BusinessDay 26 Feb 2019 by BusinessDay

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Nigerian voters go missing as turnout heads for lowest since 1999 Buhari opens 640,265 lead over Atiku after results in 14 states and FCT

LOLADE AKINMURELE

igerian voters are shrinking when the numbers suggest they should be growing. Between the last election in 2015 and 2019, 16.58 million Nigerians became eligible to vote for the first time, yet preliminary figures of the number of people who took part in the 2019 elections show a shrinking voter base. Some 8.34 million Nigerians voted for either of the ruling All Progressives Congress (APC) or the main contender People’s Continues on page 34

2 01 9

2 01 5

STATES APC

PDP

WINNER APC

PDP

WINNER

EKITI

2 1 9 ,2 3 1

1 54 ,03 2 APC

1 2 0,3 3 1

1 7 6 ,4 6 6 PDP

OSUN

3 4 7 ,6 3 4

3 3 7 ,3 7 7 APC

3 83 ,6 03

2 4 9 ,9 2 9 APC

OYO*

3 6 5,2 2 9

3 6 6 ,6 4 0 PDP

52 8,6 2 0

3 03 ,3 7 6 APC

ONDO

2 4 1 ,7 6 9

2 7 5,9 01 PDP

2 9 9 ,889

2 51 ,3 6 8 APC

LAGOS*

580,81 4

4 4 8,01 6 APC

7 9 2 ,4 6 0

6 3 2 ,3 2 7 APC

FCT

1 52 ,2 2 4

2 59 ,9 9 7 PDP

1 4 6 ,3 9 9

1 57 ,1 9 5 PDP

KWARA

3 08,9 84

1 3 8,1 84 APC

3 02 ,1 4 6

1 3 2 ,6 02 APC

NASSARAWA

2 89 ,9 03

2 83 ,84 7 APC

2 3 6 ,83 8

2 7 3 ,4 6 0 PDP

KOGI

2 85,89 4

2 1 8,2 07 APC

2 6 4 ,851

1 4 9 ,9 87 APC

GOMBE

4 02 ,9 6 1

1 3 8,4 84 APC

3 6 1 ,2 4 5

9 6 ,87 3 APC

ADAMAWA*

3 7 8,07 8

4 1 0,2 59 PDP

3 7 4 ,7 01

3 6 8,3 03 APC

OGUN*

2 07 ,9 50 APC

2 81 ,7 6 2

1 9 4 ,6 55 APC

3 08,2 9 0

ENUGU*

54 ,4 2 3

3 55,553 PDP

1 4 ,1 57

553 ,003 PDP

ABIA

85,058

2 1 9 ,6 9 8 PDP

1 3 ,3 9 4

3 6 8,3 03 PDP

YOBE TOTAL

Source: INEC

497,914 50,763 APC 4,491,878 3,851,613

446,265 25,526 APC 4,593,189 3,946,668

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

Spot ($/N)

361.54 306.85

-0.43 11.31

-0.91 13.97

-0.12

NGUS APR 24 2019 363.30

14.37

NGUS JUL 24 2019 363.75

10 Y 20 Y -0.13 -0.05 14.57

14.42

NGUS JAN 29 2020 364.65

EU, Commonwealth, others decry shortcomings, violence in Saturday’s election …US Ambassador congratulates Nigerians on successful poll INNOCENT ODOH, Abuja, TEMITAYO AYETOTO & GBEMI FAMINU, Lagos

he European Union Election Observation Mission (EUE OM) and the Commonwealth Election Observation Mission to Nigeria for the 2019 general elections have expressed misgivings over the conduct of Saturday’s Presidential and National Assembly elections. While the EU Observer Continues on page 34

Inside Emmanuel Elebute, Lagoon Hospitals founder, goes home P. 35

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Tuesday 26 February 2019

NAICOM bent on implementing insurers’ tier-based capitalisation despite cancellation MODESTUS ANAESORONYE

hat becomes of the tierbased capitalisation earlier proposed for insurance companies in 2018, which was later cancelled following resistance in some quarters, is not known yet. But the industry regulator, National Insurance Commission (NAICOM), is stillbentonimplementingitsrisk-based capitalisation that will require companies to play according to their size. NAICOM is still committed to ensuring that insurance companies only underwrite risks in areas where they have the required capital. This, in 2019 and going forward, will see the industry witness stricter regulationsintheareaofriskandclaims management, which will also require that board of directors and external auditors of insurance companies are heldresponsibleifanythinggoeswrong with firms under their watch. In the new dispensation also, some insurance companies will be barred from taking new risks until they are able to meet certain capital requirements by the regulator. Companies that owe claims to consumers of insurance companies will be forced to settle claims obligations from their capital, and also be given timeframe within which to recapitalise or be penalised stiffly. Mohammed Kari, commissioner for insurance/CEO, NAICOM, had told BusinessDay in an interview that insurance industry was used to resisting change, which is why the industry is crawling to date. “It is in our character to resist policy change, that is why we have remained where we are till today,

running behind the banks who are open to change,” Kari had said. Sunday Thomas, deputy commissioner for insurance, technical, NAICOM, said the insurance industry in 2019 and going forward would see the hand of the regulator more than it has been to meet expectations of all the stakeholders. In a paper titled ‘The Role of the Regulator in Shaping Insurance Industry Performance in 2019’ presented at the Chartered Insurance Institute of Nigeria Business Outlook in Lagos, Thomas said there were rising supervisory expectations, reflecting the growth of principlesbased supervisory approaches that emphasise the importance of governance, culture, and management approach and the outcomes. “A sound regulatory and supervisory system is panacea for maintaining a fair, safe and stable insurance sector for the benefit and protection of the interests of policyholders,” he said. Thomas also noted that effective insurance regulation supports economic growth, adding that adequate policyholder protection is critical to sustaining the long-term viability of the insurance sector as protection of policyholders is a necessary precursor to building and maintaining trust in the insurance industry. He said regulation is key to the development of the insurance sector, imploring operators to embrace the various regulatory changes. To ensure protection of policyholders, Thomas said the commission would strengthen the complaints resolution mechanism, increase regulation on claims handling, and create awareness to enhance consumer literacy level.

Car dealers embrace online platforms to expand customer base, boost sales ...Cheki Nigeria, Affordable Cars, Jiji, OLX top preferred platforms TEMITAYO AYETOTO & OLUFIKAYO OWOEYE

bout five years ago, Ifeoluwa Ajiboye, chief executive officer, Da-Ande Autos, relied on building friendships at social centres including parties, clubs and restaurants to expand his customer base and drive sales. “We talked to friends, printed complementary cards and visited relaxation places with the aim of selling,” says Ajiboye, whose Da-Ande Autos deals in imported secondhand vehicles. But with the realisation that walkin-customers have moved online, Ajiboye started embracing marketing offerings from the likes of Cheki Nigeria, Affordable Cars Limited, Jiji, OLX, among others. The increasing digital awareness among young Nigerians in recent times has birthed online vehicle marketing platforms and car dealers like Ajiboye are cashing in on them. Dealers in second-hand vehicles like Ajiboye say, contrary to the belief that the presence of online vehicle marketing platforms is threatening their survival, the platforms are actually giving visibility to their products. The online platforms have significantly pushed up car sales at a time customers connected to the internet prefer to shop from the comfort of their homes.

“When online stores sell cars, they sell for places like ours,” Ajiboye says. “The reason is dynamism, which is you change as time changes to blend with technology. In other words, you hardly find people walking into car outlets themselves.” BusinessDay findings show that most conventional dealers have contractual relationship with online platforms to promote their products far beyond the physical outlets. The outcome is that potential buyers are directly linked with the sellers, who afterwards meet for final bargaining and inspection. “That is why we contract and pay Jiji and Cheki. They snap our products, get our prices, get details and help us sell. A lot of people get too busy these days to walk around and start looking for cars,” he says. Before efritin.com shut down operations in 2017, Ogunleye Korede, a manager at Eminent Motors in Ikeja, Lagos, paid N24,000 for a three-month subscription with the online platform which, he said, really boosted his sales. The market linkage compared to old times became broader. “There was a day I sold five cars in a day, and two of those customers came from efritin.com. Sales are best in December,” Korede said.

•Continues online at www.businessday.ng

Mahmood Yakubu (l), chairman, INEC/presidential returning officer, with Muhammed Kuma, technical adviser to the chairman, at the National Collation Centre in Abuja, yesterday. Pic by Tunde Adeniyi

PDP, PCP, YPP, others reject results in states won by Buhari ... cite violence, infractions, cancelled votes … APC campaign councils faults PDP for discrediting INEC, polls ... We’ll consider observations, reports before final results, says INEC JAMES KWEN & OWEDE AGBAJILEKE, Abuja

he People’s Democratic Party (PDP), People’s Coalition Party (PCP), All Progressives Grand Alliance (APGA), Young Progressives Party (YPP), and People’s Party of Nigeria (PPN) on Monday rejected the results from states won by Buhari, the APC Presidential candidate. According to the opposition parties, results in states such as Kogi, Kwara, and Nasarawa were announced in favour of Buhari despite violence, infractions and large number of cancelled and rejected votes. At a press conference in Abuja

on Monday, the PDP rejected the cancellation of 157,591 votes from the 86 polling units in Nasarawa State, Nigeria’s north-central region. The main opposition party also accused the ruling APC of tampering with results of various polling units in Nasarawa and Sokoto States. Uche Secondus, the party’s national chairman, accused the APC of hacking the INEC IT server and manipulating election results. He also accused the government of deploying top officials to states to manipulate results in favour of the APC. “As results trickled in on Sunday, February 24, 2019, clearly putting the PDP in the lead, the ruling party and

President Buhari dispatched highranking officials to coercively influence outcomesindifferentgeopoliticalzones in the country,” Secondus alleged. “For example, the Minister of the Interior (Abdulrahaman Danbazau), was dispatched to the North West of the country; the Secretary of the Government of the Federation (Boss Mustapha) was dispatched to the North East of the country; while the Attorney General and Minister were dispatched to the South East and South-South regions,” he said. On his part, Osita Chidoka, PDP national collation centre agent, said

Continues on page 34

Oil rally from low quality crude could elude Nigerian grades ISAAC ANYAOGU

il prices are set to rise further as OPEC output cuts and American sanctions on Iran and Venezuela cause a “shortage” of the low-quality heavy crudes refiners rely on, says Russell Hardy, chief executive officer of Vitol Group. But this is cold comfort for Africa’s biggest oil producer whose major crude grades are high sulphur crudes. Hardy said in an interview with Bloomberg there is probably the potential for oil prices to be a little bit higher as oil supply is going to be pretty tight until the third quarter. But much of this demand increase will benefit low-quality crude grades as US shale producers, along with other producers including Nigeria, are pumping huge volumes of the high-quality crude, feeding a growing glut that is bearing down on demand. With an eye on the January 2020 deadline for the implementation of the new regulations from the International

Maritime Organisation (IMO), where the sulphur limit for the shipping industry will fall to 0.5 percent among other calculations, including higher prices for sweet crude, refiners had made massive investments to build plants capable of processing large volumes of low-quality crude grades. However, this calculation seems way off the mark as sanctions by the United States on Iran and Venezuela, two of the world’s biggest producers of low-quality crude, are seeing the refiners scrambling. OPEC cuts too will also shut in more cheap crude grades coming from Saudi Arabia. “You have a squeeze on heavy supply probably for the next six months,” Hardy said in a Bloomberg TV interview. “The OPEC decision has meant there’s less available, the Iranian situation has meant there’s less available, and the Venezuelan situation now is adding to that.” Bloomberg reports that the heavylight crude conundrum is turning the oil market’s usual price patterns on their head as the heavy-light spread

narrowed to an almost nine-year low earlier this month on the Brent-Dubai exchange of futures for swaps. While this favours producers like Saudi Arabia and Iraq, who don’t produce much light-sweet, Nigeria prefers a market where the light crude reigns. Nigeria badly needs higher oil prices to steer the 2019 budget benchmarked at $60 per barrel into realms of reality. President Muhammadu Buhari, when he received Ahmad Qattan, a Saudi envoy in Abuja, on February 20, said Nigeria could consider a reduction in crude oil production in support of efforts by OPEC to shore up the price. “As a responsible member of the OPEC, Nigeria was willing to go along with the Saudi initiative in limiting output so that prices would go up,” Garba Shehu, senior special assistant to Buhari on media and publicity, said in a statement.

•Continues online at www.businessday.ng

Tuesday 26 February 2019

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Zenith Bank set to become Nigeria’s 2019 election fell below expectations, first N6trn bank by Assets in Q1 2019 say Transparency Int’l, Situation Room IFEANYI JOHN

s financial inclusion increased in Nigeria recent years, banks have been the biggest beneficiaries as cash deposits from customers have continued to increase at breathtaking pace. Amongst the biggest beneficiary is Nigeria’s most profitable bank, Zenith Bank which analysts now forecast is set to become Nigeria’s first N6 trillion bank after total assets reached N5.955 trillion at the end of 2018. “At the moment, it is anybody’s guess exactly where Zenith Bank’s total assets reach at the end of the first quarter as double-digit treasury yields and lending rates could easy push total assets beyond N6 trillion without even accounting for the marketing push to get more deposits,” said Maju Eldad, a lecturer in the Economics department at Federal University of Kashere, Gombe. “Since the bank is less than N50 billion short of achieving that target and we expect their Q1 earnings to be north of N50 billion, it will definitely be the first Nigerian bank to cross the N6 trillion mark.”

Late last year, the banking system was shaken up after Access Bank announced its surprise merger with Diamond bank. The merger was expected to create a N6 trillion bank (combination of the total assets of Access and Diamond bank as at the end of the 3rd quarter 2018), however, after discounting for the N280 billion in non-performing assets in Diamond bank which is expected to be written off before the merger is completed, the total assets of the combined entity is expected to be in the region of N5.7 trillion, about N250 billion behind Zenith Bank but still ahead of First bank (N5.34trn), making Access bank the second largest bank by assets after the merger is completed later this year. “We will have to wait and see the growth performance in the total assets of Access Bank and Diamond Bank as at the end of 2018 before we can ascertain if the combined entity will still be the biggest lender in Nigeria by assets, however, it is safe to say that Access will become the largest bank by customers once the merger is completed with about 29 million customers.” Eldad told BusinessDay.

OWEDE AGBAJILEKE, Abuja

s Nigerians await the outcome of the Presidential election conducted last Saturday, Transparency International and the Nigeria Civil Society Situation Room say the exercise is a drawback on the successes recorded in the 2015 general election. According to them, the Independent National Electoral Commission (INEC) has not managed the Presidential election efficiently, pointing out that shortcomings have been recorded. The groups also expressed regret that despite the oneweek postponement of the national elections, the electoral body still experienced logistics challenges, which accounted for late arrival of materials in most Polling Units across the country. In an exclusive interview with BusinessDay in Abuja, Monday, Auwal Musa Rafsanjani, head of Transparency International in Nigeria and executive director of the Civil Society Legislative Advocacy Centre (CISLAC), kicked against the militarisation of the electoral process, as witnessed in the Presiden-

tial and National Assembly held last Saturday. “I am not sure if we have, in terms of being responsible and accountable, we have learnt anything. I think what I have seen is the continuation of impunity in many instances,” he said. “Because when people openly engage in vote buying and justifying it, and when people engage in violence and nothing happens to them, this is not a lesson,” according to him. “Rather it is a draw back in terms of what we expected Nigeria in the 2019 election,” he said. Also, presenting its third interim statement in Abuja on Monday, Convener of Situation Room, Clement Nwankwo, called for an independent inquiry into the poor management of the electoral process by INEC. Addressing a press conference, Nwankwo also called for a special audit of election results in Polling Units where Smart Card Readers failed to work. He said: “The election has been a step back from the 2015 General Election and actions should be taken to identify what has gone wrong and what can be corrected.

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Property firm mulls owning mortgage bank for increased access to housing CHUKA UROKO

orried that a good number of Nigerians still find it difficult to access mortgage facility to enable them buy or build their own houses, Pertinence Properties, an investment and development firm, says it is considering setting up a mortgage bank to give more Nigerians access to housing. A relatively young property firm that opened for business six years ago, Pertinence Properties aims to reach all income levels - low, middle and upper levels with special focus on low income earners who corner not less than 60 percent of their products and services offering. “That shows you where our heart is; we really want to be part of the solution to Nigeria’s housing deficit. We all don’t have to leave everything to the government,” Sunday Olorunsheyi, executive director, admin/operations at Pertinence, told BusinessDay in an interview. “Part of our long term vision is to own a mortgage bank so that the bank can help our clients buy our

properties by giving them the opportunity to pay over a long period of time. We want to make profit as a business but we also want to impact lives,” Olorunsheyi assured. For Nigeria’s 200 million population, home-ownership level is a little above 10 percent while housing deficit is expected to hit 20 million units by 2025 unless there is a dramatic government policy that will encourage more investment in the low-end residential properties. Experts note that there are two major issues with the housing deficit in the country. The first is lack of a functional mortgage system while the second one is the absence of a social security system in the country. Again, there is no system that is dedicated to funding housing for low-income families. In developed economies, people don’t save to buy houses. They take mortgage facilities instead. But Nigeria does not have a well-developed and functional mortgage system. Interest rate on mortgage loans is double digit, making it not in any way different from commercial loans given by deposit banks.

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Kula community soon to become oil city with industrial base IGNATIUS CHUKWU

ula, a town close to the Atlantic Ocean in SouthWest area of Rivers State (AkukuToru local council area), is set to become an industrial and oil city next to the sea. The town may become the first community in the Niger Delta to become headquarters of an oil company. This is sequel to a plan of action unveiled by Belemaoil Nigeria, Nigeria’s first indigenously owned and managed oil company, presently head-

Remodelling of 230 public schools: Edo urges timely delivery

ith work progressing on a large number of the 230 primary schools marked for remodelling, Edo State governor, Godwin Obaseki, has charged contractors handling the rehabilitation works on timely completion of the projects to provide conducive learning environment for pupils in the state. In a statement by special adviser to the Governor on media and communication strategy, Crusoe Osagie, the governor said the state government was committed to providing serene, conducive learning environment for the pupils in line with the infrastructure renewal component of the Edo Basic Education Sector Transformation (Edo-BEST) programme. The rehabilitation of public primary schools is a cardinal part of the EdoBEST programme, which will ensure that the new system of Information Communication Technology (ICT)-based teaching and learning in primary schools is conducted in a sane environment. The governor’s aide said construction work was progressing in Edokpokor, Igbesanmwan, Eweka, Evbuotubu, Ugbiyokho, Imasabor, Okhoro primary schools. Others are Oba Ewuare, Osunde, Amegor primary schools as well as Obe Primary School, in Sabongidda-Ora, Owan West Local Government of the state. According to Osagie, “The governor has given a marching order to the contractors to deliver quality work. He has just urged them to ensure that they deliver the job in good time so that the pupils can learn in a safe, habitable environment. “The renovation work which cuts across different parts of the state will see us having primary schools that we can be proud of.

… Belemaoil behind economic push, may relocate to Kula quartered in Port Harcourt. Kula is hometown of the founder/president of Belemaoil Nigeria, which has the focus of making the host community partners in both management and benefits through a system called the Belema Model. Some of the items that may launch Kula into a world class city include Belema Atlantic Island project, Belema Idustrial Bae project, Belema Atlantic Office to host the headquarters of the oil company, the ‘Billionaires Atlan-

tic Island, and Belema Trading Island. There would be road shows in Dubai, Paris and the UK to showcase the opportunities in Kula and attract investors. According to the plan, Belema would take the king, chiefs, clergy, youth and women to these capitals of the world for the road shows. For a start, an 85km road is to link the oceanic city to Port Harcourt and end the threat and dread of river travel for hours and the dread of piracy. A circular road pro-

ject is already in progress around Kula town. These projects were unveiled by the corporate affairs manager of Belemaoil, Sam Abel Jumbo, on behalf of the founder/president, JackRich Tein Jnr, an engineer, on the occasion of thanksgiving organized by the Kula community led by the monarch, chiefs and elders together with the clergy, youths and women of the area. In reeling out what Kula has already benefited from Belema in the short period of

existence (about two years), a top chief, Bourdilon Ekine Oko, named over 1000 jobs, contracts, scholarships, water for the first time, etc. He said Tein, the founder, is pure gift to the community. The King, Kroma Amabibi Eleki, danced in public for one and said God has put laughter in his mouth. He called together all the chiefs and they poured water on the soil to water the plans made by Tein. He also announced donation of land to build some

projects earmarked by Belemaoil. Belema’s executive director production and engineering, Mufaa Welsh, talked to the people in Kalabari language and revealed even more things coming to Kula such as a refinery, am airport (or airstrip), and a technical college. Belema is also launching a women empowerment scheme that would start in March 2019 to help women trade with at least N100,000 each for about 300 women.

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NEWS Nigeria’s claim against Eni, Shell could be largest-ever payment in sector corrupt case OLUSOLA BELLO with agency report

he Nigerian government’s decision to formally launch a $1.1 billion claim against Shell and Eni in UK courts, relating to funds allegedly misappropriated for bribes and kickbacks during the acquisition of an oil bloc 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 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 bloc OPL 245-which could hold up to nine billion barrels of oil. Most of the $1.3 billion 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 ongoing 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 immediately 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 barrels, is also at the

heart of an ongoing 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 purchase 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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Youth bulge in Nigeria: Asset or liability? STRATEGY & POLICY

MA JOHNSON

ince independence in 1960, expectations are that our political leaders would take us sooner or later to the promised land through sound policies and effective implementation strategies. But times are hard, and it’s no surprise that politicians have abandoned ship on policy matters. They’ve applied full verve to politics because that is perhaps, the only profession that currently guarantees balanced diet three times a day. Policy issues have been relegated to the background and substituted with politics, more so when no one can predict what happens next in the political terrain. Even the most “articulate” of our politicians have locked on to their opponents like the fire control system on board a ship tracking an enemy target. Our politicians know all the strengths and weaknesses of their political opponents, but not much is known about our youths which constitute more than 60 percent of the estimated population of about 200 million people. That the world refers to Nigeria as the “giant of Africa” is not because of the country’s technological capabilities and economic development, but mainly due to the size of its population and resources. Whilst I concede that a large population is one of the components of national power, it’s only valid when it has been converted into human capi-

tal through accelerated education in a world that is knowledge-based. In the midst of political uncertainties across the country, the Office of the National Security Adviser is concerned about youth bulge in Nigeria and its implications on national security. So the 9th Edition of the National Security Seminar organized by the Alumni Association of the National Defence College (AANDEC), took place at the National Defence College, Abuja, between 19 and 20 February 2019. The theme of the Seminar: Youth Bulge in Nigeria: Implications for National Security, brought together scholars, alumni-serving and retired military, paramilitary, and bureaucrats, members of the diplomatic corps, journalists and other professionals with a view to proffering policy options to the Presidency. What is youth bulge? According to JY Lin, a former Chief Economist of the World Bank, “Youth Bulge is a common phenomenon in many developing and in particular, less developing countries (LDCs) where infant mortality has been reduced successfully but high fertility rate still exist among mothers.”Over the years, this has led to a significant increase in the proportion of youth population between 15 years and 35 years relative to other age groups. Youths within this age bracket are most active and yet, most vulnerable of the country’s population. Nigeria has a youth bulge. That is why the Chairman, N Umaru, a retired Air Vice Marshall, in his opening remarks prescribed a three-pronged strategy of “engagement, empowerment and employment” to enable our youth bulge to be an asset. It is the nation’s inability to protect our youths from crimes and criminality through job creation that has made them to constitute a threat to national secu-

rity. It is because we have not been able to engage, empower and employ our youths meaningfully, that is why most of them are either unemployed or underemployed. Bearing in mind security challenges in the country, participants were generally of the view that youth bulge in Nigeria is a liability, not an asset. The forte of participants’ contributions is how to derive benefits from the youth bulge in a way that will make our youths productive to themselves and the country. Almost all the participants were of the opinion that if the potentials of our youths were well harnessed, they would be an asset for national development. They will not be predisposed to vices thereby constituting a threat to national security. Today, a few of our youths are contributing their quota to the development of the society by doing their businesses well. They have been engaged, empowered and employed by families, friends, nongovernmental organizations as well as local, states, and federal governments to be productive citizens of the country. But just like in any society, we have many youths that are jobless. According to the National Bureau of Statistics, 55.4 percent of our youths are unemployed/underemployed. This data shows why most of our youths are involved in political thuggery, ballot box snatching, kidnapping, armed robbery, insurgency, advance fee fraud aka “419,” and other forms of lawless activities in order to make a living. Majority of our youths –male and female- are into drug abuse. And with all these negative narratives, one begins to wonder what the future has in stock for our youths and the country. It takes a generation of committed leaders to build a nation. If this negative trend continues, how do we get our youths to be committed leaders that will build

‘

This data shows why most of our youths are involved in political thuggery, ballot box snatching, kidnapping, armed robbery, insurgency, advance fee fraud aka “419”...

the country in the future? A critical assessment of successive governments for decades show that they have been formulating policies to engage, empower, and employ youths in the country. The problem is that these policies with their imperfections die with each regime as they are not products of a national development plan. So there is no continuity in policy. Perhaps, this is the time for the country to go back to national development plan with sectorial goals and milestones. To start, we need a 10-year national development plan that aims to eliminate poverty, and reduce inequality within a time frame by drawing on the energy of the people, growing an inclusive economy, improving capabilities, enhancing the capacity of the country, and promoting leadership, as well as building bridges between different ethnic groups throughout the entire country. Interestingly, Nigeria’s development plans from the first (1962/68) to the fourth (1981/1985), consistently identified technological development as a core objective. While secondary objectives include “increase in the real income of the average citizen; reduction in the level of unemployment and underemployment, increase in the supply of skilled manpower; greater self-reliance and increased productivity among others.” All these depend strongly on technological progress. Nigeria is economically underdeveloped because the country is technologically backward. A nation which doesn’t learn from its own mistakes, or from the mistakes of others, will not be able to engage, empower and employ her youths. God bless Nigeria! Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

Intellectual democracy: An ideal for our democracies

Amamchukwu Okafor

he world is experiencing an anti-globalization wave and demagogues are the surfers who ride the wave. From US-China trade war, to immigration laws, and political isolation, all are outcome of populist sentiments. Populism describes the approach that appeals to the needs and sentiments of the ordinary citizenry as pitched against the elites. It is easily the criticism of the ‘establishment’ and the adulation of the common people. In recent times, it has been gaining traction across nations as both a thin ideology and as a strategy to disrupt existing conditions through demagoguery and democracy. Enter democracy. When we think about democracy and elections, ancient Greece comes to mind. However we bother less to know that early Athenian philosophers had an interesting perspective on democracy. The earliest known of them, Socrates, thought of voting as a skill that should be taught and learned. He taught that only those who have thought deeply about vot-

ing should be allowed to vote. As early as the age, Socrates was suspicious about democracy knowing how politicians can manipulate the public’s demand for ‘sweet’ answers. Answers that have already been grumbled; murmured and sang aloud. Therefore, he invites us to imagine an election debate between two candidates, one less skilled- a sweet-shop owner and the other very skilled–a doctor. The sweet-shop owner would manipulate the audience saying: ‘this man is of no good; he works evil on you, hurts you, gives you bitter potions, and places restrictions on your eating and drinking. But I will serve you feasts of many and varied pleasant things’. Think for a minute how effective could the doctor respond? If he gave a sincere response: ‘I cause you trouble and go against your desires to help you,’ it would stir uproar among the voters. To Socrates, therefore, those who should vote are those who have thought deeply and rationally about it. Plato too draws from this when he argued that philosophers should vote otherwise what Aristotle called mob-rule would ensue. These philosophers all warned against the direction of modern-day democracy where adult suffrage and not the proper education or voter awareness is the ultimate franchise to vote. They warned against demagoguery where the elites appeal to the (hidden) emotions and prejudices common among some class of citizens rather than to rational reasoning. We have seen this rhetoric played out in advanced democracy as hitherto perceived- the Brexit debate and US elections. In hindsight, we saw it play out

in the 2015 general elections when politicians chanted ‘change’ and artisans responded ‘Sai Baba’. How much worse could it be in today’s Nigeria, a quasi-democracy with over 90 million people living in poverty, largely unsophisticated about political matters and their belles is all the emotion there is to be tweaked to activate their thumbs. With these pre-existing conditions, the rhetoric could easily be one word, ‘Atikulate’ as it was with ‘change’. We do not find it necessary to talk about elections and voting until it is the eve of elections or after the elections have produced an unanticipated outcome. I will talk about the general elections, even though elections are not so ‘general’ anymore; some states have elections for the executive positions later or earlier than the others. And due to the preconditioned outcome, people do not ‘generally’ turn out en masse to vote. The underlying primitive here is that the condition of any democracy is as effective as the education system that surrounds it. Our democracy is weak, our electoral process is marred; look at our educational system. We must distinguish between intellectual democracy and democracy by adult suffrage and birthright otherwise we would continue as we have it already to produce more sweetshop owners and fewer and fewer doctors. As a caveat, I am not by any means advocating an elitist argument, neither am I implying that only fewer people should vote, but I am like the Athenian philosophers, triggered by recent events, pessimistic about the paradigm on elections and democracy as would any

discerning mind. Moreover, it is not so much about who is better to run the affairs of a country than who decides who is better to do the earlier. Nor is it so much about the number who decides to vote than it is for the quality of those who decides who is better to administer a country. Understandably, it is never easy to change a ruling paradigm or an accustomed way of doing or thinking, but there is already too much that we are not questioning. I am not talking about us changing the global course but our own. Unbeknownst to many, the underlying motive of the recent democratic outcome in the EU/UK debates and in the United States is economic nationalism, a finer coat for mercantilism. The only way these extreme ideologies thought archaic hitherto could find expression in this generation, in two countries that preached globalization would only be through mob rule. Is Vox Populi still Vox Dei? We must carry our own torch and find our own path. The electoral commission could organize electoral schools and programs of enlightenment to educate the citizens on the power of voting and their choices in an election before issuing a voting card. This could also be infused in school curricula across the nation and made mandatory for all. In organized forums, those knowledgeable about the subject matter could counsel those less so. We could work towards intellectual democracy, reduce the number of sweet-shop owners and increase the number of doctors. Amamchukwu Okafor, Research economist, BusinessDay Media Ltd.

