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Buhari, Atiku hopeful of victory amid uncertainty ... as INEC chair opens national collation centre ... PDP, CUPP ask commission to declare results now OWEDE AGBAJILEKE, Abuja

s Nigerians await the announcement of the results of Saturday’s elections by the Independent National Electoral Commission (INEC), the two major candidates in the Presidential election, Muhammadu Buhari of the All Progressives Congress (APC) and Atiku Abubakar of the People’s Democratic Party (PDP), have expressed hope of victory at the polls. Atiku, a former vice president, on Sunday confirmed that the initial indications from the party’s Simultaneous Vote Count indicate victory for him, and so he was optimistic of winning the presidential election. Earlier, after casting his ballot at Niyam Polling Unit in Sarkin Yara ‘A’ Ward in his hometown, Daura, Katsina State, on Saturday, Buhari, incumbent presiContinues on page 46

Inside Understanding the economy of Nigeria’s 36 states – North East & Adamawa

R-L: Mahmood Yakubu, chairman, Independent National Electoral Commission (INEC); Mustafa Lekki; Tijjani Ahmed Muazu, and May Agbamuche Mbu, national commissioners, INEC, at the opening of National Collation Centre for the Presidential and National Assembly election results in Abuja, yesterday. Pic by Tunde Adeniyi

Electoral violence shows Nigeria still struggling with democracy A ODINAKA ANUDU

t 2.25pm on Saturday, a group of gun-wielding ballot snatchers stormed a polling station at Ajao Estate, Airport Road, Lagos, shot sporadically in the air and destroyed all the sensitive and non-sensitive materials for

Booth 006. Frightened voters and INEC officials scampered for safety, ending people’s hope of electing their choice of leaders in that area. Several voters were injured in the melee and they vowed not to vote again. “I will not die because I am trying to vote in people to occupy public offices,” Nkechi

Emelonu, one of the voters, told a BusinessDay correspondent who monitored the election in the estate. “After spending three hours in the sun with my baby on my back, it is hard to swallow that I couldn’t vote and the votes before me would not count,” the 36-year-old mother of two said.

Also, at Ago Palace Way, Okota, Lagos, young men said to belong to Oodua People’s Congress (OPC) stormed polling stations in the area and set sensitive materials ablaze. One Ademola, said to be the leader of the group, was mobbed while another person was murdered in Continues on page 46

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Nigerians overlook insurance policies as rising poverty takes toll BALA AUGIE

very day, Emeka Chukwuka, 32, a graduate of one of the Nigerian universities, goes to Ojuelegba bus-stop in Lagos, Nigeria’s commercial capital, where he and other job-seekers glance through the dailies at newspaper stands. Last Tuesday, he visited his usual stand and argued over a number of issues. His biggest argument was on the insurance industry. Chukwuka said he did not have any form of insurance and having one was the least of his problem. He was living in penury and needed money to solve his immediate needs. “A lot people you see here are poor and unemployed. Any talk about insurance is absurd to us,” said Chukwuka. Insurance companies in Africa’s largest economy are losing billions of naira in revenue as deteriorating economy continues to hinder the likes of Chukwuka from taking up a cover. Insurance is a barometer for measuring human development index because during a period of boom, people acquire properties and are motivated to insure them against catastrophic events such as fire, accident and flood. “Onceeconomicactivitiesstagnate, and disposable income is squeezed, nobody will be thinking of insurance,” said Ganiu Shefiu, head of actuarial services, Cornerstone Insurance plc. Shefiu, who is an associate of Society of Actuaries United States of America (USA), said much of the revenue insurers declare is from the corporate world and that is because companies are mandated to do insurance.

“The bulk of money should be coming from individuals, but their disposable income has been under pressure because of economic conditions,” said Shefiu. In terms of income, Nigerians are becoming increasingly poorer, with 8,000 citizens jumping into the extreme poverty train on a daily basis, according to Brookings Institution. With 87 million Nigerians living below the $1.90 baseline, almost one out every two nationals (44 percent) lives in extreme poverty. Unemployment rate in Nigeria averaged 12.31 percent from 2006 until 2018, reaching an all-time high of 23.10 percent in the third quarter of 2018 and a record low of 5.10 percent in the fourth quarter of 2010. While GDP expanded by 2.34 percent in the fourth quarter of 2018, the country’s per capita income is abysmally poor as population is growing faster than the economy. But Moronfola Monsuru, actuarial analyst at Wapic Insurance plc, said the risks are there whether the economy is good or bad. Monsuru said insurance is always the last on people’s scale of preference, and most firms are focusing on retail business as the probability of huge claims is lower. “A deteriorating economy cannot stop fire from engulfing a building. You have to manage your risk to mitigate losses,” said Monsuru. Aside from deteriorating economy, insurers are beset with myriad of challenges such as apathy towards insurance. Weak regulations take their toll as penetration remains low.

•Continues online at www.businessday.ng

Again, trucks vacate Apapa bridges for election CHUKA UROKO

or the third time in just one month, trailers and tankers on Saturday vacated roads and bridges in Apapa, Lagos, in deference for the on-going general elections in Nigeria. Both the bridges and the roads were empty as well on Sunday such that, save for a few security personnel manning the entrance routes, it was quite scary driving through the bridges. That was all for the elections. The first time was a couple of weeks ago when President Muhammadu Buhari came to Lagos to canvass for votes as the presidential candidate of the ruling All Progressives Congress (APC). Dramatically, all the trucks left every route to Apapa for the visiting president to have free, unencumbered access to the Teslim Balogun Stadium, venue of his campaign rally. The second time the Apapa roads and bridges experienced relief from the heavy load of the trucks was Saturday, February 16, when the Presidential and National Assembly elections were originally scheduled to hold but were later postponed few hours to commencement of voting. A visit to the port city on that day showed clearly that the city was also shocked by the news of the unfortunate postponement. The city was not only quiet, but also deserted. The situation in Apapa that fate-

ful Saturday underpinned the depth and dimension of that postponement which many described as a national tragedy. All the rampaging trucks, their starry-eyed and aggressive drivers, and the security agencies for whom Apapa’s misfortune has become a great opportunity, were quiet. The question that readily comes to mind in these developments is, where do all these trucks disappear to on these remarkable days? Again, who gives this instruction or order that is comprehensively obeyed without exception? In August last year, Acting President Yemi Osinbajo came and gave a 72-hour presidential order for the trucks to vacate the bridges and nobody listened to him. The order was flatly disobeyed and disregarded. The question people have asked and continue to ask is whether the vice president is a toothless bulldog or he, like politicians of his ilk, never meant what he said, or did not say what he meant. Deliberately, the concerned authorities in the Apapa case have been punishing residents of this port city along with business owners, motorists and sundry stakeholders who have been denied access to all the routes to this city by a tiny fraction of Nigerians whose business interests are the cause of the suffering that has become a major feature of life and living in Apapa.

•Continues online at www.businessday.ng

L-R: Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Onyenwechukwu Ezeagu, chairman, Association of Stockbroking Houses of Nigeria; Wale Agbeyanji, group MD/CEO, Cordros Capital; James Ilori, CEO, First City Asset Management; Dayo Obisan, president, Fund Managers Association of Nigeria (FMAN), and Hajara Adeola, past president, FMAN, during the launch of Mutual Fund Trading Platform at the NSE in Lagos. Pic by Pius Okeosisi

Africa’s biggest democratic exercise marred by sad tales of violence, voter intimidation LOLADE AKINMURELE

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his country is something else, they just burnt our votes, can’t you see, they just burnt our votes.” Those were all the words a Nigerian voter, female, could utter in a 22-second-long video which showed disturbing scenes of electoral violence in the Lagos suburb of Okota. The video would end abruptly and her voice would fade in the pandemonium as she, along with scores of other voters, hurriedly fled the scene which was now tainted by smoke from burning ballot papers and other electoral materials. They were running from an angry weapon-wielding mob. Throughout the video, there was no sign of the local police, whose responsibility it was to ensure fair and peaceful elections, as an otherwise

largely peaceful election was marred by some cases of violence and voter suppression. Dozens fell victim to yet another round of decade-old bombings by Islamist militants up north in Maiduguri, capital of Bornu State, while brutal killings reigned down south in the oil-rich Rivers State, as reports of sporadic violence piled across Nigeria amid Saturday’s Presidential and National Assembly polls. People were killed and in milder cases battered and injured, while election materials were set ablaze by armed bandits and voting delayed for hours in some polling centres mainly in southern Nigeria. Situation Room, a coalition of more than 70 civic groups monitoring the election process, said it observed violent disruptions by political thugs that snatched and burnt ballot boxes and papers. The group

reported that 16 people were killed in electoral violence across eight states, six of them from Rivers State alone. Police spokesman, Nnamdi Omoni, said unknown gunmen shot dead a former local government leader and his brother in the Andoni area of Rivers State. Eye-witness videos recorded by terrified voters and shared on social media platforms showed casualties may have been slightly higher than the 16 reported by Situation Room, with 19 people killed as at the last count. The electoral body in charge of the voting process, the Independent National Electoral Commission (INEC), said it would postpone elections in some parts of the affected states from Rivers to Anambra and Lagos States, where polls could not

Continues on page 46

How Lassa fever endemic became a thorn in Nigeria’s flesh ... old habits, lack of awareness fuel spread ANTHONIA OBOKOH & MICHEAL ANI

he Federal Government is yet to find a mechanism for putting an end to the recurring outbreak of Lassa fever endemic that has plagued citizens for several decades now. Reports of cases of Nigerians affected with the virus keep resurfacing year in year out. Barely 40 days into the start of 2019, a total of 327 cases of Lassa fever were reported across 20 states and the Federal Capital Territory, with 72 deaths recorded, according to data obtained from the World Health Organisation (WHO). Statistics from Nigeria Centre for Disease Control (NCDC) show that Lassa fever endemic has been on the increase since 2014 when the agency started tracking the data. In 2014, confirmed cases and deaths from Lassa fever in the country stood at 110 and 36, respectively. These numbers fell in 2015 to 40 cases and 25 deaths, but the gains

were not sustained as the number increased abruptly to 165 and 89, respectively, in 2016. In 2018, the number of confirmed cases of the disease increased astronomically to 633, from 312 in 2017. Similarly, the number of deaths rose to 171, from 78 the previous year. Apart from the general public, the disease has dealt a heavy blow to health workers who attend to patients without prior knowledge that the patients are suffering from the ailment. Data from the WHO shows that as high as 12 cases have been reported among healthcare workers in seven states, notably in Edo (four), Ondo (three), Ebonyi (one), Enugu (one), Rivers (one), Bauchi (one), and Benue (one), including one death in Enugu State as at February 10, 2019. The above raises serious questions regarding how Africa’s largest economy is responding to tackling and ending the disease, especially as the country has battled the virus almost every year for well over 50 years since the first case was reported in 1969 from three missionary nurses

who died after caring for an infected obstetrical patient. The number of reported cases has constantly headed north, with a majority of such cases prevalent in Edo and Ondo States. Both states have recorded a combined 212 cases in the early start of 2019, with the former recording 108 while the latter had 103 cases, according to WHO. The country has responded to and contained these outbreaks, but further steps must be taken to detect them earlier to prevent illness and death. Preparedness for pandemics and healthemergencieshasahighreturnon investment, estimated at $2‒7 for every $1 committed, according to experts. However, industry experts say Nigeria sees reoccurrence of outbreak due to the absence of vaccine against the virus and the impractical control of the rodent host population. They note that control measures are limited to keeping rodents out of homes and food supplies and also maintaining proper personal hygiene.

•Continues online at www.businessday.ng

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BDCs alert public over fake $100 bills import from India HOPE MOSES-ASHIKE

he Bureaux De Change Operators have alerted the public over on-going security investigation on $100 bills being imported from India into Nigeria. Aminu Gwadabe, president of Association of Bureau De Change Operators of Nigeria (ABCON), who disclosed the development to financial journalists after the group’s National Executive Council (NEC) Meeting in Lagos, said the $100

Over 400,000 Deltans enrol into contributory health scheme

total of 485,140 persons have so far enrolled into the Delta State Contributory Health Scheme, with the aim of brining healthcare delivery closer to the door steps of Deltans, the government has said. The state government made the disclosure during Citizens’ Engagement Forum on Delta State 2019 Budget, organised by the Ministry of Economic Planning in Asaba, the State capital. The government spoke through the Commissioner for Economic Planning, Kingsley Emu, who noted that the scheme had commenced but had not reached its desired target. “Government will target a minimum of 20 percent coverage of the entire Delta State population (above 1.2 million people),”he said. He said immunisation activities would increase, scale up family planning services, scale up school health activities and continue renovation and equipping of DELSUTH Oghara targeted at making it a true centre of excellence. Emu disclosed that the sum of N8.6 billion had been budgeted for the health sector in the 2019 fiscal year while N1.6 billion had been earmarked for the water sub-sector. “The Warri Effurun water supply scheme PPP model aimed at resuscitating and providing cheaper potable safe water to over 16, 000 households in the Warri Effurun environ through prepaid water meters, remains a flagship and indeed the first water supply PPP model, not only in Delta State but Nigeria,” he declared. On education, he said the government was set to establish 19 technical colleges in the state in the next four years in areas where such institutions did not exist, thereby providing one each in the 25 local government areas.

…Get CBN, EFCC approval for campaign against fake currency bill is majorly counterfeited because of huge profit margins that come with it. Some of the fraudsters’ objective he said is not only to make profit, but to undermine Nigeria’s chances for automatic membership of the Financial Action Task Force (FATF) after assessment of the country’s financial system scheduled for the first quarter of this year. Gwadabe said the issue of fake dollar in circulation has been observed and reported at the relevant

security agencies adding that the ABCON has in the interest of the economy and Bureaux De Change (BDCs) businesses, secured Central Bank of Nigeria (CBN) and Economic and Financial Crimes Commission (EFCC) backing to begin nationwide campaign against fake currencies in the country. He said rising cases of fake currencies in circulation has led to huge losses to BDC operators and the economy.

Gwadabe said that ABCON is educating the public on how to identify fake dollar bills in order to protect the image of the country in the eyes of foreign investors. “It is part of our objectives which is enshrined in our constitution as an association to eliminate the incidences of fake currencies circulation thereby enhancing the image of the country and transparency in our operations,” he said. Gwadabe said the ABCON NEC had therefore

released a guide to all BDCs on how to detect a fake dollar bill. He disclosed that there are seven dollar bills of $1, $2, $5, $10, $20, $50 and $100 and seven steps to authenticate them. “The weight of each bill is one gram, 2.61 inches wide and 6.14 inches length. It is 75 per cent cotton and 25 per cent linen. Your finger can feel thickness and texture. Besides, the portrait water mark is partly overlapped by the Treasury seal, while

the $100 bill is printed on the right side of the bill. The strip is thin, faint and runs vertically from top to bottom to the left of the watermark portrait. Also, the 3D security ribbon, also called the thread, is bright blue and vertical on the bill,” he said. Continuing, Gwadabe explained that the raised printing feels rough on the right shoulder of Benjamin Franklin portrait while the colour shifting ink works under ultra violet light.

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Nigeria’s claim against Eni and Shell could be largest-ever payment in an oil sector corruption case OLUSOLA BELLO with agency report

he Nigerian government’s decision to formally launch a $1.1bn claim against Shell and Eni in UK courts, relating to funds allegedly misappropriated for bribes and kickbacks during the acquisition of an oil block in 2011, could lead to the largest-ever payment in an oil sector corruption case. If successful, the case, launched in November 2018, could also open the door for more scrutiny by governments of deals made

Only justice to victims can end Kajuru recurring crisis, says group ABDULWAHEED ADUBI, Kaduna

he Muslim Youth Foundation Of Southern Kaduna (MYFOSKA) and the Youth Wing Of Southern Kaduna Muslims Ummah Development Association (SOKAMUDA) have called on the Kaduna State Government not to relent in ensuring that perpetrators of the killings in Kajuru Local Government Area of the state are brought to book. According to the groups, only true justice can bring to an end the recurring crisis in the area. They made the observation in a statement issued by the group and signed by Muhammed K. Bello The statement stated that the entire Muslim Ummah in Southern Kaduna is worried with “the rising number of gruesome and unwarranted murders of members of its communities across various local communities in parts of the state, especially Southern Kaduna area, evidently planned and carefully executed in a genocide-like manner”. The group alleged that “More than seven Fulani communities were attacked and destroyed; over 120 people were slaughtered and the bodies burnt. “To put the records straight, on Monday, 11th of February, 2019, about 112 people were killed, out of which funeral prayer was observed for only charred bodies of 66 persons; some were burnt beyond recognition while others could not be found. “We therefore call on the Kaduna State Government not to relent in its effort to bring to book all those involved in this dastardly act, even if to serve as deterrence to others. Also, we are calling on government and any concerned citizen to promptly respond to the growing humanitarian needs of the victims of the crises.

...education received second-least credit at 0.38% of total credit to the economy by their predecessors in the hope of winning similar awards. The two firms have received harsh criticism from an Italian judge and now await UK court proceedings According to the Economist, Eni and Shell deny any wrongdoing related to the deal. The legal case centres on the acquisition in 2011 of offshore block OPL 245-which could hold up to 9bn barrels of oil. Most of the $1.3bn is believed to have been paid.

Lawyers for the Nigerian government said they had filed a $1.1 billion lawsuit against Royal Dutch Shell and Eni in a commercial court in London in relation to a 2011 oilfield deal. The OPL 245 oilfield is also at the heart of an on-going corruption trial in Milan in which former and current Shell and Eni officials are on the bench. “It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact im-

mediately paid through to a company controlled by Dan Etete, formerly the Nigerian minister of petroleum, and used for, amongst other things, bribes and kickbacks,” the statement said. The two oil majors are embroiled in a long-running corruption case revolving around the purchase of Oil Prospecting Licence 245. OPL 245, which is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion bar-

rels, is also at the heart of an on-going corruption trial in Milan, Italy, in which former and current Shell and Eni officials are on the bench. Milan prosecutors alleged bribes totalling around $1.1bn were paid to win the licence to explore the field which, because of disputes, had never entered into production. The new London case also related to payments made by the companies to get the OPL 245 oilfield licence in 2011. “It is alleged that pur-

chase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately paid through a company controlled by Dan Etete, formerly the Nigerian Minister of Petroleum, and used for, among other things, bribes and kickbacks.” “Accordingly, it is alleged that Shell and Eni engaged in bribery and unlawful conspiracy to harm the Federal Republic of Nigeria and that they dishonestly assisted corrupt Nigerian government officials.”

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General T.Y. Danjuma and the other generals with nine lives (3) Bashorun J.K Randle

• Continued from last week

s concrete evidence that Babangida truly has nine lives (and more), the international press has gone on a feeding frenzy over the section of the film which featured the following headline: “Babangida reveals why he annulled June 12 1993 presidential election” - By John Owen Nwachukwu “...President Muhammadu Buhari had on June 12, 2018, tendered a national apology to the family of Moshood Kashimawo Olawale Abiola, presumed winner of the election, for the annulment of the election by Babangida When asked why he failed to take the opportunity to support the 1993 democratic process, Babangida said, “Everybody said so. I agree. Even my boss, OBJ, told me that. He said you had an opportunity and if that had gone through properly, history would have recorded it as your greatest achievement. But then, we discussed at length what could have transpired. Again this: I will always talk about the Nigerian mentality. I think we are always anxious. We are always in a hurry. We want things to get done in the fastest time possible. I tried to go out and talk

to the public on why we had to do this but we were overwhelmed with criticisms. Nobody wanted to listen. I think people who said that have not been fair to me because when we started the transition programme, I was in the media; I said we will be doing it step by step, by learning. Wherever we met a hiccup, we will stop, change it and move again. On this, I was honest with Nigerians. I told them that, and they would have judged me with what I said on that particular issue. But everybody wanted the military to just leave. But I did say it, that in the process of implementation, we may have a hiccup or mistake. And if we do, we would pause, correct it and then move on. Even the transition after the June 12, we gave a time span which again nobody was patient with. But we studied, we compared to either have a non-conventional election or a general election. And everybody said they wanted to see the country carry out a general election. And you can’t just have a general election within seven days. You have to plan for it. Again, if people allowed us, we said there would be a general election in this country. I think Abacha came in November. Nobody wanted to listen. Everybody was tired. I appreciate that. I appreciate it. Yes, people were bored and we envisaged it and we said it. We warned you in advance that if this happens, this is our next step. And that led us to the famous June 12.” On whether he was threatened at the time by General Sani Abacha on being head of state, he responded, “No, he couldn’t have threatened me, to be fair to him. But I knew he wanted that job at all cost. You will be reading it…” Speaking further on why he decided on the annulment, Babangida continued, “I have a conviction that if

I get involved in building this environment, I wouldn’t like to be seen as having the environment destroyed. That’s number one. I wouldn’t be part of the destruction. So, I either make sure I remain with it, and belong there, or a circumstance will come and, eventually, I will leave. When I leave, if it gets destroyed, nobody will blame me. I wouldn’t declare the result if (Professor Humphrey) Nwosu declared the result. I knew deep into this that there were consequences which will not be fair to this country. I give an example: I took part in the management of PDP and I can’t disown them because I’m part of them. I made an input into its emergence, and if you say it is the worst thing that could ever happen to the country, I cannot in all conscience sit down and say it is because I participated in it. If the transition failed, and I knew it would have fallen down, nobody would have been bothered. They will say no. I will feel guilty like after all I spent the money but it collapsed. My conscience will never forgive me. It was not a threat to my life but if it was a threat to my life, I have no problem. After all I have a bullet in me; there couldn’t have been any greater threat than that. But my fear was: what would the country end up becoming. Could the country be better? This was what we sought to establish. Could it better? If the answer is no, then, I take the blame because I should have put in place certain measures that will make it good. What we wanted was an enduring legacy. I wouldn’t say the evil was in the person who won the election, after all he campaigned for it, people saw in him what he stood for, and therefore decided to vote for him. It was the finest hour in Nigerian politi-

‘

To make matters worse, some policemen are forced to seek refuge or free accommodation in houses owned by criminals

cal history where people voted anyhow; not ethnically, religiously and so on. That was the finest moment in our political history. He (Abiola) was on the verge of winning that election. From what I saw, he was on the verge of winning that election, because by the time it was assumed that he won, officially, the official thing was not done. Results were still coming in, and it wasn’t declared. So, I think I would be deceiving myself if I say he has won. The credit of not getting it right? You wouldn’t give me; so, I accepted that I will not be given that credit no matter what I say.” As for the late General Saliu Ibrahim, his first pronouncement on becoming the Chief of Army Staff (August 1990 to September 1993) was that: “The Nigerian army has become an army of anything goes.” He added that he had never been involved in any coup plotting and the consequent disruption of the order within the military. Discipline had even broken down to the extent that it was junior officers who decided which senior officers should be promoted or demoted!! It is instructive that the film went to considerable lengths to emphasize that those officers (regardless of their rank) who launched coup d’états were those who had a following within the army and this may even extend to the other arms of the military – Air Force and Navy as well as police and the intelligence agencies. That was the case with Ibrahim Babangida and T.Y. Danjuma.

Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

Are you stagnating or trusting your skills? GrowthView

Christina Wehbe Money & Sustainability | Impact Leader| Corporate Honesty

ompanies talk about market ‘share’ or being a market ‘leader’, and as we know, a leadership role is rarely a stagnant position. Being a leader is also defined differently - for some it is about having the largest stake, highest profit-margins, most assets, or simply highest customer retention and client segments. For others, it is about the long-term growth trajectory, sustained and shifted over time and isn’t a short-term sprint to the next opportunity. For your company to be a leading firm, you need to understand your strengths and be honest on your capacity to adapt / shift to the market priorities. In today’s economy, priorities are on impact and purpose, which are seamlessly interwoven with high investment returns. It’s okay if you don’t know how to do it - it’s new for many firms. Emerging markets are the hot topic, particularly Sub-Saharan Africa and West Africa. The question is why is this an interest for

Forbes100 companies and for FinTech investors in these complex markets? Honest evaluation: Is it to fit the demand from their clients for sustainable products and contribute to global prosperity; or is it to achieve a greater market share and be the first-mover in a specific African country? First, we, as individuals and companies, should be honest with our goals and why we change our business models. That is how you start to make money, sustainably. Your skills in comparison to others: Comparative advantage is not only about strength, it’s about agility in the market. The question is, how will companies adapt to the new target of sustainability? The impactdriven ecosystem is still being defined and at infancy on a corporate level, despite the concept having around for decades. A small side note on the history of sustainability. The concept of sustainable development(which includes prosperity) evolved overtime and isn’t a new economic thought. It started before the 19thcentury and is rooted in our human nature to help. The theories further evolved with religion or spiritual writings, such as Buddhism, and was formalised in the mid-1900s, when the United Nations was officially created. Therefore, corporate sustainability isn’t a newly invented business term. It is the fruit of decades of commitments, debates, and leaders coming together with the common goal of tackling pressing humanitarian, social and economic issues. Overall, people coming together to contribute to global prosperity. Let’s stop - pause - and think, how we can both grow and contribute to prosperity.

What am I good at as a company? How will I add value and increase the ROI (return on investment) for my investors with sustainable products? What is my market strategy to enter in Nigeria or emerging markets? How agile are my people and management to adapt in to this new context? It is not a new era, such as the digital era, where companies ‘would like to’ incorporate a social strategy to their business model. It is an overall shift in how markets and governments are interlinked, tied with a common thread of sustainable growth - that is rooted in our values as human-beings to do better in this world. “Making your business model sustainable is now the big topic - and finding a way to do it meaningfully, without impacting your bottomline is the struggle the market is seeing.” Trust your investment: Economic prosperity can be achieved once we understand our individual values and communicate them - as discussed in the previous column of GrowthView “Economic benefit of collaboration - A value not shared in the game of monopoly”. The foundation of investments is trust. The same applies when we elect someone into office, there is an intrinsic value of trust. Do you trust your representative to engage on your behalf? Are your values aligned to the values of your government? Without trust, we cannot achieve either growth or prosperity. Shareholders are shifting their investments in stock markets, away from equity investments and increasingly turning them towards sustainable and impactful investments. So, for them to trust your company, be consistent.

“Our choices and decisions as individuals, aligned with our values will drive tangible change in our economies - both in Nigeria and internationally.” Choose clear Impact & Profit goals: Health, education and women economic empowerment contribute to both prosperity and growth. These sectors are measurable and tangible. As individuals, let’s communicate these priorities to help donors, corporates and governments turn their investment priorities to these growth sectors. Be consistent and take a long-term view. “What” to fund and “where”, are the big questions posed by c-levels, as they see the equity market dipping and UHNW (ultra-high net worth) investors asking for their money to achieve a social and economic impact. In sum, prosperity and growth go hand in hand, as long as we communicate and take our time in building-out sustainable investments. It is for companies to identify the high-return sectors, that will benefit from the local skills, viable demand and comparative advantage globally. Key take-aways 1. Evaluate your company honestly 2. Identify your unique skills 3. Build trust with Investors 4. Be consistent 5. Sustainable investments take time Wehbe is passionate about helping others and fighting poverty & injustice. She is the founder of GrowthView. She writes from Zurich, Switzerland. E: christina.wehbe@gmail.com. https://www.urbanemerge.com/people https://www.qeh.ox.ac.uk/alumni/christina-wehbe

Monday 25 February 2019

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comment The road to Caracas Patrick Atuanya

f you are a small Nigerian Company that is steadily expanding, would you want to continue growing bigger and adding jobs if it will most certainly get to a point where an automatic target is placed on your back by the government for being successful? From the apparent $10 billion shakedown of one of Nigeria’s most successful companies MTN Nigeria by the Attorney General of the Federation (AGF), to requests for $20 billion in back taxes from oil companies, the government of the day apparently revels in its outright hostility to private enterprise. The Federal Inland Revenue Service (FIRS), not to be left out of the party, recently directed banks to place a lien on bank accounts of up to 3,000 companies for alleged non-payment of taxes. The exercise had resulted in hardships for many businesses, including some tax compliant businesses, within the period.

This attracted comments from many tax experts particularly those at Andersen Tax, KPMG Nigeria, and PwC Nigeria. “There are key questions regarding the powers of the FIRS to place a lien on a taxpayer’s bank account and the lack of due process in doing so in many cases. We are of the view that the substitution power granted the FIRS under the relevant laws does not support the freezing of bank accounts in the way and manner the power is being exercised by the FIRS,” said PwC Nigeria. That hostility to private enterprise comes with a huge cost though. One is that Nigerian companies are rarely growing big or specialising enough to be dominant in Africa. A list of the largest (billion dollar revenue) companies in Africa shows the Southern and Northern African firms dominating both in terms of size and numbers on the list. Lack of large firms operating in a country often makes it harder for an economy to invest in Research and Development and gain skills that large firms bring. The lack of formalisation of companies also makes it less likely for them to be taxed and reduces available government revenues in the long run. Finally such attacks on corporations and small companies often deter investments. One country which has managed to systematically destroy most of its private sector is Venezuela, a cautionary tale for Nigeria on how not to treat

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private capital. Venezuelan leaders often like their Nigerian counterparts have treated oil money as all that is needed to cure ills plaguing their country, and as such derided or ignored private capital. The then Hugo Chavez administration in 2008 began forcing foreign oil companies to accept higher taxes and smaller, non-controlling stakes in oil projects amid what it described as an oil nationalization. The following year, Chavez nationalized CANTV, Venezuela’s biggest phone company, and the utility Electricidad de Caracas. Venezuela wound up nationalizing more than 1,000 companies during Chavez’s 14 years in office, including Banco Santander’s local unit. The moves eventually backfired by crippling domestic production and leaving the country more reliant on imports. The government pegged the local currency to the dollar and set price controls for basic goods in an attempt to contain capital flight and inflation that ensued. The result was a booming black market for dollars and shortages of the basic goods being sold at a loss under price controls. If it sounds familiar, it is because it is eerily similar to Nigeria’s forex crises of 2015 – 2017, which analysts say helped to quicken the recession the country found itself in and elongated it. Tyler Cowan, a professor of economics at George Mason University in a recent write up notes the dangers

‘

Venezuelan leaders often like their Nigerian counterparts have treated oil money as all that is needed to cure ills plaguing their country

that those that propagate socialist or anti-capitalist ideas pose for an economy, even if these ideologies are followed incompletely or imperfectly. According to Cowan, Chavez’s praise for anti-capitalist, anti-American regimes such as Belarus and Iran, might have been written off as political posturing, but it has continued under his successor, Nicolas Maduro. “Maduro has also failed to use his post to educate Venezuelans about the benefits of capitalism and globalization — in stark contrast to many East Asian leaders. Instead, the promotion of socialist ideas has helped to make Venezuelan society less economically robust and more vulnerable to collapse,” Cowan said. In the same vein in Nigeria, a lot of people in government who should know better are demonizing sound ideas like privatisation, free markets (Africa Continental Free Trade Area), capitalism and the private sector. The major impact this would have is to make already difficult reforms (like unbundling the NNPC, attracting more private capital for railways, toll roads and bridges, market driven FX rate, selling moribund FG assets and so on) almost impossible to contemplate or tough to build a consensus for enacting such reforms. In the end Nigeria may just be slow walking itself on to the road to Caracas, with eyes wide shut.

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

Devaluation to reduce importation

Boniface Chizea

fter Presidential aspirant Atiku Abubakar announced on the campaign trail that he was going to float the Naira and considering the position he occupies as a strong contender for the Presidency of Nigeria, I thought it was our bounden duty not to sit on the fence and keep quiet despite what we know regarding the deleterious consequences for such a policy thrust. It was better to shout out and be at peace with one’s conscience even if nobody listened. I have since then written a paper which was well considered and was generously published in which I canvassed a position which advised against such a policy thrust as such experimentations, in my humble opinion contributed in no small measure to the lackluster performance of the Nigerian economy. Not long after that I watched an interview granted by Mustafa Chike-Obi on Arise Television where he was introduced as Economic Adviser to the Presidential hopeful Atiku Abubakar during which he expounded his views, which as himself admits are radical on the policy thrusts for giving the economy a shot in the arm and I was able to connect the dots to conclude that the Position taken by Atiku Abubakar regarding floating the Naira must have been sold to him by this gentleman. Some of the content of this interview would form the kernel of this paper. I since did an enquiry on Chike-Obi’s background and found out that like myself he read Mathematics at the University of

Lagos with a First Class degree and later attended Stanford University for a Master in Business Administration whilst I had my Doctorate in Business Administration from Manchester Business School in England and it would therefore appear that we cut our teeth in Economics as part of the mandatory foundational studies for our tertiary qualifications in related disciplines. What really concentrated my attention to do this paper was a recent interview which Mustafa Chike-Obi granted during which he canvassed the view that a policy of weaker value currency could be pursued as a strategy to discourage the unbridled appetite of our citizens for importation. Well for me that was a novel position and I have been in this business since early/mid 80s. Yes it is correct to observe that one of the collateral consequences for having a weak currency is that it discourages marginal propensity to import but I have never heard it propounded as a major objective of such a strategy. Usually what one hears is that relatively weaker currency is a strategy for growing market share at the international market and sometimes for addressing balance of trade issues between countries with bilateral relations. And one of the reasons which made some economists to oppose currency devaluation in Nigeria is that we do not have the capacity to optimize this opportunity since foreign exchange earnings in excess of 80 percent is from oil whose quantity and price are fixed for Nigeria by OPEC. And since despite best efforts we have not been able to diversify the economic base of the country; not for want of trying but probably due to lack of determined and focused implementation. What devaluation as policy thrust or even as a fall out of policy measure has done experientially in Nigeria is to cause macroeconomic instability, precipitate runaway inflationary spiral, result in loss of productivity and jobs and overall worsen the misery index in the country since such importations are not amenable to be discouraged by mere increase in costs as they are structural. We cannot also in one breadth be talking of floating the currency which to all intents and purposes amounts

to leaving the determination of the exchange rate of the Naira to market forces even as there is hardly any market for the dollar in the country! How do we define as a market a situation where there is only one dominant supplier; the Central Bank with multiple almost insatiable demands from economic agents? But in the context of floating currency it is illogical to still be talking of devaluation. In such a situation the most appropriate term for loss in value is depreciation. Devaluation only arises as managed loss in value of currency in a fixed exchange rate environment. During the interview with Arise Television under reference Chike-Obi did indicate as part of the discussions on the recommendation to float the Naira that one of the first steps an Atiku Abubakar Administration would take will be to jettison the official window at 305 Naira to the dollar as he rightly observed and we agree that it is ill informed to have two values for a currency in any economy as it encourages rent seeking behavior and fosters other distortions. But this again is not in my opinion something to terminate the following day upon assumption of office. The recommended approach will be to be cautious and deliberate. And also there is the need for a word of caution here. We must constantly bear in mind that monetary policy comes under the strict purview of the Central Bank which enjoys instrument autonomy. Therefore no attempt must be made to dictate to the Bank. Therefore such a decision must be left for the sole consideration of the Governor of the Central Bank and it might not be right to tempt the President not to respect this autonomy. In fact the President should be receiving on-going briefing from the Governor of the Central Bank during which he must insist to be carried along and thereafter he must resist the temptation to dabble into such matters in the public. This is one reason why most international commentators query the independence of Central Banks in developing countries of the world. Chike –Obi also observed during this interview, that there must be in place a policy template to grow the economy by at least ten percent for a number

of years going forward as anything less would not cut the ice particularly as we are all concerned about the burgeoning statistic of the number of the unemployed not minding the under employed. Growth is the only antidote; the only panacea for reducing unemployment and giving a boost to the quality of life of the citizenry the raison de’tre of good governance. When asked how he was going to achieve that level of growth he intoned by adopting expansionary policy measures. Well, as often heard; talk is cheap! Besides the inflationary consequences of expansionary policy, there is something like the absorptive capacity of the economy to be taken into account. There is a limit to the amount of cash you inject into the economy beyond which it would amount to throwing money at the problem which barely has any positive effect. In this connection there are policy guidelines to contend with such as the Fiscal Responsibility Act which clearly stipulates a maximum deficit of not more than 3 per cent of GDP as a result of the fears we have expressed herein. What is more in recent memory even in the best of times we have not been able to manage growth in excess of 6 to 7 per cent. And with the latest figure in this respect at 2.38 per cent, it is most unrealistic to expect that anyone is going to formulate any policy measures which would grow the rebased GDP by 10 per cent certainly not in the foreseeable future. It is commendable to be upfront with intentions on such policy measures. This is the preferred approach to ventilate and to get inputs which no doubt would enrich policy and ensure that we downgrade considerably experimentation which has honestly been the bane of rapid growth and development of this economy. We have a collective interest for economic conditions to improve radically and very soon but we must not inadvertently permit measures that we know would delay us as there must be a consensus that we are in a hurry to grow this economy and catalyze development. Dr Chizea writes from Lekki, Lagos

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Monday 25 February 2019

Bastardising the principle and practice of separation of powers

rom the invasion of the hous es of various justices of the supreme court, their arrests, detention by the Department of State Services (DSS) over allegations of corruption and abuse of judicial powers to the invasion of the National Assembly by operatives of the DSS and the various attempts to mastermind the forceful removal or change of principal officers of the National Assembly to the unilateral suspension of the Chief Justice of the federation, Walter Onnoghen over alleged false declaration of assets – the executive have often acted unilaterally and arbitrarily to muzzle and control the two other arms of the government, which in Nigeria’s presidential system are equal and coordinate arms of government – like it is in the United States of America from where we copied our presidentialism.

This is a dangerous trend and if not stopped other presidents would want to follow the trend thus endangering our democracy. While admitting that there is an obligation on the part of the government to rid the country of corruption, the executive must realise that the constitution also provided for separation of powers among the three arms of government and provided for their independence while granting them the powers to check the excesses of the other arms. It is universally acknowledged that power corrupts and absolute power corrupts absolutely. History is replete with leaders who had sought absolute powers and have used them to pursue goals that are not in tandem with the public good. That is why democratic constitutions make adequate provisions for separation of powers amongst the arms or branches of government to prevent one arm, usually the executive from

abusing its awesome powers. By seeking to arrogate to itself the exclusive powers of disciplining and checking the excesses of other arms of government without the other arms also having such powers in relations to it, the executive is going on illegal power grab that may collapse the country’s democracy. Furthermore, it has been established that the best way to fight corruption is within the ambits of the law. It is not possible to successfully prosecute the war on corruption outside the ambit of the law. Indeed, the very act of disrespecting the provisions of the constitution is corruption itself and does not bode well for the country. We have said it severally that the root cause of corruption in the country is the weakness or even absence of institutions. The government cannot therefore claim to be fighting corruption by further destroying existing institutions when the best way to

fight corruption is to build and strengthen institutions. What is more, the reckless manner the executive has been pursuing its agenda has consequences, which will deeply hurt the country and its corporate image among the comity of nations. First, no self-respecting country will do business with a country that doesn’t respect its laws. Second, no foreign investor will invest in a country that has no regard for its laws and where the courts are not independent or cannot be trusted to arbitrate on contract and trade disputes impartially and efficiently. We are at pains to remind the regime that prosperous and sustainable societies are built around respect for the rule of law and on strong institutions. This administration must not set a bad example of trampling on and consequently destroying institutions while trying to build a prosperous society. It never works.

