at 10.2percent. Elsewhere, the Apex bank conducted its bi-monthly NTB auction, wherein it successfully re-financed total maturing bills worth N58.5billion. The level of demand improved as average bids worth 3.8x (last auction 2.1x) of the offered amount turned up, though skewed largely to the 364-day tenor with a bid cover ratio of 6.9x. Thus, stop rates at the auction cleared lower to previous levels [91-day (10.15percent vs. 10.29percent at the last auction), 182-day (12.50percent vs. 12.60percent at the last auction) and 364-day (12.74percent vs. 12.85percent at the last auction)]. In the secondary NTB m a rk e t , av e ra g e y i e l d s declined w/w by 11bps to close at 13.3percent, as liquidity injections on Thursday buoyed bullish sentiments. This week, we expect market sentiments to remain guided by the level of liquidity in the system. Also, the likelihood of a resumption in OMO auctions by the CBN remains slim as outflows are expected in the form of wholesale and retail FX auctions. Bond Market: All roads lead to the April 24th bond auction Market bulls outweighed the bears in the domestic secondary bond market as average bond yields trended lower by 9bps w/w to close the week at 14.2percent. The performance was buoyed by bargain hunting in some of the short-medium term notes, which had trended higher in the prior week. However, market participants remained expectant for new issuances at the April 24th bond auction. In the secondary Eurobond market, we saw renewed interests in FGN Eurobonds as oil prices remained above $70/b. Accordingly, the average yield trended southwards by 7bps w/w to close the week at c. 6.8percent. Similarly, sentiments for Corporate Eurobond turned bullish as the average yield declined by 31bps w/w to close the week at c. 8percent. This was spurred by a

renewed interest in the soon to mature DIAMOND Bank (yield down 1.5percent w/w) and ZENITH Bank (yield down 0.8percent w/w). The strong buying interest in the now-defunct DIAMONDBank came after ACCESS’ CEO reaffirmed the company’s commitment to pay down the debt come May 21, 2019. ACCESS also announced its intentions to raise an additional $87.5mn that will qualify as tier-two capital, needed to strengthen operations post-merger this year. Notably, we saw some buying interest in Ecobank Nigeria Ltd Eurobond (yield down 8bps w/w). This was as market players priced in the successful debut issuance by its parent company -Ecobank Transnational Incorporated (ETI)- last week. Relatedly, the Federal Executive Council approved a fresh external loan. The breakdown of the loan features $150m from the African Development Bank, $50m from Africa Grow Together Fund, $20m from French Development Agency, and a $27.3 million loan facility from IADE). A look to concessional sources as these could predicate relatively lesser domestic debt sourcing. This week, we expect activities in the secondary bond market to remain muted/ bearish as players look to new issuances at the April 24th bond auction. In the absence of any downside surprises, we expect the current bullish interest in FGN Eurobond to be sustained into the week. FX: Mild appreciation at the official & NAFEX Windows FX rates recorded marginal appreciation at the official and I&E windows while rates at parallel remained flat. At rates at the official window rose 2bps to settle at N306.7/$ while the I&E (NAFEX) window rate added 1bp to N360.3 after notching its highest gain on 5bps on Wednesday. This offset the marginal declines seen earlier in the week. Also, activity level at the I&E window received a boost as average turnover surged 64.8percent w/w to $389.1mn with the turnover recorded on Wednesday ($651.6mn) the highest since late March. The uptick in activity levels can be attributed to the DMO’s Treasury Bills Primary Market Auction that occurred mid last week. Furthermore, Gross CBN reserves settled at $44.7bn following a mild w/w accretion of 2bps. We continue to see relative stability for the Naira/ USD rates as the CBN seeks to consolidate its currency stability efforts.

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•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@ businessdayonline.com

Global Market Review and Outlook

Markets take on mixed economic signals as earnings season hits full swing

ajor equity indices across the globe traded mixed in the holiday-shortened week that ended 18th April 2019. In the US, investors weighed a slew of Q1-19 earnings filings as the season took off with updates from the likes of Goldman, JP Morgan, Morgan Stanley, NetFlix among others. Beyond earnings, a flurry of IPO listings also whetted investors’ appetite with Jumia, Pinterest and Zoom listings during the past week even as Uber signaled that its IPO is in the offing. On the economic data front, the US Commerce Department indicated that Ma rch ret a i l sa l es ro s e 1.6percent, its fastest pace since 2017. Considering the contribution of consumer spending to the country’s gross output, the rebound in retail sales could signal a positive outcome ahead of the Q1-19 GDP numbers due next week. In Europe, lackluster economic performance in Germany came to the fore, following a reduction in 2019 GDP growth forecasts by German authorities to 0.5%. More so, PMI numbers for the Eurozone giant also showed @Businessdayng

continued contraction in the country’s manufacturing sector with the leading indicator remaining below the 50-points threshold. Across BRICS-classified emerging markets, strongerthan-expected Chinese Q119 GDP data (+6.4percent) emerged as a green sprout, offering hope on global growth stabilisation and improvements in global trade – at least barring taxes from the US. Clearly, the numerous stimulus packages unleashed by Chinese authorities can be said to be hitting home. Meanwhile, Indian elections forged into its second phase while South Africa’s Reserve bank expressed its concerns over the impact of continued power cuts on economic growth. In the week ahead, we anticipate the outcome of monetary policy decisions in Russia and Turkey. Crude rose 0.4percent w/w, settling above its recent high-water mark of $70/b at $71.7/b as markets continued to digest demand and supply dynamics of the commodity. In the near term, the decision to continue or otherwise the import waiver granted to buyers of Iranian oil could determine the mediumterm price trajectory of the commodity.

Thursday 25 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Our transformation plan led to declared dividend Ademola Adebise, Managing Director/Chief Executive Officer, Wema Bank Plc spoke in this interview with select senior journalists, including Iheanyi Nwachukwu. Excerpts.

As a CEO of Wema Bank, how has it been? joined the bank in 2009, with Mr. Segun Oloketuyi, the erstwhile Managing Director. When we joined the bank we embarked on what we called Project LEAP, which was basically a strategy to take the bank out of the woods. Of course we all knew the precarious state of the bank at that time. The first thing was basically to address the liquidity situation. We called that the phase of stabilising the bank. The next phase was basically to begin to have those building blocks put in place and the last stage, which we are in now, is basically to grow the bank. It has been a very tough, but exciting journey. Last year was a major milestone for us as we declared dividend for the first time in 14 years. The last time dividend was declared in this bank before last year, was during the era of Mr. Tunde Lemo. The efforts of all the transformation over the last nine years has culminated in the payment of dividend for the first time in 14 years. Where do we intend to be? We intend to be a strong retail bank, leveraging technology and innovation. For us, what we have said is that in the next two years we will try to double our key indices of assets, deposits, profit, so that by 2020, we would have achieved the doubling of our numbers and we would then embark on looking at opportunities in mergers and acquisition (M&A) for inorganic growth. We have key sectors of the economy that we have mapped out to achieve this growth. We are also trying to ensure that we have well-trained and remunerated staff to be able to achieve this vision and we are very committed to it. What strategy are you deploying to remain competitive in the retail segment of the market? To remain competitive in this market, you need to be innovative. That is because basically what you see is that everything in the banking industry is commoditised, talking about products. You will notice that product A which is in one bank, is also in another bank. For us, we want to be an idea bank. We want to be known for innovation and we want to be very agile. For you to make a mark in this space, you need to be very agile and speak to market with products that appeal to customers. It is not about developing products, it is about appealing to the needs of the customers, which for us is very key. We are going to leverage technology as much as possible. Of course you know about ALAT, the fully digital bank that we launched two years ago, it is doing very well and what we are doing now is that we are reviewing ALAT to take it to the next level. That is, to take it to a platform where we would be appealing to lifestyles. We have a lot of value creators and value consumers that is buyers and sellers on the platform. The whole idea is basically to reduce the cost of doing business and improve out top-line. We have sectors that are clearly mapped out that we play in the retail space. Of course, in the SMEs’ space we have different verticals that we can work with. We have the creative, the micro-businesses, the agric value chain, and other clearly mapped out products that we would use to appeal to these segments of the market. By the way, the bank was set up in 1945 as a retail bank. We have not moved away from that vision; it is just that things have been evolving. It appears that you are aiming to be somewhere in the industry because you earlier talked about leveraging M&A opportunities for growth. What is actually your aim in the industry? You know there are two ways to grow- it either you grow organically or inorganically. What we are saying is that in the next two years, we want

Ademola Adebise

to double our key indices through an organic growth. Now, after 2020, if there are opportunities for M&A, we are not saying that we are going for an M&A, but if the opportunities exist. It is important I clarify that. Today, we are in the neighbourhood of about N500 billion in terms of assets, if we stretch that, we should be getting to about N800 billion by the time double those numbers and if you want to get into the trillion naira mark in terms of assets base, you then have to consider that. But it is not that we are saying we would get there through M&A. Looking at your results for the year ended 31st December 2018, your efforts in taking the bank out of the woods is yielding positive results. Now that IFRS 9 is rubbing off on banks, how are you going to manage that situation? The issue is that in 2018 we adopted IFRS 9 and the impact was felt, but not heavily felt like some of our peers. Again, this is based on the quality of the collateral you have against your risk assets. For us, going forward, it is to ensure that we have that discipline in creating loans. We need to ensure that we have good quality loans. If you create good quality loans, you are not going to have an adverse effect of IFRS 9. So, that is the panacea to ensure that you don’t incur the wrath of IFRS 9. So, discipline, corporate governance and ensuring that you book quality loans are very important. There was a N30billion increase in your loans and advances in same year. What were the basic sectors you lent to? Basically, oil and gas was the major sector and of course, the SMEs’ space. There was a number of intervention schemes from the Central Bank of Nigeria towards the agric and manufacturing sectors and we took advantage of all that. But largely, the oil and gas downstream was a major contributor to the growth in lending. What of Agric sector? For us in agric, we have our strategy. We have looked at the value chain and for us we want to focus on the processing end and of course we look at the aggregators to the small farmers. For us, that is where to be. Of course, in supporting the aggregators, we look at key crops. These include cassava in the South-west and rice in the north. Another thing which is interesting in the agriculture sector today is the fact that the busi-

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ness model is changing. It is not the old style of doing agriculture. We are talking about the different players within the value chain and being able to use technology to put everything together. To grant a loan and if you are not able to get it back, the loan becomes bad. If you grant a loan at commercial rate, from day one, the loan becomes bad. So, you need to see if there are intervention schemes in the economy. The central bank has provided intervention schemes through the Commercial Agricultural Credit Scheme and we have the Anchor Borrower’s Scheme. If you get an anchor that you are supporting, the anchor has access to thousands of farmers and if you are able to bank all these farmers, the loan is repaid. And as you know, agriculture is a major contributor to our Gross Domestic Product. Once you put that in order, another thing is to boost export. Export will bring back a lot of foreign exchange into the system and it will support our external reserves. At the end of the day, if you are able to boost your GDP, tax revenue also increases. We also see opportunities in the creative sector and we are trying to build a structure, to ensure we take advantage of that space. Government is interested in certain sectors and we have keyed into those sectors and we have started building competences in those sectors. Why not cocoa? As we speak today, cassava is on the front burner for the central bank and it is a crop you can cultivate and harvest within a short period. Cocoa takes about three years. And a lot of companies in the south west are already processing cassava to take advantage of the opportunities. There is an inscription at the entrance of your head office that states that ‘We Make Magic in Wema Bank,’ and that got me thinking what kind of magic you do at Wema Bank. What was the ‘magic’ wand behind you paying dividend after 14 years. Also, you talked leveraging technology especially with your ALAT platform. But the information in have is that the ALAT is still facing some challenges. What are you going to do to make it more seamless for customers? Let me start with magic. There is nothing like magic in banking curriculum. So, when

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we say we are doing magic, it doesn’t really mean magic in the real sense of it. You know we said we want to be an innovative bank and innovative banking has to do with generating new ideas. We just launched an hackathon recently and the whole idea about it is to be able to generate ideas, solve problems in the society and the banking industry, using technology. We go young, very brilliant minds to come together to pitch to solve some of those problems. We had it about two weeks ago. The whole aim was to generate good ideas and we are putting money behind the best idea to take it to commercial level. Some of these problems were basically to solve three things- reduce cost; service our customers and improve topline revenue for the bank and solve societal problems. We got very interesting ideas from young, talented and energetic Nigerians and we intend to take this to the next level. That was what we meant ideas generation, with a view to being a very innovative bank and we christened it ‘Hackaholics.’ So, for dividend, there is no magic wand about it. Basically, this was a journey of over nine years from the era of my predecessor. We started from 2009 with the transformation plan, which was what led to the payment of dividend. Again, you might say 3kobo, but it was because we have 38 billion units in circulation. If we had 15 billion or 10 billion units of shares in circulation, we would be talking about 10 kobo or 15 kobo. Really, it was a journey of the transformation that led to where we are today. What do we intend to do going forward? We would ensure that we continue to improve on this as we move on. By 2019 and 2020, we would continue to ensure that we improve on this. What are the things we are doing? We have made sure we have all the right tools in place. You mentioned ALAT. As we speak today, we are refreshing our information technology. Information technology is expensive, but we are also being very responsible. I have an IT background, the Deputy Managing Director has an IT background and our Executive Director, Folake Sanu, has been involved in a lot of IT projects in the past. So, technology is not strange to us and technology is not about just pumping money into what we don’t know what we are doing. Also, IT is not just exciting ourselves. Our shareholders are interested in returns and so we must ensure that we deploy these limited resources in a way that would benefit all stakeholders. So, for us we have a clear digital journey that we are working on to ensure that we deal with whatever comes up. Of course, you have heard about banks deploying robots today, basically to resolve internal issues and problems. Another question you might ask is if people are not going to lose their jobs? No, business models are changing with the adoption of new technologies. All these technologies are already here in Nigeria. It now depends on how we apply those technologies. What actually is happening with technology adoption is that business model is changing. It is not about technology adoption, but about business model changing. The amount of data that you have, what does it mean to you? How can you monetise it and what patterns are you seeing? Today, we see Amazon, which started as a retail outlet, but now plays in all sectors. Today, it is a big IT firm, it is into e-Commerce, logistics and several other sectors. What has changed? Nothing has changed, but the only thing that changed it just their business model. When we say disruption, it is not about technology, but about business models changing.

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Thursday 25 April 2019

BUSINESS DAY

BUSINESS TRAVEL Sirika, Africa ministers urge member states on implementation of SAATM Stories By IFEOMA OKEKE

igeria’s Minister of State for Aviation, Hadi Sirika and the other Africa ministers in charge of Transport have urged the remaining countries in the continent who are yet to adopt the Single African Air Transport Market (SAATM) to do so. Sirika who was attending the Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism in Cairo Egypt, made the resolution of the ministers known via his twitter handle @hadisirika. “I urge all remaining Member States to join the Single African Air Transport Market (SAATM), ratify the African Road Safety Charter, the Revised Maritime Transport Charter and the Africa Civil Aviation Commission (AFCAC) Constitution.” Presently, only 28 Africa countries have shown interest to the SAATM and the African Union awaits the decision of others to join the train. According to Africa Union, SAATM is “Promoting intraregional connectivity between

Hadi Sirika

the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda.” In Cairo, the Ministers unanimously agreed to strategies that would boost infrastructures in Africa. “We, the Ministers in charge of Transport Transcontinental and Interregional Infrastructure, Energy and Tourism meeting in Cairo, Arab Republic of Egypt on 16 and 17 April

2019, consider strategies for developing smart infrastructure to boost Africa’s continental transformation and integration,” the Ministers in Cairo said. “We, the ministers, reiterate our commitment to develop Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism sectors and our strong will to implement the outcome of the meeting as we have agreed.” The committee of Ministers requested African Union

Commission (AUC) to take the appropriate measures to accelerate the development of the African integrated High Speed Railway Network (AIHSRN) flagship project, revitalization of the Union of Africa Railways (UAR) and speed up operationalization of SAATM. They also called upon the African Development Bank (AfDB) to continue providing support and mobilise more financial resources for priority intercontinental transport sector programmes such as SAATM and implementation of African Plan of Action for Road Safety. The committee appealed to member states to speed up signing and or ratification of pending legal instrument related to infrastructure, notably Maritime Charter, Yamoussoukro Declaration (YD), SAATM, AFREC Convention and Road Safety Charter. The current Member States that have subscribed to the solemn commitment are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, Gabon, Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

Passengers predict bright future for Air Peace on international routes

est and Central Africa’s leading airline, Air Peace on Monday ended the first round of its operations to give air travellers a foretaste of its soon-to-start long-haul flights to Sharjah, Dubai, Johannesburg, London, Houston, Guangzhou and Mumbai, with members of the flying public saying the carrier was on the right track to provide an exceptional international travel experience. The airline deployed one of the four Boeing 777 aircraft it acquired for its international flights for the showpiece operations, which started on Good Friday. It operated on the Port Harcourt-Abuja and AbujaPort Harcourt routes, winning accolades from air travellers comprising top government officials, royalties, corporate executives, among others. Air Peace said it deployed its wide-body aircraft for the Easter operations “to give Nigerians and the flying public an Easter gift and showcase our readiness for our international operations, starting with our inaugural international flights to Sharjah/Dubai. Other international routes, including Johannesburg, London, Houston, Guangzhou and Mumbai will later follow. We are set and ready to give Nigerians, Africans and the flying public a reliable alternative on our chosen international routes. But we are pleased to give our loyal customers on the domestic routes a foretaste of

our long-haul offering.” The Boeing 777 aircraft with registration mark 5NBVE took off from the Murtala Muhammed International Airport, Lagos at about 10:01 a.m. and landed at the Port Harcourt International Airport at 10.46 a.m. to start the scheduled operations on the Port Harcourt-Abuja-Port Harcourt route. The flights recorded huge passenger loads on all the sectors on Good Friday and Easter Monday, with ecstatic travellers praising the carrier for the initiative to give its domestic customers a feel of its international operations ahead of the actual launch. Justice Sotonye DentonWest, who was on board the Port Harcourt-Abuja sector of the flight, commended Air Peace for giving its customers a wonderful experience on its Boeing 777 aircraft. “I was hugely surprised when I saw the aircraft scheduled for my trip and when I boarded I was greeted to its luxurious atmosphere. With that, you can see the airline is on the right track with the state-of-the-art aircraft and wonderful service,” she said. For its part, Director of Legal Services of the Niger Delta Development Commission (NDDC), Mr. Kaltungo Moljengo, who was on board the Abuja-Port Harcourt sector of the flight, said he was satisfied with the luxury interior of the airline’s aircraft, its wellmannered and courteous crew and exceptional service.

Turkish Airlines holds bowling tournament in Nigeria

Ethiopian to launch flight services to Marseille

urkish Airlines has hosted its Nigerian passenger agencies in both Lagos and Abuja to a bowling tournament. The Abuja bowling took place at the Dome, Abuja while Lagos held at Twin Waters Lagos. The bowling tournament is designed to appreciate the passenger agencies and to provide a platform to bring the agencies together, ensuring that they build relationships outside the workplace. The tournament also leverages the enjoyable competition of sports as a communication tool to develop team dynam-

ics and celebrate the spirit of partnership and healthy competition. Nine agencies took part in the tournament in Lagos while ten agencies participated in Abuja. Commenting on the tournament, Yunus Ozbek, general manager, Turkish Airlines Lagos said, “We often focus on work and business, but fun and communication is important to build an environment where business can thrive, that is why Turkish Airlines organized this bowling tournament. It is heartwarming to see the Agencies engage in healthy competition and we sincerely appreciate all

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our travel agency partners that made this tournament both in Lagos and Abuja a success”. On his part, Mehmet Asik, general manager Turkish Airlines Abuja said, “healthy competition, fun and togetherness are some of the values that we are trying to achieve with this tournament. At Turkish Airlines, we aim to build a strong relationship with our agents and this bowling tournament provides an excellent platform to do that. We wish the winners a good contest in Istanbul” At the end of the tournament, Quantum Travels emerged winner in Lagos while Touch Down Travels and Rewards Travel came 2nd and 3rd respectively. In Abuja, Capstone Travels and Tours came 1st place while The Travel Place came 2nd and Eagle Travels came 3rd. The highest scoring team in Lagos and in Abuja will represent Nigeria at the grand final in Istanbul. Other participating agencies include Travel Start, Peacock Travels and Waka Now, amongst others.

thiopian Airlines, the largest Aviation Group in Africa and SKYTRAX certified Four Star Global Airline has announced that it has finalized all preparations to launch a thrice weekly flight to Marseille, France as of July 02, 2019. Marseille is the second-largest city of France and main city of the historical province. Regarding the upcoming services, Tewolde GebreMariam, Group CEO of Ethiopian Airlines, remarked, “It gives us great pleasure to launch flights to Marseille, connecting France’s second largest city to the over 60 African destinations we serve, through our hub Addis Ababa. We’ve been flying to Paris since 1971, more than 48 years, so we are not new to the market in France. “But we are very happy to expand our services closer to the customer in Marseille now. The connectivity we are establishing between Europe and Africa is facilitating trade, investment, tourism and peo-

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ple-to-people ties.” “As we forge ahead on the path of growth and success as envisioned in Vision 2025, we will keep on opening new routes to all corners of the world, bringing Africa ever closer to the rest of the world.” Marseille marks Ethiopian’s 20th destination in Europe. Ethiopian is currently serving 120 international destinations across five continents with young aircraft with average fleet age of five years. It will also bring the number of passenger flights the airline operates to European cities to 61 per week. Ethiopian Airlines is the fastest growing Airline in Africa. In its seventy plus years @Businessdayng

of operation, Ethiopian has become one of the continent’s leading carriers, unrivalled in efficiency and operational success. Ethiopian commands the lion’s share of the Pan-African passenger and cargo network operating the youngest and most modern fleet to more than 119 international passenger and cargo destinations across five continents. Ethiopian fleet includes ultra-modern and environmentally friendly aircraft such as Airbus A350, Boeing 787-8, Boeing 787-9, Boeing 777-300ER, Boeing 777-200LR, Boeing 777-200 Freighter, Bombardier Q-400 double cabin with an average fleet age of five years.

Thursday 25 April 2019

BUSINESS DAY

MADE in aba ACCIMA urges Aba entrepreneurs to tap into CBN, BoI loan schemes to grow businesses …signs MoU with Wider Perspectives on AGSMEIS fund GODFREY OFURUM

he Aba Chamber of Commerce, Industry, Mines and Agriculture (ACCIMA), a city chamber, has urged artisans and other entrepreneurs in the commercialcitytokeyintodifferent loan schemes of the Central Bank of Nigeria (CBN) and the Bank of Industry (BoI) to access funds and grow their businesses. To ensure that its members qualify for the CBN-AGSMEIS loan, the chamber has signed a memorandum of Understanding (MoU) with Wider Perspectives, a managementconsultingfirmwith headquarters in Port Harcourt, Rivers State. Andy Uba-Obasi, president, ACCIMA, while addressing members at a sensitisation workshop, observed that the capacity of MSMEs to perform its role as the engine of growth of the country’seconomyishamperedby challenges such as lack of access to finance, modern technology, and market with unfair competition to imported goods, among others. He urged entrepreneurs, especially manufacturers to apply for the CBN and BoI loans, which, accordingtohim,comewithlower interest rates. Ada Obi-Umeh, head, Economic Analysis Unit, Wider Perspectives Limited, explained that CBN-AGSMEISwasdesigned to help MSMEs in agric businessproduction, input supply,

storage, processing, logistics and marketing, education, health services,hospitalit, and catering services, among others. It also aims at empowering e n t r e p r e n e u r s i n I C T, manufacturing, mining, creative industry, fashion designing, crafts, entertainment and petrochemicals. Represented at the forum by Amarachukwu Ajomiwe, head, Eastern Operations of the firm, Umeh explained that applicants, who are interested in accessing the loan, must undergo training organised by a CBN-EDI, of which Wider Perspectives has been selected to train applicants in the South-East/South-South zones of the country. She stated also that Wider Perspectives, would package its trainees to access the CBN fund. The BoI, on the other hand, has launched the N500million Aba finished leather goods (FLG) cluster financing programme, geared towards supporting shoe, bag and belt makers in Aba, to produce seamless goods that can compete favourably in the international market. TheAbaFLGClusterFinancing programme provides affordable working capital credit to qualified members of the Leather Products ManufacturersAssociationofAbia State (LEPMAAS) with the aim of affording artisans the opportunity to reduce the level of manually completed tasks, by purchasing small scale production tools. Itwillalsohelpimprovequality

of finished leather products and promote job creation within the cluster. BoI is executing the programme, which was officially launched in August 2018, in Aba, in collaboration with the Ford Foundation West Africa and Fidelity Bank plc, its strategic partners. Godwin Emefiele, governor, Central Bank of Nigeria (CBN), at the flag-off of the disbursement of funds to the first set of beneficiaries of the scheme in April 2018, had noted that the challenge of youth unemployment and restiveness must be confronted with strategic

innovative thinking to provide sustainable solution. Addressing over 300 beneficiaries at the flag-off ceremony held at the head office of the CBN in Abuja, Emefeli explained that the disbursement was in fulfilment of the commitment jointly made by the Bankers’ Committee during its 2016 retreat, to design and fund a suitable scheme, aimed at reducing the huge financing gap for MSMEs. He also explained that the fund was instituted to create jobs, encourage financial inclusion and inclusive growth for Nigerians,

particularly the teeming youth population. Fur ther to the 2016 commitment, he recalled that the Bankers’ Committee at its 331st meeting held on February 9, 2017, came up with the AGSMEIS as an initiative to improve access to affordable financing for MSMEs, particularly those operating in the informalsectoroftheeconomyand to support federal government’s efforts and policy measures, to promote sustainable economic development and employment generation. To ensure the successful implementation of the scheme,

hedisclosedthatalldepositmoney banks in the country voluntarily agreed to set aside and contribute five percent of their profit after tax (PAT) annually to finance eligible projects under the scheme, which has exceeded N60 billion. He said the first batch of beneficiaries were youths, who had been trained on various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions and Centres such as, the Fate Foundation; Lagos Business School; House of Tara, and Thrive Agric.

How to bolster Aba products to achieve competitiveness Gbemi Faminu

ade in Aba’ is an expression which many Nigerian consumers can associate with. Aba has over 120,000 manufacturers, but their potential is not yet fully exploited due to a number of man-made clogs in the wheel of progress. However, as much as these problems exist, Aba manufacturers have a key role to play. The first port of call is the regular business and entrepreneurial training. Most of the artisans know how to produce shoes and trunk boxes within the shortest possible time but lack entrepreneurship training. E xp er ts b elie ve that manufacturers in Aba should acquire adequate training that will improve their handwork, but they also need to learn business nuggets such as accounting, preparation of business plans and marketing. They will need to work on rebranding and repackaging their products for higher and

wider consumer attraction/ acceptability. “Branding is important because it helps to change the perception of consumers who think that Aba products are inferior,” said Amanchukwu Nwankwo, a shoemaker in Aba. Artisans also need to form partnerships with local and foreign businessmen. This will help in terms of sourcing for raw materials and export. Such partnership will provide a wider market reach, more funds for expansion and raw materials for production. Currently, one million pairs of shoes are produced by more than 80,000 leather makers on a weekly basis in Aba. With 48 million pairs produced each year, access to state-of-the-art machines and better infrastructure will allow for higher production. Despite its capacity, most businesses in Aba are not registered formally with the Corporate Affairs Commission (CAC). This hinders easy access to loans, national and international opportunities, leads to less business visibility and opens an avenue for such businesses to be cheated in www.businessday.ng

various ways. Most of the businesses in Aba are wor th more than the owners are aware of. Development of these businesses will not only promote the ‘made in Nigeria’ brand, but will help all the stakeholders achieve financial stability, grow the naira, create more job opportunities, boost the reputation of local products, and create an

avenue for wider market. It will equally generate more revenue for the government and also grow the economy. Ac c e s s i ng l o a n s a n d financial aids is quite difficult for those in the industry as banks consider the players as high risk. Okezie Ikpeazu, governor of Abia state was re-elected recently. The governor has, for the past three years, paid

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attention to Aba and has highlighted various policies to develop the commercial hu b. D e s p i t e t h i s, Ab a manufacturers are still in need of facilities and tools to achieve their potential. As a returning governor, his aim should continue to be how to further develop the Aba market. Infrastructure is ver y important for any business to thrive. Making footwear can be easy with the use of sophisticated machines and production tools. Absence of infrastructure, however, makes production difficult and hurts capacity to create jobs and boost the gross domestic product (GDP). Roads in Aba are still poor while power is not readily available. The impact of this is that the majority of Aba shoe makers are using power generating sets to power their factories. Furthermore, the industry lacks tools to foster productivity. Experts want Ikpeazu to work on infrastructure in the state in order to improve production and reduce the costs. @Businessdayng

Furthermore the industry is in need of investors and partners that will inject funds, knowledge, experience and innovations into the business. Nigeria’s shoe hub, Aba, needs to partner with international companies in order to foster the desired growth and development needed. In 2017, Ikpeazu, signed a $1.5 billion deal with Huaijan Group, a Chinese shoe manufacturing firm. This was in a bid to improve the industry. The company is not yet in Aba. Ken Anyanwu, national secretar y, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entrance of foreign i nv e s t o r s a n d p a r t n e r s would enable the industry to compete globally and make funds for expansion easily accessible. Analysts also say Aba getting more investors and foreign partners could reduce its infrastructure deficit as new investors will throw in money to improve it. They add that it will attract funding to smallscale players.

Thursday 25 April 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

MALL

Nigerian shopping malls turn photo studios as tenants bemoan low patronage BALA AUGIE

t the Surulere Shopping Mall, it is easy to mistaken a throng of people pushing their way through stairways as cash-strapped shoppers eager to exercise their spending power. Sadly, most of them are beautifully dressed people in search of exquisite outdoor designs that can create a desirable background for their photos. “People you see just come here to hang around and the ones hitting Shoprite are buying small basic food items. There are no more queues for bread,” said Amaka Okafor, a 31-year-old owner of a grocery outlet. Okafor, downcast, said there were days without single patronage of her business. She pointed to some items that had been on the shelves for months and not even a 35 percent discount could do the magic of wooing customers. The optimism of bur-

geoning middle class and rising young population that crave for consumption combined with a benign economic environment led to the construction of the first mall in 2009. Thereafter, there were sprawling malls home to famous high-end brand stores, movie theatres and large supermarket chains, like the South-Africa owned Shoprite, quickly started to pop up. However, the Nigerian retail industry was dealt a great blow when the precipitous drop in the crude oil price of mid-2014 stoked a severe dollar scarcity that paralyzed business activities. While the introduction of a new foreign policy by the central bank in 2017 and a rebound in crude oil production and price helped the country exit a recession in the last quarter of 2017, Nigerian companies and household are yet to recover from devaluations. Nigerians are poorer and they have refused to open their purse strings. According to a recent

World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins. Nigeria with a population of 180 million people has 87 million people has nearly half of its population, in extreme poverty; as high inflation environment con-

tinues to erode discretionary income. Dolapo Omidire, lead researcher at Estate Intel told Quartz Africa that for a developer to leverage the promise of Nigeria’s middle class and get the most bangs for their buck, a smart play would be to switch the focus from building large fancy malls in business districts to

smaller sizes. The mall-going culture has become popular in Nigeria but many people see the large malls as destination spots for a fun day out rather than to shop thus keeping tenant retailers viable. ”If I build a $100 million mall and people are showing up just to take pictures, then it’s a big problem,” said

Omidire. Tenants, who pay rents in foreign currency, will have to pay more because the local currency is unstable and could be weakened intermittently. Embattled retailers at the Apapa shopping mall have refused to open their stores while tenants are shrinking their foot sprints more quietly by choosing not to renew the expiring lease. A total of 22 out of the 36 outlets of the two storey malls are empty, and perhaps more worrisome is that only one tenant- Spectranet- occupies a tranquil and deserted top floor that houses 15 shops, while 7 have no occupants downstairs. Ruff N Tumble- baby cloth merchant-, Cash and Carry-a luxury, clothes, and accessory firm- exited the building two years ago while Ren Money- a loan and investment firms- left last year. Other retailers that had exited Apapa malls include Samsung/Sports, Bheergz Café, Sunta- a first class clothing firm- and Homely.