Tuesday 26 February 2019

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Nigeria decides 2019: Post-election note (1) Rafiq Raji

spent the election weekend power-reading two books about Nigeria’s recent political evolution. The first, “My transition hours” by former president Goodluck Jonathan, details the author’s version about the events that led to his concession of defeat in 2015 to incumbent president Muhammadu Buhari. The second, “On a platter of gold – How Jonathan won and lost Nigeria” by former sports minister, Bolaji Abdullahi, provides a more objective view of the same events during the Jonathan presidency. I also did a quick recap of two other books; namely: “Against the run of play: How an incumbent president was defeated in Nigeria” by former presidential spokesman, Olusegun Adeniyi, and “Fighting corruption is dangerous” by former finance minister Ngozi Okonjo-Iweala. I was trying to get a better understanding of the workings in the cor-

ridors of power, the State House especially, during an election in which the incumbent is seeking a second term. True, the circumstances now are very different from those of four years ago. But as far as I know, there has probably not been an administration, with as many books by former insiders, so quickly after its end, as that of Mr Jonathan. A fifth book, “Political order and political decay” by Francis Fukuyama, which I have to admit, I am yet to finish, has a whole chapter on Nigeria. It makes for sober reading. The book reflects on the political evolution of different parts of the world. Why is northern Europe (“Germany, Holland, and Scandinavia”) more prosperous than southern Europe (Greece, Italy), for instance? Fukuyama identifies “clientelism” (or patronage) and “corruption” as key reasons why. Still, these countries, though still troubled, have managed “to provide basic public goods at a level sufficient to turn their societies into wealthy developed countries.” “When we turn to the African country of Nigeria, however, we observe clientelism and corruption of an entirely different order of magnitude and, correspondingly, one of the most tragic development failures in the contemporary world.” What is abundantly clear is that any candidate seeking to unseat an incumbent president of this country

deserves our sincere best wishes. Because he or she would need it. When you read the accounts of these former government insiders and reflect on the comments of key government officials during this election period, it is unbelievable how much you begin to understand. And how much more you do not. You certainly know for sure that there is no such thing as an “independent” electoral commission in the Nigerian context, for instance. That is, in the practical sense of the word. Because judging from the accounts of various schemes around elections during previous administrations, you realise there is a lot people in the executive branch of government can do to determine how “independent” or not an electoral commission would be. Let us just say when the current insiders also write their books, there is likely a lot we would learn that is likely very different from what they have been telling us. Was the administration totally caught by surprise by the postponement of the polls by one week, for instance? I have a view. But it is irrelevant now. Still, I thought the consistency in the responses of ‘surprise’ by top officials of the ruling party in and outside of government, when the news broke, to be a little odd. Regardless, as far as one can objectively assess what happened on election day, the presidential and

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You certainly know for sure that there is no such thing as an “independent” electoral commission in the Nigerian context, for instance

federal legislative polls on the 23rd of February were likely better than they would have been had they been held a week earlier. Turnout was impressive. And it was pleasantly surprising how the new accredit-vote-and-go process turned out to be quite effective. It reduced bottlenecks, as people did not have to wait till accreditation was over before voting. It was also heartening to see governors, those of Kaduna and Ogun for instance, and other gubernatorial aspirants, stand in line with ordinary Nigerians, genuinely waiting to get accredited and cast their ballots. True, there were some problems here and there. Card readers malfunctioned in some places. Ballot boxes were snatched in a number of places as well. Violence was also reported in at least three states. But by and large, these incidents were not outside the realm of expectations about a typical Nigerian election. But that is the calm before the potential storm. It is the aftermath of the announcement of results that bears watching. The admonition to all the candidates is that in the event the outcome is not to their satisfaction, kindly do one of these two things: Go to court or go home and rest. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Is Nigeria’s official gasoline pump price still official? Zuhumnan Dapel

igeria churns out roughly 2 million barrels of crude oil a day, making it Africa’s top producer and the world’s thirteenth. But still, because of its feeble domestic refineries, Nigeria imports about 80 percent of the gasoline it consumes at home, selling it at a government-fixed rate (US$0.43) that is below the international average price (US$0.97) and the landing cost determine by world oil price and cost of freight. The difference is finance in subsidy. For instance, in 2011 alone, the total subsidy amount was over $13 billion—about 3 percent of Nigeria’s GDP that year. To reduce this huge fiscal burden, Nigeria’s government in January 2012 attempted to free up the gasoline price by ending the subsidy regime and allowing demand and supply to determine the price. (The subsidy program was also considered rife with double-dealing—about US$6 billion in fraudulent claims were made in 2012.) Although praised by the IMF, the move was met by a storm of protests at home, forcing the government to rescind its decision. Within two weeks, the price reverted from 141 naira to 97 naira per litre. But the price deregulation move was not permanently shelved. The government that came to power in May 2015 revisited the idea, and after one year in office raised the official price by 67 percent, to 145 (N95.18 if adjusted for inflation) naira per litre (US$ 0.43 at blackmarket rates). This remains the official price today. But as the world crude oil price heads to triple digits, there are concerns that what the government spends on the subsidy may rise, potentially pushing up the official price. However, there is no clear claim by the government, despite the price rise, that the subsidy regime is

ended. But do motorists still pay this price for the product? The answer is not straightforward. These are the facts. The domestic supply of and demand for gasoline in Nigeria has not always been matched. Its excess demand has always been preceded by truckloads of the product smuggled abroad. Higher pump prices relative to Nigeria’s (US$0.43) in neighboring countries is argued to have fuel the racketeering: Benin (US$0.72); Niger (US$0.88); Cameroon (US$1.03) Chad (US$0.78); Togo (US$0.71); and Ghana (US$0.92). The fiscal dent (or ‘under-recovery’) of this, according to estimate by the NNPC, is US$2.3 million daily. This is the benefit that goes to the sellers and consumers of the products in the neighboring countries rather than the consumers in Nigeria. This often creates scarcity, which drives up the black market premium (BMP)—the difference between the unofficial (true) price and the official price. It should be noted that if the BMP is zero, then there is perfect compliance by the distributors/retailers of the product: they are selling at exactly the official price. If, on the other hand, the BMP is greater than zero, then there is some non-compliance. Therefore the closer the BMP is to zero, the higher the level of compliance to the official price. A caveat: theoretically, the BMP can be less than zero, but this is practically impossible because all distributors/sellers are expected to be rational, meaning they will never want to sell the product below its official price. However, strong enforcement of the price control law does not necessarily guarantee a high level of compliance as there could be stiff resistance to the enforcement. But weak enforcement does not mean there has been more noncompliance—sellers’ fear of state authorities may compel their compliance. However, strong enforcement can lead to high level of compliance. But:

1. Evidence from the graph shows that all the states, on an average, sell the product above the official price; no state is exactly on the y (or the vertical) axis. There is no perfect compliance in any of the states. 2. Abuja’s BMP (N1.27/litre), relative to other states, is the closest to zero, making it the most officially price-compliant part of the country. Abuja is the seat of power, where we expect institutions to be more effective in enforcing compliance. 3. Abia is the state with the highest BMP: N25.71/litre, making it the least compliant state. Other least compliant states are found on the bottom right and top right of the graph. This simply means big state-level consumers tend to comply, more than other states, with the official price. 4. Lagos is the biggest consumer of the product (see the outlier top left), followed by Kano. There are two likely reasons for this: both states have the largest (i) population sizes in the country; (ii) concentration of small and medium-scale industries that use petrol for power. We also know that there are big industries in these states but they use AGO (diesel). Kano is the commercial capital of the north while Lagos is the south’s and the country’s commercial capital. 5. The curve in the graph slants downward from left to right. This represents an inverse relationship between the BMP and the quantity of gasoline consumed. This means rising BMP (less compliance) is associated with decline in the quantity demand of the product. But what could account for the variation in the prices across the states? If distance from refinery (Nigeria has four functional refineries, although not operating at full capacity at the moment) and cost of transporting the product significantly determines the variations, then the graph will be a straight 45-degree line and all the dots (or the state labels) will cluster around the line. But what we see is partially the opposite:

states that are closer to their nearest refineries tend to pay higher prices than other states. For example, Abia State is closer to its closest refinery (Warri refinery, Ekpan in Delta State) and still pays the highest pump price. In fact, the correlation between the pump price and distance is negative 11 percent. The farther the state is from the refinery, the lower the pump price it pays, at least relative to other states. On the graph, Delta, Kaduna and Rivers (the locations of three refineries) appear in the same area. The reason is simple: the distance from Delta to Delta is zero; distance from Kaduna to Kaduna is also zero and so on. But then, about 80 percent of Nigerian petrol is imported. In this case, how is this brought into the country/distributed across the states? Answering these questions may shed some light in unravelling the source of variations. The undersupply of gasoline has been the main justification for the fuel subsidy, and consequently the official pricing of the product. And as noted by Moss et al., “this has discouraged investment in domestic refining capacity. Of the 20 refinery licenses issued since 2000, none have been used because the current market structure does not allow investors to fully cover their operational costs.” However, a discrete shift in the oil industry is forthcoming. Dangote, a private refinery considered to be the world’s biggest, is anticipated to be on stream by next year. It is expected to refine a sufficient quantity to keep pace with the domestic demand. It is, however, unclear how Dagonte will price its product, and whether its pricing may mark the end of the government’s official oil pricing and subsidy regime. Time shall tell! Zuhumnan Dapel has a been fellow of the Scottish Institute for Research in Economics; former IDRC Fellow at the Center for Global Development; and Public Policy Fellow, Woodrow Wilson Center, in DC. Tweeter: @dapelzg

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Tuesday 26 February 2019

Lekki corridor and lack of plan

he L ekki corridor, also known as ‘New Lagos’ is, arguably, the fastest growing settlement in Africa. With its fast developing real estate market, huge construction projects and major developments, this corridor is emerging as new main-street of Africa, offering vast investment opportunities. The corridor is attracting huge individual and institutional investments such as the Lekki Free Trade Zone (LFTZ), the ambitious Dangote Refinery expected to come on stream by 2019, the Lekki deep seaport, chemical and fertilizer plants, among others. About 70 companies cutting across diverse sectors of the economy are said to have signalled interest to do business within the LFTZ with many of them promising billions of dollars of investment in the corridor, which also boasts of West Africa’s biggest shopping mall. Even at that, the Lagos State government says this is just a scratch of the surface as the zone presents

limitless opportunities still to be tapped by local and foreign investors. However, with all these investments and potentials to grow into a city with its own soul, there is no known and concrete plan at public or private sector level to provide the critical infrastructure that will drive and give those investments any meaning. So far, the only access road to Lekki, for all it represents, is the six-lane Lekki-Epe Expressway that terminates at Abraham Adesanya estate. The entire stretch of the road is congested with cars during rush hour because there are no viable alternatives. And there are increasing fears that things will get worse in that corridor when all the big ticket projects like the Dangote Refinery and Petrochemical complex as well as the Lekki Deep Sea port comes on stream within the next four years. The implication is that the Lekki corridor is developing to be the heart of business activities in the country’s commercial capital when all these projects are completed. However, gov-

ernments at the state and federal level are failing to provide the critical infrastructure that is needed to support the huge developments taking place in that corridor. By now the government should have been busy expanding the road from Abraham Adesanya to Epe, constructing alternative roads, and building a rail network and providing other infrastructure and amenities to make life in that corridor match up with the development taking place. But no, practically nothing is being done and nothing will be done until the situation is out of control before government thinking of a solution or plan. Even the coastal road that was meant to link Victoria Island and Epe, and whose construction should have taken place simultaneously with the LekkiEpe Expressway construction has remained on the drawing board without any movement. We see a recreation of another Apapa, Nigeria’s congested and gridlocked premier port city. But Lekki’s case will be worse than Apapa’s because there are multiple access roads to and from Apapa, but there

is only one road to and from Lekki. Besides critical infrastructure, there is also the fear that there is no planned development in the corridor even as more people move into the area. Analysts believe the government would be contending with the development of urban slums if it does not take an interest in how the area develops. The long term impact may be a significant drop in property value that will leave land speculators counting their losses. Property value in Apapa has dropped by almost 50 percent as residents are fleeing and businesses are relocating. No new investment is coming into the port city at the moment. We call on the Lagos state government to wake up to the demands of administering a cosmopolitan city as Lagos. It should, as a matter of urgency, create a plan for the development of the corridor and show commitment, beyond mere words, to building new road and train networks that would ease the congestion on that axis and bring the infrastructure in line with major cities in the world.

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Life of Nigerian marketing agencies getting tougher Stories by Daniel Obi Media Business Editor

his is not the best time for Nigeria’s marketing agencies. Last two years have really been tough for the industry that generates communication strategies and approaches employed to improve the growth of companies. The operators tone when a call is put across to them clearly indicates that things are not really rosy as some of them owe salaries, landlords and other bills. Clients are equally putting them in tight corner with debts. As INEC releases last Saturday’s election results, many of the agencies’ CEOs are hoping for a better manager of the mono-economy waiting to be diversified. In the last three years, companies including multinationals that the agencies rely on for businesses have increasingly reduced their marketing communication budgets due to poor economic performance and unfavourable policies by government. Ehi Braimah, CEO of Neo Media and Marketing agency based in Lagos described 2018 as a difficult year for business owners and entrepreneurs. This difficulty manifested in low spending power of consumers, government regulations which include excise duty affecting clients, stiff competition and the fight for relevance, difficulty in sourcing foreign exchange and reduced FDIs. This may not change in 2019. Early last year, the agencies had hoped to leverage spin-off businesses that will emanate from both W/Cup hosted in Russia in June and pre-election 2019 campaigns by political parties. But even after Nigeria exited recession mid last year, Innocent Oboh of Dijo Communication late last year told BusinessDay that recession is still biting as there has not been substantial increase in marketing communication budget.

According to him, this is against anticipations at the beginning of 2018 based on some activities such as World Cup, pre-election and comeback from recession year. Referring to 2018, he said “This is one of the years there was World Cup and there was not much activities and events heralding the tournament”, he said. Pre-election campaign did not favour the marketing communication agencies as most political parties employed the services of below-theline firms for printing of materials. The print media was worst hit as the politicians engaged in more street campaigns. John Ehiguese, the CEO of MediaCraft, said typically, an election year should represent a season of boom for IMC agencies, but “unfortunately, that does not appear to be the case this time around. He attributed this to poor campaign funding, favourable disposition to foreign agencies by political parties and engagement of mostly unregistered but non communication firms for printing of campaign materials. “Some of the major political parties seem to be more comfortable contracting the services of foreign communication firms to run their campaigns. This is bad judgement, because there is no way such firms can understand the political terrain, and be able to deliver, like Nigerians would. We do have the expertise and

competences here in the country. And even where we do not, several of our agencies have foreign affiliations and partnerships that they can tap into, to bridge the gap. In any case, how can local professionals raise their game, and grow, if you do not give them a chance?” Ehiguese who is the president of Public Relations Consultants Association asked. Unfortunately, months ahead do not appear to be bright for the agencies as their clients are still hard hit by unfavourable environment. Many of them suspended product promotions and brand campaigns because of the elections. The agencies believed that if President Muhammadu Buhari eventually wins the presidential election, the economic situation may remain the same. But if Abubakar Atiku, his main opposition takes over power, it may take some time before his policies will begin to impact on the economy. The tough situation, according analysts really calls for new survival thinking among the agencies. This includes mergers and acquisitions, diversification and creation of new businesses and relocation of offices to better but low rent areas. As Lanre Adisa of Noah’s Ark put it recently, the industry definitely needs to rethink its business models. “We need to open our minds to unlearning some old things while we embrace new thinking”

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Indomie unveils My Indomie My Recipe campaign

ufil Prima Foods, maker of Indomie Instant Noodles, has launched Indomie cooking competition to deepen the conversation surrounding cooking among young couples. The competition, with hashtag #MyIndomieMyRecipe, is geared towards growing narratives about the role of couples in the kitchen and who should cook when both married mates return from work tired. Head of Marketing, Manpreet Singh, said the competition, which will end on 14th of March, 2019, will see several participants rewarded with Indomie products, with the grand winner having a dinner date with a hip hop recording artist, Ice Prince and actress Sharon Ooja and N100,000 cash prize. There will also be weekly and daily winners. Manpreet said to enter the competition, participants are expected to prepare their favourite meal from

#MyIndomieMyRecipe playlist on the Indomielivetv channel on YouTube. “Then participants will take a picture of the meal with their Indomie pack by the side and post the picture on social media with the hashtag #MyIndomieMyRecipe #MyIndomieMyStyle. Finally, each participant is expected to get as many likes on the post. Selected entries will be reposted on the Indomie page, with winners getting away with Indomie prizes,” Manpreet said.

Top 100 brands shortlisted for Africa Finance Award 2019

oremost brands across different sectors in Africa have been shortlisted for the 2019 edition of Africa Finance

Award. The program now in its sixth year, top brands in different sectors namely finance, marketing communications, oil and gas, security, packaging, real estate, power, manufacturing and others will feature in this year program Some of the top brands that are shortlisted for this year program includes: KCB Bank Kenya Limited, Origin 8, Consolidated

Bank Ghana, Nationwide Medical Insurance Nampak Plc, Marina Trust, Ghana Union Assurance, Sigma Pension, Inland Containers, Phoenix Insurance Company Ltd, American Tower Corporation, Allianz Insurance Company Ghana Limited, Itex Intergrated Services Limited, IGS Financial Services Limited, Diamond Capital, Elvan Group, Unity Bank, Wetherhead Advertising Group, VFD Group, African Banking Corporation Limited, NIPOST, Suntrust Bank, Federal Housing Authority, Providus Bank among others.

PHD Nigeria wins Global PR Initiative competition

HD Nigeria has been selected as one of the winners of the Global Public Relations Initiative competition, “Amplify Fund,” organised by PHD Worldwide across its 74 markets. The competition was aimed at awarding up to £10,000 to the country with the best idea to project and promote PHD within its market, strengthen the brand and add value to the team. PHD Nigeria was chosen out of 19

submissions from across the world. PHD Nigeria has therefore become the first and only African office to be selected among other winners in the highly coveted competition. The Managing Director of PHD Nigeria, Dozie Okafor said in a statement that the win is a further testament to the quality of work provided to clients and expressed gratitude to those who entrusted their media budgets with the company.

evolves over time. According to Ugo Geri-Robert Head of Kantar Millward Brown Nigeria viewers must not break their heads to understand your comms. Brand status matters Established brands elicit more smiles and as a consequence higher valence and expressiveness compared to new brands, which instead elicit more disgust, frowns, and sadness. This suggests it is harder for new brands to breakthrough as they do not have the same emotional foundation that established brands do. Users are more likely to recognize and respond to a brand with which they have a pre-existing affinity. Testing rough executions works well

Just as with comparisons of selfreported data facial coding finds virtually no difference between testing rough and finished executions. Slightly higher valence is observed for finished films, which reflects our original finding that a finished film can improve overall enjoyment due to production values. Bottomline line for the brand manager is that you are testing your Ad at two levels, first by what the respondents have told you and second by what the faces are telling you. In essence you are killing a bird with two stones. God help the poor bird! Umogun works with Millward Brown, part of Kantar Group

BD Brand Talk Good Ads and bad Ads: Learning from facial coding Mike Umogun

he Yoruba ethnic group in Nigeria is strong believer in the power of the eyes in storytelling and approval. The people are of the opinion that a person’s position on an issue can be deduced by the facial expression and you cannot hide your true emotion. Their local polygraph technology predates what the Central Intelligence Agency (CIA) is doing at its Langley firm today One of the principles applied to innovation at Kantar Millward Brown is that any new technique has to be scalable, ideally on a global basis. This was why we were the first major con-

sumer insight firm to partner with other marketing scientists to apply the automated coding of facial expressions into our Link pre-test. 30,000 TV ads later and that learning has scaled well beyond providing feedback on individual executions. The facial coding employed in Link is a true System 1 measure of people’s instinctive emotional response. Changes in facial expression are recorded in real time as people watch a test video (recordings are made with the respondent’s approval) and coded automatically into 7 discrete emotions. At an overall level we find that the more an Ad energizes people the more effective it is likely to be in driving sales (particularly for established brands).

Beyond this overall finding, facial coding has confirmed many of the principles learned from testing a total of over 150,000 ads around the world. Dear marketers the following findings are worth keeping in mind when you develop new content for TV. Make it easy to understand By all means use intrigue and mystery to engage people but make sure there is a clear resolution to the story because if people do not easily understand what is going on then the Ad is less likely to be effective. Videos that people report are difficult to understand evoke a lot more frowns and less attention. Holding people’s attention is particularly important for TV ads given that they rely on a narrative or story that

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Tuesday 26 February 2019

Failure of successive governments to diversify economy is Nigeria’s major drawback - Igbinidu Charles Igbinidu CEO of CFO & Associates, a Reputation Management firm based in Lagos, Nigeria, is a very savvy and award-winning Public Relations practitioner with a demonstrated history of achievements working in the communications industry in Nigeria. Charles who has worked with leading corporate organizations in this interview with Daniel Obi spoke on a number of issues but regrets that the performance of the economy, where marketing communication industry derive its strength is far less desirable. Excerpts

tion business doing better this year and why? I am an incurable optimist who believes that the future of this country could be great if the right policies are put in place followed by the right decisions. In the elections, my appeal to whoever is elected as President, is to pay more attention to the economy. We can only have a flourishing marketing communication sector in a thriving business and economic environment. Companies have been cutting marketing communication budgets, how has this affected the media industry? Companies are shrinking their marketing communication budgets because of the very difficult and probably harsh operating environment. This means that there have been smaller budgets for media buying resulting in dwindling revenues to the media industry. This has had deleterious effect on payment of salaries by many media organisations. What suggestions would you offer to your colleagues on innovative ways on how to survive this difficult environment? There is no one fits all solution. Depending on their positions in the corporate life-cycle, different organisations have different challenges. The onus is on the

Charles Igbinidu

leadership of the various organisations to identify their key challenges or potential pitfalls and develop strategies for countering them in line with their vision. Your agency, CFO & Associates is a young agency which has come to offer unique services to clients, what are your niche areas, DNA? CFO & Associates, a full-service Public Relations firm known for its s t r a t e g i c a p p ro a c h t o

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I am an incurable optimist who believes that the future of this country could be great if the right policies are put in place followed by the right decisions

‘

L o oking ba ck, h ow would you say business of marketing communication fared in 2018? ou cannot talk about the performance of the marketing communication sector without taking a holistic look at the general business environment. There remains little doubt that the business environment in the country was hostile during the year 2018. The economy, which was dragged into and brought out of recession by the oil and gas sector was throughout 2018 still buffeted by varied problems. Although, the price of crude oil was higher in 2018 than the two preceding years but not high enough to make the desirable impact on the economy. Revenue mobilization by government was weak leading to increase in debt accumulation. Domestically, there was continuation of heightened security tensions across the country, delayed fiscal policy response to issues such as subsidy payment and budgetary allocations and according to figures released by the Nigerian Bureau of Statistics (NBS), unemployment rate escalated thereby increasing the level of poverty. In summary, the performance of the national economy was far less than desirable. If this was the environment in which Marketing Communication companies operated in 2018, you should be able to arrive at a conclusion on their performance. Would you blame government for perhaps poor performance of the business last year and why? The country’s high dependence on the oil sector and the failure of successive governments to diversify the economy has been our major drawback as a nation. As stated earlier, the country was largely dragged into and brought out of recession by the oil sector. Successive governments have paid lip-service to the issue of economic diversification. Do you see any hope of marketing communica-

helping clients meet their varying business goals is a member of MTI Network, a leading world-wide crisis and reputation management organisation with 26 international offices and 22 subsidiary offices. We have a team of savvy Public Relations practitioners who are mavens in media relations, Editorial development and placement, media and communication counsel, issues management, Online/Social Media marketing and management, End to End event management, stakeholder liaison, Strategic blogger engagement and Social Media content strategies. We have a very passionate team at CFO & Associates. We like to say that we’re equally passionate about working in the field of Public Relations as we are about the clients we work with. In our less than two years of operation, we have made a mark in the area of crisis communication and management. Could you tell us more about your agency and your plans this year and beyond? L e t m e t h row m o re light on our relationship with MTI Network and the

unique services that it affords us. We are exclusive partners both for supporting clients of Maritime Technical International Inc operating in, or visiting Nigeria and supporting shipowners, ship managers and operators who are headquartered or operate from within, or into Nigeria.We therefore provide 24/7 crisis media response coverage in support of MTI Network’s designated clients. The MTI Network provides reputation management services to some 8500 pre- registered vessels operated by 320 ship owning and managing clients, including tankers, gas carriers, bulkers, container, ropax and cruise ships. Again, what underlines the company’s approaches to project executions – passion? Innovations? and partnership with clients or understanding of the briefs? We are a strategic player in what we consider to be a game of relationships. We ask a lot of questions, and we keep our clients involved every step of the way. We find this to be the most valuable and mutually beneficial means of accomplishing their goals and ob-

jectives – working together and with them, instead of just for them. More foreign companies are entering Nigeria looking for creative agencies to work with,why do you think your firm should be an attraction to them? There is a need for me to speak more expansively on our approach at CFO & Associates. Our approach commences by we getting the brief. During this process, we pay immense attention to the client or prospect. This enables us to comprehend and have a correct knowledge of their businesses and goals. Then we work together as a team to set practical, tangible goals and knock them out. They will always know what’s happening and what they can expect throughout the campaign. Our clients repeatedly commend us on our excellent communication and our ability to meet their expectations.We also appreciate the fact that bottom-line results are of vital importance to our clients. We always have that entrenched in our being. Our clients tell us that return on investment from our campaigns is excellent and easily quantifiable. This can only come about from a clear understanding of the client’s situation, unique expectations and the media industry at large. Significantly, our secret is in the little extra we bring to the table that make the huge difference. Businesses often seek our help when they feel they’ve done all they can on their own to promote their business through advertising. Now, they want marked difference in results from Public Relations; clients trust us to deliver better results because we always go the extra mile in every facet of their projects. In many cases these clients are surprised, positively overwhelmed and amazed by the coverage, credibility and exposure we achieve for them — and at the impact it has on their businesses.

Tuesday 26 February 2019

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Huggies manufacturer, Kimberly-Clark, mulls expansion amid growing market in Nigeria Pg. 16

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

HOSPITALITY

Nigeria risks becoming stranded on global energy shift, WEF warns LOLADE AKINMURELE

oments ago, t h e Wo r l d Economic Forum (WEF) released a report that only reinforced the tough job ahead for Nigeria’s next president ahead of crucial votes Saturday, Feb 23. Dozens of fossil-fuel-rich economies, including Nigeria, could be at risk of becoming “stranded nations” that are unable to realize the economic value of their carbon wealth, as efforts ramp up to avoid the worst effects of climate change and transition away from fossil fuels, according to the WEF report titled “Thinking Strategically: Using Resource Revenues to Invest in a Sustainable Future.” WEF expects the global energy shift to negatively affect economies that have over 10 percent of their total wealth based in carbon assets and says the affected countries must act now to develop the human capital and economic diversification to thrive in a world that is less dependent on carbon energies. Nigeria holds 21 percent of its wealth in carbon assets, higher than Egypt’s 11 percent but lower than Iraq’s 67 percent, according to WEF data. The threat of an energy shift that leaves oil-dependent economies for dead has always been there, only that this time it may happen quicker than expected. Fresh estimates predict between two-thirds to threefourths of energy will come from green sources by 2050, which is much higher than estimates crafted a decade ago, when just 15 percent of

energy was expected to be green by 2050. “This means countries with high carbon wealth may have even less time than anticipated to avoid being stranded as the pace of the green energy shift continues to beat predictions,” said Maha Eltobgy, Head of Shaping the Future of Long-Term Investing, Infrastructure and Development at the World Economic Forum. “The resource dependent, fossil-fuel-rich nations that have diligently built large sovereign wealth funds to manage the economic challenges of the Age of Oil must now consider how to use this vast wealth to prepare for the Age of Green Energy,” Eltobgy said. Sadly, Nigeria hasn’t built the sovereign wealth funds required to be better prepared for the Age of Green Energy which Eltobgy speaks of. Of the 41 fossil-fuel-rich countries surveyed by WEF, Nigeria ranks bottom, with about $2 trillion in savings compared to Norway’s $1 trillion war chest. Norway ranks top. (See chart) As Nigerians head to the polls to vote a leader on Saturday, the new government clearly has their work cut out for them in ensuring Nigeria improves on its paltry savings and quickly becomes less dependent on fossil fuels, after failed attempts by previous administrations. This task is more crucial than ever for a country set to become the third most populous nation by 2050, with a population of 400 million. Sovereign wealth funds, as some of the largest investors in the world, have been an extraordinarily powerful tool for stabilizing resource-

rich economies and securing wealth for future generations. By closely aligning their private investment acumen with public policy under a “strategic mandate”, these funds can deliver even more value to society. This can be achieved by adopting a “strategic investment fund” model whereby funds act as an additional tool for policy-makers to support local development goals. The potential for sovereign wealth funds to play a transformational role in driving diversification and sustainable growth is underpinned by the number of new funds that have

come into existence in recent times. In 2000, there were just 26 sovereign wealth funds in the world; 10 years later, 57 existed; and today, more than 75 sovereign wealth funds collectively hold over $8 trillion in total assets. Only one-third of these funds operate under a strategic mandate, yet the report identifies 41 funds from commodity producers with nearly $4 trillion in assets that could do so. As the impacts of climate change, demographic shifts and the transition towards green energy become more acute, economic policy-mak-

ers should more aggressively apply the strategic investment model to address these challenges head-on. Increasing the number ‘strategic investment funds’ is the first step to ensuring economies are prepared for the impending global energy shift, according to Patrick Schena, Co-Head of the Sovereign Wealth Fund Initiative at the Fletcher School of Law and Diplomacy at Tufts University. “Rather than waiting for the economic and social impacts, countries must use the investment acumen and wealth they have accumulated to diversify their economies,” said Patrick

“While domestic investment is difficult, and political and financial risk must be diligently managed, fossil-fuel economies must use every available tool to sufficiently respond to the impending global economic shift.” With this change, the authors say, sovereign funds can be more closely integrated with public policy, giving them the ability to actually drive, rather than react, to the global energy transition. Their direct investing approach can create wealth rather than merely manage it, bringing new sources of prosperity while preparing for the challenges of tomorrow.

BANKING

Zenith Bank targets higher loan growth in 2019 on positive economic outlook SEGUN ADAMS

enith Bank, Nigeria’s largest lender by asset, is looking to improve its loan growth in 2019 as the domestic economy shows gradual signs of growth. In Q4 2018, the National Bureau of Statistics (NBS) reported that the economy expanded by the most in more than ten quarters. Zenith bank made the disclosure to grow its loan book on Thursday after a 2018 setback in loans reflected weak economic activity. The tier-1 lender see op-

portunities in the agricultural sector, which receives good support from the government, and expressed optimism of extending opportunities to the manufacturing sector if the economic recovery continues. “Our expectation is that the economy will continue to strengthen,” the bank told an analysts’ call. “It will throw up opportunities to grow the loan book.” Although Zenith initially guided for loan growth of 2.5 percent in 2018, it is currently eyeing a growth target of 7.5 percent in 2019, noting that borrowers were replacing overdrafts with

term loans. The tier-1 bank’s audited result for 2018 shows that loans and advances trended 13 percent lower in 2018 compared to N2.1 trillion offered as credit in the corresponding period of 2017. A further breakdown shows that Gross loans and advances to customers fell 10.46 percent to N2 trillion in 2018 and allowance for impairment, which is a provision for the potential future loss of capital that has been lent out, rose 27.40 percent in 2018. The Bank’s Non-Performing Loan (NPL) stood at N100.5 billion, down from

N105.87 billion noted in 2017. Consequently, the NPL increased to 4.98 compared to 4.7 recorded in 2017. In 2018, the Bank offered the most credit to Manufacturing sector (N579.86 billion) followed by Oil and Gas (N 510.14 billion) although, in 2017, the lender had the highest exposure to Oil and Gas. Credit to Agriculture in 2018 was N56.42 billion compared to N63.22 billion in the preceding year, while Education (N5.02 billion) received the least credit in 2018. BusinessDay analysis of the NPL ratio of each sector

Zenith was exposed to show that in 2018, Finance and Insurance had the highest NPL ratio at 38.48, followed by Real Estate and Construction at 11.58. Oil and Gas had an NPL of 7.53 while Agriculture and Manufacturing had 2.09 and 5.38 respectively. The three sectors with the lowest NPL in 2018 were Government (0.055), Power (0.068) and Transport (0.67) Zenith reported a profit before tax of N231.68billion for 2018 which represents a 16.2 percent increase compared to the figure for 2017. At the close of trading Thursday, Zenith stock

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

slumped 1.94 percent to N25.3 bringing it to a Year to Date of 10.63 percent, outperforming both the banking index Year To Date (9.63 %) and the All-share Index Year To Date (3.62%) The Bank’s profit-AfterTax increased by 11.30 percent to N193.424billion in the 2018 financial year, compared to N173.791 billion in 2017. The Bank, according to Bloomberg, said its $500 million Eurobond which matures in April would be repaid from its cash flow and has no need to raise capital from the market for the time being.