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Monday 25 February 2019

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Pandas can fly

Too many challengers Education

The struggle to reform China’s economy

How Xi Jinping could both calm the trade war and make China richer

OR THE past two weeks Chinese and American negotiators have been locked in talks in Beijing and Washington to end their trade conflict before the deadline of March 1st, when America will ratchet up tariffs on Chinese goods or, perhaps, let the talks stretch into extra time. Don’t be distracted by mindnumbing details on soyabean imports and car joint-ventures. At stake is one of the 21st century’s most consequential issues: the trajectory of China’s $14trn economy. Although President Donald Trump started the trade war, pretty much all sides in America agree that China’s steroidal state capitalism makes it a bad actor in the global trading system and poses a threat to security. Many countries in Europe and Asia agree. At the heart of these complaints is the role of China’s government, which funnels cheap capital towards state firms, bullies private companies and breaches the rights of foreign ones. As a result, China grossly distorts markets at home and abroad. The backlash is happening just as China’s model of debt, heavy investment and state direction is yielding diminishing returns. Growth this quarter may fall to 6%, the worst in nearly three decades. Many suspect that the true figure is lower still. By opening the economy and curbing the state, Xi Jinping, China’s autocratic leader, could boost performance within China’s borders and win a less hostile reception beyond them. He is loth to limit the power of the government and the party, or to accept American demands. But China’s path leads to long-term instability. Its leaders are entitled to feel smug. The party has presided over one of history’s great successes. Since 1980 the economy has grown at a 10% compound annual rate as nearly 800m people have lifted themselves out of poverty. A country that struggled

Monday 25 February 2019

to feed itself is now the world’s biggest manufacturer. Its trains and digital-payments systems are superior to those of Uncle Sam, and its elite universities are catching up in the sciences. Although inequality and pollution have soared, so have living standards. Yet as our essay this week explains, since Mr Xi took power in 2013, China has in some ways gone backwards. Two decades ago it was possible, even sensible, to imagine that China would gradually free markets and entrepreneurs to play a bigger role. Instead, since 2013 the state has tightened its grip. Government-owned firms’ share of new bank loans has risen from 30% to 70%. The exuberant private sector has been stifled; its share of output has stagnated, and firms must establish party cells which then may have a say over vital hiring and investment decisions. Regulators meddle in the stockmarket, critical analysis is suppressed and, since a botched currency devaluation in 2015, capital flows are tightly policed. Mr Xi has ignored Deng Xiaoping’s advice to “hide your capabilities and bide your time”, launching the “Made in China 2025” plan, an attempt to use state direction to dominate high-tech industries. This has alarmed the rest of the world, though it has yet to produce results. Make no mistake, Mr Xi’s approach can continue for some time. Whenever the economy slows, stimulus is injected. In

January banks extended $477bn of loans, a new record. But structural shifts are working against China. The working-age population is shrinking. Investment is a swollen 44% of GDP. As resources are sucked up by wasteful projects and inefficient state firms, productivity growth has slowed. Now that debt has surged, interest payments will amount to nearly three-quarters of new loans. The backlash abroad risks becoming yet another drag. As barriers to trade rise, China cannot rely on the rest of the world for growth. Its share of world exports will struggle to rise above today’s 13%. Its biggest and most sophisticated firms, such as Huawei, are viewed with suspicion in Western markets (see article). Mr Xi promised a “great rejuvenation” but what beckons is lower growth, more debt and technological isolation. China’s leaders have underestimated the frustrations behind the trade war. They have assumed that America could be placated with gimmicks to cut the trade deficit, and that the row will end when Mr Trump leaves the Oval Office. In fact American negotiators, with the support of Congress and the business establishment, have demanded deep changes to China’s economy. Western opposition to China’s model will outlast Mr Trump. To deal with hostility abroad and weakness at home, Mr Xi should start by limiting the state’s role in allocating capital. Banks and financial markets must op-

erate freely. Failing state firms should go bust. Savers must be permitted to invest abroad, so that asset prices reflect reality, not financial repression. If money flows to where it is productive, the charge that the economy is unfairly rigged will be harder to sustain and the build-up of bad debts will slow. Mr Xi also needs to temper China’s industrial policy. It is too much to imagine that it will privatise its 150,000 state firms. But it should copy Singapore, where a body called Temasek holds shares in state firms, giving them autonomy while requiring that they operate as efficiently as the private sector. Spending on industrial policy should shift away from grandiose schemes such as Made in China 2025 towards funding basic research. Lastly, China must protect the rights of foreign firms. Within China that means giving foreigners full control of subsidiaries, including over their technological secrets. Beyond its borders it means respecting intellectual property, which will be in China’s interest as its firms grow more sophisticated. Given China’s poor record, America will need room to respond through tariffs or arbitration if China does not meet its commitments. But America should also reward good behaviour. If Chinese firms can use greater transparency to persuade it that they are operating on commercial principles, they should be treated like businesses from any other country. Today, these reforms seem a distant prospect. But they were accepted wisdom among China’s technocrats a decade ago. They are also popular at home. Corporate bosses and senior officials say that they want American pressure to get through to Mr Xi in a way they cannot. Under him, China is becoming trapped in a bad cycle of sluggish growth, debt, state control and hostility abroad. A more economically liberal China would end up richer and make fewer enemies. It is time for Mr Xi to change course.

The perils of learning in English Young children should be taught in their mother tongue instead

HEN WINSTON CHURCHILL was at Harrow School, he was in the lowest stream. This did not, he wrote in “My Early Life”, blight his academic career, for “I gained an immense advantage over the cleverer boys. They all went on to learn Latin and Greek and splendid things like that...We were considered such dunces that we could learn only English...Thus I got into my bones the essential structure of the ordinary British sentence— which is a noble thing.” Partly thanks to Churchill and the post-war Anglo-American ascendancy, English is these days prized, not despised. Over a billion

people speak it as either their first or second language; more still as a third or fourth language. English perfectly exemplifies the “network effects” of a global tongue: the more people use it, the more useful it is. English is the language of international business, law, science, medicine, entertainment and—since the second world war, to the fury of the French—diplomacy. Anybody who wants to make their way in the world must speak it. All of which has, of course, been of great benefit to this newspaper, which has floated on a rising linguistic tide. It is not surprising that there is a surge in “English-medium” education all over the world. In some regions—such as East Asia and Latin America—the growth is principally among the rich. In others—Africa and South Asia, where former colonies never quite escaped the language’s grip—it is happening at all income levels. Parents’ desire for their children to master English is spurring the growth of private Continues on page 15

Monday 25 February 2019

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The 2020 election

The DemocratsBernie Sanders jumps into a crowded pool

His success in pulling Democrats to the left may be his undoing

ERNIE SANDERS, the self-declared socialist senator from Vermont, had a good long run against Hillary Clinton in the 2016 Democratic presidential primary. His left-wing pitch has fared even better. Slogans that were lampooned then—Medicare for all, a $15 nationwide minimum wage, free tuition at public colleges—are now mainstream. Among Democratic presidential hopefuls, fealty to these mantras can even seem mandatory. In his announcement video, an 11-minute monologue, Mr Sanders sounded triumphant. “Three years ago during our 2016 campaign, when we brought forth our progressive agenda, we were told that our ideas were ‘radical’ and they were ‘extreme’,” Mr Sanders says. “Well, three years have come and gone.” He sees a successful run in 2020 as a coda to his revolution. The antagonists remain the same this time round—billionaires, especially President Donald Trump; multinational companies; bad trade deals. But Mr Sanders also seems keen to talk about sex-

ism towards women and racism against blacks, two groups that did not warm to him in 2016. This time he enters a busy field with an agenda that is no longer outlandish. Elizabeth Warren, a Massachusetts senator, is another longtime idol of the left who brings other flashy ideas—such as a wealth tax and universal child-care—along with a stronger command of detail. Even Kamala Harris, the Californian senator who took pains to say that she is “not a democratic socialist”, has nonetheless endorsed Medicare for all, the Green New Deal and a $15 mini-

mum wage. Mr Sanders may stand out, with his broadsides against banks and trade deals, but his ideological lane has become uncomfortably crowded. What that means for his chances of winning is unclear. If Democratic primary voters are looking for a contest over ideological purity, then Mr Sanders, as the Medicare-for-all hipster who supported the idea before it was cool, is favourably positioned. He is performing well in early polls. On the morning of his announcement, punters on PredictIt, a political-betting market, thought him a leading

Continued from page 14

candidate, trailing only Ms Harris and Joe Biden (who has not yet announced his plans). They rated him twice as likely to be the candidate as Ms Warren. But if voters prize electability, Mr Sanders has less of a chance. Even if there is now little daylight between him and his primary rivals, the label of out-and-out socialist could hinder him. Mr Trump’s strategists see fear-mongering over socialism as a winning strategy. His re-election campaign quickly released a statement denouncing “an agenda of sky-high tax rates, government-run health care and coddling dictators like those in Venezuela”. If elected, Mr Sanders would be inaugurated at the spry age of 79. His Democratic rivals might be too courteous to bring that up. But Mr Trump, though just five years younger, surely would. In an interview with a local radio station, Mr Sanders was eager to tackle that criticism: “We have got to look at candidates not by the colour of their skin, not by their sexual orientation or by gender, and not by their age”. He also noted that he has “a great deal of energy”.

A climate of hatred

Anti-Semitism, racism and anti-elitism are spreading in France The level of publicly expressed loathing harks back to the 1930s

HEN HERVÉ BERVILLE was growing up in rural Brittany, he was often the only black child around. But, he says, he encountered scarcely any racism. Adopted by a French couple during the genocide in Rwanda in 1994, the lanky economist went on to be elected in 2017 to the National Assembly, for President Emmanuel Macron’s party. Last year, when Mr Berville received a typed death threat by post at his parliamentary office, he threw it in the bin. When another arrived last month regretting the fact that he had “escaped the machetes”, the deputy decided to speak out. “It was so violent,” he says, and the atmosphere had shifted. “The border between threats, and acting on those threats, is shrinking.” A climate of hate is emerging in France. The targets are varied, apparently unconnected and shifting: Jews, journalists, the rich, policemen, members of parliament, the president. Sometimes violence is only threatened, as in Mr Berville’s case; two of his (black) parliamentary colleagues received the same threat. At other moments violence has been perpetrated—against symbols (a ministry, luxury cars) as well as people, usually in connection with the gilets jaunes (yellow jackets) protests. That movement, three months old, has radicalised as it has shrunk.

Some 1,700 people and 1,000 policemen have been wounded since the protests began. When the gilets jaunes movement emerged last November, it was broadly a social protest and fiscal revolt. But the infiltration of ultra-left and extreme-right agitators, and the determination of a radical core to seek the overthrow of Mr Macron, has hardened the movement’s edge. Weekly scenes of violent clashes with riot police fill French television screens and plumes of tear gas fill the air on the streets of Paris and other cities. This relentless backdrop seems to have legitimised a form of violent hate. What was once confined to the unhinged ramblings of social-media groups has erupted into public. Earlier this month the Brittany

home of Richard Ferrand, speaker of the National Assembly, was torched. Last week the constituency office in Le Mans of Damien Pichereau, another deputy from Mr Macron’s La République en Marche (LREM), was destroyed. Mr Berville says that 100 deputies from his party have been the victims of warnings or attacks of some sort. Among them are many women. Aurore Bergé, another LREM deputy, was the recipient of a particularly crude threat. During one protest, an effigy of Mr Macron was decapitated. Christophe Chalençon, a gilets jaunes organiser, recently warned that “if they put a bullet in my head, Macron will end up on the guillotine”. Anti-Semitism is mixed into the

The perils of learning in English

brew. After falling for two successive years, the number of anti-Semitic acts in France surged by 74% in 2018. On February 19th, 80 graves in a Jewish cemetery in eastern France were sprayed with swastikas. Christophe Castaner, the interior minister, says that anti-Semitism is “spreading like poison”. In recent days a bagel shop in Paris was defaced with the word “Juden”, swastikas were painted on to street art depicting Simone Veil, a former minister and Auschwitz survivor, and “Macron Jews’ bitch” was found sprayed on a garage door in the capital. Any link to the gilets jaunes is unproven. But last weekend gilets jaunes marchers were caught on video yelling “dirty Zionist shit” and “go back to Tel Aviv” at Alain Finkielkraut, a French philosopher of Polish origin, who was walking in the street near his left-bank home in Paris. Threats of death and intimidation are nothing new to politics. And anti-Semitism has deep roots in the country, reaching back beyond Vichy France to the publication of Edouard Drumont’s “La France Juive”, a popular anti-Semitic text, in 1886. Nor is France a stranger to periodic spasms of violence, such as the May ’68 uprising or the banlieue riots in 2005. “The specificity of the current period”, wrote Alain Duhamel in Libération, a newspaper, “is not the violence but the hatred.”

schooling; parents in the slums of Delhi and Lagos buy Englishmedium education in the hope that their children will gain a university degree, obtain good jobs and even join a glittering world of global professionals. Where the private sector leads, governments are following. Some countries have long chosen to teach in English as a political expedient, because a local language would prove contentious. But even where public schools teach children in their mother tongue, or a local language, education authorities are switching to English medium, in part to stem the outflow of children into the private sector. That has happened in Punjab and Khyber Pakhtunkhwa in Pakistan; many Indian states have started large or small English-medium experiments. In Africa most children are supposed to be taught in a local language in the first few years, but often, through parental pressure or a lack of textbooks, it does not happen. Teaching children in English is fine if that is what they speak at home and their parents are fluent in it. But that is not the case in most public and low-cost private schools. Children are taught in a language they don’t understand by teachers whose English is poor. The children learn neither English nor anything else. Research demonstrates that children learn more when they are taught in their mother tongue than they do when they are taught in any other language (see article). In a study of children in the first three years in 12 schools in Cameroon, those taught in Kom did better than those taught in English in all subjects. Parents might say that the point is to prepare children for the workplace, and that a grasp of English is more use than sums or history. Yet by year five the children taught in Kom outperformed English-medium children even in English. Perhaps this is because they gain a better grasp of the mechanics of reading and writing when they are learning the skills in a language they understand.

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Monday 25 February 2019 In Association With

Labour pain

The decline of the Israeli left As the Palestinian issue has faded, so have Israel’s left-wing parties

“

EACE HAS become a dirty word.” That was the main reason given by Tzipi Livni (pictured) for quitting politics on February 18th. Over the course of two decades in the Knesset, Ms Livni, once a protégé of Binyamin Netanyahu, Israel’s nationalist prime minister, came to support the establishment of a Palestinian state. But too many voters moved in the opposite direction. Her party, Hatnuah, was unlikely to win any seats in April’s election, in which it will no longer take part. The Palestinian issue was once the dividing line between left and right in Israeli politics. But as hope for a solution has waned, so too have the fortunes of left-wing parties. Most prominent among them is Labour, which sought peace with the Palestinians under leaders such as Yitzhak Rabin, Shimon Peres and Ehud Barak (all former prime ministers). In April it will be lucky to win a dozen seats (out of 120). To its

left is Meretz, which may not win enough votes to be represented in the Knesset. Roughly half of Israelis support a two-state solution, but three-quarters of them do not believe an agreement can be reached soon. The latest peace talks broke down in 2014. A decade of prosperity and relative stability under Mr Netanyahu

has left Israelis comfortable with the status quo. When asked about their priorities, they usually place the Palestinian issue fourth, after security, the economy and education, says Dahlia Scheindlin, a pollster. Labour’s manifesto reflects this. It focuses on bettering the lives of the middle class. The party’s leader, Avi Gabbay, refuses to disclose details of his

peace plan and sees no reason to remove Israeli settlements in the West Bank. Without the Palestinian issue, though, little marks Labour out from most other parties. It long ago lost its socialist ideology. Mr Gabbay is a former telecoms executive who served as environment minister under Mr Netanyahu. Some call Labour’s leadership “Likud light”. Not Mr Netanyahu, though. The prime minister has spent years trying to brand the left as a threat to Israel’s existence. One campaign advertisement released before the election in 2015 suggested that a Labour government would open the door to the jihadists of Islamic State. Older Israelis remember Labour as the party that built the country; younger ones lack such reverence. The centre-left has become factious. Labour ended its alliance with Hatnuah last month. At least three parties will compete in April for a centre-left electorate that has not increased

in size for a generation. After each loss at the polls, Labour boots out its leader. Mr Gabbay is the ninth party head since 2000. Likud has had just two. Labour has failed to take many votes from Likud and is threatened by the emergence of new centrist parties and alliances. Benny Gantz, a former army chief, has launched a party that has taken much of Labour’s support. More threatening, still, is a last-minute merger between Mr Gantz’s party and Yesh Atid, headed by former chat-show host Yair Lapid. Labour got a boost from a primary on February 11th that elected a diverse slate of candidates. Mizrahim (Jews of Arab descent) and women took many of the top spots. Even so, Labour will probably not win enough seats to lead the opposition, let alone form a government. After a decade of right-wing rule, perhaps just staying alive is an accomplishment.

No woman, no cry

An entrepreneur brings professional grieving to eastern Congo There is money to be made in the mourning business

EBORAH NZIGIRE, a 65-year-old Congolese woman, is nervous when she sits down for her job interview. Her hands are clasped tightly together, her words are slow and deliberate; she is blinking too much. “What inspired you to pursue this career?” asks one of the two people on the interview panel. Her answer is garbled, she mentions money. When asked to give a demonstration, she giggles awkwardly and leaves the room. She comes back in crying. “Bettina,” she howls and throws herself to the ground. “Bettina, Bettina, why did you leave us?” She thumps the floor with a flattened palm, her body convulses with sobs as she moans and wails. The interviewer’s eyes fill with tears. Mrs Nzigire (pictured) has got the job. She is the first recruit in Gilbert Kubali’s new enterprise to bring professional mourning to the east of the Democratic Republic of Congo. In the distant capital, Kinshasa, the mourning business is well-established and lucrative—you need not look far to find pleureuses (“cri-

on demand is simple, says Mrs Nzigire. In a part of Congo that has been ravaged by raping militias, there is much pain. Financial worries haunt the population, 77% of whom have less than $2 a day. “In every moment there is some kind of problem… your mind is always turning, asking where can I find money?” she explains. “That makes you sad and you cry. We are always ready to cry.”

ers”) to hire for a funeral. But in Goma, a city of 1m people in the east, it has not yet taken off and Mr Kubali has spied an opportunity. “I hope to monopolise the market,” he says. Ostentatious grief is tied up with a traditional belief that the dead linger long after their pulses have stopped. “We believe that the dead person is not dead, they are watching us like a film,” explains Mrs Nzigire. “If you do not cry they will be angry.” Angry ances-

tors are known to come back and disrupt the lives of their progeny. Further, it is shameful for a family member not to cry at a loved one’s funeral—and highly imprudent. Their insouciance may be interpreted as a sign that they were responsible for the death through witchcraft. One of the functions of the trained mourners is to elicit tears in others, too. But the pleureuses are expensive. To hire ten women for a week of mourning costs

some $1,500. On top of this the women expect food, drink and transport costs. This may be why the industry has not yet flourished in the east. There are more wealthy people in the capital. Mr Kubali reckons, though, that if the women are good enough and if he advertises well, he will find customers. He plans to fly a professional out from Kinshasa to train his ten ladies. As for the women, crying

Monday 25 February 2019

BUSINESS DAY

Monday 25 February 2019

BUSINESS DAY

CITYFile

Security: Lagos community hails Leadway’s support KELECHI EWUZIE

he Iponri community in Lagos, and Lagos State Security Trust Fund (LSSTF) have lauded Leadway Assurance’s consistent support to the government’s effort at ensuring the safety of lives and property of the people. Abdurrazaq Balogun, executive secretary/CEO of LSSTF said there has been a steady improvement in security of lives in Lagos owing to the interventions of the government and private sector donation of equipment such as patrol vehicles, modern communication and IT gadgets to the LSSTF. Balogun made observing while receiving the donation of a brand new Nissan patrol van to the Iponri police division of the Nigeria Police force, by Leadway Assurance. Adetola Adegbayi, executive director, general insurance, Leadway Assurance, said for a megacity like Lagos, public security would normally pose a challenge and thus concern for well-meaning residents and this requires increased stakeholder support in the maintenance of public security. “For us at Leadway, owing to our commitment to the dictates of civic responsibility, we are very happy and always ready to partner with LSSTF and all the security agencies to envision and create a safe environment where social development can flourish. For over a decade, almost as long as its existence, Leadway has consistently supported the LSSTF. Apart from donations like the one we have just done, we are also open to various other ways we can partner with the police and other security agencies in the state and the country at large”. The traditional ruler of the Iponri community, Jimoh Daramola expressed appreciation to the insurance company for deepening the development of the community.

FERMA recruits youths to clean highways

ederal Roads Maintenance Agency (FERMA), has engaged about 14, 000 youths from local communities across the country to cut shrubs and trees along federal highways. Babangida Kawuwa, an official of the agency disclosed this, Friday, in Yola, Adamawa State. He said of the total number recruited, 437 were from Adamawa, and had since commenced clearing shrubs and trees on seven selected roads in the state. According to him, the programme is part of Federal Government’s effort at supporting rural communities to improve their living condition. Kakuwa said that those involved in the programme would receive monthly payment from the agency. He said FERMA has repaired several roads and reconstructed bridges in the state, some of which include Yola-Fufore – Gurin and Gombi – Garkida -Biu highway.

Lanre Gbajabiamila (middle), director-general, National Lottery Regulatory Commission declares the ICE 2019 exhibition open flanked by international gaming industry stakeholders and the event organisers (Clarion Gaming) in London, recently.

Police arrest suspected armed robbers, car snatchers in Kano

olice in Kano have arrested six suspected armed robbers and car snatchers said to have been terrorising the residents of the city. Commissioner of Police (CP) in charge of Kano State, Wakili Muhammad, who paraded the suspects at the state police command’s headquarters in Kano, said the suspects had been dispossessing residents of Sheka, Zoo Road, Tudun Maliki, Tukuntawa and Maidile quarters of their valuables. According to the police chief, an English made pistol was recovered from three of the suspects, Auwalu Adamu, Mohammed Suleman and Abdullahi

Iliyasu. He said the other suspect, Ahmed Abubakar of Mil Tara in Kano, who specialised in snatching exotic cars on highways, allegedly conspired with others now at large. “The suspect drove to a hideout located in the above address where they disassembled and sold spare parts to unsuspecting members of the public. “One Toyota Hiece bus, one Golf Wagon and a Hummer bus are among the vehicles they disassembled,” the CP said. The CP added the two other car snatching syndicates in Ladanai quarters were also smashed, with a Toyota Hilux recovered from them.

The command, according to Mohammad, also arrested one Mohammed Sani of Mubi local government area of Adamawa with 6, 750 locally made knives concealed in sacks. The police chief said the suspect was intercepted at Kwanar Dumawa village in Danbatta local government area of Kano State on transit to Katsina State with the exhibit for unspecified mission. He said that as part of efforts to rid the state of fake and counterfeit drugs, the command also intercepted two trailers loaded with fake and expired drugs. He said investigations were ongoing after which the suspects would be charged to court.

Obaseki intervenes in Ewu-Ibore gully erosion menace ... charges communities IDRIS UMAR MOMOH

do State governor, Godwin Obaseki has flagged off remediation work on Ewu and Ibore gully erosion sites in Esan Central local government of the state, with a charge on communities to always raise the alarm when threatened by any natural disaster. The remediation work is being carried by the Nigeria Erosion and Watershed Management Project (NEWMAP). Obaseki said that gully erosions were mostly caused by human activities and urged communities to take steps to identify them for quick government intervention. “If the communities had alerted government on time, the threat to their

environment could have been prevented and unnecessary loss of lives and huge financial costs avoided,” he said. The governor observed that the remediation work marked the end of trauma, uncertainty, loss of lives and property in the two communities and a beginning of environmental and waste management. He also assured the people of Ugbalo community that work would commence to address their flooding challenge. Obaseki said the next plan for the council was the empowerment of youth through technical education and revitalisation of Ewu Flour Mill to provide jobs. The commissioner for environment and sustainability, Omoua Oni-Okpaku, speaking also, said that the two sites were

among numerous others ongoing in the state and assured that they would be completed on scheduled. She called on the communities to cooperate with contractors handling the project to ensure the completion of the ongoing phase II. The traditional ruler of Ewu, Rasaq Ojiefo III, appreciated the project, saying lives had been lost particularly during rainy seasons. “Over 10 youths have died because of this gully before this work commenced,” he lamented. Also, spokesman of Ibore community, Theophilus Okoh praised the government for fulfillment the promise to intervene in the erosion sites.

Monday 25 February 2019

BUSINESS DAY

BUSINES DAY

Monday 25 February 2019

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COMPANIES & MARKETS

BUSINESS DAY

Special publication on the Companies and Allied Matters Bill

Pg. 26

C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

MARKETS

Investors find bargain opportunities in Zenith Bank as stock climbs LOLADE AKINMURELE & DAVID IBIDAPO

he share price of Zenith bank plc rose 1.78 percent on Friday to close at N25.75, as investors seize bargaining opportunities in the under-valued yet fundamentally-sound stock. Some 4.34 million units of Zenith bank shares were traded in deals totaling N110.89 million. Investment banks expect Zenith Bank to rally by an average of 40 percent within the next 12 months and investors are taking positions to benefit from the rally. Of the 12 investment banks surveyed by Business Day, 10 placed a BUY rating on the stock as at Friday, while 2 were reviewing the stock. Zenith Bank’s billionaire founder, Jim Ovia, has increased his holdings in Nigeria’s largest bank by assets, a move that reinforces the bargain hunting opportunities in fundamentally-sound publicly quoted companies. According to Zenith’s full-year 2018 annual report released Tuesday, Ovia increased his total holdings in the tier-one bank by 11.4 percent or 520 million units to 5.05 billion units in 2018 from 4.53 billion units in 2017.

The deal happened in the second half of 2018, wherein the bank’s stock price averaged N23. Using that average market price, Business Day estimates that Ovia’s fresh investment probably cost N11.9 billion. On Wednesday, the value of Ovia’s extra shareholding jumped by 12 percent or N1.46 billion to N13.40 billion as the stock closed at N25.8. Since the bank released its financial report Tuesday, the stock has gained 8 percent. The closing price values Ovia’s total shareholding at N130.53 billion, a 12 percent increase from N116.39 billion as at December 2017. Ovia was not the only member of Zenith’s board of directors to raise his equity stake. Of the 12 directors, nine raised their stake in the bank while only three left their shareholdings unchanged over the one year period. Directors increasing their holdings in the bank give further impetus to value investors to buy Zenith bank which is fairly undervalued. The bank’s Price to Book ratio, a valuation metric, stood at 0.99 times as at Wednesday, February 20, less than GTB’s price to book (P/B) of 2.14 times and Stanbic IBTC’s 2.28 times. Zenith’s P/B ratio is also lower than the tier-one av-

erage of 1.33 times, which suggests that the bank is undervalued, since nothing is fundamentally wrong with the company. “It’s a sign of confidence in the bank if Jim Ovia decides to have more skin in the game,” said Wale Okunrinboye, head of research at Lagos-based Pension fund manager, Sigma Ltd. “There’s an opportunity for value investors to buy

a f u n d a m e nt a l l y -s ou n d company in Zenith bank at a giveaway price. It is one of the banks that have a higher Return on Equity than Cost of Equity, yet it is priced below its book value,” Okunrinboye said. Zenith boasts a Return on Equity (ROE) of 24.8 percent and ROA of 3.4 percent which compares favourably with market peers. Stanbic IBTC has an ROE

of 32.2 percent and ROA of 4.6 percent, GTB has a 35 percent ROE and 5.5 percent ROA, while UBA has a ROE of 15.6 percent and ROA of 1.8 percent, all as at Wednesday Feb. 20. Proposition of Zenith’s board of directors to pay a final dividend of N2.50 per share in addition to N0.30 per share paid as interim dividend last year is estimated to reward Zenith’s billionaire

founder with N8.86 billion. Ovia’s direct holdings in 2018 accounted for 97 percent of total direct holdings and 11 percent of total outstanding shares of 31.4 billion in Zenith’s stock respectively. Year to date analysis of Zenith Bank stock shows that the tier one bank as returned 11.8 percent, outperforming the broad market’s 3.8 percent.

PUBLIC INSTITUTIONS

CBN accounts for 28.3% of US$60bn FX turnover at I&E window … Injects 268.4m, CNY 46.3m into FX market HOPE MOSES-ASHIKE

he foreign exchange turnover through the Investors and Exporters (I&E) forex window stood at US$60 billion in 2018 with the Central Bank of Nigeria (CBN) accounting for 28.3 percent of total. In 2017, the turnover at the window amounted to US$23.9 billion, with the CBN accounting for 8.4 percent of the total. “The I&E window, which was introduced by the CBN in 2017 to improve foreign exchange liquidity and aid price discovery, has had visible success”, said analysts at the FBNQuest. In Q4 2018 the market experienced some capital flight from FPIs (primarily due to US policy normalisation) and the CBN stepped up to pro-

vide support by intervening in the market. However, since the start of this year, inflows from Foreign Portfolio Investors (FPIs) have picked up. Their funds currently account for at least 50 percent of inflows at the I&E window. The elevated returns in Nigeria’s fixed income market have resulted in increased inflows from FPIs. Yields on the NTB (T-bill) market currently range between 11.50 percent and 15.00 percent. The CBN’s several FX interventions have also supported forex liquidity. For example, its secondary market intervention sales (wholesale and retail combined) averaged US$1.4 billion per month in 2018. Analysts at FBNQuest note that its daily spot intervention slipped from US$0.5 million to US$0.1 million in early February. This could be a pointer that other

…External reserves fall to $42.5bn

forex market segments are fairly liquid and able to meet customer demand. On Friday, February 22, 2019, the Central Bank made an intervention of $268.4 million in the retail Secondary Market Intervention Sales (SMIS) and CNY 46.3 million in the spot and short tenored forwards segment of the inter-bank foreign market. This was disclosed by Isaac Okorafor, director, corporate communications department, Central Bank of Nigeria, who revealed that the intervention was for requests in the agricultural and raw materials sectors. The Chinese Yuan, on the other hand, was for Renminbi denominated Letters of Credit. Okorafor further expressed satisfaction over the stability in the foreign exchange market which according to him, was largely due to sustained interven-

tion by the Bank. He assured that the Bank would remain committed to ensuring that all the sectors of the forex market continue to enjoy access to the needed foreign exchange. Meanwhile, $1 exchanged for N360 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged at N54. Nigeria’s external reserves have declined further to US$42.5 billion as at February 21, 2019 from to $42.83 billion as at February 15, 2019. This is in spite of the increases in the price of crude oil, which traded at US$67.21 per barrel as at Friday February 22, 2019. Foreign exchange receipts from oil sales, foreign portfolio investors (FPIs) contribute indirectly to the external reserves. The global oil price slide

that started in mid-2014, coupled with domestic oil production issues, created volatility in Nigeria’s foreign exchange market. However, the CBN’s forex reforms and a price recovery have since brought significant improvement. The several exchange rates in operation have been relatively stable. The CBN’s interbank/offi-

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

cial rate (for priority transactions) is currently N307/US$. This compares with N362/ US$ at the Investors and Exporters (I&E) window. The parallel market rate appears to have barely moved in recent sessions. In the absence of an oil price crash, “we assume that this stability will continue”, FBNQuest analysts said.

BUSINES DAY

Monday 25 February 2019

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COMPANIES & MARKETS MANUFACTURING

Nigeria Enamelware earnings surge 254% on cost efficiency David Ibidapo

igeria Enamelware plc recorded a 254 percent surge in earnings in its just released financial report for 9 months ended 2018. According to the report,

period. However, company did not provide notes to finance cost entry. The surge in profit was despite decline recorded in revenue for the period. Revenue dipped 33.88 perc e nt t o N 3 7 8 . 9 m i l l i o n . Also, reasons for this decline were not provided. This led to a decline by 32.89 percent to N99.83

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Monday 25 February 2019

Business Event

t o N 5 6 . 5 4 m i l l i o n f ro m N134.48 million recorded in the previous corresponding year. S h a re p r i c e o f Ni g e rian Enamelware Plc has remained flat at N22.10 after prices fell in February 2018 by 5 percent from N23.25. Nigerian Enamelware Plc manufactures and L-R: Celestine Ogolo, former general manger, Rivers State Newspaper Company; Ibim Semenitari, 2018/2019 president, Rotary Club of Port Harcourt Cosmopolitan; and Ucheoma Amechi, president-elect, Rotary Club of Port Harcourt Airfield, during a training organized for Journalists on peace, conflict resolution and prevention, by Rotary Club of Port Harcourt Cosmopolitan, in Port Harcourt.

profit for the period increased by N3.9 million to N5.56 million on significant decline in finance cost. Cost incurred on financing reduced by approximately 62 percent to N50.97 million during the

million in company’s gross profit for the period. Als o, other income fell significantly to N6.45 million from N39.58 million representing an 83.7 percent decline, pushing operating income dow n

markets enamelware, plastic products, and galvanized buckets in Nigeria. The company was incorporated in 1960 and is based in Ikeja, Nigeria. Nigerian Enamelware Plc is a subsidiary of I-Feng Limited.

Olorogun David Edevbie (m), commissioner for finance; Ovie Agas (l), secretary to state government, and Vincent Uduaghan, commissioner for transport, during the commissioning of Brand New Vehicles Procured by the State Transport Company, Delta Line in Delta State.

DEALS

BOC UK to maintain its stake after Linde AG & Praxair’s Merger ISRAEL ODUBOLA

OC UK, a member of the Linde Group and largest provider of industrial gases in United Kingdom and Ireland, said it will continue to hold its 249.7 million shares, representing 60 percent shareholding in BOC Gases Nigeria Plc, following the merger between Linde AG of Germany and US-based Praxair, Inc. In a release filed with the Lagos bourse Thursday February 21 2019, it was revealed that the merger between Linde AG and Praxair Inc, largest industrial gases company in North and South America, was finalized October 31, 2018. Sequel to the merger, Linde Plc, an Irish-domiciled multinational company listed on Frankfurt and New York bourses, is

now the parent company of Linde AG and Praxair, Inc. Linde Plc has 92 percent interest in Linde AG, implying that the former now holds an indirect beneficial interest in BOC UK, and also an indirect beneficial ownership in BOC Gases Nigeria Plc. BOC UK has assured the investing public that all its outstanding shares in BOC Nigeria Plc will not be transferred to anyone as a direct implication of the merger. Linde Group, a global leader in gases, engineering and technology solutions acquired its UK-based competitor, the BOC Group in September 2006. In 2005, Linde AG and BOC together had 21 percent of the world market in industrial gases followed by Air Liquide with 19 percent, Praxair with 13 percent and Air Prod-

ucts & Chemicals with 10 percent. BOC Gases Nigeria Plc, established in 1959 under the name of Industrial Gases Limited (IGL), is the market leader in West Africa for production and distribution of industrial gases including argon, nitrogen, carbon-dioxide, oxygen and wielding products. As a member of the Linde Group, BOC Nigeria has access to African Oxygen Limited (Afrox), Africa’s largest industrial gases company, which operates in South Africa and 10 other nations in the continent. Linde Plc is world’s largest industrial gas company by market share as well as revenue. The company has over 600 affiliated companies in 100 countries, with customers in the industrial, retail, trade, research and public sectors.

L-R: Adarsh Bhaskaran, national sales manager, Sunola Foods Limited; Satish Nair, executive director, Sunola Foods Limited; Mide Martins, nollywood actress, and Siva Subramaian, group managing director, Kelwaram Chanrai Group, during the launch of Mom’s Curry Powder in Lagos recently

L-R: Femi Adelusi, vice president, International Advertising Association, Nigeria Chapter; Tunde Asekun, account director, Dijo Communications; Ahmed Abdullahi, team lead, Future Brand Idol, and Theodore Nyingifa, MD, Without a Box PR, at the launch of the Future Brand Idol Initiative in Lagos.

Monday 25 February 2019

BUSINESS DAY

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Monday 25 February 2019

COMPANIES & MARKETS Special publication on the Companies and Allied Matters Bill Following the passage of the CAM Bill by both legislative houses, Business Day has collaborated with leading legal firm, Udo Udoma and Belo-Osagie on a 12-part series highlighting key changes that the CAM Bill will introduce. The proposed series will focus on select areas of change in detail, and will be set out in easily digestible excerpts.

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Monday 25 February 2019

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Live @ The Exchanges Top Gainers/Losers as at Friday 22 February 2019 GAINERS Company

Market Statistics as at Friday 22 February 2019

LOSERS Opening

Closing

Change

Company

MOBIL

N170

N178

OKOMUOIL

TOTAL

N190

N195

ZENITHBANK

N25.3

N25.75

0.45

CADBURY

N11.5

DANGFLOUR

N9.7

N10.05

0.35

DANGCEM

GUARANTY

N38

N38.2

0.2

FLOURMILL

Opening

Closing

Change

N85

N80.05

-4.95

N82.5

N80

-2.5

N10.4

-1.1

N193

N192.4

-0.6

N20.7

N20.2

-0.5

ASI (Points) DEALS (Numbers)

L-R: Efiok Efiok, head, Investment Management Department, Securities and Exchange Commission, Nigeria (SEC); Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE); Patrick Ezeagu, president, Association of Stockbroking Houses of Nigeria (ASHON); Wale Agbeyangi, group managing director/CEO, Cordros Capital; James Ilori, CEO, First City Asset Management; Dayo Obisan, president, Fund Managers Association of Nigeria (FMAN).

shares worth N306.521 million in 1,330 deals. The third place was Consumer Goods Industry with a turnover of 72.042 million shares worth N4.381 billion in 2,990 deals. Trading in the Top Three Equities namely, Transnational Corporation of Nigeria Plc, Sterling Bank Plc and Access Bank Plc (measured by volume) accounted for 421.500 million shares worth N1.274 billion in 2,979 deals, contributing 28.46percent and 7.22percent to the total equity turnover volume and value respectively.