CONSUMER SPENDING

Report shows how Nigerians spent N60m on weekend movies BUNMI BAILEY

he catchy and exciting movies from the cinemas in Nigeria is making movie lovers spend a lot in watching these movies. According to Cinemas Distribution Association of Nigeria (CEAN), between the weekend period of April 12-14, 2019, there was a gross sales of N60.2 million worth of movie tickets from the top 20 movies that were shown in that period. CEAN is an association of cinema owners, operators, and managers incorporated by the Corporate Affairs Commission of Nigeria on February 13, 2018, and is meant to promote and protect the value of cinema exhibition in Nigeria. It also seems that there is more preference for foreign movies than local ones as the most top five movies was from Hollywood. The top five were Shazam which had N16.5 million worth

of ticket sales, Hellboy had N15.9 million, Captain Marvel had N7.3 million, Tyler Perry’s a Medea family funeral had N3.9illion and Breakthrough had N3.3 million Shazam is a 2019 American superhero film based on the DC Comics character of the same name produced by New Line Cinema and distributed by Warner Bros. Pictures. The movie which was released on April 5 tells the story of 14-year-old Billy Batson who with a short out of one word transforms into the adult superhero “Shazam”. Still a kid at heart, Shazam revels in the new version of himself by doing what any other teen would do have fun while testing out his newfound powers. But he will need to master them quickly before the evil Dr. Thaddeus Sivana can get his hands on Shazam’s magical abilities. Hellboy, also a 2019 American supernatural superhero film is based on the Dark Horse Comics character of the same www.businessday.ng

name was released on April 12. Based on the graphic novels by Mike Mignola, Hellboy, is caught between the worlds of the supernatural and human, battles an ancient sorceress bent on revenge. Captain Marvel is an American superhero film based on the Marvel Comics character Carol Danvers. Captain Marvel is an extra-terrestrial Kree warrior who finds herself caught in

the middle of an intergalactic battle between her people and the Skrulls. Living on Earth in 1995, she keeps having recurring memories of another life as U.S. Air Force pilot Carol Danvers. With help from Nick Fury, Captain Marvel tries to uncover the secrets of her past while harnessing her special superpowers to end the war with the evil Skrulls.

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The movie was released on March 8, 2019. Tyler Perry’s A Madea Family Funeral is a 2019 American comedy film written, directed, and produced by Tyler Perry. The movie tells a story of how a joyous reunion in small-town Georgia turns into an unexpected nightmare when Madea, Joe, Aunt Bam, and other family members gather for an

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anniversary party that turns out to be a sham. Instead of fun and relaxation, Madea and the gang soon find themselves attending an elaborate funeral that doesn’t quite go according to plan. Breakthrough is based on the inspirational true story of one mother’s unfaltering love in the face of impossible odds. When Joyce Smith’s adopted son John falls through an icy Missouri lake, all hope seems lost. But as John lies lifeless, Joyce refuses to give up. Her steadfast belief inspires those around her to continue to pray for John’s recovery, even in the face of every case history and scientific prediction. From producer DeVon Franklin (Miracles from Heaven) and adapted for the screen by Grant Nieporte (Seven Pounds) from Joyce Smith’s own book, Breakthrough is an enthralling reminder that faith and love can create a mountain of hope, and sometimes even a miracle.

Thursday 25 April 2019

BUSINESS DAY

Retail &

consumer business

CONSUMER SPENDING

In Nigeria’s food market, seasoning cubes continue to jostle for consumers’ cooking pot OLUFIKAYO OWOEYE

ood seasoning products are a very important aspect of cooking, before the introduction of modern food seasonings in cubes and powder forms, there have been several local seasonings, such as Iru, Ogiri, and Dawadawa just to mention few all of which still feature in most Nigerian cooking pots till today. In most Nigerian homes and eateries, food seasoning is important because with the right culinary expertise, especially when the right brand of seasoning that makes people salivate is used, the meal becomes something of an experience which the family relishes and keep them requesting for more like the popular Oliver Twist. The seasoning market in the country parades some great brands, with each manufacturer churning out new variants in a bid to protect its market share and remain relevant in the market space. Recently, TGI Distri Limited, former owners of Chi Limited producers of Chivita, Hollandia drink, with diversified interests and investments in Nigeria and other Africa countries announced its arrival into the seasoning market with the launch of Terra seasoning cubes. Sunil Sawhney, TGI Group Executive Director and Managing Director of TGI Distri, said the new seasoning cube was an outcome of painstaking research and insights into the

demands and requirements of customers. According to Sunil, the cubes come in two variants; beef and chicken, in single cubes of 4gram, adding that Terra Cubes have particularly been designed to meet the palate requirements of all Nigerians, especially in terms of aroma and flavor. The new entrant will have to battle the big elephants in the market leading the park is Maggi from the stables of Nestle Foods, then

Knorr and Royco, produced by Unilever. These brands are leaders in their various market segments and none of them can be pushed aside in terms of brand visibility, sales, consumer loyalty, and quality market offerings. The two major brands in the food seasoning market in Nigeria today are Maggi and Knorr brands. Even with the introduction of new seasonings into the market, these two

brands have continuously battled for the No.1 spot in Nigeria’s food seasoning market. Knorr cubes, after being bought over from Cadbury Nigeria by Unilever, has remained a force to be reckoned with in the seasoning market. Over the years, the company has invested in machines and a new savory hall, in its bid to give consumers premium quality cubes. On the other hand, Maggi is an international brand owned by Nestlé, and according to the company, it sells over 100 million cubes in the Central West African region daily. The brand has occupied a big space in the hearts of consumers and it has become the generic name for seasoning cubes in the country. Other players include Doyin Group of Companies, manufacturers of Doyin seasoning cubes, and Prime seasoning cubes, and Daily Need Nigeria Limited, makers of Suppy cubes, which come in two brands of beef and chicken. Also, PZ Wilmar, a joint venture between PZ Cussons and Wilmar International, makers of Mamador and Devon King’s Oil, recently launched its Mamador seasoning cubes which comes in three variants. According to makers of Terra Cubes, the new variants of seasoning cube will in a short period of time gain a competitive edge over other brands and control a large chunk of the market share. No doubt, the seasoning market is growing daily with new products making entry into the market. Hence, leading brands must double down or they could lose positions to new entrants such as Terra Seasoning cube brand poised to gain more market share.

company

Samsung postpones Galaxy Fold phone launch over screen defect Endurance Okafor

lectronic giant, Samsung says it will not be able to deliver the highly anticipated Galaxy foldable phone this week as previously planned. This is due to screen problems of the device. Reviewers of the phone samples reported breaks, bulges and blinking screens after a day’s use. Samsung Electronics Co Limited Monday made its first public admission of the problem with the new device. It said the Galaxy foldable phone is “prone to malfunction near the hinge.” The South Korea Tech conglomerate, therefore, plans to conduct a test and announce a new release date. The foldable device’s US release is billed for April 26. The Seoul-based tech firm is said to be retrieving all Galaxy Fold samples distributed to reviewers to investigate reports of broken screens. The last time the company had such challenges was in 2016 when it pulled off the Galaxy Note 7 from the market due to exploding batteries.

Checks by BusinessDay revealed that mobile phone penetration in Nigeria has increased significantly in recent times owing to the youthful population in the country. Having the highest population in Africa, Nigeria has about 65 percent of its 190 million people as youths. According to the 2018 figures from Euromonitor International, a UK-based market research and analysis firm, there was a stiff

competition between phone manufacturing giant, Samsung and its rival, Transsion in Nigeria in 2017 with both enjoying a large share of the market. In the review year, Samsung’s market share of smartphone shipments in Nigeria slumped to 34 percent, while Transsion Holdings shares was up 32 percent, a 7 percentage points rise from 25 percent in 2016. Transsion leverages on its products

like Tecno, Itel and Infinix which are less expensive than Samsung to break into the Nigerian market. The Nigeria mobile phone market is largely dominated by international companies with little or no input from local manufacturers. However, cheap price, smartness, compactness and improved software coupled with it multi-sim feature made the Chinese manufacturers a domineering figure in the mobile market of Africa’s most populous nation. While Tecno smartphones have turned to favourites among some Nigerian consumers who represent a larger percentage of country’s population, Itel brands have overtaken other brands in the feature phones sphere as consumers opt for a portable multi-sim phone at a cheaper price. More so, the availability and affordability for the average Nigerian consumers who are low/ middle-income earners have given these brands edge in a highly competitive mobile market. According to the Euromonitor report, Tecno Mobile comes first with Itel following closely behind; more expensive brands still represent a meager figure in the mobile market in Nigeria.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Thursday 25 April 2019

BUSINESS DAY

INTERVIEW Adire Ogun Seal shows originality of tie-and-dye, elevates fabric as international brand - Amusan YEWANDE AMUSAN is a former Commissioner for Culture and Tourism and now Senior Consultant to Governor Ibikunle Amosun of Ogun State on Culture and Tourism. Her twotime tenure in Ogun State has changed the face of culture and tourism in the state, working tirelessly on Adire’s elevation as an international brand originating from Ogun State. She facilitated various interventions and exchange programme for Adire, tie-and-dye local fabric-makers in the state in the last eight years. Now, Governor Amosun has initiated an international fashion parade involving usage of Adire and construction of Adire Mall at Ancient Itoko Market in Abeokuta which will be inaugurated this week to mark the 4th African Drums Festival. In this interview with RAZAQ AYINLA, BusinessDay’s Southwest Bureau Chief, Amusan speaks on different initiatives and interventions made so far to change the face of arts, culture and tourism in the state. Excerpts:

ecords have shown that Ogun State government, especially the Ibikunle Amosun-led administration, has contributed in no small measure to the development of Adire, tie and dye fabric locally produced by people of Abeokuta. Lately, the government mulled the idea of putting Seal on Adire to make it an international brand. What informed this and what do you want to gain in the long run? The Adire Seal came on based on feedback from various quarters. As you know His Excellency (Governor Ibikunle Amosun) over the period of his administration, has supported Adire and the use of Adire. As you can see, we all wear it. We have gone to many countries, promoting Adire originating from Ogun state. One of the things we want to do in terms of owning Adire produced from Ogun State is to position if as part of our culture and our heritage from our forefathers. Really, designers of Adire in Ogun state have been well known for the craft and it’s something that people have handed over from one generation to another. It’s part of our culture so, it is important to own it and ensure that we preserve the trade and craft and of course, utilise it in various forms. What people have been saying in the past was that there was no rule by which people produced it and they didn’t know the quality of Adire being produced. As a way to bring us into the situation where the producers are able to sell the wares or assure buyers of some level of standard, we needed to authenticate or put a process in place to authenticate the quality or the type of fabric produced here. The first thing that His Excellency did was for us to register the brand name Adire Ogun, which clearly speaks for itself, in that it is Adire that is made in Ogun. Also, it gives the buyers some level of assurance that this will give a standard, just like we have Irish Linen, Egyptian Cotton and all other types of branded items, we have decided that Adire Ogun is something that will assist our people in ensuring that we have a certain standard introduced. It does not preclude certain conditions that people have to meet. Part of it is that for Adire to be produced here you have to belong to an Association. I believe that will be done with the Association because the Adire producers have their own Association - it is a very established Association. So, we work with them to come up with parameters on which this can be done and the Ministry of Culture and Tourism will be part of this process whereby just like you have Hoteliers registering, so, through the Association, the Adire producers would be able to register and be able to use the Seal. That is the process; it doesn’t stop anybody else from doing what they are doing, but if you want to have some kind of premium brand that we are producing, you will see the value in having the authority to be able to use the Seal and as time goes on it can be further developed by both the producers and through the Ministry. We will be able to work together and ensure that we are positioned properly. Now, having a formed organisation, it gives us an opportunity to also tap into various re-

sources that ordinarily individuals would not have been able to access. So, it was very well received by the Iyalojas (market women) and as you can see, we have done a lot of things together. His Excellency, like I said, has always been supportive, to the level that we have gone to different countries of the world with the Adire makers themselves. From markets we chose them randomly from those that were recommended from the Association themselves. This has been a process that has been in place over a period of time. We have been to London, Vietnam, Paris, New York. We also partnered with an International designer - MARQ O. We went to New York Fashion Week with her (MARQ O) and you could see Adire makers themselves working with her to come up with some of the designs that we showcased last year. No doubt, many people believe that Adire as an African fabric which was crudely produced and here, you are talking about premium brand and adding value. What has changed from the crude production to the refined production of Adire? I will revalidate the expression ‘produced crudely.’ For me, that is not a valid description. It was being made by hand. When they make it by hand, it is part of the process; it is part of the beauty, it is part of the customisation. It is not something to be discarded. I think and we feel that that was a process which our ancestors - our great grand mothers and fathers - used and it gives more beauty to Afire itself. Our people have also seen by going to other countries that there are certain things they can improve on. Now you can produce 300 pieces of Adire in less time depending on what you want, unlike before. People have introduced more methodologies that are more efficient not just in terms of the quantity, but also in terms of quality and beauty. The beauty of it is that it has just gone beyond what you wear, you now see it as patterns on the walls; you see it on lamps, you can see it on bags, you see it in www.businessday.ng

different forms. I can boldly say that His Excellency, in all honesty, within the last eight years, has made a major difference. I usually say that when people decide to copy your works, it shows acceptability. It is something that has taken many forms. I remember when we first came in 2011, not many of us were using Adire; we saw Adire as traditional outfit, but now you see it on lace, you see it on chiffon, you can use it for various things. Adire fabric producers, marketers and all other people working in that industry will surely require loans, empowerment and other interventions from government. What has your government done in that regard? This is an empowerment at different levels. Even right now, we have done another empowerment as well with the Adire people where they have identified a certain number among themselves at the level of Micro, Small and Medium-scale Enterprises (MSMEs). Some of them are now getting funds to increase their capacities to produce more. So, working with the Association has been a mutual benefit. We have given all their members credit facilities through a partnership arrangement with the Bank of Industry (BoI). The State government is also planning to inaugurate Adire Mall that provides a cluster for Adire producers and sellers at the Ancient Itoku market in Abeokuta. It is part of empowerment programme of this government. For the first time, somebody is giving the Adire fabric producers and sellers mall to project what they are doing, to give them the opportunity to cluster, to buy the mall shops for themselves and it is available at a discounted payment for Adire fabric makers through their Association as well, and everybody that sells in Itoku market for instance belongs to the Association. BusinessDay understands that Ogun State will feature first ever Adire Fashion Parade at the 2019 African Drums Festival to be held

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in Abeokuta this week. What is the correlation between Adire and Fashion Parade? You have to wait to see. Adire is fabric, isn’t it? And we are doing a Fashion Parade that has to do with Adire. It is a fact that you have been in this government in the last eight years, first as Commissioner for Culture and Tourism and now as Senior Consultant to Governor on Culture and Tourism, What have you achieved? What have you done differently? In my tenure with the second administration now, I have done several things, though we complement ourselves in the Ministry. The former Commissioner also did his bit, but I was able to work on Fela Kuti’s residence in Abeokuta and other houses that our icons were born in, lived in as a way of preserving our culture, heritage and our history because this is fabric. This is what defined us. There were many other things that I would have loved to do, one of the things that I achieved is the Executive Order that I was able to put in place to guide the policy of museums and monuments in the State, that is also a very critical part. The idea is to sow a seed and to give direction that the next set of people coming in can at least take it from there and implement or expand on it and get a proper guidance. Kuti’s House, like you mentioned, Hubert Ogunde’s House, Ayinla Omowura’s House, among others. We are making effort to preserve them all and I was involved in them, but most importantly, Adire. I have worked tirelessly in projecting Adire that can be used and compared to any fabrics in the world. I also live it because I wear it; His Excellency (Governor Ibikunle Amosun) lives it and wears it. A lot of State Executive members and Civil Servants as well, live it and wear it, a lot of us are now looking at Adire differently and that has culminated into Adire Ogun Seal that you are seeing today. One of the major cultural legacies which this administration will leave behind is the African Drums Festival which metamorphosed from Nigerian Drums Festival when it was established in 2016. What are you doing to ensure its continuity beyond 2019? If you look at how His Excellency has done many things in this State, you will have to give it to him. He is somebody with vision because when the Festival started as Nigerian Drums Festival, he looked at it and said, “it is bigger than Nigeria. We need to reach out to many people.” That was how it became African Drums Festival. So, over the years, it has actually continued to improve and expand each outing. The idea is that it has served as fulcrum and there has been participation of private sector, so, it has become more driven by private sector than public sector. Really, by next year and the years to come, it’s logical that this can’t die even if there is a change of government. I don’t see it dying because everybody wants continuity. I believe a stage has been set and it will likely continue because it benefits everybody and not just about Abeokuta or Ogun State alone; it is now international. Each year the number of countries grows and I see no reason why it can’t continue.

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Thursday 25 April 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

The stray cats that stayed back ONUWA LUCKY JOSEPH

One morning, about 3 weeks ago, it rained, second time in a row in Abuja, and the oppressive heat that had built up and threatening to make the town a cauldron petered out considerably. There were intimations of cold, in fact, causing sleepers accustomed to sleeping in their birthdays suits to do a duvet wraparound at night. A cat had been outside; my kids told me when I returned from the office that night. This had me irritated as a clowder of cats had gotten in the truculent habit of disturbing my family with their weird noises at night. So I got a fairly big stick, ready to club the cat and send it packing for good. But my kids, they restrained me, imploring that it was a merely helpless baby uncomfortable with the rain and cold outside. They would have tried to help the cat somehow, but having not previously handled one, they didn’t know how to approach it. Which was why it was still out there. So I opened the door, my kids safely watching from the window after I heard it mewing again. The little cat just stood there right by the door shivering, its tail between its legs as it looked at me with its pleading big eyes. I picked it up; its fur all matted from the rain. It nestled right in my arm like it had found heaven. I tried to, with my bare palm, dry out some of the water. It occurred to me that with the rain not abating, it would be unthinkable to leave the little cat out there in the cold. My children, hitherto frightened, quickly picked up on the cat’s eager friendliness and wanted to handle it too. As I obliged, they passed it amongst themselves, stroking it in an effort to give it warmth. We decided the guest toilet was a warm enough place to house it for the night. We left it lapping up the milk we poured for her in a plate. The kids and I were good with the cat. The problem was my wife who has never been a fan of animals and would rather a wide berth between herself and them. I also suspect she has, like many Africans, this holdover from our traditional beliefs about cats and their ‘tendency’ to act as vehicle or agents for spiritual disruption. While she does not admit to such beliefs, she

C was far from supportive of our adoption of the cat. About a week after taking in Chase – that’s what my kids named it, another cat strayed over and stayed put. A little older than Chase, it looked all skinny, its rib cage in clear view. Looks like it saw Chase was doing okay and decided whatever Chase had he had to have too. This one is a bit more tentative, not as impulsive as Chase, and more of a loner even though Chase would rather duel with it all day long than leave it alone. The kids named it Ginger, for its yellow carroty colour. Meanwhile, although Wifey still has some of her hang-ups, she has come around, largely, to being friendly, accommodating even, with the cats. When she steps out the door, they run to her, or at least Chase does. Ginger follows if he determines it’s okay to do so. They are yet little and so haven’t’ developed the tendency to be aloof that cats are famous for. Ginger has a bit of that though but sometimes forgets itself and runs to Mama. It’s possible they have some sixth that alerts them to the fact that the woman runs the kitchen or wherever it is that their meals materialize from. That’s how come my family now has two cats. We find that a lot of our visitors aren’t enamored with them. And we haven’t built them a kennel yet so they like to stroll round their territory and stealth up sometimes to unsuspecting visitors some of who can’t stand the furry duo. We, we like them like that. And we hope that more Nigerians would take in animals like that and treat them nicer than what they get fending for themselves outside. It’s not a good thing to shout ‘Blood of Jesus!’

every time we see cats, or owls, or dogs or any of those animals we have been socialized or is it ‘spiritualized’ into believing are evil because of their God given attributes like piercing big eyes, or big heads or claws, etc. If we take them in as babies, they are quite easy to domesticate. It’s an important of dominating our environment, like the scriptures say. A big part of that is knowing how to handle lower creatures which for reason of human encroachment into their territories or for reason of generations of domestication now can’t fend for themselves as they ought. Or if they are forced to, must turn on the easy target of other animals that we keep for food, business or as pets. I have always wondered why we don’t treat our animals right. I mean the breeds that are native to Africa. Just see how we treat our dogs. We treat them like d-o-g-s! They have to fend for themselves, have to feed on poo, and even when they hunt, when they go out with hunters, they are permitted the pleasure of partaking much in the meat. While we are in the habit of getting exotic dog breeds and giving them princely attention, the lot of our local breeds is to be bingos for life. It’s a wonder how we ill-treat or denigrate things native to us. I have asked my vet doctor friends why that is the case. How come they don’t encourage dog lovers to own local dogs that can also pay visits to the vet? They can’t answer. They should be leading the discussions in that area. Unfortunately, they will not be bothered. That’s my next thing, Madam permitting. Get a local dog. Treat it nice. Train it like one trains the foreign breed. See how it turns out.

oca-Cola Nigeria Ltd, has delivered maternal and neo-natal care equipment to the Federal Medical Centre, FMC, Ebute-Metta, Lagos, as part of its Safe Birth Initiative (SBI) project that was launched late last year in partnership with the Federal Ministry of Health, the Office of the Senior Special Assistant to the President on Sustainable Development Goals, OSSAPP-SDGs and an NGO, Medshare International Inc. The initiative seeks to challenge maternal and newborn deaths in Nigeria, by strengthening capacity in the three critical areas of Procurement and supply of maternal and neonatal medical equipment to enable safe deliveries and post-delivery emergency care; Training of biomedical engineering technicians to improve equipment maintenance and uptime, as well as Reactivating abandoned medical equipment wasting away in public hospitals. Speaking during the equipment handover in Lagos, Coca-Cola West Africa Public Affairs & Communications Director, Mr. Clem Ugorji, stated that FMC Ebute-Metta, was the second beneficiary of the 15 recognised major hospitals to benefit from the gesture, inclusive of kits such as needles, gloves and injections, all valued at about $10.8 million. Ugorji reiterated the importance of public private partnership towards the achievement of the sustainable development goals, saying “Active and intentional collaboration between members of the private and public sector is key to transforming healthcare in Nigeria”. While he commended what he called “the good works of our doctors and nurses”, he was quick to “recognize that there is a limit to what they can do without the criti-

high blood pressure in the lungs. It is different from the regular hypertension also known as systemic blood pressure.

In regular hypertension, the arteries throughout the body are constricted. In pulmonary hypertension, the pulmonary arteries, which are the blood vessels responsible for transporting blood from the heart to the lungs are affected. Pulmonary hypertension is a rare chronic disease in which the pulmonary arteries become narrowed and thickened, making it difficult for blood to flow through and as a result causing the heart to work harder. Over time, the hearts become enlarged, weakens and it can lead to the development of

heart failure. The disease affects people of all ages, races and ethnic backgrounds. In order to get more people aware and to guard against its stealing up on them or their loved ones, the Cardiac Community is organizing WALK4PH. In other words, let’s walk together to create awareness for Pulmonary Hypertension. It’s been scheduled for the 11th of May, which happens to be the day the reggae icon Bob Marley passed on. So, on Saturday, 11th May 2019, make sure to be at the National Sta-

he Cardiac Community, a group started by two young Nigerians, Ayotunde Omitogun and Olajide Owolabi, is working hard to ensure that the hashtag above starts trending thereby creating the required awareness regarding a debilitating disease that is quietly killing many. Pulmonary Hypertension is what the PH stands for. Not ‘Port Harcourt’ as some might have assumed. Pulmonary hypertension, something Ms Omitogun suffers from, is a general term used to describe

Coco Cola Safe Birth Initiative Berths in Lagos Hospital ONUWA LUCKY JOSEPH

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cal equipment required for effective diagnosis, testing and treatment. “Through the SBI”, he declared, “we are pleased to be able to donate vital equipment to aid the work currently being done to safeguard the lives of mothers and babies here and the other hospitals that will receive donations as part of the first phase of the initiative”. Reacting to the gesture, the Chief Medical Director, Federal Medical Centre, Ebute-Metta, Dr. Adedamola

Dada, expressed gratitude “to CocaCola, the OSSAP-SDGs, Medshare International and the Federal Government for this initiative”. Even as he promised effective utilization and maintenance of the equipment, he recounted some gains of the Safe Birth Initiative: “We have recorded and supported 21 premature births with the incubators; 321 mothers and babies have been brought home alive and 46,000 other patients have benefitted in some way from the gesture. The company has also ensured maintenance of equipment, making sure we have adequate engineering capacity on ground, through the training of our engineers,” he said. Dr. Dada was also happy to announce that “since receiving the equipment early this year, we have saved just a little under N10 million in medical and administrative costs”.

dium, Surulere, Lagos, by 7am. But by 2pm, enough ground covered, it would be adios and everyone can go back home safe in the knowledge that more people have been enlightened about PH who would in turn enlighten others. Details regarding the route will be communicated before the date. And keep reading these pages for more information.

(For feedback, contact us at csrmomentum@gmail.com/ 08023314782)

Thursday 25 April 2019

BUSINESS DAY

Corporate Social Impact

Notre Dame and the Needless Backlash against the Billionaires ONUWA LUCKY JOSEPH

he Cathedral du Notre Dame is a famous Gothic church built over a period of 200 years, beginning in the Middle Ages. It had survived all the turpitude experienced by France in the past 850 years including the French Revolution, World War 1 and World War 2 (and that inclusive of the Nazi occupation). Although France is not the Christian country it once was, buildings like the Notre Dame hold a special place for French people. The sensuously muscular Gothic architecture with its eye pleasing stained glass windows have made the Cathedral something the French want to wake up to seeing every day and something they would collectively want to bequeath to their children. Its remarkable longevity marks it out as a triumph of French architecture, engineering and artistry. So when a fire raced through it on the 15th of April, 2019, France as well as the mass of civilized society was left aghast. This symbol of everything French was not going to be left as another relic of time gone by when France was at the height of its glory. Moneyed French folks were quick to bring out their chequebooks to write out the kind of humongous amounts that only rich folks can afford to write Within a few days of the disaster, François-Henri Pinault, CEO of Kering, the luxury goods conglomerate that owns Yves Saint Laurent, Balenciaga, and Gucci, reportedly offered $113 million to the rebuilding effort. Pinault, who is also husband of Hollywood star, Salma Hayek, used the Kering Group’s Twitter account to announce the donation. His accompanying heartfelt message read: . “The Notre-Dame tragedy strikes all French people, as well as all those with spiritual values and those who care about history and culture. Faced with this tragedy, my father [François Pinault] and I have decided to contribute to the funds needed to fully rebuild Notre Dame de Paris, in

order to bring this jewel of our heritage back to life as soon as possible This donation was quickly supported, as we would say in Nigeria, by Bernard Jean Étienne Arnault, chairman of the largest luxury goods conglomerate in the world, LVMH, who is reported to have pledged $226 million to assist with the rebuilding. The LMVH twitter statement acknowledged the Cathedral as “an integral part of the history of France”. Now, that is really what it is about – an integral part of the history of France. It is a heritage received from earlier generations and to be passed on to new generations on and on.

Many more rich folks have since added their princely sums to the fund while lots of groups all over the world are crowd funding to help assist the efforts. There is, however, and not unexpectedly, some hue and cry, and not all of that from the usual suspects’ category. From social media and other channels has come the question if the rich can fork out so much money in so short a period, how come they’ve done nothing about the social emergencies of the day a lot of which have been passed down from generations? To be sure, the questions are valid. They make up the bulk of the

enquiries in the social sciences: the inequity and inequality that men everywhere experience. The answers are not here. We can’t even attempt it because it is massive and intellectuals are on all sides of the divide with their lucid rationalisations for the positions they hold. For us at CSI, our strait focused purpose leaves us no room for prevarication. The billionaires are doing the right thing. Humanity everywhere seeks a glue, something that makes each heart that shares that commonality beat for its existence. The French people, rich and poor are showing their support for the cause. If anything

happened to the Arc de Triomphe, they would do the same thing. If the London Bridge experienced a disaster, you know how the Brits would do whatever it takes to get it back to what it today is. Remember the World Trade Centre after 9:11? It wasn’t quite the same in terms of history, but for significance, it towered above its peers in Lower Manhattan, New York. The thing is, what do we consider important? And why are they important? Do we have structures of such significance in Nigeria? What relevance do we accord them and why? Fact is, the relevance would usually be historical, as, as far as I know, we have not, even from historical times, been in the habit of constructing structures of epic proportions that make us stand in awe. Note must be taken how that the effort towards the rebuilding is being spearheaded by the French corporates and their honchos. And they have come out to say that this is not about tax breaks. It’s that they believe in the cause as true Frenchmen and women. Some have sought to compare Notre Dame with historically black churches that were burnt recently, three of them within 10 days. Very little movement towards chequebooks in those instances. And that is not right. However, if the blame is to be properly situated it is well within the province of the black community which must take the lead in trumpeting the situation and having its wealthier folks show some generosity. Really, it’s about what the community considers important. If the Black American Community cannot go past merely getting angry, past the press conferences and demonstrations, and get right down to rebuilding, it goes to show that the monuments and the spiritual/social services they render are not as important to the community as they would the world to believe. You put your money where your mouth is, and then the world will take its cue from that. What is important to you, you guard and preserve with your very life.