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Tuesday 26 February 2019

COMPANIES & MARKETS COMPANIES

Huggies manufacturer, Kimberly-Clark, mulls expansion amid growing market in Nigeria OLUFIKAYO OWOEYE

imberly-Clark Corporation, the manufacturer of Huggies, Kotex and a collection of other consumer care products, has said that the Company will close its factory in Lagos in the second quarter of 2019 and build a new factory with an advanced technology in its place. Th e c o mp a ny w h i c h earlier disclosed its plan t o s hu t d ow n 1 0 o f i t s 91 production factories w o r l d w i d e, i n a s t a t e ment on Wednesday said the increased demand on its products had necessitate d the decision to advance their technological capacity, close down its factory in Lagos in the second quarter of 2019 and build a new one in its place. “Kimberly-Clark can c o n f i r m t hat i t w i l l b e closing its current factory in Lagos, Nigeria, in the second quarter of 2019, while it is in the process of building a new factory. According to the company, the decision was made following a strategic review of its business model with the objective of increasing pres ence and further investments i n Ni g e r i a i n t h e n e a r future. “ K i m b e r l y - C l a rk re mains fully committe d to the Nigerian market, where it will expand its

commercial team and open an additional office i n L a g o s i n 2 0 1 9 .” t h e company said. The American multinational p ers onal care company, regret the impact the closure might have on some of its staff and affirmed its responsibility towards its workforce. “Regrettably, the decision means that for now, some 60 permanent employees have been made redundant. “It is a responsibility we take very seriously and we are working to ensure our employees are supported as much as possible during this difficult time,” the personal care company added. Th e Ch i e f E xe c u t i ve Officer and Chairman of the Board of Directors, Kimberly Clark Corporation, Thomas Falk in a p re p a re d re m a r k o n Januar y stated that the company was positioning itself for profitability. “The changes we are making will improve our underlying profitability, provide more flexibility to invest in growth opportunities and help us compete even more effectively,” he said. Diaper market in Nigeria The Nigerian diaper market has over 15 brands, with each jostling for market share across the country. While some have emerged top-ofmind brands with a na-

tional spread, some are confined to regional play. The stiff competition has also forced some to shut down parts of their operations and re-strategize. L a s t y e a r, Ni g e r i a n s woke up to the news that P&G, makers of Pampers had decided to shut down its plant in Agbara, OgunState. While many attributed the closure to the inability of the company to cope with the growing competition in the market, management of the company said that it was part of its restructuring exercise in its Nigerian operations. An assurance was given that it would continue to operate in the

countr y, albeit from its Ibadan plant only. It w ould b e re calle d that in January 2018, Kimberly-Clark initiated the 2018 Global Restructuring Program aimed at reducing the company’s structural cost base and enhance the company’s flexibility to invest in its brands, growth initiatives and capabilities critical to delivering future growth. The company expects the program to generate annual pre-tax cost savings of $500 to $550 million by the end of 2021, driven by workforce reductions along with manufacturing supply chain efficiencies.

As part of the program, K i m b e r l y - C l a r k s ay s i t expects to exit or divest some low-margin businesses that generate approximately 1 percent of company net sales. The sales are concentrated in the consumer tissue business segment. To implem e nt t h e p ro g ra m, t h e company expects to incur restructuring charges of $1,700 to $1,900 million pre-tax ($1,350 to $1,500 million after tax) by the end of 2020. Fourth quarter 2018 restructuring charges were $180 million pre-tax ($134 million after tax), bringing cumulative charges to $1,036 million pre-tax

($783 million after tax). Fourth quarter 2018 restructuring savings were $55 million, bringing cumulative savings to $135 million. Ki mb e r ly - C la rk C o rporation is an America n mu l t i nat i o na l p e rs onal ca re cor p o ratio n that produces mostly p a p e r- b a s e d c o n s u m er pro ducts. KimberlyClark brand name products include and Huggies disposable diapers and baby wipes, Kleenex facial t i s s u e, Ko t e x f e m i n i n e hygiene products, Cottonelle, Scott and Andrex toilet paper, Wypall utility wipes, KimWipes scientific cleaning wipes.

AGRO-ALLIED

Court orders meeting of Flour Mills shareholders ahead of crucial restructuring SEGUN ADAMS

lour Mills of Nigeria, one of the market’s leading manufacturers of food and agro-allied products, has notified the Nigerian Stock Exchange ahead of its meeting with the ordinary shareholders to approve its restructuring plans. In a notice filed on the Exchange, Thursday, the Food and Agro-allied giant stated that the Federal High Court, sitting in Lagos, has ordered a meeting of shareholders for the purpose of considering and if thought

fit, approving a Scheme of External Restructuring between Flour Mills and Golden Fertilizer Company Limited. Flour Mills had earlier in January notified investing public on filing a scheme of arrangement with the Securities and Exchange Commission (SEC), to transfer its existing assets in Golden Penny Fertilizers division, to its wholly owned agro-allied company, Golden Fertilizer Company Limited. According to the company secretary and director of legal services, Umolu

Joseph, the restructuring ‘’which is part of a wellthought-out, and ongoing restructuring process within the FMN Group, is expected to improve synergy, increase efficiency , and ultimately position FMN for greater operational and financial flexibility to ensure continued business growth.” However, regulatory guidelines require that shareholders consent to the scheme of restructuring. To that end, the shareholders of Flour Mills would be convening at Latana Hall, Eko Hotels &

Suites, Ademola Adetokunbo Street, Victoria Island, Lagos on Wednesday, 6 March 2019 at 10.00am. Following the successful outcome of the meeting, Golden Fertilizer Company would be made a wholly owned subsidiary and holding for Flour Mills agro-allied businesses. Golden Fertilizer Company Limited was established as a wholly owned subsidiary of Flour Mills of Nigeria in 1997 with fertilizer blending, distribution, and supply as its core business. In 2006, Golden Fertilizer Company Limited

became a division of FMN, thus an internal segment of Flour Mills. For Nine months to 31 December 2018, Flour Mills recorded a 6.28 percent decline in revenue. Even though cost of sales declined in the nine month period, revenue challenges weighed on gross profit as it dipped some 16.85 percent to N46.59 billion. Consequently, gross margin stood at 11.63 percent in the period, down from 13.11 recorded in nine months 2017. Finance costs reduced

significantly as the settlement of overdraft facilities and replacement of high interest yielding loans with more favourable loans saw cost of lending fall 34 percent to N16.5 billion. Bottom line of flour mills was weak in the nine months 2018 period as Pre-tax income slumped some 42 percent to N11.28 billion. Although tax expense in the 2018 period declined by 46 percent, Profit after Tax at N7.9 billion, was 40 percent lower than was recorded in corresponding period of 2017.

Tuesday 26 February 2019

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INDUSTRIALS

Lafarge seeks SEC’s endorsement for rights issue allotment ISRAEL ODUBOLA

afarge Africa Plc, a notable building materials solution provider, is seeking the endorsement of the Securities and Exchange Commission (SEC) for the adoption of its N89.2 billion rights issue. The company’s Board of Directors has approved the proposed allotment for the rights issue authorising the joint issuing houses to file the proposed allotment for clearance by SEC. The company sent a notice to the Lagos bourse December 2018 to indicate interest to raise N89.2 billion through rights issue. Acceptance list for the rights issue opened December 17, 2018 and closed January 28, 2019. The cement maker offered 7.43 billion ordinary shares of 50 kobo at N12 per share on the basis of six new ordinary shares for every seven ordinary shares held at close of Business December 4, 2018. The N89.2 billion right issue

indicates the second rights issue of the cement company in fourteen months. In the penultimate month of 2017, the cement maker issued about 3.1 billion ordinary shares of 50 kobo at 42.50 per share. The structure of the latest rights issue tallys with that of November 2017, plus a convertible deal which allows its principal investor, Lafarge Holcim convert debts into equities. There are concerns that the debt-equities conversion coupled with the dispassion of investors towards the primary market could increase the shareholding of its major investor after the rights issue. The cement maker must now ensure that minority shareholders have at least 20 percent stake to prevent delisting at the Customs street. The major investor took advantage of the November 2017 rights issue to raise its shareholdings by 4.97 percentage points to 76.32 percent from 71.35 percent before the allotment. Lafarge Holcim, with

76.32 percent shareholding, has more than the required 75 percent needed for major corporate changes. The Chairman of the Board, Mobolaji Balogun said that the additional capital raised from the N89.2 billion rights issue would help reduce leverage in the company’s balance sheet and foster growth & expansion. According to him, the company anticipates a stable pricing environment and benign economic conditions in its Nigerian market, while turnaround plans are on-going in South African market. Share price of WAPCO remain unchanged at N13 at close of business Wednesday, Februrary 20, and gained 4.42 percent year-to-date. Lafarge Africa Plc provides cement products and solutions. It offers concrete, aggregates as well as building and construction material for landmark projects. The company serves customers in Nigeria and South Africa.

PROFESSIONAL SERVICES

Virtual accounting firm tasks Nigerian SMEs on financial data, FRANK ELEANYA

n view of the challenges small and medium enterprises (SMEs) face in scaling their businesses, Pundit Bookkeeping Services, a virtual accounting firm with headquarters in Lagos, has reiterated the importance of maintaining financial data and reporting. Financial data consists of pieces or sets of information related to the financial health of a business. The pieces of data are used by internal management to analyse business performance and determine whether tactics and strategies must be altered. At a meeting with entrepreneurs and business executives in attendance, Jovita Madojemu, chief executive officer of Pundit Bookkeeping Services noted that failure to pay attention to financial data and reporting is behind many of the problems SMEs face. “An adequate account record will show a business owner their strength and weakness; it will put in a clear picture which services or products bring the most income,” says Madojemu. “This will help a business focus or build more on their strength and work on their

weakness.” Aside from pointing out strength and weaknesses, people and organisations outside a business will also use financial data reported by the business to judge its credit worthiness, decide whether to invest in the business, and determine whether the business is complying with government regulations. Part of fiscal responsibility is when a company pays and files for tax irrespective of its level of income, says Madojemu. Failure to remit tax is a legal offence in Nigeria. Combined with fulfilling their legal obligations, businesses also not take more they can handle at a time. Layi Adetona, a director at Pundit Bookkeeping Services said starting small, prioritising time and staying nimble are vital to succeeding as a startup. Time consciousness promotes productiveness and reduces the chances of procrastination. Often times, business owners want to put every great idea they have to work or put them up on their website. They want a discussion board, a blog, a store, a chat room, a directory of professionals in their business, resources,

links, an archive for their newsletters, audio and video, the list goes on and on. That could quickly lead to confusion and eventually fatigue sets in. According to Madojemu, Pundit Bookkeeping Services is a platform small businesses can leverage to bring clarity and coordination to their operations. Many startups, for instance, which may not have financial power to employ a full-time bookkeeper even though this is critical to their business can take advantage of the part-time but very qualified bookkeeper service that Pundit runs. This allows the startup to save significant cost. “Pundit Bookkeeping Services is a company of chartered accountants and accounting technicians leveraging IT to ensure that the entrepreneur’s entire business position and performance can be seen at a glance at every point in time,” a statement from the company noted. “We understand that bookkeeping is a universal point of pain for entrepreneurs, hence the dedication of our team of experts to changing this. We call ourselves the entrepreneurs’ internal accountant.”

L-R, Abubakar Sulieman, secretary general, Nigeria Youth Council (NYC); Sani Abduldalla, chairman, board of trustee, Buhari/Osinbajo Mandate Group, and Obinna Nwaka, DG, Committee of Youth on Mobilization and Sensitization (CYMS) during a press briefing on the State of the Nation held in Abuja. Pic by Tunde Adeniyi

L-R: Ojo Olubukunola, member, Dayonmi Love Foundation; Isiaka Lawal, corporate communications coordinator, Promasidor Nigeria Limited; Olayinka Akindayomi, service director, Children’s Developmental Centre (CDC); and Cornelius Akintola Kasunmu, chairman, Affectionate Cooperative Group, at the meeting for beneficiaries of the low-income microcredit scheme, We Too Can Grow, provided by Promasidor in partnership with CDC.

Front roll from left: Tolulope Omitosin; Olubunmi Allen, director, Vocaskill Widows Forum; Bada, director, WDC Training Centre; Falana, director, women affairs, WAPA; Mary Ajisafe; Matthias Kehinde Ajose, chairman, VocaSkill International; Olayinka Bamgbose, director, logistics, and Dotun Adelowokan (behind Ajose), director, International Outreach, during women empowerment programme organised by Vocaskill International in Lagos.

Edo State Governor, Godwin Obaseki (in suit), flanked by Chairman, Edo State Universal Basic Education Board (SUBEB) and Special Adviser to the Governor on Basic Education, Joan Osa Oviawe and Edo Basic Education Sector Transformation (EdoBEST) field workers, at the Edo SUBEB appreciation banquet organised for the field workers in Benin City, Edo State.

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Nigerian carriers need policies that will give them comparative advantage – Bernard Bankole Bernard is the President of the National Association of Nigeria Travel Agencies (NANTA), and the managing director of Finchglow Travels, an indigenous Travel Company in Nigeria. In this interview with IFEOMA OKEKE, he speaks about the travel and tour industry and how NANTA is changing the narrative. What is the current situation with the travel and tourism industry in Nigeria? rom the global perspective, the International Air Transport Association has made some changes; they have introduced the new generation of IATA Settlement Systems (NewGen ISS), which avail travel agencies the opportunity to trade in different levels, unlike before where we had a flat approach. Before, every travel agency traded on the flat approach but this one is done in such a way that you can trade on either Category A, B or C. IATA has also made provisions for ‘Pay As You go’. However, there is a little issue in this system; in the sense that now we have Go Light, Go Standard and Go Global. IATA put these measures in place from a global perspective believing that we have laws in our country that protect businesses. The Go Global means that someone can sit in Canada and be taking all the businesses in Nigeria and this can only happen if we don’t have good laws protecting travel agency business in Nigeria. We realised that laws that protect travel agencies in Nigeria are very weak, just the way the laws are weak towards domestic carriers that is making it unfavourable for them to compete both in and out of the country. So, we are really going to be engaging the government a whole lot. We on our part have been talking a lot about the downstream sector because the travel agencies are categorised to be in the

downstream sector of the aviation industry. We distribute the inventories of the airlines to the end users to be able to take their flights. If the regulators only focus on the airlines and they don’t look into what we are doing, it will mean effort in futility. For instance, a domestic carrier will have to go outside Nigeria for Maintenance Repair Overhaul (MRO), buy spare parts and simulation training, amongst others. The domestic carrier will also have to source for foreign exchange at a high cost. So, it will be difficult for them to survive, which will lead some to start cutting corners. One of the places they look at to reduce their cost is in the area of distribution. They will now choose to distribute tickets themselves rather than give it to travel agents to distribute for them. While they think they are saving money through this process, they are actually limiting their opportunity to distribute their products. There is no international carrier that does that. They give it to the travel agencies since they know their products will go very far because the travel agencies are all over the country. How do you think we can change the current narrative? If we are going to change it, we now have to start looking at the policies. The policies have to be business friendly; the policies must give comparative advantage to local carries. As a Nigerian and a Nigerian carrier, there must be benefits, just like a British carrier will have the benefits of being a British carrier. Nobody is saying there

Bankole Bernard

shouldn’t be competition, but there must be some benefits. Those benefits should be the comparative advantages we have over foreigners or over non-Nigerian carriers. For instance, domestic and foreign carriers shouldn’t pay the same landing and parking fees because the domestic carriers are adding more value such as job creation and taxes and are domiciled in the Nigerian market. If these are implemented, it will add value to travel agencies, which are on the downstream sector. Last year you introduced NANTA identity card to curb fraud in the industry. What has been the success of this scheme? To be honest with you we

haven’t made much success and that is a typical Nigeria approach to laudable ideas. Even though the government through the Nigeria Civil Aviation Authority (NCAA) says they are giving us backing, it is more of a lip service. If you say you are giving us backing and no one has been sanctioned, then you have not given us any backing. The international community has been commending the scheme because some agencies are beginning to ask for the NANTA ID Card before dealing with anyone that calls him or herself a travel agent. However, it will become more useful in 2019 because we are making some plans that for any IATA travel agency to

continue to exist in Nigeria, they must get NCAA licence or certification. Part of the requirements to get the NCAA’s certification is to have the ID card as a member of NANTA, that way, they won’t have a choice. Once we put that in place, everyone will have to embrace it and it will become a popular idea. What has the travel trend being like in Nigeria; where are people travelling to and how frequent? In 2018, the travel trend has not really changed. People still travel regularly to London, Dubai, America and South Africa. Others African countries where people visit are Ethiopia, Kenya and Ghana. We have seen a surge to Canada because they have a relaxed law. For 2019, the traffic has been extremely low and it has to do with the fact that it is an election year. People are waiting to see the direction Nigeria is going before they take decisions. People are not coming and those in are making their way out to be with their families till after the elections. Even travelling within has reduced. However, we expect that in the second quarter; passenger traffic will increase because of the Easter celebration and summer. Has membership for NANTA grown and what are your plans for 2019? The membership of NANTA has grown to over 5,000 because people are finding it more attractive as a body to reckon with because they have seen that it is well structured, it has a voice and it is a professional body to look up to.

This year, we are going to have our Annual General Meeting (AGM) in March 27th and we will do a press conference before this. The good thing about the AGM is that it is going to be in Lagos at the Muson Centre. Aside this, we are looking to proceed with the enactment of our bill, which is with the National Assembly. We know that there are going to be a lot of changes but we are trusting God that we will not have a set back because it has gone through the first and second reading and the committee. It is awaiting consideration for the third reading and then it will be sent to the upper house for concurrence. With this, the downstream sector will be fully regulated. Do you think Nigeria really needs a national carrier? I do not have a problem with Nigeria having a national carrier. Let us not rule it out because the potentials are there. One of the things to consider before having a national carrier is the passenger traffic, which I think we have. Government is in the business of regulation; government should not be establishing a national carrier. They should allow an independent body to run the national carrier, so that it is managed like every other airline around the world. Nigerians can subscribe to it and invest their money in it. But when we have a national carrier that is government driven and they are compelling people to use it, it may not work. Arik and Aero Contractors are under the management of the Asset Management Corporation of Nigeria (AMCON).

Tuesday 26 February 2019

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Policy

Nigerian crude faces stiff competition from US exports ISAAC ANYAOGU

igerian crude will struggle for market share in the months ahead on account of rising competition from US exports to the Asian market where demand has seen remarkable growth in recent times. Traders say Nigerian crude have had a difficult time clearing for several weeks, as offer levels were too high to attract buying interest from European refineries which have been suffering poor refinery margins on naphtha and gasoline according to S&P Platts report. A crude oil trader said a structural change in supply of US crude to Asia is raising concern because it seems like more Asian buyers are increasingly terming US crude. Increased preference for US crude will limit demand for West African crude grades. Traders have had to push crude grades such as Agbami, Qua Iboe and Akpo to Southeast Asia by lowering prices. “Looking at the WTI/Dubai and the WTI/Brent spreads, WAF will have to compete with US grades going to the East,” another trader said.

Further competition will come due to fallen freight costs from US Gulf Coast to Asia since early December, helping US producers push greater loadings of US crude to Asia. However, freight costs from West Africa to Asia have increased making it currently cents/b more expensive to

bring Angolan crude to the market. S&P Platts say around 17 Very Large Crude Carriers (VLCCs), or tankers capable of moving over 2m barrels have been fixed to load crude from the US Gulf Coast to Eastern destinations for February-loading cargoes, shipping reports showed,

with many more likely booked outside of reported fixtures. According to S&P Global Platts trade flow software cFlow and shipping reports for January-loading cargoes, 16 VLCCs were seen carrying US crude from the US Gulf Coast to Eastern destinations.

“Arbitrage economics remain highly favorable for more US crude purchases. The latest OPEC cut seems to be keeping the Dubai price complex relatively expensive,” a senior official at Seoul-based Korea Petroleum Association said. Analysts have pointed to a similar picture for some of the lighter Angolan grades such as Girassol, Kissanje and Cabinda. All Angolan grades across the light to the heavy spectrum, have been performing extremely well in the March trading cycle as a result of increased buying from Chinese refiners prior to Chinese New Year, as well as newly allocated import quotas for Chinese teapot refineries and a narrow EFS, says S&P Platts. However, trading sources have increasingly said the April trading cycle will look different. Some traders said April will only be supportive for selected Angolan crudes going into China, as Eastern buyers will be more focused on which grades are more desired at home. Such a development would put lighter Angolan grades under pressure due to heightening competition from US barrels, which are prices on a heavier discount compared to grades priced against Dated Brent.

Renewal of 35 major oil leases is litmus test for next president DIPO OLADEHINDE

ver seventy two million Nigerians who collected their PVCs will not only be determining the leader of Africa largest oil producing country they will also be determining the fate of 35 major oil blocks expiring this year. According to information available to BusinessDay, there are about 35 major Oil Mining Licenses (OMLs) that will expire at different period this year with most of them falling due for renewal in June. An OML is a major type of license in Nigeria granted to a holder of Oil Prospecting License (OPL) to commence production after discovery of crude oil in commercial quantity of at least 10,000 barrels per day. The duration of the license is for 10 years with option of renewal for another 10 years. OML 114, operated by Moni Pulo Limited, was due for renewal last month, while OML 115, whose operator is Oriental Energy Resources Limited, will expire in May. OMLs 29, 24, 18 and 30, operated by Aiteo Eastern E&P Company Limited, Newcross E&P Limited, Eroton E&P Company Limited and Nigerian Petroleum Development Company/Shoreline Natural Resource Limited, respectively, will expire in June. Also expiring in June are seventeen OMLs operated by Shell

Petroleum Development Company as well as OMLs 4, 38 and 41, being operated by Seplat Petroleum Development Company Plc. NPDC’s OMLs 40, 42, 26 and 34 will expire in June, while its OMLs 64, 65 and 66 will fall due for renewal in September. OMLs 116 and 117, operated by Agip Energy and Natural Resources and Amni International Petroleum Limited respectively, will expire in August.

“Whoever emerge winner will either maintain status quo or review the process of renewal or perhaps hands off totally and allow the Petroleum Industry Bill (PIB) handle the process which will be good for transparency,” Luqman Agboola an energy analyst at Sofidam Capital said. On many occasions, concerned stakeholders in oil and gas industry have expressed worries about the lack of transparency and account-

ability concerning oil contracts “Our review of 23 upstream and downstream contracts in Nigeria, including 10 model contracts, shows that contracts in Nigeria contain several terms for which a strong public interest case can be made for disclosure,” said Nigerian Extractive Industries Transparency Initiative (NEITI) — a body that shoulders the task of improving transparency and accountability in the management of revenues from

natural resources. Four years ago, Nigeria’s oil and gas sector hoped for a quick pivot reforms cheered by the news President Muhammadu Buhari emergency who doubled as country’s Minister of Petroleum. Nigerians had very high hopes that the sector will improve with his election but four years after, there seems to be little or no relative difference as oil sector contracted by 1.62 percent year-on-year in the fourth quarter of 2018, a worrying performance for an economy that continues to rely heavily on the oil sector. “Over the years, the sector has been challenged by poor governance, inadequate management of revenue streams, disjointed fiscal and regulatory provisions and gross inefficiencies in managing the upstream and downstream petroleum assets,” Agboola said to BusinessDay. Even though the Petroleum Act of 1969, as well as the Petroleum (Drilling & Production) Regulation of 1969 (as amended in 2001) authorized the Minister of Petroleum Resources to renew oil licenses once statutory payments in terms of applicable royalty, concession rentals and fees are paid, stakeholders insist that renewing the licenses without passing the Petroleum Industry Bill (PIB) remained a major setback for the country.

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Tuesday 26 February 2019

ENERGY INTELLIGENCE

Distribution of prepaid meters slowed despite increased providers DIPO OLADEHINDE

espite increasing the number of license companies in procurement of prepaid meters to solve the old perennial problem of estimated billing, latest data from National Bureau of Statistics (NBS) has revealed there has being little or no improvement in distribution of prepaid meters. Estimated billing is a bitter pill that most electricity consumers have been forced to swallow for decades. Many Nigerians have considered the billing system as deliberate extortion by the power distribution companies. Whether you are a house or flat owner, renting or a landlord the importance of having a prepaid meter cannot be over emphasis, however despite its huge significant data from NBS revealed total number of consumers with prepaid meters stood at 1.67 million, slightly above the 1.65million customers recorded in Q3 2018. “Abuja Disco has the highest number of customers metered. This is closely followed by Benin Disco and Eko Disco while Yola Disco recorded the least total number of customers metered,” NBS said in its latest report titled “Power Sector Report.” In Q4 2018, Abuja Discos recorded the highest number of consumers with prepaid meters of 295,641 consumers which was higher than 292,714 consumers with prepaid meters recorded in Q3 2018. Benin Disco recorded the second highest number of consumers

with prepaid meters of 287,995 compare to 285,144 consumers recorded in Q3 while Eko Disco had 161,382 consumers with prepaid meters in Q4 compare to 159,784 consumers recorded in Q3 2018. Enugu Discos recorded total 141,465 consumers with prepaid meters in q4 2018 compare to 140,064 consumers in Q3 2018 while Ibadan Discos recorded 256,804 consumers with prepaid meters in Q4 2018 compare to 254,261 con-

sumers recorded in 2017. “The need to place all customers on prepaid meters in order to get them to only pay for what they consume has been re-stated on different occasions across Nigeria, however it seems as if the Discos are intentionally frustrating the system,” said Emmanuel Afimia, an energy expert at Afimia consulting limited. Stakeholders expected relief when Nigerian Electricity Regulato-

ry Commission (NERC) confirmed that additional eight companies have being license to participate in procurement of prepaid meter increasing the total to 30 companies. Currently, there is a hardly a day that passes without a protest in one part of the country or the other over allegations of overbilling, estimated billing and billing when there is total power outage all through the month (generally termed “crazy bills”).

Irked by the avalanche of protests, in 2018, the Majority Leader in the House of Representatives, Hon. Femi Gbajabiamila, sponsored a bill to criminalise estimated billing. According to reports, the bill passed the third reading at the House of Representatives after the report submitted by the committee set up by the House was unanimously adopted by the lawmakers following a public hearing on the matter. Specifically, the bill, which seeks to amend the Electricity Power Sector Reforms Act prohibits and criminalises estimated billing of consumers. It seeks to outlaw estimated billing and prescribes penalties for DISCOs that fail to supply prepaid meters to their consumers within 30 days of applying to be connected to power. Interestingly, just as the critical bill was shaping up, the Minister of Power, Works and Housing, Babatunde Fashola, announced the approval of 108 firms to share prepaid meters. According to the power minister who spoke in Lagos, 108 metering companies had been given licenses to supply meters to address problem of discriminatory and arbitrary billing in the electricity sector. At the moment, there is an observed rip-off on the part of the DISCOs, which put the cost of a meter at N73, 000 as against the actual average cost of N20, 000. It is undisputable that power supply is an indispensable amenity needed to speedily drive development in any country. It has been agreed by many investors that epileptic power supply remains one of the major problems that set Nigeria on an economic retrogression.

Colombia woos investors with new contract type as Nigeria delays bid rounds STEPHEN ONYEKWELU

olombia is reviving its oil and gas sector through auctioning of oil blocks, starting February 2019 and Nigeria may learn a few things from how the Latin American country is going about it. The South American country has shifted to open-acreage license system for auctioning oil blocks, said Luis Miguel Morelli, president of the nation’s national hydrocarbon resources administrator ANH. Colombia used to offer specific blocks in different rounds, now it will offer the flexibility of selecting blocks to bidders or developers, Bloomberg reported. “The idea is to start signing contracts again. Colombia has not signed any exploration and production contract in the last 4 years” Miguel said. Colombia hopes to sign at least 30 new contracts under the new auctioning method. The Latin American country plans to increase its production to 900,000 barrel per day in current year from 850,000 bpd last year. Colombia has been awarding blocks to the highest bidder every two to three years, but bidding in the new system will privilege the first

company that requests access to additional areas. In Nigeria, the last bid round took place in 2011 and there has been calls from oil majors such as Total Plc for the government to organise one, in order to grow Nigeria’s oil reverses which has stagnated at 37 billion barrels of oil for many decades. “I hope the new government that will come after the election will launch new tenders for awarding new exploration licenses” Patrick Pouyanne, chief executive officer of Total Plc said. Total is one of the biggest players in the African oil sector, holding more proven reserves on the continent than any of the other top global oil companies. Total’s 200 thousand barrels per day Egina in Nigeria has started production and will export three cargoes of three million barrels of crude each in February. The 60,000 barrels-per-day (bpd) Ikike project is one of several projects the group has earmarked in Nigeria for a final investment decision, including the 70,000 bpd deepwater Preowei project, which would help Total increase its oil production. According to BusinessDay’s Feb. 12 report, the Department of Petroleum

Resources, the oil sector regulator, charged with the responsibility of conducting the bid rounds was not ready to conduct the bid rounds slated for the first quarter of 2019. “The DPR is not anywhere close to concluding preparations for the next bid rounds, in fact from all indica-

tions, it does not seem it will happen any time soon, because the guidance notes for the bid rounds are not even prepared yet. It does not even look like it could happen this year,” said a source that preferred anonymity. Nigeria was betting to fund infrastructure from proceeds of oil licensing

round. A source said that Ibe Kachikwu, the minister of state for petroleum resources is seeking to raise $5billion from the current oil licensing rounds. However, with the election season capturing public imagination, the likelihood that the licensing round would hold, seem more unlikely.

Tuesday 26 February 2019

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Solar power now competing for lands, holds lesson for Nigeria Stories by DIPO OLADEHINDE

he usage of solar energy is one topic that excites Nigerian, though majorities see it as a mirage because of the cost. The reason why some discerning Nigerians are interested in it, of course, is not farfetched. Successive governments have failed woefully with regards to the provision of regular electricity. While its beginning to gather momentum in Nigeria, in United States and other South Asian countries they seems move a step higher as solar power companies are now competing for land with agriculture, industry and expanding populations by placing floating panels in lakes, dams, reservoirs and the sea. In Thailand for example, Electricity Generating Authority of Thailand (EGAT)said it will tender a proposal for a 45-megawatt floating solar plant in the Sirindhorn dam in the country’s northeast while it also plans to invest in about 16 such projects across nine dams in the country. Another country doing similar thing is Singapore, the country is developing one of the world’s largest offshore floating solar systems in the Strait of Johor to the north of

the island. “In land-scarce countries like Singapore, the widespread use of PV systems is hindered by space constraints and limited roof space,” said Frank Phuan, chief executive officer of Sunseap Group told Reuters. CEO of Sunseap Group, one of the companies building the system said the platform has to be “more robust”

than systems in reservoirs or lakes to withstand tougher conditions on the open sea, and to overcome barnacles that may grow on it. “It was also difficult to find a spot in the sea that was not frequented by shipping vessels,” CEO of Sunseap Group admitted. According to the Solar Energy Research Institute of Singapore (SERIS),

despite these challenges, floating solar systems are growing quickly in Asia alongside those on the ground and on roofs. “While floating panels are more expensive to install, they are up to 16 percent more efficient because the water’s cooling effect helps reduce thermal losses and extend their life,”SERIS said.

The According to the Solar Energy Industries Association (SEIA), the United States also experienced a solar boom as installed capacity last year reached 60 gigawatts, up from about 9GW a decade ago, which it expects to more than double in the next five years, with about 14GW being installed annually. “For a start, that means much more land will be needed: under a scenario that sees solar reach 1,618GW by 2050, the government estimates a total of 6.6 million acres (2.7 million hectares) will be required by 2050 - roughly the size of Massachusetts,”Solar Industry Research Data said. According to the World Bank in a report title “Where Sun meets Water”,China currently accounts for most of the more than 1.1 gigawatts of floating solar capacity now installed. There are concerns that the panels could block sunlight, affecting marine life and ecosystems, and that the electrical systems might not withstand the onslaught of water supporters say the technology is proven, and that the panels cover too small a surface area to create major problems. Stakeholders will be hoping similar feet can be repeated in Africa biggest economy which is emerging to be one of the most attractive solar markets in the region.