NSE partners with market stakeholders, launches Mutual Funds trading platform

he Nigerian Stock Exchange (NSE) in conjunction with Fund Managers Association of Nigeria (FMAN); Association of Stockbroking Houses of Nigeria (ASHON) and the Central Securities Clearing System (CSCS) Plc on Friday February 22, 2019 in Lagos launched the NSE Mutual Fund Trading and Distribution Platform. The Mutual Fund trading platform will bring together market partici-

pants to facilitate electronic transactions with seamless interaction between NSE, CSCS Plc, Fund Managers and Brokers Dealers. Investors will have the benefit of a single view of their mutual fund investment and ease variety of transactions like subscription, redemption, cancellation and so on. Speaking on the development, Olumide Bolumole, Head of Listing Business Division, NSE, said, “We are delighted to provide a so-

lution that will enhance visibility for the listed mutual funds and promote financial inclusion, while stimulating retail investor participation in our market. This reinforces our commitment to provide market professionals, issuers, fund managers and investors with a reliable, efficient and an adaptable exchange hub in Africa, to save and to access capital. Through this platform investors can pool funds into chosen basket

2.240

MARKET CAP (N Trn

Stories by Iheanyi Nwachukwu

20,449 deals were traded this week by investors on the floor of the Exchange in contrast to a total of 2.834 billion shares valued at N28.138 billion that exchanged hands last week in 28,739 deals. The Financial Services Industry (measured by volume) led the activity chart with 1.038 billion shares valued at N10.170 billion traded in 12,232 deals; thus contributing 70.07percent and 57.63percent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 193.204 million

221,466,260.00

VALUE (N billion)

…NASD OTC market capitalisation rises to N527.25bn

higher than 21 equities in the preceding week, while 96 equities remained unchanged higher than 87 equities recorded in the preceding week. At the close of trading in the review week, all other indices finished lower with the exception of the NSE ASem, NSE Banking, NSE Insurance, NSE-AFR Bank Value and NSE Oil/Gas indices which rose by 0.96percent, 0.68percent, 0.02percent, 0.95percent and 0.13percent respectively. A total turnover of 1.481 billion shares worth N17.647 billion in

2,659.00

VOLUME (Numbers)

Nigeria’s listed stocks lose over N74bn ahead of elections igerian stock market lost over N74billion in the trading week ended Friday, February 22, 2019. At the sound of closing gong ahead of Saturday’s presidential and national assembly elections, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 0.61percent week-onweek (wow) to close at 32,515.52 points from 32,715.20 points as at Friday, February 15. Also, the value of Nigeria’s listed equities decreased to N12.126 trillion from a high of N12.200 trillion recorded the preceding week. Thirty-four (34) equities appreciated in price during the review week, lower than 60 in the preceding week. “Barring any negative surprises at the polls, we anticipate a positive start to next week’s (Monday February 25) trading as investors price in improved certainty upon conclusion of the general elections”, said analysts at Lagos-based Vetiva Capital in their weekly market note. Thirty-eight (38) equities depreciated in price,

32,515.52

of securities which have proven to be a veritable means to optimise returns and reduce risks”. Haruna Jalo-Waziri, Managing Director/CEO CSCS Plc welcomes the launch of the trading platform for mutual funds. “This marks yet another milestone for the Nigerian capital market and we believe that it will serve as a step towards improving the level of financial inclusion in Nigeria by giving investors varieties of investment products”.

12.125

FMDQ supports housing, infrastructure development …Admits Mixta Real Estate Bonds, Commercial Papers to its platform

ousing and infrastructure development in the nation is taking progressive steps in the right direction, as another corporate, Mixta Real Estate (Nigeria) Plc (Mixta Plc), taps the debt capital markets (DCM) for funding targeted at this development. The listing of the Mixta Real Estate Plc N2.96billion Tranche A and N2.32bn Tranche B Series 2 Bonds (the “Mixta Bonds”) under a N30billion Debt Issuance Programme and the quotation of the Mixta Real Estate PLC N9.84billion Series 1 and N2.08billion Series 2 Commercial Papers (the “Mixta CPs”) under a N15billion Commercial Paper Issuance Programme, on FMDQ OTC Securities Exchange (FMDQ) is another significant contribution inspiring confidence in the Nigerian markets as housing and infrastructure development progressively takes form. To commemorate the listing and quotation of the Mixta bonds and CPs, a prestigious Ceremony was held at FMDQ’s business complex, Exchange Place, on Thursday, February 21, 2019, where FMDQ played host to the issuer, Mixta PLC, represented by the Managing Director, Kola AshiruBalogun, and other representatives of Mixta Plc. Also present at the Ceremony were the sponsor to the bonds and CPs on FMDQ and the Registration Member (Listings & Quotations), FBNQuest Merchant Bank Limited, and representatives from the Joint Issuing Houses, CardinalStone Partners Limited, Coronation Merchant Bank Limited, FSDH Merchant Bank Limited, Stanbic IBTC Capital Limited and Vetiva Capital Management Limited, as well as the solicitors to the listing, Banwo & Ighodalo, Udo Udoma & Belo Osagie,

amongst others. Tumi Sekoni, Associate Executive Director, Capital Markets, FMDQ, whilst welcoming the guests gathered to commemorate this commendable feat, congratulated the issuer for the successful issuances. She highlighted that the use of the proceeds of the bonds & CPs would help address the nation’s housing and infrastructure gap in a sustainable manner to deliver prosperity for Nigerians and further deepen the domestic DCM, invariably contributing to Nigeria’s development. She further reiterated FMDQ’s commitment to continue to deliver strategic initiatives towards the development of a highly liquid, deep and well-developed DCM in Nigeria. In delivering his special address, Kola AshiruBalogun, commented “these issuances play an important role in implementing our business strategy to develop affordable housing units; our modest contribution to bridging Nigeria’s significant housing deficit. “The confidence the Nigerian capital market has in us as demonstrated in these issuances is encouraging; we are more than ever committed in our quest to make strategic partnerships and provide innovative solutions whilst utilising effective long-term financing mechanisms.” Speaking on behalf of the sponsor to the bonds and CPs, Kayode Akinkugbe, stated, “We are pleased to have advised Mixta Plc on the issuances of its bonds and CPs. As a full-service investment bank, we have supported Mixta PLC in obtaining bridge finance, advised on the bond and CP issuances and security structure, and we leveraged our extensive distribution capability to successfully sell the bonds and CPs.

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TraderMoni begins N15,000 disbursements as more beneficiaries pay back

he Bank of Industry has begun the disbursement of N15,000 TraderMoni loans to beneficiaries who have successfully paid back their first N10,000 loans. Every day petty traders and artisans — and other MSME operators/owners — across Nigeria struggle to access much

needed finance to build their businesses. MSME data shows that even though MSMEs employ about 84% of the labour force; contribute 50% of the GDP, these businesses are not able to access funding that can move their businesses beyond the MSME level to the Small/ Medium Enterprise level. In fact, in 2017, the MSME segment

received a meagre 0.04% of all bank loans originated in Nigeria. With little profit margins, many MSME operators resort to loan schemes with cut-throat interest rates and cumbersome repayment plans. These unsavoury loan products are detrimental to their businesses, and/or personal wellbeing. This situation has

helped keep millions of Nigerians unbanked making it even more difficult for their businesses to expand. In realisation of these challenges and in recognition of the sheer possibilities that the MSME sector holds for the economy; in 2016, the Federal Government launched the Government Enterprise and

Empowerment Programme (GEEP). Through its signature products — MarketMoni, FarmerMoni, and TraderMoni — the programme has reached over 1.5 million Nigerians through small loans. These loans, starting from N10,000 up to N300,000, have helped beneficiaries to transform their businesses.

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Nestlé taps local inputs to boost Nigerian operations Gbemi Faminu

estlé Nigeria, one of Niger ia’s largest f a st- m ov i ng consumer goods firms, is tapping local raw materials to boost its operations across the country. Headquartered in Switzerland, the foods maker has shown that it is not just taking from Africa’s largest economy, but it is also giving, as its interest extends to developing the country’s latent raw materials. The manufacturer has enrolled thousands of farmers in its backward integration programme, converting inputs into quality raw materials to meet expected standards. Formerly an importer of raw materials, it now sources local inputs from over 41, 600 local farmers and processors across the country. This makes Nestlé Nigeria one of the local input content drivers, as it sources 80 percent of the company’s inputs locally.

“The Industry has huge needs and we must help farmers improve their yields to meet them,” said Mauricio Alarcon, CEO of Nestlé Nigeria Plc recently. “To achieve real success with connecting farmers to industry, a 360 degree approach which will include the aggregators, processors,

and logistics suppliers must be considered within this value chain,” he added. In a statement made by Nestor Finalo, supply chain manager for Nestlé Nigeria, the company said local suppliers constitute more of its direct suppliers. He said the company has up to 1,000 direct suppliers, with 700

of them being local players. The company plans to bring in many more local suppliers as long as they are able to fulfil all the requirements attached, he added. The baby foods maker has more than three functional factories in Nigeria, equipped with processing locally obtained raw ma-

terials such as corn, millet, sorghum and soya, which are major inputs for the company. According to Nestlé’s manufacturing operations report, the company aims to purchase raw and packaging materials majorly from local sources, believing that it will aid in developing the economy, creating job opportunities and maintaining a strong stance for the naira against continuous dominance of the dollar. According to data from the Manufacturers Association of Nigeria (MAN), utilisation of local raw materials by manufacturers in Nigeria stood at 56.6 percent in the first half of 2018. Local sourcing of raw materials in food, beverage and tobacco sub-sector in the first half of 2018 was 79.12 percent. Nestlé Nigeria is one of the companies responsible for this high local input sourcing in the industry. The company also helps farmers improve their living by investing in sustainable farming practices through the Sorghum and Millet in

the Sahel, Feed the Future Nigeria, and Nestle Maize Quality Improvement projects. BusinessDay analysis of the company’s financials for nine months to September 30, 2018 shows that its revenue was N203 billion, which was a 10 percent increase from the N185 billion recorded in the same period of 2017. The profit grew by 44 percent to N33 billion, having had N22 billion in 2017. Its profit before tax was N48 billion, which is 39 percent higher than N34 billion achieved in the same period of 2017. Nestlé’s total equity also witnessed a 22 percent increase, having had N56 billion in 2018 as against the N45 billion in the same period for 2017. Furthermore, the company’s board members are set to meet to discuss and approve for public disclosure, the externally audited financials for the full year 2018 on the 4th of March. Issues relating to dividends payment will also be discussed.

‘Huge opportunity exists in Canada for Nigerian exporters’ Kenneth Oguzie is the director of African -Canada Trade and Investment Venture. He speaks with Business Day’s Harrison Edeh on opportunities for Nigerian businesses in Canada.

What can Nigerians export to Canada or import from there? anada is home to world-class businesses in multiple s e c t o r s ra n g i n g from agriculture and agribusinesses, unique beverages, health foods, information and communication technologies, ocean technologies, to oil and gas services. Canada has a long trade history with Nigeria and Africa as a whole, with bilateral trade between both countries averaging about $2.3 billion yearly since 2006. This has been projected to grow further after the Foreign Investment Promotion and Protection Agreement (FIPA) signed a few years ago to improve ease of doing business between both countries. Canada’s exports to Nigeria totalled $313 million in 2016, which makes Nigeria Canada’s third largest export destination. Most of these came from wheat, manufacturing equipment, software, aeronautics, seafood (Nova Scotia), cars as well as servicebased industries, including IT and financial services infrastructure. In addition, Canada refines a good chunk of crude oil from Nigeria. From the Nigeria side, most of exports to Canada consist of mineral fuels and oils, cocoa, rubber, agricultural products,

lead and processed foods. There are also opportunities for increased export especially in the areas of agriculture and agri-business. Products such as ginger, palm kernel oil, cocoa butter, and shea butter are also been imported from West Africa, including Nigeria, to Canada. Chinese, British and American goods and services are very popular in Nigeria, and in high demand too. But not much is known about Canada’s. Why is this so? I think Canadian products are in abundance in Nigeria, but probably the general public is not aware. Manufacturing equipment, wheat, seafood and aeronautics are large-scale imports from Canada to Nigeria. A great chunk of seafood consumed in Nigeria comes from Canada. Organisations such as Africa Canada Trade Investment ventures ( www. activafr.com) are capable intermediaries to contact for information on potential buyers in Canada. As the British, Chinese markets are getting more saturated. Businesses should consider exploring new markets, including Canada especially with their friendly trade rules. Canada also has more than 300 commercial ports and harbours for transport of goods locally and internationally and is also home

to the world’s longest inland waterway open to shipping in addition to its sophisticated rail transport system for goods and cargo. The Nigerian government is determined to ensure increase in non-oil exports. In concrete terms, what are these things Nigerians can export to Canada? These are some of the products that I alluded to earlier, including mineral fuels and oils, cocoa, rubber, agricultural products, lead and processed foods. Other agricultural products include ginger, palm kernel oil, cocoa butter, and shea

Kenneth Oguzie

butter, among others. There’s a belief among many in Nigeria that there is currently a hostile immigration attitude towards wouldbe Nigerian immigrants. Is this different in Canada? I would not use the word ‘hostile’ as Canadians are one of the friendliest people on earth and there is evidencebased research to support this. I think Canada has a robust and objective immigration system which might appear ‘daunting’ on the outside but is not overly complicated if an individual puts in the work to study it thoroughly and see if they meet the

requirements. The application and immigration pathway is straightforward but it has been formulated majorly to ensure highly skilled professionals are the main targets. That is not to say, there are not opportunities for international students as well as refugees and asylum seekers who have been displaced from their countries for one reason or the other. In fact, between 2015 to 2018, Canada was one of the countries with the highest number of refugees and asylum seekers who chose Canada as they consider it a safe haven for them and their families. The United States a few years back deliberately promoted policies that encouraged the import of certain African food, why has Canada not followed suit? The aim of the bilateral trade agreement (Foreign Investment Promotion and Protection Agreement) signed a few years ago is to improve ease of doing business between Nigeria and Africa, and there are empirical data to show how imports and exports have grown between both countries since that time. African businesses looking to connect with businesses in Canada for export and trade opportunities are encouraged to network and attend trade summits, including the upcoming Trade and

Investment Summit taking place in Halifax, Canada in March 2019. Businesses can get the opportunity to meet with senior decision makers of Canadian businesses looking to partner and engage in Trade with African businesses and build connections. What are your plans to encourage a robust and mutually beneficial relationship between Canada and Nigeria? As an individual and the director of African Canada Trade and Investment ventures (ACTIV), a leader in building business bridges between Canada and Africa and connecting businesses, we provide business expertise to businesses across both regions as a result of our extensive and in-depth knowledge and understanding of both markets, including regulations, culture and access to decision-makers within the private sector as well as government. We also host trade and business summits such as the upcoming Nova Scotia-Africa Trade and business summit taking place in Halifax, Canada. This first of its kind event in Maritime Canada will give African businesses that much desired platform to gain international exposure for their business and build long last relationships with their Canadian counterparts.

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Monday 25 February 2019

Manufacturers canvass reduction of corporate taxes to attract investors …as FIRS plans to cut taxes for MSMEs ODINAKA ANUDU & GBEMI FAMINU

anufacturers say federal and state governments should cut corporate taxes to reduce production costs borne by businesses and attract foreign investors. “Most countries are reducing corporate taxes in an effort to encourage investors, which is what Nigeria should be doing in order to increase investment in the organised private sector,” Paul Gbededo, group managing director, Flour Mills of Nigeria, said at an interactive session between the Manufacturers Association of Nigeria (MAN) and the Federal Inland Revenue Service (FIRS) in Lagos. Gbededo, however, added that the FIRS was making efforts to support the business environment, stating that taxes should be paid regularly in order to boost social development.

L-R: Dimeji Iyowu; Omodolapo Oshundeyi, both of Clarion Events West Africa; Jafar Abdullah, planning officer II, Raw Materials Research and Development Council (RMRDC); Joseph Oru, project manager, Clarion Events; Mayowa Nunayon of Clarion Events; Odinaka Anudu, industry editor, BusinessDay; Oludolapo Ashiru, special reports editor, and Yvette Dimitiri, audience engagement manager, BusinessDay, during Clarion Events’ visit to BusinessDay’s corporate head office in Lagos last Thursday

Nigeria’s taxes have risen from 37 to 54 in the last four years, according to tax experts. Manufacturers and corporate organisations contribute a lot of money in taxes, but they are also battling high production cost and low purchasing power of Nigerians.

Mansur Ahmed, MAN president, said revenue from taxes had significantly improved and fast becoming another credible source of central government’s yearly budget funding, thereby minimising the vagaries and volatility associated with oil prices at the international

Hundreds of manufacturers ready for 3-in-1 expo ODINAKA ANUDU

undreds of manufacturers are preparing for a 3-in-1 expo, which will see local and international companies congregating in Lagos in March. The event, which holds at Landmark Event Centre between March 12 and 14, will collocate Manufacturing &Equipment Expo with the Raw Materials Expo and the Multimodal West Africa. The event is significant as it enables manufacturers to understand and learn locally available raw materials that are not put to proper use. It will also show manufacturers available machines that can solve some of their production problems. Moreover, Multimodal West Africa is the largest transport and logistics. By collocating it with the two events, manufacturers can now establish contact with the best transport and logistics firms across the world. Prominent government officials and policy makers

will be at the event. Experts believe the event is part of Nigeria’s vision towards achieving economic expansion and increasing growth. The event’s theme is, ‘Optimising Value Chain in Manufacturing Sector to Ensure Sustainable Growth and Competitiveness’. Joseph Oru of Clarion Events, who is also the project manager of the event, said the manufacturing and raw materials expos, which are in their fifth year, have been the only platform where manufacturers get the latest technology in the sector. Oru said there will be conferences where experts speak to owners of micro, small and medium businesses on how to scale their business and achieve growth. He added that another conference will be devoted to women in manufacturing sector. Women manufacturers will listen to their successful peers, who will tell their success stories and reveal how they succeeded. He disclosed that big firms such as Dangote Group, Sona

Group, Procter &Gamble, among others, as well as those from Italy, South Africa and other countries will participate in the event. “Our biggest achievement so far is that we have solved the problem of bringing local raw materials to manufacturers,” Oru said during a visit to BusinessDay corporate head office in Lagos. “In the last three years, manufacturers have sourced more raw materials locally,” he said, adding that several companies are trying to explore backward integration. On her part, Mayowa Nunayon of Clarion Events explained that the event has become important as many manufacturers do not know many locally available inputs. “They now know that many raw materials are available locally,” she said. Jafar Abdullahi, planning officer at the Raw Materials Research and Development Council (RMRDC), said his organisation uses the event to support manufacturers in their quest to source inputs locally.

market. “Government should widen the tax net rather than increasing the tax rate, thereby moving up taxes and levies, which are usually borne by the narrow tax compliant segments of the populace, especially corporate entities, majority

of whom are manufacturers and whose internal system cannot permit avoidance or evasion of tax,” he said. Segun Ajayi Kadiri, director-general, MAN, said the FIRS was a credible partner to MAN in efforts to improve the Nigerian economy. He requested that every government agency should work hand in hand with MAN to foster growth in the manufacturing sector. Babatunde Fowler, executive chairman, FIRS, said the agency was making plans to ease the business environment for Micro, Small and Medium scale Enterprises (MSMEs). This would be done through tax reduction, tax waiver and patronage, he said. “The FIRS follows the vice president’s team on tours relating to the ease of doing business. In addition to that, all penalties and interests dealt on unremitted taxes up to 2016 have been waived for MSMEs,” Fowler said. He said the agency held re g u l a r m e e t i n g s w i t h MSMEs and plans were being made with the minister

of finance to reduce tax rates for them. He further disclosed that there were directives from the office of the president and the vice president to ensure that government agencies at the federal level patronised local manufacturers with 40 percent of all its expenditures. He further said tax multiplicity did not exist in Nigeria, explaining that multiple taxation only existed when two tiers of government were charging the same tax at the same time. He stated that investigations under the Joint Tax Board (JTB) exposed fraudulent activities relating to tax and called on all stakeholders and tax payers to report all uncertainties regarding taxes to the FIRS. Fowler also disclosed that the FIRS remitted N5.3 trillion to the federal government in 2018, with 55 percent coming from the non- oil sector. He commended the manufacturing sector for being major contributors and for paying taxes regularly.

Why Nigerian-American Chamber’s trade mission is significant ODINAKA ANUDU

he Nigerian-American Chamber of Commerce is set to lead delegates on a trade mission to Silicon Valley, USA. The five-day trade mission themed ‘Turning Promises to Action’ will bring together the Nigerian private and public sectors, in an effort to learn more about the available technology opportunities in the emerging market and improve Nigeria’s financial infrastructure. Apart from boosting Nigeria-American trade by connecting businesspeople from both countries, experts believe the trade mission will attract the much needed Foreign Direct Investment(FDI) to Nigeria. The trade mission is an annual commitment of the chamber to promoting the development of trade, commerce, investment and in-

dustrial technological relationships between the public and private sectors of the Federal Republic of Nigeria (Nigeria) and the United States of America (United States). It is targeted at driving socio-economic growth and development for all. It will take place between April 28 and May 3, 2019. Delegates will be hosted by the Silicon Valley Nigeria Economic Development Inc. There will also be meetings with Silicon Valley top executives, angel investors and venture capitalists in information technology, and Silicon Valley organisations (chambers of commerce; Silicon Valley tech companies; the mayor of San Jose, amongst others). This is a time when delegates leverage the chamber’s initiative to meet new international buyers and distributors, expand into new markets, exchange market knowledge, network, gain insight from

industry experts and promote their business across border further generating new business for their company’s. The trade mission will attract businesses in IT, banking, agric, tech, cloud technology solutions, artificial intelligence, robotic process automation, block chain, and smart contracts, amongst others. Last year, the NACC led delegates to Washington DC, USA, where it had success stories in new deals and investments. This year, the chamber, in fulfilling its objective of linking businesses in Nigeria to global enterprises, will not only create business opportunities for participating delegates but is prepared to lead a movement of many more success stories. More information is available on the Chamber’s website. www.nigerianamericanchamber.org

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Our plans for Chi Limited, by Coca-Cola ODINAKA ANUDU

oca-Cola Company recently completed a 100 percent acquisition of Chi Limited’s juice, dairy, snacks, ice tea, and retail segments. Peter Njonjo, president of West Africa business unit of Coca-Cola, said the global firm plans to make Chi products billion-dollar brands. He told BusinessDay in Lagos, in an interview, that Coca-Cola would expand Chi’s distribution network to reach all parts of the country. “You know there is something Chi is doing right that makes it successful,” he said. “You will see a lot more investments going into Chi, focusing on distribution and how we work with our customers.” He explained that the company would train Chi’s staff more to enable them meet expected goals. “If you are to grow fast, you will invest in talents. So, we will invest in people. There will be a lot of investments that will come to Chi, but that change will not translate into something that the consumer will see as a

distinct difference,” he said. “Right now, there has been a lot of focus on Lagos, but how do we go outside Lagos and reach other parts of the country? And how do we get to other parts of the continent? For example, if you

think about the Vietnams of this world, it is very similar in terms of population dynamics with Nigeria.” He explained that the key question centres around what Coca-Cola can do to be successful in Nigeria and then

build Chi brands and push them to other parts of Africa. “As we mentioned, our objective is to ensure that Chi and Hollandia become billion-dollar brands. For us to achieve that, you need to have a different mind-set.”

He stated that Chi is already in South Africa and is launching in Democratic Republic of Congo (DRC). “We will be launching in Ghana. In Ghana, we are already exporting from here. We have trucks driving up

and down in Accra. For us, it is a huge commitment,” he said. He stated that nothing would significantly change in Chi Limited as Coca-Cola does not intend to change logos and brand identities of already-established Chi brands. “So far, the brands have resonated with the consumers and they have developed relationships with the brands,” he said. “So, if you acquire a business and you start significantly changing the brands, there is a risk of you not deriving the benefits that you set out to achieve as a result of acquiring the brands,” he added. “In companies where we have been successful globally, we acquired the business and, to a great extent, let it continue running. We then figure out what we can get from the Coca-Cola Company that is relative to the new organisation and we just give them that. We do not try to change them, because when you try to change them, you lose why you acquired them. That is, for us, our commitment. You will not see much change from the products standpoint,” he explained.

International Breweries shows grit amid competition

nternational Breweries is showing that it is capable of being a market leader in the Nigerian brewery industry in the near future. Last year, the brewer commissioned its $250million Gateway plant at Bara village along Abeokuta-Sagamu interchange. This is the fourth brewery plant owned by the firm, with existing three breweries in Onitsha, Ilesha and Port Harcourt. That is not all. It is also seen as the largest breweries in the West African subregion. With this plant, the brewer is positioning itself for effective competition in an industry that also has the Nigerian Breweries and Guinness as key players. History favours International Breweries. Founded in 1971 by Lawrence Omole, it was listed on the floor of the Nigerian Stock Exchange in April, 1995. On 1 June, 2012,

SABMiller took over the firm following a strategic alliance with the Castel Group. SABMiller had earlier acquired a controlling interest in Pabod Breweries Limited in Port Harcourt and built a green field brewery – Intafact Beverages Limited in Onitsha. In September 2016, AB InBev combined with SABMiller worldwide, thereby effectively owning controlling interests in Intafact, Pabod and the then IBPlc. In November 2017, Intafact and Pabod Breweries combined with International Breweries Plc to form International Breweries. Today, it is still the subsidiary of AB InBev. Today, International Breweries has two brands that have been accepted by fun-seeking Nigerians. Seen as economic brands, Trophy Lager and Hero Lager have become engines of International Brewery’s business. The brewer offers consumers further choice with

Castle Lite lager and Eagle Lager and Eagle Stout brands. Just before the World Cup, the firm unveiled Budweiser, launching it with its sponsorship of the FIFA World Cup tournament in

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Russia. Apart from beer, the company also produces malt drinks, with Grand Malt and Betamalt as key brands. “With the coming on stream of this brewery, 600 direct jobs and well over

2,000 indirect jobs will be created along our value chain,” Annabelle Degroot, managing director, said during the launch. “Our combined contribution to the Nigerian

economy through the already existing breweries is well above N8billion in excise, N7billion in VAT and in N2.5billion in other taxes annually. As we grow and prosper, so will our contribution to the economy,” Degroot said. The plant will, indubitably, have multiplier effects on the economy, adding jobs and growing other affiliate industries. “ Yearly, we buy over 30,000 tons of sorghum and maize and other raw materials locally. This will be significantly increased with the coming on stream of this new brewery,” she said. Degroot said the firm had also positively impacted the growth of several other industries, pointing out that manufacturers of cans, crown corks, bottles and labels had benefitted from the brewer’s steady and increasing patronage, enabling them to generate further employment.

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FC Bayern Youth Cup: Allianz Nigeria strengthens sponsorship talks

T L-R: Richard Borokini, director general, Chartered Insurance Institute of Nigeria(CIIN); Sunday Thomas, deputy commissioner for Insurance, Technical; Isioma Chukwuma, council member, Chartered Insurance Institute of Nigeria; Eddie Efekoha, president, Chartered Insurance Institute of Nigeria; Andrew Nevin, advisory partner and chief economist, PwC West Africa; Funmi Babington-Ashaye, council member, Chartered Insurance Institute of Nigeria; and Okey Udezue, CEO Don Mitchell & Co at the 2019 CIIN Business Outlook Seminar held in Lagos recently.

PWC scribe want insurers to focus on growth catalysts to deepen penetration Stories by Modestus Anaesoronye

WC chief economist, Andrew Nevin has challenged the Nigerian insurance industry to discover its growth catalysts to be able to deepen penetration. He said the growth catalysts would be to drive products that have both savings and investment elements, stating that such will attract the attention of Nigerian’s and also align with their psyche. Nigeria’s insurance penetration, which is the contribution of the industry to the GDP, is still at an abysmal 0.3 percent, despite the country’s huge population over a180 million people. Nevin made the disclosure during a question and answer session during the 2019 Economic Outlook Seminar organised by the

Chartered Insurance Institute of Nigeria (CIIN). Nevin said that when the growth catalysts is discovered, the next effort will be on how to regain customer trust, by ensuring that claims are paid promptly, as well as other quality service experience. He further observed that the popular Old Mutual in South Africa was more of an investment and asset management company with insurance complimenting its services. That should be replicated here. “Looking at the psychology of Nigerians, what will sell here are products that have savings elements, investment elements, so that if no losses occur at the end of the day, they can have their savings and returns on investment, paid back to them. That will be the catalyst, he stated. Andrew Nevin reviewing Nigeria in 2019, stated that the country was not among the fastest growing econo-

mies in Sub-Saharan Africa (SSA) by percentage growth in GDP. According to him, the largest economies in SubSaharan Africa offer opportunities for business growth, particularly when considering an expansion into new regions He also stated that economic growth is still sluggish, characterised by lackluster recovery, where the real GDP growth is expected to grow slightly to 2.5 percent year-on-year on moderate improvements in net exports and domestic demand. “Depressed oil demand coupled with production supply cuts and price fluctuations will impact the economy’s growth trajectory, he said. He said the investment climate will also be dampened in the short-term by uncertainty, usually associated with the pre and post-election cycles in the country. “We expect revenues to

underperform budget by 27 percent, as a shortfall in oil supply offsets the impact of oil price growth scenarios. “Consequently, debt service to revenue expands higher than the projected 31 percent in the budget, while fiscal deficit widens by 79 percent to N4.55 trillion (3 percent of GDP). We expect that the deficit will be funded by an increased issuance in the domestic bond market”. On the good side, he said the Nigerian diaspora sent an estimated $25 billion in remittances to the country in 2018, representing 6.1 percent of GDP. This figure translates to 83 percent of the Federal Government budget in 2018 and 11 times the FDI flows in the same period. “Nigeria’s migrant remittance inflows were also seven times larger than the net official development assistance (foreign aid) received in 2017 of $3.359 billion”.

he local operating entity of global insurance giant, Allianz, may be concluding talks to sponsor the Nigeria leg of the football club (FC) Bayern Youth Cup. FC Bayern Global partners, the Allianz Group is famous for the Allianz Arena which is also home stadium of the Bundesliga champions. Ahead of the national finals, the FC Bayern Youth Cup delegation led by the Nigeria tournament director and VOE Foundation representative, Victor Edeh, had paid a courtesy visit to the Lagos office of Allianz. Speaking during the visit, Ibitunde Balogun, head of Research, Strategy and Projects at Allianz Nigeria enthused that as a responsible global corporate citizen, the Allianz Group was committed to promoting fitness and wellness through sporting partnerships that encouraged young and old to explore life more fully. “We are looking very closely at keying into sponsorship opportunities with the Nigeria leg of the FC Bayern Youth Cup in the coming year and keeping this partnership for a long time as it aligns well with our current global and local corporate strategy”, Ibitunde Balogun disclosed. Staff at Allianz Nigeria were excited to have photo sessions with Klaus Augenthaler, 1990 World Cup winner and FC Bayern Legend who personally signed jerseys handed out as souvenirs. The football legend expressed optimism that there is a lot of talent in Nigeria and looked forward to a bril-

liant outing in Germany by the Nigeria team selected at the national finals. Over a thousand people were in attendance to witness the national finals which took place at the Meadowhall school in Lekki, Lagos on February 2 &3, 2019. The youngsters competed earnestly for a place in the national team to represent Africa’s most populous nation at the Youth Cup world finals in Germany and eventually, a total of ten players were selected from the different teams. Team Nigeria will be invited to camp at the start of May, in preparations for the world finals. This is the second year Nigeria will be sending a team to the world finals in Germany. The Allianz Group is one of the world’s leading insurers and asset managers with more than 88 million retail and corporate customers. Headquartered in Germany, Allianz customers benefit from a broad range of Personal and Corporate insurance services, ranging from Property, Life and Health insurance to Assistance services to Credit insurance and Global Business insurance. The Allianz Group is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers, while their asset managers – Allianz Global Investors and PIMCO – manage an additional 1.4 trillion euros of thirdparty assets. In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the Group.

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Snap shot of insurers Q3 gross premium income BALA AUGIE

mid apathy towards insurance, poor regulations, and tough and unpredictable macro-economic conditions, 19 largest insurers have been growing steadily in the last five years even during the recession period. But the uptick has been at a slow pace when compared to peers in counties like Morocco, Kenya, Egypt, and South Africa, where a young and rising middle class are driving the industry. Of course, National Insurance Commission (NAICOM), the body that regulates insurance business in Nigeria, have said that they are rolling out various initiatives with the main objective of deepening and broadening insurance penetration in the country. The cumulative gross premium income (GPI) of 19 largest listed insurers that have released third quarter 2018 results increased by 13.39 percent to N172.11 billion from N152.32 billion as at September 2017. Further break down of the figures shows combined GPI was up 6.17 percent in 2014-15, at the height of the precipitous drop in crude price, and there was an increase of 14.01 percent in 2015-16 amid a severe dollar shortage that saw the coun-

try slip into its first recession in 25 years. Additionally, cumulative GPI was up 15.79 percent in 2016-17, thanks to as rebound in the crude price and production and introduction of a flexible exchange regime that added impetus to business activities. A breakdown of the figure shows AIICO Insurance’s GPI was up 13.77 percent to N25.93 billion in September 2018 as against N22.35 billion the previous year. The charts show the insurer’s top line fell 7.16 percent in 2014-15 financial years, but GPI has been increasing since 2016. AXA Mansard Insurance Plc’s GPI stood at N24.71 billion in September 2018, this compares with N19.65 billion in 2017, N15.23 billion in 2016, N14.75 billion in 2015, and N13.50 billion in 2014. N.E.M Insurance Plc’s GPI stood at N10.46 billion in September 2018, from N9.82 billion in 2017, N7.96 billion in 2016, N7.43 billion in 2015, and N6.79 billion in 2014. Mutual Benefit Assurance Plc’s GPI was up 12.72 percent to N10.46 billion in September 2018, from N9.28 percent as at September 2017. But this compares with the 15.36 percent drop in revenue in 2016-15 financial period.

Wapic Insurance’s GPI stood at N8.62 billion as at September 2018, from N7.28 billion in 2017, N5.52 billion in 2016, N4.38 billion in 2015, and N3.52 billion in 2014. Consolidated Hall mark Insurance’s GPI was up 19.27 percent to N5.20 billion in September 2018, from N4.36 billion the previous year, but the insurer’s revenues were down 10.65 percent to in 2017-16 financial year. Royal Exchange Plc’s GPI increased stood at N11.18 billion as at September 2018,

from N10.36 billion in 2017, N9.38 billion in 2016, N8.19 billion in 2015, and N7.56 billion in 2014. Cornerstone Insurance Plc’s GPI stood at N8.12 billion as at September 2018, from N6.46 billion in 2017, N6.04 billion in 2016, N5.22 billion in 2015, and N3.83 billion in 2014. While premium income has been growing in the last 3 years, Stalk holders say it is growing at a slow pace, Indeed insurers’ capital bases are weak for them to

take on more risk and magnify earnings as evidence is deteriorating profit margin. The combined profit margin of 19 largest listed insurers fell to 12.15 percent in September 2018 from 20.18 percent as at September 2017. Of all the companies under our coverage, only Cornerstone Insurance

ernance, risk management, capital adequacy and others,” said Mohammed Kari, Commissioner for Insurance ‘‘We are also exploring ways to ensure that insurance companies are adequately capitalized to enhance their risk-bearing capacities. This was the thinking behind the capital

and Consolidated Hall Mark turned each unit invested in sales into higher profit. “NAICOM fully appreciates the necessity of having insurers that can safely carry the risks they underwrite. As such Risk-Based Supervision is being adopted as a regulatory tool because it is proactive and addresses the key issues of corporate gov-

initiative of the commission,” said Kari. Some industry experts were disappointed at National Insurance Commission (NAICOM) for suspending the Tier Based recapitalisation exercise, casting a pall on the ability of the regulator to implement radical reforms that would spur the industry to growth.

Linkage Assurance moves to strengthen ties with brokers Modestus Anaesoronye

inkage Assurance Plc, a frontline Insurance firm in Nigeria has opted to plays host to NCRIB Members in the month of February edition of NCRIB Members’ Evening as part of efforts to extend the frontiers of its operation and break new ground in its relationship with insurance brokers. The bi-monthly event which is scheduled to hold at

T.A Braithwaite Events Hall, Insurance Brokers House, 58 Moleye Street, Alagomeji, Yaba Lagos on February 26, 2019 at 3:00pm would be graced by the cream of the insurance broking profession. The Linkage Assurance team would be led to the event by its managing director, Daniel Braie, a seasoned insurance professional with a distinction from the prestigious West African Insurance Institute (WAII). He is an Associate of the Chartered In-

surance Institute of London and Nigeria, he holds an MBA and is an alumnus of Enugu State University of Science and Technology (ESUT) Business School. He is expected to intimate brokers with the new policy direction of the company, among other issues. Linkage Assurance Plc prides itself as one of the leading insurance companies in Nigeria with a reputation for prompt and accurate service delivery, efficiency and customer satisfaction. For

over two decades, it has been driven by its tested relationship with various respectable brokers/agents. Through its alliance with reputable financial institutions and its growing investment in human resources & information technology, Linkage Assurance Plc has maintained the professional mien required of a global reputable insurance company. Linkage Assurance Plc was incorporated on March 26, 1991 and was licensed to

cover and transact non-life insurance businesses on October 7, 1993. As part of the recapitalisation and consolidation reforms of the Federal Government of Nigeria, the company merged with Central Insurance Company Limited on February 27, 2007 to form a new and bigger Linkage Assurance Plc. The hosting of Insurance Brokers under the aegis of the NCRIB by Linkage Assurance Plc would be quite symbolic, given the fact that

it would be the first edition of the Council’s Members evening in 2019 and will be playing host to over 300 brokers within Lagos and its environThe event would be a win-win event for both Linkage Assurance Plc and Insurance Brokers as it would facilitate harmonious relationship between both parties. It is a known fact that insurance brokers constitute a crucial chain in the insurance industry in Nigeria given the enormous clientele controlled by them.

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Access Bank Rateswatch Market Analysis and Outlook: February 22nd – March 1st , 2019

KEY MACROECONOMIC INDICATORS GDP Growth (%)

2.38

Q4 2018 — Higher by 0.57% compared to 1.81% in Q3 2018

Broad Money Supply (M2) (N’ trillion)

27.07

Decreased by 14.38% in Dec’ 2018 from N31.79 trillion in Nov’ 2018

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

22.72 23.29

Decreased by 1.54% in Dec’ 2018 from N23.08 trillion in Nov’ 2018 Increased by 10.93% in Dec’ 2018 from N2.1 trillion in Nov’ 2018

Inflation rate (%) (y-o-y) Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor) External Reserves (US$ million) Oil Price (US$/Barrel)

11.37 14 14 (+2/-5) 42.63 62.68

Decreased to 11.37% in January 2019 from 11.44% in December 2018 Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9% February 20, 2019 figure — a decrease of 1.26% from February start February 22, 2019 figure— no change from the prior week

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr)

Friday

22/02/19

15/02/19

32,515.52 12.13

32,715.20 12.20

Change(%)

(0.61) (0.61)

Volume (bn)

0.22

0.81

(72.61)

Value (N’bn)

2.24

6.49

(65.45)

Friday Rate

Change (Basis Point)

MONEY MARKET NIBOR Tenor

Friday Rate (%)

(%)

22/02/19

15/02/19

OBB

18.8300

15.8300

300

O/N CALL 30 Days

20.2500 14.0417 11.6357

17.5000 16.0417 2.4822

275 (200) (85)

90 Days

12.8455

12.9866

(14)

FOREIGN EXCHANGE MARKET Market

Friday

1 Month

(N/$)

Rate (N/$)

22/02/19

15/02/19

22/01/19

Official (N) Inter-Bank (N)

306.80 361.48

306.75 361.65

306.80 362.46

BDC (N) Parallel (N)

0.00 360.00

0.00 362.00

362.50 363.00

Indicators

22/02/19

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.) Cotton ($/lb.) Sugar ($/lb.) Wheat ($/bu.) Metals Gold ($/t oz.) Silver ($/t oz.) Copper ($/lb.)