Andela “Ticks all the boxes” for Serena Williams and social good. Part of the company’s thesis, Serena wrote, is backing companies “that embrace diverse leadership, individual empowerment, creativity and opportunity.” And Andela ticks all of those boxes. With a diverse team of co-founders and executives as well as local lead directors in countries where it operates, Andela admits budding African developers into a highly selective program (it has an admission rate of 1%), trains them to become globally competitive and outsources them to global companies in need of development talent. It’s a model that’s proven enough to win significant investor backing with

YOMI KAZEEM

ndela, the developer training and outsourcing company with operations in four African countries, already has a high-powered roll call of investors including the Chan Zuckerberg Initiative and a former US vice president. It turns out Serena Williams, the 23-time tennis Grand Slam champion, is another. Through Serena Ventures, an investment fund founded in 2014 which has remained secret until an Instagram post this week, Williams has backed 30 companies across e-commerce, fashion www.businessday.ng

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Andela among the best funded start-ups in Africa. Its $100 million Series D round, which Serena Ventures participated in earlier this year, is one of the largest ever single rounds raised by an Africanfocused tech company and brought the total venture funding raised by the company to $180 million. Alongside Andela, Serena Ventures has also backed Coinbase, the San Francisco-based cryptocurrency exchange, Masterclass, the online learning platform and Wave, a remittance service that’s available in five African countries. (Culled from Quartz Africa. We only changed the headline)

Thursday 25 April 2019

BUSINESS DAY

ENERGYREPORT

Oil & Gas

Power

Renewables

Environment

ExxonMobil boss identifies unique opportunities of gas to Nigerian economy Stories by Olusola Bello

or Nigeria, gas provides a unique opportunity to provide steady, widely available, cost-effective and generally affordable power to everyone, according to Paul Mcgratt, the managing director of ExxonMobil He said a shift to gasfuelled power generation would represent significant savings opportunities over sources such as diesel which is multiple times more expensive than gas at the current price of USD 2.5 / mmbtu. “This saving can then be redeployed by power consumers (individuals and businesses) to other goods and services and to new investments”.

L-R: Olayinka Mosuro, clinical health adviser, SPDC; Hope Nuka, social performance adviser, SNEPCo; Sam Azoka Onyechi, vice president, OGTAN; Yakubu Gowon (retd), former military head of state; and Simbi Wabote, executive secretary, NCDMB, during an inspection of the exhibition booth of Shell at the 2019 Annual Conference and Exhibition of the OGTAN in Lagos.

Additional opportunity, he said, exists in leveraging gas to develop industries that use gas as feedstock,

to produce methanol and ammonia used in fertilizer production. The ExxonMobil boss

who spoke on what Nigeria’s gas can do for the economy at the Nigeria Gas Association NGA annual general

What Nigeria can learn from Saudi’s gas-to-wealth project ...sees gas as road map to a more prosperous economy

igeria as a country well endowed with gas has been struggling to turn its gas to wealth. This is because the government has never been seen to be serious about the need to see the series of policies it has initiated to logical conclusion. The Gas Master Plan which was initiated during President Olusegun Obasanjo era is not being given the needed attention and, because of this, it is being implemented haphazardly to the detriment of the economy. Experts argue that if Nigeria can take a cue from Saudi Arabia, an equally endowed country with crude oil and gas resources which has leverage on its gas resource to turn itself into a global economic power house, the country (Nigeria) might soon be a force to reckon with. Saudi Arabia was built by oil, but natural gas is shaping its future. In fact, that trend applies to most countries’ economic growth plans. One of the cleanest and cost-effective fuels for power generation, industry, transportation, and numerous other sectors worldwide, is gas which is the ultimate future fuel. According to Al-Naimi, Vice-President, Petroleum Engineering & Development, Saudi Aramco, the company, Olusola Bello, Team lead,

which is the world’s leading integrated energy and Chemicals Company, is making natural gas a strategic focus. “Here’s why we see gas as the roadmap to a more prosperous, sustainable future – and how innovation is helping us to tap its tremendous economic and environmental potential,” he said. “To put our future aims in context, it’s important to see the central role that non-associated gas – found in natural gas reservoirs that do not contain crude oil – has historically played at Saudi Aramco. “Our exploration of the Kingdom’s abundant natural gas began in 1956, with total production of 12bn ft³ by the late 1960s,” he added. The next milestone was 1977’s Master Gas System (MGS). With four natural

Graphics: Joel Samson.

gas liquids (NGL) processing plants, three major export terminals and a cross-country pipeline network, the megaproject provided a sturdy backbone for Saudi Arabia’s nascent industrial network, and drove the more economic practice of using or selling virtually all the gas associated with oil production, rather than burning it off, he said. He said, the MGS has achieved 100mn metric tons (mt) of CO2 avoidance over the past 40 years, thanks to that early decision to minimise flaring. These landmark developments laid the groundwork for the next phase: the strategic decision to substitute gas for oil in power generation. As Saudi Arabia enters a new phase of growth with Vision 2030, the Kingdom’s economic transformation

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program, energy demand is rising in the facilities and industrial sectors. Using cleaner-burning natural gas for electricity and freeing up liquid fuels for export and for value-added products like petrochemicals carries huge economic and environmental benefits, and diversifies the energy mix. Over the next decade, Saudi Arabia is taking clean gas to more than 70% of its utilities fuel mix – that’s among the highest rates in the world, Al-Naimi, Vice-President, Petroleum Engineering & Development, Saudi Aramco Taking advantage of the MGS’s built-in expansion capacity, new gas projects are underway to meet growing demand for gas in household electricity, heating and cooling installations, water desalination plants and chemical industries. In addition to addressing power generation, gas energy will be used in the form of liquefied natural gas (LNG) that can be stored in tankers and shipped around the world for industrial use. Compressed natural gas (CNG) and liquid petroleum gas (LPG), used to fuel many types of transportation including cars, trucks, buses, tractors and other vehicles specially designed to run on natural gas, is another major future use.

meeting in Lagos said Trinidad and Tobago is a good example of a country that has accomplished much with its gas resources. With a small population of 1.4 million and only 11 TCF of proven gas reserves, the country has developed a globally competitive petrochemicals industry, he said. “Today, Trinidad and Tobago is the world’s largest exporter of ammonia and second-largest exporter of methanol leading to this industry contributing significantly to the country’s GDP. Nigeria, with significantly larger gas reserves, has the potential to achieve even bigger success.” The Nigerian agricultural sector, the largest GDP contributor to our economy, he explained, would benefit immensely from great-

Joint investigation visit to assess Nembe Creek fire incident

Joint Investigation Visit (JIV) comprising security and regulatory agencies, community representatives and Aiteo personnel will be constituted and deployed to the site where fire broke out on the Nembe Creek Truck line to attend to the necessary incident formalities. This is coming following confirmation by the Joint Task Force (JTF) that the fire was caused by sabotage of the pipeline at Awoba, Rivers State. JTF also claimed it has identified some culprits and is set to take necessary action. Aiteo said that working on further site preparation and mobilisation of specialised equipment to the swamps for further remedial action to facilitate a quick return to full functionality. The company had declared a force majeure on the 150,000 barrels per day Nembe Creek Trunk line because of an outbreak of fire. The fire outbreak was discovered by the company’s surveillance team comprising the JTF, FSS around NCTL RoW near Awoba today It said it Operations Emergency Response team was immediately activated and following its urgent in-

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er availability of fertilizer. Considering the low nitrate concentration in our soil and gas being the key feedstock for nitrate-based fertilizer, developing the gas industry could contribute to enhancing food security. Further benefits for Nigeria from gas development would be for the Nigeria LNG (NLNG) to maintain 70-80 thousand jobs in the economy and contributes ~USD 1.3 billion each year in revenue to the Federal Government, providing much needed revenue for the government to deploy for the benefit of Nigeria, such as development of infrastructure and diversifying the economy. Other areas where gas can benefit the economy include alternative fuel for transportation, residential and commercial utilization.

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tervention and containment action, it was constrained to shut in injection as well as other related operations into the NCTL. In accordance with standard procedure other injectors were asked to do the same. The NCTL has, hitherto, enjoyed smooth operations preceding this incident founding suspicion that this fire may have occurred through an illegitimate, third-party breach of the functionality of the pipeline. The company stated further that relevant investigations are continuing while further information about the remote and direct causes of the fire will be communicated as soon as these become available. We ask our stakeholders to wait further, detailed briefing in due course. Nembe Creek Trunk Line is a 97 kilometre, 150,000 barrels of oil per day pipeline constructed by Royal Dutch Shell plc and situated in the Niger Delta region of Nigeria. The Trunk Line is one of Nigeria’s major oil transportation arteries that evacuate crude from the Niger Delta to the Atlantic coast for export. The 1.22 diameter pipeline is 97 kilometres long which passes through Cawthorne Channel Field and has 14 pump stations.

Thursday 25 April 2019

BUSINESS DAY

ENERGYREPORT Why we are driving very hard to raise standards in downstream sector The downstream sector of the petroleum industry is replete with unethical activities. However the operators are now more than ever before determined to rid it off of those unwholesome activities. In this interview, Tunji Oyebanji, chairman Downstream, Lagos Chambers of Commerce and Industries (LCCI) and managing director 11plc explained to Olusola Bello, what steps the sector is taking in this direction. Why do MOMAN want to professionalise the downstream at this point in time when the business is on the downward trend and with just one dominant player? f you are not making money the excitement of introducing new things in the business will be reduced but our argument is that we are the oldest and most experienced in the this business of downstream. So we should take the lead in at least pointing the way forward. Hopefully at a time when the country finally determines it is ready for deregulations and to move forward then we can bring that experience to bear in providing direction for the best way for the industry. Take for example the issue of safety in trucking. What is the proper standard for trucks that should be used in the industry? What kind of safety standard should be deployed, retail outlets? What is the quality of service rendered? So we want to take back our pride of place as being the group the government should come and meet when it wants to do something by asking us what the standard should be and so forth. This is part of the vision we are having in MOMAN. We make no qualms that

it is going to be tough in this environment where our margins have be reduced to a ridiculous level or barest minimum. However we would do what we can. But at least you know they say without a vision the people perish. Let us prepare the way so when the government goes that direction we are already there. As you can see many people are falling by the way side now. These were marginal fringe players. Even though things are tough, the ones that are surviving up until now are those big and well-managed publicly quoted companies that are in the business that seem to be managing to weather the storm, though. It is all these experiences that we should bring to bear on the industry. Some of those companies that came on an emergency basis because there were some quick money to be made, if they have started to imbibe some of our practices, be it governance, safety, control, quality, they may have been able to stand the test of time themselves. This is really what we want to do as MOMAN. We have allowed ourselves as MOMAN to be crowded out in the scheme of things, losing some degree of influence and recognition. We want to get back to that

overall the standard of the industry can be lifted as a whole.

Tunji Oyebanji

pride of place. If the downstream is to be professionalised as you want it and you are now talking of MOMAN, what happens to independent marketers? How are you going to bring them to the scheme? Ourselves as MOMAN, we believe that the era of seven sisters or supper majors and what have you are gone. You will notice now that even in our ownership structure in many cases, apart from Total that is still a multinational as it were, most other

companies there ownership structure has changed over time. So we believe that our own organisation with time would have to change, and we would be bringing other people on board. Some of other people have demonstrated that they want to grow in professional manner. This is not an exclusive club. So in future we would bring more people on board and then help those people to improve their standards, quality, making the experience that we have available to them so that

Generally, how would you describe what is happening in the industry in terms of standard, safety and services to customers? Well, I think that if you look at the newspapers you will see areas where the people are not happy with in terms of how we do things. For instance trucking. The standard of the trucks on the road are below what is proper. This is an area I think we all need to have common front and needs to be addressed. So that the regrettable loss of lives that happens periodically is reduced. Another thing is the quality of the fuel we are consuming. Is it really the best, is it what we should be consuming. Many countries across the World have passed legislations in terms of the quality, particularly of diesel that is sold or imported into their countries. This is something we all need to work on because I don’t see us as a country being committed to these new international standards. So again, there is another opportunity there. Another area that we need to focus on is the service level at the retail out-

lets. Are people really being served optimally? If you buy a litre, are you getting really a litre of fuel? At the end of the period what I would like to see is that when people come to our stations they would be sure of good quality service. So we are driving these initiatives very hard to try and get all our members to raise their standards. The other thing I want to say is the issue of corporate governance. Our member companies are running a very transparent process with no scandals because they are following current principle of corporate governance. So it is something we would encourage our members whether old or new to adopt. These are the new areas I have observed in the industry and I think we need to work on. We also are in an environment where we have one dominant operator, that is Nigerian National Petroleum Corporation NNPC. We need to reach out to NNPC because we cannot ignore a player of that size. We have to work together with them. If something is going to change in the industry they have to be part of it. Working with it as the most experienced organization is necessary if you want move the industry forward.

NNPC impressed by works on East-West Gas Pipeline construction India and China may defy sanctions as oil prices jumps by 3 per cent

he Nigerian National Petroleum Corporation (NNPC) has said it is impressed by the capacity and progress made by the contractor working on the East- West gas pipeline project popular called OB3 136 km by 46 inches. According to Saidu Mohammed p COO, Gas/Power NNPC he said: “This is a project that we have been waiting for in Nigeria and we are glad that the contractor is performing towards bringing light at the end of the tunnel. What I have seen so far is very impressive and the deadline of completing this project is achievable as all materials needed for the completion of the work are on ground.” Tunde Bakare Managing Director of the Nigerian Gas Company (NGC) who represented Saidu Mohammed said “From what we have seen so far, Oilserv has done very well. The Gas Treatment Plant (GTP) is massive with a capacity of two billion standard cubic feet per day (2bscf/d). What is left is just the piping work and we are sure that by

September 2019 we will have the Vice President here to commission the project’’. The accolade came when the NNPC officials visited the site of the constructing company while inspecting the Gas Treatment Plant (GTP) site of the OB3 Project . Oilserv Limited, a leading Engineering, Procurement, Construction, Installation and Commissioning Company in Nigeria has been a major player in the industry since herinception in 1992 and has contributed immensely to the development of pipelines systems infrastructure in Nigeria, having executed various large and medium scale projects. Emeka Okwuosa , Chairman of Oilserv;while thanking the NNPC delegation for their commitment towards the project by making out time from their busy schedules to inspect the work said “Oilserv with the support of the client; NNPC has demonstrated that such a huge project can be done locally. The project is quite a challenging one and Oilserv has always shown commitment www.businessday.ng

in the process of executing the project from Engineering and Construction. The Gas Treatment Plant (GTP) is the largest that exists in Nigeria and maybe Africa today and it is meant to have capacity of two billion standard cubic feet per day (2bscf/d). few changes in the entire design in addition to other issues that came up led to quite some delay but being that as it may the company is racing towards the finished line and we are sure we will deliver on the new schedule’’. Responsible for the first Gas Distribution Network System built in Nigeria; The Greater Lagos Phase I, II,III and IV Gas Pipeline Project for Gaslink Nigeria Ltd, Oilserv has also executed and delivered many other projects using high quality and safety standards. Such projects include the Alaoji Gas Transmission Pipeline System for Nigerian Gas Company (NGC), The National Integrated Power Project (NIPP) Lot 1 & 2 (Ihovbor, Egbema & Gbarain) for the Niger Delta Power Holding Company (NDPHC).

he two top buyers of Iranian oil may not obey U.S. sanctions. “Iranian exports will not actually reach zero,” analysts at Eurasia Group said in a research note published this week. “China, which imports approximately 500,000 bpd (barrels per day), will make considerable cuts in the near term. For Beijing, securing the trade agreement with the U.S. is the top priority, and China will

not link Iran oil imports to the trade talks Meanwhile Oil prices shot up to new highs for the year on this week after the U.S. announced that it would let waivers on Iran sanctions fully expire. In early trading on Tuesday, WTI topped $66 per barrel and Brent moved above $74. According to oil price .com, oil surges on U.S. decision on Iran sanctions. Trump surprised the oil market on Mon-

day, announcing that he would let U.S. sanctions waivers expire at the end of the month. The eight countries granted six-month waivers last year had hoped to obtain extensions, but the Trump administration has opted for “maximum pressure” on Iran. However, it may also mean maximum pressure on the oil market if Iran loses a significant portion of its oil exports. Oil surged by roughly 3 percent on Monday.

Pinnacle Oil & Gas wins Nigeria’s local content top prize FRANK UZUEGBUNAM

innacle Oil and Gas Limited has been formally recognised and applauded by the Nigerian government for its contribution to local content development in the Nigerian oil and gas industry. At a ceremony graced by the Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, Bayelsa State Governor, Seriake Dickson and top

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oil and gas operators in Nigeria last week, the Nigerian Content Development and Monitoring Board (NCDMB) powered the second edition of the Nigerian Oil and Gas Opportunity Fair (NOGOF), praised Pinnacle Oil and Gas for championing local content promotion in the oil and gas industry. The award‘Downstream operating company with the most impactful local content development initiatives,’ is easily one in the growing local and international recognitions for Pinnacle oil @Businessdayng

and gas Limited. Famed for its first mover advantage in pioneering the development and construction of a world class petroleum products handling facility at the Lekki Free trade zone in Lagos, Nigeria, Pinnacle oil and gas was among others recognised by the NOGOF for this facility which would comprise a 600,000 MT tank farm for storage on the shore, connected to Single Point Mooring (SPM) and Conventional Buoy Mooring (CBM) facilities.

Thursday 25 April 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Government needs to be more committed to the growth of businesses and investments in Nigeria – Ifeoma Utah In this edition, IFEOMA UTAH, General Manager, Commercial Legal, MTN Nigeria, speaks to BusinessDay Law Editor, THEODORA KIO-LAWSON, about in-house legal services, investments in Nigeria, training for Nigerian lawyers, and the need for Nigeria to walk its talk. EXCERPTS…

icensed to practice law in Nigeria and the state of New York, with a Masters degree in international transactions, Ifeoma Utah who heads a 22-man in-house team at MTN, begins her interview speaking about the difference between legal practice in Nigeria and the United States of America. She said, “Legal Practice in the US is very competitive, and playing in a male dominated field, not only as a black but as a black female, meant you had to put in the work.

How did your legal training in Nigeria support the work you did in the US? “Law School in Nigeria was mostly theoretical. All you had to do was memorize and reproduce all you have been taught, whereas in the US, learning the law is a hands-on experience. It opens you to the practical aspect of the law and I learned a lot from my experiences over there. I had to obtain a second degree in law, before going on to do a Masters,” she said. As the interview progresses, Utah speaks of her decision to go inhouse: “I found my inspiration to study law from reading books (which I loved to do a lot) and from the movies. I was enthused by the way lawyers engaged. However, on getting to law school, taking the courses; moving on to court attachment and law firm attachment, I realised early that litigation wasn’t going to be my thing. During all of this process it was easy to see that I had a commercial and transactional mindset to the practice of law and so found myself tilting towards corporate commercial law. With the utmost respect to litigation, I simply considered courtroom practice a total waste of my time. I had at this time begun setting specific goals for myself and I envisioned that I would like to be a significant part of the growth of businesses. I wanted to be a part of a process that helped them ac-

these legal solutions. We take time to understand and evaluate the legal and regulatory needs of each of the divisions and how best to support them. We also see ourselves as gatekeepers who protect the business from taking steps or initiatives that could get it into trouble and send it down. So we study bills and regulations within the jurisdiction, to see how it can potentially affect our business. A good example is the new Federal Competition Act, which we have studied and currently in the process of carrying out a competition audit of our business to see areas where we are most exposed and to take proactive steps to protect ourselves. We do not intend to wait to get a letter from the Federal Competition & Consumer Protection Commission (FCCPC).

Ifeoma Utah

complish their set goals and become better. It is for this reason I towed the line of corporate commercial and transactional law. Helping businesses wade through legal and regulatory challenges to be become stronger and better has become the core of what I do. I am passionate about this and being successful at it, makes me extremely happy. How has the legal team at MTN supported and steered the organisation away from some of its deepest regulatory crises in Nigeria to keep the business at the top? A strong institution with a sustainable business structure will survive all eventualities. However, as in-house legal team, our approach is to offer risk-based legal services. This entails us analyzing the company’s risks – both inherent and residual. We also evaluate the risk appetite of the institution before taking mitigating steps – planning for all possible eventualities. We work towards building in elements that keep the organisation going, regardless of what challenges it faces. www.businessday.ng

The team’s Commitment Other than the business structure, there’s also the element of commitment. Members of the legal and regulatory team at MTN are very passionate about the work they do. We work closely with other divisions of the business to ensure the business is on the right path.

‘‘

To encourage FDI flow into the country, we must walk our talk as a nation We consider ourselves business enablers and facilitators who should not only give legal advice but must contribute to the growth of the business. So, while we are mindful and advice against certain decisions or efforts that could pose legal and regulatory challenges to the business, we also ensure that we proffer efficient alternatives to

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Do you consider the business environment in Nigeria an investment friendly one? All I can say is that, we do not walk our talk in Nigeria. We need to begin to do this. We say we are trying to attract Foreign Direct Investments (FDIs) into the country but we fail to see that those we hope to attract are sophisticated investors, who own businesses in other parts of the world. They have worked hard to earn money and will do all they can to protect their investments. They do not throw money around and so they want to see systems and processes in place that guarantee the protection of their investments. Are there grave issues with the protection of investments in Nigeria? In these parts, investors are having to deal with not only obsolete laws, but also draconian laws. Institutions and regulatory bodies are also bugged down with bureaucratic shortfalls, whereas, in several parts of the western world, public institutions are just as efficient as the private sector. In Nigeria, government in@Businessdayng

stitutions need to be more committed to seeing businesses and investments grow and thrive in the country. The first contact and experiences most investors have upon arrival are with government agencies and we must begin to pay attention to the efficiency of our processes and ensure that we have a disciplined environment for businesses to thrive. To encourage FDI flow into the country, we must walk our talk as a nation. Unlike many others, I do not think it is a lost cause. We have good examples of situations where Nigerian stood up to be counted and they were counted. All over the world, Nigerians who work in both private and public sectors in various countries have been recognised as diligent, efficient and consistent – be it in some of the greatest healthcare institutions in the world or in government institutions in other parts of the world. We are brilliant and hardworking people. We just need to bring that to bear in our own jurisdiction. Let us be our efficient selves right here in our own land. I believe in the Nigerian dream but I also believe that it would take everyone of us (the people) to make it happen. MTN Collaboration with the Nigerian Bar Association (NBA) and the focus on the young lawyer The Youth is the future. The older ones are set in their ways, and so for any sort of development, we think it’s best to begin with those who are still impressionable and whose mindsets are still malleable. That way, we can guide them towards defining and charting good courses for themselves. There are people who mentored me, deposited knowledge and contributed to my growth and success today and it is important for me and the team here to give back to the profession; and what better organisation to do this with but the umbrella body of all lawyers in Nigeria – i.e. The Nigerian Bar Association (NBA).

Thursday 25 April 2019

BUSINESS DAY

LEGALINSIGHT

LegalBusiness

Banks as collecting agents for FIRS – a conundrum IFEATU MEDIDEM

he Federal Inland Revenue Service has intensified its drive to recover outstanding tax liabilities from tax payers in default of tax obligations. To this end, FIRS has been writing to tax payers’ bankers, appointing the banks agent of the banks’ customer, to collect outstanding tax liabilities from the tax payers’ bank account balance. This is referred to as tax substitution. FIRS bases its appointment of the banks as collecting agents on the provisions of Section 49 of the Companies Income Tax Act 2004, and Section 31 of the Federal Inland Revenue Service (Establishment) Act 2007. Section 31 of the Federal Inland Revenue Service (Establishment) Act 2007 provides: 1. “The Service may by notice in writing appoint any person to be the agent of a taxable person if the circumstances provided in subsection (2) of this section makes it expedient to do so. 2. The agent appointed under sub-section (1) of this section may be required to pay any tax payable by the taxable person from any money which may be held by the

agent of the taxable person 3. Where the agent referred to in subsection (2) of this sectiondefaults, the tax shall be recoverable from him. 4. For the purposes of this section, the Service may require any person to give information as to any money, fund or other assets which may be held by him for, or of any money due from him to, any person. 5. The provisions of this Act with respect to objections and appeals shall apply to any notice given

under this section as if such notice werean assessment.” Section 49 of the Companies and Income Tax Act, 2007 also empowers the FIRS to collect tax due from companies and appoint agents to collect tax due from companies, thus: “The Board may by notice in writing appoint any person to be the agent of any company and the person so declared the agent shall be the agent of such company for the purposes of this Act, and may be required to pay any tax which is

or will be payable by the company from any monies which may be held by him for or due by or to become due by him to the company whose agent he has been declared to be, and in default of such payment, the tax shall be recovered from him”. Typically, FIRS instructs the bank to set aside an amount equivalent to the tax payer’s outstanding tax liability, and remit same to FIRS. FIRS also directs that the bank place a restriction on the tax payer’s accounts and inform FIRS of any transaction on the tax payer’s account prior to execution on the accounts. The bank is also expected to release the tax payer’s bank statements and other financial records to FIRS. The banks, probably concerned about compliance and cooperation with government agencies are quite swift to comply with the directives. Some valued customers are lucky to receivesome notification, prior to the bank’s execution of FIRS’ directives; others, not so much. Understandably, given how difficult it often is to recover outstanding debts from recalcitrant debtors, it may not be so surprising that FIRS devised this strategy. But the appointment of banks as collecting agents has stoked several fundamental issues in relation to

the propriety or otherwise of the action. Chief of which, is the constitutionality of FIRS’ appointment of banks as collecting agents to collect and remit outstanding tax liabilities of tax payers, without court orders. This is besides the conversation around the hardship that may be occasioned the tax payer who has had its bank account restricted, particularly where it turns out that the restriction is unjustifiable. However, a salient issue that seems to have eluded discussion is the query, “Is a bank legally enabled to act as collecting agent to collect outstanding tax liabilities from its customers’ bank account(s)on behalf of the FIRS?” FIRS’ APPOINTMENT OF A BANK AS A COLLECTING AGENT IMPOSES A MANDATORY RESPONSIBILITY On a cursory reading of the provisions of Section 31(3) FIRS Establishment Act and Section 49 of theCompanies Income Tax Act, it may appear that the provisions create an ordinary principal/ agent relationship between FIRS and the appointed collecting agent. By principles of law an agency relationship presumes a payment obligation between the principal and the agent. This is not the case with tax substitution, because the Continues on page 32

National Housing Fund (Establishment) Act, 2018: Analysis and Recommendations for Legislative Review Continued from next week

his is a new development, as no tax was imposed on cement manufacturing companies and importers under the 1992 Act. The Levy is thus part of the additional sources of funding created by the new NHF Act to boost effective financing of housing development in Nigeria. COMMENTS Generally, the thrust of the new NHF Act is well understood, given the fact that the housing sector requires adequate funding to support a robust mortgage system for the provision of affordable homes for Nigerians. According to data released by the Nigerian Bureau of Statistics, Nigeria’s housing deficit stood at 17 million units as at 2012. Today, the housing gap continues to widen rapidly with Nigeria’s burgeoning population (currently estimated at 200 million people) coupled with low access to housing finance, particularly among low and middle income earners and operators in the informal sector of the economy. Recent reports underpin the country’s low rate of access to affordable homes. Nigeria reportedly has only 25% rate of home ownership compared to 84% in Indonesia, 73% in Kenya and 56% in South Africa. If the current rate of population growth is sustained, it is estimated that about US$363 billion would be needed to curb Nigeria’s current housing deficit of about 20 million units. Therefore, the urgent

need for policies and regulations geared at deepening the mortgage market is quite understood. Mortgage finance in Nigeria currently stands at 0.58% of Gross Domestic Product (GDP). This is abysmally low compared to 80% in the United Kingdom, 77% in the United States of America and 31% in South Africa. In spite of the above and the good intention reflected in the main objective of the new NHF Act, the legislation as passed by the National Assembly contains provisions which would make its implementation difficult and which, apparently, have potentially counterproductive effects on the housing sector, financial market and the Nigerian economy at large. Firstly, the 2.5% contribution mandated for qualified individuals amounts to a regressive tax on the people’s income. For instance, a worker placed on the soon to be implemented monthly minimum wage of N30,000 is required to contribute the sum of N750 monthly to the Fund while a middle class worker earning N300,000 monthly is required to contribute a sum of N7,500. Economists and tax analysts have argued that this is not progressive, as it imposes more tax on low income earners than the average and high income earners; when the contributions are expressed as a percentage of the income tax (PAYE) of the respective workers. Secondly, the imposition on commercial and merchant banks, insurance companies and PFAs to invest 10% of their PBT in the Fund, will further reduce the amount of www.businessday.ng

credit available from banks to other sectors of the economy; such as loans to Micro, Small and Medium Enterprises (MSMEs) as well as cut the returns on investment to shareholders of banks, insurance companies and PFAs. By forcefully diverting investible funds from more profitable ventures, such as capital market instruments; trade finance; project finance and consumer lending etc. at a meager interest rate of 1% above the interest rate payable on current accounts by banks, the new NHF Act, if operational, will shrink projected revenues and profit margin of banks, insurance companies and PFAs as well as trigger further liquidity crisis in the financial market. This is not desirable at this time when banks are struggling to return to stability and profitability and insurance companies barely struggling to stay afloat amidst economic recession and stagnancy. Also, given Nigeria’s past bitter experiences with provident funds and the sensitivity and fragility of pension fund assets vis-à-vis the poor performance of the Fund since its establishment in 1992; caution is advised in the way and manner the growing pension funds in the country is invested. Thirdly, there are no provisions as to the duration of the investment which banks, insurance companies and PFAs are to make in the Fund. The new NHF Act is silent on whether the capital invested by the affected financial institutions can be withdrawn after a particular period and the mode of such withdrawal. It is therefore not clear if a bank, insurance

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company or PFA facing imminent liquidity challenge could resort to making withdrawal out of its stake in the Fund. Fourthly, the Levy of 2.5% exfactory price before transportation cost for each bag of 50kg or its equivalent in bulk, will eventually be passed on to consumers by way of increase in price of a bag of cement. A clear unintended consequence of this is that the cost of building a house will further go up, thereby defeating the original purpose of making affordable housing available to Nigerians through the Fund. It therefore appears that the Levy, as proposed in the new NHF Act, will be counterproductive on implementation. Fifthly, the penalty regime in the new NHF Act is not commensurate with the offences created therein. The amount of fines prescribed and the terms of imprisonment stipulated for persons (individuals and corporates) found guilty of contravening any of the provisions in the new NHF Act are too heavy and stringent and could cripple the affected sectors. Rather than boosting the housing sector and the economy, the excessive and disproportionate penalties would act as disincentive to investment and further stifle the ease of doing business in Nigeria. In conclusion, whilst we support the need to deepen the mortgage market in Nigeria, the Fund should not be grown at the expense of the other vital sectors of the economy as analyzed. In our opinion, the first step to take in boosting the Fund should be a review of its operation since in@Businessdayng

ception to determine its strength, weakness, opportunity and threat (SWOT analysis) with a view to charting the right path and policy direction for the growth and efficient application of the Fund. To avoid the likely negative multiplier effects on the economy, it is strongly recommended that the new NHF Act be subjected to legislative overhaul through wide consultations with relevant stakeholders including the Bankers Committee, Nigerian Insurers Association (NIA), Pension Fund Operators Association of Nigeria (PenOp), Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), Nigerian Economic Summit Group (NESG), labour unions, civil society groups and the Organized Private Sector. The recommended review should be done and the concerns raised addressed after which the President’s assent can again be sought to the new NHF Act. This is an abridged version of the authors’ article.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/ attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 25 April 2019

BUSINESS DAY

GLOBALREPORT

UK quietly signs up to EU criminal justice measures

he UK has quietly signed up to four sets of measures involving criminal justice cooperation with the EU, the Law Society Gazette has revealed. Columnist and Law Society Council member Jonathan Goldsmith wrote on Tuesday that, in the run-up to the expected Brexit date of 29 March, the UK filed formal notifications with the registry of the EU Council that it would opt in to two judicial cooperation measures. They are: Improvements to Eurodac, a centralised database containing the fingerprint data of asylum seekers and illegal border crossers found within EU territory. Governance changes to Eurojust, the cooperation unit for investigations and prosecutions. This now becomes the EU Agency for Criminal Justice Cooperation. Meanwhile on 12 April,

It also contains provisions for the deployment of armed sky marshals on flights between signatory states, joint police patrols, hot pursuit by armed police into the territory of another state for the prevention of immediate danger, and cooperation in case of mass events or disasters. Goldsmith notes that the UK is under no obligation to opt into any of these measures even if it remains a member of the EU. -LAW SOCIETY GAZETTE

Big four to separate professional services from audit work

egal practices s et up by the ‘Big Four ’ accountants: Deloitte, EY, KPMG and PwC, would be split from the firms’ auditing business along with other professional services under long awaited shake-up proposals published by the competition watchdog on Tuesday. The Competition and Markets Authority’s (CMA) recommendations echo those of a committee of MPs earlier this month. In a market study to address what it calls ‘serious competition problems’ in the UK audit industr y, the CMA recom-

LegalBusiness

Bar investigation into polygamy could raise other legal challenges

the deferred date for leaving the EU, the UK notified the EU of its intentions to take part in the adoption and application of changes made to the European Criminal Records Information System (ECRIS) and to apply the Prüm Convention, an intergovernmental treaty on cross-border cooperation, particularly in combatting terrorism and cross-border crime. Prüm allows for automated access to DNA profiles, fingerprint data and national vehicle registrations.

mends an ‘operational split’ at the Big Four. This would require the firms to hive off their auditing business under a separate management, accounts and remuneration and to end profit-sharing between audit and consultancy. However the report shies away from recommending ‘an immediate global structural split’ between the firms’ audit and other service functions. It states that legislation is needed to address ‘the vulnerability of the industry to the loss of one of the Big Four, and the current inadequate choice

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and competition’. Each of the Big Four has expanded their legal services clout in recent months. Earlier this year Deloitte announced t hat i t ha d h i re d Mi c ha e l Castle, a former magic circle partner, to head its UK legal arm. In a speech at the end of last year lord chancellor David Gauke said he welcomed the arrival of the Big Four to the legal services market. The CMA’s proposal follows recommendations by the House of Commons Business, Energy and Industrial Strategy Committee, which earlier this

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he Utah State Bar is investigating complaints that seven lawyers are violating rules of conduct by being involved in polygamous relationships, a felony punishable by five to 15 years in prison. The lawyers under investigation include Paul Kingston, leader of the Davis County Cooperative Society, also known as the Kingston Group, according to the Salt Lake Tribune. The publication received the state bar acknowledgement letters from complainant Melissa Ellis, who is a former member of the Kingston Group.