Nigeria’s commercial and industrial solar capacity stood at 20MW in 2018 - Study

ith significant opportunities for off-grid and mini-grid power, thanks to relatively high level of economic activity, and latent demand a new study has explained why Nigeria’s Commercial and Industrial (C&I) solar power as at 2018 stood at 20MW. According to the 2019 report by research company BloombergNEF (BNEF), Nigeria’s market is very distributed, with the majority of installations being smaller than 30kW while sites over 30kW are estimated to add up to just 8.9MW. “Nigeria’s size and poor electricity supply suggest it is likely to remain one of the largest C&I solar markets in Sub-Saharan Africa (outside of South Africa). Some 77percent of the nation’s electricity demand is already met through self-generation, usually in the form of diesel or petrol generators,” BNEF report said. BNEF report acknowledged that the government’s efforts to

encourage local solar module assembly are not working as solar modules with bypass diodes must pay a 5 percent import duty plus 5percent VAT. “There are also very high transaction costs for customs handling. Merchandise can often sit in the port for weeks, at a high cost to the importer. Developers also mentioned that there are often delays in evacuating merchandise from the port,” BNEF report said. BNEF report admitted that most of the major barriers to more C&I solar in Nigeria are financial, from debt availability to credit risk and foreign exchange hedges. Many developers in Nigeria told BNEF they wish that import tariffs would be reduced. Retail power tariffs have not been updated to their indexed formula since year-end 2014, leading to under-recovery of costs and an expectation that they are more likely to rise than to fall in coming years.

BNEF report said Commercial banks are largely absent from the C&I solar market, offering debt that developers consider too costly mostly over 25 percent and only for tenors up to two years. “There is no project financing product available in Nigeria that lets vendors borrow against a cashflow stream. All local financing in Nigeria requires the developer to provide a physical asset as collateral. Lenders do not typically accept solar equipment as collateral and require borrowers to own real estate,” BNEF report said. BNEF report said in the large and densely populated cities such as Lagos, rooftop space is scarce and usually not sufficient, while land for ground-mounted installations is often too expensive. Industrial off-takers are often preferred because they have plentiful land for on-site solar installations. BNEF report noted that power outages are likely to remain a part of daily life in Nigeria for

Analysts: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

the foreseeable future even if new power generation capacity is added because transmission and distribution networks are too weak to deliver more electricity, and network reforms are even further behind than efforts to boost generation capacity. Although, BNEF projects that cost of C&I solar will decline to $0.10/kWh by 2030, however it admitted that the cost today for C&I solar with battery storage is $0.19/ kWh which is 67percent higher than the industrial grid tariffs and 63percent above the commercial rate, but lower than electricity from a diesel generator, which generally costs $0.28-0.32/kWh. As of November 2018, the largest reported C&I solar project in Nigeria was 2.35MW Tulip Cocoa Processing Plant developed by Alfen BV, designed by Solarcentury, and built by Solarmate. Next is the 1.2MW Usuma Dam Solar Power Plant built by Japan International Cooperation Agency (JICA) in

Abuja, followed by the 1MW project built by Enerwhere for Bayero University in Kano state. In Nigeria, captive independent power producers with a generating capacity of over 1MW must hold a captive generation permit issued by the Nigerian Electricity Regulatory Commission (NERC). First-time offenders of this rule face a fine of N100, 000 ($275) or as much as one year in prison. The permit is valid for five years with an application fee of N50, 000 ($138), a permit fee of N200, 000 ($550) for projects between 1-10MWp, and a fee of N50, 000 naira for permit renewal. The developers interviewed by BNEF agreed unanimously that they can only be in business today because of the poor state of the nation’s electricity grid not only in the most pronounced rural areas, but also in cities such as Lagos or Abuja as outages in Nigeria are unpredictable and range from four to 15 hours on average per day.

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Tuesday 26 February 2019

Infrastructure Maintenance With Tunde Obileye

Project

Reasons Trinity Towers is next destination for businesses, investors Stories by CHUKA UROKO

eyond the profit and dividend motive which are, of course, the hallmark of any business or investment, security of such investment is also critical. Every business or investment needs security and an environment where there is stability for it to thrive and grow. These are part of the value propositionS that Trinity Towers offers investors and businesses. An ambitious development being promoted by City of David, a province of the Redeemed Christian Church of God (RCCG) to fund its future CSR projects, Trinity Towers is Nigeria’s first three-tower office complex. It is fondly described as ‘unity of three towers’ combined into structural beauty and functionality, offering the best of environments for business and leisure. As a piece of architecture, Trinity Towers is just like any other office complex in its class. But unlike other complexes, it offers very unique, spectacular and compelling value propositions which a savvy investor or business concern can hardly gloss over. “An entry into this best-in-class property with an opportunity to adjust to specification with early commitment into long lease option is, indeed, as good as an outright sale as an adult buyer practically holds

the space beyond his life time”, Gbenga Olaniyan, CEO, Estate Links, explained to BusinessDay. Estate Links (Gbenga Olaniyan and Associates) and Knight Frank are the lead marketing and lease agents on Trinity Towers and, according to Olaniyan, the involvement of these two commercial real estate giants in the leasing of West Africa’s first tri-tower office complex is a major plus for investors and the security of their investment. There is stability of investment in Trinity Towers which implies that, unlike the common short lease arrangement, the long lease offering serves up security on investment as well as cuts out the cost associated with relocation, new premises renovation and fit-outs. The appreciation/annuity which this investment assures of means that a ’buy-to-let’ investor will expect to receive direct income as cash flow but over time also will witness capital appreciation as the property increases in value. “Besides predictability which helps with long term forecasting and budgeting while helping the tenant- owner withstand economic volatility, there is also strong bargaining power for concessions and improvements. This means that early entrants will be able to dictate, to a large extent, the finishes on their floors as well as alterations within limits”, Olaniyan assured.. According to him, investors will

also be able to transfer their leases subject to the consent of the owners of the property, meaning that an investor has that alienability of rights to the lease he has made. Another strong value proposition which the complex offers is

that its long lease cost is negotiable; the long lease term....(I removed the 60 years here as we want to be silent on that)...., is also negotiable while rent per annum for the office Continues on page 24

Prime Office Market

Investors show risk appetite, snap up 14,500sqm prime office space in Q4’18

nvestors in Nigeria are becoming, increasingly, risk averse in spite of the lull in economy and the political risk and uncertainty occasioned by the just concluded presidential and national assembly as well as the upcoming governorship and state assembly elections. This diminishing risk aversion to the aftermath of the elections relative to the previous electoral cycle of 2015 was reflected in the market transactions in the last quarter of 2018 when approximately14,500 square metres of A-grade office space was taken-up in the Ikoyi, Lagos market alone. Ikoyi, an upscale real estate destination in Lagos, was originally

and predominantly residential, but today it is about an unrivalled home of glitzy luxury high-rise office buildings mostly along Kingsway Road. In this location are the Heritage Place (15,631 sqm), Alliance Place (6,670 sqm), Kingsway Tower (12,000 sqm), Temple Tower (14,000 sqm), BAT’s Rising Sun (10,000 sqm) and Lake Point Towers (13,400 sqm). Heritage Place, arguably, is Nigeria’s first green office building standing on 14 floors. “This ultra modern, eco-friendly building is Nigeria’s most advanced development, employing the latest building principles and state-of-the-art finishes; it is one of Lagos’s most

Average Asking Rents/Net/M2/Annum Rigion

A-Grade

B - Grade

Ikoyi

US$750

US$600

US$650

US$450

Lekki

US$240

N70,000

Ikeja

US$325

N45,000

Lagos Island

___

N30,000

___

N65,000

Abuja

Source: Broll

recognizable and accessible buildings”, said Funke Okubadejo, a director at Actis—the developers of the office complex. Heritage Place is the only Leadership in Energy and Environmental Design (LEED)-certified building in Nigeria. It has five floors of parking with the highest parking availability for 360 cars. It has high profile tenants including Actis, British Petroleum, BBC, HP, Visionscape and others. In Q4 2018, longer term investors continued to enhance their presence in the market with a number of signed leases being for more than1,000 square metres, which deviates from the smaller sized office transactions in previous years when investors looked for between 200 and 500 square metres. Bolaji Edu, CEO, Broll Nigeria in their office market viewpoint with Intel Property, noted that 2018 saw a significant amount of activity relative to the previous year, especially as the economy forged ahead in its path to recovery. “The level of enquiries for office space increased in 2018 with a more diverse profile of tenants in the technology, finance, oil and gas, fast moving consumer goods (FMCG), aviation and pharmaceutical industries”, he affirmed, adding that 2018 also witnessed a slight evolution of occupier requirements for lease acquisitions. An increased number of tenants

have started looking at flexible, serviced office options, especially small scale new entrants seeking flexibility to either expand or exit the market as and when required. Co-working space requirements has risen significantly and service operators are operating at full or near full capacity. Service providers are primarily local providers, operating in stand-alone converted residential properties or B-to C-grade office buildings. Co-working space is coming up thick and investment opportunity here is huge. Demand, driven mostly by milliennials and start-up community, is growing exponentially. “Millennials and the startup community continue to drive up the demand for coworking spaces with service providers seeking to convince traditional large-scale employers of the benefits of coworking just as corporates are in conversations geared towards putting up underutilised space for coworking use”, Ayo Ibaru, Director at Northcourt Real Estate, confirmed. But, for the prime office, there is no denying the fact that challenges remain despite the transactional improvement seen in the last 12 months. Though vacancy rates are are currently down, 59 percent and 54 percent in Ikoyi and Victoria Island respectively, over 40,000 square metres space is expected in the market to add to the existing 400,000 square metres stock.

The task of cleaning for facility managers

s I thought of what to write about this week, I spent a great deal of time looking at some of the most difficult areas that create challenges for facilities managers. It was not difficult to take cleaning as a topic simply because it is a daily task for facilities managers to oversee whether it is the office, school, hospital, shopping mall etc. As a result, different cleaning standards have been applied by facilities managers and cleaners due to their level of understanding, training and information available. When considering a cleaning workload, it is easy to feel frustrated by a lack of information during the planning process because the only possible information available may just be location. Often times, the cleaners plan their workload based on square footage without taking into considerations other important factors that may be necessary to do a great job. As a result of this, when cleaning teams actually enter the area to be cleaned, they may find two areas of similar size requiring different amounts of time and approach to clean properly. This will likely lead to the team feeling overwhelmed or underutilized. It is clear that to prevent this kind of situation a cleaning plan should be designed by the facilities manager with some guidelines that create a formula for proper workload balancing for the cleaners to achieve the required result. I have identified 5 guidelines that are useful in devising a plan: 1) Knowledge of Square Footage of the building – knowing and understanding the facilities’ square footage is crucial to the cleaning plan particularly when deploying manpower. The key information required is the net cleanable square feet and not the gross square feet. 2) Knowledge of the Facilities’ Floor Types – knowing and grouping different floor types is critical when making the plan, for example, carpet versus tile. This will be useful in determining the time it takes to clean them and ensure less time in switching equipment and supplies for getting the job done. 3) Knowledge of the Building’s Room Types – The standard of cleanliness required will depend on room use. A vacant office space is unlikely to require the same attention as a hightraffic office. Knowing the rooms that require special attention is crucial to the facilities manager balancing the cleaning team’s workload 4) Knowledge of Fixtures in Each Room – Fixtures are often very tricky to deal with in facilities when devising the best formula for the cleaning plan. Fixtures can include items in use daily such as toilets, windows, door handles and furniture or they can be ones that collect dust easily therefore requiring to be revived such as drapes, air vents and drapes/curtains. A well prepared cleaning plan will mean appropriate equipment is deployed and less time is spent swapping equipment. 5) Knowledge of cleaning and maintenance equipment – knowing and understanding the available tools will help when putting together the cleaning plan. The facilities manager working with the cleaning team will know when to upgrade equipment or not. Using the same equipment for years may actually be costing the cleaning team extra time and causing frustration. Although equipment such as mops, brooms, vacuums, or floor waxers can last for years, newer makes or models customized for certain floor types can deliver a higher standard of cleanliness or get the job done faster. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Tuesday 26 February 2019

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BUSINESS DAY

Construction

Construction: How attitudinal problem, weak control undermine growth, quality ISRAEL ODUBOLA

istorically, the Nigerian constr uction industry inherited its legacy and tradition from the United Kingdom (UK) like other developing countries and relies on the values, systems and techniques as regards the quality developed in the West and Far East. Often times, these techniques are embraced but poorly applied without any conformity with the country’s specific background, and this answers why buildings collapse and the industry is not growing as fast as it should in Nigeria—a country with all the resources. Growth prospect for the industry in Nigeria is very high and expectation among industry players is that by 2020, the country alongside India will enjoy higher growth rates than notable nations like China. They predict that by 2021, the industry will triple its investment value. Though in the last 12 months, there has been some movement in terms of growth as reflected in National Bureau of Statistics (NBS) Q4 2018 figures, fundamental factors such as human attitudinal problem and weak quality control need to be addressed and quickly too for the country to be able to realize the 2020 growth prospect. In real terms, the construction industry recorded a growth rate of 2.05 percent, year-on-year, in Q4 2018. Even though this represented a decline of –2.09 percent points from the rate recorded a year earlier, the the Q4 performance

was better by 1.51 percent points when compared to the preceding quarter’s 0.54 percent growth rate. The NBS figures show that quarter-o- quarter, the sector grew by 21.72 percent in real terms while total real growth rate of the industry in 2018 was 2.33 percent, up from 1.00 percent recorded in 2017. The contribution and impact of this industry to the economy cannot be neglected as it has become a veritable index when it comes to employment generation for both skilled and unskilled employment in Nigeria. NBS estimates that the industry’s contribution to total real GDP in 2018 remained relatively stable at 3.73 percent compared to 2017. This seeming growth is yet to reflect in the quality of construction done in the country. A couple of years back, the Federal Ministry of Power, Works and Housing disclosed that 54 buildings collapsed between 2012 and 2016, ca using 175 deaths and 427 others injured. An average of five deaths are recorded per annum as a result of building collapse, research has showed, a reflection of poor construction quality. Damilola Ijalade, agent at PWAN Homes & Properties, positioned the issue of poor construction quality is driven by non-compliance with specifications and standards by developers as well as contractors, employment of inept contractors and the use of sub-standard materials and equipment. “There is proliferation of inexperienced and stingy developers in the industry. Their

plans on how work should be carried out on-site at times negate the overall interest of the project”, Ijalade said. “There are also cases where suppliers of building materials connive with contractors to deliver low quality building materials,” he added. Poor construction quality revolves around ignorance, carelessness and greed. Ignorance comes to play when inept developers are in charge of a project. Negligence surfaces when the specification adopted for past projects are used without adequate review. Greed plays out when building personnel fail to use quality materials for the projects due to personal interest. A survey that captured the opinions of professionals including architects, engineers, builders and quantity surveyors disclosed that most of the problems arising from poor construction quality in Nigeria stems from human attitudinal problems, quality

assurance processes and lack of implementable standards. It is noteworthy to state that there is lack of consensus on the set of factors affecting construction quality in Nigeria. However, the major factors driving poor construction quality include: High construction cost Construction materials such as cement, steel, iron, aluminium account for more than 70 percent of total project costs, and about 50 percent of them are imported. Inflationary pressure in the macro-space and exchange rate fluctuations have made imported materials costlier, which is not good news for developers. The industry is controlled by the forces of demand and supply. Dwindling economic fortune has pared the purchasing power of an average Nigerian consumer, thus making demand below supply. As a result, many developers resort

to compromising quality by using substandard products in push for competitiveness. Quality Control This is a prominent reason for poor construction failure according to research. Quality control involves total adherence to established standards. Quality control is one aspect of business that must never be overlooked as it can make or mar a project. A report by Bureau of Labour Statistics revealed that the causes of private workers death in construction sites are falls, strike by objects, electrocution and caught-in-between. These are traceable to non-compliance to quality control on sites. Despite the growing adoption of quality assurance by developing countries, the awareness of this practice is still low in Nigeria. This problem of awareness has been observed as a major factor for quality improvement in Egypt and South Africa.

Iron rod price soars as buyers’ investment decisions shun price hike Temitayo Ayetoto

ing months of the year and fluctuates midway before ending on lower note by year end. “The reason is because most of the factories that supply us are just beginning production for the year and not all of them have begun. So the few producing have been stirring the price increase because supply is still low. But by the time other producers resume full operation, prices will drop,” Akinyemi said.

Reasons Trinity Towers is next destination... Continued from page 23

Building Materials

ealers in construction materials say iron rod sales witnessed 20 percent rise since the beginning of the year as buyers shunned price hike in their purchasing decisions. Iron rod prices stood at N175,000 per ton as at December 31 but has risen 17.6 percent to N197, 000 without dampening demand. Timilehin Akinyemi, chief executive officer at Twins Faja Nigeria Limited, says it is fast becoming a trend for demand to rise simultaneously with price. The dealer said the current trend is induced by low supply arising from the fact that many producers were yet to resume full operations. Iron rod prices is considered one of the most unstable construction materials as prices go up in the open-

By mid-March, he expects that prices would begin to drop as full production operations begin. In other construction materials however, prices have been somewhat stable while demand has not been as positive as expected. Cement prices continue to hover over its 2018 base of N2350 and N2500 according to dealers. Financial Derivatives Company’s domestic commodities price movement confirm prices have

remained flat but pegs the range at N2550 since January, left a year low at N1,700 and N2700 as the highest rate in the last on year. For granite, demand has also seen lull as dealers cite election jitters as affecting decisiveness in spending approval. Demand dropped about 30 percent since January, unlike the trend at the end of 2018, according to Lekan Omowaiye, manager at Jomark Multiconcept Unique Enterprises, a company dealing in granite supply. Granite is not usually prone to volatility but demand responds primarily to the volume of construction projects being executed within a period. More construction of roads and buildings would mean higher sales in dealers’ books. “Prices still remain the same but price depends on the quarry producing

it. There are some quarries that sell for N2,800, N2,700 or N2,500 per ton. So the farther the point of demand is from the quarry, the higher the price. And most of the quarries are in Ibadan.” According to SJONES Nigeria Enterprises, Aluzinc, a galvanized steel with metal coating composed of Aluminium, has been topping the demand for roofing sheets for its fashionable designs and the moderate prices in the last 10 years. Well-heeled consumers appear to increasingly pitch tent with stone coated variant which is currently the most expensive at N2, 500 per square metre. But moderate spenders are settling with Aluzinc at N16,500 per bundle or Zinc at N14,500 per bundle. Generally, dealers are eagerly looking to a postelection recovery for sales to rebound.

floors is N125,000 per square metre per annum which, Olaniyan noted, “is very conservative compared to the market average for Grade A properties of N170,000 per square metre per annum”. Located in the heart of the fast developing commercial centre of Oniru, Victoria Island, Lagos, Trinity Towers is due for structural completion by the last quarter of 2019. It is a unique, innovative masterpiece and a meticulously designed mixed development of commercial and leisure space. The Grade A office complex is within easy reach of Lagos finest commercial and residential environments and has neighbours such as City of David Church, Four Points by Sheraton, Lagos Oriental Hotel, Exxon mobil Headquarters, The Palms Shopping Mall, The Incubator and Get Arena. It is the first Tri-Tower building in West Africa sitting on a transfer beam above five floors. Upon completion, the development will boast of 13,320sqm of contemporary real estate spanning 12 floors with parking for around 670 cars in the multi-storey car park, 5000-seater concert hall, indoor amusement for children, retail therapy for the shopaholic, two cinema halls, a gymnasium, rooftop swimming pool, helipad, medical centre, café & restaurant, multi-purpose halls, banking halls, and ATM Gallery. Others features of the complex are 12 passenger lifts; 1 goods lift; automated and integrated lighting, sound & video system; tenant-dedicated external garden terraces protected by a lattice framework. There are 12 floors of approximately 500 square metre each, totalling 7,630 square metres which are available to let or for long lease. This comprises the 6 upper floors in the north and south towers respectively. Projects of this magnitude usually come with a lot of advantages. Over time, it has been observed that traction on a property increases once nearing completion or upon completion and this has been the case in some of the major projects in metropolitan Lagos. In these projects, several investors and potential tenants expressed interest when the project was nearing completion, and many others after completion. But the interesting thing to note, according to Olaniyan, is that early entrants always come out with an advantage of concessions which will also be the case with the trinity Towers.

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Tuesday 26 February 2019

Office Space

What tenants, investors should look out for in Grade A office space CHUKA UROKO

n office building is termed prime, not only because it is flexible, technologically-advanced work environment and safe, but also because of the recognition that its users pay special cognizance to work effectiveness and staff well-being. Grade A or prime offices in London were once constructed to suit the needs of banks and other financial services groups, usually within the parameters of the City of London or the West End. Similar considerations were taken in Nigeria by suppliers of Grade A offices who targeted chiefly corporate organizations and other high-end tenants. In Grade A buildings, considerations such as design, parking space, accessibility, adequate space and equipment needs of its occupiers; deliberate selection of interior finishes and art installations, well-maintained restrooms, lifts, provision of cafeteria, gym, crèche, smoking patios (terraces) are all factored into the design. For investors looking out for this grade of offices, there is need to look out for those markers that constitute a ‘Grade A’ commercial space. One of such markers is the ‘finishing’ which should be of the highest standards Udo Okonjo, CEO, Fine and Country West Africa, notes that efficiency is a key component in mar-

keting today’s Grade ‘A’ office. “The efficiency of space and energy is a crucial offering and must be communicated as a key feature of the space. This is in keeping with the provision of various workstations and café culture breakout areas, allowing for a greater occupancy ratio than the one person per 10 square metres the traditional office format provides”, Okonjo says. Contemporary office design

and a layout that portrays a ‘fun’ environment to work in are thought to improve overall staff satisfaction. The sustainable footprint of a building should also cater to greater efficiency. The premium placed on organizational culture/employee wellbeing cannot be over-emphasized. The wellbeing of the workforce is now a hot topic in the office market, organizations with a culture of

value for employee wellbeing, are looking to be presented with spaces that progress beyond healthy food cafes and complimentary fitness studios. Elements such as the flow of fresh air in a building, the availability of natural light, the smell of the office and noise levels are critical. Using the office to promote wellbeing is has indeed become standard practice.

Fine and Country says there is a list of about 25 factors that should be present in a commercial space for it to he termed ‘Grade A’, and these include car park spaces. The company explains that the provision of car-park spaces is very critical, especially in the Central Business District of a city like Lagos as inadequate provision can mar the productivity of users and experiential functionality of the building. Adequate alternative powersupply systems like power generators and UPS systems should also be provided in a Grade A office building. Reception with state-of-theart visitor management/accesscontrol systems, as well as central location for building directory, schedules, and general information are also necessary just as raised floor systems and energy efficiency – motion-sensor lights and motion-sensored water taps should be available. “Temperature monitoring in the critical areas such as Panel, ATS, Control rooms; and installation of health, safety and environment functionalities such as pressurized and fire-rated stairwells, railings at the staircases of the emergency-exits are necessary”, Okonjo advises. Continuing, she says, “there are other factors that drive the effective marketing of Grade ‘A’ commercial spaces such as understanding intricate marketing insights like pre-qualifying a client, presentation and strategy that ensures the deal is closed”.

Interior

Burgeoning furniture market finds strength in style-driven demand Temitayo Ayetoto

he evolving sense of style for cutting edge furniture products among Nigerians, prospects of growth in real estate projects around the country and foreseeable rise in population has been lending strength to the expansion of investment in furniture making, according to leading dealers. By 2020, Lifemate, a highend focused home furnishing company will establish what can be described as the biggest and all-encompassing mall that can cater for interior needs of all classes; be it home, office, kitchen or outdoor. The expansion plans come barely a year after investing in a 6,800-square-metre showroom in Lekki considered the biggest in the country. It also plans to open a new branch in the heart of Victoria Island and an additional office showroom at Mobolaji Bank Anthony Way, Maryland Ikeja, which will bring its total number of outlets spread across Abuja, Ibadan, Port-Harcourt and Warri

to 16. “We want to build a furniture mall that is a one stop solution centre for people; so that people can get everything they need from Lifemate when they want to build their houses,” Alan Ping Fu, director sales department, Lifemate Nigeria Limited. To broaden its market share, the company which has spent about 17 years expanding operations in Nigeria is set to depart

from a strict focus on luxury furniture items to a wider market driven by middle and low income class demand. Ping Fu said the firm’s expansion plans is rooted in the understanding that Nigerians prefer sophisticated products and seem to have a progressive rate of change in lifestyle and taste. Hence, its fresh focus on designing products for the circle of customers outside wealth is its

way of responding to this change. According to her, demand in and out of the year has continued to grow except in politically charged periods when uncertainties curb spending rate. “Before, we targeted high level customers and have given them the quality life that matches their demand. But now we want to focus on the people who cannot afford it. This year we are going to divide our products into different categories. These sets of people are very young. They don’t like royal bogus furniture. So we are going to give them very fashionable and simple ones that the price would not be as high as royal products. We want to tap into this low income customers because they also need good life,” Pung Fu explained. Analysts see Lifemate’s growth as reflective of a growing furniture market that will continue to expand as more real estate projects spring up to fix the housing deficit in Nigeria and as improvements in the economy bolster consumption level. Also considering the rate of

population growth, there will always be constant demand from both the retail end and the corporate end of furniture for furniture maker, Michael Kolaru, treasury and investment associate at Financial Derivatives Company Limited said. He noted that the fear in the economy and the uncertainty in the capital market has been encouraging investors to diversify their risk appetite into properties, which eventually translates into higher demand for retail for furniture. “The primary thing is that a lot of people are beginning to diversify their needs. If you check a company like Lifemate, they make high end sofas. So their focus will be on real investors that are investing into properties which will definitely need furniture to equip those properties,” Kolaru said. “For a company that has futuristic plans with the assurance that income of workers will increase, you should start looking at what would be the need of workers.”

BDTECH Tuesday 26 February 2019

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Stakeholders call for more investments in ICT skills Jumoke Akiyode-Lawanson

lthough Nigeria’s information and communication technology (ICT) sector recorded 11.81 percent growth in 2018, and continues to grow despite economic challenges, stakeholders say there is need to invest more in the sector which has the capacity to positively transform the economy. During the inauguration of the Digital Bridge Institute Telecommunication Network Equipment Laboratory in Abuja recently, Ikechukwu Adinde, the Administrator of Digital Bridge Institute (DBI), called for significant investment in skills of the workforce to make them key drivers of the economy. The one million US dollars laboratory was donated by Huawei Technologies Nigeria Limited. According to Adinde, investing in skills of the workforce of a nation is crucial, especially in an increasingly globalised world. “There is, therefore, the urgent need for us to train and make available to the industry highly skilled human resources to serve as key drivers of the economy. “It is in response to these chal-

L-R: Obinna Anyanwu, country head (Nigeria) Commonwealth Enterprise and Investment Council (CWEIC); Ezekiel Egboye, COO Rack Centre; Nozipho Sibanda, finance director Rack Centre; Lord Marland of Odstock, chairman, Commonwealth Enterprise and Investment Council (CWEIC) and Ayotunde Coker, managing director/CEO, Rack Centre; during a recent visit to Rack Centre Limited.

lenges that the DBI has built this ultra-modern Lab to train and equip Nigerians with relevant ICT skills for the 21st century to tackle challenges presented by the 4th industrial revolution which requires tailor-made solutions that keep pace with the ever-evolving telecom industry”, he said. Titi Omo-Ettu, telecommunications engineer and chairman,

governing board of DBI, said that the inauguration of the laboratory represented a leap in the efforts of the institute to provide qualitative hands on practical telecommunications and ICT training. Omo-Ettu said that the development of skilled workforce across all sectors of the economy had become a national priority. “We are keenly aware that

there is a global shift from natural resources as a basis for national competitiveness to human resources underpinned by knowledge innovation. “Interestingly, it is also increasingly evident that innovation is not about academic qualifications or certificates, the emphasis is on skills and creative abilities of the individual.

“The new DBI telecom industry has a full complement of GSM/UTMS equipment and will be fully deployed for the training and retraining of entry level and middle level engineers in industry. “This effort is the first step in an ambitious plan by the institute to develop functional laboratories and workshops in its campuses in Kano, Lagos, Enugu and Yola.” It was revealed that the DBI campuses will serve as focal ICT training centers and would in time transform to Innovation Hubs. Kevin Yangyang, deputy managing director, Huawei Technologies, said that as partner to the Nigerian Communication Commission (NCC) and DBI, the organisation believes in contributing significantly to the development of ICT. He said that Huawei was doing this through leading ICT solutions and innovations and is happy to see high-tech facilities and operations in Africa. “It is with this passion that we decided to donate this lab to DBI fully equipped with Optical Fibre Nodes, Wireless Radio Access Nodes and Next-Generation Code Switching Network,” Yangyang said.

Huawei plans investment shift to UK amid US ban on its 5G network Jumoke Akiyode-Lawanson with wired reports

espite restrictions in the United States on Huawei’s 5G network equipment, and controversial allegations that Chinese manufacturers are spying on the West, the United Kingdom’s National Cyber Security Centre (NCSC) have determined that Huawei’s network equipment are not a threat to security, adding that any potential

risk posed from using the company’s equipment can be easily mitigated. According to a Financial Times report, the NCSC has ruled out a blanket ban, but hasn’t formally settled on what to do in response to the US’s persuasion to ban the use of Huawei equipment. Huawei’s founder, Ren Zhengfei, in an interview with the BBC, stated categorically that “the US cannot crush Huawei”. In a previous report by the Bloomberg, Ren, had stated that despite the potential impact of the US plot on the business, he was

confident Huawei’s revenue would grow to $125 billion in 2019 from more than $100 billion last year. Speaking on the NCSC’s findings regarding the safety of Huawei’s equipment, Ren reiterated the fact that many of the UK’s mobile companies, including Vodafone, EE and Three, are working with Huawei to develop their 5G networks. Ren, added that Huawei “…will invest even more in the UK. Because if the US doesn’t trust us, then we will shift our investment from the US

to the UK on an even bigger scale.” Huawei is considered a global leader when it comes to telecoms equipment, and is one of only a few true suppliers of 5G. Many have speculated that the motivation behind the United States allegations are both commercial and geopolitical, given that the United States and China are locked in a trade dispute that has disrupted the flow of hundreds of billions of dollars of goods. Reuters reported last year that President Donald Trump was con-

sidering an executive order for 2019 to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China’s Huawei and ZTE Huawei maintains its stand on non-involvement in allegations of spying, stating that it would not be in the company’s interest to do so, and would cause the company to lose its image and the current position in the international market. Huawei recorded a sales revenues of up to US$ 108.5 billion in 2018.

proboth sting bers.

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Cloud: The answer to improved security, efficiency and regulatory compliance Adebayo Sanni, Managing Director Oracle Nigeria

rganisations are struggling to cope with the increasing sophistication of today’s threat landscape. Zeroday exploits are on the rise and insider attacks are becoming increasingly prevalent, requiring more refined analysis and real-time remediation. Security teams, already overtaxed and understaffed, are being asked to increasingly identify and prevent new threats. Fortunately, cloud technology brings a solution. New cloud services can ingest massive amounts of operational and security telemetry, analyse it in real time using purposebuilt machine learning and react to findings using automation. Oracle and KPMG recently published the Cloud Threat Report; a report that explores from the depth of the trenches what security challenges are being faced across the globe; how they are responding to these security challenges and what technology solutions are enabling them to

resolve these threats. The threat landscape is increasingly complex and varied, headlined by phishing, malware and exploits, have been broadly experienced, with these and other threats such as business email compromises being top of mind concerns. 66% of companies surveyed have suffered a significant business operations interruption in the past 24 months; 90% of firms say at least half of their data is sensitive information; 38% reported issues detecting and responding to cloud security incidents, making this the most cited cybersecurity challenge in the survey. So how do you start responding and addressing cybersecurity challenges? Data breaches that result in confidential data being compromised, whether it is just released to the general public or used for more malicious purposes, have become almost a daily occurrence, making cybersecurity a non-negotiable for organisations. This includes both educational awareness and the necessary hardware or software tools. The increasing complexity of emerging technologies and advances in hacking practices

9mobile rewards customers in new Magic Hour promo

mobile recently announced the commencement of its newly launched reward scheme, Magic Hour promo, in which millions of customers stand a chance to win amazing prizes over the next three months. The promotion which started on the 11th of February 2019 and will run for 90 days will reward subscribers with free airtime, smartphones and cash prizes for customer loyalty. “The amazing reward scheme which will run for a record 90 days, will see some customers move up the social status ladder as millionaires would emerge in the promo draws holding across key cities in Nigeria,” 9mobile said in a statement. Prizes up for grabs include the N20 million grand prize for one winner at the end of the promo, and N5 million cash to be won by one lucky customer in each of the 3 months, at the monthly draws. Also, one lucky customer each day will win N250,000 throughout the 90-days promo duration while 5 customers will win N50,000 cash each daily for 90 days. Other fantastic prizes are 5 smartphones per week to be won during the 90-days

promo. Explaining the process of participation, Adebisi Idowu, VP marketing at 9mobile, said all that customers need to do is recharge a minimum of N100 to keep winning. Customers can also text WIN to 88808 to increase their chances of winning. According to Idowu, Magic Hour is another innovative way of putting a smile on the faces of millions of 9mobile customers, and the telco’s way of saying thank you to them for their loyalty and for keeping faith with the brand. “9mobile is a caring brand and a brand for all Nigerians. Magic Hour is truly the first-of-its-kind, because for the first time, subscribers are being given a chance to play over and over again, to stand a chance to win a wide range of prizes. At 9mobile, we are known for going the extra mile to ensure that we give our customers the best. This reward is just one of our numerous ways of appreciating and thanking our customers for being with us over the past 10 years,” Idowu said. He added that the promo is also the telco’s unique way of changing the lives of its customers for good and affirming 9mobile as a caring network.