Friday

Change

(%)

(Basis Point)

22/02/19

15/02/19

3-Year 5-Year

0.00 16.74

0.00 15.43

0 131

7-Year 10-Year 20-Year

14.65 14.70 14.58

14.68 14.64 14.54

(3) 6 5

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

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

YTD Change (%)

62.68 2.68

0.00 3.88

(2.76) (12.30)

2317.00 99.65 74.60 13.27 490.50

0.78 (2.59) 4.12 5.74 (3.87)

19.68 (23.46) (3.74) (13.44) 13.15

1322.54 15.85 294.10

0.48 1.28 5.43

0.38 (7.80) (10.28)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS Tenor

Friday

Change

(%)

(Basis Point)

22/02/19

15/02/19

1 Mnth 3 Mnths

10.62 12.07

12.03 12.21

(141) (14)

6 Mnths 9 Mnths 12 Mnths

15.12 16.61 17.30

13.69 16.65 17.42

143 (4) (11)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

AVERAGE YIELDS Friday

1-week Change (%)

BOND MARKET Tenor

Global Economy In Japan, the economy grew 1.4% year-on-year in Q4 2018, after a 2.6% contraction in the September quarter. According to data reported by the Cabinet Office, private consumption, which accounts for more than half of the nation's economy, rose 0.6% as households spent more on eating out and traveling. Capital expenditure was up 2.4% as firms took advantage of record-high corporate earnings to boost capacity and productivity. In a separate development, China inflation rate eased to 1.7% in January 2019 from 1.9% in the prior month on the back of lower food prices. It is the lowest inflation rate in the past 1 year as reported by the National Bureau of Statistics, China. Elsewhere in India, consumer price slowed to 2.05% in January 2019 from 2.11% in December 2018. According to the Office of the Economic Adviser, it is the lowest inflation rate since June 2017 as food prices continue to decline. The Reserve Bank of India recently lowered its inflation forecasts to 2.8% for January-March 2019, mentioning a deflation in food items and a sharp fall in fuel inflation.

Friday

Change

(%)

(Basis Point)

22/02/19

15/02/19

2,758.94

2,762.37

(0.12)

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

8.90 5.54

8.91 5.57

(0.12) (0.48)

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

12.31 -43.42

12.45 -43.26

(0.14) (0.16)

Index

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

Rate(%)

Date

91 Day 182 Day

3,384.18 10,000.00

11.3102 14.4753

13-Feb-2019 13-Feb-2019

364 Day

140,000.00

17.6385

13-Feb-2019

Domestic Economy The National Bureau of Statistics (NBS) in its recent quarterly report said the total value of investment inflows into Nigeria in the fourth quarter of 2018 was estimated to be $2.14 billion as against $2.85 billion, $5.51 billion, $6.30 billion and $5.38 billion in Q3 2018, Q2 2018, Q1 2018 and Q4 2017 respectively. The report titled Nigerian Capital Importation (Q4 2018), revealed that the total value of capital importation into Nigeria in the year 2018 grew by 37.49% to $16.81 billion from $12.23 billion in 2017. The report further revealed that the largest amount of capital importation by type was received through portfolio investment, which accounted for $11.80 billion or 70.2% of total investment inflows, followed by “other investment”, which accounted for $3.82 billion or 22.69% of total investments in year 2018. The report also stated foreign direct investment followed as it accounted for $1.19 billion or 7.11% of total capital imported in 2018. The NBS report revealed that the United Kingdom (UK) emerged as the top source of capital investment in Nigeria in 2018 with $6.01 billion, accounting for 35.74% of the total capital inflow in year 2018. In a separate development, the National Bureau of Statistics (NBS), revealed that the Federation Accounts Allocation Committee (FAAC) disbursed the sum of N649.19 billion among Federal, States and Local Governments in January 2019 from the revenue generated in December, 2018. The amount distributed was from the statutory account, value added tax (VAT) and exchange gain differences comprising of N547.46 billion, N100.76 billion, and N976.53 million respectively. A breakdown of the sum disbursed among the three tiers, revealed that the Federal Government received N270.17billion, states received N178.04billion and the local governments received N133.83billion. The oil producing states received N45.36billion as the 13% derivation fund. Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N4.69 billion, N4.04 billion and N8.04 billion respectively as cost of revenue collections. Stock Market Indicators at the local stock exchange turned bearish as sentiments around the political environment affected the market. The All share Index (ASI) declined by 0.61% to 32,515.52 points from 32,715.20 points the preceding week. Similarly, Market capitalization contracted by 0.61% to N12.13 trillion from N12.2 trillion the prior week. This week, political considerations, notably the outcome of the allimportant Presidential and National Assembly

elections would dominate proceedings on the bourse. Money Market The money market settled in varying directions as short tenured rates rose while longer tenured rates declined. Market liquidity was relatively tight, largely due to Net Open Market Operations (OMO) in the region of N100 billion and February bond auction by the government which drained N150 billion from the system. Accordingly, short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates notched up to 18.83% and 20.25% to 15.83% and 17.50% respectively the previous week. In contrast, longer-tenured interbank rates, such as the 30- and 90-day NIBOR eased to 11.64% and 12.85% from 12.48% and 12.99% the previous week. This week, the market is expected to remain relatively flat amidst expected inflow of bond coupon payment of N39 billion. Foreign Exchange Market The local unit appreciated against the dollar across most market segments. At the Investors' and Exporters window, it gained 17 kobo to settle at N361.48/$ from N361.64/$ the previous week. Similarly, at the parallel market the naira settled higher by N2 at N360/$ from N362/$ the prior week. In contrast, at the official window, it dipped by 5 kobo to settle at N306.8/$ compared to N306.75/$ the prior week. The appreciation recorded in the parallel and Investors' and Exporters market segments may be attributed to the apex bank's regular interventions. This week, we envisage the stability in the market would continue due to consistent FX liquidity injections by the CBN. Bond Market The Fixed Income market closed the week ended 22nd of February 2019 on a bearish note with selloffs seen across select maturities particularly the FEB 2028 which was offered at the recent bond auction. Yields on the five- , ten- and twenty- year debt papers closed at 16.74%, 14.70% and 14.58% from 15.43%, 14.64% and 14.54% respectively the previous week. The Access Bank Bond index declined by 3.42 points or 0.12% to finish at 2,758.94 points from 2,762.37 points the previous week. This week, result of the bond auction held last week will influence market direction in the near term as the unmet demand filters into the Bond market. Commodities Last week, oil prices rose as signs of tighter global crude supplies outweighed pressure from a continued rise in U.S. production and the global economic slowdown. OPEC basket of prices gained $1.69 to close at $65.97 a barrel. 3% up from the previous week. In a similar vein, gold prices rallied as concerns over a global economic slowdown spurred safe-haven demand. Consequently, gold prices increased 0.40% to $1,316.24 per ounce last week. Meanwhile silver prices settled lower by 12 cents, or 0.8%, to $15.77 per ounce on the back of weak demand. This week, we expect crude oil prices will continue to find support from tighter supply on the back of OPEC-led output cuts and US sanctions on Venezuela. For precious metals, prices are likely to inch higher buoyed by optimism over US-China trade talks.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Feb’19

Mar’19

Apr’19

Exchange Rate (Interbank) (N/$)

364

365

Inflation Rate (%)

11.5

11.55

11.6

Crude Oil Price (US$/Barrel)

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

Monday 25 February 2019

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Watchlist

Will Banks see improved ROE in 2018? BALA AUGIE

anks in Africa’s largest economy are expected to see a drop in full year 2018 return on equity because the fundamentals that helped propel portability the previous year has waned. But the big lenders will continue to make money since government will continue to borrow to fund capital project and mop up excess liquidity from the system. In 2017, Banks’ bottom line got a boost from interest income from treasury bills when yields were at all time high and the introduction of a flexible exchange rate system by the Central Bank of Nigeria (CBN) that eased dollar scarcity was a boon for them. Guaranty Trust Bank Plc recorded return on equity (ROE) of 30.17 percent in December 2017, the highest figure since 2015 when the figure stood at 25.55 percent. The lenders’ profit has been rising steadily since 2013, but the growth was slow in between 2015-16. Zenith Bank Nigeria Plc has been using shareholder equity in generating higher profit in the last three years as ROE stood at 22.32 percent in December 2017, this compares with 18.42 percent recorded in 2015. First Bank Holdings Plc’ ROE increased to 6.35 percent in December 2017 as against 2.11 percent in December 2016, albeit lower than the 16.67 percent recorded as at December 2014, before bad loans started showing in its books. Stanbic IBTC Holdings Plc’s ROE jumped to 29.68 percent in December 2017 as against 21.14 percent as at December 2016, but the fastest jump was recorded in 2015-16 financial year. “We shouldn’t expect marked improvement in returns in 2018 because lenders were coming from a low base the previous year, and, also, 2017 wasn’t that bad a year,” said Gloral Fadipe, head of equity research at CSL Stock Brokers Ltd. In 2014, banks were expected to take advantage of a rising population, growing

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middle, and a benign economic conditions, but the precipitous drop in crude price soured such dreams because customers were unable to pay back interest on money borrowed, hence, resulting in huge bad loans. But the big players were able to weather the storm because they have strong capital buffers compared to the smaller players. “We would see single digit ROE for most of them and it would be flat for some,” said Ayodeji Ebo, managing director/CEO of Afrivest Securities Ltd. There has been improvement in asset quality since the country existed the recession in 2016, but credit to the real economy has been ebbing as lenders are cautious of lending to risky sectors. Non-Performing Loans ratio of the banking industry declined by 2.50 percent in the last quarter of 2018 from 14.20 percent in 2017, but the figure is above the CBN’s 5.10 percent threshold, according to a recent report by the National Bureau of Statistics (NBS). But the report stated that banking sector credit to the economy declined 2.9 percent q/q from N15.6tn in Q3 2018 to N15.1tn in Q4 2018 while total banking sector credit tom the economy declined 2.50 percent to N61.70 trillion in 22018 from N63.30 trillion in 2017. Analysts say lenders will continue to apply brakes on lending in 2019 because they will always find a way to make money. “In our view, we believe banking sector credit to the real economy will remain subdued for as long as yields on government instruments remain as attractive as they are,” said analysts at CSL Stock Brokers Ltd. “Even in the event of a moderation in yields on fixed income instruments, many banks believe that as long as yields remain above 10%, they still remain attractive considering that fixed income instruments have no Capital Adequacy Ratio (CAR) implications, are tax free and do not result in NPLs. Little wonder NPLs are moderating with decreasing loans to the real sector,” said the analysts.

P.E

SHORT TAKES 11.37% The consumer price index, (CPI) which measure inflation rate stood at 11.37% in January 2019. This is 0.07 percent points lower compared with 11.44% recorded in December 2018.

$11, 802.27 million Portfolio investment imported to Nigeria in 2018 totalled $11, 802.27 million. The equity and bonds component of Portfolio investment stood at $2, 362.73 million and $0.96 million respectively.

N145.70 Average price paid by consumers for premium motor spirit (PMS) declined 23.7% y/y and 0.1% m/m to N145.70 in January 2019 from N145.80 in December 2018.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: Dipo Oladehinde, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: FIFEN FAMOUS)

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

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Monday 25 February 2019

Markets Intelligence

Equity fund managers’ loss becomes fixed income fund managers gain … As equity-based funds declined 15 percent in 2018, fixed income funds jumped 114 percent IFEANYI JOHN

018 was quite an interesting and terrifying year for fund managers in Nigeria. While some suffered as market losses and fund outflows dominated the year’s activities, others were flying above the moon as inflows swelled throughout the year. Not surprising, it’s the equity fund managers who left 2018 feeling bitter. As the equity market tumbled throughout the year, investors pulled billions out of funds that had equity exposure and increased allocation to fixed income, bond and money market funds. Specifically, ethical funds lost 7 percent of assets under management in 2018, mixed funds lost 8 percent of funds and equity-based fund managers saw their assets under management decline by as much as 15 percent according to data compiled from Securities and Exchange Commission (SEC). “While it is not clear exactly how much of the funds that equity managers lost in 2018 was due to stock market losses or investors outrightly pulling out cash to rotate their portfolio, we think the greatest contributor to the loss last year was the poor stock mar-

ket performance rather than the sector rotation” one equity fund manager told BusinessDay. The Nigerian All Share Index declined almost 18 percent last year, becoming one of the top 10 worst performing markets in the world after only recently enjoying a 42 percent rally in 2017 which made it the third best performing market in the world two years ago. But that golden performance is now history as equity investors are forced to lick their wounds holding onto stocks during a volatile pre-election season in Nigerian markets. As broad market sentiment turned bearish, stock prices declined through the last 10 months of the year causing the All Share Index to shave about 10,000 points between January 2018 and January 2019. Broad market selloffs and high economic uncertainty caused money market and fixed income yields to rise aggressively throughout 2018 and the fixed income fund managers rode on the rising yields to drive up funds under management to record levels. Fixed income funds grew by 114 percent in 2018, followed by money market funds which grew by 60 percent during the year. Bond funds also grew around 51 percent, helping the overall in-

dustry funds under management to appreciate by 58 percent despite significant declines in equity exposed funds and real estate funds which declined around an average of 10 percent and 7 percent respectively. As at January 2018, total funds in the industry stood at N418.8 billion growing rapidly to N621.5 billion at the end of the year

largely propelled by an inflow of around N175 billion into money market funds during the year. Money market funds which totaled N465.2 billion at year end 2018 accounted for about 75 percent of all funds in the market as at December 2018. Analysts told BusinessDay that if treasury yields continue to rise in 2019 as they did in 2018, then fixed

income managers could well have another super year in 2019. As at market close on Thursday (the last trading day before the public holiday), year to date performance on the local bourse was 3.62 percent versus one-year treasury yields which currently sit above 17 percent. It won’t be a surprise therefore to see more cash roll into money market funds in 2019.

NSE underperforms emerging markets index, as Egyptian Exchange, Shanghai leads ISRAEL ODUBOLA AND SEGUN ADAMS

he Nigerian Stock Exc h a n g e ( N S E ) , h av e gained 3.77 percent yearto-date, Tthis compares with Egyptian Exchange (16.72 percent), Shanghai Stock Exchange (12 percent), Nairobi Securities and Exchange (8.36 percent), and Bovespa (7.59 percent). Analysis of the comparison of noteworthy bourses in emerging markets since the start of 2019 – February 20, 2019 revealed that the Lagos bourse outstripped Johannesburg Stock Exchange (-5.17 percent) and National Stock Exchange of India (-2.97 percent). However, performance is below MSCI Emerging Markets Index (7.36 percent), an indicator of equity market performance in global emerging economies. Nigeria Nigeria stock market has not had a fantastic start to the New Year as much as other major bourses. Despite the easing of a hawkish monetary policy stance by Feds, weakening dollar and improvement in key global trends, political risk continue to weigh on the Nigerian as lack of caution on the part of key players in the political space have affected market performance.

Specifically, the suspension of the Chief Justice of Nigeria by President Muhammadu Buhari and the recent postponement of the election by Independent National Electoral Commission (INEC) have each affected investor’s confidence in the economy and weighed on the market. South-Africa The unimpressive performance of the Johannesburg bourse is largely connected to the fragile economic posture of the South African economy. Although the economy has exited from its first technical recession since 2009, in Q3 2018, but growth is gradually gaining momentum.

The JSE witnessed massive capital outflows last year fuelled by hike in US Fed rate. This drastically affected the rand and pared investors’ confidence. However, with the retention of the benchmark repo rate at 6.75 percent, pause in US Fed rate, possible resolution of US-China trade spat and the commitment of the South African Reserve Bank to put the economy on the path of growth, the JSI is expected to jerk up by the end of year. Brazil Bovespa improved performance reflects the resilience of Brazilian economy amid economic headwinds that obstructed

growth of other economies in South Africa. According to Bloomberg, Brazil GDP is one of the 12 global economic indicators to watch out for. The growth in the Brazilian economy expanded 0.8 percent in Q3 2018, above 0.2 percent increase in Q2 2018. This was the highest growth rate since Q1 2017, triggered by the rebound in government expenditure and investment after the country’s diesel crises between May-June 2018 which substantially pared growth. India NSE India lost 2.79 percent year-to-date, reflecting that the market is yet to recover fully

from its de-ratings which caused 17 percent drop in 2018. Major benchmarks - Niffy 50 and BSE Sensex lost 1.17 percent and 0.87 percent respectively year-to-date. Analysts at the global scene positioned that Indian market would record improved performance by the end of 2019 as returns is expected to range between 10-15 percent, on the back of strong earnings, moderate de-ratings and absence of global and domestic political shocks. China China Stock Market is currently in a bull market as government stimulus amid fears of economic slowdown fuel the uptick, driving all four major equity benchmarks to new highs since May 2015 with the Shanghai composite index at 12.00% Year-to-Date as at Wednesday. The relative strength of four major indexes has all climbed above 70. Despite The Dow Jones China Index closing bearish last year on the heels of a the US-China Trade war, which saw both countries impose sanctions on each other and dampen global growth commerce, the Dow Jones China index is currently on a rebound that’s now nearing $1 trillion since January. Investors are largely bullish as resolution on the trade war between Beijing and Washington remains on-going.

Monday 25 February 2019

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How Balogun makes her mark in fashion industry Gbemi Faminu

niola Balogun is a you ng, i n n ovat i ve fashion designer and chief executive officer of Nymodera Wears. She describes her brand as one that deals with interpreting fashion details, creating quality and affordable outfits while bringing comfort and confidence to women. Although she has her Ordinary National Diploma (OND) in Mass Communications from Yaba College of Technology, she is currently a student of the Lagos State University, where she studies Educational Technology. She was inspired to become a designer by her love for fashion and good designs. “I am never satisfied with what tailors sew for me. I love keeping myself busy and I am very innovative when it comes to fashion,” she tells Start-Up Digest. “This motivated me to enrol in a local tailor shop and here I am today,” she adds. She started her business in 2015. This was when she was in Yabatech on a part-time programme. During her free time, she went to learn how to sew and soon was

making outfits for herself. Seeing her progress, her parents and grandfather got her necessary machines and instruments to start her own business. She sewed dress for herself and her friends were impressed. They subsequently requested their own clothes and paid her for the services. That was how she started. On how she copes, juggling both school and business, she answers that “It is not easy because I get jobs often but I always try to create time for both of them so one does not affect the other.” Ev a l u a t i n g h e r b u s i n e s s growth, she mentions that she is proud of how far she has come, although it has not been easy. She says her business has been booming as clientele base grows. Furthermore, the business made her more attentive to details and helped her to make friends. Although she is yet to have employees, she tries to get affordable quality materials, make distinctive designs and promptly delivers to her customers. This, she says, is why her customers keep coming back while also recommending others. She operates in Lagos and gets her materials locally from major markets in the state. With the aid of social media, she is able to ad-

Eniola Balogun

vertise her products and get more customers. These have helped grow her business. Balogun wants to get more training to gain knowledge, expertise and certification that will help her business to grow further. She also wants to attend an international fashion school. Speaking about her business

Application for Tony Elumelu Entrepreneurship Programme closes March 1

he Tony Elumelu Foundation, an Africanfunded and founded philanthropy committed to empowering African entrepreneurs, has announced its last call for applications into its prestigious 2019 entrepreneurship programme. The application portal launched on the 1st of January 2019 will close on the 1st of March, 2019. Selected beneficiaries will join 4,470 current alumni and will receive $5,000 seed capital, access to mentors, bespoke training and numerous opportunities to impact policies at the local and global level. Open to African entrepreneurs from the 54 African countries, the entrepreneurship programme accepts business ideas as well as existing businesses with less than three years of experience in all sectors of the economy. It has been commended as one of the few acceleratortype programmes that encourage viable businesses at idea stage that can demonstrate potential to scale, generate revenue and create employment opportunities. A 10-year, $100 million commitment to identify, train, men-

tor and fund 10,000 African entrepreneurs, the programme’s objective is to generate at least 1 million new jobs and create at least $10 billion in new business revenue across Africa. One of the success stories from the Tony Elumelu Foundation Entrepreneurship Programme include Mama Moni, founded by Nkem Okocha, a fintech social enterprise that provides loans to women in rural communities in Nigeria. Another one is Desserts Anyone, a chocolate processing enterprise in Kenya, founded by Martin Ruga. It was built from scratch and with the infusion of the capital from the Tony Elumelu Foundation Entrepreneurship Programme, the business now serves over two tonnes of chocolate to over 50,000 consumers. Founded by Abiodun Adereni, Help Mum, a Nigerian-based enterprise that provides low-cost birth kits to prevent child and maternal mortality, recently won the first ever Google Nigeria Impact Challenge and has attracted additional capital investments. Also, iMed Tech, founded by Nneile Nkholise, innovates in the medtech space in South

Africa by using technology to create breast prostheses for women with breast cancer. Another beneficiary is Ahmed Abbas of Egypt, who founded Sun City that provides mobile solar pumps for small farmers. Additionally, six of Tony Elumelu Foundation entrepreneurs were recognised on the Forbes 30 Under 30 List, among many other achievements. Some have been appointed on the boards of global companies, government and developmental institutions, influencing policies at various levels. The programme is inspired by Tony Elumelu’s economic philosophy of Africapitalism and his vision to institutionalise luck and democratise opportunity for a new generation of African entrepreneurs. Applications will be judged based on criteria including feasibility, scalability and potential for growth of the product/ service; market opportunity for the idea/business; financial understanding, leadership potential, and entrepreneurial skills. Applicants can apply on TEFConnect - www.tefconnect.com the largest digital networking platform for African entrepreneurs.

expansion plan, she says, “I intend to build a strong people’s network to grow my clientele database, establish a fashion empire that will also serve as an institute.” “I also want to employ and train people and make my brand renowned and international. I might even incorporate sale of fabrics too,” she says.

Despite the love for her work, Balogun enumerates some of the challenges she encounters in her business. She discloses that, “I find it difficult to access adequate and necessary funds to acquire some important tools.” She adds that some customers can be discouraging with the prices they offer for her services. “Besides, when I have so much to do, It is very difficult to get helping hands. Epileptic power supply is also an issue.” Although she has managed to work her way around these, she still calls on the federal government and capable organisations to lend helping hands to micro, small and medium enterprises (MSMEs) through grants, lowinterest loans, workshops, and sponsored trainings. She also asks that they set up necessary infrastructure to reduce the cost of production and aid faster and neater work. Her mentors include fashion icons whom she hopes to work with in the nearest future. Advising other entrepreneurs, she says, “Whatever is worth doing at all is worth doing well. Hard work and determination must be your watchwords. Make conscious effort to develop yourself regularly.”

Mustard Grain set to hold 2019 master class for entrepreneurs, others Josephine Okojie

he Mustard Grain Projects is set to hold its 2019 leadership master class programme for entrepreneurs and other global transformers. The leadership master class is aimed at personal, leadership and business transformation through various leadership models and processes. Ifejola Adeyemi of John Maxwell Team said in a media briefing that the master class models provide excellent world-views and highlights of solution to the ever-growing challenges in organisations, public offices, and government institutions. “Mustard Grain Projects is company envisioned to promote growth of businesses and nation-building through leadership, knowledge acquisition and skills empowerment,” Adeyemi said. “Our focus is to relate business models that work for individuals, organisations and government establishments,” she added. She stated that equipping entrepreneurs with the right skills that can help them grow their businesses sustainably will help drive economic growth and development. According to her, the leadership programme will help to prepare entrepreneurs and other global transformers and is scheduled to hold from April 1st to 5th, 2019 in the United States. The early bird payments from now till February 28th for registration will attract 10 minutes project presentation and award.

Late fees from March 1st are $1,500 and an optional Atlanta tour to World of Coca Cola, Georgia Aquarium and CNN costs $200. Also, one-on-one-coaching with experts is optional and costs $500 and visa application assistant. Participants can register on mgprojectsllc. com/training/masterregstration She stated that certificate of participation will be given to participants and that 50 percent of the registration fees will be refunded if participants fail to secure a visa. Key speakers of the leadership program include: Selina Haris, an enterprenuer, Olayide Ania, a John Maxwell Team; Jason Stoughton, executive director of John Maxwell, and Ifejola Adeyemi, a John Maxwell Team, among others.

Start-Up Digest Team Odinaka Anudu Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Bummi Bailey Gbemi Faminu Joel Samson Graphics

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Monday 25 February 2019

Start-Up Digest

Tosin Olukuade: Entrepreneur changing Nigeria’s fashion landscape Josephine Okojie

osin Olukuade is the creative director of FC Accessories, also known as #Acessorizing Lifestyles brand. The jewellery and accessory design entrepreneur is making waves in the fashion industry, creating sought-after designs and changing the way the business is run. Tosin’s jewellery and accessory brand consist of a wide variety of manufactured pieces, including earrings, bracelets and necklace that are inspired by cultures and traditions. Tosin, who is a graduate of Political Science from the University of Lagos, was inspired to establish FC Accessories owing to his love and passion for fashion. “Fashion has always had my love for many years, even from when I was a teenager. I was particular about my looks, and a humble background wasn’t a deterrent to that,” he says. To translate what he had passion for into a business, the political scientist established FC Accessories in 2017 but finally registered the business in 2018. “Having been in the business of fashion for about two years ago, the concept of ‘less is more’ became more fascinating to me.

Tosin Olukuade

For the fact that I have been a lover of accessories for many years, I decided to create a premium accessory brand to cater to the very discerning and stylish individuals,” Tosin says. The young entrepreneur was able to raise about half a million naira from family and friends as well as from his personal pocket to kick-start his business. He has not taken loan from any

loan deposit bank since starting. He says the business has grown since starting and will continue to grow despite challenges. “Looking at our growth, I would say that we have fared well, despite the challenges we have faced. I am positive the business is on an upward trajectory, with the future holding a lot of good in store for us.” Currently, the business has three employees who are all full-

time staff members. Tosin tells Start-Up-Digest that he sources his raw materials from markets that offer premium quality. “We source our materials and products from distinct destinations that offer premium quality. We go to every length to discover these sources, some in the far-east, some from Italy and other parts of the world,” he explains. Responding to questions on what the business is doing differently to survive, he says that FC Accessories is leveraging collaborations with other online stores to drive sales of its products. “Our strategy is to increase our number of collaborations, thereby helping us to cut down on overheads, while we expand the brand’s reach to many more outlets,” he says. “Also we are engaged in some selected fashion fairs and expos that afford our tribe greater brand recall and we have unique offerings that stand us out in the fashion space,” the young entrepreneur adds. He states that with the right policies and infrastructure, Nigeria’s fashion industry has the potential to lead on the continent. The political scientist-turnedentrepreneur says that the fashion industry can help diversify the Nigerian economy away from oil

because of its broad value chains. “The fashion industry is one of the top sectors with a broad value chain. We have sourcing, production, designers, tailors and finishers. “With all these, the fashion industry has a high multiplier effect on the economy, and any serious government will pay special attention to it as a veritable economic driver,” he notes. On the challenges facing the business, Tosin says that infrastructural gaps remain the major issue. He notes that poor power supply has continued to drive his business production cost up as it operates an online store. He also adds that poor internet service is a bane to the business. Tosin urges the government to bridge the huge infrastructural gaps in the country to drive industrialisation and increase survival rates of businesses. On his advice to other entrepreneur he says, “With patience, a lot of grit and doggedness, creativity and innovative spirit, a lot of enthusiasm and a can-do spirit, one can make it work as an entrepreneur.” “It is a very challenging terrain, and sometimes are very lonely path, but at the end of the day, if one doesn’t give up, one would earn the reward,” he concludes.

Youths wishing to make millions from mining must be patient— Bamidele Babatunde Bamidele, an engineer, is the managing director/CEO of Glister Success Limited, pioneers in the production of micronised calcium carbonate for high precision industrial applications. In this interview with SIKIRAT SHEHU, he analyses issues surrounding the mining industry. How did you get into mining as a vocation? started my career as an Industrial Engineer in Nigeria Industrial Development Bank and became investment officer whose duty was to appraise industrial projects. A mining project around Kwara/Kogi corridor was appraised by me in 1992 and from there I developed interest. So, in 1998, I promoted a mining project around Oke-Ogun axis of Oyo State, specifically Alagutan/Igbeti axis, bearing in mind that I was an investment banker/ industrial engineer. I was able to let my experience bear on the running of the company and today we give glory to Almighty God. We began the production of high-grade coated calcium carbonate for cable metal and plastic pipes industries in 2012, the first of its kind in West Africa. Before this time, these products were imported into the country. Do you see any prospect of Nigeria benefitting from your industry as an alternative source of revenue for the nation? Nigeria has a lot to benefit from the solid mineral resources in Nigeria, I can say without fear of contradiction that there is hardly any mineral resource that is available anywhere in the world that is not available in Nigeria. I think with the Mining Cadastre system backed with Mineral act of 2007, the Federal Government has done its parts, because

this has given investors adequate security of tenor. However, if the regulatory authorities are transparent in their approach and oversight, the country will benefit immensely from the industry. What are the challenges associated with your work as a miner? I will not take them as problems but rather as challenges and they are surmountable. One of it is the various regulations by government agencies on taxes and operations. Aside this, we have the perception of host communities who think that the mineral deposits in their domain belong to them, thereby coming to ask for their share in one form of the other, and if not well managed, it can create a lot of crisis. I think government should find a way of controlling this so that investors are well-protected from a hostile community. What are your suggestions to government on repositioning the mining and extractive industry? My first suggestion is that government should invite stakeholders, people who are practical on the job. If government needs true guide on making headway in the mining and solid mineral sector, it is not the work of professors or academicians. We in the field have been through the reality on the field. We face challenges and know how they are. So formulating policies about that sector would be best done by us. The bottom-line is liberalisation of

the solid minerals sector. We hear of Illegal miners, how can government deal with this menace? These so-called illegal miners exist as a matter of necessity. Most of the miners see what they do as a means of livelihood and until government provides alternative sources of livelihood for these people, the fight against illegal mining will be difficult because we have them in thousands. My advice is that governments should introduce a scheme to accommodate these illegal miners, train them on modern ways of mining, just the way farmers are trained on modern ways of farming. Take it or leave it, these Illegal miners have

Babatunde Bamidele

become proficient in what they do; accommodating them and bringing them on board as legitimate miners with appropriate license will allow government enjoy their existence in the industry. I am not trying to justify the illegality of what they do, but my point is that they are created by the spate of poverty in the nation, and government must find a way of accommodating them so as to be productive to the society. Government can issue licenses to them. What advice do you have for youths who want to come into mining? It is a very good environment for youths to be gainfully employed, but they need to endure the gestation period before profits start rolling

in. My problem with youths of these days is their unquenchable thirst for quick riches. It takes four to five years before profits start coming in as a miner so making riches overnight does not arise here. What advice do you have for youths passing through hard times and hoping for a better future? Patience, perseverance and determination to succeed. Rome was not built in a day so whatever the youths see happening today is a product of long term efforts coming to fruition gradually. When our youths start on a venture, they must remain focused and endure, business gain does not come in one day, it takes time but when the gains begin to roll in, then the entrepreneur is said to have been established. Patience is essential in business venture. As a manager of men and resources would you like to join politics so as to be able to serve your people? Well, If I am invited by my people, I will readily accept to serve them in any capacity but I will never come and contest any election under the present circumstances in Nigeria. If you remember the Hope 93 scenario that brought about June 12; that was a sad experience, I will not say more than that, but in my views any of us doing business are already part of governance. We employ labour, pay taxes and engage in community development efforts.

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Start-Up Digest

Amaete Umanah: The restless creator, serial entrepreneur ODINAKA ANUDU

maete Umanah can best be described as a serial entrepreneur, having founded Silicon Africa, Pontaba Inc and Honeyflow Africa. He is also the brain behind Kamila, the first company that digitalised the popular ‘Whot’ game. He started a gaming company at Silicon Valley while in California, the United States of America. “One day, I went to a friend’s place in Los Angeles, United States, and we decided to play ‘Whot’, which was quite interesting. I thought that it would be awesome to turn it to an ‘app’. I checked play store but did not see it. So, I decided to be the first person to bring Whot to IOS and Android and after a year of hard work, I was able to accomplish it. That gave me some publicity and recognition in tech scene abroad and in Nigeria. This made me start a secret group on Facebook known as Silicon Africa because I noticed that a lot of us were trying to do different things and learn new things. So, I started the group on January 29th, 2012. As of yesterday, there were 9,800 members from different nationalities,” he recounts. The entrepreneur, who hails from Akwa Ibom State, was born in Atlanta Georgia, the United States. He studied Electronics Engineering and worked in an oil and gas company. He also worked in the

Amaete Umanah

manufacturing sector, after which he went to the Silicon Valley. Amaete got the necessary education and wings needed to properly set up a business. He ran several businesses in the United States, which gave him the opportunity to understand why businesses fail or succeed, having himself had a fair share of failure like many entrepreneurs. Through Honeyflow Africa, the entrepreneur is creating an ecosystem that will revolutionise the agriculture sector. First, he has identified fluids in plants that can attract beneficial insects. What this does is that it prevents the farmer from spending on insecticides and

pesticides. Second, he has done extensive studies on bees. His plan is to build billion-dollar bees/ honey company that will compete world over, in Nigeria. Third, he uses insects to produce local feed for poultry farmers. The feed is much cheaper and the birds (output) are often healthier than those fed with feed in the Nigerian market. “I am a farmer. So, basically, I started three years ago with trying to come up with sustainable ways to cheaply grow crops and raise livestock because feed is expensive and energy to process the food is also a problem. So, I tried to figure out how to solve

that. As a farmer, I grow crops, rear livestock and do greenhouses. So, I incorporate technology info farming,” he says. “At a time, poultry feed was N3, 700 for a bag, which was expensive. So, I thought of ways to create the feed myself which I was able to do by fermenting the feed. You can take the seed, soak it for three days and it will ferment, giving it a bunch of enzymes and amino acids which you can use to feed your chickens. “It is cheaper and more beneficial, and it saves cost. That is what I have used for my livestock in Port Harcourt,” he explains. He says that there is a need to reorientate farmers and teach them to make more money by buying low-cost inputs like the fermented feeds for poultry, and also for a quick germination of seeds. “Instead of waiting for five or seven days to germinate, you can just get a paper towel, wet it, put seed in it, fold it, put it in a zip lock bag, blow some air into it, seal it up and within 48 hours the seed will germinate and they can transfer it to the soil. All these are simple technologies you can do to ease farming. This can be taught to farmers,” he says. “Dealing with pests, we know that some farmers cannot afford pesticide, while some are strict organic farmers. What they can do is to plant specific flowers that will attract beneficial insects, like bees, lady bugs, and praying mantis, among others, which will, in turn, kill the pests. Unfortunately, most

farmers don’t know this.” He states that there is a need to grow beneficial plants and crops that can fight off some of these pests by teaching farmers technology that will add to the bottom-line of what they do. Amaete says he decided to leave the United States for Nigeria because he saw enormous opportunities in the country. “I have always wanted to come back to Nigeria. In October 2013 when I lost my father, I was still at Silicon Valley, but I came back to Nigeria for the burial in November, after which I decided to stay back for a year exploring different opportunities Nigeria had to offer. After a while, I decided to go with agriculture and incorporate technology into it,” he says. How easy has it been for him doing business in Nigeria? The entrepreneur replies that the country is an interesting place to do business. “Henry Ford said, ‘If you think you can you are right; if you think you can’t you are also right.’ So, I always ask myself, ‘Are you teamcan or team-can’t? I say to myself, ‘I am team-can. Nigeria can be frustrating but not impossible. People set up businesses here without godfathers and they are doing fine. So, I will not give up. I have a plan and I have to make it work. So, I have learned to manage my expectations.” The entrepreneur is enjoying positive perception and reviews from investors who have also pumped money into his business.

Meet George Okafor, CEO of Dr Food Enterprises Jonathan Aderoju

eorge Okafor is the chief executive officer of Dr Food Enterprises Nigeria Limited. He hails from Delta State and has a degree in Computer Science. His firm, Dr. Food Enterprises, is a company that deals with manufacturing/production of healthy meals. He started the business in August 2018. He began with the release of Vip Garri, which comes in different flavours such as strawberry and banana. “The health deficiency in garri production makes it totally unhealthy for patients with diabetes and eye problems, among others,” he says. “So, we came up with the concept of VIP Garri, rich in coconut milk to help minimise heart risk and other deficiencies,” he says. He explains that his brand is rich in potassium, vitamin, calcium and honey for healthy eye, with standardised sugar level, which makes it suitable for all. He adds that its benefits vary with flavours. George started the company

with less than N10, 000, which he raised himself, in 2018. Today, he gets his raw materials from his farm and from some suppliers. “We get our raw materials from our farm since it has to do with farm produce. Then we get the rest of the materials from our trusted supplier at Onitsha and Lagos, most especially, in order to ensure efficiency and effectiveness in production,” he says. “Doing things like ordinary people makes you ordinary. You could do something popular in a community yet people may not appreciate it because you are doing something common. But if you do it in a unique way, that makes it different from the rest.” “It begins with the mind-set. I was at the church (World Insight Christian Centre) some time ago and Pastor David was teaching about ‘packaging’. That really struck me and ministered to me that there were thousands of companies in the industry with different names but none was looking universal even though they .are “And we know that whenever anybody hears about the word ‘doctor’, they think about medical doctors. So I thought of the name

Dr Food, which depicts our professionalism in the industry of food and beverages.” “So with this, if anybody needs to see a doctor for food and beverages, they can talk to us.” When asked about his challenges, the young entrepreneur says, “We need finance and that has been the major issue. You

George Okafor

will agree with me that strategies most times without finance can be so frustrating. This has rendered many youths lifeless.” He explains that there are thousands of youths scattered all over Nigeria with quality ideas that are now dead. He says his firm needs support to make its mark in the market and

employ a large number of young people. “Just imagine what giving life to those ideas would look like. Nigerians will no longer cry for good food. This, I can assure, should happen if the government comes into this.” On his long term goals, he says, “For ensuring that nobody is left out on our products, we will penetrate through the major markets in different cities and states. It will also be available in supermarkets. Every Saturday, we will be feasting with our potential buyers and also we will be given 50 percent discount to our products, which makes it access with just N100. There will also be a show-off every last Saturday in potential cities of which prizes will be given.” Currently, he has just employed 18 people within the last couple of months and still counting and he is willing to engage more people. Advising other entrepreneurs and youths, he says “My biggest advice to all youths is to never think within the limitations of your ability, rather learn to think outside the box. It might start small but it will never end small. Stand up and leave your comfort zone and get something working.”