Opponents of the practice have criticized Utah’s leniency toward polygamists who hold public office and professional licenses, but legal experts told the Salt Lake Tribune the bar complaints are unlikely to meet the definitions of misconduct. Under the Utah State Bar rule cited in the complaint, misconduct occurs when attorneys “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness,” the publication says. Another section of the rule defines misconduct as “involving dishonesty, fraud, deceit or misrepresentation.” Linda Smith, a University of Utah professor who sits on the Ethics Advisory Opinion Com-

month said the CMA should consider separating the two arms. The CMA, which has been in the process of draw ing up recommendations since December last year, said the accountanc y regulator the Financial Reporting Council (FRC) should also hold audit committees ‘more vigorously to account’ and that the effects of the proposed changes should be reviewed periodically, in the first instance five years from full implementation. Today’s proposals also recommend mandatory ‘joint audit’ to enable firms outside the Big Four to develop the capacity needed to review companies, and the introduction of statutory regulatory powers to increase accountability of companies’ audit committees. @Businessdayng

mittee at the Utah State Bar, said comments published with state bar rules have shown that some crimes are not offenses that would reflect on a lawyer’s fitness to practice. Legal experts also said the investigation could give polygamists what they need to challenge Utah’s bigamy statute. “These lawyers should challenge the effort and underlying law,” Jonathan Turley, a Washington, D.C., attorney who represented the Brown family from the reality television show “Sister

Wives,” told the Salt Lake Tribune. “They enjoy the same constitutional protections as their clients. An effort to disbar them based on their lifestyle would raise serious constitutional questions.” Kody Brown and his four wives sued Utah in 2011, after police investigated whether they were breaking the portion of Utah’s bigamy statute applying to polygamists. A federal judge in Salt Lake City found that portion of the bigamy statute unconstitutional, but the 10th U.S. Circuit Court of Appeals at Denver said the Brown family couldn’t show they were harmed and lacked standing to sue.

-ABA JOURNAL

A review last year also recommended that the FRC be re p la c e d ‘a s s o o n a s p o s sible’ with a new independent regulator called the Audit, Reporting and Governance Authority. Andrew Tyrie, CMA chairman, said: ‘People’s livelihoods, savings and pensions all depend on the auditors’ job being done to a high standard. But too many fall short – more than a quarter of big company audits are conside re d s u b -s t a n d a rd by t h e regulator. This cannot be allowed to continue.’ The government has said it will respond to the CMA’s recommendations within 90 days.

-T H E L AW S O C I E T Y G AZETTE

Thursday 25 April 2019

BUSINESS DAY

INDUSTRYFILE Ag CJN calls on heads of courts to ensure productivity in courts

he Acting Chief Justice of Nigeria, Hon. Justice Ibrahim Tanko Muhammad has charged all heads of courts in the country to put in place effective structures that enhance productivity and speedy administration of Justice. Making this call during the Maiden Edition of Roundtable For Heads of Courts which held recently in Abuja, the Ag CJN urged the heads of courts to make detailed efforts to improve the process of Courts in ways that promotes confidence in the judicial system, “Judicial independence encompasses information technology, allocation of judicial services, judicial selection and retention, as well as the education and training of Judges and their support staff,” he said. According to him, the courts can be efficient in the discharge of its duties if there is an effective court management system, adding that the national judicial policy was formulated by the NJC in 2016 to put in place necessary strategy to achieve this. “The policy reiterates that strategies shall be put in place to achieve the goals of judicial administration vis-à-vis the inherent power in the courts under section 6(6) of the 1999 constitution. “The policy directs head of each judiciary to establish an efficient court management structure that will provide tools and support

Acting CJN, Hon. Justice Ibrahim Tanko Muhammad services in order to ensure high performance, productivity, speedy and fair administration of justice, which will not influence on the independence of the judiciary,” he said. Justice Muhammad expressed the belief that the Presidential Implementation Committee on Autonomy of State Judiciary and Legislature will come up with recommendations that will bring about the full implementation of section 161 of the 4th alteration to the 1999 constitution (As amended).

He thus called on each jurisdiction in the country’s judiciary to aspire to implement the guidelines provided by the Judicial Information Technology Policy (JITPO), adding that, “there should be a tireless commitment to improving the quality of justice delivery in courts. In her remarks, the Administrator of the National Judicial Institute (NJI), Justice Rosaline Bozimo, also called on heads of court to work with insight and wisdom in the discharge of their judicial obligations as judicial officers.

Banks as collecting agents... Continued from page 30

appointed/declared agent is the agent of the tax payer, and not FIRS. The provisions of Section 31(3) of the Federal Inland Revenue Service (Establishment) Act 2007 and Section 49 of the Companies and Income Tax Act, 2007 impose a mandatory responsibility on the Bank appointed as collecting agent, rather than a commission earning activity. By these provisions, where the FIRS appointed Bank fails to remit the outstanding tax liability from the tax payers’ funds in its custody, such bank would be personally liable to FIRS for the tax payer’s outstanding liability. This certainly places the banks between the devil and the deep blue sea. BANKS OWE A DUTY OF CONFIDENTIALITY/SECRECY TO THEIR CUSTOMERS WITH SOME EXCEPTIONS A pressing issue for concern, as to the propriety of the banks’ appointment as collecting agents for FIRS, is the unavoidable breach of a bank’s fiduciary duty to its customer. This issue has raised a lot of hue and cry, over FIRS’ appointment of banks as collecting agents over their customers’ outstanding tax liabilities. A bank and its staff are obliged to keep secret, information regarding the business and account(s) of

its customers. In Tournier v National Provincial and Union Bank of England, (1924) 1KB 461, BankesLJ of the Court of Appeal of England held that confidentiality was an implied term in the customer’s contract and that any breach could give rise to liability in damages if loss results. As with every general rule, there are exceptions to the duty of the bank to keep secret, every information regarding the customer’s account(s). These exceptions are: a. Where the bank has duty to the public to do so. b. Where the bank’s own interest requires disclosure: - This occurs for example, where legal proceedings are required to enforce the repayment of an overdraft or where a surety has to be told the extent to which his guarantee is being relied upon. c. Where the bank has the express or implied consent of its customer to do so: - where he supplies a reference to its customer or where it replies to a status inquiry from another bank. d. Where disclosure is required by law. FIRS’ appointment of banks as collecting agents in respect of the bank’s customer’s outstanding tax liability, ostensibly falls under the exception (d) above; given the provisions of Section 31(3) FIRS www.businessday.ng

Establishment Act and Section 49 of theCompanies Income Tax Act. Yet, the manner in which the banks typically respond, with swift compliance, undeniably raises issues of conflict of interest and breach of the bank’s fiduciary duty to its customer. The banks’ compliance with the directives imposed by the FIRS,against ‘tax defaulters’(customers of the banks) involve a glaring breach of the duty. A bank cannot perform the obligations of tax substitution, without impairing the confidential obligation it owes its customers. This confidentiality obligationis the pillar of banking. Clearly, the banks, as collecting agents for FIRS, are conflicted, in that they are torn between complying with directives of FIRS, a government agency; and fulfilling their obligations to their customers. There is however no positive law to safeguard the relationship between a bank and its customers. It is advisable that banks tread with caution, and take steps to secure their position.

To be continued next week Ifeatu Medidem Senior Associate/Practice ManagerOlisa Agbakoba Legal

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LegalBusiness

Justice advocacy group faults removal of former CJN, Justice Walter Onnoghen

rights watch organisation, Access to Justice, has faulted the procedure leading to the conviction of former Chief Justice of Nigeria, Justice Walter Onnoghen, by the Code of Conduct Tribunal (CCT). The CCT last Thursday convicted Onnoghen of failure to fully declare his assets. The tribunal ordered his sacking and forfeiture of the funds in five bank accounts which Onnoghen failed to declare. Reacting to the CCT verdict in a statement by its Director, Joseph Otteh, and Programme Officer, Daniel Aloaye, Access to Justice, said while it believed in the principle of equality before the law, the proceedings leading to the verdict were not fair. The group contended that in the handling of Onnoghen’s case, the CCT failed the requirement of independence expected of any court, adding that the tribunal made it obvious from the beginning that it was out to reach a predetermined outcome set by the executive arm of government. It said, “It would be a serious fallacy to characterise the tribunal’s verdict as one reached after a due process trial using even the lowest possible denominators of what a fair trial represents. “The procedures adopted by the tribunal in the case were far too faulty and flawed to be regarded as a judicial process. To reasonable observers, it would appear that the tribunal’s procedure and speed were deliberately concocted to enable it to reach its pre-determined outcomes, and its verdict was simply a reflection and product of the shambolic trial. “Undoubtedly, Justice Onnoghen’s trial before the Code of Conduct Tribunal was, in every way, grossly and grievously unfair, and no fair-minded court or tribunal could have descended to the depths the Code of Conduct Tribunal delved in trying to convict Walter Onnoghen of the charges against him in order to remove him from office. “The tribunal was so desperate to convict Justice Onnoghen that it had to overturn or sidestep its previous judgments on similar matters, decisions such as those given in a prior case involving another Justice of the Supreme Court. “A cardinal principle of our Common Law system is that similar cases are decided @Businessdayng

alike in other to prevent arbitrariness and caprice in the adjudication of cases. “This is not a way to fight corruption. There is no positive, but rather, there are plenty negatives to this flawed judgment. This judgment merely shows how much is still lacking in Nigeria’s courts and tribunals and how distanced they truly are from being independent vehicles of justice. Unfortunately, the Code of Conduct Tribunal has been headed for a long time by a person who himself has been the subject of corruption allegations, and that, in itself, is a major weakness.” Condemning the earlier interim order of the CCT empowering President Muhammadu Buhari to suspend Onnoghen, A2J added, “The tribunal had, from the word go, drawn the handwriting on the wall indicating that it was bent on a particular outcome, and that it would look neither to the left nor to the right in the blind pursuit of that goal. At several pivotal junctures in the course of the trial, the tribunal appeared to demonstrate that it was clearly on the same side with the government, and was not sitting as an unbiased umpire or judicial arbiter. “Nowhere was this more evident as when Danladi Umar and another member of the tribunal granted, speaking figuratively, under cover of darkness on January 23, 2019, an ex parte order removing Justice Walter Onnoghen as the Chief Justice of Nigeria. “The bizarre and egregious procedure taken to unseat Justice Onnoghen was an unmistakable indication that no barrel was too deep to plumb in getting to achieve what the tribunal wanted to achieve, and no rule or principle of law was strong or revered enough to forestall its plan. It will not surprise many that the Code of Conduct Tribunal reached the verdict it did after using very questionable procedures from the very start.”

Thursday 25 April 2019

BUSINESS DAY

Garden City Business Digest Elano: Faster development await Indorama’s host communities after court verdict Ignatius Chukwu

aster and massive development is expected to sweep through the Indorama-Eleme Petrochemicals host communities made up of Eleme and Elelenwo towns. This follows the court verdict reaffirming the authority of Elano Investment Limited as ‘legitimate manager’ of the 7.5 per cent equity granted to the host communities of Indorama by a Port Harcourt High Court. The judgment is said to have not only laid to rest the acrimonies that erupted two years ago in Eleme areas leading to arson and violence but has restored peace in the area. The managers at Elano said at a press briefing in Port Harcourt that it is time to push development with faster speed in all of its development packages especially in the infrastructural development aspect. Elano had dragged 28 persons from the seven communities that own lands in Indorama to court over protracted violent actions including arson against its board members by some persons who felt Elano had no legitimate agreement to manage the shares which fetch billions of naira every year. Some sources had said that when it was time to go acquire the 7.5% equity with about N3Bn, everybody looked the other way, but as soon as they felt that the loans had been liquidated, they appeared to demand the shares back from Elano. They even burnt down houses and chased the people that fought the battle to bring home the shares which in one swoop fetched N14Bn to the community. The matter had caused crisis and disrupted execution of infrastructural projects until the courts ruled to reaffirm Elano as the legitimate managers of the funds. In his ruling, the justice, Hillary Oshomah, granted all the prayers of the Elano board, saying he did so after studying the claims by Elano and counter claims by the defendants. The court said it took cognizance of the fact that Elano was given due mandate by the communities to source for funds (almost N3Bn) to buy out the 7.5 per cent offered to the host communities by the Federal Government through the Bureau of Private Enterprises (BPE) and to manage it.

The judge said it also recognised the agreement between Elano and the host communities which provided for sharing of dividends and use of funds for development purposes. The court granted order of injunction restraining the defendants from interfering or obstructing Elano from acting as ‘legitimate manager’ of the 7.5 per cent Indorama Eleme petrochemicals limited host community equity. Reacting, the chairman of Elano Board, an Eleme chief, Ogomba Okanje, told newsmen that the judicial resolution of the matter has brought all matters to rest and affirmed the fundamental issues. He said Elano saw an opportunity to capture what was about to escape and raised almost N3Bn to buy the shares granted the host communities. Okanje: This briefing is to shed light on Elano and its development activities. Recall the allotment of 7.5 per cent to the community and the opportunity we saw was one to help the community. Elano was mandated to acquire it for the communities and manage it. This later brought crisis but the court has reaffirmed the right of Elano to manage it. That is why we called you to shed more light. Any other court cases pending? We are in world where you cannot stay without issues. The primary issue is the legitimacy of Elano to acquire and manage the shares. The court has affirmed it, confirming all the documents about it as legitimate. Way forward? The court verdict is to the favour of all parties. We must thank the community and the aggrieved persons that allowed due process of the law to be followed. When the matter came up, Elano’s position has been that we should all follow due process to avoid causing more crisis. Way forward: The way forward is for the community to unite and support Elano. This arrangement is a novelty. The only time shares were allotted to host communities was in Aladja Steel project in Delta State and they could not mobilise funds to acquire it and the shares elapsed. So, if Elano did not act, the Eleme shares would also have perished. Many felt the shares were in lieu of our land but we were to realise that land belongs to the FG, so the shares are

Ogomba Okanje, chairman, Elano

a privilege and if you do not pay for it, it’s not your share. So, we went to the community and asked for a right to acquire and manage it, and they granted it and we succeeded. Disruption: Most of the programmes cut across the communities and beyond. Elano is not meant for the Indorama communities alone. It is about acquiring shares and using it on behalf of the host communities. We have never stopped implementing our programmes but attention was no more given to infrastructural projects. We have been executing other aspects such as medicals, scholarships, welfare, and empowerment. We have never stopped. Elano has not claimed ownership of the shares because the shares belong to the host communities. Some people applied to join the case in court but the court declined saying the communities were well represented. It was Elano that dragged some persons to court. The essence of taking them to court was for the court to de-

termine whether the actions of those persons who claimed to be acting for their communities should affect the mandate clearly given to Elano. The court said the contract is valid. This answers those who said we did not have a contract with the community. Resumption of projects? Our programmes have never stopped. We just paid for another quarter of our Health Insurance scheme. All other projects are ongoing but the constructions had to stop because it needed movement of men and equipment. When we paid for scholarships, we asked if there was anyone left out. We asked so nobody would say he or she was victimised. Our roads are for everybody. We are preaching peace because without peace, development will not come. We extend hand of fellowship to anyone aggrieved. We at Elano never marginalised anybody, we follow the agreement reached. Those who have not been collecting their money should please go and register and collect, it is your right. Those shunning the health scheme should go and join because it is one of the best ever. Any notice of appeal? There is no notice of appeal. So, we assume the matter if finally over. The matter in court did not stop disbursement. We did not ask for damages. The board members were those mostly affected by arson and we see it as a price for leadership. Platform: We usually hold annual general meetings (AGMs) and look at every issue. We encourage anybody who has suggestions or grievances to make use of the AGMs. We usually take decisions on subject matters. We are a responsible board. Not every decision will be palatable but once taken, it is binding on all. We thank the aggrieved persons because their action fetched this affirmation. We now appeal to all parties to rally round so we can forge ahead. Let’s enjoy the little development that God has brought to us through Indorama and Elano. Indorama is our parent company. If there is no Indorama, there would be no Elano. We must however understand that they are from other climes and they are here for profit. We must be guarded and guided at all times.

Garden City: The harm politics inflicts, the balm gospel music brings Port Harcourt by Boat

IGNATIUS CHUKWU

any good programmes and events previously lined up in Port Harcourt have continued to suffer shifts and outright cancellations. This is because just as JAMB shifted the 2019 tertiary institutions entrance exams from March to April, so have many organisations shifted many planned events in Port Harcourt. Many still shiver at the crisis and tensions that seized the Garden City for a couple of months over the 2019 elections. The panic began on February 16 and 23 when the presidential election took place. The next thing that happened in Rivers State was killings and general violence. On 23 February, a well-known two-time local council chairman in the state, Monwan Etete of

Andoni LGA, was mowed down in broad daylight by an audacious killer-gang that walked into his home after claiming at the gate that they were being expected by the local kingpin. They not only killed him and his two relations but the man’s head is suspected to still be an issue to this moment. You know barbaric traditions still exist in some places; else, what are you doing with the head of someone you have successfully killed? At Abonnema, fighting between bad boys and soldiers lasted for almost one day (and bodies fell down endlessly), an indication of the firepower of the bad boys that withstood the Army for hours. In Bonny, voting was not even allowed to hold on that day. Violence swept through the land all of February and March and the tension went on till April when INEC braved all odds and declared somebody a winner. The tensions that dogged the APC internal crisis with external lanterns and the issues in court that stopped a whole national ruling party from fielding not even an ant as candidate shook the state to its foundations. The pains and moods are still not totally over, if you are one of those with an ear to the ground. In each election case, most parts of the nation voted and moved on but the case of Rivers State was always different. Newsmen were always running round the city and the state. Some were abducted but released. The GRA section of Aba

Road was on siege for over one month because INEC headquarters is located there. (We think they should shift it to the GRA or any other out-ofsight location). People and other commuters suffered daily as no road would lead through there. The type of tension in the city was such that when the BBC Pidgin team went round Nigeria, it was in PH that they were attacked and forced to allow someone that did not meet the entry qualification (polls) to be on the podium. The BBC officials sweated profusely and looked confused when political thugs and bad boys decided many things by force. Many do not know why the much advertised Rivers Governorship Debate at Hotel Presidential was shifted to somewhere at the Stadium Road; fear of invasion. So it was that many event centres and hotels shut out mega events that would attract huge crowds. Now, many churches and corporations shifted or cancelled many events. This is how cities bleed economically because every cancelled or shifted event is at a huge cost. Even if you insist on hosting it, the bill from security outfits would be outrageous. So it was that JC Records that had planned a mega gospel concert for May 23 could not meet up with arrangements because nobody was in the mood to listen to them; deals could not be sealed up, and planning became very difficult, according to the point-man in Port Harcourt.

This is said to have affected May 4 date. Now that winners and losers have emerged, the tortoise is beginning to bring its legs out of the cocoon. Event managers are beginning to restart their events and the centres would begin to boom again. The climax would be on May 29 when the inauguration of Gov Nyesom Wike would take place. With that celebration, lesser celebrants such as JC Records would follow; thus June 23rd. The over 40 gospel artistes waiting to be unveiled would take turns to present the songs they have laboured to record. Family and friends plus church members and lovers of music would wipe away their tears and file out at The Hub, said to be the biggest and best event centre in PH, to sweep away the tension in the land and welcome peace and love plus the love of Christ. Songs like Incredible God; Great and Mighty God, etc, would waft through the mega speakers at The Hub to bathe the troubled city and seep through to the roof of heaven, hoping to please God enough to send down the rain of love and forgiveness upon the Garden City. According to the organisers, the artistes are ready, JC Records is ready, the songs are ready, the album containing about 40 new songs is ready, and the Garden City is ready. The rest is about organisation and preparation to serve it hot, so said the organisers. The day would prove if the waiting was worth it.

Thursday 25 April 2019

BUSINESS DAY

BOOK SERIALISATION

W H Y N OT Citizenship, State Capture, Creeping Fascism, and Criminal Hijack of Politics in Nigeria

Continued from Wednesday

Chapter VII A Path from Serfdom CONCLUSION Why And Why Not Yes, I am frequently harangued and harassed about t h e t r o u b l e s o f Ni g e r i a . Sometimes I get angry and wonder why they think Nigeria is my problem and not theirs. Then I come back to the re cognition that it is my problem. If they choose to do nothing about the fact the problem is also theirs, that is their choice and we are the choices we make. I must do my duty and leave myself to the judgment of my conscience, the judgment of history and the judgment of God. But the question “why bother” has been raised by friends, relatives, and people who see a reputational risk in becoming involved in what they call a murky world of indecent people called Nigerian politics. They may well be right ; I am not sure I have a monop oly of w is dom. However, I am confident in the reasons I adduce for sayi n g w hy n o t . I w a s o n c e in a workshop in Sweden w i t h a ve r y s e l e c t g rou p of global thought leaders which included three former European thought leaders in Stockholm, Sweden. As we reviewed regions of the world, one former UN hotshot who was on CNN almost every night during the Balkan wars remarked about Africa that the most evident factor in the region was Nigeria’s descent into “strategic irrelevance.” As he so clearly put it : 25 years ago (the late 1970s), any of the world powers that wanted to make a move in Africa would at least pause and ask how Nigeria would react. But today, Nigeria has played itself into strategic irrelevance. I knew that already but h e a r i n g s o s e n i o r a f o reigner put it this way almost

crushed my spirit. To know t h i s a n d t o re a d p e o p l e like Robert Kaplan predict the Coming Anarchy with Nigeria at the epicentre of West Africa’s journey down the Road to Somalia, and do nothing is a burden any decent conscience must feel oblige d to do s omething about. I have determined to k e e p f a i t h w i t h my c o n science. That choice has never taken away from the fact that I know I can profit greatly from keeping quiet or collaborating with evil. I have always asked myself, though; how much a bigger bank balance can do to make my life more wholesome? Many of my friends have converted collaboration w ith wrong into big mansions in Abuja, Lagos, their hometowns, London and choice locations in the United States. I choose to laugh at them and make the point that I do not have a room outside of Nigeria and that even the home in my hometown was built by my father and is unoccupied most of the year. In the years before planning began, I spent less than 10 days every year in the house. It was logical for the question of why I should have the hottest part of hell just to have things I seldom use. The confrontation between hav i ng a n d b e i ng w ou l d clearly influence my choices.

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I have determined to keep faith with my conscience. That choice has never taken away from the fact that I know I can profit greatly from keeping quiet or collaborating with evil www.businessday.ng

I was also clear that I was not the starryeyed idealist who opted for living on the brink of poverty to advertise his purity. I have lived very decently with a quality of life comparable to, if not better than many of my American classmates from graduate school. With public recognition since age 19 and high-profile positions in the public, private, academic and social enterprise sectors, I have always been aware that I can conver t reputation into a fortune by joining or even just keeping away. We know newspaper publishers who use such reputations to blackmail and to live by; just as we know those whose lives have remained extremely modest. My choice has been to speak truth to power on the one hand and yet participate so that I am not just that iconoclast or muckraker who is all ‘talk’ and no ‘do.’ I am fully at peace with my choice and will not hesi-

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tate tomorrow to risk it all for the advance of the common good when I see how much gain it brings. Exposing those who have foisted poverty on tens of millions of varied currencies, allowed violent killing of innocent citizens in a state of anomie, while they run around in long motorcades with dozens of armed security people; and who have left their country the laughing stock of the world on their watch. That gain is unoccupied houses, monies left in accounts for others to use to trade and improve the quality of life of their own people who have already enjoyed the great escape, while misery defines us. To challenge the culture that has crippled a country of promise is a moral imperative of citizenship, I respect the choice of those who choose not to be citizens. I will be in error if I allow

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their sense of what is worth risking weighed against the good of all to deter my sense of duty. Nevertheless, this does not mean one should be unable to reasonably assess what one is up against. This book is about why w e say “ w hy n o t ” t o t h e “why bother to participate” question. I learnt as a young man that what matters in any decision is not what people think but the motivation; so long as your motivation is driven by the good of all and is not self-ser ving in a way that does harm to your neighb o u r, t h e n i t should matter. In participating in public sphere, I have been guided by the desirability o f a ju s t s o c i ety, care for the weak and vuln e rab l e, a n d a recognition that man has r ig hts to a dignity that is inalienable as the product of God’s creation which government has an obligation to advance. O u r c o u n t r y ’s recent experiences with party primaries (political party primary elections) amount to a walk towards 20th cent u r y s l av e r y . T h e CNN Freedom Project shows clearly the kind of concern we should have for two congruent phenomena holding Niger ia hostage. They are the phenomenon of State capture and that of criminal capture of political party machinery by cultists, 419ers, and conmen. I travel often to South Africa and watch with interest their anxiety on the subject of State capture. I also tease them that if they wanted to understand State capture, they should come to Nigeria and see it in operation. Th e p r i ma r i e s o f 2 0 1 8 finally proved the disregard the political titans have for the rule of law, their contempt for democratic order and the right of Nigerians to determine the direction of their country. The matter of the trouble with Nigeria is so grave, that for me to look away or seek to build my small personal

Thursday 25 April 2019

BUSINESS DAY

BOOK SERIALISATION local government of affluence while across my high wa l l s a n d s e c u re m o t o rcades, is the most miserable society to live in on earth even with God’s gracious and generous gifts of natural resources like crude oil. Many years ago, my concern for direction led me from worrying about economic development strategy to recognising that leadership and its impact on culture and institutions did the most to affect the wellbeing of the larger society. I set up a centre for researching and evangelising leadership, and advocacy for good leadership. From there, I have tried to reflect on contemporary Nigerian experience as crystallised i n my p e r s o na l d i l e m ma of why and why not be involved or run for office in a field of vampires. Should I have kept away from some of those ‘strongmen’ as some have argued, knowing that they would probably have found my values challenging to what they represent? Again, the pages b e f o re h e l p e x p l o re t hat journey. With an intense search of conscience to convince myself of my motives and becoming satisfied that in never asking for any great personal favour from power i n 4 0 ye a r s o f b e i ng o n e of the most recognisable faces in Nigeria, I have been confident of a rectitude of intention for accepting the pull into public life. A s I h av e s a i d s e v e ra l times, my confidence in my motives is clearly evidencebased as I can show and have shown that in four decades of being close enough to power in which I have had a one-on-one relationship w i t h e v e r y b o d y w h o ha s been President or Head of State in Nigeria except Sani Abacha. I have never asked a material favour for self. With cabinet ministers and governors, the network of friendships has been legion. Yet none can say this is what I did for Pat Utomi, but I can point to plenty of sacrifices I made in advance of the interest of many of them. The examples of Bola Ahmed Tinubu and Adams Oshiomhole were case studies for this excursion. Whereas it is easy to show that they could not be relied on, I think I get greater value by being able to show from the case of the relationships the Achilles heels of many who aspire to leadership in Nigeria the

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...my confidence in my motives is clearly evidence-based as I can show and have shown that in four decades of being close enough to power in which I have had a oneon-one relationship with everybody who has been President or Head of State in Nigeria except Sani Abacha obsession with self. Even when I have put commercial ventures for support in Edo and Lagos it was more for how to create jobs and development the hard way. It is an interesting irony that a clear-thinking American, Brian Browne who co-authored the book “Financialism: Wa t e r f r o m a n E m p t y We l l ” w i t h B o l a Ti n u b u provided a good definition of leadership at the launch of a coffee-table book on l e a d e r s h i p p u b l i s h e d by that Centre I founded, the CVL. He said, “If you look in the mirror and all you see is yourself, and 70 percent or more of your thoughts is about you, then you are not a leader”. He was quite right. Leadership is other-centred behaviour. Obsession with self is an indicator of disqualification from leadership. You may have power or have authority; formal power accruing to the position, but a person of sustained influence you are unlikely to be because people calculate what may be driving your actions ; self-interest or the common good. It has been clear to me for a while that what takes away from the great opportunity to become true leaders rather than men of power and authority who c a n e n g a g e i n “ t r a n s a ctions” to get what they want for a Tinubu or an Oshiomhole, is self-love. It is narcissism ; manifested in the deployment of wife, children, and cronies into every place of opportunity from which rent can be extracted from the system. www.businessday.ng