Adebayo Sanni

mean that enterprises and their legacy networks - often built with kit bought from multiple vendors at the cheapest price at auction, by a procurement team over the years - are no longer safe. Of top concern are infrastructure downtime, security threats and vulnerabilities, and data protection. Companies are responding through several ways, including hiring CEOs who come from the cybersecurity space, as they know how to manage risk, and speeding up their migration to

the cloud - with mature users understanding that cloud computing provides better security than on-premise environments. Step 1: Migrate to the cloud In addition to the right to access, right to erasure and data portability, one of the key legislative requirements of various data privacy laws, is to be able to provide any individual with every piece of data an organisation holds on them, including all data records and any activity logs that may be stored. This places the focus firmly

on good data management, with the benefits being increased security and operational efficiency, to improved customer service. By turning to cloud computing at the infrastructure, platform and software level, businesses gain the ability to extract, collate and analyse data at incredible volumes and speed - even from across previously disparate systems - to ensure compliance. In a growing number of countries, data privacy regulation now stipulates where data must be stored, presenting organisations that want to use public cloud services with a challenge. However, the availability of innovative managed on-premise solutions now allows customers to move their workloads to the cloud while keeping critical information and applications within their own data centres. Ensuring regulatory compliance is a long term commitment, and investment in implementing a cost-effective supporting infrastructure might even represent one of the biggest opportunities for companies to accelerate digital transformation in recent years.

Step 2: Educate and automate With security at the core of a modern organisation, good governance for managing systems and people effectively is critical; strong authentication and encryption becomes a necessity. Backup, archiving and storage helps to further protect against ransomware, and mobile device management becomes an instrumental means of controlling information at the edge. It is also not just about the technology: industry estimates put nearly half of all security breaches down to human error, and educating employees on how to spot suspicious emails can help cut down on phishing, whaling and other attacks that rely on unsuspecting end-users to click on links to infected websites, or open attachments that install malware or ransomware. However, the very advances in technologies that enable the threats are also providing companies with the tools that are required to combat them, including artificial intelligence and machine learning - especially vital in an environment characterised by a shortage in critical skills.

Samsung launches Galaxy S10 in Nigeria …celebrates 10 years of Galaxy devices Jumoke AkiyodeLawanson

amsung has introduced a new line of premium smartphones: Galaxy S10, with three unique devices – the Galaxy S10, S10 + and the S10e. All the new devices are fully upgraded with enhanced performance level, ground breaking innovations in display and camera functions. The company is also celebrating 10 years since the launch of the very first Samsung Galaxy device. “Since its launch ten years ago, the Galaxy S series has stood for premium innovation – offering consumers an incredible experience, and the ability to find the device that’s right for them,” David Suh, managing director at Samsung Electronics West Africa, said. Speaking at the launch party in Lagos recently, Suh said that the “Galaxy S10 builds on that incredible legacy, and delivers breakthrough display, camera, and performance innovations. With three premium devices, each built for a unique consumer in mind, Samsung is leveraging a decade of in-

dustry leadership to usher in a new era of smartphone technology.” With its power sharing capabilities, you can now charge your other devices wirelessly with an S10 device. It is also built with premium hardware and machine learning software including the AI-powered performance enhancement and Intelligent Wi-Fi. Introducing the Dynamic AMOLED Display: Full Screen Experience with Ultrasonic Fingerprint Scanner Galaxy S10 is made with Samsung’s best screen yet, the world’s first Dynamic AMOLED display. As the first HDR10+-certified smartphone, the display delivers vivid digital content, and with dynamic tone mapping, you’ll see a wider range of colour for a brilliant, realistic picture. Galaxy S10’s Dynamic AMOLED display is also VDE-certified for vibrant bright colours1 and the industry’s best contrast ratio on a mobile device for even deeper blacks and brighter whites. The result of an incredible engineering process, Galaxy S10’s unique Infinity-O Display packs an array of sen-

sors and camera technology into a hole-in display – so users can maximise screen real estate without any distractions. Samsung revealed that its Galaxy S10’s Dynamic AMOLED display also includes the first-ever embedded Ultrasonic Fingerprint Scanner5 that reads the 3D contours of your physical thumbprint – not a 2D image of it – for improved antispoofing. With the world’s first FIDO Alliance Biometric Component certification, this next generation biometrics authentication offers vault-like security to keep your device safe. Pro-Grade Camera: Building on Samsung’s camera leadership of Dual Pixel and Dual Aperture firsts, Galaxy S10 introduces new camera technology and advanced intelligence that makes it easy to take epic shots and videos: Ultra-Wide Lens: A first for the S Series, Galaxy S10 offers an Ultra-Wide Lens with a 123-degree field of view, like the human eye, so what you see is what’s in frame. Perfect for impressive landscape shots, big panoramas and even fitting the en-

tire extended family into the photo, the Ultra-Wide Lens ensures that you’ll always be able to capture the full scene. AI Camera: Galaxy S10 makes already smart features more accurate with a Neural Processing Unit (NPU) so users can get pro-grade shots worth sharing without having to manually select any advanced camera settings. Scene Optimizer can now recognise and more accurately process additional scenes because of the NPU. Availability: The Galaxy S10, Galaxy S10+ and Galaxy S10e will be available in stores and online in Nigeria from March 15, 2019. Preorders for the Galaxy S10, Galaxy S10+ and Galaxy S10e have begun in Nigeria from Friday, February 22, 2019 and will last until March 14, 2019. Samsung announced that during this period, every customer who pre-orders any of the three devices will receive a pair of Galaxy ear buds worth NGN 45,000 for free. Samsung Galaxy S10, Galaxy S10+ and Galaxy S10e will be available in prism white, prism black and prism green. Galaxy S10+ will also be available in ceramic white for customers in Nigeria.

Tuesday 26 February 2019

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LegalPerspectives

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by Ikechukwu Nwakanma of Perchstone & Graeys

Nigeria copes with an evolving environment of international trade in the 21st century. But unlike them, Nigeria has failed to innovate and thus even with seemingly impressive annual revenue generation, much more can and should be received in revenue by the most populous black nation in the world. According to a report by allAfrica published on July 18, 2017, the Nigerian Senate Committee Chairman on Custom, Excise and Tariffs was quoted to have reported that over NGN 4.35 trillion worth of goods are smuggled into the country each year. The World Bank also disclosed recently that a staggering sum of NGN 750 Billion ($5 Billion) worth of assorted goods are smuggled into Nigeria through Nigeria’s border with Benin Republic every year.

Something must be done. The Nigerian government has made strides in enhancing the ease of doing business. When the NCS introduced ASYCUDA++ and the Nigerian Integrated Customs Information System (NICIS) into its operations in 2017, annual revenues skyrocketed by almost 500 billion Naira. ASYCUDA++ is a software developed in the early 80’s following the United Nations Conference on Trade and Development (UNCTAD) to automate the operations of

Odunayo Oyasiji

A time to keep, and a time to automate order security and international trade are two sides of a coin that constantly present significant concern – due to the inherent risk and benefit traditionally associated with both endeavours. The UK has chosen BREXIT to retake control of its borders, immigration and trade autonomy. The longest government shutdown in American history was connected to protecting America’s borders from smuggling, illegal immigration and loss of government revenue from the Mexican border. In the Middle East, Dubai Customs recently launched “iDeclare” – a smart app which enables passengers into Dubai declare their belongings, if needed, in only 5 minutes, rather than 45 minutes which was the average required time prior to the innovation. The revenue generated by this innovation is better imagined. In Nigeria, the Customs Service (NCS) is second only to the oil sector, in revenue generation for the Federal Government, generating over NGN 2.3 trillion in the last 2 years. But the NCS is far from attaining peak revenue generation, and this portends both opportunities and risk. Opportunities to leverage private sector partnerships through a PPP arrangement, to finance the full automation of its operations, and the risk of being overtaken by ‘sister’ countries in Africa that have completely moved away from the manual operations of import and export surveillance to a full or semi automation of their customs operation, making them the international trade destinations in Africa. In 2016 the Malawian Revenue Authority introduced ICT innovations to its customs service which enables it to link the operations of its customs with road traffic development and the Malawi Police Services to improve efficiencies and speed up clearance of motor vehicles. Several years ago, Dubai’s customs service launched an automated project (Mirsal 2) that deploys technology to enhance customs operations and ensure more effective border management. Like these countries,

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customs. Currently, about 80 countries use this software. A PPP partnership would however enable the deployment of cutting-edge ICT tools in Nigeria’s customs operations. Some of the automation tools that can be invested in, include infrared/ultraviolet tracking devices capable of detecting cargos or goods on land and water ways (to tackle smuggling and bring more revenue into government coffers); xray scanners for scanning cargos and goods (strengthening security); electronic clearance of goods using technologies such as block-chain (enhancing speed and efficiency); and technology that enables goods to be accessed and excise duties paid directly to the government, even without the physical presence of the importer at the ports and borders (enabling the fight against corruption). One can therefore see the need to completely automate the operations of the NCS, to reap the full benefits of international trade and block leakage of revenue suffered in the hands of smugglers which comes at a time of great financial need in the country. With a badly eroded security infrastructure and a diminished status in the eyes of the global community due to a ravaged economy, Nigeria has much to prove if she is to continue to enjoy the attraction of foreign investors. The government’s 2017 Economic Recovery and Growth Plan (ERGP) has demonstrated a policy resolve to build an economy that is less dependent on the oil sector, and to leverage other initiatives through the benefits of Science and Technology Innovation (STI). It is time that resolve is matched by action, innovation and new private sector partnerships.

LOCUS CLASSICUS

Dunlop pneumatic tyre Co vs. Selfridge Ltd (1915) AC 79

n this case, the plaintiff had an agreement with a dealer that he shouldn’t sell their product below a certain price. They also made the dealer promise to extract this same promise from other people they sold to. The dealer subsequently sold to the defendant and made him promise not to sell below the ascertained price. They even agreed that for every good sold below the ascertained price, 5 pounds would be paid to the

plaintiff. However, the defendant sold below the price and also didn’t pay the 5 pounds. Thus, the plaintiff sued to enforce the agreement between the dealer and the defendant. The court held that the even though the defendant breached the agreement between it and the dealer, the plaintiff was not a party to the contract and it did not furnish consideration for the promise. Hence, there was no privity of contract between them.

The principle of Pacta Sunt Servanda in commercial transactions

a c t a Su nt S e r va n d a m e a n s ‘a g r e e m e n t s must be kept’. Therefore, it deals with sanctity of contract. Whatever we agree upon must be followed by parties. Contractual obligations must be respected. It must be noted that parties have the freedom to contract and agree as they wish. The only exception is that they cannot contract to commit crime or illegalities. The freedom is limited to acting within the ambit of the law. Therefore, if parties agrees on anything and

reduce it into writing then the terms agreed upon automatically becomes binding on the parties. In a situation where there is dispute between the parties the court’s duty is to interpret the terms agreed upon. It is not the duty of court to introduce new terms or read unnecessary meanings into the terms of the contract. The court in interpreting the terms often adopts the literal rule of interpretation of law i.e. giving the wordings of the contract its ordinary meanings.

Difference between originating summons and writ of summons

hey are both means of commencing a civil action in court. Originating summons is mostly used in a situation where the matter boils down to the interpretation of law and it is not likely to be a contentious matter. In essence, you are presenting a provision of the law to a court and relating it to some facts and then asking the court for the interpretation of the provision as it applies to the facts presented. This process is

usually faster than the process under writs of summons. Writ of summons on the other hand is used when a matter is contentious and there is need to go through the process of trial. In this situation witnesses are called and parties tend to file and reply to many processes. Since business disputes are mostly contentious matters, lawyers tend to use writ of summons when instituting an action bothering on business transactions.

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

Zenith Bank Nigeria Plc: Improved operating efficiency underpins profit BALA AUGIE

enith Nigeria Bank Plc, (Zenith Bank), in its recently released audited financial statement for year ended December 2018, showed significant improvement in profitability and key performance ratios. The second largest lender in Africa’s largest economy has an excellent risk management strategy as Non Performing Loans (NPLs) stood at 4.98 percent amid a challenging operating environment. It is also efficient in curtailing costs while contemporaneously bolstering profit as cost to income ratio has been ebbing in the last three years. The bank uses its strong balance sheet and liquidity as well as efficient trade finance processes and services, to continuously grow and support businesses. Zenith Bank has consistently been rewarding its 369 403 shareholders in form of dividend payment. An interim dividend of N9.42 billion, being N0.30 per share from the retained earnings account was paid in H1 2018 while an additional N2.50 per share has been proposed as final dividend for 2018 FYE. This will bring the total dividend for 2018 to N2.80per share. Effective management of expenses bolster profit Zenith Bank’s profit before tax increased by 16 percent to N231.68 billion in December 2018 as against N199.32 billion recorded the previous year. The uptick at the bottom line was largely driven by improved efficient as evidenced in optimization of cost to income ratio, cost of risk, and reduc-

Peter Amangbo, group managing director/CEO, Zenith Bank Nigeria

tion in interest expense. Net income was up by 11 percent to N193.42 billion in December 2018 from N173.79 billion the previous year. The chart shows profit has been growing steadily since 2013 even during the economic recession. Operating profit was up 8 percent to N457.18 billion in the period under review from N422.73 billion as at December 2017; however, trading gains fell by 49.23 percent to N80.20 billion in the period under review from NI57.97 billion the previous year. Zenith Bank’s investment in latest technology with a view to reducing cost has paid as total operating expenses increased by mere 1 percent to N225.50 billion in the period under review as against N223.411 billion the previous year. A quick glance at the chart shows cost to income ratio fell to 49.30 in December 201, this compares with 52.80 percent in 2017, 52.70 percent in

2016, 57.20 percent in 2015, and 57.70 percent in 2014. Net interest income spikes amid low yield environment Despite the precipitous drop in yields on short term government securities in 2018, net interest income increased by 15 percent to N295.59 billion in December 2018 from N258 billion the previous year. Average 1 year T-bills yield (2018–15%, 2017–21%). However, interest income on similar income capitulated to low yield environment as it fell by 7 percent to N440.05 billion in December 2018 from N474.62 billion the previous year. Improvement in key performance ratio Zenith Bank remains committed to delivering impressive returns to shareholders as return on average equity (ROAE) increased to 23.80 percent in December 2018 from 22.90 percent the previous year. Return on average assets (ROAA) was flat at 3.4 percent despite the significant decline in the yield environment for money market instruments and drop in average interest rate on loans and advances to customers. Net interest margin (NIM) remained flat at 8.9 percent, demonstrating the Group’s ability in delivering optimal pricing for its interest-bearing assets and liabilities even in a declining yield environment. Cost of funds improved significantly by 40.4 percent YoY, from 5.4 percent recorded in 2017 to 3.1% in 2018. The Group will continue to focus on its drive for low cost deposit mix. Excellent risk management strategy keeps NPLs below CBN’s threshold Zenith Bank’s risk management strategy has paid off as Non performing Loans (NPLs) of 4.98 percent is below the Central Bank of Nigeria (CBN)’s threshold. NPLs in absolute figures stood at N100.50 billion in the period under review, from N105.87 billion the previous year. NPLs by sector showed exposure to the oil and gas stood at 38.23 percent, manufacturing, (31.05 percent); real estate and construction, 13.05 percent; and General trading, (9.92 percent). NPL coverage ratio increased to 192.40 percent as at December 2018 as against 143.40 percent the previous year; the significant growth in coverage Ratio in 2018 was as a result of IFRS9 implementation Strong and liquid balance sheet led by securities portfolio and interbank placements. For the year ended December 2018, Zenith Bank’s total asset increased by 6 percent to N5.95 trillion in December 2018 from N5.59 trillion the previous year. The significant growth in total asset can be attributed to significant increase in property plant and equipment, treasury bills, and investment security by 11.80 percent, 6.38 percent, and 70.82 percent. On the other hand, gross loans and advances were down 10 percent to N2.01 trillion in the period under review from N2.25 billion the previ-

ous year. Banks in Africa’s largest economy have refused to turn on the tap on lending because assets quality suffered deterioration when a precipitous drop crude price of mid 2014 hindered customers from paying interest on money borrowed. Bloomberg reported recently that Zenith Bank is increasing its focus on consumer lending as lower oil prices weigh on the economy, hurting its business customers. The Lagos-based bank is expecting to expand retail loans as a percentage of total credit to about 4 percent this year from less than 1 percent in 2018, Chief Executive Officer Peter Amangbo. It will achieve this by making a bigger push into personal loans, car financing and mortgages. “There is a lot we’re doing on revenue,” Amangbo said. “We expect our retail franchise to grow. Our electronic business, our digital banking is grow-

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ing,” said Amangbo. Zenith Bank’s total liability increased by 7.32 percent to N5.13 trillion in December 2018 from N4.78 trillion as at December 2017. Deposit to customer was up 7 percent to N3.60 trillion in the period undr review from N3.43 trillion as at December 2017. Loans to deposit ratio fell to 44.20 percent in the period under review as against 54.40 percent the previous year. The Group’s efforts to deepen its roots in the retail segment have started yielding benefits. This has resulted in a remarkable increase in the volume of transactions across various electronic platforms as well as significant customer acquisitions, according to Amangbo. Zenith Bank shares closed at N25.70 as at 2:00 pm on Tuesday February 21, while it has market capitalization of N808.46 billion.

Tuesday 26 February 2019

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Top Cab 25 million: Didi Chuxing, the Chinese ride-sharing service, became the industry’s largest company in the world in 2016, making about 25 million trips per day in China. + A Time for Change 80%: A survey from PricewaterhouseCoopers found that 80% of American chief executives see the need to respond to AI and shifts in technology as a top business priority. + Mental Illness Awareness 1 in 4: Approximately 1 in 4 adults will experience mental health issues, according to research from the U.S. National Alliance on Mental Illness. + Rare Company 55: Last year, Donna Strickland became the first woman in 55 years to be awarded the Nobel Prize in physics, sharing the prize with Gérard Mourou. + Data Collection Agency 90%: In a report from Accenture, 90% of respondents expressed that they would not oppose their employers collecting data on them, as long as it benefited the employees in some fashion.

How do you ask your boss for an unpaid leave?

hat makes someone a strong leader? One characteristic that is often overlooked is humility. The best managers acknowledge their weaknesses and aren’t afraid to show their vulnerabilities. It’s tempting to want colleagues to see you only at your best, but that’s a bad way to lead. For one thing, it’s unsustainable. We’re all human, and we all make mistakes. Sooner or later, you will, too. For another, leading is about connecting. People will

follow you, work hard for you and sacrifice for you if they feel connected to you. And they won’t feel that way if you only let them see what you think will impress them. So don’t be afraid to own up to the areas where you aren’t perfect. If it helps, think of it this way: You aren’t weak; you have weaknesses. There is a difference.

(Adapted from “The Best Leaders Aren’t Afraid to Ask for Help,” by Peter Bregman.)

answers: “What did you hear when I shared my strategy?” or “How did it feel to you when I sent that email?” Tell your team that you want both positive and negative comments, and then resist the urge to respond to what they say — even if you disagree, simply listen and reflect. Lastly, thank your team for their honesty, and use their feedback to make necessary changes.

(Adapted from “How Leaders Can Get Honest, Productive Feedback,” by Jennifer Porter.)

t’s normal to underperform from time to time. After all, everyone has bad weeks — or even months. But don’t just sit back and wait for a painful performance review; be proactive and talk with your manager about what’s going on (before they have a chance to discover it on their own). Explain your view of things in straightforward, direct terms. Talk about whether your underperformance is a one-off situation or an ongoing trend, as well as whether external factors are involved. But

Expertise It’s in our DNA FirstBankofNigeria

don’t make excuses — take responsibility. It may be appropriate to express contrition, in which case a sincere “I’m sorry” goes a long way. And then segue into how you can make things right going forward. Focus on this last part — what you can do to correct the situation — to show that you’ve thought carefully about a solution. You can also ask your boss for their advice on next steps, which will show that you respect their opinion.

(Adapted from “How to Talk to Your Boss When You’re Underperforming,” by Rebecca Knight.)

hen Monday morning arrives, do you feel relaxed? Or are you still stressed out from the previous week? Research shows that one way to make your weekends more refreshing is to think of them as a short vacation. Part of this is simply enjoying yourself: Sleep in, do less housework, eat a bit more than you normally would. And find ways to make common tasks more fun, whether that’s turning on upbeat music in the car while running errands or making yourself a margarita for folding laundry. Another part is slowing down: Pay attention to

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent. You can be conﬁdent that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

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ay you’d like to take time off work to travel or spend time with family, but don’t have enough vacation days. How do you ask your boss for an unpaid leave? Before the conversation, think about the concerns that might come up. Your manager will have a lot of reasons to say no, so know how you’ll respond to them. Consider what you want to achieve during your leave, and be ready to frame your request in terms of how it will benefit the company. You might outline the new skills you’ll learn, or the professional connections you’ll make. When it’s time to talk, bring multiple options to the table. Does the leave need to happen all at once, or could it be staggered in phases? Keep an open mind in case your boss suggests a plan you haven’t thought of. And, of course, time the conversation for when your manager is feeling positive about your performance.

(Adapted from “How to Ask Your Boss for an Unpaid Leave to Travel, Study, or Spend Time with Family,” by Amy Gallo.)

To start your week refreshed, treat the weekend like a vacation

If you’re underperforming, be honest with your boss

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

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To be a strong leader, don’t hide your weaknesses

Leaders, make it safe for employees to give you honest feedback

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Tips & Talking Points

Harvard Business Review

ust like everyone else, leaders need honest feedback to grow. But what leaders hear is often vague, or isn’t tied to specific behaviors, which means it isn’t very useful. One way to get feedback that will help you improve is to build a culture where it’s safe for employees to be honest. Show colleagues that you want to know what they think, even when — especially when — they might hesitate to tell you. You can do this by asking open-ended questions and listening carefully to the

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your surroundings, the activity at hand and the people who are involved. Keeping your mind on whatever’s happening will help you savor it, which in turn will help you feel like you’re breaking out of the day-to-day grind. But save these “vacation weekends” for when you really need them — research shows they lose their effects if they happen too often.

(Adapted from “ Treat Your Weekend Like a Vacation,” by Cassie Mogilner Holmes.)

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Tuesday 26 February 2019

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Live @ The Exchanges Stock market gains 0.57% as focus shifts to election results Stories by Iheanyi Nwachukwu

he Nigerian stock market opened this week on a positive note, gaining about 0.57percent despite that investors are keenly following the outcome of last weekend’s presidential and national assembly elections. The equities market closed Monday February 25, 2019 with the All Share Index (ASI) at 32,700.12 points as against the preceding day low of 32,515.52 points. The stock market’s Year-to-Date (YtD) returns currently stands at +4.04percent. Likewise, the value of listed equities increased from N12.126 trillion to

N12.194 trillion, representing an increase of about N68billion. At the sound of closing gong on the 9th floor of the Exchange, the market recorded 25 gainers as against 8 losers. “Politics and earnings should be the two biggest themes that would guide trading sentiments this week. In the wake of the just concluded Presidential and National Assembly elections, markets would have to come to terms with uncertainties around the probable economic direction of the new (or old) government, even as earnings continue to trickle in”, analysts at Lagos-based United Capital Plc said in their February 25 note. Nigerian Breweries recorded the highest gain of N3.2 or 4per-

cent after its share price moved up from N80 to N83.2. Mobil Nigeria Plc also advanced, from N178 to N180, up N2 or 1.12percent. Dangote Flourmills Nigeria Plc increased from N10.05 to N11.05, adding N1 or 9.95percent; NASCON Plc gained 65kobo or 3.56percent, from N18.25 to N18.9. Dangote Sugar Refinery Plc advanced from N15 to N15.5, adding 50kobo or 3.33percent. Equity research analysts at Vetiva Capital Management Limited had in their Monday February 25, 2019 note said “barring any negative surprises at the polls, we anticipate a positive start to this week’s trading as investors price-in improved certainty upon conclusion of the general elec-

tions.” In 2,999 deals, investors exchanged 219,808,655 units valued N5.549billion. Nigerian Breweries Plc, Diamond Bank Plc, Access Bank Plc, GTBank Plc, and FCMB Group Plc were actively traded stocks. On the losers table, Total Nigeria Plc declined most from N195 to N190, losing N5 or 2.56percent. Flourmills Nigeria Plc also declined from N20.2 to N20, losing 20kobo or 0.99percent. Access Bank Plc declined from N6.4 to N6.35, losing 5kobo or 0.78percent; PZ Cussons Nigeria Plc was also down from N12.35 to N12.3, losing 5kobo or 0.40percent; while FBN Holdings Plc declined from N8.35 to N8.3, also losing 5kobo or 0.60percent.

Cryptocurrency Assets Get Arab World’s First Regulatory Nod

he Arab world’s smallest country is taking the lead in regulating crypto assets. Bahrain’s central bank said on Monday that it issued “the final rules on a range of activities relevant to crypto assets.” The framework covers areas from licensing and governance to cyber security. The central bank’s “introduction of the rules relating to crypto assets is in line with its goal to develop a comprehensive rules for the fintech eco-system supporting Bahrain’s position as a leading financial hub” in the Middle East and North Africa, Khalid Hamad, executive director of banking supervision at the central bank, said in an emailed statement. Once the undisputed banking center of the Gulf, Bahrain is vying to regain its place as competition intensifies from counterparts in the region and be-

yond. Most central banks around the world aren’t yet convinced of the benefits of digital currencies and don’t plan to issue one any time soon, according to a recent Bank for International Settlements survey. Bahrain’s neighbours Saudi Arabia and the United Arab Emirates have previously launched a joint pilot crypto currency initiative with the goal of easing cross-border payments and better understanding blockchain technology, a decentralized public ledger of transactions that offers more speed because it doesn’t rely on a central record keeper. The central bank in Bahrain has already been operating an incubatorstyle sandbox licensing program, which included crypto-currency exchange platforms and companies using blockchain.

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Solid Minerals business Symbol Mining to unleash Nigerian mining potentials to the world Stories by JOSEPH MAURICE OGU

ymbol Mining, an Australian company operating in Nigeria, is posed to showcase the success stories of the country’s mining industry to the world through its own achievements in the industry. Symbol Mining is currently operating in Bauchi State through its subsidiary company, Imperial Joint Venture. “Symbol is building a reputable, safe and trusted mining company in Nigeria, and hopes to raise awareness of Nigeria’s potential as a mineral resource producer,” said Tim Wither, CEO, Symbol Mining. Apart from Imperial Joint Venture, Symbol Mining has another subsidiary company in Nasarawa State, Tawny Joint Venture, which it partners with Adudu Farms Nigeria Ltd. Starting operation in Nigeria in 2012, Symbol Mining has in the last six years “completed over 12,000m of exploration

drilling,” according to Wither, who added that “our maiden resource demonstrated a mineralisation zone of high-grade zinc and lead.” Looking forward, the company integrates the development of its hosting communities into its plans, with which it enjoys good collaboration. “Central to our future success is the support of the local community and development of a skilled workforce. Our core values include respect and acceptance from the local communities in which we operate, and this is only achieved by open and honest conversations,” Wither said. While the company started mining activities in June 2018, it has nonetheless made tremendous impact in the industry. Although most of its technically skilled workforce is still being sourced abroad due to the infant stage of the company, it however plans to train local people to have the necessary technical skills from where the company will source

its technical skilled workers. “Our vision is to grow capabilities in-house by training and educating people from the local community. This will support our aggressive exploration and growth strategies and help expand the mining industry in Nigeria,” he said. “Ideally, we would like to be the employer of choice for the mining industry in Nigeria,” Wither said. One major legacy the company plans to establish in Nigeria is to demonstrate to the whole world of the striving mining business environment in Nigeria, thereby encouraging other investors to invest in the industry in Nigeria, which will in turn benefit the country and mining communities. “Symbol wants to demonstrate Nigeria’s potential as a mineral resource producer. Our success will help grow the awareness of Nigeria mining sector and will also attract additional supporting industries,” Wither assured.

Bitumen, untapped mineral awaits investors

panning approximately 120km, Nigeria’s bitmen deposit is the the secondlargest in the world, waiting to be turned into economic prosperity. The estimated probable reserves of bitumen in Ondo State is 16 billion barrels, while that of tar sands and heavy oil is estimated at 42 billion barrels, almost twice the amount of existing reserves of crude petroleum, according to data from the Federal Ministry of Mines and Steel Development. Bitumen, which occurs both on the surface and sub-surface,

is found in Ondo, Lagos, Ogun, and Edo States, and occurs in both forms. One of the uses of bitumen is in road construction. It is also used in waterproofing products. Constructions are heavy projects constantly on going in Nigeria. This means that industries in bitumen enterprise will have both local (Nigeria) and foreign targets as their markets, as bitumen is high in demand for both road constructions and other construction uses. “Investing in bitumen in Nigeria promises a high return for investors in the shortest pe-

riod,” said Stephen Ayodele, site engineer, Quarry Construction Company, Abeokuta. The deposit of bitumen in Ondo State is huge such that non-exploration could cause environmental degradation on the farmland and water. Exploration of this material can reduce the environmental hazard. Investing in bitumen exploration in Ondo State will not only be friendly to the environment, it will also create jobs for Nigerians, enrich the nation through tax, and also invite prominent local and international investors.