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Monday 25 February 2019

Start-Up Digest

The burgeoning business of furnituremaking, interior decoration ODINAKA ANUDU

igerian entrepreneurs are finding opportunities in furniture-making and interior design. Many of them are introducing innovations, redefining the sector that was once known as ‘old men’s industry’. In the furniture-making industry, which is a critical part of interior decoration, Blessing Ohikhena Sule has proved that a woman can do whatever a man can. Sule is the chief executive of the Lagos-based AASIS Resources Nigeria Limited and is not ashamed to be called a ‘carpenter’. A graduate of Computer Science from the University of Benin, Blessing also holds an Ordinary National Diploma (OND) in Accounting from the Federal Polytechnic, Bida, Niger State. The Edo State-born entrepreneur started with just N2,000. She was motivated to set up her own business few years ago because she always wanted to force herself out of poverty. “I have always wanted to be my own boss. I grew up with all men and have always wanted to better my life to kill poverty. One thing I know, for sure, is that if you don’t build your business, someone will employ you to build theirs,” she tells Start-Up Digest. The entrepreneur says that there is a lot of money to make from furniture-making, adding, however, that it requires patience. She gets international models from the Internet and designs them. Through her work, Blessing has courted customers from various spheres of life, including bank workers, civil servants, friends and family. The social media has also greatly helped her, as she markets her furniture products via Facebook, Twitter and other platforms, while also putting her handbills on church bulletins.

Blessing Ohikhena Sule

In terms of what is trending in the furniture industry, Blessing says it is what is called ‘Strictly Antique’. She states that patronage of locally made furniture is slow owing to consumer preferences and petty considerations. On where she wants to be in five years’ time, Blessing says she sees herself owning a big furniture factory. Next is Marvis Marshal Idio, chief executive of the Port Harcourt-based Jacmavis, which deals in interior design, furniture-making and construction in general. Though the Imo State-born entrepreneur has been in the industry for a few years, she came into prominence in December of 2016 after winning Season 3 of The Next Titan organised by Heritage Bank. A graduate of Architecture from University of Uyo, and with second degree in Interior Designs from Florence Designs Academy, Italy, Idio walked off from that competi-

Chukwubuike Nnoli

tion with N5 million, and a brand new Ford Ecosport from Coscharis Motors. One major reason why she won the prize was her capacity to turn what is commonly called ‘trash’ into raw materials for her interior designs and artistic works. Hence she converts waste products into goods that are sought-after. Her target is to create an African interior decoration brand that will be affordable and environmentally friendly. She plans to always create value for the environment and support others to manage wastes. By so doing, the country will have fewer wastes and jobs will be created along the collection and conversion value chains. Her plan is to turn wastes to wealth, which is when the commonest things anyone sees in her factory in Port Harcourt, Rivers State, are used tyres, cardboard sheets, pet bottles and old furniture pieces, among others.

Another entrepreneur that is making waves in the interior decoration industry is Mimi Shodeinde, chief executive of Minimat Designs. Shodeinde holds a degree in Interior Architecture at Heriot Watt University in Edinburgh, the UK. She is based in the UK but is truly Nigerian. Her artistic work is not only meant for those in the UK but also people in Nigeria and other parts of the world. She started as an artist and interior designer and her firm specialises in furniture and product design for commercial and residential projects in the UK and globally. Interior design is not exclusive to female entrepreneurs. Chukwubuike Nnoli, chief executive of Zubnol Investment Limited, is also making waves in the industry. Nnoli manufactures interior decoration products and supplies them to retail stores, open markets and several outlets. Zubnol produces ‘throw pillows’, bed sheets, baby duvets and embroidery products. His basic business is to buy raw materials, which can be in unfinished or semi-finished forms, and turn them into finished pillows, bed sheets and duvets used in homes, offices and hospitals. Based in Awka, Anambra State, Nnoli’s products are supplied to distributors and several outlets that, in turn, sell to final consumers. Zubnol Investment Limited started in 2011 with N190,000 as Zubnol Ventures. The fund was used to acquire materials. From N190, 000, the business has now grown to over N3 million, supplying products to over 10 outlets located across the country.

“Our target is to capture the local market and the West African market,” the entrepreneur tells Start-Up Digest. “One of the key feedbacks we get is that our products are well designed and durable,” he says. “We are in many stores already and demand is already overshooting supply,” he discloses. “Our target is to satisfy the burgeoning local demand and then export to earn foreign exchange. This, with God, will happen soon,” he says. On the patronage of made-inNigeria products, he says, “I am not expecting Nigerians to patronise made-in-Nigeria products just because they want to be patriotic. The truth is that locally made products are good enough and much, much better than what we get from Asia.” “Going into export requires some capital outlay. You will require a lot of funds. We need N10 to N20 million to acquire some more critical machines and move into a big factory. The creativity is there, the innovation is not lacking, but we need cheap and long-term funds,” Chukwubuike says. He stresses that through the online shop, which will soon be ready, customers in Nigeria or abroad can buy Zubnol products online and have products delivered to them at stipulated time. He points out that the responses he gets from customers convinces him that many Nigerians want cheaper but good products from local manufacturers and retailers. “Our inputs are expensive, which is why some of the finished products are costly. However, in as much as we are making products with a touch of class, we are giving our customers what they want at affordable prices,” he states.

Monday 25 February 2019

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42 BUSINESS DAY NEWS

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Monday 25 February 2019

Quest for Human Capital Development suffers as banks stifle credit to educational sector MICHEAL ANI & DAVID IBIDAPO

igeria’s quest for Human capital development might suffer some setbacks as a rising yield environment has reduced the attractiveness of the educational sector to banks. Education received the second-least credit from banks and was higher than only Mining & Quarrying, despite it being tipped by the International Monetary Fund (IMF) and other agencies as a sector that is critical in driving human de-

Delta constructing roads to open state to investors – Okowa MERCY ENOCH, Asaba

overnor Ifeanyi Okowa of Delta State has explained that the reason for his administration’s interest in road construction is borne out of the desire to open up the state to investors. Over 317 roads have so far been constructed across the state’s 25 local government areas in the three and half years of the Okowa-led administration. Speaking at the commissioning ceremony of Emede Ring Road, Emede, Isoko South local government area of the state which was constructed by his administration, the governor noted that investors were important to the socio-economic development of the people. “They will create job opportunities and contribute to the development of our state. That is why we are constructing roads in all parts of the state, to make our communities accessible,” he said. He explained that concrete was used for the construction of the road rather than asphalt as it would last longer due to the terrain. He assured the people that there were plans for more projects to be commissioned. The governor had earlier commissioned blocks of stores at Akporio Market constructed by the Isoko North Local Government Council at Ozoro, where he restated his administration’s commitment to the completion of the Ozoro Modern Market being constructed by his administration. According to him, such projects would boost the economic life of the people of the area, especially those in the rural communities. The President-General of Emede Progress Union, Okporokpo Ejumejowo, in an address said that the award, completion and eventual commissioning of the road attested to the truth that the governor kept his promises.

...education received second-least credit at 0.38% of total credit to the economy velopment and curtailing unemployment that soared 23.1 per cent as at Q3 2018. Bank loans to the education sector stood at N57.3 billion, representing about 0.38 per cent of the total N15.13 trillion credits to the private sector as at Q4 2018, according to National Bureau of Statistics data. “In Nigeria, investors in general and financial institutions, in particular, shy away from investing in education because they have a hard time measuring return on

investment. Bankers do not understand what schools are doing and schools seem not to understand the language of investors,” Bunmi Lawson, Managing Director/ CEO Accion Microfinance Bank Ltd, told BusinessDay on phone. Nigerian Banks over time have focused on tapping into juicy opportunities from financial instruments, throwing less on their financial obligations of lending to the real sector which will help stimulate growth in an economy still very much in its fragile state.

“In our view, we believe banking sector credit to the real economy will remain subdued for as long as yields on government instruments remain as attractive as they are,” said analysts at Lagos-based CSL Stockbrokers. Yields on one-year treasury bills stood at 14.88 per cent according to data obtained from FMDQ OTC exchange, while those on federal government one-year bond were well over 14.79 per cent. ‘The Central Bank of Nigeria (CBN) has held key interest

rate for 14 consecutive times since July 2016 at 14 per cent to cushion the possible effect of inflation that soared around 18.7 per cent in January 2017, according to data compiled by BusinessDay. While the benchmark rate at 14 per cent has caused the rates at which goods and services are sold to slow 11.37 per cent year-on-year in January 2019, it has nonetheless increased the cost of borrowed funds, discouraging private sector operators, who are seen as the engine growth in the

economy, from borrowing from banks. “Even in the event of moderation in yields on fixed income instruments, many banks believe that as long as yields remain above 10 per cent, they still remain attractive considering that fixed income instruments have no Capital Adequacy Ratio (CAR) implications, are tax-free and do not result in NPLs. Little wonder NPLs are moderating with decreasing loans to the real economy”, CSL said in a February 20 note to clients.

Monday 25 February 2019

NATIONAL DISCOURSE

RUTH UDEMBA

igeria faces various issues today. Problems such as the poor management of natural resources, high rate of unemployment, corruption, economic instability, governance crisis and others, which have continuously plagued the system. These issues can only be curbed by the people living in the society, the citizens who have taken the first step by selecting leaders; but then are the leaders elect the leaders we need? We all have a role to play in betterment of our country but the act of placing a leader on the pedestal shows the fact that the people need to be led someone who can make the right choices and actions. So then the real

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What type of leaders do the youth want? question is what do we need from the leaders? What do we need them to possess to make the change we desire? The title of leadership cannot be singularly defined as it is dependent on the attributes of individuals and these individuals are bound to change. Regardless of this, the type of leaders the youths of Nigeria want are those who have created an individualistic legacy, not through their words but by their actions. Words are sweet to the hearing but actions are beneficial to the body that holds the ear. Nigeria requires leaders who don’t just spew colorful grammar but create a lasting impact through their self-less service. This 21st century is still being governed by the old generation, but hopefully by 2022, the youth will be willing delve into politics and decide on a leader who is experienced, youthful, educated, resilient, from a good party, gives back and most of all communicates with every citizen regardless of their tribe, gender,

language or religion. Nigeria needs an experienced leader who has served its citizens, its community hands-on in one way or the other. A person who understands the plight and yearnings of the masses, enabling him/her to be equipped to handle problems and strategically solve them with clarity of mind. A leader’s experience level should be backed up by how much they have given back to their community. ‘A true leader succeeds when those who follow him succeed ‘. Mko Abiola was a man known for his stupendous generosity and although his life was cut short, he lives on the minds of Nigerian citizen as the true Nigerian presidential candidate who deserved the presidential crown. ‘A man who can do nothing when he has little cannot do anything we he has much’. Noble leaders are quite scarce. This is made obvious by the disgraceful squabbles witnessed now and again in both chambers of the National Assembly. Education not only

helps one acquire a good status but also prepares one to be able to look up and create solutions to myriads of problems that trouble the nation. According to Sanni “anyone you cannot hire to run your business as CEO has no business running Nigeria”. Comportment produces respect which allows you stand our ground in decision-making. Those who are considered starters in the world of politics are looked at as innocent unless they have made a legacy of themselves in a field peculiar to the minority. This is why experience is regarded highly. Corruption cannot be fought meekly, so a leader that can make a strong standing for him/herself in a corruption filled environment without fully compromising his/ her morality is considered in high regard. Political parties, regardless of what people think, play a big role in the election process of the leaders. People, regardless of the candidate, select a leader based on the party they belong to and

if it is a renowned party, there is less of a power struggle for the title. Nigeria has 91 registered political parties which most people are unaware of and thus parties such as PDP and APC have constant power hustles and leaders being decided based on their parties’ accomplishments. Language barriers affect campaigns which in turn depreciates voters. Fluency in tribal languages majorly Hausa, Yoruba, Igbo and even English contributes a great deal in creating a good relationship between the citizens and their leaders. Nelson Mandela once said “If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart”. We don’t need a leader that hides behind others definition of his words. His words should transparently depict who he is. All in all, the youth want non-illiterate men and women standing side by side to make a definite difference in the governing of this country Nigeria.

Microsoft: Getting behind AI growth in Africa OSA VICTOR OBAYAGBONA

he impact of artificial intelligence (AI) dominated discussions at this year’s World Economic Forum in Davos – with delegates touching on everything from ethics to democratisation and workforce re-skilling. While AI is primed to be the driving force of the Fourth Industrial Revolution, its widespread acceptance and adoption among businesses is still in early stages. The year 2018 was an important one in shifting current perceptions around AI, demonstrating it as a technology that is here to augment human capabilities, not replace them, and to benefit the speed and scale of any organisation, large or small. These conversations carried weight. In just four years, the number of global organisations deploying AI has increased by 270 percent. In Africa, the momentum is similar, and continues to grow as access to high quality broadband and cloud computing improves. Organisations are recognising AI’s ability to help with some of the continent’s most pervasive problems, from reducing poverty to improving healthcare and enhancing crop yields to feed a growing population.

“Microsoft, through initiatives such as 4Afrika, has its sights on making AI available to everyone on the continent, in line with our global mission to empower every person and organisation on the planet to achieve more. We are partnering with forward-thinking policy makers, innovative startups, technology partners, civil society groups and stakeholders to promote the growth of a vibrant AI ecosystem in Africa – one that enables inclusive growth and provides a clear and trusted path to digital transformation.” Promoting innovation with AI Many of our local partners, including SMEs and start-ups, have already begun their AI journeys. Nigerian start-up, MyMusic, has experimented with chatbots to help users discover new local music. Also fintech start-up, MoVAS Group, is now building AI into their credit-scoring algorithms, enabling more unbanked farmers and small-business owners to access loans the first time. In the finance industry, 66 percent of the population in subSaharan Africa is listed as unbanked. The proliferation of mobile banking across the continent has increased financial inclusion, and AI powered intelligent applications are now taking this further. AI can capture and crunch large volumes of non-tradition-

al data, such as mobile wallet transactions, that enable service providers to make automated loan decisions to new customers, with no previous financial track records, in seconds. Across the Middle East and Africa, a projected $28.3 million will be spent on developing AI solutions in the financial sector – and organisations are ramping up efforts to ensure young developers are well equipped for the task. At the recent AI Bootcamp hosted by Data Science Nigeria and sponsored by Microsoft, for example, local developers were upskilled in using deep learning concepts to drive financial inclusion. Developing this kind of AI capacity in Africa is essential, not only to ensure our 200 million-strong youth population is equipped for jobs of the future, but also to ensure local AI systems themselves are unbiased and inclusive. Putting humans at the centre Through Microsoft’s various programmes, from skills development initiatives to growing the start-up ecosystem, it is working to help make an AI-enabled future in Africa a reality. In every AI endeavour, it goal is to augment and amplify human ingenuity, accelerate economic and social prosperity. African innovators revolutionised the way mobile technology is used, and it look

forward to seeing what they will do next with AI. Developing the right skills and data sets Without the skills to build homegrown applications, organisations are likely to import machine-learning algorithms developed elsewhere, which are trained on biased data sets that lack local context. This could have severe consequences in industries like healthcare. What Africa needs is a richer pool of local data, coupled with AI applications that are built by skilled local teams with diverse demographic, gender, ethnic and socio-economic backgrounds. To achieve this, outdated processes need to be digitised, education systems need to adapt quickly, and digital literacy programmes need to be more far-reaching. Local organisations are making good headway. The Centre for Proteomic and Genomic Research (CPGR) in South Africa recently collaborated with Microsoft to build a first-for-Africa technology platform on Azure, which is enhancing the storage and processing of African genomic datasets. With this data and computing power, the CPGR is running more ground-breaking biomedical research in local disease development and prevention. In Malawi, the United Nations

High Commission for Refugees (UNHCR) has opened a Microsoft AppFactory at the Dzaleka camp, which is bringing skills in coding and data analytics to young refugees and asylum seekers. Applications that have already been created include Smart Mapokezi, which manages schedules for the allocation of food at the refugee camps. Policies for an AI-enabled future As AI opens up new frontiers for economic and social transformation, policymakers will need to ensure that this new data-driven ecosystem is governed by a strong code of ethics. We need to ensure that ethical AI systems are reliable, secure, private, transparent, accountable and beneficial to all. Across Africa, Microsoft is supporting government bodies in developing necessary policy frameworks. Initiatives such as the Microsoft Policy Innovation Centre at Strathmore University in Kenya are providing fora to discuss policy issues surrounding the digital transformation of industries and countries. Together with Access Partnership, it also recently commissioned a white paper on the implications of AI in Africa, which will be presented to South African government delegates in March, during an event dedicated to addressing AI policy advancements.

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Monday 25 February 2019

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This is M NEY A guide to your Personal Finance

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

Elections and your personal finances Nimi Akinkugbe

o you worry about what the elections mean for you and your money? Have you taken an interest in what the politicians have said about the economy, education, infrastructure, unemployment, taxation, healthcare, security etc? By far your most important responsibility is to be out there to cast your

vote, not just for the Presidential elections, but for other candidates whose roles will affect your day-today life directly, whether at state level, or right where you reside in your local government. Elections in Africa tend to be associated with security and political risks and 2019 is a crucial year with presidential elections in at least nine countries including Nigeria and South Africa. Africa is attracting so much attention from international business; they view the region as a critical investment destination. As the world observes as we take turns to go to the polls, individuals and organizations cannot afford to ignore this form of investment risk. For investors, political risk can simply be defined as “the risk of

losing money due to changes that occur in a country’s government or regulatory environment.” A change in the country’s ruling party, or change in existing legislation or introduction of new laws can have a significant impact on a country’s economic environment and investor perceptions about a country’s prospects. It is well known that political stability is a prerequisite for economic stability. Without political stability, policy initiatives and structural reforms can become paralyzed, decision-making becomes sluggish at best, and investor confidence ebbs as investors naturally wish to seek safe havens for their investments. Political Risk One of the keys to successful investing is to understand the political risks that you face,

so that you can make better-informed decisions. Apart from the presidential elections where you were most convinced about your choice, have you familiarized yourself with other candidates for upcoming elections, their political parties and their economic policies and plans? These will also have a direct impact on your personal finances? With high levels of unemployment, an air of insecurity, and some political uncertainty, it is easy to become discouraged and anxious. The need for having a sound financial plan in place becomes more glaring at times like this. We cannot be in control of everything that happens to us; we should thus be proactive about taking charge of our financial lives.

There is risk in doing nothing In uncertain times, the natural tendency is to sit on the sidelines and stay out of the markets. Yet, uncertain times and volatile markets present huge opportunities, including taking advantage of stock selling below their true value particularly as foreign investors some of the largest players, maintain a conservative stance. Sometimes one finds that property is being offered either for rent or sale at less than in buoyant times. “Don’t put all your eggs in one basket” The old adage describes diversification perfectly. Diversification is a tried and tested method for mitigating investment risk including political risk. “If you put all your money in one investment, your return will depend solely on the performance of that investment. Diversification spreads your risk across various asset classes. When your money is invested in a variety of asset classes including stocks, bonds, cash, real estate, etc they tend to respond to market vagaries and financial conditions differently. It is not possible to avoid political risk completely but you can limit your exposure to single country risk by having a mix of domestic and international investments in both currency and assets. That way even if your political risk measure proves to be inadequate, you at least limit the damage to one geography. Seek professional advice but

‘

Because no country is immune to political risk, you do need to pay attention to the markets that you invest in so that you are in a better position to assess current risks and reduce your exposure by adjusting your investments as and when appropriate

improve your knowledge Most people do not have the time, inclination or skill to make their own investment decisions, so it is important to seek professional advice. Professionals have a plethora of information with which they can make better-informed decisions and guide you appropriately. You do however need to develop your own knowledge, as ultimately you are responsible for your money. Focus on your long term goals If you have goals and stay focused on achieving them, you are less likely to be swayed or shaken by market hype, volatility, inflation, currency devaluation, political uncertainty and insecurity. The best way to weather economic and political uncertainty is to protect what you already have and to cut back on your spending. If you are disciplined with your finances and stay focused on your goals when times are rough, you are more likely to come out relatively unscathed when the climate begins to turn around. All forms of investing come with a degree of risk; some of this can be eliminated whilst others can only be managed. Whether you handle your financial affairs by yourself or use the services of a professional, you are still susceptible to risk. It is thus imperative, therefore, that you try to build your knowledge so that you have some understanding of the various risks that you will inevitably face. Because no country is immune to political risk, you do need to pay attention to the markets that you invest in so that you are in a better position to assess current risks and reduce your exposure by adjusting your investments as and when appropriate. Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@moneymatterswithnimi Website: www.moneymatterswithnimi.com Twitter: @MMWITHNIMI Instagram: @MMWITHNIMI Facebook: MoneyMatterswithNimi

46 BUSINESS DAY NEWS Electoral violence shows Nigeria still... Continued from page 1 cold blood for political reasons.

The electoral violence in parts of Lagos, Rivers, Ekiti and across the country on February 23 shows that Nigeria is still struggling with democracy while desperate politicians prey on hopeless youths to advance their selfish ends. Nigeria harbours over 350 million (or 70 percent) of estimated 500 million illicit small arms and light weapons circulating in West Africa, according to reports. Most of these weapons find their way into the hands of non-state actors, posing serious threat to both the existence of the country and lives and property of citizens. “With the 2019 elections less than a year away, Nigeria’s ability to hold free and fair elections is open to question. Of particular concern are the security threats posed by the Boko Haram insurgency and clashes between farmers and herdsmen in northern Nigeria. There is also a threat posed by the arming of rival political supporters. Finally, there is the lack of election financing regulations which leaves the door open for patronage networks to fund campaigns using public funds,” Olayinka Ajala, associate lecturer and conflict analyst, University of York, said

in a June 2018 article. “The proliferation of arms prior to elections also remains a huge threat. Since the 2003 elections, the arming of supporters has become an election tool,” he said. Sixteen Nigerians were killed on Saturday across the country, according to the Situation Room, a network of civil society organisations. Like Nigeria, the Senegalese are casting their votes in a presidential poll at the moment, but no violence, killings or maiming has been reported so far. Nine people, including a soldier, were killed in Rivers State in an election marred by blood, tears and sorrow. Mowan Etete, a former aide to Governor Nyesom Wike of Rivers State, was murdered, among several supporters of the two main parties. The Nigeria police said on Saturday that three people were killed in Kogi. One person was killed in Ekiti State, as ballot papers and other sensitive materials, including INEC office, were burnt in Osun State. “The politicians in Nigeria have over the years become more desperate and daring in taking and retaining power; more reckless and greedy in their use and abuse of power; and more intolerant of opposition, criti-

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cism and efforts at replacing them,” Anthony Egobueze and Callistus Ojirika, analysts at Rivers State House of Assembly, Port Harcourt, said. Democracy is defined as government of the people, by the people and for the people. On Saturday, thugs and partysupportersthreatenedandforced voters to thumbprint for their parties while the security agencies looked away, BusinessDay found in Lagos. Nigerians are becoming poorer, with 8,000 citizens jumping into the extreme poverty train on a daily basis, according to Brookings Institution. With 87 million Nigerians living below the $1.90 baseline, almost one out every two national (44 percent) lives in extreme poverty. Incidentally, India, which is second in the poverty pedestal, has 57 million people that are extremely poor, representing just 4.4 percent of its 1.3 billion population. The GDP only grew by 1.9 percent in 2018, with misery index sitting at 34.4 percent. General unemployment is 23.1 percent, but youth unemployment is over 60 percent. “Many youths have no job, so politicians only need to dole out few wads of cash to woo them,” Matthew Ibe, a managing director at MD Services Limited, a general and manufacturing services firm, said. “Nigeria has to wipe out high

L-R: Tonia Shoyele, director general, Abuja Chamber of Commerce and Industry (ACCI); Ahmed Rabiu, commissioner for Commerce, Industry, Cooperatives and Tourism, Kano State, and Adetokunbo Kayode, president, ACCI, during the commissioner’s solidarity visit to ACCI in Abuja. Pic by Tunde Adeniyi

Buhari, Atiku hopeful of victory amid... Continued from page 1

dent, said he was optimistic of winning the 2019 Presidential

election. “I will congratulate myself. I will win the election,” Buhari told journalists in Daura when asked if he would accept defeat and congratulate the winner. Africa’s biggest oil producer held its Presidential and National Assembly elections on Saturday after an earlier postponement from the original scheduled date of February 16. Though reports say the election was largely marred by violence, vote buying, delays, smart card reader failure and voter intimidation, Mahmood Yakubu, INEC chairman, told journalists the commission was “generally satisfied” with the polls. Some polling stations remained open on Sunday to allow more Nigerians to vote in what many see as a tight presidential race between Buhari and Atiku, although some 70 other presidential candidates participated in the election. Nearly 73 million eligible voters were cleared by INEC to vote in the election.

While results have been circulating on social media, Yakubu cautioned against premature declaration of results by candidates, political parties and their associates. “Only the Independent National Electoral Commission can tally figures, announce results and declare winners,” Yakubu said. Meanwhile, Yakubu yesterday decalred open the National Collation Centre for the Presidential and National Assembly elections results in Abuja. He, however, adjourned proceedings till 11am today. There is as yet uncertainty as to where victory would go. While Atiku lost his own polling unit in Adamawa State to Muhammadu Buhari, his main challenger and APC presidential candidate, he, however, rebounded quickly from the loss as he defeated Buhari in the Presidential Villa, Abuja. But both Buhari and Atiku camps continue to claim “resounding victory”, citing results from different polling units across the country. “With strong shares of vote in South South, South East as well as an increased share in SW and NC,

we are very pleased with the progress the PDP has made. We look forward to sharing some exciting news in other parts of the country very soon, which will confound all the armchair pundits,” Phrank Shaibu, Atiku’s special assistant on public communication, said in a statement on Sunday. “The people of Nigeria can take solace that very soon the living nightmare of the last four years will come to an end so that together we will get Nigeria working again,” Shaibu said. Also, the PPD on Sunday called on INEC to immediately announce results as delivered from the polling units and declare its candidate, Atiku Abubakar, the winner of the February 23 presidential election. The PDP said results across the country showed that its presidential candidate was in “clear lead both in spread and total number of votes cast”, accusing President Buhari and the APC of planning to alter election results at the collation centres. “Curiously, INEC server is now shut down, results are no more being transmitted and the reason is to enable the APC to inflate figures from six designated states. We call on international observers and election monitors to

poverty rate to make headway,” Akpan Ekpo, professor of Economics and Public Policy and immediate past director general, West African Institute for Financial and Economic Management, said at a breakfast meeting in Lagos. “Even its GDP needs to grow 10 percent or more and sustain it for 15 yearstoreducesuchpoverty,”headded. Before the election, party supporters went from home to home identifying with the voters and, in some cases, dishing out veiled threats. A senior politician in Lagos told an ethnic group that their votes would be monitored last Saturday. Nigeria has been an uninterrupted democracy since 1999, but it is replete with violent elections and killings by thugs.

Monday 25 February 2019

“If we wish to reduce election violence, we must begin to reduce the rate at which we handle physical materials,” Samuel Oyigbo, a lawyer, said. “INEC needs to improve. Arriving late with sensitive materials, like they did on Saturday, endangers the lives of voters,” he added. He explained that Brazil, India and many other countries with similar characteristics with Nigeria have adopted electronic voting and Africa’s biggest democracy must not be left out. “There is no way we can have democracy if we do not have free and fair elections,” Odinaka Okeke, an Awkabased lawyer, told BusinessDay. “The impression that politicians give their supporters must change. Young people must also stop being gullible,” he added.

Africa’s biggest democratic exercise marred... hold due to the acts of violence. Polls held in several polling units in the affected states on Sunday. The Presidential election was a two-horse race between incumbent President and former military dictator, Muhammadu Buhari, 76, and main opposition candidate and billionaire businessman, Atiku Abubakar, 72, although some 70 other candidates also vied for control of Africa’s biggest oil producer and most populous nation. The candidates had urged peace and non-violence in the weeks leading up to the elections, as they inked several peace accords, but the script go as planned in a country where more civilians were killed in electionrelated attacks last year than in either Yemen or Afghanistan, according to the Armed Conflict Location and Event Data Project. “It was a step backwards for a country whose democracy many assumed was beginning to mature,” an international observer said of the violent outbreaks in some polling units across the country. “There were some shocking sights. Instances where voters were beaten up for siding with the minority party in an area where another party was the dominant one,” the person said on condition of anonymity. The Nigerian government warned the international community to steer clear of “interfering” with the

elections, with one of the northern governors going as far as threatening that foreigners who interfered would leave the country in “body bags”. Unsure of Nigeria’s definition of “interference”, our source pleaded anonymity. No international observer has publicly commented on the reported electoral violence yet. The YIAGA Africa Watching The Vote group, a civic organisation which deployed nearly 4,000 observers to monitor or watch the election, reported cases of voter abuse mostly in the northern part of the country. The group said that security officers in Kaduna and Yobe States had arrested and detained accredited observers, apart from the many Nigerians who were also denied access to some polling units in Yobe State to exercise their franchise. The group also claimed that their supervisor was arrested and detained in Kafanchan, Kaduna State. 73 million Nigerian voters were cleared to vote on Saturday, although low voter turnout has been a mainstay in Nigerian elections. In 2015, only 41 percent of eligible voters turned up. The elections held after a weeklong delay was announced by the electoral body roughly six hours to the election date of February 16. The initial date was called back due to some “logistic challenges”, according to INEC.

insist on a transparent process of transmission of results and the monitoring thereof,” Kola Ologbondiyan, PDP national publicity secretary, said in a press statement on Sunday. “We already have reports of how APC governors in the northern states have been making desperate effort to tamper with the results of the elections in their respective states with the view to award conjured votes to President Buhari. In Kogi State, Governor Yahaya Bello has been making frantic moves to change results to suit APC’s intent and purposes as against the wishes of the people, expressly delivered at the polls,” Ologbondiyan said. While saying that any attempt to alter election results would be vehemently resisted, the opposition party expressed concerns over delay in announcing final results. Similarly, the Coalition of United Political Parties (CUPP) in a statement on Sunday accused INEC of planning to cancel some Area Council presidential election results won by PDP in the Federal Capital Territory (FCT), Abuja. Specifically, the CUPP claimed the electoral body wanted to declare the presidential polls results in the nation’s capital inconclusive and

pave the way for a rerun. Ikenga Ugochinyere, CUPP spokesperson, who signed the statement, insisted that the PDP presidential candidate, Atiku Abubakar, won the FCT with over 75 percent margin. “President Buhari and his team after the FCT results were tabulated realised that not only did Atiku defeat him in FCT but that he could not score 25 percent of the votes cast requirement, hence the plan to cancel results from the remote areas of Bwari, Abaji, etc to help declare FCT inconclusive. The world monitored election in Abuja and know that Atiku led Buhari with wide margins despite all the rampage visited on voters in the remote areas of FCT. “We call on INEC chairman to back down from the evil plan of his men working with outgoing (President) Buhari to declare election inconclusive in FCT or any other part of the country as this will be an invitation to anarchy. The will of the people of FCT given to Atiku must be respected,” the statement said. INEC announced last week that it would make the final results of the Presidential poll available on Wednesday.

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COMPREHENSIVE COVERAGE OF NATION’S CAPITAL

Sickle Cell: Experts harp on genetic texting CYNTHIA EGBOBOH, Abuja

xperts in the Medical and Fertility field have harped no the need for genetic texting before conceiving as a way of minimising birth of children with sickle cell anaemia. The wake up call in the strive towards sickle cell birth was made at the Preimplantation(PGT) and Prenatal(CVS), Genetic Texting Workshop in Abuja at the weekend, and said with with genetics texting, lovers do not have to loosesleepovertheirgenotypes. Speaking at a workshop with the themes: ‘Frontiers of Genetic Testing In Nigeria’, the Chief Executive Officer of Nisa Premier Hospital, and Fertility Gynaecologist, Ibrahim Wada said the idea of texting embryos before planting in the womb of their mothers became essential because Nigeria is now looking at how to end sickle cell anaemia. Wada noted that partners who are carrying the sickle cell trait and have no way of initially avoiding sickle cell anaemia baby, but with the the option of genetics texting they are sure of having a sickle cell free baby. “When genetics texting is applied, it will allow to have are normal and they don’t have to suffer sickle cell. Thus idea is not new its been there since early 90s but it took a long while before bringing it into the country. It is the process of checking the embryo before putting it in the womb of the mother. “Before this time there is a process that entails the woman going to the hospital in the ear-

ly stage of pregnancy to check if the baby is sickle cell nor not, and inmost time confronted with the option of aborting the baby if the baby is sickle cell. According to Wada there are two stages of genetics texting, one of the stages is selecting before pregnancy, and there is the option of selecting during pregnancy with being faced with the option of aborting the baby if it is Sickle cell using full count technology. “The full count technology is the one that you are in love and married without having to face the fear of chromosome disorder or afraid of conceiving sickle cell baby, and it is the highest level of technology. “This technology is not just for sickle cell, some people give birth to babies with abnormalities and they want to know what the next baby would look like by looking at all sort of characteristics of the embryo, by knowing what is the genotype, the chromosome, even certain diseases are x-chromosome linked. This technology allows to know all these before conceiving. “We are trying to remove the obstacle of two AS not getting married, funny enough love is blind, we fall in love but we don’t fall in love with genotype or chromosome. So people can follow their heart in marriage and not whether they are sickle celled or not”,he said . Adekunle Rowaye, representative of the Director General , National Boitechnology Develooment Agency said the next level of medicine is genomic medicine and it is much needed in the fight against sickle cell anaemia.

FCT-IRS refutes recruitment scam JAMES KWEN, Abuja

he Federal Capital Territory Internal Revenue Service, FCT-IRS has said that the Service is not embarking on any recruitment exercise as being speculated in some quarters. FCT-IRS cautioned fraudsters to desist from duping innocent residents in the guise of recruitment exercise by the FCT Internal Revenue Service, just as the Service called on residents not to be gullible to the tricks of fraudsters. Investigations revealed that the Service is inundated by reports of ongoing staff recruitment exercise, just as the Service has assured that any recruitment will be made public. FCT-IRS Official who do not want to mentioned told journalists that the management of FCT-IRS is disturbed over the development, stressing that security operatives have stepped up investigation into the alleged recruitment

scam. “I want to state emphatically that FCT-IRS is not embarking on any recruitment exercise as being speculated in many platforms. The management have expressed concerns over this ugly development because some fraudsters are using the corporate name of FCTIRS to dupe innocent job seekers. “We are calling on residents not to be desperate in search of job opportunities as fraudsters are out to dupe any gullible and desperate applicant through the social media platforms. However, I want to inform you that security operatives are digging deep into the issue and very soon, the outcome of the investigation will be made public”, the Official said. The source assured that the IRS will not carry out recruitment exercise in secrecy, stressing that as soon as the FCT-IRS concluded recruitment plans, it will be made known to the public through newspapers advertisement.

FCTA begins investigations of cannibalism, sodomy, drug abuse in Deaf School JAMES KWEN, Abuja

he Federal Capital Territory Administration, FCTA has began investigations into the reports of acts of cannibalism, sodomy and drug abuse in the Abuja School for the Deaf, Kuje. According to Kabiru Musa, Chief Information Officer, FCTA Education Secretariat, the numerous mainstream and social media reports on the alleged cannibalism, sodomy and drug abuse at the

School was being handled by experts. “The attention of the Education Secretariat of the Federal Capital Territory Administration has been called to the numerous mainstream and social media reports on the alleged incident of cannibalism, sodomy and drug abuse at the School for the Deaf in Kuje, FCT. “Understandably, public reaction to the alleged incident has been that of shock and anger when the news broke on an Abuja local radio station.

“As a follow up to our earlier media releases on this matter, we wish to reiterate that medical and criminal investigations are ongoing from independent medical experts and the Nigeria police Force. The reports of both inquiries are still being awaited. This in addition to the establishment of a special investigative Committee by the Federal Ministry of Education. “We wish to state that all these investigations are being carried out free from hinderance or interference in any form or

guise from the Education Secretariat of the Federal Capital Territory Administration. There are no attempts afany cover- ups nor will there be. “We wish to once more ask all parents and guardians to remain calm and be assured that their children and wards are safe in our custody. Any questions or enquiries on this issue can be addressed by the Secretary for Education, FCTA or the Executive Chairman, FCT Universal Basic Education Board”, Musa stated.

L-R: Adesoji Adesugba, provost, ACCI Business Entrepreneurial Skills and Technology (BEST); Emmanuelle Boulestreau, head of Regional Economic Department France (REDF); Adetokunbo Kayode, president, Abuja Chamber of Commerce and Industry (ACCI); Paul Vernus, attaché, France’s Regional Economic, and Tonia Shoyele, DG, ACCI, during an advocacy visit by the REDF to ACCI in Abuja. Pic by Tunde Adeniyi

ICEED trains 24 women solar technicians in Borno JAMES KWEN, Abuja

he International Center for Energy, Environment and Development, ICEED under the Borno MAIDA project has trained first 24 women solar technicians out of the targeted 140 for the State. The training which combined intensive classroom and practical activities was conducted at the Borno State Vocational Training Center, Maiduguri with five young women among the graduated solar technicians. Ewah Eleri, Executive Director of ICEED said he was glad that women in Borno are beginning to get involved in an area that has been mistakenly seen as the exclusive preserve of men, stating

that, solar energy offers a win-win situation for anybody that wants to get in as an entrepreneur and in a short while, they will start reaping the benefits of the training. “Access to electricity is vital to improved livelihood; however, in Nigeria this is often highly constrained, and more exacerbated in conflict-affected areas. In 2018, ICEED conducted a research which sought to know the level of satisfaction with the public power supply in 6 LGAs of Borno State, 62% of respondents that were using public power said they were not satisfied with the level of power supply to homes. Solar energy as an alternative energy solution, as well as solar technicians, is almost nonexistent in conflict

affected communities of Borno State. “Solar energy business has been, and continues to be, a male-dominated field, leaving women out of the livelihood track. To address these gaps, the International Centre for Energy, Environment and Development (ICEED) in partnership with Mercy Corps and funding from the European Commission is implementing a project aiming to strengthen resilience and improve the livelihood of people in six of the LGAs affected by the insurgency in Borno State. “140 young men and women would be trained on solar installation and business in Six LGAs of Borno State. Some educational facilities, as well as households in these locations will be equipped with solar

energy kits to reduce protection risks for women and children, and reduce gaps in services resulting from energy deficiencies. In providing the installations, the trained solar technicians will be actively involved, thus enhancing their skills and visibility”, he said. Shettima, Principal of the Vocational Center, in his message to the trained technicians said this is an opportunity for you to excel in a trade that has few actors, especially in Borno state. “To the young women, I am glad that you have defied the odds and came out of your shell to acquire this training, I implore you to take this as a trade and run with it as there are visible opportunities to earn a living as solar technicians”, he noted.