Should such conclusions about the nature of the character of such people not have made me stay far from them? Maybe and maybe not. First, I pride myself in being able to engage with men of all sorts, the good, the bad and the ugly. This d er ives from a vi e w that none is the child of a lesser god. Same reason why I am at home with kings in their palaces, and the homeless on the streets; the young, and the geriatrics. T h e n t h e re i s t h e f a c t that not engaging may cost you an opportunity to slip through the cracks and make a difference that is impactful. Had Yemi Osinbajo stayed far away, the chance of his being offered up to b e t h e v i c e -p re s i d e n t i a l candidate alongside Buhari, when the plot for a MoslemMoslem ticket of BuhariTinubu failed, would not have presented itself. In my view, so long as you never abandon your core values, it is important to engage and work towards what happened with Yemi Osinbajo. To make this point, I often turn to the story of the World War 2 German General who was the last Nazi Governor of Paris. When Hitler began to tu r n t o “s c o rc h e d ea r t h” tactics as the German army began to lose grounds, and ordered General Dietrich von Choltitz to burn down Paris, he is reputed to have looked himself in the mirror and asked why history should remember him as the man who destroyed the most beautiful city in the world. He, therefore, resisted Hitler’s orders and encouraged the Allied Forces to move in and take the city before the Panzer divisions reacting to his resolve not to act on orders moved in or before Luftwaffe 3 General Otto Dessloch got his way to bomb Paris to a rubbish heap. Even though some French historians quarrel with the widespread view of von Choltitz as the saviour of Paris, the City of Light as we know it may not have been saved were he not there. That alone is a justification f o r s t ay i ng f a r away a n d pointing to them either in fear, pride or powerlessness. I recognised the limitations of such men of power, b u t I a m p ro b a b l y m o re bothered by the average educated middle-class person

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that either dismisses them, fears them or speaks to the business of trying to change things as a foolhardy enterprise. The kind of people who ask me “why bother?” I find their chuckles and careless comments that make light of the obligation to participate in public life for the sake of the common good bothersome. Encapsulated in the jocular treatment of the abuse of the rule of law and democratic ethos in deliberately rigged and abused party primaries is the view that the citizen who wants to challenge, to change things is either an ambitious moron or a person too naïve to realise that wisdom is in avoiding these contaminated charlatans. Yet many of these same people will rush to hail the criminal the day he is pronounced senator or governor. In my view, this group does more damage to the possibilities of redemption for Nigeria than the power-driven playmaker who knows what he is playing for to corner power for the advancement of self-interest ; materially and reputationwise. In many ways, the crisis of conscience in Nigeria is captured in the metaphor of the third term bid of President Olusegun Obasanjo. When Bola Tinubu’s aides told the incredible story of how he worked a transaction with President Obasanjo to support the third term bid if a window could be opened to all term-limited elected public officials like himself (Tinubu), I was aghast with disbelief. I had come to visit the then outgoing Governor at Lag o s Hou s e, Mar ina ; w e w e re s u p p o s e d t o g o t o g e t h e r t o t h e May Day parade. When word came that candidate Buhari had arrived Lagos to show up at the May Day parade (as part

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...My choice has been to speak truth to power on the one hand and yet participate so that I am not just that iconoclast or muckraker who is all ‘talk’ and no ‘do

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of the protest against the disgracefully rigged elections in favour of the PDP candidate in 2007), Tinubu suggested we call off the trip to the stadium, w onder ing why Buhari chose Lagos instead of Abuja which was nearer t o h i m. We t a l ke d ab ou t the abuses of Obasanjo in a way that I could never have i mag i n e d t hat t h e re ha d been an Obasanjo-Tinubu transaction on that failed third term bid. The story that Chief Bode George had called a press conference to reveal the Obasanjo-Tinubu deal, but the Tinubu team had managed it such that a word of it was prevented from being published, seemed too much for me to believe. I took the stories therefore as boasts of aides who were playing up their power and influence to shut up the media and pull stories off a press in print. When years later I asked Chief Bode George if any such thing had happened and he confirmed it, I realised that the problems of Nigeria were the result of an elite conspiracy driven by corruption and failure to realise the effect of the choices being made in the media, civil society, and even traditional rulers. For years now, I have lived with the burden of Nigeria as a country all dressed up with nowhere to go, brutally damaged and gang-raped by its own children who think politics is just a game about cornering power. I have never had a doubt that history will hunt not just these entrepreneurs of power and politics but also those who know better but are too selfish to make the effort and sacrifice to educate those in error so the common good may have its place. In spite of the sham of Asaba and the general loss of confidence in the political parties by most Nigerians I talk to, with obvious consequences for the legitimacy of the Nigerian State, I remain optimistic that Nigeria will rise up again! However, it will not come from wishful thinking, it will come from the investment of the passions and talents of citizens. The key question for Nigeria, therefore, is: Where are the citizens? I hope, certainly not on the flight to Canada, the way the Irish took off to the United States a century and a little bit earlier. Completed

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Thursday 25 April 2019

BUSINESS DAY

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Thursday 25 April 2019

BUSINESS DAY

news Moves to measure, recognise CSR projects by Nigerian, African firms begin in Lagos Daniel Obi

oves to measure Corporate Social Responsibility (CSR) by various companies in Nigeria and across Africa and subsequently bestow corresponding recognitions on the impact of their initiatives have begun. Companies, which have embarked on certain community projects, are therefore requested to come up with such projects for 2019 recognition by internationally recognised SERAS CSR Awards Africa. Over the years, the awards, according to the organisers, have garnered a reputation internationally, and among key industry stakeholders, and business community, as the CSR and sustainability industry gold standard. The organisers say the theme for the 2019 SERAS CSR Africa awards is - Driving Sustainability through Inclusive Growth-Strategic Partnership as key to Unlocking Opportunities. “Since inception in 2007, The SERAS has recorded a growing interest that has seen the participation of 180 top organisations across various sectors, 750 entries, and over 1,000 CSR projects have been verified with over 240 award categories won by organisations from Angola, Uganda, Kenya, South Africa, Botswana, Ghana, and Nigeria, among others,” the organisers state. To kick-off the 2019 process, the organisers have also announced three-hour workshop billed to hold tomorrow at Intercontinental Hotel, Victoria Island, Lagos. Explaining the reason for holding the first ever awards workshop, Mary Ephraim, the executive director of TruCSR and vice chairperson of the local organising committee, says in a statement, “Over the years, we have observed some organisations struggle with the submission process. So we came up with this idea of taking everyone through the process at the same time, answer the frequently asked questions, and also the rules guiding participation in the awards this year, and the verification process. “Besides the new and easily navigable website, which we are going to launch, we are also going to unveil some new award categories as well as showcase innovations, and new international level partnerships that would help set new highs for The SERAS and participating organisations.” The SERAS CSR Awards is opened to large, medium, smallscale, social enterprises and notfor-profits organisations. In the awards’ 13-year history, MTN, Coca-Cola, GTBank, Lafarge, Nigerian Breweries Plc., Investec Bank South Africa, and Access Bank have emerged overall winner. However, only MTN and Access bank have ever recorded backto-back triumphs.

Fintech critical to Nigeria’s 80% 2020 financial inclusion target - stakeholders SEGUN ADAMS

inancial Technology (Fintech) has been recognised globally, not only as a disruptor of the financial services industry, but as a tool to reach the unbanked population and promote financial inclusion in countries like Nigeria where a sizable portion of the adult population is outside the formal financial system.

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As Nigeria counts down to the 2020 timeline for achieving 80 percent financial inclusion rate, Fintech 1000+, the largest Fintech group in Africa, gathered together stakeholders to address issues affecting Fintech in Nigeria and deliberate on ways to further the delivery and availability of financial products and services across Nigeria leveraging technology. Samuel Okojere, director of Payments Systems Man-

agement Department of the Central Bank of Nigeria (CBN), at the inaugural edition of the Lagos Fintech week on Wednesday, acknowledged the opportunities Fintech companies present in bringing many unbanked Nigerians in contact with financial services. According to Okojere, FinTech is critical to promoting financial inclusion in the country. Nigeria’s financial inclusion rate has improved from 41.6

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percent exclusion rate in 2016 to 36.8 percent in 2018 on the back of fast evolution of Fintech companies in addressing the service need of Nigerians. Speaking on the bank’s agenda to provide necessary support for the ecosystem, he said the apex bank had presented and was waiting assent of the National Assembly to the Payment System Management Bill. The CBN has taken proac-

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tive steps in collaborating with the Nigerian Communications Commission (NCC) in the regulation of mobile money service, and in a bid to avoid inter-agency hiccups has devised means to manage the activities of telcos providing payment solutions. “Today, we are working on licensing some telcos through their 100 percent owned subsidiaries that would be under the purview of the CBN,” he said.

Thursday 25 April 2019

BUSINESS DAY

news Buhari endorses Ambode’s infrastructure... Continued from page 1

the projects “are perfectly aligned with the efforts of the Federal Government to improve the country’s infrastructure especially in the transport sector”. The president, who was on a one-day working visit to the state, commissioned the reconstructed Murtala Mohammed International Airport Road, the new Oshodi Transport Interchange, and the mass transit medium and high capacity public buses. He observed that the transport interchange would change the face of public transportation in Lagos, just as the 820 mass transit buses would move the people of Lagos in a more comfortable and more efficient manner. Buhari also commissioned the Lagos Theatre in Oregun and the reequipped maternal and

child health facility (popularly called Ayinke House), situated within the Lagos State University Hospital (LASUTH), describing it as critical timely intervention in the nation’s health sector. The president also declared that his administration was prioritising highimpact infrastructure with the aim to improve lives across the country. “I am delighted to be here to commission three key projects that reflect the drive and success of our administration as we pursue policies and programmes that will positively impact on our citizens,” Buhari said. “The new Oshodi Transport Interchange, the mass transit medium and high capacity public buses and the reconstructed Murtala Mohammed International Airport Road by Lagos State

government clearly demonstrate the need to continue to provide high impact projects for the development of infrastructure and opportunities for job creation at all levels,” he said. Buhari said Ambode “has performed satisfactorily and we should all commend him for his contributions to the growth and development of Lagos State”. “I want to once again thank all the people of Lagos State for their support for our government and our party. It is therefore with great pleasure that I commission the new Oshodi Transport Interchange, the Mass Transit Buses and the Murtala Mohammed International Airport Road,” he said. “To compliment the Oshodi Transport Interchange, the Federal Government has recently approved the reconstruction of the Apapa-Oshodi Expressway up to Oworon-

shoki and Old-Toll gate which was last attended to 40 years ago,” he said, adding that his “government will continue to prioritise high impact infrastructure which will vastly improve the lives of” Nigerians. Buhari was joined in the commissioning of the projects by his host, Governor Ambode; governors of the southwest states, including Abiola Ajimobi of Oyo, Ibikunle Amosun of Ogun, Kayode Fayemi of Ekiti, and Rotimi Akeredolu of Ondo, among some federal cabinet members. T h e Ay i n k e Ho u s e which was commissioned by Buhari, fondly referred to as “Lagos babies factory”, had been out of use for about seven years. It is now upgraded from an initial 80-bed to 170-bed space, 5 surgical theatres, 16-bed emergency care units with 3 organ support facilities, 30-bed special baby care unit, 5 neo-natal

intensive care units, laboratory with support services and blood bank and ICT centre. Governor Ambode, at the event, said the facility would provide world-class childbirth and maternal care services to Lagosians and Nigerians at large. Ambode, who recalled how the journey began, said the facility was commissioned 29 years ago, with the late businessman and philanthropist, Mobolaji Bank-Anthony, donating the first maternal and child care facility to the state government, in memory of his mother, hence the name “Ayinke House”. According to the governor, the hospital, which started with one surgical theatre, soon assumed a life of its own as a firstclass childbirth and maternal care centre in the country as first choice for expectant mothers. However, the facility lat-

AMCON denies Supreme Court’s order to... Continued from page 1

jor daily newspaper does not represent the order of the apex court, noting that there was never an issue of any liability of AMCON before the Supreme Court. The statement further accused Bi-Courtney of trying to tie the order to their obligation to AMCON noting that the whole matter of N132 billion is strictly a case between Bi-Courtney Limited and the Federal Government of Nigeria/Federal Airport Authority of Nigeria (FAAN). “The net effect of the

above is that AMCON was never ordered to pay BiCourtney N132 billion nor any other amount and AMCON has never been a party to any of the proceedings pending at the court of Appeal,” the statement added. AMCON maintained that Bi-Courtney, owned by Wale Babalakin, is still indebted to the Corporation in excess of N119 billion and it would continue to explore legal means to recover the said sum in the national interest and that of its bond owners. AMCON had earlier

Debut 30-year FGN bond oversubscribed... Continued from page 1

received from investors for the N20 billion offered by the DMO for the 30-year bond, representing a 400 percent subscription rate.

The bulk of the subscriptions came from asset managers and insurance companies who have been looking for long-term, good quality assets to buy in order

PFAs, other operators’ revenue affected... Continued from page 2

final payout. Operators in the industry earn their monthly income as fees on percentage of total fund assets under management of each contributor as stipulated by PenCom. The fees cut which was first implemented in July 2018 and second phase in January 1, 2019, according to industry experts, has impacted negatively on the revenue generation of some of the operators, particularly the smaller PFAs. The next phase of the cut will be January 1, 2020,

while from 2021 the fees would be reviewed based on pre-determined triggers, according to PenCom. “The fees cut is already impacting negatively on our income, so we are under pressure now not to spend,” a chief executive officer of one of the PFAs told BusinessDay. “As we speak, my monthly revenue has dropped by over 20 percent, so I am constrained to spend on certain things, and this is the general situation with every stakeholder that earns from the managed funds,” the www.businessday.ng

er became over-stretched and somehow obsolete. But in recognition of the need to sustain Bank-Anthony’s philanthropy, the state government, during the administration of former Governor Babatunde Fashola, awarded the contract for the expansion and reconstruction of the facility. “Beyond the significance for the health sector, this institute is a major contribution to our education sector also as it becomes a veritable platform for our medical students in the state university to enhance their exposure and experience with the top-class medical equipment provided,” Ambode said. The 500-seater arts theatre, also commissioned by the president, is in Oregun, Ikeja, and is one of the four newly completed by the Ambode’s administration. The other three are located in Igando, Badagry and Epe.

included Bi-Courtney on the published list of its

debtors, a claim which the company vehemently

denied. According to BiCourtney, Federal High

Court had in 2012 ruled that the Federal Government, AMCON’s principal, was indebted to Bi-Courtney to the tune of N132 billion. Earlier in the week, a five-man panel of justices, led by the Acting Chief Justice of Nigeria (CJN), Tanko Muhammad, in a unanimous judgment upheld the appeal of Bi-Courtney against the judgment of the Court of Appeal in favour of AMCON. The apex court in its lead judgment delivered by Justice Amir Sanusi also dismissed the appeal of AMCON for being incompetent and lacking in merit.

to match their liabilities. With the success of the 30-year bond offering, the DMO has reinforced its pioneering role in the Domestic Capital Market by introducing another longerdated instrument which for

the government represents appropriate funding for infrastructure and an effective tool for spreading out its liabilities, while for the private sector, it provides an avenue for other issuers, such as corporates, to ac-

cess longer-term funding for their projects. The DMO offered a total of N100 billion in tenors of 5, 10 and 30 years at the auction and received total subscriptions of N149.30 billion, representing a total

subscription level of about 150 percent. The DMO allotted a total of N97.40 billion to successful bidders at 14.50 percent for the 5-year, 14.55 percent for the 10-year, and 14.80 percent for the 30-year FGN bond.

chief executive said. The National Insurance Commission (NAICOM) had in a circular on 21 June, 2019 announced a revised fee structure for the pensions industry covering the period 2018-2020. The circular also broke down to specifics the charges across the multifund structure which commenced 2 July, 2018. From the breakdown, total fees earned from Fund 1 effective July 2018 are 2.25 percent, where PFAs earned 1.6 percent, PFCs 0.40 percent, and PenCom 0.25 percent. From January 2019, the fees dropped slightly to 2.025

percent, while PFAs earn 1.5 percent, PFCs 0.30 percent, and PenCom 0.225 percent. For Fund 2, which is the default fund for contributors aged 49 and below and effective July 1, 2018, a total of 1.925 percent was charged, where PFAs earned 1.4 percent, PFCs 0.30 percent, and PenCom 0.225 percent. In 2019, effective January 1, a total of 1.79 percent was charged where 1.3 percent goes to the PFAs, 0.275 percent to PFCs, and 0.215 percent to PenCom. In 2020, a total of 1.65 percent will be charged by all parties with 1.2 percent going to PFAs, 0.25 percent

to PFCs, and 0.2 percent to PenCom. For Fund 3, which is the default fund for contributors aged 50 and above, the regulation required that effective July 2018, a total of 1.8 percent was charged with PFAs taking 1.3 percent, PFCs 0.275 percent, and PenCom 0.225 percent. Effective January 1, 2019, a total of 1.65 percent was charged with 1.2 percent going to PFAs, 0.25 percent to PFCs, and 0.20 percent going to PenCom. In 2020, 1.5 percent will be charged, with 1.1 percent going to PFAs, 0.225 percent to PFCs, and 0.175 percent to PenCom.

Fund 4, which is for retirees, stipulates that effective July 2018, a total of 7.5 percent was charged with 5 percent going to PFAs, 1.5 percent to PFCs, and 1 percent to PenCom. Aderonke Adedeji, president, Pension Fund Operators Association of Nigeria (PenOp), said as at the end of February 2019, pension fund assets under management had risen to N8.74 trillion, with retirement savings account holders now 8.5 million. According to her, 274,000 retirees are already receiving their pensions either through programmed withdrawal or annuity.

L-R: Taiwo Okeowo, deputy managing director, FBNQuest Merchant Bank; Omobola Johnson, non-executive director, FBNQuest Merchant Bank; U.K. Eke, GMD, FBN Holdings; Bello Maccido, chairman, FBNQuest Merchant Bank, and Kayode Akinkugbe, managing director/CEO, FBNQuest Merchant Bank, at the bank’s annual general meeting in Lagos, yesterday. Pic by Pius Okeosisi

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Thursday 25 April 2019

BUSINESS DAY

news CBN boosts liquidity at inter-bank forex market with $210m Hope Moses-Ashike

n continuation of its mediation in the inter-bank foreign exchange market, the Central Bank of Nigeria (CBN) on Wednesday, April 24, 2019, intervened with $210 million to sustain liquidity in that segment of the market. According to the figures released by the CBN on Wednesday, authorised dealers in the wholesale segment of the market, as in previous deals, were offered $100 million, while those in the Small and Medium Enterprises (SMEs) segment got a boost of $55 million. Customers purchasing foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Al-

lowance (BTA), among others, were also allotted a total of $55 million. Isaac Okorafor, CBN’s director, corporate communications department, confirmed the transactions, reiterating that the CBN would continue to ensure the availability of foreign exchange in order to ensure continued stability in the markets. In its last intervention on Thursday, April 18, 2019, the bank injected $254.8 million and CNY34.8 million into the Retail Secondary Market Intervention Sales (SMIS) segment. Meanwhile, the naira on Wednesday, April 24, 2019, exchanged at an average of N360/$1 in the BDC segment of the market.

Global grounding of Boeing 737 Max lowers company’s profit Q1 IFEOMA OKEKE

oeing’s revenue and profit fell in the first quarter from the global grounding of its 737 Max jets following two deadly crashes, but the company said it was making “steady progress” on a fix. The company on Wednesday reported a one billion dollars increase in production costs connected to the 737 Max defects and warned that the crisis would force it to revise its earnings expectations for the full year. Boeing said Wednesday in a statement that the company “is making steady progress on the path to final certification for a software update,” having completed more than 135 test

and production flights with the update installed Boeing recorded revenue of $22.9 billion in the first quarter, down 2 percent from a year earlier and nearly matching S&P Global Market Intelligence expectations of $23 billion. The manufacturer posted net earnings of $2.15 billion, exceeding expectations of $2 billion but down 13.2 percent from a year earlier. The company’s 737 Max planes were grounded in March after an Ethiopian Airlines crash that killed all 157 people aboard and a Lion Air crash that killed all 189 people on-board. Dennis Muilenburg, Boeing CEO, has apologised and acknowledged that a manoeuvring system contributed to the crashes.

House adjourns plenary midway over Shiites protest James Kwen, Abuja

ouse of Representatives Wednesday adjourned plenary midway following the protest by members of the Shiite Islamic Movement of Nigeria (IMN) to the National Assembly. The adjournment was sequel to the observation by the deputy speaker of the House, Yusuf Lasun, who was presiding over other Committee of the whole, which was considering some reports when the protesting Shiites members crashed into the first gate of the National Assembly. Lasun asked the Sergeant at Arms to step out of the Chambers and ascertain the situation and report to the House and the House hurriedly adjourned. It adjourned after considering: “Report of the Committee

on Tertiary Education and Services on a Bill for an Act to Provide for Establishment of Federal University of Technology, Ogoja, and a Bill for an Act to Amend the Ahmadu Bello University (Transitional Provisions) Act, 2004 to Specify the Minimum Qualification of the Chairman of the Governing Council, Ownership of Intellectual Property and to Provide for Pre-Action Notice to the University Authority”. Members of Shiites regularly carry out protests to demand the release of their leader, Ibrahim El-Zakzaky, who was arrested by the Federal Government since December 2015. El-Zakzaky was arrested along with his wife after soldiers killed hundreds of Shiites members in Zaria, Kaduna State, between December 12 and 15, 2015, including ElZakzaky’s children. www.businessday.ng

NCC asks telcos to restructure business operations for increased revenues Jumoke Akiyode-Lawanson

elecoms operators in Nigeria have been told by the Nigerian Communications Commission (NCC) to consider restructuring their business models in order to survive in Nigeria’s complex operating environment. The telecoms regulator says it has become apparent that businesses can only thrive when service providers tap into opportunities by restructuring and providing value for changing consumer needs. Speaking at the Vanguard Economy Forum on Telecoms, held in Lagos Wednesday, Umar Garba Danbatta, executive vice chairman, NCC, who was represented by Bako Wakil, head, technical standards and network integrity, NCC, said the telecoms industry was currently experiencing dynamics in terms of infrastructure investment and industry growth. In line with the theme of the

forum, ‘’Unlocking the Revenue and Growth Opportunities in the Telecoms Sector in a Changing Business Model and Digital Technology Environment: Role of Regulator, Operators and OTT Service Providers,” Danbatta said it was high time telecoms service providers focus more on quality data provision rather than traditional voice services in order to record increased revenues. ‘’Voice revenues are in decline and profits are also suffering from decreasing termination rates in many jurisdictions. ‘’Over-The-Top (OTT) services such as WhatsApp, Snapchat, Facebook, Messenger and Skype are fast replacing traditional voice and SMS as the primary method of communication for consumers. ‘’The business environment is becoming more complex, and the business models that were created in the past are no longer sustainable as telecommunications companies are presently seeing the gradual ero-

sion of their average revenues per user (ARPU). ‘’As a result of the increasing complexity of the operating environment of our industry, telecommunications companies who grew on the back of traditional voice and data traffic are realising that value is moving into other stages in the telecommunications ecosystem. ‘’The value is moving into completely different markets as consumption patterns change and these consumption patterns are changing rapidly,’’ Danbatta said. Expertsunanimouslyagreedthatit was necessary for industry players like telcos, vendors and Value Added Service (VAS) licensees to consider taking steps to change their business models in line with current and forecasted industry trends as might be required. ‘’In order to remain in business and thrive, there is need for telecommunications companies and vendors to think outside the box and create innovative partnership

and low cost business models with themselves and other players in the business ecosystem. ‘’This will create a win-win situation for all players and enable them to remain in business and thrive despite the industry’s complexities,’’ he said. Also speaking at the Forum, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said the telecoms sector was the backbone for other critical industries to grow and should be regarded as such. Addressing the threat by the Nigerian Civil Aviation Authority (NCAA) to shut down telecom masts across the country, Adebayo said Nigeria had forgotten that telecoms remained infrastructure of infrastructure because other sectors including aviation, banking, health, transport rely on ICT to drive their operations, “when critical telecoms infrastructure is attacked, the economy and the people will feel the impact negatively.

L-R: Adeyinka Jafojo, company secretary, Custodian Investment plc; Omobola Johnson, chairman, and Wole Oshin, managing director, at the 24th annual general meeting of Custodian Investment plc in Lagos, yesterday.

Inappropriate, ambiguous provisions in budget stifle economic growth, promote corruption - CSJ HARRISON EDEH & CYNTHIA EGBOBOH, Abuja

entre for Social Justice (CSJ) has raised concern that some identified ambiguous provisions in the 2019 budget estimates have the capacity to stifle Nigeria economic growth as well as serve as an avenue for corruption to thrive. Eze Onyekpere, lead director, CSJ, said exclusively to BusinessDay that filling the budget with ambiguous provisions as identified in some line item in the 2019 budget estimates prevent the budget from focusing on the critical issues affecting the economy and the populace, adding that it also distorts prioritisation and promote diversion of resources from the areas of need to less important issues. “The frivolous and inappropriate provisions made in the budget provides opportunities for corrupt activities to thrive, when budgetary

provisions can only be understood by the exact persons who placed them in the budget, it means that citizens’ oversight through monitoring and evaluation will not be possible,” Onyekpere said. Speaking on the current state of the Nigerian economy, Onyekpere explained, “The economic growth can not match the population growth neither is it sufficient to create jobs for the rising jobless population in the country,” adding that it had provided the justification for the continued increase of local and foreign indebtedness because we were channelling scarce resources to inappropriate expenditure while seeking to borrow for capital funding. “The Nigerian economy is not growing at a rate that matches the population growth, neither is it growing sufficiently to create jobs for the teeming youth bulge.

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The economy fails to produce the quantum and quality of goods and services required to meet the needs of the society,” he said. It would be noted that the department and agencies of the Federal Government are currently doing budget defence, Onyekpere had however identified ambiguities in budgetary provisions in certain specific line items. “We have statutory transfer, which contain a lump sum provision without details for National Assembly, human rights commission, public complaints commission, Niger delta development commission as well as the national judicial council. “NDDC has a vote of N95.118 billion; Ministry of Niger Delta get N41.60 billion while the Amnesty programme has a vote of N65 billion, which sums up to N201.789 billion. The Niger Delta master plan should be the basis of budgeting instead of the current uncoordinated @Businessdayng

approach.” Raising further concern on the Niger Delta budget, he pointed out that the allocation and investment in the region should be streamlined to address holistic needs of the people. Onyekpere speaking further noted that the agricultural sector allocated huge sums for unexplained value chain as well as many research institutes and centres with weak extension service, stressing that the research institutes get repeated sum year after year, which had not improved the outcome of the sector. “No one can monitor a project or program without location, known activities and deliverables. So, money will be spent on projects that deliver no value. The third is that inappropriate provisions distort the link between the budget and official policies. But policies should find resonance in the budget.”

Thursday 25 April 2019

BUSINESS DAY

RESEARCH&INSIGHT

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

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Why shrewd investors should make buy decisions now ADEMOLA ASUNLOYE

s of today, the nation’s capital market is in the negative territory as bearish sentiment hovers around investors’ decisions. Despite the uncertainties in the capital market, some private and institutional investors are betting on equities as they anticipate a future rise in prices. Based on the alpha capture in April 2019 in the report prepared by analysts at Rand Merchant Bank (RMB) Nigeria Limited—a leading African corporate and investment bank, the report focused on the key elements that will tip the balance of their banking coverage for investors to leverage on in 2019. The bank which has over 10 years of transactional experience outlined 4 major factors that might affect stability in the equity market in 2019: • declining yields on government securities • the recent 50bp cut in the Central Bank of Nigeria’s Monetary Policy Rate (MPR) • the outlook for cost of risks coverage • regulatory uncertainty Although, it is believed that the current valuation of Nigerian banks is unjustifiably cheap, these stocks hold much prospect when compared with Kenyan banks which have 1.2x and 19 per cent of return on equity (ROE). Consequently, RMB’s five coverage banks which are First Bank of Nigeria Holdings (FBNH), Guaranty Trust Bank (GTB), Stanbic IBTC, United Bank for Africa (UBA) and Zenith Bank remain attractive at 0.9x for 2019e Price

Source: Company data, RMBN 2019

to Book ratio (P/B) and 21 per cent ROE even as it anticipates an average total return of 53 per cent inclusive of a 10 per cent dividend yield. Opportunity exists for investors as the coverage banks have a P/B range of 0.3x for FBNH and 1.7x for Stanbic IBTC. It should be noted that FBNH with a target price of N9 has potential for growth subject to the resolution of its case with Atlantic Energy (AE). “We also think FBNH (Equal Weight (EW), N9) is a stock that investors should keep an eye on given its potentially strong earnings growth and profitability contingent on the resolution/write-off the AE loan”, said analysts at RMB. RMB Analysts’ forecasts showed that the valuation of assets would appreciate to N11 when the cost of risks was reduced

12734BDN

RMBNS Nigeria banks coverage

from 6 per cent to 4.5 per cent; and even to a higher N13/share when the cost of risks was normalised at 2.5 per cent over the forecast period. Treasury and asset yields environment have already been priced lower in 2019e as a 100bp year-on-year (YoY) declined in average yields to 14.7 per cent was modelled even as treasury assets accounted for 53 per cent of the coverage banks’ interest-bearing assets. In 2019e, the cost of risks is expected to be higher by 40bp to 1.6 per cent; normalised earnings showed 10 per cent growth while 2 per cent decline in earnings is expected with exclusion of FBNH and Access Bank within the coverage universe. The aforementioned banks currently trade on an average of 2019e, P/B of 0.9x with an average 2019e ROE of 21 per cent. This trails the Kenyan banks’ valuation for 2019, P/B of 1.2x, ROE at 19 per cent, Middle East and Africa (MEA) banks which have for 2019, P/B of 1.3x and ROE 18 per cent. Valuation of Nigerian banks in comparison to Kenya’s and MEA Using ROE as the major driver of valuation, findings by analysts at RMB revealed that banks trade at a discounted

38 per cent and 29 per cent to fair value based on MEA and Kenyan banks’ ROEadjusted valuations. Analysis from the table above revealed that the most undervalue banks are FBNH at -60 per cent discount, UBA at -64 per cent discount and Zenith at -48 per cent discount. On the assumption that the risk-free rate of Nigerian and Kenyan markets are similar, the analysts believed that Kenyan banks are closer comparable to the Nigerian banks with both countries having a 10-year bond yield of about 13 per cent and 14 per cent respectively. This informed the conclusion that the Nigerian banks remain cheap from relative standpoint, despite the headwinds. With preference for GTB that is trading at a 2019e, P/B of 1.5x with an expected ROE of 28 per cent, Zenith Bank, trading at a 2019e, P/B of 10.7x with an expected ROE of 21 per cent, and UBA that is trading at a 2019e, P/B of 0.4x with an expected ROE of 16 per cent. This is due to the overweight (OW) rating with a TP of N48, N32 and N11 respectively, on a riskadjusted basis over the next 12 months with potential upsides of 41 percent, 59 percent, and 79 percent respectively from the current levels. While FBNH, equalweight (EW) with a TP of N9 is a stock to watch based on observable milestones relating to AE credit resolution, it also has an upside from the sale of Ontario downstream assets. The current valuation prices of these banks are attractive as potential total returns inclusive of dividend yield on GTB hover about 8 per cent; Zenith, 14 percent, and UBA with dividend yield of 11 percent could post returns as much as 49 percent, 73 per cent and 92 per cent respectively. Although the three banks are OW, GTB has strong profitability despite normalising income; Zenith is under-priced with decent yields and UBA African subsidiaries are expected to drive strong loan growth in 2019.