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34 BUSINESS DAY NEWS Nigerian voters go missing as turnout heads... Continued from page 1 Democratic Party (PDP) in the

14 states and Federal Capital Territory (FCT) where presidential results were declared Monday by the electoral body, the Independent National Electoral Commission (INEC). That’s 196,366 people or 2.3 percent less than in 2015, when 8.54 million people turned out in the same states, according to INEC data. By our metric, the lowest voter turnout was recorded in Lagos State, as Nigeria’s economic hub maintained an ugly record from 2015 as the state with the lowest voter turnout. In Lagos, total votes for the two main parties shrank by 27.79 percent (395,957 votes) to 1.02 million votes in 2019, from 1.4 million in 2015. That works out to 18.5 percent of the 5.5 million voters who collected their Permanent Voter Cards (PVCs) in Lagos. In 2015, 98.64 percent of votes in Lagos went to APC and PDP combined. South-eastern state, Enugu, recorded the second highest voter

apathy. In Enugu, considered a PDP stronghold, votes to the dominant APC and PDP fell 27.71 percent to 409,976, from 567,160 in 2015. On the other hand, the Federal Capital Territory (FCT) recorded the highest increase in voter turnout, with a 35.7 percent jump. Ekiti State was second with a 25 percent increase. Meanwhile, Muhammadu Buhari, candidate of the ruling APC has opened up a 640,265 lead over main challenger Atiku Abubakar. Buhari, 76, won in nine states of the 14 states and FCT where election results were announced Monday. Atiku, 72, won six states. As analysts run the numbers of the results trickling in, they say there are strong indications that in 2019, voter turnout may well be lower than the previous election in 2015. “We estimate that turnout may be around 40 percent (give or take 5-10 percentage points on either side),” said Charles Robertson, the chief economist at Moscow-based investment bank, Renaissance Capital. “This looks like it will be down

C002D5556

a little on the roughly 44 percent turnout of 2015. But the growing population means total votes should top the 29 million of 2015,” Robertson told BusinessDay. In 2015, 29.43 million Nigerians voted, representing a 43.65 percent turnout compared to the 67.4 million registered voters. President Buhari claimed 53.96 percent of the votes (15.4 million) as he beat then incumbent Goodluck Jonathan who had garnered 44.96 percent (12.85 million). If the voter turnout this year falls below the 2015 figure, then it could be the lowest turnout since the country’s return to democratic rule in 1999. Only 52.26 percent of eligible voters turned up to vote in 1999, according to INEC data. In 2003, the figure jumped to 69.08 percent. It has declined every election year since then. In 2007, voter turnout fell to 57.49 percent, while in 2011 and 2015, turnout was lower at 53.68 percent and 43.65 percent, respectively. Political analysts say cases of voter intimidation and electoral violence played a role in the reduced voter turnout. The sudden postpone-

L-R: Cheryl Adhiambo Majiwa, director, Industrial and Commercial Development Corporation (ICDC); Jonathan Tobin, executive director, corporate services, Bank of Industry (BoI); Toyin Adeniji, executive director, micro enterprises, BoI; Olukayode Pitan, MD/CEO, BoI; Bernard Muteti Mung’ata, chairman, ICDC; Joseph Kipkemoi Kiplagat, director, ICDC, and Grace Mudola Magunga, corporation secretary, ICDC, during the ICDC executives study visit to BoI head office in Lagos, yesterday. Pic by Olawale Amoo

EU, Commonwealth, others decry... Continued from page 1

Mission said operational short-

comings on the part of the Independent National Electoral Commission (INEC) reduced confidence in the electoral process and put serious burden on voters during the election, the Commonwealth expressed worries over the violence recorded during the elections, stressing that violence has no place in modern democracy. This is as the African Union Election Observation Mission (AUEOM) warned Nigerians on the use of the social media to spread misinformation and hate speech during elections, stressing that the country should address the matter forthwith. The Election Observation Mission of the Economic Community of West African States (ECOWAS), on its part, said despite challenges of violence, delays and malfunctioning of smart card readers in some parts of the country, Saturday’s Presidential and National Assembly elections were generally peaceful and transparent. “On election day, the majority of polling units opened extremely late, leaving voters waiting for hours uncertain of when voting would begin,” Maria Arena, head of the EU Mission,

said at a press conference in Abuja on Monday while presenting a preliminary report on the 2019 election. “The delay due to lack of materials was compounded by an absence of public information from INEC about what was happening and whether the closingtimewouldbeextended.Asaresult,therewasconfusion,sometension, and we observed that some people were put off from voting,” Arena said. Cases of violence in some states led to the death of approximately 20 and 35 people on election day, the EU said, noting that at least 46 people were killed in pre-election day violence and several dozens more in crowd-control incidents at rallies. “Media coverage of the campaign was dominated by antagonistic commentary by the two leading parties. Consequently, with the exception of a fewstates,votershadlimitedaccesstodiverse and factual information on which tomakeaninformedchoice,”Arenasaid. The International Republican Institute (IRI) and the National Democratic Institute (NDI), at a press conference to present a joint preliminary report on the 2019 general election, observed that political parties remain the weakest link among Nigeria’s nascent democratic

institutions, stressing that opaque campaign financing and candidate selection process, as well as weak internal party democracy are significant disadvantages. The two pro-democracy groups led by Fatoumata Tambajang, NDI president and former vice president of The Gambia, and Daniel Twining, IRI president, said lack of ideological differentiation between political parties favours ‘cross carpeting’ with party elites regularly switching parties to secure nomination for elected office. They also called on Nigerians to address immediate and long-term challenges bedevilling the conduct of credible elections in the country. Hallemariam Desalegn, head of the AU Election Observation Mission, while presenting a preliminary statement on the election on Monday, said the use of hateful language against candidates and groups was rampant during the campaigns and called on Nigerians and other stakeholders to act responsibly and refrain from using the social media to spread hate speech. The AU said despite the challenges of reported cases of violence and deaths, Nigerians exhibited their strong desire to vote. It observed that there was a large voter turnout in an atmosphere generally regarded as peaceful and that the Presidential

ment of the election at the eleventh hour may have also affected voter participation. Dozens were victims of yet another round of decade-old bombings by Islamic 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

Tuesday 26 February 2019

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 the people from Rivers State alone.

PDP, PCP, YPP, others reject results in states... Continued from page 2

at the National Collation Centre on Monday that it was wrong for Michael Adikwu, vice chancellor of the University of Abuja and returning officer for the Kogi State Presidential election, to announce results in Dekina despite earlier agreement. Chidoka noted that apart from violence claiming lives and marring the elections, the smart card reader was not used for accreditation in many polling units and results there were to be cancelled according to INEC guidelines and regulations for the conduct of the 2019 general elections. Adikwu, while presenting the results in which Buhari scored 285,894 votes to defeat his closet rival Atiku Abubakar of the PDP with 218,207, said the election was marred in 69 polling units across the state, while 32,480 votes were rejected. Godwin Chinma, national collation agent for PCP, in his submission decried the large difference in total number of accredited voters and total number of votes cast in some states, particularly Kwara, Kogi, Nasarawa, and the Federal Capital Territory, Abuja. Chinma stated that the differences between the total number of accredited voters and votes cast in Kwara and Kogi amounted to 17,000 each; in Nasarawa, it was 32,942, and 16,366 in the FCT. Ben Oyediji, Alaye Eremie and Eyiowuawi, APGA, YPP and PPN national collation centre agents, in their separate reactions rejected the cancellation of 157,591 votes in Nasarawa State on the account of over-voting and called on Mahmood Yakubu, INEC chairman, to review the situation which they had already and National Assembly elections were critical for deepening and consolidating Nigeria’s democracy. The AU Mission also observed that the political space has significantly broadened, as evidenced by the high number of registered voters, political parties and candidates who took part in the elections. “Despite some reports of electionrelated violence, deaths and intimidation, the overall political climate remained largely peaceful and conducive for the conduct of democratic elections,” Desalegn said, urging political parties to channel electoral complaints through the legal process and accept the verdict of the people. Jakaya Kikwete, former president of Tanzania and head of the Commonwealth Election Observation Mission, while presenting preliminary statement on the election, said there were logistical and technical difficulties in the elections which INEC and all stakeholders will have to address. It said notwithstanding the difficulties and challenges surrounding the elections, Nigerians had the opportunity to express their will and exercise their franchise. Also on Sunday night, while making a preliminary declaration on the election pending the collation and declaration of final results by INEC,

mentioned in their individual reports to the electoral umpire. Results from Nasarawa State where Buhari won with 289,903, defeating Atiku Abubakar of the PDP who polled 283,847, showed that 157,591 votes were cancelled. Azubuike Nwankwo, provost of the Nigerian Defence Academy and returning officer for the Presidential election in Nasarawa State, while announcing results at the National Collation Centre, Abuja, said the votes were cancelled from 86 polling units across the state due to overvoting and violent disruption of polls. In a quick response, the APC Presidential Campaign Council yesterday faulted the PDP and its Presidential candidate, Atiku Abubakar, for discrediting INEC over the outcome of the Presidential polls. Festus Keyamo, director, Strategic Communications, APC Presidential Campaign Council, said PDP resorted to such antics due to imminent defeat that stares the party in the face. In his response, INEC chairman assured party agents and Nigerians that the commission would consider observations and reports from the various parties as well as poll officials before the determination of the final results. Buhari won six out of the seven states whose results have been submitted at the National Collation Centre as at press time, while Atiku won only the FCT. Based on the results, Buhari defeated Atiku in Ekiti with 219,231 against 154,032; Osun, 347,634 against 337,377; Kwara, 308,984 against 138,184; Nasarawa, 289,903 against 283,847; Kogi, 285,894 against 218,207; and Gombe, 402,961 against 138,484; while Atiku defeated Buhari in FCT Abuja with 259,997 against 152,224. Ellen Johnson-Sirleaf, head of the ECOWAS Observer Mission, said although the media played a major role in informing the people, media platforms were used to misinform the public and propagate hate speech. The ECOWAS Mission, comprising 200 observers from ECOWAS member states, including 170 shortterm observers and 30 long-term observers deployed to 31 states across the six geo-political zones of Nigeria including the Federal Capital Territory (FCT), also observed that although the campaigns were largely peaceful, some incidents led to violence and deaths. Some deaths also occurred during the elections. Johnson-Sirleaf urged INEC to take steps to address the many shortcomings,includingoperationalcapacityand systems that were observed all through the process. It further appealed to party leaders, candidates, their supporters and the press to show tolerance and restraint leading up to, and after, the announcement of the results. She called on the candidates, in the spirit of the commitment made in the Peace Accord of February 13, to accept the verdict of the polls in good faith, and in case of complaints, to seek redress solely by legal means.

•Continues online at www.businessday.ng

Tuesday 26 February 2019

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Hamzat advocates Oil price falls after Trump decentralisation of urges OPEC to “relax and elections take it easy” JOSHUA BASSEY

eputy governorship candidate of the All Progressives Congress (APC) in Lagos State, Obafemi Hamzat, has advocated the decentralisation of the conduct of elections in Nigeria, saying the current situation whereby everything flows from Abuja is expensive, wasteful and time-consuming. Hamzat spoke with newsmen at the Lagos Collation Centre of the Independent National Electoral Commission (INEC), Yaba, as he made reference to countries like the USA, UK, India and others with efficient electoral processes. He noted that Nigeria as a country “is not serious” and cannot develop with the manner it was being run. Hamzat argued that the decentralisation of elections in Nigeria would bring about efficiency in distribution of materials and collation and announcement of results. The deputy governorship candidate, who bemoaned the long delay often associated with results of elections in Nigeria, said if, for example, the processes are split along the six geopolitical zones with a coordinating INEC office in each of the zones allowed to print its materials, but monitored by INEC at the centre, it would be easier and faster to distribute materials to the polling units. This, he believed, will take care of complaints of disenfranchisement of voters on account of late arrival of materials. The former Lagos State commissioner for works and infrastructure decried the huge cost of centralised elections in the country, describing it as a national waste.

DIPO OLADEHINDE

rent Crude, the benchmark for Nigeria crude oil, fell sharply after United States President Donald Trump warned Organisation of Petroleum Exporting Countries (OPEC) against squeezing supply. “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!” the President tweeted. US West Texas Intermediate crude oil futures fell $1.36, or 2.4 percent, to $55.90 around 8:25 a.m. International benchmark Brent crude futures were down $1.53, or 2.3 percent, at $65.59 a barrel. It was his first tweet directly addressing OPEC since late November, when he warned the group against cutting supply. Saudi Arabia and Russia led the cartel and its allies in cutting output regardless, eventually leading to an oil price rally at the start of 2019. The Tweet followed another set of fresh three-month highs for oil prices following a jump in global risk assets after the President said he would delay new tariffs on China-made goods, which were set to kick-in on March 1, thanks to what he called “substantial progress in trade talks between Washington and Beijing. Crude has risen by approximately 30 per cent so far this year and was near $66 a barrel on Monday, but remains well below the fouryear high of $86 a barrel it hit in October last year. Trump’s tweet will be taken as a warning to Saudi Arabia, one of Washington’s chief allies in the Middle East, not to over-tighten the market at a time when the US is targeting OPEC members Iran and Venezuela with oil sanctions.

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Emmanuel Elebute, founder of Lagoon Hospitals, goes home

he Elebute Family announces the passing of their father and grandfather, Professor Emmanuel Adeyemo Elebute, who died in the early hours of Saturday, February 23, 2019, after a protracted illness. Born on September 15, 1932 in Lagos, Prof Elebute is survived by his wife, Prof Mrs Oyinade Elebute, four children (Adekunle Elebute, Modupe Odunsi, Adebimpe Nkontchou and Folasade Laoye) as well many grandchildren. ProfessorElebute, CON, was educated at CMS Grammar School Lagos (1941-1948) where he was Senior Prefect and went to Trinity College, Dublin, where he graduated with BA, MB, BC.h., BAO in 1956 and later was conferred with MA and MD (by thesis). At Trinity, he won the Cunningham Medal for Anatomy, Acquilla Smyth Prize for Pathology, Bacteriology and Materia Media, and Fitzpatrick Scholarship for best performance throughout all professional examinations. He held

Fellowships in Surgery, and was appointed Professor of Surgery at Lagos University in 1969, Provost of College of Medicine in 1977 - 1980, and Chief Medical Director of LUTH in 1978 - 1980. He served on many learned and professional organisations, having been Secretary of the Association of Surgeons of West Africa (later converted to the West African College of Surgeons) (1967-1971), President of Nigeria Medical Association (1968-1970), Member of Executive Committee of the International Federation of Surgical Colleges (1970-1976), Member of Executive Council of Societe International de Chirugie (1979-1983), Member of the Council of the UK-based Association for the Study of Medical Education, Member of National Universities Commission of Nigeria and of Nigeria Medical Council, Member of Editorial Board of such prominent medical journals as British Journal of Surgery and World Journal of Surgery. He was chairman of the World Health Organization’s Task Force on the Develop-

ment of Appropriate Technology for Health in the field of Laboratory Equipment, and of the World Health Organisation Committee of Heads of Medical Schools in the Africa Region. He was also President of the National Postgraduate Medical College of Nigeria, which College later nominated him a Distinguished Fellow in appreciation of his services to the College. In 1997, he chaired the Health Group of Vision 2010 Committee set up by the Nigerian Economic Summit Group. He was a Member of the Governing Board of the Pan-Atlantic (formerly Pan African) University. In 1985, Professor Elebute and his wife Professor (Mrs.) O. Elebute co-promoted a healthcare company, Hygeia Nigeria Limited (which owns and runs the Lagoon Hospitals/Clinics in the Apapa, Ikeja, and Victoria Island and Ikoyi) and Hygeia HMO Limited, a Health Maintenance Organisation providing healthcare cover for company employees and individuals in all areas of Nigeria as well as the enrollees

of the National Health Insurance Scheme of Nigeria. Professor Elebute’s research activities yielded contributions to medical knowledge, which have produced improvement in the care of critically ill patients in the tropical environment of Nigeria; and he devised a scoring system (Sepsis Score) which can be used for the assessment and follow-up of patients with severe sepsis. He has co-authored books in the field of Surgery, published articles in academic journals, made presentations to scientific conferences and delivered public lectures. In 2011, he assisted his wife to author the book, A New Face of Private Healthcare: The Hygeia Nigeria Story, telling the story of their adventure in private healthcare. Recently, he published a book about The Life of James Pinson Labulo Davies, A Colossus of Victoria Lagos, and a book titled, Worthy in Character and Learning, a collection of lectures and addresses on social issues pertaining to education and health.

L-R: Godwin Obaseki, governor, Edo State; his wife Betsy Obaseki, and Emmanuel Emovon, celebrant, at the thanksgiving mass in celebration of Professor Emovon’s 90th birthday, at St. Paul’s Catholic Church, Benin City

NSC reviews annual registration fee for service providers at ports MainOne, Facebook reveal open-access fibre network in Nigeria AMAKA ANAGOR-EWUZIE

… providers to pay less on registration

s part of its effort to reduce the cost of doing business at ports, the Nigerian Shippers’ Council (NSC) says it has reviewed the earlier published annual registration fee for all service providers operating in the nation’s seaports. With the newly reviewed fee, the Council will not only cut down the fees to be paid by these service providers, but will also reduce the cost of doing business at the ports. A breakdown of the new fees shows that Seaport Terminal Operators, who are supposed to pay N100,000 as registration fee, will now pay N50,000; stevedoring companies and warehouse operators that supposed to pay N20,000 before, will now pay

N5,000, while shipping lines and shipping agencies that were paying N100,000, will now pay N50,000. Also, inland container depot operators, who supposed to pay N50,000, will now pay N25,000; off-dock terminals registration fee was reduced from N20,000 to N10,000; freight forwarders and clearing agents fees were reduced from N10,000 to N5,000; haulage companies fee was cut down from N10,000 to N5,000. Others include, shippers who will be paying N1,000; cargo surveyors to pay N5,000 and shippers associations fee was reduce from N20,000 to N5,000. BusinessDay understands that the registration, which is aimed at regulating the activ-

ities of the service providers, will ensure quality service delivery and eradication of quackery in the maritime industry. It will also enable the regulator to sufficiently protect indigenous operators from the dominance of foreigners. Speaking exclusively with BusinessDay, Hassan Bello, executive secretary of the NSC, who described the registration as the basic and a one-off, said it was of much interest how people reacted to newly introduced registration fee for the service providers at the port. Bello said the reaction was good because NSC must consult stakeholders before taking certain actions, adding that stakeholders had the right to make observations.

ainOne has announced a metro fibre infrastructure project in two states of Nigeria, with support from Facebook. The infrastructure collaboration is part of Facebook’s efforts to connect more people to broadband internet. This partnership will leverage MainOne’s strength as a wholesale telecoms infrastructure service provider with investment from Facebook and support from local regulatory and state authorities to further deepen broadband penetration in Nigeria. As part of this project, MainOne is building and operating approximately 750km terrestrial fibre infrastructure in Edo and Ogun states, two of Nigeria’s

fastest growing states. These open-access transport networks will provide metro fibre connectivity to reach more than 1,000,000 people in Benin City, Abeokuta, Sagamu and 10 other towns by connecting mobile operators’ base stations, Internet Service providers, Points of Presence (POPs), and public locations including schools and hospitals. Speaking on the partnership, Ibrahima Ba, Network Investments Lead for Emerging Markets at Facebook, said: “We are working closely with MainOne and other partners to accelerate broadband deployment. In Nigeria, we are bringing together Facebook’s learnings from scaling our global infrastructure with MainOne’s knowledge of the lo-

cal environment to develop and test new working models for multiple operators to access common infrastructure.” Funke Opeke, MainOne’s CEO, lauded the collaboration and the commitment of Facebook and authorities in Nigeria to improving broadband penetration across the country. Commenting on the partnership, she said, “MainOne has always been committed to broadband innovation, job creation, as well as growing the digital economy of West Africa. We believe that this partnership and the open-access network we have developed will be beneficial to improving the quality of access and accelerating the digital transformation in Ogun and Edo states.”

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EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Why technical vocational education should matter to Nigeria KELECHI EWUZIE

economic growth and development. Orolu opines that implementing TVET schemes require strong financial commitment, stressing that government must take the lead in investing in the schemes to make it attractive for private sector organisations to participate and patronise. “The lack of a comprehensive system for certification of competencies is a key challenge; TVET Centers must be accredited by the Government and issued Certificates benchmarked with existing degrees and awards, to earn the required recognition in the labour market. Education curriculum at secondary and tertiary institutions should be properly aligned to Industry needs; otherwise, it creates a weak linkage between the town and gown”, he said. He added TVET helps individuals to make transitions between education and the world of work, to combine learning and working, to sustain their employability, to make informed choices and

to fulfil their aspirations. TVET contributes to social cohesion by enabling individuals to access labour market, livelihood and lifelong learning opportunities. According to him, “As Nigeria prepares to join the rest of the World for Industry 4.0; it has become apparent that the absence of skilled workforce will be a critical bottleneck”. He further opines that in 2015, Siemens cooperated with Tata in India for the setting up of a training centre. The centre has a yearly intake of 108 trainees. Similarly, as part of the Egypt mega power project, Siemens went into strategic alliance with the Egyptian government resulting into setting up a training centre and rehabilitation of another vocational school. Within a period of 4years, more than 5,000 trainees would be recorded along major trades. “Siemens is able to support Nigeria replicate these successes through cooperation with the Federal Government and/or reputable industrial

conglomerates to produce technically skilled workforce to meet the present and future skill requirements of Industry 4.0 and bring youth unemployment to minimal levels”, he said. The latest report from the Nigerian Bureau of Statistics put unemployment rate at 23.1percent as of Q3 2018, an increase of 23 percent from 18.8percent in Q3 2017. Under-employment rate was 20.1 percent while youth unemployment and/or underemployment stood at 43.3 percent. The high rates of youth unemployment and underemployment has made it imperative for government and private sector stakeholders to adopt far reaching methods and initiatives to create jobs for the young populace. Nigeria has a rare opportunity of a relatively youth population compared with other countries, particularly in Asia. This offers opportunities for industrialisation and rapid economic growth arising from availability of labour.

s forward looking countries develop strategic competitive advantages for its citizens as it concerned the acquisition of knowledge and skills for the world of work, Technical Vocational Education Training of their human capital base is proving to be a vital resource. United Nations Educational, Scientific and Cultural Organization (UNESCO) described Technical Vocational Education Training (TVET) as concerned with the acquisition of knowledge and skills for the world of work. TVET, as part of lifelong learning, can take place at secondary, post-secondary and tertiary levels and includes work-based learning and continuing training and professional development which may lead to qualifications. Experts say the availability of competent and qualified trainers is a critical issue; and there needs to be internship opportunities for trainees to demonstrate knowledge and skills during the theory stage of TVET programmes. A strong collaboration with industries is required in drafting a curriculum that meets their skill requirements so apprentices will have the industry-required skills. Oladayo Orolu, Head, business development, Siemens Limited avers that lessons from other economies that have experienced rapid growth in industrialisation suggest that technical, vocational, and professional skills that require higher cognitive abilities, add- L-R: Adebowale Tade, member, board of trustees; Samuel Olatunji, chairman board of ing that this will need to be trustees, and Bayo Kolade, director Trinity Education Development Foundation, during a News produced to support Nigeria’s Conference on the Kickoff, of the newly approved Trinity University in Lagos.

Meadow Hall foundation tables N4m for 2019 inspiring teacher winners

eadow Hall Foundation (MHF) has to announce plans to reward inspiring teachers at her third edition of Inspirational Educator Awards (INSEA) and Education Convention. Kehinde Nwani, founder, Meadow Hall Foundation, said these awards will go a long way in rewarding the hard work of exceptional teachers and school leaders and also inspiring others to continue to strive for excellence in their teaching profession. She wants parents, students, educators and the general public to nominate

inspirational teachers and school leaders of their choice for these awards. Nwani said the Education Convention provides an opportunity for teachers, school owners, parents, government officials, policy-makers and other stakeholders to gain fresh perspectives on pertinent educational issues from their interactions with teachers and educational experts. The programme scheduled for 4th of May, 2019 with the theme ‘Accelerating National Development through Education is expected to draw about 1,000 stakeholders. The vision of Meadow Hall Foundation is to advance the

educational outcomes of the Nigerian child by enhancing teaching quality, changing mindsets about teaching and advocating for the teaching profession. To this end, the Foundation focuses on training and equipping teachers and also rewarding outstanding and inspirational teachers and school leaders who go out of their way to better the lives of the pupils in their care through the Inspirational Educator Awards (INSEA). The Inspirational Educator Awards (INSEA) is a meritbased award aimed at elevating the teaching profession and motivating teachers and school leaders to continue to

strive for excellence in their profession. The award is open to teachers in Nigeria who teach in public or private schools (primary or secondary). The Inspirational School Leader of the year will receive a cash award of N2, 000,000.00 while the Inspirational Teacher of the year will receive a cash award of N1, 000,000.00. The two runners-up for both categories will also receive the sum of N500, 000.00 each. To nominate an Inspirational Teacher or School Leader for these awards, visit www.inseawards.org. Nominations close on Friday, 15th of March, 2019.

Higher

Human Capital

Trinity University to commence 2018/2019 academic session in April DIPO OLADEHINDE

rinity University, a Lagos based institution says it is ready to commence 2018/2019 academic session and admit pioneer students following its approval on January 9 by the Federal Executive Council. Samuel Olatunji, chairman, Board of Trustee of the university, told BusinessDay in Lagos that the school was already listed on the Joint Admission Matriculation Board (JAMB) website for accessibility by eligible students and would kick-off academic operation with two faculties and 14 courses by April this year. “The vision of the Trinity University is to be a world class institution of higher learning that combines academic excellence with high moral and ethical standards in the pursuit of entrepreneurship focused education,” Olatunji told BusinessDay. Olatunji said that the institution would commence with 14 courses and two faculties and that it would be mentored by the University of Lagos. He said that the two faculties, faculty of science and faculty of arts, management and social sciences, would offer courses in computer science, information technology, industrial chemistry, mass communication and economics. The Chairman, Board of Trustee explained that tuition fee for the university is quite moderate and competitive depending on the course offered while also admitting that the school is open to all students irrespective of religious or tribal differences. Concerning the challenges faced in setting up the university, Olatunji explained that the cost of setting up and running a university is very expensive because the government does not give any form of waiver or subsidy which some Federal university currently enjoys. Olatunji lauded the NUC for maintaining international standards and thoroughness in the accredita-

tion of new institutions and programmes in Nigeria. “The NUC does not compromise or lower standards when it comes to licensing of new universities or accreditation of courses. “The process of getting approval and license for a new university from NUC is very tedious and that is why it took us nine years to obtain our license. “While we wondered why it took that long, we saw files of some others who have been processing theirs for 15 years and even above, while others got theirs in less than nine years.’’ According to him, the school needed a pass mark of 70 percent before they can get approval however Trinity University scored 95 per cent during the NUC accreditation process as announced by the commission, due to qualified manpower and facilities on ground for the take-off of the university. He recommended that while standards should still be maintained, the processes leading to licensing of universities should be made seamless and less cumbersome by the commission. The chairman also lauded the newly introduced policies of the National Universities Commission (NUC) to approve a mentoring institution for every newly approved university. According to him, “Since the NUC during approval specifies the areas a new university is expected to work on, the mentorship will go a long way to assisting new universities. “It symbolises a positive advantage and will help the university to perceive its own vision and bring in new dimensions and opportunities. “You cannot build a university alone, so the government expects you to collaborate in terms of curriculum, financing, facilities or faculties”, Olatunji said. A tour by BusinessDay around the Yaba campus of the university showed that facilities such as electronic library, ICT and science laboratory, entrepreneurship center, hostels, security and health care facilities are already in place.

Tuesday 26 February 2019

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EDUCATION Schools may now be subject to Corporate Taxes in Nigeria

here is now a new legal development in Nigeria’s education sector that further pushes the envelope on the question as to whether schools in Nigeria are subject to corporate taxation. The new development races towards the conclusion that schools of a certain character and/or structure must be subject to corporate taxes like every other company. The otherwise settled view is that schools (and educational institutions generally) are not subject to corporate taxes because of the public character of the services that they provide. The section of the Companies Income Tax Cap C21, LFN 2004 often cited as the legal basis for this settled view is Section 23(1) (c). This section provides that the profit of any company engaged in ecclesiastical, charitable or educational activities of a public character are exempt from tax in so far as such profits are not derived from a trade or business carried on by such company. In 2015, the FIRS sought to bring the American International School into the corporate tax net in the case of American International School (AIS) vs. Federal Inland Revenue Service (FIRS). The crux of FIRS’ argument was that the AIS could not be said to be engaged in educational activities of a “public character” because the services provided by the AIS cannot be said to be available

Cross section of Greensprings Students and the school management at the GREENY-G Mini Mart stand at the Lekki Campus, Awoyaya.

for all Nigerians to use, share or enjoy since, its services are not available free of charge. On the other hand, the AIS argued that its educational activities were of a public character because (a) its educational services benefit the Nigerian public in general and (b) its profits are not available for distribution to its promoters. In coming to a decision, the Tax Appeal Tribunal (TAT) observed that the FIRS did not provide prove that (a) any segment of the Nigerian public was excluded from the educational services provided by the AIS or that (b) any profits or income are distributed to the directors or guarantors of AIS (c) that AIS generates income

from other sources other than the provision of education services. The TAT therefore declared that the educational services provided by AIS were of a public character and that AIS could not be subject to corporate taxes. The TAT also discountenanced the submission by FIRS that the ‘high’ tuition charged by AIS supported the conclusion that the services provided by AIS were not available to the general public. Our Comments We welcome the decisions of the courts to the extent that it advances the law relating to public character of educational, ecclesiastical and charitable organisations. The decision of the FIRS to push

the envelope in some cases is welcome and accords with the interest of the public and with the practice of tax authorities in developed countries. We do not find it gross or sinful, that there may be reasonable grounds upon which any educational or other tax-exempt institution may rightly lose its tax exempt status Our interpretation of the wording of section 23(1) (c), is that there is no presumption of “public character” in favour of educational, ecclesiastical or charitable institutions. Inevitably, our courts must exercise caution in assuming that such presumption exists. In our view, the wording of section 23(1) (c) clearly indicates that it is possible for there

School Enterprise Challenge: Greensprings students Lekki campus bag $2,000 KELECHI EWUZIE

or their efforts at the School Enterprise Challenge 2018 edition, students of Greensprings School Lekki campus, Lagos have received a cash prize of $2,000. The School Enterprise Challenge is an initiative of “Teach A Man To Fish” a UK charity organisation. Over 1000 schools across the globe participated in this program. The aim of which is to help students learn valuable 21st-century business skills they can use to support their schools and local community. Greensprings School Lagos, (Lekki campus) participated in this enterprise challenge, and came up with a business called “GREENY-G Mini Mart.” The aim of the business is to provide toiletries, stationery and healthy snack foods

to members of the school community. With its establishment, the students have learnt skills such as planning, finance, sustainability, teamwork, research, sales and marketing. In addition to this, they have also learnt how to keep financial books accurately. Feyisara Ojugo, principal, Greensprings School, Lekki campus says the “GREENYG Mini Mart has provided the students with the opportunity of meeting their immediate community’s stationery and grocery needs, adding that it has also ignited the spirit of enterprise among the students. “We are hopeful that they will come up with other ventures to continue to grow their entrepreneurial skills,” she added. At the end of the challenge, the students of Greensprings School Lekki campus emerged the Africa Region – Best Bronze Win-

ner, and a sum of $2,000 was awarded to them. Helen Brocklesby, d i re c t o r o f Ed u cat i o n Greensprings School said commended the efforts of the students adding that they have worked very hard to achieve success in this business, and we believe it will be profitable. I am happy that our school got recognised and won an award. This is exciting for us as an institution,” she added. Speaking on the importance of the School Enterprise Challenge, Nik Kafka, the CEO of Teach A Man To Fish, said, “We are on a mission to tackle youth unemployment and the ‘learning crisis.’ The impact shown by these winners reminds us why it is so important to give young people the skills and experience to become the job creators of tomorrow.” Students who took part in the School Enterprise

Challenge were actively involved at every stage of the school business activity. Over the course of the enterprise challenge, students wrote a business plan, conducted market research and prepared a business budget - and all these were put together, while also producing some of the items for sale. Sustainability and social responsibility are important criteria required to succeed in the School Enterprise Challenge, and the students of Greensprings School Lekki campus successfully demonstrated this yardstick. Th e w i n n e r s o f t h e School Enterprise Challenge 2018 edition were announced this February, and the registration for the 2019 edition is in progress. It will be recalled that a few weeks ago, four students from the school won a scholarship that was worth $60,000 in the Conrad Challenge.

to be companies that carry out educational activities of a private character. Educational institutions may decide to be ‘for profit’ and structure their affairs accordingly, if they so choose. Accordingly, our view is that “public character” must be shown & proved as a matter of mixed law and fact, in every case and on case by case basis. We think that the onus of proof must necessarily originate from the tax payer. We think that the notions of public character and public benefit are coincident and co-existing. Accordingly, our view is that an inquiry into the public character of an educational (or other charitable) institution is one into whether or not, the institution provides public benefit. Our courts must therefore provide further interpretive precedent and guidance for determining what is “benefit” and/or “public”, within the context of section 23. Generally, we think that an attempt to statutory define “public character” or “public benefit” will unduly fossilize the law and thereby, rob the law of its pristine functionality as an instrument of social change. We take the view that what amounts to public character and/or public benefit should be left to judicial precedent which should appropriately respond to social and economic change. To our mind, the notion

of “public character” or “public benefit” within the context of tax liability is “continuously floating” and ought to remain so. Implications for School Owners & Investors It would be erroneous to assume that the AIS case laid down a general principle of law that all educational institutions that are registered as companies limited by guarantee are exempt from corporate tax. In the same manner, it would be erroneous to also assume, as with the BCIS case, that educational institutions registered as limited liability companies will necessarily be subject to corporate taxation. What is clear is that FIRS will continue to push the envelope. As earlier mentioned, FIRS would be well within its statutory mandate to so act. Accordingly, educational institutions must now be more deliberate about the operational and structural considerations of their organisations. It would be very appropriate for schools to seek professional counsel, to consider reviewing their current legal, operational and extraction structures with a view to structuring appropriately, for tax–exemption, to the extent that tax-exemption aligns with the overall strategy of the promoters. Olubunmi Abayomi-Olukunle Lead Transaction Counsel Private Funds, Finance & Investments Balogun Harold

Edo Poly Usen eyes Choudhary’s grant to advance natural product research

arely two months after management of the Edo State Polytechnic, Usen, unveiled the Muhammad Iqbal Choudhary Centre for Natural Product Research (ICCNPR) the center has concluded plans to kickstart operations with a grant to advance natural product research in Nigeria. Abiodun Falodun Rector, Edo State Polytechnic stated that once the center wins the grant, the center will be open for multi-disciplinary and in-depth research in natural products to provide solutions to peculiar problems facing the country. According to him, “The Edo State Polytechnic has proven to be a leading light in higher education in the state in just a matter of months. We have inaugurated two centers that will lead advanced research in areas that are not just germane for development, but that will groom capable hands in conducting advanced, applied research. “We have also secured very crucial partnership with local and international col-

laborators to drive the mandate of making this school into a world-class institution. “The National Space Research and Development Agency (NASRDA), for instance, is a strong partner for the Center for Geospatial Information Science (CGIS) and Muhammad Iqbal Choudhary is working with us on Natural Product research.” “So, what we have done for the ICCNPR is to basically apply for grants to ensure that there is a sustainable source of funding for the research we will do at the Center. “This will ensure that this research does not suffer hiccup and also set clear research objectives and timelines. We already have the laboratory with which to work,” he added. The ICCNPR was launched in December 2018, as a pioneer center for Natural Product Research and serves to groom a new crop of practical-oriented scientists and technologists to develop new drugs and other solutions for the benefit of society.