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Polls: Group condemns killing in states, Polls: Johnson-Sirleaf expresses satisfaction, Reforms: Edo tasks communities, NGOs, corporate bodies, others on forest conservation calls for commission of enquiry to give ECOWAS preliminary report INNOCENT ODOH, ABUJA

ead of the Economic Community of West African States (ECOWAS) Election Observation Mission to the 2019 general election in Nigeria, Ellen JohnsonSirleaf, has expressed satisfaction with the conduct of the election and praised the patience of Nigerians during Saturday’s general elections. The former President of Liberia and her delegation visited several polling centres in the Federal Capital Territory of Nigeria, Abuja, to observe the general elections, a statement issued on Sunday by the media officer of the ECOWAS Commission, Jonathan Brahart, said. While speaking with members of the press during her visit to polling cen-

No decision yet on Okota, Isolo election – INEC INIOBONG IWOK

he Independent National Electoral Commission (INEC) is yet to take a decision on Saturday’s Presidential and National Assembly election in Okota and Isolo parts of Lagos that was marred by violence, the commission says. Late arrival of materials and violence at several polling units, and snatching and burning of ballot boxes and papers marred election in Okota and Isolo parts of Lagos State. Speaking with Businessday Sunday afternoon, INEC Public Relation Officer (PRO) in the state, Femi Fabiyi, said the commission had not decided on the next line of action on the situation in Okota. He said INEC was still awaiting the report from the electoral officer in charge of the area, and dismissed reports that election in the area had been cancelled. “We are still waiting for the officer to tell us what happened in Okota. It is then we would decide on what to do,” Fabiyi said. He confirmed that the results of the National Assembly election would be announced at the different collation centres in the state, while the Presidential election result would be announced at the commission’s head office in the state.

tres in Maitama, Durnmi, Wuse zone four, Zone six and in Mabushi areas of the Federal Capital Territory, Sirleaf said she was impressed with the patience of the electorate and pleased with the level of organisation witnessed in most polling centres. She also visited the Centre for Democracy and Development (CDD) election analysis centre as part of her observation mission where she was introduced to the structure of the centre and its role in aiding democracy and development in Nigeria. The head of the ECOWAS Observation Mission was accompanied by the Liberian Ambassador to Nigeria and to the ECOWAS, Al-Hassan Conteh, the former Liberian Minister for Foreign Affairs, Marjon Kamara and the ECOWAS Commission’s director for political affairs, Remi Ajibewa.

do State government has urged for continued support from community leaders, corporate bodies, nongovernmental organisations (NGOs), and other wellmeaning stakeholders to deepen efforts at rolling back the effects of deforestation and ensuring sustainability of forest reserves in the state. Commissioner for Environment and Sustainability, Omoua Oni-Okpako, made the call while commissioning 39 newly acquired motorcycles to aid in the patrol of the interiors of the state’s forest reserves, especially sections that are inaccessible by vehicles. She noted, “Deforestation and its resultant effects are creeping on us. We either salvage our forest now or lose it forever. Our focus now is on planting of trees and conserving the remaining existing ones. So, this Ministry will not tolerate any form of illegalities that will further degrade our forest and jeop-

ardise the ecosystem. “I wish to also emphasise here that Government cannot do it all. For effective forest sustainability, community leaders, corporate bodies, individuals and other stakeholders in the sector should form a part of the process of protecting the forest, if for no reasons, but for posterity. “We should not look at the Forest reserve as Government property that could be abused. Unlawful forest activities should be reported to the Forestry office immediately and offenders would be prosecuted accordingly. “As a state, and as a people, let’s join hands together to preserve these Natural resources that God has bequeathed to us. This time, it is not only the timber trees but also everything in it. The Total forest estate has been so depleted that the flora and fauna species are being endangered and others have gone extinct. We have to strive to bring nature back to its original position.”

INNOCENT ODOH, Abuja

ntegrity Friends for Truth and Peace Initiative (TIFPI) has condemned the widespread killings across some states of the federation during Saturday’s Presidential and National Assembly Elections and called for a commission of enquiry into the killings. The TIFPI is a duly accredited Domestic Observer organisation for the 2019 general election in Nigeria. Its executive director and lead observer, Livingston Wechie, in a statement on Sunday said as a democracy driven platform, the TIFPI strongly condemned the wanton killings of Nigerians during the exercise in various places including INEC staff in Rivers Ibisiki Amachree and destruction of properties particularly election materials. The group therefore called for a commission of enquiry into these cases of violence and killings with a view to bringing perpetrators to justice.

It also commended the Independent National Electoral Commission (INEC) for holding strong despite overwhelming attempts by certain desperate politicians to scuttle the process in many places across the country as Nigerians of voting age trooped out en mass to elect the president and national legislators of their choice. “Thus it is important to note that threats and killings of innocent people who are rightfully stakeholders in the electioneering processes are absolutely unjustifiable. It is best described as a crime against humanity and nothing more pretentious to take the life of another in a process where the destiny of a state or country is being rightfully determined. “Thus in our 26 states deployment of observers, it is regrettable that while some states had a carnival-like election atmosphere, some others were disappointedly arenas of electoral violence seeking to undermine the credibility of the elections,” the statement said.

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NSACC to hold breakfast forum in Lagos

igeria-South Africa Chamber of Commerce (NSACC) will hold its February 2019 Breakfast Forum scheduled for February 28, at Eko Hotel and Suites, Lagos, by 7.30am. Femi Osinubi, partner/leader, Data and Analytics/AI, Pricewaterhousecoopers (PWC) West Africa, will be the guest speaker. Osinubi heads the Risk Assurance team in PwC Nigeria, Data and Analytics team across PwC West Africa and Internal Audit and Risk Management teams in PwC Nigeria. Osinubi is also the Technology, InfoComms, Entertainment and Media Leader for PwC Nigeria. He will share insights on the topical issue: “Leveraging Emerging Technology for Improved Business Performance” given the dynamics of Leveraging Emerging Technology in our ever evolving society. Executive secretary, Iyke Ejimofor, stated that the event was primarily for captain of industries, business owners and top level executives as well as other interested parties. He said the chairman of the Chamber, Foluso Phillips and other executive directors are expected to attend the fo-

rum. He further noted that as in previous times, this edition would be educative and also insightful. Ejimofor, on behalf of the Chamber, encourages everyone who wants to grow and strengthen his or her business or gain insights on how to thrive globally should make effort to attend. He expressed that the meeting was a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on.’ Since the inauguration of the NSACC in the year 2000, the bilateral relation between both countries has grown tremendously. The Chamber has been a veritable economic tool responsible for the increment in trade between Nigeria and South Africa. Through the Chamber activities, many South African firms have indicated interest in joint partnership with Nigerian firms and other forms of economic co-operations with several business establishments in Nigeria. South African firms or firms with South African participation are active in Nigerian business sectors such as

telecommunications, broadcasting, petroleum, banking, hospitality and to mention but a few. Membership comprises both Nigerian and South African owned firms and a combination of those with ownership by both Nigerian and South African investors. NSACC’s membership covers almost the whole spectrum of business activities in Nigeria. Such as banking/finance services, manufacturing, insurance, advertising, accounting, auditing and management consulting. Others include airline services, broadcasting, engineering, law, freight, hospitality, health/pharmaceuticals, oil and gas, property, telecoms, stock brokering, and information technology. Membership is spread all over the country with specific presence in Lagos, Abuja, Port Harcourt, Kaduna, Kano, Ibadan and Onitsha. For International Business partnerships, enquiries about South African businesses, cross fertilisations of business ideas, creation of platforms for contact making, and other business related features, the solution is at their fingertips, NSACC.

Catholic Bishop commends Obaseki for violence-free polls in Edo … traditional ruler applauds on Ewu, Ibore gully erosion remediation work

atholic Bishop of Uromi Diocese, Most Reverend Donatus Ogun, has commended the Edo State governor, Godwin Obaseki, for ensuring violence-free conduct of the Presidential and National Assembly elections in the state. The Bishop gave the commendation while delivering a homily at a Thanksgiving Mass in celebration of Emmanuel Emovon’s 90th birthday anniversary, held at St. Paul’s Catholic Church in Benin City, on Sunday. The Bishop expressed delight at the peaceful atmosphere in the state after the conduct of the Saturday elections, noting, “We just completed a phase of the 2019 general elections and I am happy about the way and manner Edo State electorates conducted themselves and maintained peaceful disposition throughout the state. I thank the governor and all his men for ensuring a peaceful election in the state. “We will continue to pray for Governor Obaseki and all those working with him for ensuring we have peace in the state, unlike in some other states in the country.” The governor, who attended the Thanksgiving Mass, described the celebrant as an Edo icon who

had made Benin people proud. According to Obaseki, Professor Emovon represents hard work, humility, stewardship, honesty and accountability, adding, “he represents the best as he has been a teacher, professor, university administrator, minister and a chief.” Meanwhile, the Onojie of Ewu, His Royal Highness, Rasaq Ojiefo III, has also commended the governor for embarking on remediation work to mitigate gully erosion in Ewu and Ibore communities. Ojiefo III said this when Governor Obaseki visited the site of the remediation work at Ewu. According to His Royal Highness, “We thank you our governor, the contractors and everyone working towards the success of the project. We have lost over ten persons to this gully before this work commenced.” The state government and the Nigeria Erosion and Watershed Management Project (NEWMAP) are executing the Ewu and Ibore gully erosion remediation works. While inspecting progress of work at the site in Ewu, Governor Obaseki identified human activities as the main cause of gully erosion, and urged residents of communi-

ties threatened by erosion and other forms of natural disasters to take proactive steps in raising the alarm for urgent government intervention. He said, “If the communities had alerted government on time, the threat to their environment could have been prevented and unnecessary loss of lives and huge financial costs avoided.” The governor added that the remediation work marked the end of the trauma, uncertainty, loss of lives and property in the two communities and a new beginning for proper environmental and waste management. Adding to the commendation, spokesperson for Ibore Community, Theophilus Okoh, praised the governor for fulfilling his electioneering promises in 2016. Earlier, Commissioner for Environment and Sustainability, Dame Omoua Oni-Okpaku, said the remediation work on the erosion sites at Ewu and Ibore was among other ongoing projects across the state. Oni-Okpaku urged residents in the affected communities to cooperate with contractors handling the project to ensure completion of the project’s second phase.

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NCC, ONSA clamp down on fake mobile device distributors JUMOKE AKIYODE-LAWANSON

… set up committees to stop proliferation

orried by the recurrent cycle of fraudsters deploying their trade via fake and substandard mobile devices, the Office of the National Security Adviser (ONSA) in collaboration with the Nigerian Communications Commission (NCC) and other government agencies recently set up committees to combat the situation. The two joint committees set up are the Project Steering Committee (PSC), comprising the Infrastructure Concession and Regulatory Commission (ICRC), the Federal Ministry of Communications and the NCC; and the Project Delivery Team (PDT), which draws representation from the Federal Ministry of Communications, the ICRC, the Federal Ministry of Finance and the NCC. The committees, with specific terms of references, are to work together to ensure the implementation of Mobile Devices Management Systems (DMS), a public-private partnership project aimed at combating the proliferation of fake, counterfeit, substandard and cloned mobile communications devices in the tel-

ecoms industry. While inaugurating the committees in Abuja, Umar Garba Danbatta, executive vice chairman of NCC, said the move was in line with the mandate of the commission, as enshrined in the Nigerian Communications Act (NCA) 2003, to type-approve all devices used in the telecoms industry and to ensure that all devices used in the industry were in line with agreed standards and specifications. According to Danbatta, the principal objective of the proposed DMS project is to “establish a secure and comprehensive single-window solution that will enable the commission to implement a proven solution in the Nigerian environment that is sustainable and demonstrate value for money in addition helping to address the various concerns that have been raised with the NCC from the Office of the National Security Adviser (ONSA) in our regular interactions on security matters as it concerns the telecommunications industry.” He said the increasing cybercrime, evasion of taxes, terrorism and health and safety concerns raised by the use of stolen, counterfeit and

substandard devices in Nigeria was a responsibility that the NCC took seriously. “In 2015, we organised a stakeholder forum aimed at developing recommendations that could influence decision and policy directions, leading to solutions to combat the issue of counterfeit and substandard Information and Communication technology (UCT) devices in the country. “Based on the importance of the project to the NCC, the Bureau of Public Enterprises (BPE) and the ICRC were engaged for a no-objection to advertise for International Competitive Bidding (ICB) process towards the acquisition of an effective MDMS solution, adding that the ICRC subsequently recommended the establishment of the two committees to fast-track the process,” he said. Adebayo Shittu, minister of communications who was represented by Nkechi Ejele, permanent secretary, Federal Ministry of Communications, commended the NCC for the initiative, saying that she was impressed with the comprehensive and clear terms of reference given to the committees.

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Fifteen Ogun communities at risk of isolation over Lagos-Ibadan rail project MIKE OCHONMA & STELLA ENENCHE

T L-R: Kola Oni, chief marketing and strategy officer, AXA Mansard Insurance plc; Benoit Claveranne, chief executive officer, AXA International and New Markets; Nkiru Umeh, head, brand and communications, AXA Mansard Insurance plc, and Hassan El Shabrawishi, chief executive officer, AXA Africa Holding, during the visit of Benoit Claveranne, CEO, AXA International and New Markets, and Hassan El Shabrawishi, CEO, AXA Africa Holding to AXA Mansard.

UK court ‘grants Nigeria’s demand to appeal $6.59bn damages DIPO OLADEHINDE

n a case with British Process and Industrial Developments Limited (P&ID), an engineering and project management company, a UK Commercial Court has granted Nigerian government request for ‘relief from sanction’ over the $6.59 billion award against it by the District Circuit Court in Washington DC for alleged breach of contract. According to a statement from the Nigeria government, the Court of Appeal’s ruling will offer Africa biggest economy an extension of time to file its arguments on the merits at a subsequent hearing originally billed for last Friday, but now re-listed for hearing on May 21. “The Federal Government intends to vigorously defend its interests in the United Kingdom. It is entirely proper for Nigeria to raise and to strongly assert all available and proper de-

…hearing shifted to May 21 fences to the claims brought by P&ID,” the statement from the Attorney-General’s office said. The Solicitor-General of the Federation and Permanent Secretary of the Federal Ministry of Justice, Dayo Apata, has always insisted Nigeria did not default in the contract as P&ID never began the construction of the project to warrant its $40 million claim allegedly incurred as preliminary expenses. P&ID, founded by Irishmen Michael Quinn and Brendan Cahill with over 30 years of experience in engineering projects in Nigeria had entered into a 20-year gas and supply processing agreement (GSPA) with the Federal Government in 2010 to build a state-of-the-art gas processing facility. The plant, in which Nigeria was to have a 10 percent stake, was to refine associated natural gas into nonassociated natural gas to power the national electric

grid as conceived in 2006 when President Olusegun Obasanjo was in power. The agreement stipulated Nigeria would receive 85 percent of the non-associated gas at no cost for electrical generation and industrialisation. P&ID would receive the remaining 15percent of by-product – methane, propane, butane – to sell on the commercial markets, of which Nigeria would receive proceeds from their 10 percent stake in the company’s ownership. Based on the agreement, government was to supply 150 million standard cubic feet (scf) of the gas per day to P&ID — rising to 400 million scf in the life of the project. The gas was otherwise being flared by the oil-producing companies. The GSPA also required the government to build a gas supply pipeline to the P&ID facility. P&ID said after spending several years preparing for the project, the project col-

lapsed because the Nigerian government did not build a pipeline or secure a supply of gas as stipulated in the agreement. With the ensuing crisis unresolved even after proposing an amendment to the agreement, P&ID commenced arbitration against Nigeria in August 2012 in London, UK. Nigeria, failing to have mounted a strong legal challenge and to acknowledge the urgency and seriousness of the matter, lost the case in arbitration and was ordered by the tribunal to pay damages to P&ID. P&ID subsequently moved forward with enforcement proceedings in the US and UK. At the hearing held on December 21, 2018 in the UK, P&ID sought to obtain a default judgment against Nigeria on account of its late filing of acknowledgment of service, which was outside the period prescribed by the Commercial Court

Mafita to create 68,000 jobs for marginalised youth to northern Nigeria ADEOLA AJAKAIYE, Kano

here are indications that Mafita Project financed by UK`s Department for International Development (DFID) which is currently being implemented in northern Nigeria would be providing job opportunities for 68,000 marginalised youths in the area. About 2,925 of the youths have already been provided with employable skills in various trades, while 17,000 others are currently undergoing trainings at different centres in four states-Kano, Kaduna, Katsina, and Jigawa - where the project is being implemented. Umar Nuhu Mohammed,

leader of the implementation team, who made this disclosure to Business a.m., on the side-line of a media briefing organised by Mafita, to create awareness for the programme held in the commercial city of Kano, said the project which started in 2015 had a five-year life span. Here are two classes of beneficiaries of the programme, Mohammed said. The first-class beneficiaries are marginalised youths between the ages of 15-24 years, who are living under N360 a day and are not enrolled in any full –time formal education. He disclosed that the first category of beneficiaries include: Almajirai, Girls in Islamiyya and Qur’anic

Schools, Persons with Disabilities (PWDS), Orphaned and Vulnerable Children, as well as young persons who dropped out of schools. He added that the second category of beneficiaries are those with links with the with the primary enrolees in the programme, and include: Malamai (Teachers of Qur`anic, Tsangaya and Islamiyya Schools), Traditional Leaders; Micro and Small Enterprises; Trade Associations; Master Craft Persons (MCPS); and State Agencies Giving insight into the nature of the project, the team leader explained that it also supports the re-modelling of government –owned Business Apprenticeship Training Centres (BATCs) and

converting them to Community Development Centres (COSDECs) in the target areas. He added that the Centres were conceived to deliver structured and certified skills trainings through processes of bringing training opportunities to communities, rather than encouraging migration to urban areas for skills acquisition. “COSDECs are designed to operate as ‘One-Stop– Shop ‘skills delivery facility offering foundational skills, vocational, entrepreneurial, life skills training, incubation facilities to the beneficiaries, as well as a community –based governance structure in the form of Community Management Committees.

he fate of 15 communities in Ogun state, who may be cut-off from social and economic activities of the Abeokuta community hangs in the balance and remains uncertain, unless urgent steps are taken to address their plight. The said communities were among those affected as a result of lack of access to motorable road due to on-going construction of the Iju- Abeokuta axis of the Lagos-Ibadan standard gauge rail modernisation project. During the ceremony to mark the inauguration test-run of the DK 79 Iju to Abeokuta completed section of the Lagos-Ibadan rail project which held in Abeokuta, some of villagers from Alagbayum, Abata, Gbagura, Akinseku, Asaka, Isa, Sokan, Ijimere, Elefun, Jangede and others, who were directly affected, had assembled at the reception venue at Ori village, where the transportation minister, Rotimi Amaechi, was to be accorded warm reception. The placard-carrying protesters with many inscriptions on the cards complained of being cut off from urban centres, as the new road built for the communities was under the bridge and was said to be water-logged. The protesters, who were all residents of the area, carried placards with different inscriptions, including: “Our movement to the town

is restricted; Our children want access roads; Our water is polluted, We need drinkable water, and Give us a motorable road.” Chairman of AkinsekuElefun/Jangede Community, Ogunwale Olukunle said that for two months, children in the community could not go to school. While appreciating the Federal Government for the rail development that passes through the various communities which he noted would help the residents in various ways, he lamented that the major problem confronting them was the absence of access road out of the community. “We are very happy about the school that the government built for us, the school we had was small and it was demolished because of the tracks. Now the one they built is bigger and better,’’ Olukunle said. He said the problem they had at the moment was the road to the school, which was under the bridge and not motorable or accessible with foot because of water. He appealed to the government to help construct a road that would allow their children to attend the new school. On his part, Chairman of Elefun/Jangede Community, Idowu Bashiru, said they came out to appeal to government in the interest of their children’s future. Olarenuaju Aderekan, who spoke on behalf of the Ba’ale in the area, said the only access road could only take one vehicle at a time.

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Theresa May promises vote on final Brexit deal by March 12 PM vows to continue ‘positive talks’ with EU and avoid delay to March 29 exit Laura Hughes and Henry Mance

heresa May has promised to put her final Brexit deal to a vote in parliament by March 12, as her own ministers threatened to take control of the exit timetable. The UK prime minister also suggested that she would not sack three Europhile cabinet ministers who intend to break government orders on Wednesday in order to try to block a no-deal Brexit. Mrs May said: We still have it within our grasp to leave the EU with a deal on 29th March”. Mrs May is engaged in high-stakes negotiations with EU leaders, after her original Brexit deal was defeated in a so-called “meaningful vote” in the House of Commons last month by a record margin of 230 votes. Speaking on a plane on her way to the EU-Arab League summit in the Egyptian resort of Sharm el-Sheikh, she said that she would continue the “positive talks” with the EU this week and “as a result of that we won’t bring a [second] meaningful vote to parliament this week, but we will ensure that happens by March 12”. “We still have it within our grasp to leave the EU with a deal on 29th March”, Mrs May said.

The deadline she has set for the meaningful vote is an attempt to circumvent MPs’ attempts to extend Brexit talks. A proposal by Labour’s Yvette Cooper, which parliament is due to debate on Wednesday, would give MPs the ability to seek an extension to the Article 50 exit process if no deal has been approved by parliament by March 13. Home secretary Amber Rudd, business secretary Greg Clark and justice secretary David Gauke indicated on Friday they would back the proposal, which would contradict Mrs May’s continued insistence not to extend Article 50. Mrs May insisted on Sunday that “collective [cabinet] responsibility has not broken down”. Questioned on whether the three Europhile ministers could remain in government, Mrs May said: “What we’ve seen around the cabinet table, in party and in the country at large is strong views on the issue of Europe. That’s not a surprise to anybody.” Earlier on Sunday Michael Gove, the UK environment secretary, hit out at the Cooper proposal to block a no-deal Brexit, calling it a “mistake” that would not solve the impasse between London and Brussels. He told the BBC’s The Andrew Marr Show that blocking a no-deal

Brexit would not “advance our effective movement towards a deal”, and “might end up with a second referendum”. Fellow cabinet ministers have called for Ms Rudd, Mr Clark and Mr Gauke to be sacked, the Sunday Times reported. In a sign of tensions within the Conservative party, Nick Boles, an MP who has led efforts to block a no-deal Brexit, labelled the anonymous ministers “pathetic invertebrates”. Jacob Rees-Mogg, the Euros-

ceptic backbench MP, told the BBC’s Pienaar’s Politics that any minister who votes against the government would have “automatically resigned”. But Mr Gove sought to damp down tensions, saying that calls for sackings were inappropriate “macho postures”. A previous attempt to rule out a no-deal Brexit was defeated last month in the House of Commons by a margin of 23 votes. Mr Rees-Mogg also raised procedural doubts about the revised Cooper

amendment, saying it did not change the EU Withdrawal Act, which sets the date of Brexit as March 29. Mr Gove said “progress is being made” in negotiations, and that changes to the backstop could come in the form of a time limit, a unilateral exit mechanism or an additional legal document making clear that the UK would not be kept permanently in the arrangement. The EU has ruled out a time limit or a unilateral exit mechanism.

Wall Street revives US retail ‘big short’ Buffett downbeat on Berkshire’s prospects for megadeals this year Bears stake out aggressive positions ahead of earnings this week

Alistair Gray

all Street is reviving a “big short” of the US retail sector ahead of a raft of earnings reports this week, even though earlier bets on a mall “apocalypse” have failed to pay off. Bears last week staked out the most aggressive positions in a year against SPDR S&P Retail, the sector’s benchmark exchange-traded fund. The fund, known as XRT, was so heavily betted against that the short positions were about four times larger than shares in the ETF itself, according to data provider S3 Partners. XRT, which tracks S&P’s equalweighted Retail Select Industry index, is the most heavily shorted of any ETF in the country, according to State Street Global Advisors. The shor ts are back even though the US retail industry has so far defied fears of a collapse en masse at the hands of Amazon. “If you were short the sector at the wrong time, you would have lost a lot of money,” said Stephen Ketchum, founder of Sound Point Capital, a hedge fund and collateralised loan obligation manager with $19.4bn of assets under management. “But a lot of these retailers are in for a long secular decline. It’s unequivocal that the trend for purchasing online will continue to increase.” Brad Lamensdorf, portfolio manager at Ranger Alternative Management in Dallas, said that while several companies in the

sector were holding their own in the digital era, others had “horrendous” metrics. “There is obviously a very, very serious transformation occurring,” he said. “There are also a lot of signs that the consumer is buckling,” he added, pointing to rising car loan delinquencies. Retail stock prices have been volatile as investors try to understand how the sector is adapting to the rise of internet shopping. Some chains, including the world’s biggest retailer Walmart, are reporting strong sales figures, yet several including Payless ShoeSource and Gymboree have filed for bankruptcy this year. Earnings this week are forecast to confirm financial pressures on companies including department store chain JC Penney, where annual net losses are forecast to widen to $300m, and L Brands, owner of Victoria’s Secret, where net income is set to drop more than a quarter. But they are also expected to show how other companies are performing better. Annual net income is forecast to rise 17 per cent at the discounter TJX, and 44 per cent at the electronics specialist Best Buy, according to analysts’ forecasts collated by Bloomberg. Investors who bet against XRT when short interest rose at the start of 2017 have lost out. The fund has gained about 5 per cent since then, although the performance has been volatile, with the fund up as much as 23 per cent but down as much as a tenth over the period.

Investor warns prices are ‘sky-high’ as his company searches for an ‘elephant’ acquisition Eric Platt

arren Buffett’s Berkshire Hathaway will struggle to clinch a big acquisition this year, the doyen of the investing world lamented in his annual letter to shareholders at the weekend. Mr Buffett, who transformed the textile manufacturer he purchased in the 1960s into a sprawling investment conglomerate that is now one of the world’s most valuable companies, warned on Saturday that the prospects for a mega-deal in 2019 “are not good”. “Prices are sky-high for businesses possessing decent long-term prospects,” he wrote to shareholders in his wide-ranging and capricious annual letter. “2019 will probably see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition.” The downbeat assessment comes more than three years after Berkshire Hathaway completed its last major takeover: the $37bn purchase of industrial goods company Precision Castparts in January 2016. Since then, cash has built up on Berkshire’s balance sheet as its insurance and other businesses threw off profits and several contemplated multibillion-dollar takeovers collapsed. By the end of 2018, cash, primarily invested in short-term Treasuries, reached almost $112bn. For much of last year, Mr Buffett spent some of Berkshire’s cash on investments in publicly traded companies such as Apple

and JPMorgan Chase, as it sat out a merger and acquisition frenzy that saw both private equity groups and companies snap up businesses. Berkshire repurchased some of its own stock, a relative rarity for the group. But the almost $500bn-valued company slowed new stock investments and its own share buybacks in the final three months of the year, a move that caught Wall Street analysts and investors by surprise. Morgan Stanley had expected Berkshire to buy back $2.5bn of its own stock in the quarter, ahead of an anticipated $10bn spree in 2019. Instead, the company repurchased $418m of its shares in the period. That has raised questions over how Mr Buffett and his management team plan to spend its growing capital base. “There will be limited opportunities for Mr Buffett [and] that puts more pressure on his investment team,” said James Shanahan, a senior analyst with Edward Jones, who characterised the level of share buybacks in the quarter as disappointing. “They’ll probably put more capital towards individual stocks . . . They won’t buy and hold forever. It’s more of a trading orientation that I don’t necessarily like.” Mr Buffett’s sobering hunt for acquisitions comes as merger activity begins to slow from 2018’s heady pace, according to data provider Dealogic. Volatile market swings late last year have complicated M&A negotiations, with buyers and sellers often struggling to agree to a price on deals at the start of this year, bankers and lawyers said.

That may prove an added barrier to Berkshire as it seeks to secure a large acquisition. Mr Buffett is known to avoid auctions for companies, and has said he will only buy a business so long as it is valued at a “a sensible purchase price”. The group’s avoidance of debt in its deals also leaves it at a disadvantage to competitors that have been willing to borrow heavily to push their bids for assets higher. In 2017 Berkshire was elbowed out of an $18.8bn fight for Energy Future Holdings, the parent company of Texas utility group Oncor, by Sempra Energy. Mr Buffett has sat out buyout frenzies before. He and vice-chairman Charlie Munger long refrained from investing in technology companies, a move that helped shelter Berkshire from the boom and bust of the dotcom bubble. The growing cash levels may nonetheless add pressure to the two executives seen as frontrunners to replace Mr Buffett when he eventually retires: Greg Abel and Ajit Jain. But investors and analysts said they did not expect that to push either Messrs Abel or Jain, or Ted Weschler and Todd Combs — the two executives who run part of the Berkshire investment portfolio — to tweak their long standing strategies. “What the wise man does in the beginning, the fool does at the end,” said Cole Smead, a portfolio manager with Smead Capital Management, which holds Berkshire shares. “How many companies will have $100bn of dry powder at lower index or stocks prices?”

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FT Huawei unveils Mate X foldable phone at Mobile World Congress

Nigeria counts votes as presidential rivals signal confidence

Under-fire Chinese telecoms group introduces model costing up to $2,600

Winner expected to be announced on Tuesday but early results likely to come in on Sunday

Tim Bradshaw

Neil Munshi

uawei has joined Samsung in the race to persuade consumers they need to spend more than $2,000 on a new type of foldable smartphone by unveiling its Mate X device at Mobile World Congress in Barcelona on Sunday. Huawei is on the offensive at the annual telecoms industry event in Barcelona, despite intensifying rows with governments across the US and Europe over the security of its networking products. Richard Yu, chief executive of Huawei’s consumer business group, took swipes at the company’s smartphone rivals Apple and Samsung on Sunday as he unveiled the Mate X, which unfolds to reveal a seamless 8-inch display. M r Yu c l a i m e d i t wa s t h e “world’s fastest foldable 5G phone”, thanks to its in-house processor and modem. He also said it was slimmer than Samsung’s recently unveiled Galaxy Fold, and offering “uncompromised viewing” compared to its rivals. Mate X is also one of the most expensive smartphones ever released, costing as much as €2,299 ($2,600) when it goes on sale later this year. Samsung drew criticism for pricing its Galaxy Fold at $1,980, when it unveiled the product last week in San Francisco. The smartphone industry is hoping that as the first generation of foldable smartphones go on sale this year, they will spur consumers to upgrade their existing devices more quickly. Slower replacement rates contributed to a decline in smartphone sales last year. Despite the industry’s overall decline, Huawei enjoyed strong growth last year, selling more than 206m smartphones, boosting its consumer group’s revenues to more than $52bn. Some analysts forecast that the company could overtake Apple and Samsung to become the world’s largest smartphone maker within the next year or two. “S e ve n yea rs ag o, n o b o dy knows Huawei, even in China,” Mr Yu said. “Today we are becoming one of the leading brands globally.” With the Mate X, Huawei is taking a different approach to Samsung in the emerging category for smartphone-tablet hybrids. Samsung’s Galaxy Fold opens outwards like a book, with a small 4.6-inch display on the exterior, intended for one-handed use. Huawei, by contrast, wraps the display around the exterior of the device, allowing for a much larger 6.6-inch screen on the front when folded in half. Mr Yu said Samsung’s approach was “too small” and “difficult to use” when folded. Huawei engineers have been working for three years to develop the patented “falcon wing” hinge that sits at the centre of the device. Huawei’s approach makes the Mate X much thinner — measuring 11m when closed — than the Galaxy Fold, which is 17mm thick. Forrester analyst Thomas Husson said the Mate X “clearly shows that Huawei is a technology innovation leader” but warned that it would take “a lot more time for a critical mass of consumers to experience the benefits of foldable phones and 5G technology”.

‘My model is capitalism’: Ethiopia’s prime minister plans telecoms privatisation Abiy Ahmed outlines policies in country’s shift towards economic liberalisation Lionel Barber and David Pilling

thiopia aims to complete a multibillion-dollar privatisation of its telecoms sector by the end of this year, followed by a selloff of stakes in state energy, shipping and sugar companies, according to the new prime minister Abiy Ahmed. The government also plans to launch a domestic stock exchange in 2020, part of a gradual but decisive shift towards economic liberalisation in the fast-growing east African country of 105m people. “My economic model is capitalism,” Mr Abiy said in an interview with the Financial Times, conducted in his refurbished headquarters in Addis Ababa. “If you give me $100bn now, I can’t use it. There is not only money, there is talent and experience. That’s why we need the private sector.” Mr Abiy’s policies mark a break with the previous administration, which emphasised controlling the economy’s “commanding heights” and reinvesting profits in infrastructure, health and education. This so-called “development model” pursued by Meles Zenawi, a previous prime minister, led to annual growth of 10 per cent for more than a decade until 2017, according to official statistics, but ran into capacity constraints and chronic shortages of foreign exchange. Mr Abiy has pursued foreign loans and investment, especially from the Gulf and Middle East, to help ease the cash crunch, including a package worth $3bn from Abu Dhabi. Appointed after a popular revolt against the government, the prime minister is likely to face resistance

from some in his own four-party coalition, the Ethiopian People’s Revolutionary Democratic Front, which has run the country since 1991. The government is planning to sell off a 49 per cent stake in Ethio Telecom, according to people familiar with its plans. Ethio Telecom is the biggest telecoms company in Africa in terms of customers in a single country, with more than 60m subscribers. But its opaque debt structure and low earnings per customer mean it might fetch less than the government expects, say bankers. Mr Abiy said that earning cash from a state monopoly was less important than launching services such as electronic money, e-commerce and virtual government, in which African peers such as Kenya are more advanced. To promote competition, Ethiopia is also likely to auction off spectrum to two additional telecoms companies, with Vodacom, Orange, MTN and others expected to bid, according to bankers. Miguel Azevedo, head of investment banking for Africa at Citibank, said: “When I speak with international investors about opportunities in Africa, the first name that pops up is Ethiopia.” The prime minister said he would proceed cautiously on privatisation in order to avoid any hint of corruption. “We do telecom, we learn something, we evaluate seriously, we continue,” he said. Debretsion Gebremichael, chairman of the Tigray People’s Liberation Front, part of the EPRDF coalition, said there were “serious dangers” in moving away from a planned

economy. “If we go the way the neoliberals advise, this will go off the rails,” he said, alluding to the country’s strong development record, which has seen it overtake Kenya as east Africa’s biggest economy. “The state still has its role in the economy. We have proved that.” Mr Abiy is unpopular in Tigray where he is seen by many as biased against Tigrayans and the TPLF, which dominated the coalition before Mr Abiy’s selection. Mr Abiy is the first prime minister from the Oromo region, whose people make up a third of the population but who have long felt marginalised. Asked about party unity, including rumours that the TPLF might quit the EPRDF coalition, Mr Abiy said: “I have never paid attention . . . whether the EPRDF is together or not. But I don’t think we’ll split apart.” Mr Debretsion also strongly denied that the TPLF would consider leaving in spite of disagreements with Mr Abiy’s policy direction. Outside the economy, among the most pressing issues Mr Abiy faces is an intensification of nationalist feelings among many of the country’s ethno-linguistic groups, which form the basis of the country’s nine regions. More than 1m people were displaced last year, mostly over land disputes. There is even talk of potential war between Tigray and the neighbouring Amhara region, which has recently stepped up claims to Tigrayan land. Mr Abiy has stressed the unity of Ethiopia in what some regard as a threat to the federalist constitution. People must learn to co-operate “instead of killing each other”, he said.

Saudi Arabia names princess as US ambassador in first for kingdom Reema bint Bandar is appointed the country’s first female envoy Ahmed Al Omran

audi Arabia has named Princess Reema bint Bandar as ambassador to the US, making her the first woman envoy in the country’s history, as the kingdom seeks to repair its image in American power circles. US-Saudi relations have been tense in recent months after the killing of journalist Jamal Khashoggi in October. While President Donald Trump has defended the alliance with Saudi Arabia, the kingdom has come under increasing scrutiny by members of Congress, who voted

to withdraw US support of the Saudi-led military campaign in Yemen. Prince Khalid bin Salman, who will leave Washington to become deputy defence minister, has faced mounting criticism following Khashoggi’s killing by Saudi agents in the kingdom’s consulate in Turkey. That criticism has led to calls by some legislators to expel him from the US, but these were rejected by the state department. He will now be replaced by Princess Reema, who has no diplomatic experience but is the daughter of Prince Bandar bin Sultan, who was the kingdom’s

ambassador to the US between 1983 and 2005. Princess Reema has a background in business, including operating the Harvey Nichols store in Riyadh, before she was appointed undersecretary of the General Sports Authority in 2016 to focus on boosting female participation. Ride-hailing company Uber named her to its Public Policy Advisory Board in the same year, and she has emerged as one of the voices promoting recent Saudi economic and social reforms led by Crown Prince Mohammed bin Salman.

igerians were on Sunday awaiting the initial results of a presidential election as vote counting continued across Africa’s most populous nation with both major parties expressing confidence about winning Saturday’s poll. There had been widespread delays on Saturday, with polling places across the country opening hours late, as well as scattered reports of technical glitches, irregularities and violence, including estimates that 16 people had died. Almost 73m Nigerians — almost 90 per cent of registered voters — collected their voter cards for Saturday’s election, which is likely to be Africa’s largest ever and will set the country’s course over the next four years. The first results from some parts of the country are likely to be announced on Sunday evening with the Independent Nigerian Electoral Commission expected to declare a winner by Tuesday. More than 70 candidates were on the ballot, but only President Muhammadu Buhari, a former military ruler seeking a second term, and former vice-president Atiku Abubakar, a wealthy businessman, have a chance of winning. In order to claim victory, a candidate must win the popular vote as well as at least a quarter of votes in twothirds of Nigeria’s 36 states. A second round will be called if no candidate achieves that. Analysts and the parties themselves forecast a tight race, though both sides used social media to claim momentum was on their side during the weekend. After Mr Buhari cast his ballot in his hometown in the country’s north, he said: “I will congratulate myself because I am going to be the winner.” In a press release on Sunday morning, Mr Abubakar thanked voters and said that “victory is assured”. The delays on Saturday were minor compared with the last-minute postponement that Inec announced last Saturday, citing logistical challenges, just hours before polls were meant to open. But the Youth Initiative for Advocacy, Growth and Advancement, which conducted a US- and UKbacked observation and polling mission, criticised the electoral commission for overseeing an election “characterised by many of the same shortcomings that have marred previous national elections in Nigeria”. “They were not the elections Nigerians deserved,” Yiaga said in a statement on Sunday. The group said turnout was likely to be below 2015’s 44 per cent. Idayat Hassan, head of the Abujabased Centre for Democracy and Development, said the outbreaks of violence were concerning, and betrayed a “win at all costs” attitude on the part of the parties, but that Nigerians had overcome a host of obstacles to come out to vote. “People stayed on [despite the widespread delays],” she said. “That’s the most positive part of the election: the determination to participate.” Mr Buhari and Mr Abubakar have mounted an at times acrimonious campaign.

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Pensions industry welcomes FCA Brexit assurance Authority’s focus ‘is on continuity and avoiding any disruption to business’ Chris Flood

ension fund representatives have welcomed reassurances from the UK’s financial regulator that retirement schemes will not have to stump up extra cash for derivative contract trades after Brexit. At a Brexit briefing on Friday morning, Andrew Bailey, chief executive of the Financial Conduct Authority, told representatives from bodies including the Pension and Lifetime Savings Association, the Investment Association and the Association of British Insurers that UK regulators would ensure no disruption to their operations even in the event of a no-deal Brexit. “The message from Andrew Bailey was clear. The FCA’s entire focus is on maintaining continuity and avoiding any disruption to business after Brexit day,” said James Walsh, policy lead, EU and international, at the PLSA, which represents more than 1,300 UK retirement schemes with 20m members. UK pension schemes were facing an uncertain period due to rule changes in Europe that overlap with Brexit. Pension funds across Europe have benefited from a temporary exemption from European rules introduced in 2012 that set tougher standards on the minimum collateral that investors must offer as security to back centrally cleared derivative trades.