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

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Thursday 25 April 2019

BUSINESS DAY

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

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Real Estate sector: A look into the Facilities Management industry AMAMCHUKWU OKAFOR

he facilities management industry in Nigeria is growing gradually albeit in its infancy. Its growth stems from the growing real estate and construction sectors over the last years. In 2018, both sectors contributed 6.41 percent and 3.73 percent to GDP â&#x20AC;&#x201C; from 6.85 and 3.72 percent in 2017. From a post-recessionary standpoint the sectors seem to be rebounding. Facilities Management generally refers to the delivering of support services to improve the efficiency and extend the durability of buildings through the management and maintenance of infrastructures. The industry which started as an offshoot of the growing real estate sector has evolved over the past decades to become a necessity for organisations, commercial and residential building owners who outsource the management and maintenance of the their structures and assets to external facilities managers or facilities management companies. The major players in the local industry are real estate and property development firms who provide

services, project management and execution. These aspects of facilities management touch on the different value chain in the management processes. The industry runs a straightforward value chain for either internally or externally generated services, in which companies tend to either perform all the activities in the segments of the value chain, as is the case in developed economies or a segment and outsource others.

This was the first type of service in the industry, and primarily involves temporary contracts to provide a service for a specified period. Bundled service facilities management includes the provision of more than one service as a package by the same FM provider. It is mostly common in small firms that merged or firms that expanded operations to provide a complementary service. There is however a hybrid type, commonly referred to as integrated facilities

The industry is also characterised according to the nature of the demand for the services. The demand for the industryservices varies across different buildings and objectives and has evolved from the provision of single-service to bundled service. Single service facilities management includes provision of a service such as security, cleaning, plumbing, waste management, and pest control among others.

management (IFM) which consolidates a group of services into one business package. However, despite the significant opportunities that present in developing economy for facilities management, obstacles exist that hinder the growth potentials of the industry. For instance, the panoply of dilapidated buildings and concomitant infrastructural decrepitude due to a lack of maintenance culture

Source: NBS data, BRIU Analysis

integrated services for buildings constructed by the company. There are however, other smaller firms established by individuals who leverage on their industry experience and network to provide facilities management services. Some aspects of facilities management within the real estate sector include facilities advisory services, internal and external engineering, technical

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presents both opportunities and challenges. Facilities owners, in a bid to maximize returns from the assets often overlook the necessary periodic maintenance of the facilities. This attitude is common where the facilities have been transferred or inherited. Another limitation is the limited number of smart buildings with advanced technologies that require expert maintenance and management beyond the capabilities of the owners. A great many buildings in Nigeria are locally constructed without efficient technologies such as escalators or elevators, or central cooling and heating systems. The owners therefore see no need to employ the services of a formal management firm; they at best would have the usual in-house cleaners. This limits the growth of the industry. In general, the facilities management industry depends on the spatial development of the economy. This is because the current trend is that the expansion of the industry has been concentrated in the major urban centres where there is high concentration of industries and workers who could employ their services. Also, constrained access to cheap funds is yet another cog in the wheel. The industry can be operationalized towards efficiency through regulations that mandate periodic maintenance of public builds â&#x20AC;&#x201C; both commercial and residential. A regulation on building standards and maintenance process by certified facilities managers is necessary for a growing economy with in@Businessdayng

frastructural deficit and decrepitude. Moreover, a growing facilities management industry would bring tremendous benefits to the economy some of which include: job creation for the pool of unemployed, a multiplier effect on the real estate sector as well the economy at large, standardized building practises and the safety implications, operational efficiency for firms who outsource these aspects of their process to facility managers. Nonetheless, some events portend an impressive future for the facilities management industry. For instance, the growing consciousness around environmental sustainability and efficient building is feeding back into the sector as attitudes are changing towards regulatory compliance to environmental laws. Again, buildings are not merely built to serve a single purpose, unlike before, buildings are designed to serve multiple purposes include for the aesthetic effect on the surrounding area. More firms are building large capacity buildings with smart technologies that accommodate headquarter services and therefore require the services of professional facilities management. This trend is mainly breezing in from global environment where efficient building technologies and automation are common place. The application of these technologies by corporations in the local economy is gradually changing the preference matrix. So many opportunities abound within the industry; it behoves the government to set the regulatory tone.

Thursday 25 April 2019

BUSINESS DAY

NEWS

IMF sets $86m as capital budget for FY2020 HOPE MOSES-ASHIKE

nternational Monetary Fund (IMF) has set $86 million as capital budget for the Financial Year (FY) 2020, which provides financing for capital projects for building facilities and IT. In a statement by the Fund on Monday, this includes major projects to overhaul work practices and introduce modern digital platforms and tools. The net administrative budget for FY2020, which covers all administrative expenses less receipts (primarily from external sources to help support capacity building activities and excluding lending income), has been set at $1.158 million. On April 5, 2019, the executive board of the Fund approved the IMF’s administrative and capital budgets for financial year 2020, beginning May 1, 2019, and took note of indicative budgets for FY2021–22. The FY2020 budget represents an unchanged resource envelope in real terms for the eighth year in a row, measured relative to the IMF’s budget deflator, with the exception of a small (0.6%) increase in FY2017

to meet rising cyber and physical security costs. The budget priorities for FY2020 include increased resources to country work, notably in low-income countries and fragile states, the work on governance and the fight against corruption, and macrofinancial surveillance. To accommodate this with unchanged resources, reallocation and savings measures amounting to 3 percent of the previous year’s budget are planned for implementation. As is customary, the nominal dollar budget includes an adjustment to accommodate price increases, 2.6 percent for FY2020. The FY 20 budget proposal is formulated against the backdrop of a weakened global outlook and financial volatility. The budget reflects a strategic agenda - operationalised in the managing director’s Global Policy Agenda (GPA) and Board Work Programme (BWP) - to help members rebuild policy space, strengthen resilience, and implement structural reforms. This will be supported by continued work to review policies and strategies to enhance Fund advice.

Oshodi Transport Interchange to start operations May 2 BUNMI BAILEY

n line with the Lagos State government’s planned effort to ease transportation problems in the metropolis, the third terminal of the Oshodi Transport Interchange (OTI) project is set to commence operations on May 2, 2019. This was made known to journalists at a press conference and tour of the transport interchange in Lagos, Tuesday. The project, which comprises three multi-storey terminals, is a part of the Bus Reform Initiative of the Lagos State government that started in 2017. Terminal one and two are set to start in two weeks’ time. The project under the administration of Akinwunmi Amode, the governor of Lagos State, seeks to transform Oshodi into a world-class Central Business District (CBD) with business, travel and leisure activities conducted in a serene, secure, clean, orderly and hygienic environment. Biodun Otunola, MD, Planet Project Limited, said, “The multilevel bus terminal in Oshodi is to address the traffic, environmental, safety and transporation problems in and out of Oshodi and Lagos at large. Oshodi is the busiest transport interchange in Africa, and because of its large population, there is high level of theft and insecurity. “This multi-level terminal bus system is divided into three terminals, the first terminal is meant for intercity operations and is meant to work for 24 hours while the rest of the two is for intercity movement. It

is a world-class terminal that is fully secured and central air-conditioned. It is meant to station up to 500 buses of Marcopolo brands comprising of 27-seater and 70-seater buses. “Each of the floor is about 3,700 square meters and that can take close to 40,000 people at a time. The terminalscantakeonemillionpeople everyday within Lagos and outside. And each of the terminals has six lifts and one escalator. So, in all we have 18 lifts and three escalators. The skywalk connecting the three terminals is the longest skywalk ever in the country.” President Muhammadu Buhari, who on a day visit to Lagos yesterday, commissioned three key projects with the Oshodi Transport Interchange among them. “The new Oshodi Transport Interchange; the Mass Transit Medium and High capacity public buses and the reconstructed Murtala Mohammed International Airport Road by Lagos State government clearly demonstrate the need to continue to provide high impact projects for the developmentofinfrastructureandopportunitiesforjobcreationatalllevels. “Just as this transport interchange with three different terminals is going to change the face of public transportation, the mass transit buses totalling 820 will move the people of Lagos State in a more comfortable and more efficient manner. “These projects by Lagos State are perfectly aligned with the efforts of the Federal Government to improve the country’s infrastructure, especially in the transport sector,” President Buhari said.

L-R: Saheed Alao, managing director/chief executive officer, Blueprint Technologies Limited; Adanna Monde, chief executive officer/founder, GLOW Health Enterprise, and Kennedy Uzoka, group managing director/ chief executive officer, United Bank for Africa plc, at the official launch of GLOW Health in Lagos, recently.

Aiteo OML 29 oilfield fire incident kills six vandals Samuel Ese, Yenagoa

he April 21, 2019, fire outbreak at OML 29 oilfield operated by Aiteo Eastern Exploration and Production killed six suspected pipeline vandals on the Nembe-Bonny oil export pipeline, BusinessDay has reliably gathered. This came to light after a site visit on Tuesday by the Commander of the Joint Task Force (JTF) Operation Delta Safe, Akinjidie Akinrinade, who inspected the area affected by the fire at Awoba, a Kalabari settlement on Kilometre 97 on Nembe-Bonny oil export pipeline. Akinrinade disclosed that he immediately deployed troops to

the area explaining that it was troops on surveillance at a nearby houseboat that confirmed that all the suspected vandals died in the ensuing explosion and fire. He told newsmen who accompanied him on the visit that he regretted the incident that affected the 150,000 barrels per day Nembe Creek Trunk Line and that though the suspects were dead, the JTF was making efforts to arrest their collaborators. According to Akinrinade, criminals who carry out oil theft operate in groups, but assured oil firms operating in the Niger Delta region of safety of their facilities and personnel as his www.businessday.ng

men would redouble efforts to stop crude oil theft and pipeline vandalism. He stated: “I am here for an on the spot assessment following the fire incident on the Nembe Creek Trunkline, which is a critical national asset and to restate our commitment to protecting oil facilities in the Niger Delta region. “This incident has adverse economic implications and the military high command is concerned; that is why I am here with my component commanders and we shall continue to provide security to the oil firms. “I assure the oil firm of security to ensure that the breached point on the line is traced and

fixed.” Remains of the suspected vandals and oil thieves were being recovered in the creeks when the commander visited while local divers were seen searching for more dead bodies near the scene of the fire disaster. Aiteo had declared a Force Majeure on oil exports from the export line following the fire incident on April 21 and later said the fire had been doused, although the area was still smouldering at the time of the visit. On March 1 this year, the trunk line was shut due to an explosion that led to a fire outbreak and was restarted five days later before the latest incident that resulted in loss of human lives.

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2019 budget: Senate defers approval yet again … as lawmakers yet to get budget details OWEDE AGBAJILEKE, Abuja

or the second time in two weeks, approval of the 2019 budget suffered a setback on Wednesday in the Senate, as its approval was again postponed till next week. This was due to the inability of lawmakers to have printed copies of the budget, according to the Senate. Senate president, Bukola Saraki, who presided over the session on Wednesday, urged the Clerk of the Senate to ensure that all 109 senators have printed copies of the details of the budget by Monday, April 29. It would be recalled that the Committee had last week presented the budget on the floor of the Senate. Saraki had earlier assured that the upper legislative chamber would pass the budget by April 16, 2019. The development is coming four months after President Muhammadu Buhari presented a budget of N8.83 trillion before

a joint session of the National Assembly. Senate majority leader, Ahmad Lawan (APC, Yobe), had earlier informed his colleagues that chairman and vice chairman of the Appropriations Committee were absent. But speaking on the matter, Saraki said: “The chairman (of the Appropriations Committee, Danjuma Goje) did speak to me that some of the members had not got printed copies of the details. And I have directed the Clerk to make sure that latest by Monday, we all have printed copies of the budget so that everybody can see the details of the budget. And by so doing, we can now pass it at the next legislative day. Because we don’t want to run into problems where we pass it without details and our colleagues will now comment on that.” It would be recalled that the Committee had last Wednesday presented the budget report on the floor of the Senate.

Why investors are looking at Yaba, Lagos ISRAEL ODUBOLA

aba is a sub city located on Lagos Mainland, with several Federal Government Institutions like the Queen’s College, the Nigerian Institute of Medical Research, Yaba College of Technology, Igbobi College, University of Lagos, Federal Science and Technical College, and the Federal College of Education. This sub city also has one of the busiest market sites in Lagos, known as Tejuosho Market. Directly opposite the market is the Yaba Psychiatric Hospital, known as Yaba Left by many. Yaba is one of the go-to places for technology renaissance in Africa, with tech start-ups like Hotels.ng, Andela, Cc-Hub, and many others, impacting the economy ecosystem for good. As the popularity of the region soars, the hotels in Yaba are evolving as well to cater for the upsurge of tourists and business owners and as well as look at other part - upwardly mobile. In recent times, Yaba market had been the house or major market for almost everyone living around the vicinity. There are various markets located inside the Yaba market, varying from cloth shops, boutiques to sports complex and food items. Due to Lagos’ agenda for a mega city status, most of the small shops in the Yaba market had been demolished, leaving just the bus park and the market behind the railroad. Yaba is central in Lagos State and is the core of what makes up Lagos Mainland. It is bounded by other important city centres like Ojuelegba, Mushin and is the gateway to Lagos Island, Victoria Island and the highbrow Lekki. There are five reasons real estate developers and investors @Businessdayng

are looking at Yaba. Tolu Bawa-Allah, director at Prindex Properties, postulates that Yaba has one of the highest densities of middle-income earners who work on the Island but seek relatively upscale yet affordable residential accommodation on the mainland that is as close as possible to the Island. Another key reason identified by the real estate company Prindex Properties is that the average commute time from Yaba to the Island is 46 minutes, depending on traffic, but this timing still works relatively well compared with other parts of Lagos. Also, Yaba has been identified as the pulse of enlightenment in Lagos State, as it boasts of the highest density of tertiary institutions and technological renaissance than any state in Nigeria. Bawa-Allah maintains that Yaba is the second only area in the state with relics that still tell the rich stories of the colonial era and Old Lagos. From iconic monuments and buildings such as Jaekel House, the railway headquarters to the strong and enduring colonial style of real estate that still dot the streets of Yaba These and some other reasons is why Prindex Properties situated the about to be unveiled Residential project called 30/32 Apartments. The 30/32 Apartments is a residential apartment block of double bedroom apartments in Yaba. It is a contemporary residential scheme of high-quality build, making a remarkable impression in this area. The unique design is a L-shaped block of ground and three suspended floors. The building will consist of 18 number two-bedroom services apartments. The 30/32 Apartments will be unveiled on Sunday, April 28, 2019.

Thursday 25 April 2019

BUSINESS DAY

news NAMA decries poor radio communication on Nigeria’s air space IFEOMA OKEKE

anaging Director of Nigeria Airspace Management Agency (NAMA), Fola Akinkuotu, has confirmed that radio communication over the Nigerian airspace is still a challenge despite efforts being put into it to resolve it. The NAMA boss made this known Wednesday at the noholds bar Air Traffic Controllers (ATC)/Pilot Interactive Session with theme: Enhancing Safety of Flight Operations organised by Nigerian Air Traffic Controllers’ Association (NATCA) in collaboration with the Flight Crew Association of Nigeria (FCAN) and National Association of Aircraft Pilots and Engineers (NAAPE). According to Akinkuotu, part of NAMA’s job is provision of communication in the airspace but the agency has not fully achieved this key role. “Radio communication

today is not the best. I have spent two years in NAMA and I thought I would have fixed this problem but I haven’t. Effort is being made and we are not going to stop because any air traffic communication that is not crisp clear is a recipe for confusion. “In the South east, a lot of pilots have had to step on each other and ATCs because of poor communication and if you are foreign to the clime, that may make you categorise our airspace as unsafe. “I work for NAMA and part of NAMA’S job is communication but we have not achieved what we set out to do. So, we are asking feedback from the users. We are not afraid of criticism but we enjoin you to make it civil. We beg you in the interest of safety to take things seriously and for our pilots to be more patient and understanding with the ATCs,” he said. Corroborating, Abayomi Agoro, president, NATCA, said

commercial flight operations without communication between the pilot in the cockpit and controllers in the tower, the consequences were grim and better unimagined. “The present ControllerPilot VHF Communication coverage of Nigeria’s airspace is a far cry from the required international standard but it is still work in progress with NAMA. Over the years, it has been quite herculean for Air Traffic Controllers to communicate effectively with pilots,” Agoro said. He further went to enumerate some other challenges that are worthy of note including the deplorable state of some Control Towers. “At the risk of sounding repetitive, it is important to mention it again that the Control Towers at the following locations: Kaduna, Maiduguri, Ilorin, Yola, Sokoto, Benin, Katsins are in very deplorable state.

U17 AFCON: Guinea edge Nigeria 10-9 on penalties to reach final Anthony Nlebem

uinea narrowly edged out Nigeria’s Golden Eaglets after a goalless 90 minutes in the first semi finals of the 13th Africa U17 Cup of Nations (U17 AFCON) in Tanzania, before a marathon penalty shoot-out that ended when Ogaga Oduko heaved his effort sky-high to send the Junior Syli Nationale into Sunday’s final. The Eaglets wasted goal scoring opportunities that would have long settled the encounter before the end of regulation time, and paid dearly in the lottery of penalty kicks as they would be battling for the bronze instead of the gold medals. Forward Wisdom Ubani

should have done better with two opportunities in the first half, but he delayed his decision each time and the chances went away. Guinea came close through Bah Algassime and Toure Momo but also could not utilise the openings. Seven minutes into the second half, Ubani fluffed another golden opportunity when it appeared easier to put the ball in the net, and three minutes later, Fawaz Abdullahi’s dipping shot flew narrowly over the sticks. On the hour, Algassime rocked goalkeeper Sunday Stephen’s upright from long range, and Toure Alya came close in the 66th minute as he hit the bar from a corner. In the 72nd minute, Ubani was clever to create an opening for himself, only to waste the same.

Three minutes later, with goalkeeper Camara Sekou wrong-footed, Ubani’s 25–yard free kick was deflected and kissed the crossbar. Fawaz Abdullahi and Ogaga Oduko had chances later on, but the two teams would only be separated by sudden death penalties. Bangoura Alya, Toure Alya, Conte Aboubacar, Bangoura Sekou, Keita Ahmed, Bangoura Mahmoud, Bah Algassime, Fofana Ibrahima, Dado Ibrahima and Soumah Mohamed made no mistake from the spot, while Nigeria’s Ogaga Oduko lost his kick after Ibraheem Jabaar, David Ishaya, Olakunle Olusegun, Clement Ikenna, Olatomi Olaniyan, Shedrack Tanko, Fawaz Abdullahi, Wisdom Ubani and Samson Tijani had scored.

World Book Day: Edo reiterates commitment to knowledge economy … seeks harsher punishment for piracy

do State Governor Godwin Obaseki says the state government’s investment in education is aimed at tapping the transformative power of books and the knowledge economy to drive growth and development in the state. The governor said this in commemoration of the World Book and Copyright Day, marked every April 23, by the United Nations Educational, Scientific and Cultural Organisation (UNESCO), and other organs of the United Nations (UN). According to Obaseki, the state aims to groom actors in the fast-evolving global knowledge economy by ensuring that pupils in the state are provided with the best possible education that meets the demands of the new world infor-

mation and communication order. He said the emphasis on enhancing and protecting indigenous languages in this year’s commemoration of the day aligned with the state government’s programmes to preserve the state’s heritage and culture, through establishment of culture clubs in schools; support for cultural institutions and training of Edo language teachers for better service delivery. “As we commemorate the World Book and Copyright Day, I want to restate the state government’s commitment to groom a generation of young people that are well fitted to the times, who will participate actively in the knowledge economy as a result of the up-to-date education they are getting through the Edo Basic www.businessday.ng

Education Sector Transformation (Edo-BEST) programme. “At the same time, we are very mindful of the fact that much of this cannot be achieved without the transformative power of books. This is why I call for stricter measures to check piracy and reward the effort of those, who commit to writing and preserving knowledge for future generations,” he said. Through the Edo-BEST programme the state government has purchased over 800,000 books and equipped teachers to deliver lessons using tech gadgets that make the teaching and learning experience in public schools more pleasurable, he said. “It would imbue in the pupils a healthy reading culture and make them life-long learners,” he said. https://www.facebook.com/businessdayng

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Thursday 25 April 2019

BUSINESS DAY

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Thursday 25 April 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

No end to poverty without financial inclusion, says World Bank

Finance in developing countries has to be expanded carefully, says a senior official JAMES POLITI

wo things come to mind for Ceyla Pazarbasioglu when she thinks of financial inclusion. First is the core mission of the World Bank, where she has been vice-president for equitable growth, finance and institutions since October of last year. “You step in the main entrance here and it says, ‘Our dream is a world free of poverty.’ That’s the first thing that hits you. And I really think we’re not going to eradicate poverty unless we have financial inclusion,” she says. Yet Ms Pazarbasioglu also warns that unless finance is expanded in the right way, it has the potential to backfire dangerously — a cautionary note that is informed in part by her previous roles at the International Monetary Fund and as a government official in her native Turkey. “You have good finance, bad finance, and ugly finance . . . You need to make sure it serves citizens, the SMEs [small and medium-sized enterprises], and not just the banker, or the wealthy, or the chosen few,” she adds. Ms Pazarbasioglu is on the front line of a key battleground in global development. In 2017 there were still 1.7bn adults in the world without an account at a financial institution or a mobile money provider, according to the latest Global Findex database published by the World Bank. While this has improved since 2014, when 2bn people were classified as “unbanked”, it still represents a huge mountain to climb. The Findex report identifies Chi-

na, India, Indonesia and Pakistan as the countries with the biggest shares of financially excluded individuals — but it remains a pervasive problem across other parts of Asia, the Middle East and Africa. In Egypt, for example, the share of people aged 15 and over with an account at a financial institution

Wall Street grafts new technology on to old-school fundraisings

ankers on Wall Street have always tended to look for an edge in old-fashioned ways: a firm handshake, an expensive suit, an invitation for a client to a top sporting event. But now technology could be about to change the traditional ways of doing things, just as it has in other old-school business lines such as the trading of stocks and bonds. The next frontier is the “primary” side of the banks’ capital markets businesses, which helps companies issue debt and equity. Bank of America Merrill Lynch, for example, has spent time collecting and cleaning up internal information on initial public offerings it has managed, and fed the 50-gigabyte data set into a machinelearning tool it calls “Predictive Intelligence Analytics Machine”, or Priam. Since September the bank has used Priam to help predict which investors will be interested in European listings, and it now plans to apply the tool to US and Asian deals too. “Once we’d cleaned all the data, it was unbelievable what we could do,” says Elif Bilgi Zapparoli,

Institutions are investing in a bid to reach ‘unbanked’ groups in Africa and the Middle East LAURA NOONAN

the bank’s co-head of global capital markets. “[Priam] is learning and improving with every deal.” Some senior bankers are dismissive, sneering at efforts to graft artificial intelligence on to what is an essentially relationship-driven business. And even enthusiasts argue that AI will not be a gamechanger, given it works best on vast sets of data with billions of observations, rather than the thousands of IPOs and bond deals that banks tend to have in their databases. Humans will always remain at the centre of most of the work, they insist. Nonetheless, some bankers are optimistic that the often knotty work of arranging debt and equity deals could become much faster and more efficient. Projects under the banner of “digital capital markets” are proliferating across the industry, with banks seeking computer-driven clues on which clients might want to issue, when, and at what maturity and currency. This could result in banks needing fewer people to do the work, at a time when many are still struggling to boost returns to shareholders in an age of low interest rates and tougher post-crisis regulation. www.businessday.ng

you have an inclusive system, it’s not a sustainable or stable system,” Ms Pazarbasioglu says. “There is much more awareness and much more understanding.” In the Middle East and Africa, she says, fintech’s role in financial inclusion is seen as a way to help foster entrepreneurship and lower unemployment among the regions’ burgeoning youth populations. There are specific cases that have given Ms Pazarbasioglu hope, including a recent visit to Ethiopia to see the World Bank’s women’s entrepreneurship development programme in action — an initiative that gives female owners of small businesses better access to loans and credit. The case of M-Pesa, a mobile phone money transfer system launched in Kenya in 2007, is also often cited as a pioneering financial inclusion instrument. And Kristalina Georgieva, the World Bank’s chief executive officer, has led what is known as the African “digital moonshot” — a $25bn investment in digital transformation between now and 2030 — with the potential to add $25bn more from the private sector. There are undoubtedly some potential pitfalls in this growing field, from saddling individuals with risky levels of debt to allowing data breaches. But on balance, Ms Pazarbasioglu believes the gains could be large across the developing world. “What I like about technology is that it starts by asking a question, and is trying to find a solution to a problem,” she says. “How can I solve it with limited costs, and then see if it can be scaled up?

Banks use fintech to make up for lost time on financial inclusion

Bankers hope artificial intelligence will boost efficiency of stock and bond sales ROBIN WIGGLESWORTH AND LAURA NOONAN

rose from 13.7 per cent in 2014 to 33 per cent in 2017. That compares with well above 90 per cent in advanced economies. Margaret Miller, global lead for responsible financial access at the World Bank, explains that these groups share several traits: individuals have lower incomes; they are

geographically isolated, usually in rural areas; they have lower levels of education; and they are predominantly female — 56 per cent of the unbanked globally are women, according to Findex. But the growth of technology including fintech is now offering a promising new avenue to accelerate the efforts already under way to narrow these gaps. “It reduces costs, it’s much more efficient, it can be scaled up,” Ms Pazarbasioglu says. “It does come with risks as well because, you know, you really don’t want to hurt those that are most vulnerable,” she adds, referring to threats such as cyber security and people borrowing excessively. “So we have to be careful. But I think it is really remarkable.” Last year, the World Bank locked arms with the IMF to present a joint fintech agenda at their annual meetings in Bali, Indonesia, which included a specific call for countries to “enable new technologies to enhance financial service provision” around the world. “The number of institutions and people talking about financial inclusion and the need for it have really, I think, grown very sharply in the last decade,” Ms Pazarbasioglu says. “You also see a lot of the private sector now talking about it and being engaged.” Crucially, too, national regulators and central bankers, which might have resisted pushes for financial inclusion in the past for fear that they could destabilise their financial systems, have become much less sceptical. “I think it’s much more clear now that unless

t fell to a mobile phone company more than a decade ago to financially empower tens of millions of Africans who found themselves passed over by the traditional banking sector. Now, some 12 years after Vodafone co-founded M-Pesa, the mobile payments venture that took east Africa by storm, banks are upping their game to improve financial inclusion rates across Africa and the Middle East, as technology widens their ability to deliver banking services at lower costs. The region’s need is great: the latest financial inclusion index from the World Bank showed that less than half of the population in sub-Saharan Africa has bank or mobile money accounts, while relatively high levels of financial inclusion reported in some areas of the Middle East mask the fact that many immigrant labourers do not have access to services. Nat Cartwright, chief operating officer of Finn AI, which sells virtual assistants to banks, says technological advancements are lowering the costs for institutions to serve customers. “There’s a business case for them serving people who were

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formerly either unbanked or underbanked.” The term “underbanked” generally refers to people that rely on cash to manage their finances rather than bank accounts or credit cards. TymeBank, one of Finn AI’s clients, describes itself as South Africa’s “first fully digital bank” and uses artificial intelligence to interact with its customers online and via kiosks rather than human beings at call centres or branches. The result is a low-cost account that Tyme hopes will appeal to the around 11m underbanked people in the country. “Every South African has the right to accessible and affordable banking so that they can take part in, grow and benefit from the country’s economy,” its mission statement says. Yet traditional South African institutions such as First National Bank are also removing barriers in an effort to lure previously overlooked customers. Last August, FNB launched a mobile bank account that could be opened using just a name and national identity number, and with no monthly fees. It chalked up 50,000 new users in its first month. Global institutions, meanwhile, are using a philanthropic approach @Businessdayng

to help close the financial inclusion gap in the Middle East and Africa. JPMorgan Chase has joined up with the Bill & Melinda Gates Foundation and specialist financial inclusion consultancy BFA to create the Catalyst Fund. It provides early-stage capital and other support across emerging markets to help “impact-oriented fintechs get to scale”, says Colleen Briggs, JPMorgan’s head of community innovation and corporate responsibility. “We’re seeing a tonne of funding going into fintech but we’re not necessarily seeing that those are focused on low-income [clients],” Ms Briggs says. “That to me is the market opportunity and the gap.” Since 2015 the Catalyst Fund has worked with 20 start-ups, 12 of which are in Africa. JPMorgan focuses on companies that can make a meaningful impact on the financial health of their local populations. “What we find is that a bank account alone does not equate to financial health,” Ms Briggs says. She cites the example of India, where although bank accounts are now universal thanks to a governmentled push, she says, “a lot of those bank accounts are dormant, nobody uses them”.

46 BUSINESS DAY

Thursday 25 April 2019

NATIONAL NEWS

Drones to deliver medicines to 12m people in Ghana Zipline project is world’s largest drone delivery network NEIL MUNSHI

he world’s largest drone delivery network, ferrying 150 different medicines and vaccines, as well as blood, to 2,000 clinics in remote parts of Ghana, is set to be announced on Wednesday. The network represents a big expansion for the Silicon Valley start-up Zipline, which began delivering blood in Rwanda in 2016 using pilotless, preprogrammed aircraft. The move, along with a new agreement in Rwanda signed in December, takes the company beyond simple blood distribution to more complicated vaccine and plasma deliveries. “What this is going to show is that you can reach every GPS co-ordinate, you can serve everybody,” said Keller Rinaudo, Zipline chief executive. “Every human in that region or country [can be] within a 15-25 minute delivery of any essential medical product — it’s a different way of thinking about universal coverage.” Zipline will deliver vaccines for yellow fever, polio, diphtheria and tetanus which are provided by the World Health Organisation’s Expanded Project on Immunisation. The WHO will also use the company’s system for future mass immunisation programmes in Ghana. Map of Zipline’s drone network in Ghana Later this year, Zipline has plans to start operations in the US, in North Carolina, and in south-east Asia. The company said it will be able to serve 100m people within a year, up from

the 22m that its projects in Ghana and Rwanda will cover. In Ghana, Zipline said health workers will receive deliveries via a parachute drop within about 30 minutes of placing their orders by text message. Zipline’s drones will have a roundtrip range of 160km, travelling at 110km an hour. The drones are the least complicated part of the business, Mr Rinaudo said, compared to designing a complex supply chain where none exists, integrating into national healthcare systems and working with regulators, such as the civil aviation authorities in Rwanda who touted Zipline to their Ghanaian counterparts. Ghana’s president has been widely praised for his plans to take the country — a lower-middle-income nation with about $4,500 in per capita income in purchasing power parity terms — “beyond aid”. But his ambitious economic reform programme has been slow to progress and much remains underdeveloped. Still, the IMF last week projected Ghana to be the fastestgrowing economy in the world this year, at 8.8 per cent. The Ghana project follows a similar model to past Zipline endeavours, but on a much larger scale. It includes a partnership with the government, Gavi, the Vaccine Alliance, the UPS Foundation, the Bill & Melinda Gates Foundation, Novartis and Pfizer. Zipline is backed by Sequoia Capital and Andreesen Horowitz, among others.