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Tuesday 26 February 2019

EDUCATION ‘Nigeria’s education system needs to compete with countries like Finland, Singapore’ Peter Okebukola, a professor and chairman of Council, Crawford University, Faith City, Igbesa in this interview with KELECHI EWUZIE gives insight into topical education issues and steps to improve the sector. Excerpt:

indly assess the performance of the education sector in the country; what do you see as the way forward? Indeed, quality is worsening on all fronts. Poor performance of the education sector on nearly all input, process, product and outcome indicators. High illiteracy rates, large number of children who are out of school, inadequacies in number and quality of teachers and poor quality of products from the school system are some of the numerous impediments to education contributing much to the growth of the economy. The interesting point to note is that all national reports on education over the last 20 or more years have documented the scenario I just described, yet our pace of improvement has been snail slow. To ensure that we hike performance of education, greater attention should turn to improving the delivery of education at all levels. Mind you, it is not all about throwing in more money into the system. It is about all stakeholdersparents, students, teachers, school managers, you the media, religious leaders, examination bodies and the general public contributing in some form to improving efficiency, effectiveness, relevance and quality at all

levels. What steps should government take to better the education sector? I believe we should not be talking about steps that government alone should take. We all have to be part of improving education and hence its contribution to growth. Most Newspapers devote six pages to sports every day and a few paragraphs to one or two pages to education a week! What about parents? How many take the time to provide opportunity to learn at home for their children. The children are allowed to roam with friends after school, watching European league matches and chatting away on their instant messaging devices. The poor send their children to hawk wares after school. Moving on to teachers, many do not inspire students and are willing to connive with invigilators to cheat during public examinations. What about school managers who receive funds from government? Tremendous leakage inhibits the money from impacting on the target areas needing improvement. Since you want me to talk about government specifically, I will say that the necessary policy and practice environment should be provided for the delivery of quality education at all levels. I am not talking about federal government alone. State and local governments have their

Peter Okebukola

roles to play. We must invest more in education. I will advise that you do not compare Nigeria with the countries you just listed. On many education indicators, we are better than these countries. I will be comfortable with Finland (Europe), Singapore (Asia) and the US (North America). The growth potential of education in Nigeria is stifled by inability to faithfully implement national policy provisions. This is the long and short of the story. The inside elements of the story include poor quality of preparation of teachers; stu-

dents poor attitude to work; depressed reading culture; poor teaching, learning and research environment and a host of socio-cultural factors such as religion, early marriage, low value placed on the power of education of boys (especially in the some eastern states) and of girls (especially in some northern states). How would the right investment transform the curricular in the education sector? It will lead to a re-awakening of the need to revise the curricula at all levels to strengthen those areas

with low rating such as employment potential. This provides more justification for entrepreneurial studies at all levels. What really is the Federal Government policy on education? Looking at the policy in question, do you think it is working? Our National Policy on Education is one of the finest documents on education in Africa. It virtually covers all angles in the delivery of education. It is not working as envisioned in some areas because many are satisfied with flouting its provisions since the penalty for transgression is weak. Looking at the issue critically, sir, how best do you think the Nigerian universities need to be managed, as an organisation? Universities need to be in the hands of managers who can run the institution efficiently and prudentially manage resources. Such managers include Council, Vice-Chancellor and his or her Senate. This means we should not be parochial and nepotistic in appointing the managers or subject such appointments to the vagaries of politics and religious affiliation. We also need to give the managers enough resources especially funds to run the universities and ruthlessly sanction those who are careless with such funds. Is Federal Government’s allocation for education

sufficient to fund development in the universities? The level of funding is still far short of what is needed to restore the university system to its old glory. My estimate is that the universities need more than triple their current funding levels. It is my view that government alone cannot provide all the funds. The universities should be resourceful enough to explore others ways of securing additional funds to support government subvention. Sir, with the preference of employers to hire graduates with foreign degrees to the detriment of graduates from our local universities, what does this portend for the development of the education and productive level in this country? It is a crying shame that the quality of many (not all!) of the products of our universities is rather poor and employers will rightfully extract the best from the pool and in some cases elect to employ those with foreign degrees from North America and Europe. Surely, it is a development that will hinder national productivity. The good news is that steps are being taken to address the problem through compulsory entrepreneurial studies programme in our universities and the tightening of admission process to select only the best from the secondary school system.

Resolving the growing challenges of education in Nigeria

ell, our educational sector is in crisis; all levels of our education, from primary, secondary and higher institutions need adequate care. If you don’t take care of primary school that means the secondary school would not be alright and if you cannot take care of secondary students that means tertiary education would be problematic; we need to take good care our these students from the basis. They have been problems of policy inconsistency and lack of continuity of those

that make the policies. In Nigeria, plan and policy are not our problem; we have series of sound and effective plans and policies, but implementation has been our problem. No Nigeria Minister of Education has used considerable years to serve the country, inconsistency and lack of continuity has been the bane of our educational sector. Although, the educational policies and some bold steps taken by this administration are commendable, at least the intervention of the Ministry in education, especially secondary education

and some higher institutions is laudable. The intervention in the area of examination malpractices in the external examinations like WAEC AND NECO and decision to sanction erring schools are commendable. If we get it right from secondary schools, higher institutions will have little or no problem in terms of teaching and learning scheme. Also, if Federal Ministry could take bold steps to disaccredit some crucial courses in the College of Medicine, University of Abuja, though it was unheard of that a Federal

University close to the seat of power could not meet up with prerequisite standard expected of a University for that matter, it is highly laudable. The other failure they Federal of Education and Federal Government also recorded was their refusal to implement the agreement reached with the Academic Staff Union of the Universities (ASUU); it is quite unheard of that Federal Government and Ministry of Agriculture would reached agreement with the ASUU and reneged. Federal ministry of Edu-

cation and National Universities Commission (NUC) should review the conditions adopted in granting licence to the private institutions since many of them have failed in the obligations to the students and the society at large. Credibility and competence must be upheld in the exercise. Lack of basic amenities in Nigeria Universities: 80 per cent of Nigeria Universities lack basic needs and that impedes learning and draws our students backward. Federal Government should prevent through adequate allocation to the Federal

Universities and extension of subvention to State and even Private Universities since both State and Private produce 70 per cent of the graduates annually. Federal Government must fight decadence in tertiary education through provision of considerable fund to support the State and Privately-owned Universities to boost learning and research in Ivory towers across the country. Contribution of Ikechukwu Muo, an educationist from Olabisi Onabanjo University, Ago-Iwoye, Ogun State

Tuesday 26 February 2019

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Omo-Agege, Ekpenyong, Akinyelure, Tinubu, Kalu, Moro, Uba, others win Senate seats Our Reporters

he results of the Senatorial election have continued to trickle in. Mohammed Sani Musa of the All Progressives Congress (APC) has been declared winner of the Niger East senatorial district. Professor Ali Audu Jega, the returning officer, said Musa scored 229,415 votes to defeat his closest opponent, Ishaku Ibrahim of the PDP, who polled 116,143 votes. Ifeanyi Uba of the Young Progressive Party (YPP) has been declared winner in the Anambra South Senatorial Election held last Saturday. According to results declared by the returning officer, Prof. M.N. Umenweke, Ifeanyi Uba polled 87,081 to defeat his closest rival Chris Ubah of PDP who scored 52,468 and Andy Uba of All Progressives Congress (APC) polled 13,245. Ayo Akinyelure of the People’s Democratic Party (PDP) has won the Ondo Central Senatorial district election. The Returning Officer, Prof. A.B Bello declared that Akinyelure polled 67,994 votes to defeat Tayo Alasoadura who scored 58,092 votes. In Oyo State, the People’s Democratic Party (PDP) candidate for Oyo South Senatorial District, Muhammed Kola Balogun has defeated Governor Abiola Ajimobi to clinch the senatorial seat. Balogun, a former Commissioner for Commerce and Cooperatives in the state, floored Ajimobi with a total of 105,720 votes as against 92,218 votes.

Ifeanyi Uba

Ayo Akinyelure

Muhammed Kola Balogun

Oluremi Tinubu

Ovie Omo-Agege

Abba Moro

Chris Ekpenyong

Ibikunle Amosun

polled 131, 725 votes, to defeat her closest rival, Adesunbo Onitiri of People’s Democratic Party (PDP), who got 89, 107 votes. Ovie Omo-Agege, APC, Delta Central Senatorial District reelected. He polled 111,100 to defeat Evelyn Okoro of PDP who polled 99,422 votes. Abba Moro, ex-minister of Interior wins Senate in Benue South senatorial district. Moro, a PDP candidate polled 88,192 to defeat Stephen Lawani of APC who polled APC 47,972. Chris Ekpenyong, a senatorial candidate of the PDP for Akwa Ibom North-West District, defeated Godswill Akpabio, a former Senate minority leader, of the APC. While Ekpenyong polled 136,373, Akpa-

bio got 67487. Governor Ibikunle Amosun who contested for Ogun Central on the APC platform defeated his closest rival, Tunji Oseni Gomez of African Democratic Congress (ADC). Amosun polled 88,110 votes against Gomez’s 37,101 votes. In Kogi, Senator Dino Melaye of the PDP was declared winner of the Kogi West Senatorial election. The Returning Officer, Prof. Emmanuel Bala announced in Lokoja that Melaye polled 85, 395 votes to defeat Sen. Smart Adeyemi of the APC who scored 66, 901 votes. In Delta North Senatorial district, PDP’s Peter Nwaobosi polled 186,423 to beat Doris Uboh of APC who polled 30,360.

Dino Melaye

Peter Nwaobosi

Oluremi Tinubu, wife of the national leader of the All Progressives Congress (APC), Bola Tinubu has won her third term seat in the upper chamber of the National

Assembly (Senate). The Independent National Electoral Commission (INEC) on Monday declared Tinubu the winner of the Lagos Central Senatorial District. She

Nigerians grow impatient, want INEC to declare all results without further delay OWEDE AGBAJILEKE, Abuja

s final results of the Presidential, Senatorial and House of Representatives elections trickle in, attention is being shifted to the International Conference Centre, Abuja, where the Independent National Electoral Commission (INEC) is officially declaring the winners of the elections. As expected, more interest is on the presidential result as many Nigerians wait with bated breath to hear the final announcement. Like a man whose pregnant wife is in the labour room about to put to bed, the major contenders must now wait for the Chief Returning Officer for the 2019 Presidential election and INEC Chairman, Mahmood Yakubu, to declare the winner of

the election. Although Yakubu had earlier announced that the winner would be declared latest Wednesday, it remains to be seen if this is feasible considering the Commission’s postponement of elections in some parts of Abia, Bayelsa, Benue, Plateau, Zamfara Sokoto and Kuje Area Council of the Federal Capital Territory, Abuja due to late arrival of materials and reconfiguration of the Smart Card Readers. There are also concerns over delays in the announcement of presidential election results in most South East states, 48 hours after the exercise ended. For instance, United States lawmaker and ranking member of the House Sub-committee on Africa, Rep. Chris Smith (R-NJ), expressed fears that INEC officials are “receiving enormous pressure to alter polls

results” in Anambra, Enugu, Ebonyi, Imo and Abia States. “I am very concerned by credible reports that the vote is being tampered with. To avoid any manipulation of the tally, it is critical that the Independent National Electoral Commission (INEC) announce without delay actual results — which are certified by party agents and observers — at each polling unit as the vote is tabulated,” he said in a statement issued on Sunday. While saying that all eyes are on Nigeria, he called on the United States Secretary of State, Mike Pompeo to “hold accountable anyone who seeks to cheat the Nigerian people of their vote or foments violence”. Like previous elections in Nigeria, one of the talking points of Saturday’s exercise was political gladiators losing their Polling Units

to their opponents. In the buildup to the national elections, major political actors had launched what they called ‘Operation-deliver-yourpolling-unit’. A leaked tape also showed APC National Leader and former Lagos State Governor, Bola Tinubu, promising handsome financial rewards to party leaders that deliver their Polling Units for the governing APC, even as PDP Presidential candidate, Atiku Abubakar, held similar meetings assuring of incentives to leaders that deliver their Units for the main opposition Peoples Democratic Party (PDP). Some key political actors that lost their Polling Units include: PDP Presidential Candidate, Atiku Abubakar; Vice President Yemi Osinbajo; former President Olusegun Obasanjo; Lagos PDP governorship candidate, Babajide Sanwo-

Olu, and PDP Spokesperson, Buba Galadima. Although President Buhari defeated Atiku in his Polling Unit in Katsina, the latter made a rebound by thrashing the former at the Presidential Villa, Abuja. While some political commentators beam their searchlight on Polling Units of bigwigs, some pundits, however, attribute their defeat to the fact that they lacked electoral value. But does their defeat really mean they have no electoral value or like prophets, they are not honoured in their homes? Speaking on the implication of politicians losing their polling units, wards or local governments, Jide Ojo, a development consultant and public affairs analyst, submitted that losing one’s Unit does not necessarily translate into victory in the overall result.

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Tuesday 26 February 2019

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Successful House of Reps candidates

akubu Dogara polled 73,609 votes to defeat Dalhatu Kantana of the All Progressives Congress (APC), who scored 50,078 votes. APC Femi Gbajabiamila won Surulere federal constituencies I to finish 20 years at House of Reps. APC Olatunji Soyinka of the People’s Democratic Party (PDP) Surulere federal constituencies II Abdulmumin Jibrin won Bebeji/Kiru constituency under the APC, Kano state. Shina Abiola Peller, CEO Quilox Aquila Group won Iseyin, Kajola, Iwajowa and Itesiwaju federal constituency Oyo state. Akin Alabi won Ona-Ara/Egbeda, federal constituency of Oyo State. PDP’s Ndidi Elumelu wins Aniocha/Oshimili federal constituency, Delta state. Elumelu polled 84,615 votes to defeat his opponent, Paul Adingwupu of the All Progressives Congress, (APC) who scored 11,086 votes. Amobi Akintola, the AP C c a n d i d a t e f o r Iw o / Ay e d i re Olaoluwa federal constituency, O yo State. Akintola, polle d 29,229 votes as against the PDP candidate, Mudasir Lukman, who came second with a total vote of 21,608. APC’s Fakeye emerged winner of Ila/Ifedayo/Boluwaduro

Yakubu Dogara

Femi Gbajabiamila

Ndidi Elumelu

Shina Abiola Peller

Amobi Akintola

Enitan Badru

Akiolu Kayode

Vincent Ofumelu

federal constituency, Osun state. Fakeye returned as winner having scored highest votes of 20,371 to defeat his opponent, Clement Akanni, who polled 17,247 votes. Enitan Badru of the All Pro-

gressives Congress (APC) polled 15,245 votes to beat his closest rival, Violet Williams of the Peoples Democratic Party (PDP), who scored 3,258 votes, Lagos Island Federal Constituencies 1.

Akiolu Kayode of APC won Lagos Island Federal Constituencies with a total of 18,758 votes cast, 973 votes rejected and 17,785 votes valid. Vincent Ofumelu of the People

Democratic Party (PDP) defeated the candidates of the All Progressive Grand Alliance (APGA) and All Progressives Congress (APC) to win Oyi/Ayamelum Federal Constituency In Anambra state.

PDP, PCP, others reject results in states won by Buhari over violence, infractions, cancelled votes ...Buhari won six out of seven, Atiku won FCT James Kwen, Abuja

s the Independent National Electoral Commission, (INEC) continues with the national collation of the last Saturday’s Presidential election results from the states, the main opposition People’s Democratic Party (PDP), Peoples Coalition Party (PCP), the All Progressives Grand Alliance (APGA), Young Progressives Party (YPP) and Peoples Party of Nigeria (PPN) have rejected the results from states won by Buhari, the Presidential Candidate of the ruling All Progressives Congress (APC). According to the opposition parties, results in states such as Kogi, Kwara, Nasarawa were announced in favour of Buhari despite violence, infractions and

large number of cancelled and rejected votes. Osita Chidoka, PDP National Collation Centre Agent particularly said it was wrong for the returning officer for Kogi State Presidential election, Michael Adikwu, vice chancellor of the University of Abuja to have announced results in Dekinna despite earlier agreement. Chidoka noted that apart from violence claiming lives which marred the elections, the Smart Card Reader was not used for accreditation in many polling units and results there were to be cancelled according to INEC guidelines and regulations for the conduct of the 2019 general election. Adikwu, while presenting the results in which Buhari scored 285, 894 votes to defeat his closet

rival Atiku Abubakar of the PDP with 218, 207, said election was marred in 69 polling units across the state while 32, 480 votes were rejected. Godwin Chinma, national collation agent for PCP in his submission decried the large difference between the total number of accredited voters and total number of vote cast in some states particularly, Kwara, Kogi, Nasarawa and the Federal Capital Territory, Abuja. Chinma stated that differences between total number accredited and voted in Kwara and Kogi amounted to 17, 000 each, 32, 942 in Nasarawa and 16, 366 in the FCT. Ben Oyediji, Alaye Eremie and Eyiowuawi, APGA, YPP and PPN, respectively, all national collation centre agents in their separate

reactions rejected the cancellation of 157, 591 in Nasarawa State on the account of over voting and called on Mahmood Yakubu, INEC Chairman to review the situation which it is already in their individual reports to the umpire. Results from Nasarawa State in which Buhari won with 289, 903 and was closely followed by Atiku Abubakar, Presidential Candidate of the main opposition PDP with 283,847, 157, 591 votes were cancelled. Azubuike Nwankwo, Academic Provost of the Nigerian Defence Academy and returning Officer for the Presidential election in Nasarawa while announcing results at the National Collation Centre, Abuja said the votes were cancelled from 86 polling units across the state due to over voting and violent disruption of polls.

Yakubu in his response assured party agents and Nigerians that INEC will consider observations and reports from the various parties as well as poll officials before the determination of the final results. Meanwhile, Buhari has won six out of the seven states whose results have been submitted at the National Collation Centre while Atiku won only the FCT. Based on the results Buhari defeated Atiku in Ekiti with 219, 231 against 154, 032, Osun, 347, 634 against 337, 3377, Kwara, 308,984 against 138,184, Nasarawa, 289, 903 against 283, 847, Kogi 285, 894 against 218, 207 and Gombe, 402, 961 against 138484 while Atiku defeated Buhari in FCT, Abuja, 259, 997 against 152, 224.

Tuesday 26 February 2019

NATIONAL DISCOURSE

JOSEPH MAURICE OGU

ne of the key values sportsmen and women are taught is called the sporting spirit. It comprises the ability to let go when they suffer a defeat in a sporting event among others. Sportsmen and women often congratulate the opponent while they go back to the drawing board to evaluate

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The will to let go what went wrong in view of performing better next time. That is what brought about the popular saying ‘the spirit of sportsmanship.’ Humility, selflessness and love are key to human leadership. It usually takes a great leader to say “I’ll let go.” He will let go because the interest and well-being of his country supersedes his personal ambitions. Leaders of nations, especially in Africa, have over the decades frequently thrown their countries into strife and war in the pursuit of their personal and narrow-minded ambitions. The failure of the leadership of Cote d’Ivoire to let go caused the death of over 3,000 people after the 2010 presidential election between Laurent Gbagbo and Alassane Ouattara. Kenya boiled in 2007 in a

post election crisis. The disputed election between Uhuru Kenyatta and Raila Odinga claimed 130 lives because none of the leaders was ready to let go. Just recently in The Gambia, at least 24 people lost their lives in a disputed election because neither Yahya Jammeh nor Adama Barrow was ready to let go after the heated crisis that ensued after the 2016 general elections. In as much as Africa has witnessed avoidable crises arising from disputed elections, leading to the death of citizens, the continent has, however, prided herself with leaders who let go even in the midst of obvious cheating or with the opportunity to stay put in power. To the total relief of Nigerians and international community, Gen. Olusegun Obansanjo conducted elections in 1979 and handed over to the first

executive president in Nigeria, Shehu Shagari. Obasanjo imbibed the virtues of humility and allowed the spirit of ‘let it go’ to take precedence. Having been released from prison and putting end to apartheid regime, South Africans overwhelmingly voted for Nelson Mandela as the first post-apartheid president, in 1994. The whole world was surprised when Mandela decided to let go by declining to contest for a second term in office, despite his people’s wish that he do so. Despite having served for only one year and faced with the opportunity to stay in power longer, Gen. Abdulsalami Abubakar conducted general elections in 1999 and handed over to a democratically elected civilian. Nigeria still enjoys the benefits of the democracy he ushered in 20 years ago.

“My ambition is not worth the blood of any Nigerian.” With those words, in 2015, Goodluck Jonathan took the world by surprise when he conceded defeated even before the official announcement of the election result. That was how Jonathan let go his pride. His famous statement still resonates in the minds of many Nigerians. Here we are again in 2019 to test our democracy. But really, it is not our democracy that is being tested, rather, it is the quality and integrity of our leaders that is being put to test. As we await the results of the Presidential and National Assembly elections, our leaders should embrace the spirit of sportsmanship and be ready to leg go. Re-emphasising Jonathan’s axiom, no one’s ambition should worth the blood of any Nigerian. It is time to say, ‘I let it go.’

NEWS

US researchers develop device to detect cancer faster with drop of blood

esearchers at the University of Kansas invented a sensitive device that may detect cancer and other diseases quickly from a droplet of blood. The study published on Monday in the journal Nature Biomedical Engineering reported the “lab-on-a-chip’’ device that could detect the tumour cells’ exosomes or tiny parcels of their biological information to promote tumour growth. Exosomes were previously believed to be “trash bags’’ used by cells to dump unwanted cellular contents, but scientists came to realise that tumours could send out exosomes packaging molecules that mirror biological features of the parental

cells, according to the study. The researchers led by Zeng Yong, associate professor of chemistry at the University of Kansas, used 3D nano-engineering method to make the device that can push exosomes into contact with the chip’s sensing surface. When exosomes are moving closer to the sensor surface, they tend to be separated by a small gap of liquid, but the device managed to enable the contact much more efficiently than before due to its herringbone pattern, according to Zeng. Zeng’s team developed a nano-porous herringbone structure that can drain the liquid in that gap and bring the particles in hard contact with the surface,

a process like draining water in a kitchen sink. The researchers tested the chip’s design using clinical samples from ovarian cancer patients, and they found that the chip could detect the presence of cancer in a minuscule amount of plasma. Also, the chips could be cheap and easy to make, allowing for wider and less-costly testing for a host of other diseases. “Almost all mammalian cells release exosomes, so the application is not just limited to ovarian cancer or any one type of cancer. “We’re working with people to look at neurodegenerative diseases, breast and colorectal cancers,’’ said Zeng.

Scientists develop smart needle for critical body regions

merican Researchers have developed a smart needle that can safely deliver medicine to difficult-to-target regions in the body. The study published on Monday in the journal Nature Biomedical Engineering showed that the intelligent injector could detect changes in resistance in body issues with different densities. It could also enable needle movement into a target tissue and with minimal overshoot into an undesired location. In a pre-clinical test, investigators from Brigham and Women’s Hospital in Boston examined its delivery accuracy in the suprachoroidal space, which is located between the sclera and choroid in the back of the eye.

The space is an important location for medication delivery and is difficult to target because the needle must stop after transitioning through the sclera, which is less than one millimeter thick, according to the study. Using extracted tissue and an animal model, the researchers found that the resistance-sensing device precisely delivered medication to the desired location without any additional training. They also showed the injector could deliver stem cells to the back of the eye. “The next step toward human use is to demonstrate the utility and safety of the technology in relevant pre-clinical disease models,’’ said the paper’s co-author Miguel GonzalezAndrades, an ophthalmologist at the Brigham.

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Tuesday 26 February 2019

Stanbic IBTC’s CFO joins Board as Executive Director OLUWASEGUN OLAKOYENIKAN

B L-R: Adesanya Abby, account executive/campaign manager, West Africa, Goal.Com; Olamide Adeyemo, chief strategy officer, Pace Sports and Entertainment Marketing; Thelma Edinbus, senior sales executive, West Africa, Goal.Com, and Olufemi Olatunji, media officer, Higher Institutions Football League (HiFL), at the Pace Sports and Entertainment Marketing and Goal.com MoU signing for the Higher Institutions Football League (HiFL) 2019 season in Lagos, yesterday.

BP expects oil demand to hit 130mbd on emerging markets’ growth STEPHEN ONYEKWELU

ritish Petroleum plc (BP) says rising demand for energy in developing countries across the world will push demand for oil to around 130 million barrels per (mbpd) by 2040. In its Energy Outlook 2019, which assessed the future of fossil fuel, the London headquartered multinational oil company stated that the vast majority of energy used in buildings was provided by electricity, reflecting greater use of lighting and electrical appliances and increasing demand for space cooling in much of the developing world as living standards increase in Africa, Asia and the Middle East. “Oil will continue to play a significant role in the global energy system in 2040, with the level of oil demand in 2040 ranging from around 80mb/d to 130mb/d,” the report stated. But renewable energy at 7.10 percent growth rate per year is the fastest growing

source of energy, contributing half of the growth in global energy, with its share in primary energy increasing from 4 percent today to around 15 percent by 2040. Natural gas at 1.7 percent growth rate per year is growing much faster than either oil or coal, overtaking coal to be the second largest source of global energy and converging on oil by the end of the Outlook. Oil is expected to grow by 0.3 percent per year, during the first half of the Outlook, although much slower than in the past, before plateauing in the 2030s. Coal consumption will continue to slow by -0.1 percent per year and is broadly flat over the Outlook, with its importance in the global energy system declining to its lowest level since before the industrial revolution. “One of the biggest challenges of our time is a dual one: the need to meet rising energy demand while at the same time reducing carbon emissions” Bob Dudley, BP’s group chief executive, said.

Police dismiss rumour of attack on Igbos in Lagos JOSHUA BASSEY

agos Police Command on Monday dismissed the rumour that some persons suspected to be political thugs attacked Igbo traders in Oshodi area of Lagos. There was an unconfirmed report that the Igbos were being attacked at Oshodi for voting Atiku Abubakar, candidate of the People’s Democratic Party (PDP) in last Saturday’s Presidential and National Assembly elections, and not President Muhammadu Buhari of the ruling All Progressives Congress (APC). According to a statement signed by the State Police Command’s spokesperson, CSP Chike Oti, the police had intensified patrols and surveillance to allay the fears of members of the public. “Attention of the Lagos State Police Command has been drawn to the news on the internet to the effect that a group of boys, popularly called the ‘Area boys,’ are attacking Igbo traders at Oshodi, preventing them from opening their shops.

“The command wishes to debunk the rumour in its entirety as nothing could be further from the truth. “Although the command received distress calls from concerned Nigerians whose apprehensions were understandably heightened by disturbing rumours emanating from some social media platforms. “The command swiftly and massively deployed its personnel drawn from various units to Oshodi and environs to assuage the feelings of residents,’’ Oti said. He further assured Lagos residents of its readiness to decisively deal with any person or group of persons who attempt to breach the public peace. He said the Commissioner of Police in the state had commended residents of Lagos for conducting themselves in a peaceful and orderly manner during last Saturday Presidential and National Assembly Elections. “The Police with support of other sister security agencies worked round the clock to ensure that the process was generally peaceful.

oard of Directors of Stanbic IBTC Holdings Plc has appointed the company’s Chief Financial Officer (CFO), Adekunle Adedeji, as an Executive Director. Adedeji, whose appointment took effect from Friday, February 22, took over from Victor Yeboah-Manu as the company’s CFO in April 2018. This was after Yeboah-Manu resigned to assume a similar role at Stanbic Bank Ghana. In a notice filed at the Nigerian Stock Exchange (NSE) Monday, the Board assured that with the new appointment, the new Director would continue in his role as the Group’s CFO. “The Board is pleased to welcome Adedeji as an executive director on the Board, and looks forward to benefiting immensely from his wealth of knowledge and ex-

perience,” the company said. Adedeji has over 24 year’s post-graduation experience with over twenty years in the banking sector. He holds a Bachelor’s Degree in Accounting, an MBA in Finance and has attended several executive development programmes. He previously served as CFO for Stanbic Ghana from May 2013 to April 2018; and prior to that, he had served as Financial Controller for Stanbic IBTC Bank plc, the company’s largest subsidiary. Before joining Stanbic IBTC, Adedeji had also previously served as Financial Controller and Regional Financial Controller for Ecobank Liberia and Nigeria, respectively. Prior to entering the banking industry, Adedeji worked with Ernst & Young for three years with his experience covering audit, taxation and other consultancy services.

Nigeria’s Humphrey Nwugo heads Afreximbank SA regional office HOPE MOSES-ASHIKE

he African ExportImport Bank (Afreximbank) has appointed Humphrey Nwugo as regional chief operating officer for its Harare-based Southern Africa regional office. Nwugo had been serving in an acting capacity since February 2018, following the departure of the previous regional chief operating officer. Prior to that, he was senior manager, Syndications, at the bank’s Cairo headquarters from 2011. He joined the bank in January 2010 as manager, Banking Operations. Nwugo’s previous experience includes stints at Intercontinental Bank plc Lagos, as deputy manager/head, Financial Advisory, Corporate Finance Department, from 2007 to 2009, and at Zenith Bank plc Lagos, as senior assis-

tant manager, Real Estate Finance, Agriculture and Export Finance, Mortgage and Consumer Credit, from 2003 to 2007. Nwugo also worked as assistant banking officer, Corporate Finance, at Citizens International Bank Limited, Lagos, from 2000 to 2003. The new regional chief operating officer received his MBA from the University of Leicester in the United Kingdom and a Bachelor of Science in accounting from the University of Calabar, Nigeria. He is a member of the Chartered Management Institute, United Kingdom, and the Institute of Chartered Accountants of Nigeria. He is also an Associate Chartered Accountant. In his new position, he is responsible for driving Afreximbank’s business development activities in trade projects and export development finance at the regional level in Southern Africa.