The European Commission has proposed that the temporary exemption, which was due to expire in August, should be extended for at least two more years. Matthies Verstegen, senior policy adviser at PensionsEurope, the trade association, said: “The EU is planning to extend the pension fund exemption for at least another two years. This provides time to work on a solution to avoid the detrimental impact on pension funds of funding cash collateral requirements related to derivative central clearing.” The commission proposal is expected to become law later this year. This created a headache for UK pension funds as it was unclear whether they would continue to benefit from the exemption between March 29 and the date at which the commission’s proposals passed into law. Late on Friday afternoon, the government said that the extension to the exemption would apply to UK and European pension funds even if there was a no-deal Brexit. “It is good news for pension schemes that the UK government has quickly followed Andrew Bailey’s comments with a public statement. This gives pension schemes certainty that they will still be exempt from central clearing obligations for derivatives, whatever kind of Brexit we get,” said Mr Walsh.

Scor sues Barclays over botched takeover deal documents French reinsurer wants bank to stop using the documents and hand them over Oliver Ralph, Barney Thompson and David Keohane

French reinsurer Scor has sued Barclays, demanding that the bank hand over hundreds of pages of confidential documents relating to a botched takeover bid it was working on. Barclays had been advising Covéa, a French mutual insurer, which last year wanted to make a bid for Scor. Covéa is already Scor’s largest shareholder with 8 per cent and has a standstill agreement not to go beyond 10 per cent until April of this year. Scor pushed back strongly against the potential bid and Covéa has since said it was no longer interested in a deal. In court documents filed with the UK High Court relating to the case, Scor claims that “Barclays obtained from Covéa information that was highly confidential and sensitive to Scor”. Scor is demanding that Barclays stop using the documents and hand them over. The information includes details of a valuation of Scor prepared by BNP Paribas and details of a rival deal that Scor was working on. This information, it alleges, came from Covéa’s chief executive

Thierry Derez, who at the time had a seat on Scor’s board. He resigned from the board last November. “Barclays knew, or ought reasonably to have known, that such information was confidential to Scor and/or that it had been obtained by Mr Derez in breach of confidence and loyalty owed to Scor,” the court documents say. “So far as Scor is aware,” adds the filing, “Barclays remains in receipt of the confidential information and remains engaged by Covéa in relation to a potential acquisition by Covéa of Scor.” Scor is also claiming damages, although the court documents do not detail how much it wants, and it wants an inquiry into how much information Barclays received from Covéa or Mr Derez. Barclays declined to comment. Scor has previously launched legal action against Covéa, Mr Derez and Rothschild, one of the insurer’s other advisers. Rothschild has declined to comment and Covéa has denied any wrongdoing. Its board said last month that it “firmly rejects all the groundless accusations made by Scor and reaffirms its unanimous support to Thierry Derez and his action”.

Andrew Bailey pledged that UK regulators would ensure there would be no disruption to their operations even in the event of a no-deal Brexit © Reuters

Microsoft proves pioneer in ‘augmented reality’ with HoloLens 2 Tech giant doubles down on corporate customers with latest version of headset Tim Bradshaw

ilicon Valley is convinced that the next era of computing will be worn on people’s faces, with Apple, Facebook and Snap racing to develop “augmented reality” glasses that are as small and light as an ordinary pair of sunglasses, but able to project digital images on to the real world. Those efforts remain locked inside R&D labs, and could still be years away from release. But Microsoft is proving an unlikely pioneer with its “mixed reality” HoloLens headset, the latest version of which it unveiled at Mobile World Congress in Barcelona on Sunday. Instead of aiming for massmarket consumers, Microsoft is doubling down on corporate and commercial customers with the latest version of the headset. “A lot of technology is a displacer of jobs,” said Alex Kipman, who has led Hololens’s development at Microsoft since the project began almost a decade ago. “Devices like HoloLens are enablers of jobs. They give people superpowers at work that they didn’t have before.” After Windows was outflanked by Apple’s iPhone and Google’s Android in smartphones, Microsoft is determined to get ahead in what comes next. When the first version of HoloLens was initially unveiled in 2015, it became emblematic of a fresh approach to innovation from Microsoft’s then-new chief executive Satya Nadella.

The first version of HoloLens, which has sold for upwards of $3,000 since it began shipping in 2016, was hailed as a breakthrough for conjuring “holograms” that could be positioned precisely on to real-world objects. Microsoft even developed its own custom silicon, the “Holographic Processing Unit”, to power the device. In contrast to virtual reality headsets, such as Facebook’s Oculus Rift or Sony’s PlayStation VR, which enclose wearers entirely in a virtual world, HoloLens combines the physical and the digital through its transparent visor. While VR has struggled to win over consumers, HoloLens has been picked up by workers in warehouses, factories and other industrial settings, who cannot sit behind a PC. The device is entirely self contained, bundling all its computing power into the headset itself, meaning that it is completely portable with no wires to trip over. For instance, Thyssenkrupp has equipped its elevator repair engineers with HoloLens so they can see schematics inside the display or communicate with colleagues back at the office, all while leaving their hands free to work. “Using mixed reality, somebody that could be kilometres away could enter into the real space of our technician,” said Javier Sesma, general manager of Thyssenkrupp’s Elevator Innovation Centre. “We were able to troubleshoot in 20 minutes what would normally take two hours.”

However, the first HoloLens model was criticised for offering only a narrow field of view within which the holograms could be seen and for its bulky size, which made it uncomfortable for longer sessions. Such technical limitations, as well as the difficulty in persuading regular people to wear computers on their heads, have made some observers cautious about the nearterm prospects for these kinds of headsets. The first HoloLens model was criticised for its bulky size, which made it uncomfortable for longer wear. © Bloomberg Despite the billions being invested by big tech companies into AR and VR, some start-ups, including Meta and Osterhout Design Group, are being forced to shut down after running out of money. Magic Leap, a Florida-based startup that has raised more than $2bn to build its own smart glasses, has been slow to ramp up sales. Microsoft, however, is continuing to plough significant resources into mixed reality headsets, in what Mr Kipman calls a “substantial investment from the company that is growing year over year”. “You don’t get to do custom silicon in less than 36 months for less than a few hundred million dollars,” he said. “Very few VCs are that patient. We are strategically patient on mixed reality.” The latest version of Microsoft’s headset, the HoloLens 2, will be commercially available later this year for $3,500.

Rising salary growth is not reflected in rates implied by bonds Kate Allen

ages are picking up in Europe. But no one appears to have told the bond market. Data released late last month showed the pace of wage growth rising across the continent, offering some relief to European Central Bank president Mario Draghi as he attempts to ditch some of his crisis-era stimulus. But in the section of Europe’s bond market that reflects expectations for inflation, investors still seem gloomy. Break-even inflation rates — the difference between nomi-

nal yields and the amount that index-linked debt pays — have been tumbling since the middle of last year. They are now historically cheap, suggesting mounting concerns over the state of the eurozone economy. “Euro area inflation breakevens have cheapened markedly . . . led by both lower commodity prices and subdued eurozone core-inflation pressures,” said Stefano Di Domizio, head of fixed income strategy at Absolute Strategy Research in London. For instance, the 10-year inflation rate implied by German Bunds has fallen by about 40 basis points over the past three months

and is currently at about 0.94 per cent. Italian and French breakeven rates have also moved lower. The rates have not reacted to the most recent employment data which showed eurozone workers’ pay rising by 2.5 per cent year on year in the third quarter of 2018 — the most recent figures available — up from 2.2 per cent in the previous quarter. Mr Di Domizio noted that break-even rates tended to move in step with pay growth. That implies euro area breakeven rates can be expected to move higher in the coming weeks, he said, making current prices “a buying opportunity”.

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ANALYSIS Supermancos, the fund businesses winning big from Brexit Luxembourg and Ireland’s one-stop shops for fund providers benefit from City outsourcing Siobhan Riding

uxembourg and Ireland are not known as dynamic financial centres. But the influx of business due to Brexit has spurred the emergence of a new wave of asset management beasts in the sleepy, back-office hubs: the intriguingly named super-management companies. Brexit will end the open relationship on which asset managers rely © DPA. The Austrian chancellor, Sebastian Kurz, right, and the president of the EU Council, Donald Tusk, with Egyptian President Abdel Fattah to manage and sell funds in the EU, el-Sisi in Cairo ahead of their meeting requiring them to apply for new licences in the bloc. Supermancos, as they are known, offer a workaround for UK managers who are soon to be cut adrift from one of their biggest markets. The EU-Arab summit opens amid concern that Brussels is legitimising authoritarian regimes for political ends Management companies are a the Gulf monarchies, into unapolo- in the past,” says Mr Vimont, now a longstanding feature in Luxembourg Michael Peel

Why the EU is embracing Middle East strongmen

or the EU, the timing could hardly have been worse. Egypt’s parliament this month backed a proposal to extend President Abdel Fattah al-Sisi’s increasingly authoritarian rule until as far as 2034, a power grab that has shaken the country. If approved, the move would extend the authority of the military and Mr Sisi, whom critics brand an autocrat responsible for curbing freedoms and jailing dissenters. Yet on Sunday the former general is expected to welcome more than 20 European leaders to the Red Sea resort of Sharm el-Sheikh for the inaugural EU-Arab League summit designed to tighten bonds between the two sides. European diplomats are trying to put a brave face on it. “It’s not as if Sisi is Mandela,” says one conscious of the embarrassment for the EU in this recalibration of its foreign policy. But another, with a more sceptical approach to the Brusselsbased bloc’s embrace of Mr Sisi, puts it more bluntly: “It looks like he thinks he can get away with it.” The summit — an EU-inspired event to be attended by Angela Merkel, the German chancellor, plus the Italian and British prime ministers, Giuseppe Conte and Theresa May — has emerged as an emblem of what might be called the “EU’s strongman bargain”. The bloc’s chronic problems and internal feuds, notably over migration, have led to a small revolution in its willingness to co-operate with authoritarian rulers such as Mr Sisi, even when that lays it open to charges of hypocrisy and lending these regimes legitimacy. The arm’s-length relationships that the bloc — if not all member states — had with hardline leaders such as Hosni Mubarak, who ruled Egypt for 30 years before he was overthrown in 2011, have given way to a keener embrace. Critics say this sits uncomfortably with both the EU’s stated position as a promoter of human rights — and its sense of itself as a more palatable western alternative to US president Donald Trump. While Mr Trump has been unapologetic and sometimes vocal in his backing of autocrats, Europe has discreetly moved beyond its traditional discomfort at dealing with the likes of

getic relations with a wide range of authoritarian states. HA Hellyer, an analyst at the Royal United Services Institute in London, says EU engagement has already helped the Sisi government to improve its international standing after the criticism following the popularly-backed 2013 coup that brought him to power. “Egypt wants to affirm that it’s well thought of in the world,” Mr Hellyer says, pointing to how Cairo has presented itself as a good partner on immigration management, antiterrorism and regional stability. “It’s an easy sell to people in Europe who want to buy.” Europe’s dilemma has been magnified by the changing global geopolitical landscape, with a number of countries sliding into fullblown dictatorship or existing in a grey zone of hardline rule cloaked in elections of varying credibility — from Turkey to Thailand. “Realpolitik means that you have to talk in a world of craziness with the crazy people and the totalitarian people,” says an EU member-state diplomat. “You cannot just live on your tiny island and say you are not concerned.” The calls for a more pragmatic approach to the EU’s international engagement are becoming more public. The bloc needs a “reality check” and to understand that in an “insecure, multipolar world, ‘power’ is not a dirty word”, said Mark Rutte, the Dutch prime minister. “Sometimes you have to dance with whoever’s on the dance floor,” Mr Rutte told an audience in Zurich earlier in February. “We don’t always have a choice.” This hardening of attitudes has sparked questions about whether such an approach is sustainable. Pierre Vimont, a veteran French envoy who was the first executive secretary-general of the EU’s diplomatic service between 2010 and 2015, sees in the bloc’s actions the beginning of a doctrine of “principled pragmatism” first pledged in 2016. This has created potential conflicts with the commitments to human rights that were central to the EU’s identity when it emerged from the ruins of the second world war — and are still a strong focus of member countries such as Sweden today. “The EU is trying to find a more realistic foreign policy than it had

senior fellow at the Carnegie Europe think-tank. “What is somewhat difficult for the Europeans is to admit it and recognise it.” The Sharm el-Sheikh gathering has already thrown up several diplomatic hurdles for the Europeans. Dictatorships, absolute monarchies and elective autocracies feature prominently in the 22-member Arab League. Sudan’s President Omar al-Bashir, who is under International Criminal Court indictment for alleged genocide, is expected to stay away. European diplomats will be relieved that the same goes for President Bashar al-Assad of Syria, after speculation this year that his war-torn country’s more than seven-year suspension from the League might end soon. EU diplomats say they have also sought and received assurances that Saudi Arabia’s Crown Prince Mohammed bin Salman will not have too high-profile a role and that King Salman may lead the Saudi delegation. The kingdom sparked outrage after government agents murdered the journalist Jamal Khashoggi at its consulate in Istanbul last year, in what Riyadh said was a rogue operation. Mr Trump later appalled many western allies with what they saw as a public apology for the Saudi government and the crown prince — though the EU has also trodden lightly over the case at a collective level. At the heart of the summit’s agenda is migration, which has driven EU interest in Egypt and the wider region over the past six months. The rise of European antiimmigrant parties has intensified the bloc’s crisis over those who want to come to its shores, even though numbers of migrant arrivals are a fraction of their 2015 and 2016 highs. Donald Tusk, European Council president, met Mr Sisi in Cairo and New York last year, while the Egyptian leader made an official visit in December to Austria, then holder of the EU’s rotating presidency. The overtures have yielded few tangible results for the EU so far. Cairo has shown little interest in satisfying two main European desires, that Egypt take in rescued Mediterranean migrants and extends coastguard patrols along the north African shoreline.

Martin Vogel, chief executive of MDO Management Company, which has also seen more inquiries, says many small and mid-sized asset managers had responded slowly because of the uncertainty surrounding the terms of the UK’s exit. “Quite a few have woken up in the past few weeks or months” as the possibility of a nodeal Brexit increased, says Mr Vogel. Robert Mellor, a partner at PwC, says that engaging a third-party supermanco is a quick way for UK managers to gain access to the EU market. It also gives managers flexibility to change their EU sales approach when the terms of Brexit become clearer. Mr Spendiff says the rising cost of running a standalone manco is also driving interest in third-party arrangements. He estimates the cost of setting

George’s Quay Plaza, Dublin, which locals call Canary Dwarf because of its similarity to Canary Wharf, London © Giuseppe Masci/Alamy

and Dublin. A far cry from their counterparts in the City of London, Luxembourg and Irish mancos serve as operating platforms for the €6.8tn of fund assets domiciled in the countries. Supermancos are souped-up versions of these companies. While a traditional manco will provide services to one type of investment product, such as retail funds, supermancos have multiple regulatory licences, making them one-stop shops for fund providers. Marco Boldini, head of the asset management legal team at PwC, says many fund groups now realise the benefit of centralising their functions in one supermanco to create economies of scale. Mr Boldini says Brexit has made the supermanco model more appealing, as fund groups seek to minimise costs by using one entity with two or more authorisations. These could include managing retail funds, known as Ucits, running alternative investment funds or carrying out individual and segregated mandate management. The largest asset managers have set up or extended their own supermancos in Luxembourg or Ireland but a growing part of the market is so-called third-party supermancos, which provide outsourced services. FundRock is one of the groups that has developed rapidly as it mops up Brexit-related business. The group is in the process of taking over €15bn in assets from investment groups affected by Brexit, according to Paul Spendiff, global head of sales. Most of FundRock’s new clients are small asset managers, typically with less than €10bn under management. They lack the resources to set up a management company of their own but need to act to avoid being caught out by Brexit, says Mr Spendiff.

up and running a manco at €2m to €4m, the main component of which is salaries. The minimum number of employees that a manco must have is growing, a change brought about by regulations introduced in Ireland and Luxembourg. Ireland has notably made it less viable to run so-called self-managed funds, which do not require the backing of a fully staffed manco. Meanwhile, the grand duchy last year introduced more stringent staffing requirements for mancos with more than €1.5bn under management. Moreover, Brexit has made regulators more sensitive to EU mancos that could be perceived as “letterbox entities”. After the 2016 UK Brexit referendum, the European Commission and main EU securities regulator became more vocal about the number of local employees management companies needed to avoid being classed as a shell company, known as “substance”. Mr Vogel says: “In the old days, you could have a manco in Ireland or Luxembourg with one or two people. Today you need [up to] seven. Substance requirements have increased tremendously.” It is not just a question of boots on the ground. John Donohoe, chief executive of €31bn Irish third-party manco Carne, says regulators expect mancos to have staff skilled in risk, compliance and, increasingly, investment. The growing demand for these professionals and the current small talent pool makes them more expensive for mancos to hire. Mr Donohoe says it is easier for third-party mancos to fulfil these requirements due to their scale. Carne, for example, has a team of risk professionals that it seconds to small management companies. The group has also invested in its IT system to help manco clients.

Monday 25 February 2019

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Our digital lives don’t need to make us unhappy, unhealthy and unwise Steve Blank

m e r i c a n adults now spend over 11 hours a day listening to, watching, reading or interacting with media. That’s more time than we spend eating and sleeping. Out of this cloud of mood-altering material emerges a new set of health challenges. One in five Americans is clinically depressed. Tens of millions more suffer from mild to moderate anxiety and other mood disorders. More work is required to understand the complex relationship between media diets and depression.

Now is the moment to pursue a three-pronged approach to all digital encounters, harnessing no-

tions of literacy, hygiene and product labeling. We have the opportunity to reshape our still primi-

tive and often unruly digital culture into a safer, healthier, more rewarding domain. First, we need a greater effort at the national level to increase digital literacy; to cultivate and inculcate a basic understanding of different content types; to reveal their effects on the brain; and to emphasize their benefits for emotional well-being. Second, it’s important to formulate and circulate simple principles governing digital hygiene — when to use and when to resist digital content to protect sleep, enhance interpersonal relationships, combat loneliness or dislocation and improve other biological impera-

tives, like breathing. Literacy and hygiene aren’t just valuable; they’re the only realistic approach to countering simplistic calls for eliminating screen time altogether. What else can be done? There is a broad consensus among decision-makers in the tech sector, leaders in entertainment, policymakers and academics that it’s time for a transparent labeling system. Although the conversation is still in its earliest stages, there is optimism around an initiative to start categorizing various types of digital material. Drawing from at least three prior examples of success at scale — con-

sider tobacco education, food literacy and ratings for movies and television — we believe the prospects for improving behavioral health through a combination of greater literacy, improved labeling and public awareness, aided by industry certification, are promising.

own multinational giants — companies now going global themselves through both exports and foreign acquisitions. Western multinationals are facing new competitive challenges in their own backyards. Today multinationals are studying a map of global demand that doesn’t look anything like it did a decade ago, and they have new technologies at their disposal that reduce the importance of labor costs. The calculus that goes into decisions about where to locate operations and where to invest in new capacity is changing, particularly in light of new automation technologies. Because shipping goods halfway

around the world hampers responsiveness and slows speed to market, some manufacturers are establishing or consolidating more regional supply chains to serve their major markets more efficiently. These shifts in corporate decision-making are starting to show up in trade statistics. Factors such as proximity to customers, the quality of infrastructure and the availability of a more highly skilled workforce are assuming greater weight than the drive to find the lowest possible global labor costs. At the same time, service flows are growing 60% faster than trade in goods. With both industry

structures and the global economy in flux, this is a moment to re-evaluate where to compete along the value chain, and where to operate around the globe in the future.

(Carrie Barron is the director of the Creativity for Resilience Program at Dell Medical School in Austin, Texas. Nicco Mele is the director of the Shorenstein Center on Media, Politics and Public Policy. Michael Phillips Moskowitz is founder and CEO of Moodrise and AeBeZe Labs.)

The next era of globalization James Manyika and Susan Lund

f you ask the average CEO what’s making him lose sleep these days, it’s a good bet that the answer will be tariffs and trade wars. But companies can’t afford to merely react to the news cycle. Our new research looks in detail at 23 different industry value chains across 43 countries to get a better view of what companies are already doing on the ground and how they add up to fundamental changes that will shape the next era. First, the geography of global demand has radically changed over the past decade. China, In-

dia and other emerging economies originally plugged into global value chains by making laborintensive manufactured goods and exporting them to advanced economies. Now their billion new consumers are a powerful force. They are lucrative consumer markets in their own right, and their companies are a new source of compe-

tition. While local demand is rising, emerging economies are also reaching a new level of industrial maturity. They are building out domestic supply chains and importing fewer of the intermediate inputs they need to keep their factories humming. Furthermore, developing economies are giving rise to their

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(James Manyika is the chairman of the McKinsey Global Institute, where Susan Lund is a partner.)

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Monday 25 February 2019

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Women win more scientific prizes, but men still win the most prestigious ones earned an average of about 64 cents for every dollar won by men. Importantly, as our forthcoming research suggests, there’s no evidence that the quality or value of womenled research is any lower than that of men, as measured by citations per article, productivity or breadth of research topics studied. Another interesting finding was that women are more likely to win prizes for service to biomedicine than awards for research. Not only are such awards considered lowerstatus, but doing service work can be seen as taking precious time away from research activities that could result in greater recognition and advancement. The bottom line: While on the surface it may appear that the gender gap has narrowed when it comes to science prizes, large inequity lurks just below. It’s time for that to change.

Brian Uzzi

e don’t do a great job of recognizing women’s contributions to science and innovation. Only two women have won the Nobel for physics in the nearly 100 years it has been conferred. And evidence suggests female academics are also less likely to receive grant funding due to gender bias. My collaborators and I wondered: Is one of the reasons why women are more likely to leave science than men because they don’t receive the same recognition? Do they not have access to the same incentives? Our study focused on prizes in the biomedical sciences, the rationale being that if we’re going to find gender equality anywhere in science, it would be in this field. Our initial results highlighted overall good news: The proportion of bio- But there’s a not-so-silver linmedical prizes awarded to ing. When we looked at the association between gender and women has risen steadily.

qualityof prizes awarded, we observed a major disparity: On average, women scientists

win prizes associated with less money and prestige than men do. Female prizewinners

(Brian Uzzi is a professor at Northwestern University.)

How to figure out how much influence you have at work Maxim Sytch

nformal power — which is unrelated to your formal title — can enable you to mobilize resources, drive change and create value for the organization as well as yourself. And in the modern workplace, informal power is increasingly pivotal and can secure your place within your organization. Why? Nowadays, workflow is migrating from specialized verticals to the white spaces between the verticals as companies respond more precisely to customer needs. This trend matters in organizations with cross-functional teams, account managers or a matrix structure. Do you have the informal power to generate value and get things done? Here’s how to do a power audit: Step 1: List your top 10 contacts who enable you to get work done. Step 2: For each contact, assign a score from 1 to 10 indicating how much you depend on them. Step 3: Do the same in reverse, assigning a score to yourself. Next, look for red flags, which could indicate that you lack informal power and are replaceable. Do all your con-

tacts work on one team, function, product unit or office building? This could indicate a limited ability to generate value beyond the basic requirements of your job description. Do your contacts provide you with more value than you re-

turn? Such relationships are difficult to sustain in the long run. Are your dependence scores low throughout? This could indicate the prevalence of transactional relationships. In contrast, highdependence relationships can be imbued with values and relational

dynamics that are not simply calculated. Is all the value you give or receive concentrated in a couple of contacts? You could be vulnerable if you lose these contacts or your relationship changes. So, now that you’ve conducted your audit, how can you improve

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your standing? First of all, a prime way to rectify unfavorable power-audit scores is to earn relationships by delivering value to your contacts. Second, manage your job so that you can contribute to the workflows of multiple functions inside the organization as well as customers, outside partners or regulators. Third, get to know your stakeholders and collaborators better as individuals. Shared activities have an underestimated impact on expanding our networks beyond an insular group of immediate co-workers. Your value should not be defined solely by your ability to perform a formal organizational role. If it is, you are likely in trouble; sooner or later, a cheaper, younger and smarter competitor will join the company. By creating value for diverse stakeholders and making yourself irreplaceable, you open possibilities for yourself within the organization and beyond.

(Maxim Sytch is an associate professor at the University of Michigan.)

Monday 25 February 2019

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FIXED INCOME

equities

Cover Story

INVESTING

FG bonds oversubscription shows investors preparing for life with lower yields

These stocks show why dividend reinvestment pays-off

Why comatose textile industry should not deter investment in cotton

Must you diversify your portfolio?

Reinvesting dividend is an investment strategy that brings sustainable wealth and help to raise investment income overtime. It is one of the easiest and cheapest ways to grow small holdings to attractive sum.

Those who saw the boon in the local textile industry before 1980, when companies began to crash from the impact of a choking operating environment...

The volatility of the stock market across economies especially the Nigerian stock exchange market has somewhat necessitated the need for diversification of owns portfolio to hedge against risk.

Page 65

Pages 66-67

Page 6

Last week, the Debt Management Office conducted auctions on three February 2019 Federal Government of Nigeria (FGN) Bonds which saw a sustained trend of over-subscription at FGN Bond Auctions for the year.

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Fixed Income FG bonds over-subscription shows investors preparing for life with lower yields OLUWASEGUN OLAKOYENIKAN

ast week, the Debt Management Office conducted auctions on three February 2019 Federal Government of Nigeria (FGN) Bonds which saw a sustained trend of over-subscription at FGN Bond Auctions for the year. The three FGN Bonds, for five, seven and ten-year tenors, were offered at a total value of N150 billion. But the instruments were bid in excess of N84.35 billion with a total subscription level of 156 percent, even as the ten-year bond unsurprisingly attracted more investor bids compared with the other two largely due to its long-term outlook. The over-subscription witnessed by the government instruments is seen as investors’ expectation of lower yields on subsequent bonds issuance by the state debt agency, considering a sustained decline on clearing rates on the instruments. In the just concluded week, the Nigerian market was engulfed with political risks which were worsened by a week delay of the country’s general elections earlier scheduled to commence on Feb. 16. As a result, forward-looking investors projected yields on government securities were relatively attractive compared to what would be obtainable after the polls, a move that may significantly improve the risk premium of the economy. For instance, figures obtained from the DMO show that the clearing rates on February

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Nigeria’s inflation rate slowed to 11.37 percent in January from a year earlier. This is 0.07 percentage points lower than 11.44 percent recorded in December 2018

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2019 FGN Bonds were 14.52 percent, 14.79 percent and 14.93 percent for 5-year, 7-year and 10-year instruments, respectively. These are lower when compared with 15.20 percent, 15.25 percent and 15.35 percent rates on January 2019 FGN Bonds, and rates on December 2018 FGN Bonds at 15.25 percent, 15.50 percent and 15.50 percent for the three tenors, respectively. “The signal from DMO is they are going to be issuing government instruments at lower rates,” Gbolahan Ologunro, an analyst at Lagos-based CSL

Stockbrokers Limited, told BusinessDay. “You will expect that by March the rates would also be declared lower for each of those tenors.” Besides, data from the National Bureau of Statistics released days to the auction also show that Nigeria’s inflation rate slowed to 11.37 percent in January from a year earlier. This is 0.07 percentage points lower than 11.44 percent recorded in December 2018. This, coupled with a recordhigh interest rate, international oil benchmark, Brent crude, which currently hovers around $67 per barrel, and forecasts of

reduced political risks after the elections, have all combined to inform the attractiveness of federal government bonds by foreign investors, according to Ologunro. This indicates that the investors, which are mostly Pension Fund Administrators and foreign investors, according to Busayo Awoyemi, an investment analyst at First Ally Capital Limited, may have taken advantage of the current rates with expectations that DMO’s marginal rates on the instruments would continue to fall with uptick in oil prices and waning political risks.

About BD Money: This finance supplement is targeted at investors and other readers keen to make their money work harder. Team Members: Lolade Akinmurele (Lead); Hope Moses Ashike; Segun Adams; Oluwasegun Olakoyenikan; Temitayo Ayetoto; Israel Odubola; Olufikayo Owoeye; David Ibidapo; Graphics: Fifen - Famous

Monday 25 February 2019

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Equities These stocks show why dividend reinvestment pays-off ISRAEL ODUBOLA

einvesting dividend is an investment strategy that brings sustainable wealth and help to raise investment income overtime. It is one of the easiest and cheapest ways to grow small holdings to attractive sum. With consistent rise in dividend pay-out, shareholders get an increasing amount on each unit of shares held which can also purchase larger units of share, consequently elevating returns overtime. While investing in dividendbearing securities can be a good way to generate regular investment income, reinvesting those funds in the company’s stocks serves shareholders better than taking cash often times. A major reason why some investors find dividend reinvesting less appealing is because of fluctuations in share price. However, investing for long-term gains makes returns grow exponentially especially in a company with sound dividend fundamentals.

The following stocks paint a scenario of how returns expand by reinvesting dividends in stocks with sound dividends fundamentals. Nigeria’s biggest lender by assets has an enviable dividend payment profile. Dividend payment to shareholders has been consistent in the last five years. The Tier-1 lender upon the submission of its 2018 Full year financials, proposed a final cash dividend of N2.50 per share, 5kobo higher than N2.45 per share paid 2017 year ended. Going back, the Tier-1 lender paid N1.77 per share March 23, 2017 and traded N13.80 the same day. Hypothetically, an investor with 100, 000 units

of shares are entitled to a dividend of N177, 700. Assuming such investor reinvest the cash to purchase additional shares that day, he would 12, 826 units, making his total holdings 112, 826 units. Furthermore, with 112, 826 units, he would get N276, 423.7 as dividend April 13, 2018 given that dividend per share was N2.45. Reinvesting the money would give 10,590 units given that the stock traded N26.10 April 2018, making his total shares outstanding 123, 416 units. Now imagine what this person’s return will look like if he reinvests dividends given that N2.50 has been proposed per share.

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Investing in dividend-bearing securities can be a good way to generate regular investment income, reinvesting those funds in the company’s stocks serves shareholders better than taking cash often times

’

Dividend per share of Okomu oil, a key player in the agricultural sector of the Lagos Bourse, has been trending northwards since 2016. The oilpalm producer doubled dividends to shareholders in 2018. On June 26, 2016, the company paid 10 kobo dividends per share and the stock traded N31.01 the same day. Doing a simple calculation, an investor that owns 100, 000 units the company stocks would get N10, 000. Assuming that is reinvested that day; the owner would have an additional 322 units, making his total holdings 100, 322 units. The oil palm producer paid

N1.5 per share July 26 2017 and traded N61.56, implying that such investor would get N150, 483. Reinvesting the cash that same day gives 2444 more shares, making his holdings 102,766 units. Going further, the company paid N3 per share June 25 2018 and traded N94.20. This connotes this person is entitled to N308, 298. Reinvesting raises his holdings by 3272 units to 106, 038 units. All things being equal, with annual rise in dividend per share, returns on investment expand. Leading pan-African financial services group, UBA have been consistently increasing its final dividend per share since 2015, a signal of good dividend fundamentals. The Tier-1 lender paid 40 kobo per share April 12, 2016 and traded N3.15 that same. Hypothetically, an investor with 100, 000 units of share is entitled to N40, 000. If such investor reinvests his entire dividends that same day, he gets 12, 698 additional units, making his total holdings 112, 698 units. The bank paid a final dividend of 55 kobo per share April 10, 2017 and traded N5.26. This implies such an investor is entitled to N61, 983.9, and reinvesting this sum gives 11, 784 additional shares, growing total holdings to 124,482 units. Going further, the bank paid a final dividend of 65 kobo for every share April 23 and traded N11.25, implying that such investor would receive N80, 913 as dividend, and reinvesting heightens his holdings by 7,192 units to 131,674 units. Returns on investment will trend northwards given increasing dividend per share as holdings rises. Small dividend can add up to powerful gains overtime if they are invested regularly. It is noteworthy to state that these stocks are only used to explain the benefits of dividend reinvesting, and not a recommendation.

66 BUSINESS DAY

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Monday 25 February 2019

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Why comatose textile industry should not deter investment in cotton ‘

Temitayo Ayetoto

hose who saw the boon in the local textile industry before 1980, when companies began to crash from the impact of a choking operating environment, may consider venturing into cotton cultivation as good as a nonlucrative idea. That, however, may not be absolutely true in the face a boost to shore up cultivation of the non-cash commodity across producing regions. Investors can no longer afford to be blinded by the rhetoric of decimated textile production when opportunities nest in a local market driven by ginning companies and an insatiable export market. Ginning firms separate the seeds, seed hulls and other small objects from cotton fibre. They rely on cultivation for supply. In 2010, Nigeria’s cotton production achieved an all-time

While plans to resuscitate the textile industry carry on, investment is still open in other value chains beyond textile or garment making

’

‘

Investment in textile is still very lucrative. The market is there. That the textile companies are few now does not mean there is no market. We have access to the international market which is the most lucrative

’

peak of 103,419 tons of production, according to records from Index Mundi but dropped by a staggering 31.58 percent to 70,760 metric tons in the following year. Production sank further to a 6th time low of 43, 544 metric tons in 2014, before showing little signs of growth again with 50, 076 tonnes churned out in 2015. This year, growers are determined to drive growth from 2018’s 51, 165 tons to a minimum of 130,000 tons. If the federal government’s arrangement with the National Cotton Association of Nigeria (NACOTAN) through the Central Bank’s Anchor’s Borrower’s Programme (ABP) is not altered by the outcome of the election, more than

100,000 farmers will be contributing to the new production target. This means growers can tap into it. The association is set to hold a feasibility meeting with the Bank on cost of cultivation in order to determine the size of support required to drive the boost. Essentially, support for recommended quantities of input such as seedlings, chemicals, fertiliser as well as extension services will be guaranteed to a large extent for those who participate. Anibe Achimugu, NACOTAN president said the association is targeting a minimum yield of 1.3 tons per hectare and 1.5 tons in the best case scenario, speaking via a telephone interview.

The cotton ginning companies spread in the north central, southwest and northwest region between Katsina and Zamfara, for instance still rely on cotton cultivation to feed operations. “There is potential for investment in ginning as well because if the volume of production increases, then ginning capacity also has to increase. And if production is sustainable, it also means that not only will the textile companies come back on stream but also create an opportunity for investors to come in and set up factories whether in spinning, weaving or complete textile company which will include printing and finishing,” Achimugu explained. While plans to resuscitate the

textile industry carry on, investment is still open in other value chains beyond textile or garment making. These areas cover cotton oil extraction from cotton seeds. The oil is edible and also used for making cosmetics, pharmaceutical products, margarine and soap among others. Besides being a fibre content, coffee filters, archival papers, fish nets and book binding materials can also be generated from cotton. These are options that will bear fruits only with the ramping up of production. Inherently, cultivation will still be a good bet for any investment, even if it is a hectare. Available reports peg average cost of production in Nigeria, inclusive of

labour, inputs and implements at N125, 000 depending on the level of inflation in the economy. Current price range of seed cotton in local market hovers over N180, 000 and N200, 000, indicating a 44 percent reward on investment is guaranteed. Amodu Achema, Arewa Cotton and Allied Product Limited chief executive officer confirmed that market continues to exist locally for discerning investors. And in terms of export, profitability is guaranteed. The company targets export volume of 5,000 tonnes of lint this year to Turkey and Liverpool and could have been more if supply rises from the end of cultivation. “Investment in textile is still

very lucrative. The market is there. That the textile companies are few now does not mean there is no market. We have access to the international market which is the most lucrative.” Achema said. “Most times, we support cotton farmers majorly in the northwest and north central. And there are still textile industries who are direct consumers of lint.” There are also incentives for production that can be expected from the Memorandum of Understanding between the Ministry of Industry, Trade and Investment and Shandong Ruyi International Fashion Industry. From the partnership, $2 billion will go into different value chain from growing to ginning, spinning, textile manufacturing and garment production in Katsina, Kano, Abia and Lagos states. Also, Vlisco Group, a leading player in African fabric prints last November proposed investment of $200 million in Nigeria, with focus on 700,000 jobs. Should these proposals materialise, the cotton cultivation will roar to alive, widening opportunities for investors to take part.

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Monday 25 February 2019

Investing Must you diversify your portfolio? David Ibidapo

he volatility of the stock market across economies especially the Nigerian stock exchange market has somewhat necessitated the need for diversification of owns portfolio to hedge against risk. However, while the term diversification is not in itself a bad concept, there is need understand why and when to diversify as some investors by default assume the need for diversification upon entry into the market. Diversification is the act of investing in different asset classes and securities in an attempt to reduce overall investment risk and to avoid damaging a portfolio’s performance by the poor performance of a single security, industry, economy. In literature, there are divergent views on the concept of diversification. While some believe diversification reduces significantly investment risks, others opine that risks are higher when portfolios are diversified. Also some suggests the need to diversify more when an investor is committing significant

fund into the market but in a case of less substantial funds, putting your eggs in one basket is ideal. In the words of Warren

‘

Diversification could to some extent compromise your results and your likelihood of beating the market except if you are not interested in beating the market and just fine with aiming for average returns

’

Buffet, chairman and CEO of Berkshire Hathaway and world most successful stock investor explained, “Diversification is a protection against ignorance.” In his view, an investor who understands what he is doing may not really need to diversify. This means more or less you have no business investing in the stock market with little or no knowledge about the market. Putting in consideration the time, skills and attention required in making right investment decisions, concentrating more on eggs in one basket may be more efficient than divided concentration. While this may be true, portfolio diversification may be a necessity for investors with significant stake in the market, even with adequate knowledge about the market because no investor always beat the market in the long term and they

definitely have more to lose. Conventional wisdom dictates that diversification is essential to long-term investing success. This may not apply to investors with minor stake in the market as diversifying such portfolio may even cause more harm than good. Imagine the case of the 2018 market sell-offs which forced market prices down as political uncertainties prevailed, everyone who had stakes in the market had their fingers burnt as market was generally down. However, there was a larger chance that an investor with lesser fund, who had diversified his portfolio, would have lost more in combined value as against if he had committed his fund in one stock. “It is unwise to spread one’s funds over too many different securities,” said Bernard Baruch, an American financier, stock investor, philanthropist, statesman, and political con-

sultant. “Time and energy are required to keep abreast of the forces that may change the value of a security. While one can know all there is to know about a few issues, one cannot possibly know all one needs to know about a great many issues.” Diversification could to some extent compromise your results and your likelihood of beating the market except if you are not interested in beating the market and just fine with aiming for average returns. This however, inhibits an investor’s chance of accumulating good wealth as the likes of Warren Buffet. While this is not to discard the importance of diversification, this however stresses the need to be abreast with developments around industries you are interested in to improve your chances of beating the market (making good returns) with little or no diversification.

Monday 25 February 2019

Data

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Federal government eurobond Following the postponement of the General Elections by the Independent National Electoral Commission (INEC) in the early hours of Saturday, February 16th-the initially scheduled date, Yield on Nigerian Eurobonds-especially the 2027 and 2032 issues-rose on Monday, as Investors reacted to the news. As the week progressed, the sell pressure declined so that week-on-week Average yield contracted week-on-week across all tickers by c2.3bps with yields on FGN 21s, 23s and 22s dropping the most. On the other hand, Yields on FGN 47s and 38s declined the least by 1.47 and 1.75 respectively.