How developing nations use tech to reach the ‘underbanked’

Lenders in Africa and the Middle East circumvent weak digital infrastructure to make progress

SARAH MURRAY

hey come armed with a clipboard. Across much of Africa and the Middle East, microfinance lending officers visit homes and businesses to assess the value of collateral such as cars, sewing machines or livestock. Technology such as artificial intelligence is being used in some locations to improve data collection and streamline credit decisions. Yet for the world’s “underbanked” population, who rely heavily on cash — estimated by consultancy Accenture to be a global market opportunity for financial services providers worth $380bn — factors such as weak digital infrastructure mean that the human aspect of financial services is likely to remain critical for some time. Still, progress is being made in these regions to expand citizens’ access to financial services. Egypt’s Commercial International Bank is developing predictive analytics software that can assess an individual’s willingness and ability to repay loans. In a country where about two-thirds of citizens lack a bank account, often because traditional credit-scoring methods exclude them, such tools can enable the bank to serve more customers and with less risk. The small size of loans made to low-income borrowers render them relatively expensive to administer for the microfinance lenders, which include non-governmental organisations, credit unions

and commercial banks. Technology can achieve economies of scale that bring these overheads down. “There’s a lot of potential to reduce transaction costs and increase speed,” says Nicole Van Der Tuin, co-founder and chief executive of First Access, a New York-based software platform for microfinance lenders. In Uganda, for example, where it is estimated that less than a third of the population has an account at a financial institution, some lenders use First Access software to combine user data with internal records, making it easier to appraise customers and match them with appropriate products. In many African countries, however, weak digital and communications infrastructure and nonstandardised processes threatens to hold back a shift towards digital banking. “The single biggest factor limiting large-scale financial inclusion across Africa is the cost of infrastructure and the ability to deliver those solutions across multiple regulatory jurisdictions,” says Andrew Baker, chief technology officer at Absa Group, formerly Barclays Africa. Ms Der Tuin says automating a “highly repeatable process” such as the loan appraisal process can deliver cost-efficiencies. But she also believes that, in Africa, where loan activities are highly dependent on human decision-making, digital technologies must first be integrated into communities’ existing ways of working before being fully embraced. www.businessday.ng

The Digital Tunisia 2020 project is aiming to develop secure payment systems and growing the number of households that have internet access © Alamy

Cash culture drags on financial inclusion efforts in north Africa A distrust of banks is slowing efforts in some countries to bring digital banking to the masses ALICE KANTOR

hen Sahar Ben Hadj Falah was recently given a book as a gift from a friend, the traditional present came via an untraditional channel: the friend transferred her the money via a mobile payments app, which the 29-year-old Tunisian then used to send the gift to her home. Paymee is a mobile money transfer app that launched in Tunisia last June. “It’s the first time I’d heard about something like this,” says Ms Ben Hadj Falah, a principal’s assistant at the American School in the capital city, Tunis. “It works great.” Marwen Amamou, Paymee’s founder, says the app allows those who cannot easily access financial services, but who own a smartphone, to shop, transfer funds and pay bills online. “It’s more secure, more practical, you don’t have to look for change,” he says. Users load money onto their account via terminals located in various locations around the country. Financial inclusion — the mission to provide underprivileged populations with access to financial services such as loans and bank accounts — is critical for competitiveness and growth in the region. Yet start-ups and governments in some countries have struggled to convince people to embrace digital banking.

In the Middle East and north Africa, fewer than half (44 per cent) of adults over the age of 15 have a bank account, according to 2018 data from the World Bank, compared with 68.5 per cent globally. In Tunisia alone, this figure is 37 per cent. Since Paymee’s launch, Mr Amamou says the app has attracted 2,200 users. If successful, he says, it could contribute to Tunisia’s strategy to increase access to digital finance. Tunisia has a population of about 11m people and 14m mobile phone subscriptions. Increasing the adoption of mobile payments could offer an easy route to expanding financial inclusion in the country. Yet just 2 per cent of Tunisians have a mobile money account, compared with 4.4 per cent worldwide. Progress on capturing “unbanked” groups has been slower in Tunisia than for some of its neighbours. In 2017, Egypt was chosen — along with China and Mexico — to be part of a World Bank Group initiative to research and advance financial inclusion in developing countries. Egypt is part of the bank’s Universal Financial Access 2020 programme, which aims to bring 2bn unbanked adults across 25 countries into formal financial systems. This followed a 2014 move by the Egyptian central bank to ease regulations and lower capital requirements for banks to encourage them to open mini-branches in areas of the country where most people are

“underbanked” and rely heavily on cash transactions. “Mena [Middle East and north Africa] countries have become aware, with a little delay, of the importance of digitisation and also mobile payment,” says Zouhair el Kadhi, an economist at the Tunisian Institute of Competitiveness and Quantitative Studies. The Tunisian government’s Digital Tunisia 2020 project was launched to create jobs in digital industries, develop secure payment systems and grow the number of households that have internet access from one-fifth to three-fifths. Over the past couple of years the scheme has also received financial support from the African Development Bank and Chinese communication equipment maker Huawei. Yet efforts to promote digital finance have had limited success, according to Ahmed El Karm, president of the Tunisian Professional Association of Banks and Financial Institutions. In October, he highlighted the 13bn dinars ($4.3bn) worth of cash circulating outside of the banking system. Paymee’s Mr Amamou believes one reason for this is that many people still “don’t trust bank accounts”. He says it was difficult to convince people of the advantages of transferring money and paying for bills on a phone instead of using cash. “A lot of education is still needed,” he argues.

Pioneering Kenya eyes next stage of mobile money Fintech aims to tackle a fragmented farming sector and help solve bigger economic problems TOM WILSON

enya has led the African continent in financial innovation for more than a decade with its revolutionary mobile money service M-Pesa, used by two in five Kenyans. Now its entrepreneurs are seeking to use the country’s love for mobile payments to solve bigger economic problems. Mobile money was just the “first step”, says Ken Njoroge, co-founder and co-chief executive of digital payments company Cellulant. The second, he continues, was digital lending. “Only when you get to the third tier, when you take these products and assemble them together to really solve a huge economic problem in the market do you make real progress.” In the second of the half the year, Mr Njoroge’s Nairobi-headquartered company will launch Agrikore,

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a digital payment, contracting and marketplace system that connects small farmers in Kenya with large commercial customers. Agrikore is already up and running in Nigeria, and Cellulant believes the system can unlock the vast potential of Africa’s fragmented agricultural sector and deepen the reach and impact of financial services for the continent’s 1bn people. “To really win the financial inclusion battle in Africa, you build it in agriculture and then replicate,” he says. Kenya is a perfect test case for both the potential and the limits of traditional efforts to expand access to financial services. More than 80 per cent of Kenyans now have access to financial services — defined to include those offered by banks, microfinance providers and mobile money providers — up from 27 per cent in 2006, according to a survey published this month by Kenya’s central bank. In the @Businessdayng

capital Nairobi, financial inclusion is as high as 96 per cent. But despite the rapid progress in access to financial products, the impact on daily lives has been modest. When financial problems arise, more than 60 per cent of Kenyans still turn to informal borrowing — from friends, families and loan sharks — and more than two-thirds of Kenyans say they are still unable to meet their daily expenses in each income cycle. “Many Kenyans have formal accounts in various forms, but these accounts are rarely used because they are not solving real day-to-day problems for many households, smaller and micro-scale businesses, and farmers,” Patrick Njoroge (no relation to Ken Njoroge), the governor of the central bank, said in the report. In short, simply having access to a bank account does not lift someone out of poverty.

Thursday 25 April 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Credit Suisse trading unit rebound eases pressure on Tidjane Thiam Quarter profits rise 8% to beat expectations as division ends lossmaking run STEPHEN MORRIS

redit Suisse reported an 8 per cent rise in first-quarter net profit, beating estimates, as its wealth management unit continued to grow and it reversed the decline in its securities trading business. The Swiss lender’s previously struggling global markets division made a SFr282m pre-tax profit in the period, exceeding analysts’ expectations and recovering from the SFr289m it lost in the second half of last year. Credit Suisse outperformed its bigger rivals on Wall Street, reporting only a 10 per cent year-on-year decline in trading revenue — or half that on a Swiss-franc basis — compared with an average 14 per drop at US banks. Andrew Coombs, a Citigroup analyst, said: “We view these as decent results. Global markets has been the main cause of earnings downgrades over the past year and has now shown signs of stabilising.” He also noted the Asia-Pacific trading unit eked out a small profit after consistently losing money for the past two years. Profit at the group’s flagship wealth management unit also jumped 8 per cent as the bank attracted SFr9.6bn of net new assets, increasing the total under management to a record SFr786bn. The shares rose 2.9 per cent. The performance defies dire predictions by some observers and eases some of the pressure on chief executive Tidjane Thiam, for whom trading has been the most persistent problem despite his swingeing cuts to the expensive and volatile division. Analysts had forecast on average European investment banks’ revenue would drop about a quarter. Mr Thiam’s crosstown rival, UBS chief executive Sergio Ermotti, warned last month his investment bank had one of its worst starts to a year in recent history with revenues dropping about a third. As such, UBS will be watched

closely when it reports on Thursday. “The positive momentum we observed towards the end of the first quarter has broadly continued in April,” said Mr Thiam. “While geopolitical and macroeconomic concerns remain, we believe their impact has begun to recede, with client confidence returning.” The improvement in its global markets unit was credited to the bank’s focus on fixed-income trading, which generally fared better in the quarter, and an improved performance in equities, where it has been investing and hiring. However, overall revenue at the investment banking division fell 12 per cent, largely because advisory and capital markets division swung to a pre-tax loss of SFr93m after revenue fell by a third. The bank blamed the drop off in M&A, bond and equity underwriting on “the US government shutdown, investor concerns over reduced growth in corporate earnings and GDP as well as the uncertain geopolitical environment”. Still, the largely positive results add momentum to Mr Thiam’s often stop-start turnround of Credit Suisse. The 162-year-old Swiss lender returned to profit last year, ending a three-year lossmaking streak during which it made SFr6.7bn of losses as it unwound risky leveraged trading positions, cut more than 10,000 jobs and paid big misconduct fines around the world. Credit Suisse’s net profits climbed 8 per cent to SFr749m, beating analysts’ expectations for SFr676m. Earnings were helped by a 6 per cent decline in operating costs to SFr4.2bn. “There’s no reason post-restructuring why cost discipline should fall away . . . we keep a tight lid on expenses,” head of investor relations Adam Gishen said on a call with reporters. “If we feel revenues aren’t there we really turn the taps off on expenditure.”

Winton appoints new chairman to oversee strategy change Leading hedge fund firm will reduce reliance on following trends in financial markets LAURENCE FLETCHER

inton Group, one of the world’s biggest hedge fund firms, is to appoint cofounder Martin Hunt as chairman as it reduces its reliance on following trends in financial markets in an effort to bolster performance. Mr Hunt has spent most of his career working with Winton chief executive David Harding with a focus on the firm’s quantitative trading systems. Starting on July 1, he will take over from City veteran and former Barclays chairman Sir David Walker, best known for his Walker Report of corporate governance in UK banks. The move comes as Winton, one of the best-known names in computer-driven hedge fund investing, shifts its focus from following financial market trends to other computer-driven trading models. Mr Harding is one of the pioneers of trend-following — where funds use complex algorithms to try to identify when a market move is becoming a trend and then profit from it — and the ‘H’ in AHL, a computer-driven fund now owned

by Man Group. However, returns from trendfollowing have been lacklustre for years, which some in the industry blame on the surge of investor inflows into this sector after it made large gains during the credit crisis. “The evolution of that strategy will be the principal preoccupation going forward” for Mr Hunt, said Sir David, who worked under Mr Hunt’s father, Secretary to the Cabinet Lord Hunt, in the 1970s during his time at the Treasury. Winton’s flagship fund is up 0.3 per cent this year to mid-April, having lost 0.6 per cent last year, according to numbers sent to investors. Even though last year’s return outshone many computer-driven hedge funds, Winton’s overall assets have dropped from about $30bn to more than $20bn as some clients have pulled out their cash. Sir David has spent much of the past four years updating Winton’s corporate governance. His Walker Report has helped shape the way the financial services industry is run. Mr Hunt is chairman of the Winton Fund. www.businessday.ng

For Tidjane Thiam, trading has been the most persistent problem despite swingeing cuts to the volatile division © Bloomberg

Occidental launches $55bn hostile bid for Anadarko Attempt to stop takeover by Chevron as battle over prized US shale assets intensifies ED CROOKS

ccidental Petroleum has launched an unsolicited $55bn bid for Anadarko Petroleum, in an attempt to stop its planned acquisition by Chevron, starting a takeover battle for highly-prized US shale oil assets. On Wednesday morning Occidental, one of the five largest US oil and gas production companies, announced it was making an offer worth $76 per Anadarko share, a premium of roughly 22 per cent over the value of the bid from Chevron launched earlier in the month. In a letter to Anadarko’s board, Occidental said it was “surprised and disappointed” that directors had rejected its proposal for a cash and shares deal before accepting the Chevron deal at a lower value.

The Chevron deal, also in a mix of cash and shares, was worth about $63.50 per Anadarko share at Tuesday’s market prices. Anadarko’s board rejected the offer from Occidental on the grounds that there was too great a risk that the deal could not be completed, people familiar with the situation have said. Like Chevron, Occidental has focused on the appeal of Anadarko’s assets in the Permian Basin of Texas and New Mexico, the heart of the US shale oil boom. Vicki Hollub, Occidental’s chief executive, said in a statement: “Occidental is a leader in using technological innovation to create value, and we will deploy our expertise to enhance the performance and productivity of Anadarko’s assets not only in the

Permian, but globally. Occidental and Anadarko have a highly complementary asset portfolio, providing us with a unique opportunity to realise significant operating, cost, and capital allocation synergies and achieve near-term cash flow accretion.” She added: “We have been focused on Anadarko for several years because we have long believed that we are ideally positioned to generate compelling value from a combination with them. We look forward to engaging immediately with Anadarko’s Board and stakeholders to deliver this superior transaction.” News of the offer sent Occidental’s shares sharply lower in premarket trading. They were initially down about 7 per cent at $57.98.

Cyprus garners strong demand for debut 30-year bond deal Mediterranean island nation has turned around economy since deep recession ADAM SAMSON

yprus has seen strong demand for its inaugural 30-year bond sale in the latest sign of the country’s dramatic rebound since a fiscal and economic crisis six years ago. The Mediterranean island nation garnered more than €5.9bn in orders, well beyond the €750m on offer, according to terms seen by the Financial Times. The country also drew €4.9bn in orders for five-year paper. The offerings were expected to price later on Wednesday. This represents the first time the country has sold debt with a 30-year maturity, and it comes three years after the country emerged from a painful bailout programme, in which it borrowed roughly €7.5bn from the eurozone and International Monetary Fund. It has found more stable foot-

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ing since losing access to international capital markets in 2013 amid troubles in its banking sector and deteriorating public finances. The countr y’s economy has grown ever y year since 2015, according to official data. It contracted 5.8 per cent at the depths of its downturn in 2013. Last year, gross domestic product increased 3.9 per cent, exceeding the 1.9 per cent pace recorded for the eurozone as a whole. Cyprus also now maintains a BBB- rating at Standard & Poor’s and Fitch — with both rating agencies having upgraded the country to the mainstream investment grade rankings last year. Moody’s still rates Cyprus at Ba2, leaving it in the speculative-grade territory favoured by investors with a higher risk appetite. Investors more broadly have @Businessdayng

been snapping up riskier debt in recent months as they seek out higher returns amid persistently low rates. An abrupt halt to the Federal Reserve’s rate-rising regimen and a slowdown in the European Central Bank’s tightening plans have both helped to create a better backdrop for bond investors, Michael Krautzberger, head of European fundamental fixed income at BlackRock, said on Wednesday. “Monetary conditions have eased quite a bit recently,” he said at a press event in London. Mr Krautzberger added that the European economy may “be around a turning point” after a sluggish conclusion to last year and weakness early in 2019. Barclays, Goldman Sachs, JPMorgan, Morgan Stanley, Deutsche Bank and Société Générale were the banks handling the deal.

Thursday 25 April 2019

BUSINESS DAY

ANALYSIS

FT Could Donald Trump be impeached?

With Democrats controlling the House the door to impeach the president has opened KADHIM SHUBBER, FAN FEI AND NIKI BLASINA

mpeaching Donald Trump has been talked about since he took office. Now the revelations from Robert Mueller’s 448page report have intensified calls from some Democrats to turn that talk into action. The report did not accuse the president of crimes relating to conspiracy with Russia or obstruction of justice, but the evidence laid out by the special counsel has fuelled claims by Mr Trump’s critics that he is unfit for office. Democrats are split on whether to wield the power of impeachment, with the party’s establishment, led by Nancy Pelosi, speaker of the House of Representatives, preferring to focus on the 2020 election as the way to oust the president.

Others, such as Elizabeth Warren, the Democratic senator who is trying to win the party’s nomination for the upcoming presidential election, have urged Democrats to begin impeachment proceedings despite the risks: “There is no political-inconvenience exception to the United States Constitution.” Any attempt to remove Mr Trump would be a bitter, partisan affair, because the president has solidified the Republican base behind him. So far, polls suggest the public has a limited appetite for removing Mr Trump through impeachment, despite his relative unpopularity. Recent polling has shown that around a third of voters support impeachment, while 48 per cent oppose it. What is impeachment? Impeachment is the process that the US constitution provides for removing the president, vicepresident and other civil officers, such as judges, from office. The test for impeachment is ultimately a political one. Article II of the constitution states that a person can be impeached for “treason, bribery, or other high crimes and misdemeanours”. Article I gives the House the power to bring impeachment proceedings and makes the Senate adjudicate the case. The phrase “other high crimes and misdemeanours” has led to debate over what exactly is an impeachable offence. The role of Congress makes this superficially legal affair a partisan process.

“An impeachable offence is whatever a majority of the House of Representatives considers it to be at a given moment in history,” said Gerald Ford, the former US president, in 1970, when he was a representative. No US president has been removed from office by impeachment. Two have been impeached, and another, Richard Nixon, resigned before he could be, when it became apparent he had little support in Congress. What does this mean for Donald Trump? The Democratic majority in the House opens the door for an attempt to remove Mr Trump from office, even as some Democrats view such a move as an unhelpful distraction from issues such as healthcare and tax cuts. Democrats have used their control of the House’s various

committees to mount investigations into Mr Trump’s administration and his personal affairs. They have not, however, opened an impeachment investigation. The judiciary committee, led by Jerrold Nadler, a Democrat from New York, would be responsible for such an investigation. It could hold hearings, just as it did in the Watergate affair, before voting on whether to recommend impeachment for a full vote in the House. The Senate, on the other hand, still has a Republican majority. Any successful campaign to remove Mr Trump from office will need to convince Republican senators to vote against a president from their own party. The strength of the president’s support among Republican voters means Senate Democrats would probably struggle to persuade enough of their conservative colleagues to win a two-thirds vote. The situation could still change. A host of investigations by federal, state and congressional bodies continue to surround Mr Trump and the facts they unearth might change the political calculus for Democrats and Republicans. Revelations from these investigations could turn the threat of impeachment into reality. Mr Trump may survive, with his base fired up by the political warfare. Or he could become the first US president to be removed from office by impeachment.

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Colony Capital: the mixed investment record of Tom Barrack Some believe the longtime friend of Donald Trump has been a poor steward of other people’s capital MARK VANDEVELDE

s the global recession deepened in 2008, Tom Barrack was in his element. Over the course of two decades, the chief executive of Los Angeles-based Colony Capital had carved out a reputation as a real estate investor who placed winning bets when others ran scared. So, at the bidding of a longtime associate, Mr Barrack set off for Las Vegas to meet Michael Jackson. The king of pop was in a bad place. He had defaulted on the mortgage on his Neverland ranch in California, a country-style house with its own zoo, and no bank would help. “You have my family and my life in the palm of your hand,” Jackson would tell those around him, according to his manager Tohme Tohme, who had helped Mr Barrack raise money in the Middle East, and was the man who invited him to Las Vegas. “Please don’t hurt me.” Mr Barrack sensed an opportunity. Using some investor money, he bought the $23m Neverland loan and cancelled a plan to auction off the property. Jackson, spared from the threat of eviction, was not given a fixed deadline to pay off the debt, which passed to a Colony private equity fund backed by some of the largest public pension funds in the US. The deal helped solidify an image of Mr Barrack as an international dealmaker like no other. Bald and often bronzed from his long days on the world’s polo pitches, Mr Barrack seemed to know everyone everywhere — from the show business elite of Hollywood to royal families in the Middle East, insiders of the Reagan White House, Dallas billionaires and even a New York developer and casino owner turned reality television star named Donald Trump, 30 years before he reached the White House. In Mr Trump’s Washington, he has come close to real power. Mr Barrack spoke at the 2016 Republican convention in support of Mr Trump’s candidacy, and helped raise a record $107m as chairman of the president’s inauguration committee. He introduced Mr Trump to campaign chief Paul Manafort, who is serving a prison sentence for financial fraud, and hired Rick Gates, Mr Manafort’s former deputy on the campaign, to cultivate business opportunities in Washington. He participated in an effort to sell nuclear reactors to Saudi Arabia, according to a report issued by a congressional committee, and his firm provided office space for a December 2016 meeting between an associate of Vladimir Putin and Jared Kushner, the future US president’s son-in-law, according to the report by special counsel Robert Mueller. But despite an investment career that set Mr Barrack on a path to influence and fortune, some believe he has been a poor steward of other people’s capital. Data seen by the Financial Times indicate

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a performance record for Colony funds which has been, at best, mixed. “He’s been bad for investors and made hundreds of millions of dollars for himself,” says one investor, offering his opinion of a record that includes deep losses on some of his biggest investments. People close to Colony reject that assessment, and the 71-year-old Mr Barrack is adamant he will prove his doubters wrong. Colony Capital is “the dominant factor in my and my family’s pride, reputation and future”, the Colony boss told stock market analysts last year. “And I don’t intend to leave it tainted, or unattended.” A 1988 Manhattan property deal changed the course of Mr Barrack’s life. His mission was to sell the Plaza Hotel at the corner of Central Park, which his then boss, the Texas oil heir Robert M Bass, had bought as part of a larger deal. Mr Barrack fetched a price of $400m — more than anyone had ever paid for a single hotel before. The buyer was Mr Trump. Four years later, with property prices falling, Mr Trump was forced to hand over a 49 per cent stake in the hotel to his creditors. But the deal made Mr Barrack’s name, enabling him to strike out on his own and raise his first $185m fund in 1991. He picked a good time: the US government, having bought $400bnworth of real estate assets over a decade of banking failures, was offloading them at a discount. His earliest deals made a 60 per cent profit, according to data from Preqin, an independent research group. For two decades Mr Barrack participated in some of the world’s biggest property transactions. He took over the British cinema interests of MGM in 1995, creating Virgin Cinemas in partnership with Richard Branson. Three years later he bought London’s Savoy Hotel alongside Blackstone, which was on its way to becoming the world’s largest private equity company. More recently his performance has been less impressive. His largest ever fund, raised in 2006, lost more than half of the $4bn it invested, pension fund accounts show. The losers included public retirement systems in Texas, Pennsylvania and New York City. But a median real estate fund raised the same year returned all its original capital with a 14 per cent profit, according to Preqin. The Neverland investment probably has not helped. The ranch is still on the market; in February a real estate agent cut the asking price by 70 per cent, to $31m. (People close to Colony insist the ultimate outcome is still unknown.) But the worst setbacks involved bigger investments, such as a 2007 deal with Frank Fertitta, the casino heir best known for turning Ultimate Fighting Championship into a global mixed martial arts empire. Colony provided equity financing for an $8.8bn leveraged buyout that took Station Casinos private and enabled Mr Fertitta and his family to cash in $300m of shares in the @Businessdayng

company his father had founded in the 1970s, while remaining in charge. Two years later, the company entered bankruptcy and Colony lost almost all of its $2.6bn investment. Mr Fertitta remains chief executive, under new investors. A confidant of Mr Barrack says the troubled deals were struck at a turbulent time for all investors, and that other firms not only lost money but had to close shop permanently. The sheer diversity of Mr Barrack’s portfolio make it difficult to weigh gains against losses. Although Colony is traded on the stock market, its share price does not fully reflect the performance of assets it manages but does not own. Some public pension systems invest in Colony’s private equity funds, and while their disclosures offer some clues, Colony says other investors in the same funds may pay lower fees. Several of Mr Barrack’s successful investments have not been part of Colony’s funds, and the firm has declined to say who the investors were, or how much they gained. One such deal was struck in 2010, when Disney sold the Miramax movie studio to a consortium of investors led by Colony, which reportedly included the Qatar Investment Authority. The studio was sold in 2016 to the Qatar-based beIN Media Group; financial terms were not disclosed. Still, in an effort to ascertain how well his investors have fared over Mr Barrack’s 30-year career, the FT examined unaudited performance figures relating to funds that Colony raised between 1991 and 2015. The numbers were originally compiled by Preqin, which confirmed that its own records matched the figures seen by the FT. They suggest a wide variation in what investors have received for every dollar they put in: $1.95 for a successful fund raised in 1998; as little as $0.45 for an ill-fated vehicle set up shortly before the crisis; between $1.14 and $1.63 for four funds raised since 2011. Adding the data for all 18 funds together, those figures suggest that investors lost about 3.7 cents of every dollar they invested. That conclusion is disputed by Colony, which queried the Preqin data on the grounds that that information uses net returns rather than gross returns, which it believes are a more accurate representation of performance. Colony provided an alternative set of performance figures for 11 funds, although it excluded the fees paid by investors and declined to say which number related to which fund. Its figures exclude five of the funds covered by the Preqin data — including two that racked up losses of nearly $1bn — on the grounds that they were part of joint ventures, at least four of which Colony has a 50 per cent stake in. The firm said two of its eight socalled “opportunity funds” had recorded gross returns of over 100 per cent since their inception and that the four debt-related funds raised after the financial crisis had each produced gross returns above 10 per cent a year.

Thursday 25 April 2019

BUSINESS DAY

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Thursday 25 April 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

WeSabi secures N12m funding from ARM’s DAAYTA programme FRANK ELEANYA

eSabi, an online platform that matches clients with domestic workers within their neighbourhood, has emerged the winner of a N12 million funding at the 2019 edition of the Deji Alli ARM Young Talent Award (DAAYTA). The event organised by Asset & Resource Management Holding Company Limited (ARM) held on Friday, April 12 at the Four Points by Sheraton Hotels, Victoria Island, Lagos. A statement sent to BusinessDay explained that the DAAYTA programme was inaugurated in 2015 by ARM to honour the company’s founding CEO, Deji Alli. It is part of the company’s CSR efforts to educate and empower young entrepreneurs to make meaningful socio-economic impact in their immediate environment and the nation at large. The 2019 edition opened applications in November 2018 with more 500 young business owners applying. 20 businesses finally made it to the initial selection stage. The number was eventually cut to 6 top candidates among which was Murtala Sani founder of WeSabi. A team of four judges comprising of Victor Asemota, Africa partner for Alta Global Ventures, Mitchell Elegbe, founder of Interswitch, Sadiq Mohammed, deputy Group CEO of ARM

Group, and Ndidi NnoliEdozien, group chief Sustainability and Governance Officer of Dangote Group made the final selection. WeSabi’s proposition stood out among the six finalists. Launched in 2015, WeSabi is a startup that helps people find affordable, trained and thoroughly vetted workers for both domestic and commercial needs. The platform has an array of services that it supports including washman, electronics repair, carpentry, AC repairs, and generator repairs, among many others. The services can be accessed through a website, mobile application and a USSD platform. The CEO said the goal is to build Africa’s marketplace for the blue-collar sector. The N12 million funding will be channelled towards growing the business. According to ARM, the money which will be disbursed over a period of one year also facilitates the founder’s busi-

ness plan, completion of a 5-month entrepreneurial education at the Pan Atlantic University’s Enterprise Development Centre in Lagos, as well as receives support for development of WeSabi through an accelerator programme by a reputable entrepreneurial hub in Lagos. “We are happy that this huge part of our firm’s corporate social responsibility has yet again yielded fruits by empowering a good startup business which will have a positive impact in the environment,” Uche Azubuike, managing director of ARM Academy said. “There is a lot going on in the ecosystem right now, a lot of support from experienced people and from technology as well. So I would advise the winners of to take advantage of that and make an impact.” In the fifth position was Oluwayomi Oyatoye of MechoMedics whose initiative aims to address the problem of poor adoption of the new

Secondary School curriculum in Nigerian schools specifically in the area of implementing trade courses and entrepreneurship development. Daniel Odediran of PrestPro came in fourth with his idea which aims to produce an energy-saving cooling system using clay for the preservation of freshly plucked tomatoes in order to extend their shelf life. Yusuf Shittu of “Jojolo” Neo Childcare bagged the third position after explaining that Neo Childcare as a mobile child health service provider seeks to provide top quality and affordable healthcare for children especially in low-income communities in Nigeria. Dare Odumade of Chekkit made the second position with his innovation which is an anti-counterfeiting, asset-tracking and consumer feedback analytics platform and tool aimed at addressing the problem of counterfeiting, pilferage and inefficient supply of products.

Brother’s inkjet multi-function centre targets big print volume users FRANK ELEANYA

ne of the major advantages of the digital revolution is ensuring that consumers get more value out of the products they use and manufacturing are constantly on their feet trying to one step ahead of the curve. The printer market whether in Nigeria or across the world is experiencing its fair share of innovativeness, from ensuring that users get to print using their phones, today the battle field has moved to affordability without compromising quality and quan-

tity, an indication that manufacturers are beginning to listen to consumers who want low maintenance cost and high capacity printers. Brother International’s new Inkjet Multi-Function Centre includes enough ink to print up to 6,000 pages in white and black and 5,000 coloured pages. Conventional cartridges are only good for 300 to sometimes 1000 pages. There is also an affordable refill ink that helps users minimize the risk of print head damage that arises from using none—official ink. This in turn reduces repair and replacement costs.

Its ultra-high yield ink bottles also let users make less frequent ink purchases and enjoy added convenience. It is a shift from the traditional model. Ordinarily users who need to do more print volumes would go for cheap alternatives which may often be fakes and end up damaging their print head because of the frequency of use. Buying and replacing the cartridges are uneconomical and often consumers resort to refill kits or refilled and recycled cartridges from third party to help keep the cost down. With the Inkjet MultiFunction Centre and the

refill ink, even the inconvenience of running out of ink at midnight is reduced and the more users print the more they are saving. This is because with the ink refill, Brother International is entering the market created by third parties, duplicating the entire process created by them from refill bottles to external ink tank systems and selling this on to consumers at a more affordable cost. Similarly when users need more ink, it is available in convenient volume bottles that have drip-free nozzle and resealable cap for easy storage.