Corporate eurobond Across board, yields on Nigerian Corporate Eurobonds fell by an average of c3.26bps week-on-week- although it rose Monday as election jitters upset Foreign Investors. Yields on all corporate bonds declined with the exception of ACCESS BANK PLC III and UBA PLC which both rose by an average of 2.5 percent. Diamond bank as at Friday offer the highest yield on the Eurobond list at 15.42, compared to 17.58 offered on Friday last weekend.

Monday 25 February 2019

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Commodities This ‘cash-cow’ seed has managed to elude investors OLUFIKAYO OWOEYE

he name- sesame seeds, might be strange to some Nigerians. The seed – popularly called Benne seed in the Northern part of Nigeria is an important crop to the Nigerian agricultural sector and non-oil sector. The crop is largely cultivated in the country, thriving in relatively poor climatic conditions. According to the Foreign Trade Statistics Q3 2018, the seed is second only to cashew nuts. Globally, there are over 4.8 million tonnes of the seeds produced yearly, with Myanmar being its largest producer. Nigeria is now the 2nd largest African producer, behind Sudan and ranked 7th in the world. Due to the drought-resistant nature of the sesame plant, it thrives excellently

in the Northern part of the country and averagely in some parts of South West states. Sesame seed production probably began in the Middle Belt region of Nigeria before spreading to other states. The leading producers of the seeds are Jigawa, Nasarawa, Benue, and Sokoto. Other sesame cultivating states include Yobe, Kano, Katsina, Kogi, Gombe, and Plateau states. However, the seed can also thrive in some parts of the South East and South South, since it has been successfully cultivated in Ebonyi State and the Northern part of Cross River State. Sesame also grew when planted in Delta State, but its hybrid did not yield many seeds, although the leaves were bigger. Research by BusinessDay shows that sesame seed is cultivated in about 26 states

across the country with good returns for sesame farmers, buoyed by the huge demand by importers, its cultivation is expected to increase and spread to other states soon. Why is the demand for this small seed huge? Sesame seed has numerous uses, one of which is in being a very good source of

vegetable oil that contains no cholesterol, making it the most demanded vegetable oil in the world. It can be used in pharmaceuticals, confectionery, cosmetics and many industries for paints, soaps, lubricants, shampoos, etc. Sesame seeds contain 50.5% oil and 25% protein. Has Nigeria tapped into

the Sesame Value chain? Sadly, Nigeria only engages in the exportation of the seeds and does not extract the oil at commercial scale. Contract cleaning facilities are available in Lagos, nevertheless, there are no hauling operations. Currently, the exportation of sesame seeds in Nigeria is led by three companies: Olam, Kelani Ark Poter Hamlet Ltd, and Greenwen International Resources. Olams is an Indian agribusiness multinational company operating from seeds to shelves in over 60 companies. Olams also exports cash crops like cocoa, coffee, etc. Kelani Ark Poter Hamlet Ltd is a seasoned exporter of most agro-allied products from Nigeria. Other leading sesame seed exporting companies include Errand Horse Ltd, Paveway International Traders Ltd, etc. Although, Nigeria’s Ses-

ame seeds holds value for exports and is currently in hot demand throughout the world because oil extracted from the seeds is better than any other oil in the whole world. Nigeria manufacturers can better make use of this seed if they can engage in the extraction of oil from this seed. The total value of sesame exports in Q3 2018 was N9.02 billion, according to the Foreign Trade Statistics Report for Q3 2018 released by the National Bureau of Statistics (NBS). No doubt this small sesame seed can be termed a black gold, which can earn Nigeria billions of dollars in foreign exchange annually if government pay more attention to the seed and encourage investment in its value chain. Also, its oil could be extracted on a commercial scale, with much value addition.

INEC report on total number of Registered Voters and PVC Collection rate as at 11/02/19

Source: INEC

INEC last week released the figures of the total number of Registered Voters for the 2019 General elections. The figures show that South West had the lowest collection rate while the North East had the most with Ogun State (71.36%) having the lowest of the 36 states while Katsina with 98.69 collection rate ranked number one. Total Number of Registered Voters was highest in North West with 20.16 million voters compared to South East with 10 million, the lowest of any geo-political zone.

Week Ahead Week Ahead (25th February – 1st March, 2019) Commodities Sugar: Prices to trend upward due to India’s diversion of cane to ethanol production. Cocoa: Unfavourable weather in Ivory Coast to push up global prices. This is positive for Nigeria’s export revenue. Fixed Income Commercial papers with description “FBNQ CP II 27FEB-19” issued by FBN Quest Merchant Bank October 30, 2018 with issue yield of 12.19 percent will mature Wednesday, February 27, 2019. Commercial papers with description “FSDH CP VII 28FEB-19” issued by FSDH Merchant Bank November 15, 2018 with issue yield of 12.82 percent will mature Thursday, February 28, 2019. Currency Naira to hover around N360/$ - N362/$ at the parallel market this week.

Data Release The National Bureau of Statistics to release Foreign Trade in Goods Statistics for 2018 (Q4 & Full Year) Wednesday, February 27, 2019. Event The meeting of the Board of Directors of Dangote Cement Plc will hold Monday February 25, 2019. The consideration of full year audited Financial Statements for the year ended 31st December, 2018 is the main agenda of the meeting. Conference call details Dangote Cement PLC (FY 2018) Date: Tuesday, February 26, 2019 Time: 15:00 Lagos/ 14:00 London Dial in: Register here Replay facility dial in: +234 (0)18889001 (Nigeria); +44 (0)20 7043 4129 (UK); 0844 873 8149 (UK); 1-213-325-3283 (US) Playback Code: 462994#

Monday 25 February 2019

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understanding the economy of nigeria’s 36 states

he purpose of this series is to present evidencebased picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative. Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument. The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the

context of its geopolitical zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward? Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile). Today’s edition covers an overview of North East region and Adamawa State in the region.

North-East Summary • Economy 4.1 percent of GDP, less than one-twentieth of the economy, 3rd in the North and 5th in the country. This was made up of 56 percent Services, 40 percent Agriculture and 4 percent Non-Oil Industry. NE’s agricultural sector is 3rd in the country, after Northwest and North-Central, and the is NE’s livestock output is 2nd in the country, after Northwest. A Functioning rail transport links with the coast is required to unleash NE’s latent potentials in agriculture, industry and commerce. • Endowments NE controls 30.8 percent of Nigeria’s land mass, that is nearly a third of the country, and is the largest among the six regions. It is without a coastline, bordered by Chad Republic to the east, Niger Republic to the north, and shares boundaries with Jigawa, Kano, and Kaduna States in the North West Zone to its northwest, and Plateau and Benue States in the North Central Zone to its southwest.

• 66 percent of the region’s non-oil output was Manufacturing, • 32 percent was Construction. * N2.6 trillion Services output in the region was 4.0 percent of Nigeria’s Service sector, the 6th in Nigeria. Inter-Region Comparisons With a Gross Regional Product (GRP) of N4.6 trillion or 4.1 percent of Nigeria’s GDP in 2017, NorthEast’s economy is the 3rd in the North, and 5th among the regions. North-East’s Population of 27 million is 15.3 percent of the country’s, 3rd in the North, and 5th in the country. NE’s Land Area of 280,400/km2 is 30.8 percent of Nigeria’s land mass, the largest in the Country. NE’s Government Revenue of N330.8 billion in 2017 was 11.1 percent of all regions’ total, 3rd in the North, the 5th in Nigeria.

• Wellbeing 15.3 percent of the population, nearly a sixth of the population, 3rd in Northern Nigeria, the 5th in Nigeria. North-East has a density of 96 people per km2 compared to the national average of 219 people per km2, it is the most sparsely populated region in the country- the result of combing the largest share of the country’s land area with the 5th largest share of the country’s population. Literacy in North-East is 2nd in the North, the 5th in the country. Life expectancy of 46 years in the region is the least in the country: Female life expectancy of 49 years is the least in Nigeria; Male life expectancy of 44 years is also the least in the country. North-East’s N171 thousand Per Capita GRP is the least in Nigeria. • Budget NE retains 11.1 percent, nearly an eighth, of regions’ revenue; spends 14.1 of regions’ outlays, incurs 27.1 of regions’ deficits, and holds 9.2 percent of the regions’ total debt stock.

1. Economy Structure Gross Regional Product (GRP) of N4.6 trillion in the North-East in 2017 was 4.1 percent of Nigeria’s GDP, 3rd in the North and 5th in the country. This was made up of 56 percent Services, 40 percent Agriculture and 4 percent Non-Oil Industry.

2. Endowments The North-East geopolitical zone is made up of six states: Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe. It is without a coastline, bordered by Chad Republic to the east, Niger Republic to the north, and shares boundaries with Jigawa, Kano, and Kaduna States in the North West Zone to its northwest, and Plateau and Benue States in the North Central Zone to its southwest. North-East’s total land area of 280,400/km2 is 30.8 percent of Nigeria’s land mass, the largest among the six regions in the country.

* North-East’s N1.9 trillion Agricultural output in 2017 was 7.8 percent of Nigeria’s agricultural sector and 3rd in the country, after Northwest and Northcentral. • With N958.8 billion crops contributed 51 percent of NE’s agricultural output; • N764.7 billion output in livestock was 41 percent; • N146 billion output in fishery was 8 percent. • Forestry was Nil. * North-East’s N200 billion Non-Oil Industrial output in 2017 was 1.3 percent of the Nigeria’s nonOil Industrial output in Nigeria, 6th among the regions.

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Monday 25 February 2019

understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue 2017 actual total revenue of N330.8 billion was 11.1 percent of all States’ actual total revenue, 3rd in the North, 5th in the country. The revenue components in 2017 were: • Statutory Allocations of N179.5 billion was 12.3 percent of regions’ total, 3rd in the North, 5th in Nigeria. • Internally Generated Revenue of N42 billion was 5.5 percent of total, was the least in the North, and in the country. • Value Added Tax of N59.5 billion was 12.6 per cent of regions’ total, the least in the North and 5th in country. 4.1.2.2 Spending Total expenditure in the region of N520.1 billion in 2017 was 14.1 percent of actual total spending by regions, 3rd in the North, 5th in the country. The spending components in 2017 were: • Recurrent Spending of N393.9 billion was 14.9 percent of total for regions, 3rd in the North, 5th in the country. • Capital Spending of N126.4 billion in the NE was 12.2 percent of all regions’ total, 2nd in the North, 4th in Nigeria. 4.1.2.3 Deficits N-E’s deficits of N189 billion or 27.1 percent of regions’ total in 2017 was 2nd in the North and in the country. 4.1.2.4 Debt Total debt of N425.2 billion in the NE was 9.2 percent of regions’ total, 2nd in the North, 5th in the country. • Domestic Debt of N326.9 billion in 2017 was 9.8 percent of regions’ total, 3rd in the North, 5th in the country. • Foreign Debt of N98.6 billion in 2017 was 7.8 percent of regions’ total, 2nd in the North, 5th in Nigeria. 4.1.3 2013-2017 Trends North-East’s Revenue: Total Revenue declined from N423.6 billion in 2013 to N330 billion in 2017. The slump in revenue came from gross statutory allocations (GSA) while internally generated revenue and value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy.

North-East’s 27 million population is 15.3 percent of national population, 3rd in Northern Nigeria, the 5th in Nigeria. North-East has a density of 96 people per km2 compared to the national average of 219/km2, it is the most sparsely populated region in the country- the result of combing the largest share of the country’s land area with the 5th largest share of the country’s population. Literacy in North-East is 2nd in the North, the 5th in the country. Life expectancy of 46 years in the region is the least in the country: Female life expectancy of 49 years is the least in Nigeria; Male life expectancy of 44 years is also the least in the country. North-East’s N171 thousand Per Capita GRP is the least in Nigeria.

4. Budget

North-East’s Spending: Total Spending surprisingly rose from about N394 billion in 2014 to N520 billion in 2017, recording a 24 percent increase over those three years. Recurrent spending increased by 46 percent from N223 billion in 2014 to N393.9 billion in 2017, while capital spending fell by 27 percent from N171 billion to N126 billion in 2017. North-East’s Revenue Use: North-East had a balanced budget from 2014 to 2016, keeping enough current surplus to fund capital outlays. By 2017, all capital outlays, and some recurrent spending, were deficit financed.

4.1. Fiscal Realities of North-East 4.1.1 2018 Aspirations North-East’s 2018 budget of N927.3 billion is 9.9 percent of all regions’ budget, 3rd in the North, 5th in the country. 4.1.2 2017 Realities

North-East’s Financing • Revenue financing: overall deficits were 12 percent of total revenue in 2015, 59.7 in 2016, and 57.1 percent in 2017. • Spending finance: overall deficits as a percentage of total spending was 10.6 in 2015, 37.4 in 2016 and 36.3 in 2017. • Capital finance: overall deficits as percentage of the capital budget was 30.3 in 2015, 104 in 2016, and 149 in 2017. North-East’s Debt • Foreign debt stock grew threefold from N32.5 billion in 2013 to N98.5 billion in 2017; from 7.6 percent of revenue in 2013 to 29.7 percent in 2017. • Domestic debt stock continued to grow from N99.7 billion in 2013 to a peak of N326.9 billion in 2017; from 23.5 percent of revenue in 2013 and rose to 77.2 percent in 2017. • Total debt stock rose from 31.2 percent of revenue in 2013 to 106.9 percent in 2017.

Monday 25 February 2019

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understanding the economy of nigeria’s 36 states

Adamawa Adamawa State Summary • Economy Adamawa’s GSP was 0.65 percent of Nigeria’s GDP in 2017, 3rd in the North-East, 16th in the North, and 29th in the country. Services were 68 percent of the State’s GSP, Agriculture, 29 percent, and Non-Oil Industry was 3 percent. • Endowments Adamawa’s Land Area is 4.2 percent of Nigeria’s land mass, 5th in the North-East, 7th in the North and the country. With no coastline, the State boarders with Cameroon and is bounded by three other States within its region; Borno, Gombe and Taraba.

Construction was 32 percent. * Adamawa State’s N496.1 billion Service output was 0.8 percent of Nigeria’s Service output, 3rd in the North-East, 11th in the North 24th in the country. Inter-State Comparisons With a Gross State Product (GSP) of N733.3 billion or 0.65 percent of Nigeria’s GDP in 2017, the 3rd in the North-East, 16th in the North, and 29th in the country. The State’s 4.5 million Population is 2.26 percent of national population, the 3rd most populated State in the NorthEast, 14th in the North, and 26th in the country. Adamawa State’s Land Area of 38,700/km2 is 4.25 percent of Nigeria’s land mass, 5th in the North-East, 7th in the North and the country. Adamawa’s N177.9 Revenue is 1.9 percent of all States’ total revenue, 3rd among the NorthEastern States, 10th in the North, and 22nd among the 36 States and the FCT.

• Wellbeing Adamawa’s population is 2.26 percent of national population, 3rd in the North-East region, 14th in Northern Nigeria, and 26th in the country. The State’s density is 32nd in Nigeria, 26th in literacy, and has the 35th life expectancy of 45 years in the country. The State’s Per Capita is 3rd in the North-East, 16th in the North and 29th in the country. • Budget Adamawa retained 1.9 percent of States’ revenue in 2017, 22nd in the country; expended 3 percent of all States and FCT outlays, 10th in the country; incurred a fiscal deficit, and held 2.1 percent of States’ debt, 19th in the country.

1. Economy Structure Adamawa’s estimated Gross State Product (GSP) in 2017 was N733.3 billion or 0.65 percent of Nigeria’s GDP in 2017, the 3rd economy in the North-East, 16th in the North, and 29th in the country. Services were 68 percent of the State’s GSP, Agriculture, 29 percent, and Non-Oil Industry was 3 percent.

2. Endowments Gongola State was renamed Adamawa State in 1991 after Taraba State was carved out of it. Adamawa does not have a coastline, it shares boarder with Cameroon on the East, and is bounded by three States, Taraba to the South-West, Borno to the North-West, and Gombe to the West. Adamawa State’s land area of 38,700/km2 is 4.2 percent of Nigeria’s land mass, 5th in the North-East, 7th in the North and the country. Major towns and cities are Demsa, Fufore, Ganya, Girei, Gombi, Guyuk, Hong, Jada, Lamurde, Madagali, Maiha, Mayo-Balewa, Mubi, Numan, Yola, and Song.

* Adamawa State’s N212.3 billion Agricultural output is 0.9 percent of all agricultural production by the States and FCT, 4th in the North-East, 14th in the North, and 17th in the country. • N148.8 billion in livestock was 70 percent of the State’s agricultural output, • N52.3 billion in crops was 25 percent, • N11.2 billion in fishery was 5 percent, • Forestry is Nil. * N25.0 billion 2017 Non-Oil Industrial output in the State was 0.2 percent of the gross NonOil Industrial output in Nigeria, 5th in the North-East, 18th in the North and 35th among the 36 States and the FCT. Manufacturing (mainly Food, Beverage and Tobacco, Textile, Apparel and Footwear, and Wood and Wood Products) was 66 percent of the State’s non-oil output,

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Monday 25 February 2019

understanding the economy of nigeria’s 36 states 3. Wellbeing

and the FCT. The revenue components in 2017 were: • Statutory Allocations of N28.2 billion was 1.9 percent of the total allocations to all States and FCT, 4th in the North-East, 17th in the North and 29th in the country. • Internally Generated Revenue of N7.6 billion was 0.99 percent of total, 2nd in the North-East, 14th in the North and 19th in the country. • Value Added Tax of N10.0 billion was 2.1 percent of States’ total, 4th in the North-East, 12th in the North, and 23rd in the country. 4.1.2.2 Spending Adamawa State’s actual total expenditure of N111.9 billion in 2017 was 3.0 percent of actual total spending by all States, the highest in the North-East, 10th in the North and the country. The spending components in 2017 were: • Recurrent Spending of N88.5 billion was 3.3 percent of the recurrent outlays of all the States and the FCT, the largest in the North-East, 4th in the North, and 8th in the country. • Capital Spending of N23.4 billion in Adamawa State was 2.2 percent of States and FCT’s total capital outlays, the 2nd in the North-East, 4th in the North and 10th in Nigeria. 4.1.2.3 Deficits Adamawa State is one of the only 25 States and FCT in Nigeria that had deficits in 2017. The State’s deficit of N54 billion is the highest among the North-East States, 4th among the 17 States that had deficits in the North and 6th among the States that had deficits in the country. 4.1.2.4 Debt Adamawa State’s total outstanding debts of N98.4 billion was 2.1 percent of the States and FCT’s total debts, the 2nd in the North-East, 8th in the North and 19th in the country. • Domestic Debt of N69.6 billion in December 2017 was 2.1 percent of States and FCT’s domestic debts, 4th among the North-East States, 12th in the North and 21st in the country. • Foreign Debt of N28.8 billion in December 2017 was 2.3 percent of the total foreign debts of the States and FCT, the 2nd in the North-East, 3rd in the North, and 10th in the country. 4.1.3 2013-2017 Trends Adamawa’s Total Revenue: Total Revenue declined from N79.3 billion in 2013 to N57.9 billion in 2017. The slump in revenue came from gross statutory allocations (GSA) while internally generated revenue and value added tax proved resilient in the face of global oil price slump and associated recession in the national economy.

Adamawa State’s 4.5 million population is 2.26 percent of national population, 3rd in the NorthEast region, 14th in Northern Nigeria, and 26th in the country. With a land area of 38,700 per km2, Adamawa State has a density of 117 people per km2 compared to the country average of 219/km2, 5th in the North-East, 16th in the North and 32nd among the 36 States and the FCT. Adamawans’ literacy is the 1st in the North-East, 8th in the North, and 26th in the country. The State’s life expectancy of 45 years life is the 4th in the North-East, 17th in the North and 35th in the Country. Female life expectancy of 45 years is 6th in the North-East, 20th in the North and 37th in the country. Male life expectancy of 42 years is the 5th in the North-East, 19th in the North and 36th in the country. The State’s Per Capita GSP of N162 thousand is 3rd in the North-East, 16th in the North and 29th in the country.

4. Budget

Total Spending: Despite the decline in total revenue, total Spending grew from N69.9 billion in 2014 to N111.9 billion in 2017; recurrent spending grew from N45.2 billion in 2014 to N88.5 billion in 2017, while capital spending fell slightly from N24.7 billion in 2014 to N23.4 billion in 2017.

4.1. Fiscal Realities of Adamawa State 4.1.1 2018 Aspirations Adamawa State’s budget of N177.9 billion is 1.9 percent of the 2018 budget by all States, 2nd in the North-East, 8th in the North and 18th in the country. 4.1.2 2017 Realities

Revenue Use: Since 2015, Adamawa has spent all revenue on recurrent outlays, having to borrow to support recurrent headings and fully fund capital projects. As at 2017, the State borrowed N54 billion or 93 percent of its revenue to support expenses. Financing: • Revenue financing: overall deficits were 16.9 percent of total revenue in 2014 and 93.2 percent in 2017. • Spending finance: overall deficit as a fraction of total spending was 14.4 percent in 2014 and 48.2 percent in 2017. • Capital budget: overall deficit as a fraction of the capital budget was 40.8 percent in 2014, and 230.7 percent in 2017. Adamawa’s Debt • Domestic debt stock rose from N15.9 billion in 2013 to N69.6 billion in 2017, from 20.1 percent of revenue in 2013 to 120 percent in 2017. • Foreign debt stock in the State had grown six-fold from N4.8 billion in 2013 to N28.8 billion in 2017; from 6 percent of in 2013 to 49.9 percent in 2017. • Total debt stock rose from 26.2 percent of revenue in 2013 to 170.1 percent in 2017.

4.1.2.1 Revenue Adamawa State’s 2017 actual total revenue of N57.9 billion was 1.9 per cent of all States’ actual total revenue, 3rd in the North-East, 10th in Northern Nigeria and 22nd among the 36 States For enquiries, please call Teliat 08098710024, Chuks 08116759816 or teliat.sule@businessday.ng

Monday 25 February 2019

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LegalPerspectives

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Odunayo Oyasiji

Case review on law and entertainment

Musical copyright society of Nigeria Limited/gte v. Compact disc W

CITATION: (2018) LPELRSC.425/2010 hat to note: This is a matter that was decided at the Supreme Court in 2018.It addresses the issue of Copyright i.e. category of person who have the locus standi to institute an action for copyright infringement. FACT The appellant at the Supreme Court was the plaintiff at the trial court. The bone of contention was that the appellant claimed an infringement of its copyright by the respondent. The respondent at the trial court entered a conditional appearance and raised an objection on the basis that the appellant did not fulfil a condition precedent before filing the action. The condition precedent was that the appellant before filing an action should have a valid and subsisting collection society’s licence issued by the Nigerian Copyright Commission. The Federal High Court ruled in favour of the appellant who was the plaintiff by dismissing the objection that was raised and holding that the plaintiff/ appellant has the locus standi to institute the action as an owner, assignee or an exclusive licensee of the copyright in compliance with Section 15(1) of the Copyright Act. The respondent who was the defendant at the trial court being dissatisfied with the judgement of the High Court decided to file an appeal at the Court of Appeal. The Court of Appeal set aside the decision of the High Court and held that non-adherence to the condition precedent to bring an infringement of copyright action should under the Copyright Act temporarily deprive the person the right to institute the matter. The plaintiff at the trial court being dissatisfied with the position of the Court of Appeal decided to take the matter further to the Supreme Court. ISSUES FOR DETERMINATION The appellant identified on issue for determination before the Supreme Court. The sole issue is –“Whether or not by virtue of the provisions of Section 16 (1), 17, 19 and 39 (1) & (3) of the Copyright Act Cap C.28, Laws of the Federation of Nigeria 2004, the appellant can lawfully commence infringement proceedings against the respondents in respect of the musical works and related audio visual available and broadcast within the territory of the Federal Republic of Nigeria (as distilled from the grounds of appeal).”

uting royalties to its members, who are the actual owners of the copyrights to their original works. The counsel urged the court to uphold the decision of the lower court.

Counsel to the respondent identified two issues for determination by the court. The issues identified are – “1. Whether the appellant can for the first time, before this Court, without the prior leave of this Court, canvass any retrospective copyrights. 2. Whether a Copyright owner, assignee and exclusive license, engaged in negotiating and granting copyright licences to third parties requires as a condition precedent, a collecting society’s licence as statutorily required by the provisions of Sections 17 and 39 of the Copyright Act, Chapter C.28, Laws of the Federal Republic of Nigeria before originating a copyright infringement suit before a Court of Law.” The court decided to adopt the sole issue formulated by the appellant for the determination of the matter. ARGUMENTS/SUBMISSIONS The counsel to the appellant contended that “it is without contest that copyright is a property right exercisable over certain types of intangible/memorable property and so a person having a legal right over such property is entitled to enforce his right in accordance with the laid down principles of law contained in the Copyright Act Cap C.28 Laws of the Federation of Nigeria 2004 and so secured under Section 44 of the 1999 Constitution of the Federal Republic of Nigeria. That what is required in tackling the issue on ground is the in-depth interpretation of Sections 6 (1), 8 (1) & (2), 10, 11, 16, 17 and 39 of the Copyright Act.” The counsel further stated that the Copyright Act identifies 5 categories of persons who can

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He stated on for the appellant that it can be said that the right to sue is exercisable either jointly or severally by any one or more of the categories of persons so listed institute an action for copyright infringement either personally or in representative capacity. The persons are an owner, an assignee and exclusive licensee of copyright in a work by virtue of section 16 of the Act, as person carrying on the business of negotiating, granting of licenses, collection and distribution of royalties for not more than 50 owners of copyright in any category of works protected by the Act by virtue of section 17 of the Act and as association of copyright owners (collecting society) which may be formed upon the satisfaction of the conditions provided in Section 39 of the Act. “He stated on for the appellant that it can be said that the right to sue is exercisable either jointly or severally by any one or more of the categories of persons so listed. That the rights conferred under Sections 16, 17 and 39 of the Copyright Act automatically create the capacity a person acts and as such an

owner, assignee and Exclusive Licensee acts in a personal capacity while a person under Sections 17 and 39 acts in a representative capacity. That being the case, whilst the latter capacity requires a licence or exemption, the former is not so required in order to exercise its rights.” It was further argued that the appellant is not a collecting society but an owner, exclusive licensee and an assignee of copyright in works sought to be protected. It was also argued that Copyright (Amendment) Decree No. 42 of 1999 introduced Section 15A (now 17) is not retrospective as it stated that its commencement date is May 10, 1999. Counsel for the respondent on the other hand argued that “the appellant’s arguments canvassed about the retrospective rights of the appellant before Sections 17 and 39 of the Copyright Act came into effect were not raised by the appellant at the Federal High Court or the Court below or in the notice of Appeal before this Court and so cannot be raised in the appellant’s brief for the first time without prior leave of Court.” It was also stated that that the claim of the appellant at the Federal High Court was filed on 2nd August 2007 while the alleged infringement complained of occurred in 2006 and so the Copyright Act applicable is that of 2006 and 2007. The respondent further submitted that the appellant is a collecting society as it was stated in its pleadings that the appellant is a registered association, limited by guarantee with the principal objective of negotiating and granting licences and distrib-

JUDGEMENT/DECISION The court held that “It is also settled law that in determining whether a party has locus standi, the Court would have recourse to the plaintiff’s pleadings only. Standing to sue does not depend on the success or merit of the claim but on the interest of the plaintiff in the subject matter of the suit. As rightly asserted by learned counsel for the appellant, a cursory look at the statement of claim would show that there is nowhere therein where it pleaded that it is a collecting society. The respondents cannot go outside the appellant’s pleadings to justify their assertion.” The court further held that “in Adeokin Records & Anor v Musical Copyright Society of Nigeria (Ltd/GTE) delivered on the 13th July 2018 which lead judgment was delivered by Ejembi Eko, JSC, which settled the questions right before this Court now. That decision impels this Court to hold that the exclusive licence of the copyright musical works which forms the basis of the suit at the trial Court was transferred to the appellant since 1986 and 1990 respectively while the provisions of the Copyright Act, 2004 came into force on the 10th day of May, 1999 and so the same cannot be said to affect the rights already transferred long before its commencement date. Therefore, just as this Court held in Adeokin Records & Anor v Musical Copyright Society of Nigeria (supra) on 13/7/18 the matter is properly before the trial Federal High Court and since the Court of Appeal went outside the clear situation, this Court is best suited to intervene and hold that the position taken by the Court below is not the proper stand as supported by the facts on ground in context with the necessary statutory provisions. The conclusion is that the appeal is allowed and decision of the Court of Appeal set aside”. CONCLUSION The decision of the Supreme Court established the fact that Copyright (Amendment) Dceree No. 42 of 1999 that introduced section 15A (now section 17) does not have retrospective effect. Its effect starts from the commencement date stated in the decree i.e. May 10, 1999. The provision does not have effect on things that have happened before it came into place.

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20 years on, Nigeria’s democracy is stuck in utter crudity global Perspectives

OLU FASAN

his year marks the twentieth anniversary of Nigeria’s return to civil rule in 1999. Nigeria has thus had twenty years of uninterrupted electoral democracy, with this year’s general election being the country’s sixth since 1999. Yet, despite the sustained period of civil rule, Nigeria’s democracy remains undeveloped, hampered by crass politics and failed institutions. At the time of write this, I had no idea how last Saturday’s rescheduled federal elections had gone, but regardless of how they went, this year’s general election, like previous ones,is tarnished by political and institutional failures. Everything that could go wrong with elections –violence, intimidation, disenfranchisement, vote-buying, incompetence of the electoral body, etc – exists in Nigeria. If “peace accords” must be signed before every general election, if elections are always postponed for security and logistical reasons, then that democracy is troubled and immature. Yet, that’s the state of Nigeria’s democracytwenty years on. To be sure, the 1999 general election, which returned Nigeria to civil rule, set a bad precedent.The outcome of the presidential poll was fixed by the military. In his book, Vindication of a General, the then chief of army staff, General Ishaya Bamaiyi, said that the then military head of state, General Abdulsalami Abubakar, had prepared a handover note for General Olusegun Obasanjo even before the election had taken place.General Abubakar, he said, had agreed with Generals Ibrahim Babangida, T Y Danjuma and Aliyu Gusau to hand over power to Obasanjo, a former military head of state. Of course, a beneficiary of a fixed election can hardly conduct a free and fair one himself. The two general elections,

in 2003 and 2007, conducted under President Obasanjo’s administration were massively rigged. In 2003, Obasanjo was running for a second term, the election was so flawed that former US president, Jimmy Carter, an observer, condemned it. Indeed, in the presidential poll, Obasanjo got 99.9% of the vote in his home state, Ogun; the courts later annulled the results. The 2007 election that Obasanjo conducted, after his failed third-term plot, was also massively rigged, so much so that international observers described it as “a charade” and even his handpicked beneficiary of the election, Umaru Yar’Adua, admitted it “had shortcomings”. To President Jonathan’s credit, the two general elections conducted under his presidency, in 2011 and 2015, were broadly free and fair. However, they were seriously marred by violence and institutional failure. In 2011, the Independent National Electoral Commission, INEC, postponed the National Assembly elections for two days after voting had started, blaming “late arrival of result sheets in many parts of the country”.Then, in 2015, the general election was postponed for six weeks on the ground of security challenges in the North East, which only affected 14 out of Nigeria’s 774 local governments. That wouldn’t have justified nationwide cancellation ofelections in sophisticated democracies. But Nigeria is nowhere near attaining any level of democratic sophistication! Yet, nothing tarnished the general elections under Jonathan’s presidency more than threats of violence and actual violence. In 2011, after Jonathan was declared winner of the presidential election, violent clashes spread across the North, leaving over 800 people dead. Provocative comments by General Muhammadu Buhari, a presidential candidate in that election, were blamed for the violence. But the spectre of violence was hugely escalated during the 2015 general election as rival politicians and their supporters threatened the disintegration of Nigeria if the election didn’t go their way. Those apocalyptic predictions forced the international community to literally put Nigeria on a suicide watch to stop it committing a hara-kiri. President Jonathan and General Buhari signed peace accords, but the stakes were so high, and nothing could be taken for granted.

Indeed, the hysterical behaviour of one politician, Godsday Orubebe, who disrupted the collation centre as the results were going against his party, showed how desperate and volatile the situation was. Of course, history will always credit Jonathan for averting the impending Armageddon by conceding defeat even before the results were announced. But Jonathan’s singular act must not mask the inherent weaknesses of Nigeria’s democracy, the deep political and institutional failures that continue to undermine and discredit it. These structural decays have, of course, been on display in this year’s general election. First, the spectre of violence has not gone away. Most commentators had thought that because the two leading presidential candidates, Muhammadu Buhari and Atiku Abubakar, are both Northerners and Muslims, the threat of violence would be virtually nonexistent. But, not so! Buhari and Atiku were shamed into signing two peace accords, the second witnessed by former presidents of Liberia, Tanzania and Botswana, as well as the secretary-general of the Commonwealth, Patricia Scotland. Former US president Bill Clinton, who was to attend, allegedly backed out following the reckless comment by Nasir el-Rufai, the Kaduna State governor, that foreigners who intervened in Nigeria’s elections would leave in “body bags”, in other words, they would be carried home dead!It’s beyond the pale. But, apart from el-Rufai’s condemnable threat, President Buhari himself made intemperate comments. For instance, he was criticised for using the Hausa word “fitna”, which his opponents said amounted to inciting violence, but his supporters described as a “joke”. The dictionary defines “fitna” as “unrest or rebellion”, it’s therefore not clear how using it can be a joke. But if Buhari was joking with the word “fitna”, what about his orders to the police and the military to shoot ballot-box snatchers at sight. As the president said, “I have directed the police and the military to the ruthless”. So, here was, in a supposed democracy,governed by the rule of law, a president advocating jungle justice, summary execution,for electoral offences that should be dealt with by the courts. Of course, Buhari and his party members are not the only politicians making

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inciteful comments. Atiku and members of his party have also been reckless with making unfounded allegations. For inEverything that could stance, Atiku recently alleged that the APC operatives in China to fast-track go wrong with elec- trained card readers in their strongholds of Northtions –violence, intimi- West and North-East, while slowing them dation, disenfranchise- in other geo-political zones in order to ment, vote-buying, disenfranchise voters in those zones.This incompetence of the is a serious allegation of potential electoral manipulation and fraud. But where is the electoral body, etc – evidence? exists in Nigeria It was this dreadful state of affairs – the violent expressions and political desperation – that recently prompted some elder statesmen, such as Dr Christopher Kolade and Chief Philip Asiodu, under the auspices of “Burdened Elders” to cry out that “The nation is bleeding profusely and approaching a frontier it had never seen before”. But if political failure has tarnished this year’s elections, so has institutional failure. The last-minute cancellation of the February 16 Presidential and National Assembly elections was a national disgrace. There was no serious breach of peace, no natural disaster or any other emergency, the only grounds permitted for postponement under the electoral law. Yet, INEC decided, in the middle of the night, at 2.30am, to cancel the elections starting a few hours later at 8am, blaming “logistical challenges”. When a country’s electoral body blames “logistical challenges” for postponing a long-scheduled general election, it’s evidence of appalling incompetence, and severely weak state capacity. But the postponement came with huge economic cost, with some analysts putting the potential losses, including loss of foreign investment, at about $9bn. And, of course, it did an enormous damage to Nigeria’s already battered international reputation. So, Nigeria may have had twenty years of uninterrupted democratic rule, its democracy is still primitive, stunted by a broken politics and failed institutions; indeed, by state failure!

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

What sectors will the jobs come from? ECONOMIST

NONSO OBIKILI

y last column was about jobs, a topic that needs no introduction. In that column I made a very simple argument; to create the volume of jobs that Nigeria needs to reduce unemployment, we need significant growth in sectors that are labour intensive and that primarily employ low-skilled labour. Given the current level of poverty and the fact that poor people generally have weak demand for most products outside basic goods, the focus needs to be on sectors with capacity for exports.The obvious next question is “what sectors”? Two things before we get to that. First, what exactly are labour-intensive sectors? Consider a simple example where you are

given N100,000 to manufacture a product. If you spend N80,000 of that on labour in the process of manufacturing that product then it is labour intensive. If, on the other hand, you spend N90,000 renting machinery and only N10,000 on labour in manufacturing that product, then it is not labour intensive. The key point here is not that capital-intensive activities don’t create jobs, they do. But that the spending is skewed towards things other than labour. For example, the oil industry, including crude oil refining, is considered capital intensive not because it does not create jobs, but because the amount of spending on machinery and equipment and so on is so large relative to the amount of labour it employs. In Q3 of 2017 the mining industry, which is dominated by crude oil, accounted for just over 11 percent of all economic activity in Nigeria but only accounted for 0.17 percent of the employed labour force. That is less that twentieth of a percent. Industries like vehicle assembly plants which we like to focus on are also not labour intensive. It was reported in the news a couple of days ago that Honda was shutting down a plant in the UK which employed about 3500 people. That plant produced an average of 150,000 cars a year,

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A popular industry that checks all the boxes in terms of labour-intensiveness and exports is the clothing industry: textiles, leather, and shoe manufacturing

almost ten times the number of new cars sold in Nigeria in 2018. Produced by just 3500 people. For these kinds of sectors, the size of output that would need to be created to make a significant dent in our unemployment numbers are so large that they do not seem achievable. Secondly, before we get to what sectors are labour-intensive, it is useful to dispel a popular misconception about where or how value is created. When you pick up a pair of jeans that is labelled “Made in Bangladesh” does it actually meanthe entire jeans from cotton to zipper were made in Bangladesh? Probably not. The cotton may have been grown somewhere, the cotton woven into fabric somewhere else, the zippers, and buttons produced somewhere else, and the whole thing brought together somewhere else. Maybe even by an entity that is based somewhere else. The question then, is not if this sector or that sector is labour intensive, but what part of the value addition process is labour intensive. So, what are these labour-intensive sectors with capacity for exports? The obvious first candidate is agriculture. The caveat here is that almost 50 percent of currently employed people in Nigeria already work

in agriculture, and there is a very strong association between agriculture and poverty. If you add the fact that increasing yields in agriculture typically involve getting people out of the farms and the use of more machinery and technology, then it is difficult to imagine agriculture as the path to job creation. A popular industry that checks all the boxes in terms of labour-intensiveness and exports is the clothing industry: textiles, leather, and shoe manufacturing. This is one of those sectors, that due to the way it is currently structured requires lots of labour. In Bangladesh, which is a big participant in the global textiles, the industry exported about $18bn worth of clothing and textile products employing over four million people directlyin 2012. The statistics in terms of the employment output ratio are similar in other clothing sector powerhouses like Mauritius and Vietnam. Some other light manufacturing of things like toys, bicycles, machinery for metallurgy and so on have also been demonstrated to be relatively labour-intensive. Continues online @www.businessday.ng

Dr. Nonso Obikili is Chief Economist at Business Day.

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