Broadband Infrastructure

How Visa’s free tools help banks detect, combat fraud CALEB OJEWALE

e i ng d e f rau d e d through unauthorised card transactions is one of the biggest fears of the average Nigerian who operates a bank account. Safety of an account or at least whatever is left in it after a transaction, ranks high on why a number of Nigerians are sceptical about digital payments, or even owning a card in the first place. Aribidesi Lawal, risk manager, Visa West and Central Africa, in chat last week, which coincided with the company’s security awareness week, discussed some of the prevalent forms of cyber security attacks in Nigeria’s financial system, and how they are being combated with some tools he says have been offered to banks for free. Excerpts: E-commerce attack In Nigeria, the most prevalent fraud that we are seeing is Card Not Present (CNP) fraud, and to address it, Visa has a solution called e-commerce threats disruption (eTD). Some people will say if you use your card on a particular web terminal, afterward you discover your card being used on several other terminals. That is what we call skimming. The CBN has done a very good job of ensuring banks install AntiSkimming Devices (ASD) on their ATM terminals, but most skimming do not occur on ATM terminals, rather online. So we at Visa have raised the bar by ensuring that through innovation, we came up with eTD to combat e-commerce skimming that happens online. What we do is constantly scan web merchant’s terminals, to detect presence of malware being used to skim cards. Once we detect the malware, we immediately notify the merchant and the acquirer, then work with them to bring down the malware. Thereby ensuring that anyone who uses their card on that web terminal, the card will not be skimmed. No bank pays a dime for the eTD tool, and that way we are able to reduce the incidence of e-commerce attacks in our ecosystem. ATM Cashout This is a cyber attack on bank networks, where the aim is to use cards mostly

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

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Bank IT Security

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outside Nigeria to make cash withdrawals. While it is a big concern for us in this region, we have been able to prevent attacks and timely detect as they happen. What we use is a tool called Vita Sign. Through this tool we have been able to raise the bar, especially in places where the central banks do not have the adequate monitoring tools to combat cash out attacks. We have been able to come in and work with them to ensure that activities of cybercriminals are detected. Several attacks have been stopped in our markets whereby we had to reach out to the banks to say; please can you confirm this transaction if it was initiated by the customer, and then they come back to say No, this is fraud. This is also offered free. BIN (Bank identification Number) Attack This is when criminals use tools to simulate and check if they are able to accurately predict the correct “card number” on either a debit or a credit card. When they generate a number, they test it online, mostly with small ticket transactions like one cent or one naira to see if they have been able to accurately generate a valid card. Every bank has a BIN, so what they do is that from the BIN of one card, they try to simulate and generate other card numbers based on the BIN. They don’t do it manually but mostly use a tool to come up with a range within the BIN, and then test it on a merchant that is sometime in connivance with them. The Cyber criminals do not use one or two cards but simulate several card transactions on the web terminal to see if those cards are actually valid. If for instance a card is used in a web terminal, and gives response showing wrong CVV or CVV 2 or wrong expiry date, it means the card number is correct, but those accompanying parameters are the ones not valid. This is being solved using the Card Attack Tool (CAT), which detects account enumeration as it happens. It is also offered free to clients, and works in a similar way with eTD by constantly checking for fraudulent activities. The article continues online at www.businessday.ng

Thursday 25 April 2019

BUSINESS DAY

cityfile Agency issues ultimatum to illegal property owners in Uyo ANIEFIOK UDONQUAK, Uyo

Children queue, during a free medical outreach and feeding programme organised by STF in Gyambwa Village Mangu NAN Local Government Area of the State on Tuesday.

Navy arrests 7 smugglers, seizes 470 bags of rice in A’Ibom

he Nigerian Navy, Forward Operating Base (FOB) Ibaka, in Mbo local government area of Akwa Ibom has arrested seven suspected smugglers and seized 470 bags of contraband rice in two separate operations. The commanding officer, FOB, Toritseju Vincent, while handing over the suspects and seized items to the Nigeria Customs, said the five suspects and their wooden boat were intercepted alongside 308 bags of

50kg rice, while two other suspects were intercepted with 162 bags of 50kg rice, during routine patrol. He said the five suspects were arrested on April 22, with 308 bags of rice suspected to have been smuggled in from Cameroun while the other suspects were nabbed near Mbo River, by OronCalabar channel to the Nigeria Customs Service on Sunday, April 21, 2019 during a routine patrol by the Navy gunboats. Receiving the suspects and bags of rice from the Navy, the zonal com-

mander, Nigeria Customs Service, Kolade Iloyode, commended the navy for protecting the nation’s territorial waters. Iloyode, who was represented by Kabir Ogah, said the agency would continue to collaborate with the navy to check smuggling. “This will encourage us on the land to do more,’’ Iloyode said. One of the suspects Emmanuel Bassey from Udung Uko local government area, Akwa Ibom, said he regretted his involvement in smuggling

the contraband rice; adding that he was compelled into the business, to survive. Bassey said he sawed wood in Cameroun for two years, but had to return home because he was often harassed by hoodlums in that country. “I went to Cameroun to bring rice back to Nigeria, but on my way back, I was arrested by the navy. This is my first time in this trade. “I was promised N5, 000, but now I regret my involvement in smuggling,” he said.

Stakeholders partner to help motherless babies RAZAQ AYINLA, Abeokuta

orried by the neglect of orphans and the destitute, especially babies and children, Nigeria’s first hospital, Sacred Heart Hospital, Abeokuta, owned and operated by the Catholic Church, has partnered Omodayo Owotuga Foundation to offer cares for these less privileged persons. Omodayo O wotuga Foundation was established in 2009 in memorial of Matthew Omo-

dayo Owotuga to cater for orphans and indigent children whose parents could not pay tuition fees and take adequate care of them. The foundation had been extending charities and gifts to orphanages in Abeokuta as part of effort to remember the departed soul, but changed the system this year by partnering with the famous Catholic hospital established in 1895 to help orphans, indigent students and the destitute. Jonathan Samuel, chairman of the foundawww.businessday.ng

tion, at the handing over of Omodayo Owotuga Orphanage to Sacred Heart Hospital in Abeokuta, on Tuesday, said the foundation following the path of Omodayo Owotuga when he was still alive. “He (Owotuga) had laid the foundation of kindness before he died. At Omodayo Owotuga Foundation, we pay tuition fees of indigent students; we also pay for their exams like WAEC, GCE and JAMB. This we have been doing in addition to giving gifts to orphanages since 2019.

“Up till date, we have spent N21 million on tuition fees and academics of those children that their parents are unable to pay for their schooling. We have trained lots of students through this scheme and some of the indigent students have graduated”, Samuel said. P e t e r O d e t o y i n b o, Bishop of Catholic Diocese of Abeokuta, app e a l e d to t h e r i ch to empower the poor as a way of reaching out and appreciating God’s mercies.

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yo Capital City Development Authority (UCCDA) in Akwa Ibom State has given a one-week ultimatum to owners of illegal and unapproved structures within Uyo metropolis to remove them or risk their demolition. Enobong Uwah, chairman of the agency issued the warning during an inspection tour of structures within Uyo, explaining that the action became necessary due to the unyielding attitude of developers who,

despite repeated warnings and demolition notices, still remained adamant. Uwah, accompanied by other officials and town planners, frowned at the indiscriminate location of structure including shanties on government right of way. He said such structures distort the master plan of the capital city. He reiterated the resolve of government to restore sanity to the metropolis and urged developers to always obtain building approvals from the UCCDA before erecting any structure within the capital city.

NGO donates equipment to health facilities in Taraba Nathaniel Gbaoron, Jalingo

n o n - g ov e r n mental organisation, Mariestopes International Nigeria, has donated clinical equipment worth millions of naira to 50 health facilities across 14 local government areas of Taraba state. Modupe Dimka, the state clinical training officer of Mariestopes, who made the donation at the State Primary Healthcare Development Agency, Jalingo said that the equipment, mainly autoclaves, were to prevent infection in the course of family planning services to the communities. She commended the level of response to the services being rendered across the 14 local governments where Mariestopes currently works. “The equipment will help those rendering the services to sterilise and clean the instruments before using them on women seeking for family planning services. “We want to encourage families to have children by choice and not by chance in order to @Businessdayng

improve on the overall development of the communities as controlling births would impact positively on the overall economy and also improve the wellbeing of the women and quality of life of the people,” she said The executive secretary of the Taraba Primary Healthcare Development Agency, Aminu Hassan, who received the equipment expressed appreciation for the intervention of Mariestopes in the area of family planning. He assured the NGO of government’s commitment in providing an enabling environment for them to have an uninterrupted flow in the discharge of their mandate in the state. He called on other NGOs working in various healthcare services to partner government towards improving the wellbeing of the population. Mariestopes International Nigeria had earlier trained various categories of health workers, traditional and religious leaders in the state to acquaint them with knowledge and commodities involved in the planning process.

Thursday 25 April 2019

BUSINESS DAY

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Sterling Bank Nigeria Plc: Increased interest income underpins profit BALA AUGIE

terling Bank Nigeria PLC has been growing earnings at a blistering pace since 2016 after it surmounted the headwinds brought on by lower crude oil price that paralyzed business activities and prevented customers from paying interest on loans. While Nigerian banks are grappling with a low yield environment as evidenced in receding top lines (revenue), Sterling Bank recorded double digit growth in interest income. The Nigerian has utilized the resources of shareholders in generating higher profit as there was an improvement in return on equity and asset, while each unit invested in revenue has yielded an uptick in profit as margins spiked. Increased non interest income strengthens gross earnings Gross earnings for the year ended December 2018 increased by 13.97 percent to N152.15 billion from N133.47 billion the previous year; the growth was due to uptick in non-interest income. Interest income was up 13.16 percent to N125.16 billion in the period under review as against N110.31 billion the previous year. A breakdown of interest income shows interest on loans and advances to customers increased by 21.51 percent to N95.22 billion in December 2018 from a year ago. This means the lender hasn’t turned off the tap on lending to the economy like most banks that crave for yields on short term government securities. Fees and commission income was up 18.18 percent to N15.21 billion in December 2018 from N11.31 billion as at December 2017. Other operating income followed the same growth trajectory as it rose by 84.43 percent to N8.61 billion from N4.67 billion the previous year. Non-interest income was up 16.65 percent to N27 billion in the period under review from N23.17 billion the previous year; increase in non-interest was attributable to growth in re-

Abubakar Suleiman, managing director/chief executive officer

tail lending as well as a increase in transaction banking revenues. Reduced impairment charge bolster margins Sterling Bank’s profit before tax was up 17.03 percent to N9.48 billion in the period under review from N8.10 billion the previous

year. Profit after tax followed the same growth trajectory as it was up 14.83 percent to N9.21 billion in the period under review from N8.02 billion the previous year. The growth at the bottom line was supported by a sharp reduction in loan loss expense. Impairment charge on assets was down

55.70 percent to N5.84 billion in the period under review from N12.67 billion as at December 2017. Nigerian banks recorded double digit growth in profit as they leveraged on foreign exchange gains and a reduction in loan loss expense to emerge best performer among the Nigerian Stock Exchange (NSE) 30 firms. Amid these monumental challenges, the 30 most liquid and capitalized firm otherwise known as Nigerian Stock Exchange (NSE) 30 that have released full year results saw cumulative profit increase by 29.23 percent to N1.38 trillion in December 2018 from N1.06 trillion as at December 2017. But a breakdown of the figure shows the major driver of bottom-line were banks, who saw combined net income move by 24.92 percent to N778.85 billion in the period under review, thanks to a reduction in bad loans and foreign exchange gains that helped compensate for drop in interest income. Banks have been leveraging on the high yield environment to impetus to revenue, a strategic plan that hinders them from lending to the economy as evidenced in slow loan growth. Sterling Bank’s total operating expenses were up 26.36 percent to N66.95 billion in December 2018 from a year ago; thanks to increased investment in technology and people. Sterling Bank’s loans and advances were up 3.83 percent to N621.01 billion the previous year from N598.07 percent the previous year, with the bulk of the increase being cash backed. Net profit margin increased to 7.35 percent in the period under review from 6.0 percent the previous year. Return on equity (ROE) rose to 9.41 percent in the period under review from 7.89 percent as at December 2017. Sterling now Nigeria’s most innovative bank One of the leading lenders in Nigeria and Africa’s most agile company, Sterling Bank Plc has won the Innovative Bank of the Year Award at the 2019 edition of the Electronic Payment Incentive Scheme (EPIS) Efficiency Awards organised by the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBBS). The CBN EPIS Efficiency Awards, now in its fourth edition is held annually to celebrate financial institutions, merchants and all other stakeholders at the forefront of driving electronic payments in Nigeria. Sterling Bank according to a statement beat all other Nigerian banks in the innovation and platform efficiency categories. The awards were presented by senior officials of CBN and NIBSS at an elaborate event, which held at Eko Hotels and Suites, Lagos last weekend. Group Head, Transaction Banking at Sterling Bank Plc, Abidemi Asunmo, said the lender had always been at the forefront of efforts to provide customers with unique electronic payments channels that promote financial inclusion

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Thursday 25 April 2019

BUSINESS DAY

Investing in Rivers State

Books: Rivers kids must discover where the real treasure lies – Chidinma Ubakanwa ...As ‘Proudly Rivers’ scheme debuts Stories by Ignatius Chukwu

he founder of Creative Bibliophiles and one of the moving minds behind ‘Proudly Rivers’, Chidinma Ubakanwa, says children in the oil-rich state must be redirected to where the real treasure lies. The chartered librarian told BusinessDay in an exclusive interview in Port Harcourt that the real treasure in life lies in books and not anywhere else, and that creative ways must be put in place to goad children to such targets. He said ‘Proudly Rivers’ is a quiz and debate scheme that would explore the rich cultural heritage of the Rivers people by making the children focus on knowledge that connects with their roots. She said the scheme is no mere fun but something created to rescue Rivers children from deviance and to reconnect them to their roots. It is also keep their hands and minds busy so as to offer alternative to vice and evil. She said news emanating from most parts of the oil-rich state at the moment is not encouraging. She said this is a call to action to save the future of the state. Ubakanwa, the founder of Creative Bibliophiles, worked with another organization, Road Map, to give birth to ‘Proudly Rivers’. She said it is to look at children’s narrative, saying most of the problems in the state can be solved through education, information, and carrying the children along. A pilot of the scheme was carried out in 2018 where Ubakana and her team found that most children from

a part of Rivers State could not mention the name of the Rivers State capital and rather preferred to name the nearest town to them (Eleme) as the state capital. “We found that all other quiz programmes are national in outlook and the kids do not know their roots. So, this one tries to teach them what is in their origins. It is heritage quiz. We will make them learn about where they come from. It will make the kids know where they come from like other countries that teach citizenship.” The chartered librarian said ‘Proudly Rivers’ as a project was born out of a combination of her passion for books, her calling as a reader, and her profession as a librarian. “I love reading and I like impacting lives, no matter how little. Creative Bibliophile is about promoting culture and we want to catch them young.” She said the programmes targets schools because their syllabuses do not have enough to teach them the real things that would shape their lives especially things from their roots. She said their pilot exposed gaps that would require the quiz topics to be formed 80 per cent from the roots. “It is not good for kids to know national without knowing local matters. Some cannot speak their dialects. We want to see how we can make Rivers proud and make the children imbibe their culture and drill deep down their roots.” The group has collected cultural facts and the history of ethnic groups and localities of Rivers State from the 23 local council areas which she said can be grouped into areas of same history. The Rivers State Ministry of Education and the Ministry of Infor-

Chidinma Ubakanwa

mation would play leading roles in this scheme. She said the scheme is at mobilization level but by third term, they would hit all the schools in Rivers State for preparations for November 2019. “The state government and the councilors and senators would be part of it. Whatever we do goes back to them. Its no mere fun but to impart knowledge of their environment. If you are an Ikwerre child, you should be able to speak passable Ikwerre. Some schools try to do some cultural shows but its not enough. I was born in Rivers State and am able to speak Ikwerre fluently and am able to give back to them because I am now a citizen.” On why she wants prizes to be books only, Ubakanwa said: “Motivation is important in any competition. I

will like the children to be given books because a reader is a leader. A lot of treasures are hidden in books. That is why we want them to discover the treasures. It will help the kids change the narrative because this attitude of doing vices in the state does not give good name. If school kids can get the right focus, it would save the society a lot of fear in future. There are some inappropriate things that the kids are getting involved in. There is need to introduce programmes to engage the children. I believe that every child is a super hero. If you do not give God, you will give to Satan. This is why these children act the way they do. If the government sees what is going on when all of us come together, they would be motivated to intervene. There should be programmes such as ICT, quiz competitions, spelling bees, etc. It will help. In the past, there were exciting programmes and competitions at Isaac Boro Park and Tourist Beach which made many of us to exhibit many talents; acting, dancing, singing, etc. Children would be forced to ask; what do I showcase there?” She went on; “So, lack of creative challenges in the midst of growing children is making them to deviate to anything available including drugs, cultism, pornography, violence. Some of the kids can use tyres to make works of art. If the state establishes camps, the kids will shoot out in talents.” She agrees that the present generation of parents have tried to push the kids to positive ends but that more action is needed. “Parents are trying but we should do more and be creative about it. They have tried but

more is needed. If you tell a child not to do this, what then should the child do? Show them what they should do. These kids are talented. They should be exposed to many things especially how to make things; drawing, decorations, acting, etc. Our aim is to take them back to their roots but there are many other things that can be done. “If we say we are Rivers indigenes, we should be say to be fluent in the history and culture and current affairs of the state. Some do not even know the year the state was created. We should go back to the roots, then other programmes can come in.” Funding: Funding is always a challenge, she said. “We appeal to agencies and individuals to support this noble cause. We all must join hands to get the children on the right path. Children belong to their parents only when they are in the stomach, but once out, they belong to the public. We want the governor, deputy, commissioners, mayors, and councilors, to join this endeavourer. We must join hands to change the narrative.” Ubakanwa however showered huge appreciation to the Rivers people for their accommodating nature which made her to part of them. “I am happy to be born here and happy that I am now promoting reading culture. I am happy to be founder of Creative Bibliophile where we target orphans and other less privileged and rural children. It is my passion as a chartered librarian and member of the Nigeria Library Association and the Librarian Registration Council of Nigeria to do this. If we do not get them right now, we will not get them again.”

Total E&P grooms entrepreneurs to world class levels to meet supply needs ... Urges participants not to migrate to the cities but stay to form hubs in the community

otal E&P has launched a scheme to transform local business owners into world class entrepreneurs. To achieve this, Total has kickstarted a programme of training entrepreneurs selected from Oil Mining License (OML) 38 host communities who are usually equipped with starter packs to begun private businesses. To give the trainees a higher level of competence, Total began a ‘train-the-trainer’ scheme in Port Harcourt, Rivers State, on Thursday, April 18, 2019, at Voyage Hotel on Ken Saro Wiwa Road (formerly Stadium Road). Resource persons who spoke at the event said it is crucial to transform the CEOs from skilled persons into business men and women, saying skill or talent alone does not put food on the table but businesses do. This, he said, underlined the need to put a business line behind one’s handwork of skill.

Declaring the training open, the Deputy General Manager, Community Affairs and Development Division, James Urho, who was rep-

resented by the Capacity Development Manager, Erika Ukey-Omodu, said the aim is to groom the trainees into competent business owners.

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“This is targeted at producing self-employed entrepreneurs and to support the sustainable development needs of the communities in tandem with the United Nations Sustainable Development Goals (SDGs) on jobs for all”, he said. Urho said Total is bent on closing the gap in the employment market by producing competent entrepreneurs that can stand their own ground anywhere in the world. The oil giant said it has lined up partners that would not only train the entrepreneurs but would link them up with funding partners, markets and business openings. He said: “We are anxious to see the trainees become trainers in the coming years. The TEPNG’s Skills Acquisition Programme is one of our human development initiatives designed to impact practical training in several trades with the main objective of producing selfemployed entrepreneurs within the @Businessdayng

local economy.” He went on: “Apart from creating employment opportunities for youths and women of our host communities, the scheme is also in tandem with the desire of the Total Group to support the socioeconomic development of host communities and promote the UN SDG Number 8 on ‘Decent Work and Economic Growth”. He said this goal has, as one of its targets, to substantially reduce by 2020 the proportion of youths not in employment, education or training. He said it is always important for the trainers to always draw the attention of the trainees to the fact that there is no end to learning and that this opportunity is only the beginning of their training. “Please let them know that a great deal of humility and patience are required for them to continue learning at the feet of those of you who have mastered your respective trades”.

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Opinion

The apotheosis of Buratai The Public Sphere

CHIDO NWAKANMA

illiam Shakespearefamously itemised the three routes to greatness in Twelfth Night. He said that some are born great, some achieve greatness and some have greatness thrust upon them. More than prominence is playing out in the matter of the Chief of Army Staff, General Tukur Yusuf Buratai. The apotheosis of Buratai is proceeding at jet speed before our eyes. The dictionary provides two senses for the word apotheosis. One is “the highest point in the development of something; a climax.” The other refers to “the elevation of someone to divine status”. It is unclear which sense of the word General Burutai and his team prefer, but they are walking the path to apotheosis. The careful observer would have noticed the hagiographic articles that speak with the solidity of wind all extolling the wonders of Buratai. One example in the Vanguard recently would suffice. ”Buratai

and the birth of a new Army”. https://www. vanguardngr.com/2019/03/buratai-andthe-birth-of-a-new-army/ Written by one Udeike, the article claims, contrary to the evidence of our eyes and the report of all authorities, that the Army did a wonderful job during the elections. The piece utters absolute falsehoods with no shame. The writer claims, “I stand to be corrected that we today live in peace even after a major election is indeed a testament of the invaluable role the Nigerian Army played in ensuring that the polls were indeed credible, free and fair. For example, in states like Rivers and Zamfara, the Nigerian Army were even victims. They were loathed by the government of these states and made life unbearable for officers and soldiers on election duty. But in all of these, it didn’t stop them from carrying out their duties in a most professional manner and concerning human rights. This is the new Nigerian Army under Lt. Gen Tukur Buratai.” The construction of an alternate reality and alternate universe of a giant conquering military strategist called Tukur Yusuf Buratai took a more insidious dimension with the involvement of two universities. Vice Chancellor of Ebonyi State University Prof Chigozie Egbu led a team from the institution to the Abuja office of Buratai to announce the naming of a newly established Institute for Peace and Strategic Studies after the Chief of Army Staff. Egbu claimed that the Lt.-Gen. Tukur Yusuf Buratai Institute for Peace and Strategic Studies would “offer members of the

Armed Forces, Police and paramilitary agencies the opportunity to get higher and relevant education.” A statement by Army spokesman Col Musa Sagir affirmed that Igbinedion University, Okada, also had on April 15 honoured the Nigerian army by naming its Centre for Contemporary Security Affairs after Gen. Buratai. Vice Chancellor Prof Lawrence Ezemonye said Igbinedion University acted on a January 2017 proposal for the centre. The Tukur Yusuf Buratai Centre for Contemporary Security Affairs would “interrogate emerging security challenges of local and global concerns.” The big one would happen on May 4 when Lt Gen Buratai takes his selflionising mission to primary schools with the launch of a children’s storybook. Dr Abubakar Mohd Sani is the nameplate author of The Legend of Buratai described by the Army as “about the exploits of the Nigerian Army over insurgency and insurrections in Nigeria under the leadership of Gen. Buratai in a fictional style narrative of children’s literature”. Buratai is nurturing under his command of the Nigerian Army a cult of personality and hero worship that ascribes to the head of an institution attributes that belong to the collective. A troubling question is: to what end is this elevation of Buratai? What does Buratai worship represent? Here is a general under whose watch Nigeria has become a security nightmare. Buratai’s Commander-in-Chief delivered a verdict on the performance of

‘

Is the commander in chief aware of the evolving cult of worship of his Chief of Army Staff?

the Army in his Easter message on April 19. President Buhari does not see any reason to celebrate the security situation, the claim to fame of Buratai’s Army. The President lamented: “Our nation is currently gripped with gloom over unfortunate killings, kidnappings and violence, as seen in the recent tragic incidents in some states of the federation.This administration will do all it takes to adequately equip and motivate our armed forces and other law enforcement agencies to enable them successfully confront these security challenges. We will not allow merchants of evil and death to overwhelm the nation. Under my watch, the nation will triumph over them – terrorists, bandits, kidnappers and the like.” What is Buratai’s claim to fame? Or what is this script of adulation? The Army claims it is for the extraordinary feat of defeating Boko Haram and ensuring peace in the land. Please do not laugh! Is the commander in chief aware of the evolving cult of worship of his Chief of Army Staff? As a public officer, does the naming of study centres and such other honorifics and gifts not offend the prescription of section 6 of the Code of Conduct for Public Officers? What is the end goal of these moves by a man hailed as a strategist? To what end?

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.

The maturation of Nigerian democracy, 1999-2019 (3)

ik MUO

ast week, we x-rayed three key features of Nigerian democracy at maturity: democracy without democrats, a cashpropelled process and a full-blown war. Today, we identify the other features of the Nigerian democracy at maturity. Before going further, I wish to remind us of the two greatest Nigerian democracy quotes by (former) Comrade, Adams Oshiomhole, chairman of the ruling APC; that those who cannot withstand rigging should not go into politics and that whoever joins the APC has his or her sins cleansed. Out of the abundance of the heart, the mouth speaketh and these statements by the shining light of Nigerian democrat, shows the state of our democracy at maturity. In other democracies, the voters are supreme because votes are counted and the votes count. In Nigeria, we organise something that looks like an election but the final say belongs to the lawyers and judges, the courts and tribunals. Our twotier electoral system starts with pseudo elections and ends at the tribunals. That is why as at April 1 2019, APC has 8 seats at the National Assembly without any occupants. The seats have been ‘won’, but the courts and tribunals are being awaited to determine the rightful occupants of those seats! It is not an APC affair because PDP also has one of such issue in the strange and truly Nigerian scenario. As at the first week of April 2019, 736 petitions have been lodged at the various election tribunals. And that is why political pundits are still very cautious in the permutations and combinations regarding 2019 elections because even though voting has ended, most results are yet to be declared by the tribunals. And I ask; is

there any need to waste resources and raise tempers and tensions organizing elections? Why not ask the courts and tribunals, through their agents (lawyers and judges) to determine the winners ab initio? In this scenario, two or three candidates would step forward and declare themselves as winners and the courts would rule on the matter: case finished! We went to America and copied Presidential democracy but when we returned here, we turned it into democracy of (and for) the president. In Nigeria, democracy is what the president says it is. In fairness to PMB, this brand of democracy was introduced by OBJ. It was in Obasanjo’s do-or-die era that 3 legislators would impeach a governor in a 25-member state assembly; where some people signed impeachment papers from EFCC cells and when an idle civilian could kidnap a governor because he had presidential cover. What PMB has done is to raise the bar on the theory and practice of this Nigerian invention; democracy of the president. The president, the head of one arm of our government declared the entire judiciary too dirty to do its job and totally rubbished that arm of Government. The same president spent three years doing roforofo fight with the head of the legislature. And in the past few months, the president has bluntly refused to sign all the bills presented by the legislature though I know that his executive pen is eagerly awaiting the 2019 budget. This one he will surely sign, even though he may express his reservations after appending his signature. In Nigerian democracy and politics, the civil service and public institutions are fully involved with unarguable partisanship. For years, we have witnessed the partisan activities of the police, EFCC and even INEC. This year, the army came out in full force and got itself tainted. But even the civil service has become openly partisan. That is why the Head of Service, Mrs Eyo-Ita congratulated the president on his re-election. The highest however was when Grace Gekpe, Permanent Secretary, Ministry of Information and allied services congratulated the Minister of Information, Lai Mohammed for destroying the Saraki Dynasty in Kwara (after the national

‘

We went to America and copied Presidential democracy but when we returned here, we turned it into democracy of (and for) the president

elections) and assured him of greater support in the governorship polls. There are still other features of the matured Nigerian democracy. Godfatherism has been raised to a fine art (even though some of them were humiliated at the just concluded election); inconclusiveness is an inescapable part of our democracy; we play the politics of envy and we have a strange scenario in which the Local Government is a tier of the federation and yet they are swallowed by the imperial governors of their various stateswithout exception. Voter-behaviour is largely determined by ethnic and religious biases; issues and public debates weigh nothing in the electoral scale and local political philosophies are on the rise, like iberiberism, which according to Chido Nwakanma, promotes ofushiarism (rule by one man) instead of ohashiarism (rule by the people) and Kwakwansiya characterized more by dress codes rather than a set of codified political principles and practices. One of the core aspects of our matured democracy is rigging: if it is not rigged, then, it is not a Nigerian election! The only thing that matters is the extent and methods of rigging: whether it is scientific, crude, raw or in your face. And then, we have the electoral victory through remote control. If you doubt it, ask President Buhari who declared that his party won the Osun Election through remote-control. The features of a matured Nigerian democracy is still an emerging field of study and more will be unfolded in due course. Obama told American people when he won his reelection that ‘whether I earned your vote or not, I have listened to you. I have learned from you. And you’ve made me a better president. And with your stories and your struggles, I return to the White House more determined and more inspired than ever about the work there is to do and the future that lies ahead’. Those who wish to hear this kind of speech from a Nigerian President under the matured Nigerian democracy, are living in a dreamland! Other matters: Nigerian university education; it is finished! We are still within the Easter season and even non-Christians will remember the final

words of our Lord Jesus before He gave up his ghost on the cross. He said: It is finished! This short sentence has been subject to various interpretations, one of the most popular being that Christ, through his voluntary death, has summarily dealt with all the afflictions of the past, present and future generations of believers. But that is not my concern today. I have just heard a worrisome news about our university education; that NUC is grappling with application for licenses for 303 private universities, including the proposed PMB University being promoted by the one and only Aisha Buhari! When I heard this news, the only thing that came to my mind was: It is finished and by finished, I meant FINISHED! I don’t want to dwell on the Buhari University, being proposed by a family that is so poor that the presidential forms (2015 and 2019) were bought by kind-hearted dogooders, and whom we have just been told, are poorer today than they were in 2015. My concern is how our currently poorly funded, staffed, equipped and supervised universityeducation can accommodate the influx of more than 303 universities. I consciously say ‘more than 303 universities’ because several public universities are also in the ever busy pipeline. And my own applications for three university licenses (for technuzu, management sciences and restructuring studies) are still on the way! Those who want to understand what I am saying should take a cursory look at our private schools. It started in trickles, turned into a deluge and ended up at the current stage where the various state ministries of education do not know the number of schools they are supposed to be supervising. As an elder, and one that is okala-madu, okala-muo( half human, half spirit), I dare say that in the next 10 years, our university education will be like our private schools of today. And that is when we will understand that it is really finished! And by that itme, it would have been too late!

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

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