Cement industry bruised by sluggish growth, weak infrastructure spending – Afrinvest Edo SEEFOR flags off road projects in Owan West ISRAEL ODUBOLA

report released by Afrinvest Limited, an independent investment banking firm, titled “In Search of Growth Triggers,” disclosed that slow growth of the economy, multiple naira devaluation and weak private and public sector spending on infrastructure, are the major challenges bedevilling the Nigerian cement industry. The report unveiled that the cement sector was badly bruised by the tepid posture of the macro-economy, basically because the sector closely tracks the performance of the

economy as well as government reforms, policies and spending on infrastructure. The cement sector was severely affected by this economic havoc. The sector grew (compound annual growth rate) 13.7 percent between 2000 and 2014. But growth averaged -1.0 percent in the last three years compared with 16.9 percent in the previous decade. The report pointed out that since the sharp drop in economic growth to 2.6 percent in 2015 from 6.2 percent a year earlier, the sector faced numerous challenges, and chief among them was weak demand for cement. Consequently, cement

consumption per capita plunged 20.49 percent to 97kg in 2017, lower than Brazil (278kg), South Africa (234kg), Senegal (222kg), Ghana (202kg) and the sub-Saharan African region (116kg). The steep naira devaluation recorded between 2014 and 2017 resulted in higher production cost, given the exposure of energy costs and debt to foreign currency risk. The high cost raised cement prices, which in turn adversely affected volumes of cement sold. According to analysts at Afrinvest, two factors have revived the fortunes of cement makers. Firstly, diversification of input sourcing, which means

that they are now able to source previously imported inputs locally. Secondly, stability in the foreign exchange market has eased pressure on their production cost. The lacklustre posture real estate and construction sectors continue to rub off on the cement industry. Also, inadequate private and public spending on infrastructure posed threat to the sector. The report noted that although the Buhari-led administration increased infrastructure spending, it is still below the recommended $50 billion (N18.trn) based on the Nigerian Integrated Infrastructure Master Plan (NIIMP).

as council chair hails developmental strides

hairman, Owan West Local Government Area, Frank Ilaboya, has commended Governor Godwin Obaseki’s forthright and people-focused approach to development, noting that the stance has paved the way for his council to properly align its development efforts to impact the people. The council boss said this at the flag-off of road construction projects executed by the Edo State Employment and Expenditure for Results (SEEFOR) in Owan West Local Government Area. The roads are Irueghe

Street, Ajanaku Street, Palace Road, Ozalla, among others. Ilaboya praised Governor Obaseki for constructing five roads at the same time in the local government, noting, “I want to express my appreciation to Governor Godwin Obaseki on behalf of the people of Owan West LGA for these wonderful projects. The governor is development-oriented, and we will continue to support him.” The contractor handling the project, Otunba Ahmed, said the roads in the area were being constructed by the state government through SEEFOR.

Tuesday 26 February 2019

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Polls: IGP laments unprovoked attacks on officers, vows to punish perpetrators INNOCENT ODOH, Abuja

L-R: Shadimu Mutiu, PDP House of Representatives Candidate, Oshodi-Isolo Constituency 1; Olujimi Agbaje, PDP Governorship Candidate in Lagos, the running mate, Haleemat Busari, during a news conference on the alleged violence that characterized last Saturday Presidential and National Assembly elections in Lagos, yesterday. NAN

Nigeria, Pakistan, Togo, Zimbabwe, others rank among world’s most complex markets BUNMI BAILEY

igeria, Bangladesh, Mali, Pakistan, Togo and Zimbabwe have been placed among the countries with the highest complexity in market, operational, and regulatory, according to a 2019 Global Markets Complexity Index (GMCI) report. The GMCI report was developed by Wilson Perumal & Company, a leading international management consulting firm in partnership with the Wall Street Journal, a U.S. business-focused, English-language international daily newspaper based in New York City. It assessed 83 countries across 31 measures of market, operational, and regulatory complexity, and places them into eight country groups with distinct complexity profiles. Nigeria, Zimbabwe, Pakistan, Bangladesh, Mali and Zimbabwe were categorised in the eighth group called

“Only the Brave” where they had a low score of 0-39, which indicates a high degree of complexity in market, operational, and regulatory processes. “‘Only the Brave’ includes the most complex countries in the world. These countries have the highest market, operational, and regulatory complexity in the GMCI. However, this complexity is better characterized as growing pains than a terminal illness,” the report stated. The report further stated that some of these countries are simply in a rapid development phase, with quickly changing regulatory environments, consumer preferences, and operational challenges and over time, they will likely gain control over this complexity and improve the business environment. The scores on a scale from 1 to 100, shows where 1 represents the most complex country and a score of 100 represents the least complex country Nigeria ranked in 76th,

78th and 80th in market complexity, operational complexity and regulatory complexity, respectively. Vivian Alozie, an equity research analyst at Capital Bancorp plc said that there are a lot of regulations that are preventing companies in Nigeria from reaching their potentials and also gaining access to the resources that they require to scale up. “For example on the Nigerian Stock Exchange (NSE), the listing requirements for companies are cumbersome and it is still an obstruction for companies that may wish to get listed and tap into the wealth,” Alozie said. For example our manufacturing sector is still struggling to attract Foreign Direct Investments (FDI), which is one of the economic bedrock for development. And we need more FDI to allow other sectors of the economy to grow,” Alozie said to BusinessDay in a telephone interview Ibrahim Tajudeen, head of research, Chapel Hill

Denham, in his own opinion, said the regulatory processes was a major factor and that we need to improve on our regulatory processes of doing business in this country. “And this applies to not only new but also existing businesses. For you to attract more foreign investments you need accommodating regulatory processes. For example the process of registering a business is long and stressful and this can make someone not to register a business at all,” Tajudeen said. According to the World Bank Ease of Doing Business ranking for 2018, Nigeria ranked 146 out of 190 countries in 2018, dropping by a spot from its 145th position in 2017. The GMCI report provides additional hint in helping to answer that question for investors and corporates trying to find their way in less-developed markets where size and market potential isn’t as simple as it looks on paper.

Oluwatoyin Aralepo joins Cellulant Nigeria as CFO HOPE MOSES-ASHIKE an-African financial technology service provider, Cellulant, announces the appointment of Oluwatoyin Aralepo as its chief financial officer (CFO), Nigeria. The announcement was made recently by Bolaji Akinboro the co-founder and Co-CEO of Cellulant Group. According to Akinboro, the appointment of Oluwatoyin is consistent with the company’s quest to becoming a robust financial organization as it continues its journey towards building a

$1billion revenue business. “Oluwatoyin emerged as the best person for the position of the CFO Cellulant Nigeria and Deputy CFO Cellulant group after a meticulous search process led by International recruitment agencies. We are thrilled to have her join the Cellulant team,” her experience from the banking and telecoms industry would count in providing strategic financial leadership for the organisation, Akinboro said. Oluwatoyin is a first class accounting graduate. A Fellow of the Institute of

Chartered Accountant of Nigeria (ICAN), Fellow of the Institute of Information Management of Africa and an Alumni of the London School of Business and Finance (LSBF), with over 15 years of cognate work experience across Finance strategy and business partnering, financial planning, analysis and reporting, audit and business assurance, financial controls and governance. She is a very passionate and entrepreneurial role model to young women. Before joining Cellulant,

Oluwatoyin held the position of the Financial Controller of Airtel Nigeria. “We are excited to have Oluwatoyin with us; we run the largest marketplace and digital financial service platform for farmers in Nigeria and across Africa; finance operations is a huge part of our business, and it is imperative to have the right people who will be able to manage and monitor our operations. We are confident that she will leverage on her wealth of experience to inspire the finance team to deliver on their mandate,” Akinboro stated.

cting Inspector General of Police (IGP) Mohammed Adamu has decried the attack on a deputy commissioner of police in Brass, Bayelsa State, on Sunday, and has ordered for the immediate arrest, investigation and diligent prosecution of persons involved, no matter their positions in society. The IGP, who described the incident as unwarranted and unprovoked, warned in a statement issued on Monday by Force Public Relations Officer, Frank Mba, that under his watch, such brazen acts of impunity would not be condoned. In a related incident, five male suspects have been arrested in Umuahia, Abia State, over an attack on a deputy superintendent of

police (DSP) who was patriotically defending the sanctity of the electoral system at a collation centre in Umuahia. “These attacks have once again highlighted the risks and hazards inherent in policing our clime, and the need for stakeholders and government at all levels to continue to support the officers and men of the Force in the discharge of their responsibilities,” the statement said. Meanwhile, the IGP commended all Nigerians, who, by their words and actions, had clearly identified with the Force by denouncing the barbaric and uncivilised actions against Police Officers performing their legitimate duties. The IGP therefore reassured the public that the two officers are safe and in good health and are not under any form of unlawful restraint or detention.

Alleged fraud: Absence of Alison-Madueke stalls arraignment

bsence of Deziani Alison-Madueke, former minister of petroleum on Monday in the FCT High Court, Apo, stalled her arraignment on five-count charge bordering on fraud. The News Agency of Nigeria reports that the exminister, who is now based in the UK, is charged alongside former chairman of Atlantic Energy Drilling Company, Olajide Omokore. Justice Valentine Ashi has fixed Monday for the arraignment of the two defendants, having issued bench warrant for the arrest of the Alison-Madueke earlier. Faruk Abdullahi, Counsel to the EFCC told the court that the arraignment would not hold, as AlisonMadueke and her co-accused were not in court. Abdullahi explained that the EFCC had forwarded a request to the Attorney-General of the Federation (AGF) for onward commencement of Alison-Madueke’s repatriation process from the UK. He said the absence of the second defendant, (Omokore) was linked to the commission’s inability to serve him with the court’s processes. The prosecutor, therefore, prayed the court for further adjournment to enable the team tidy up its house. Adeniyi Adegbonmire, counsel to Omokore said his client was prepared to stand trial but that the right process to commence the trial must be

adhered to. “My Lord, the prosecution appears not to be diligent with this case. In fact I was the one who informed him this morning that my client was not served,” he said. Justice Ashi held that the prosecution has no excuse not to have served the second defendant who was in the country. According to the judge, EFCC must show diligence in pursuing the case or be prepared to discontinue it. The judge therefore, adjourned the case until May 22 for further hearing. Alison-Madueke and Omokore, are billed to be arraigned on five-count charge bordering on conspiracy and illegal acts of accepting and giving bribe. EFCC averred that the accused persons had conspired at different levels to commit the fraud. The anti-graft body further alleged that the ex-minister accepted gift of properties described as penthouse 22, Block B, Admiralty Estate, Ikoyi, and penthouse 21, building 5, block C, Banana Island, Lagos. The EFCC said the alleged offence, contravened the provisions of Sections 26(1) and 17 of the EFCC Act, 2000. On December 5, 2018, Justice Ashi ordered the police, EFCC, Department of State Services (DSS), and others to produce Diezani in court within 72 hours. Ashi gave the order, following an ex parte motion made before the court by the counsel to the antigraft agency.

Tuesday 26 February 2019

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World Business Newspaper

Donald Trump raises China trade hopes with tariff delay US president proposes summit with Xi at Mar-a-Lago to conclude agreement James Politi and Hudson Lockett

resident Donald Trump said the US would delay an increase in tariffs on $200bn of Chinese goods set for March 1, averting an imminent escalation in tensions between the world’s two largest economies. Mr Trump said in a tweet on Sunday that there had been “substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues”. “I will be delaying the US increase in tariffs now scheduled for March 1,” he added. Mr Trump also said that if “additional progress” were made between Washington and Beijing, his administration would plan for a new summit with Xi Jinping, the Chinese leader, at the US president’s Mar-a-Lago resort in Florida to “conclude an agreement”. Mr Trump’s comments came at the end of a new round of negotiations between Robert Lighthizer, the US trade representative, and Liu He, the Chinese vice-premier, in Washington, which lasted through the weekend. US and Chinese negotiators have been criss-crossing the Pacific Ocean over the past two months to see

if they can settle their trade dispute, building on an initial truce reached between Mr Trump and Mr Xi on December 1 following the G20 summit in Buenos Aires. Mr Trump did not provide any further details on a potential future deadline for the tariffs increase. This would raise the punitive tariff rate on $200bn of Chinese imports from 10 per cent to 25 per cent, and would inflict much more severe damage on Chinese exporters, and US consumers, than has been the case so far. In spite of Mr Trump’s optimism and praise for the talks from the official Chinese news agency Xinhua, which described the negotiations as moving towards a “win-win” solution, there was deep scepticism that real progress was being made or that Beijing was offering substantial concessions. People briefed on the negotiations have been saying for weeks that the two sides remain far apart on issues such as technology transfer and how to ensure compliance with the agreement. “While some compromise may be reached between the US and China on certain trade matters, the process is unlikely to be smooth and the US-China relationship should remain contentious, swinging between compromise and conflict, and involving fric-

tions not only on trade, but also on technology, investment and geopolitics,” said Marie Diron, managing director at Moody’s Investors Service An extension in the trade talks and a delay in the tariff rise had been strenuously ruled out by senior US officials until earlier this month, when the possibility was first floated by Mr Trump. Previously, Mr Lighthizer had insisted March 1 was a hard deadline. But due to the complexity of

the trade issues being discussed — which seek to refashion what is arguably the most important economic relationship in the world — it became increasingly apparent that Mr Liu and Mr Lighthizer needed more time to craft a deal. The move to delay the planned tariff increase marks the latest sign that Mr Trump is determined to reach an agreement with China to fulfil one of his campaign pledges and avoid any further disruption to the US economy as he starts his

re-election bid. But it is far from clear whether Mr Trump will be able to secure sufficient concessions from China on industrial subsidies, the protection of intellectual property, the end of regulatory restrictions on US investments, and other issues, that he and his negotiators have been seeking. The US has also been trying to find a mechanism to hold China to its commitments, one of the biggest sticking points in the talks.

Barrick Gold launches $18bn hostile Theresa May goes to the wire with new Brexit deadline of March 12 Gambit to win fresh concessions dismays business, Europhile MPs and EU leaders offer to buy rival Newmont All-share deal would create gold mining behemoth

Henry Sanderson and Neil Hume

arrick Gold has launched a hostile $18bn all-stock offer for Newmont Mining, a combination that would create a gold mining titan and radically reshape an industry that has struggled to attract investors. The Canadian-listed group said a merger of the two companies would offer greater benefits to shareholders than Newmont’s planned $10bn acquisition of Canadian miner Goldcorp. Under the deal, Newmont shareholders would receive 2.5694 Barrick shares, giving them 44.1 per cent of the combined company. Based on Friday’s closing prices that entity would have an equity market value of $40bn, far surpassing its nearest rivals. “The combination of Barrick and Newmont will create what is clearly the world’s best gold company,” said Barrick’s chief executive Mark Bristow. “The merger represents a radical and long-overdue restructuring of the gold industry, and a transformative shift from short-term survival tactics to the long-term creation of sustainable value,” he added. The deal is an extraordinarily bold gambit by Barrick but will raise questions about its ability to integrate another miner. Barrick has just completed the acquisition of Randgold, which Mr

Bristow built into London’s biggest gold miner. Mr Bristow said the deal would generate synergies of more than $1bn, primarily by combing Barrick and Newmont’s assets in Nevada. There would also be $135m of cost savings by closing corporate offices. “It will enable us to consider our Nevada assets as one complex, which will result in better mine planning and fully realise the state’s enormous geological potential for all stakeholders,” he said. Barrick also plans to match Newmont’s annual dividend of $0.56 per share. Newmont, which is led by Gary Goldberg, is widely regarded as one of the best run companies in the gold industry. Its shareholders will now have to decide whether to back Barrick’s nil-premium offer and share or push ahead and vote in favour of the Goldcorp deal. Newmont’s all-stock deal for Goldcorp, which was announced in January, has received a lukewarm response from investors. Newmont estimates the deal will generate just $165m in synergies. It offered a 17 per cent premium for Goldcorp That takeover is due to close in the second quarter of 2019 after a shareholder vote and Goldcorp is entitled to a $650m fee if Newmont abandons the takeover. Shares in Barrick last traded at C$17.13 in Toronto, valuing the company at C$30bn ($22.8bn). Newmont’s market value is $19.4bn.

Laura Hughes, Alex Barker and Henry Mance

rime Minister Theresa May pushed back the British parliament’s next big vote on her Brexit deal to as late as March 12, just 17 days before the UK is due to leave the EU, as she briefed the bloc’s leaders on what some European capitals and Europhile MPs regard as a high-stakes gamble. After three senior cabinet ministers threatened to vote against the government to block a no-deal exit, the UK prime minister tried to keep a grip on negotiations by offering the House of Commons a new deadline to vote on a revised deal. The gambit was condemned by the CBI business group as “running down the clock”, while Europhile MPs argued that it was unlikely to save Mrs May from a humiliating defeat on Wednesday, when parliament will debate her Brexit plans. At a meeting at the Egyptian resort of Sharm el-Sheikh on Monday, Mrs May also agreed with Jean-Claude Juncker, European Commission president, to wind up the EU-UK negotiations before the bloc holds its next summit on March 21, but a series of European leaders expressed scepticism about the Brexit talks’ prospects and timeline. “We are sleep walking into no-deal scenario. It’s unacceptable and your best friends have to warn you,” said Mark Rutte, the Dutch prime minister, one of a number of leaders attending an EU-Arab League summit in Sharm el-Sheikh. “Wake up. This is real. Come to a conclusion and close

the deal,” he added, in comments quoted by the BBC. During a 45-minute breakfast meeting on Monday, German chancellor Angela Merkel asked Mrs May if she was considering extending the formal Article 50 divorce process. Mrs May said a delay “won’t solve the issue” because it defers difficult decisions, according to people with knowledge of the meeting. They added that an Article 50 extension was “not something she [Mrs May] wants to do” and “believes it just defers difficult decisions”. Mrs May earlier insisted it was still “within our grasp to leave the EU with a deal on [the scheduled date of ] 29 March”, implying the necessary follow-up legislation could be passed in a matter of days. The new deadline she has set for the decisive “meaningful vote” on her deal is an attempt to circumvent attempts by MPs to extend the Brexit talks. The main such proposal is an amendment by Labour’s Yvette Cooper to enable parliament to seek an extension if it has not approved a deal by March 13. But in an indication of the doubts about Mrs May’s timeline in both Brussels and Westminster, Leo Varadkar, the Irish prime minister, has said he was “not playing chicken” with Britain, while Sebastian Kurz, the Austrian chancellor, noted it might “be good to postpone Brexit” if Mrs May failed to win a majority by early March. Mrs May used her trip to Egypt to press her case on Brexit with European leaders on the sidelines, as she

sought a revised Brexit agreement that could win the support of MPs after her original deal was defeated in the House of Commons last month by a record margin of 230 votes. Many EU capitals are concerned by her high-risk tactics and doubt that the reassurances they could realistically offer will prove decisive in Westminster. Mr Varadkar said he was open to discussing “mechanisms” that would allay some UK worries over the backstop plan to avoid a hard border on the island of Ireland, which Eurosceptics say will “trap” the UK in a customs union with the EU. But he insisted this would not contradict the “legal reality” of the exit treaty or include any time limit. Lars Lokke Rasmussen, the Danish prime minister, said he was “worried” by the situation as he insisted there would be “no deal in the desert” at the gathering. “It does not look good but we must keep up hope,” he said. “If this matter is to be resolved we will have to go close to the deadline and then we will need some precise solutions, and we are not there yet.” Although Mr Juncker previously said he was suffering from “Brexit fatigue”, he and Mrs May hailed “good progress” on three areas of talks on Monday: tweaks to the political declaration on future relations that accompanies the exit treaty; a commitment to explore “alternative arrangements” to the Irish backstop; and legal language that would give “additional guarantees” about the measure’s temporary nature.

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FT General Electric to sell slice of life sciences unit in $21bn deal

Zimbabwe’s currency reforms criticised as ‘voodoo economics’

US industrial conglomerate’s latest move signals a focus on reducing its debt

Former finance minister warns central bank action is bound to fail

Eric Platt and Ed Crooks

Joseph Cotterill

eneral Electric has agreed to sell most of its life sciences business to Danaher for $21.4bn, taking a significant step towards chief executive Larry Culp’s target of raising cash to slash the company’s debt burden. The deal is worth $21bn of cash, and Danaher will also take on some of GE’s pension liabilities. “Today’s transaction is a pivotal milestone,” Mr Culp said on Monday. “It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.” Mr Culp, who had led Danaher earlier in his career, said last month that the company was aiming to raise $30bn-plus from selling stakes in its healthcare division, which includes life sciences, in the oilfield ser vices group Baker Hughes, and in the transport equipment company Wabtec. The life sciences deal alone takes GE two-thirds of the way to that target. The Biopharma business provides tools for medical research and the development of advanced therapies. It generated roughly $3bn in sales last year, about twothirds of the total annual revenues of the life sciences operations, which are about $4bn-$5bn. GE will retain the other main business in life sciences, pharmaceutical diagnostics, which has technology that it sees as a better fit with its healthcare equipment, such as scanners. The price Danaher is paying shows the high level of interest in medical technology businesses. Analysts had suggested that GE’s entire life sciences operation could be sold for $20bn-$25bn. Mr Culp has been working to focus GE on just two key sectors, aviation and the power industry, in an attempt to simplify its previously sprawling structure and cut its debts. He has set a target of reducing its net debt, excluding its financial services operations and its pension fund deficit, to 2.5 times its earnings before interest, tax, depreciation and amortisation. GE’s market valuation has more than halved over the past two years, as investors and analysts have focused on its leverage and legacy insurance liabilities from operations the group exited in the mid-2000s. Analysts with Moody’s said late last week that the asset sales would help GE contend with the “the possible need to further increase GE Capital’s statutory insurance reserves for long-term care policies.” Danaher said it would finance the acquisition through a new $3bn stock issuance, as well as cash it holds on its balance sheet, new debt and credit facilities. The two companies expect to complete the transaction in the fourth quarter. GE shares climbed 7 per cent in pre-market trading to $10.86 on Monday while Danaher stock rose 3 per cent to $116.55. PJT, JPMorgan Chase, Citigroup and Goldman Sachs offered financial advice to GE, while law firm Paul Weiss provided legal counsel. Barclays and Kirkland & Ellis advised Danaher.

Kim Jong Un, left, and Donald Trump signed a declaration at their Singapore summit that critics say has resulted in little progress on denuclearisation © AFP

Donald Trump ‘not in a rush’ for North Korea to denuclearise US president ‘happy’ as long as Pyongyang does not conduct further weapons tests Demetri Sevastopulo

resident Donald Trump said he was “not in a rush” to force North Korea to abandon its nuclear programme and added that he was “happy” as long as Pyongyang was not testing weapons. Mr Trump made the comments on Sunday, just days before he was due to fly to Vietnam for a second summit with North Korean dictator Kim Jong Un. “I’m not in a rush, I don’t want to rush anybody,” Mr Trump said at the White House. “I just don’t want testing. As long as there’s no testing, we’re happy.” In recent months, Mr Trump has played down concerns that Mr Kim has failed to follow through on the pledge to denuclearise made during their first summit in Singapore last year. US officials have struggled to convert the vague declaration the two leaders signed in Singapore last year into concrete steps towards removing nuclear weapons and missile delivery systems from the Korean peninsula. But Mr Trump has stressed his personal rapport with the North Korean leader. “It’s a very interesting thing to say but I’ve developed a very, very good relationship,” the US president said on Sunday. “We’ll see what that means, but he’s never had a relationship with anybody from this country and hasn’t had lots of relationships anywhere.” Critics have accused Mr Trump of

reducing the pressure on Mr Kim by saying that he was in no rush to reach a deal, even as the US president has countered that he has not removed any of the tough sanctions on the regime. The White House is hoping that the president will make tangible progress on denuclearisation after eight months of intermittent talks. Steve Biegun, the top US negotiator for North Korea, recently said Washington did not know if Mr Kim was serious about abandoning his weapons, but that Mr Trump had created the conditions to make that determination. Bruce Klingner, a former CIA North Korea analyst, said Mr Trump’s latest comments continued his recent trend of lowering the bar on what he was demanding from the regime in Pyongyang. “The administration is backing away from previous policy positions on parameters and timelines of denuclearisation, a data declaration and steps necessary for sanctions relief,” said Mr Klingner, who is now at the Heritage Foundation, a thinktank. US officials recently admitted that despite the months that had passed since the Singapore summit, “there is still not an agreed upon definition of ‘denuclearisation’ between Washington and Pyongyang”. Mr Trump is expected to have two days of talks with Mr Kim. White House officials said the format, which is still being finalised, would be similar to Singapore where the

leaders held a one-on-one meeting before an expanded session with their top aides. US officials have declined to provide any details about their negotiations with North Korea, but reports have suggested that Mr Trump and Mr Kim could agree to open liaison offices in each other’s countries. Some experts also believe that Mr Trump might agree to a peace declaration to officially end the Korean war, which concluded with an armistice. Kim Eui-kyeom, a spokesman for South Korea’s presidential Blue House, said Seoul would welcome such a move but added that a peace treaty would likely come at the final stage of denuclearisation that would need to be verified by multiple third parties. Since the Singapore summit, Mr Trump has argued that North Korea no longer poses a threat to the US — a claim that has been dismissed by most experts. His own intelligence officials last month told Congress that they thought it was “unlikely” that Mr Kim would give up his weapons because his regime needed them for survival. On Sunday, North Korea warned the president not to listen to US critics who were hindering efforts to improve bilateral relations. Mr Kim left Pyongyang on Saturday by train for the more than 4,000km journey through China to Vietnam. He is due to arrive in Hanoi on Tuesday.

US and UK strike long-term derivatives deal

Accord seeks to minimise Brexit disruption to markets Philip Stafford

K and US markets regulators have finalised a sweeping long-term agreement to jointly oversee each other’s derivatives markets after Brexit, removing concerns of financial turmoil in the $481tn market if Britain leaves the EU without an agreement. The accord will close off risks of massive disruption to banks, institutional investors and corporations, which use derivatives like swaps and futures to hedge against movements in interest rates and currencies. The two sides, which together account for the majority of the global derivatives market, unveiled their deal in London on Monday. The agreement is set to begin when the UK leaves the European Union on March 29. UK clearing houses LCH, ICE Clear Europe and LME Clear, act

as middlemen in the securities and derivatives markets, preventing the rest of the financial system from being hit if one institution defaults on payments. “The US and UK have special responsibilities to keep their markets resilient, efficient and open. The measures we are announcing today will do that,” said Mark Carney, governor of the Bank of England. The agreement comes as the EU aims to finalise tougher rules for overseas clearing houses, drawn up after the UK notified the EU it would leave the bloc. However some of the EU proposals for more direct regulation have been resisted by both UK and US regulators, which prefer regulators to “defer” main oversight of derivatives markets to local authorities. They would then closely co-operate with their peers. “London is, and will remain, a global centre for derivatives trad-

ing and clearing,” said Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, the main US derivatives regulator. “They provide a bridge over Brexit through a durable regulatory framework upon which the thriving derivatives market between the UK and the US may continue and endure.” The UK-US agreement will see the UK give permission for US investors to use US derivatives trading venues and clearing houses that provide services in the UK. American regulators will issue “no action” relief letters that exempt UK market participants from complying with certain US market rules. Last week European derivatives traders were given formal permission to use crucial UK market infrastructure in a no-deal Brexit, as regulators enact contingency plans to contain market turmoil from Britain’s departure from the EU.

he former finance minister who oversaw Zimbabwe’s adoption of the US dollar to curb hyperinflation has slammed the “voodoo economics” behind a new set of reforms that pave the way to recreating a local currency. Tendai Biti, an opposition politician who was a minister in a brief unity government under former president Robert Mugabe, said currency reforms announced by the central bank last week would fail without associated fiscal reforms to restore trust. “It is disaster, it is grand theft, it is voodoo economics,” Mr Biti told the Financial Times in an interview. “There is no market confidence and there are no reserves.” He added: “We are Zimbabweans, we have seen this before.” The Reserve Bank of Zimbabwe took a big step towards enabling the return of a national currency by effectively devaluing local stand-ins for scarce US dollars. Its reforms, which are due to come into effect on Monday, will allow banks to trade the dubious quasi-currencies, also known as RTGS dollars, at market rates instead of at official parity to the US dollar. The central bank says it has secured sufficient credit lines to defend the stability of the RTGS dollars, which in their old guise traded at three to four to the US dollar on the black market. The floating of the RTGS dollars is aimed at fixing a dire cash shortage that has bedevilled the rule of President Emmerson Mnangagwa, who replaced Mr Mugabe as head of the governing Zanu-PF in a 2017 coup. However, Mr Biti said “the fundamentals are not there” to back the central bank’s abolition of a peg that had kept quasi-currencies officially equal with scarce US dollars. There is also little trust among Zimbabweans in electronic money, which has been debased by runaway state spending that is the root cause of the country’s cash shortage. Only 4 per cent of Zimbabwe’s 3.2m individual bank accounts had more than $1,000 in them, according to the central bank. As finance minister in a 2009-13 unity government under Mr Mugabe, Mr Biti cut Zimbabwe’s debt and oversaw the country’s adoption of the US dollar and other external currencies after its own money was destroyed. State finances deteriorated again when Zanu-PF returned to power on its own and began printing electronic dollars without physical backing to pay state bills. Mthuli Ncube, current finance minister, has pledged to restore fiscal stability, including ceasing use of a government overdraft at the central bank to finance spending. He has also sought to boost revenues including by imposing a levy on electronic money transfers. Yet the central bank will continue to subsidise access to dollars for buyers of critical imports such as fuel, a system that critics say is abused for political patronage. “The Zanu-PF elite go to the Reserve Bank and get the dollar at a cheap price,” said Mr Biti, adding that the trade in dollars for fuel imports was “one of the commanding heights of corruption” in Zimbabwe.

Tuesday 26 February 2019

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China stocks rally after Trump tweet on tariffs delay CSI 300 posts best one-day gain in 3 years and renminbi hits 7-month peak Emma Dunkley and Hudson Lockett

hinese stocks romped into bull market territory on Monday after President Donald Trump said he would delay a rise in US tariffs on Chinese goods, taking gains since the start of the year to more than 20 per cent and making China the world’s best-performing equity market. After months of trade tensions between Washington and Beijing, Mr Trump said on Sunday that the White House would postpone the increase in tariffs on $200bn of Chinese imports set to take effect March 1, citing “substantial progress” in trade talks. The announcement on Twitter sent China’s CSI 300 index of companies listed in Shanghai and Shenzhen up by 5.9 per cent on Monday, its best one-day gain in more than three years. The CSI 300 has advanced over 25 per cent since early January, moving into a bull market by the definition of a 20 per cent rally from a recent trough. The index has rebounded 16.5 per cent in February alone, putting it on track for its best month since April 2015. European stock markets rose after the Asia rally, although at a slower pace. Frankfurt’s Xetra Dax 30 gained 0.6 per cent, with the region-wide Stoxx 600 up 0.2 per cent. In New York, the S&P 500 rose 0.6 per cent in opening trade. The Wall Street benchmark closed at its highest level since November on

Friday, while Germany’s Xetra Dax rose 1.4 per cent over the course of last week, on hopes of progress in the negotiations. This year’s performance for Chinese stocks is a sharp reversal of fortune after they fell into bear market territory last year as the worst-performing equity market globally. Investors said last year’s slump had left the market looking attractively valued. “Everybody went into 2018 loving China, and then it went down 20 per cent,” said Mark Tinker, head of Asia equities at Axa Investment Managers. “We’ve come into this year and it’s up over 20 per cent; companies have strong fundamentals, and valuations are looking more attractive,” he said, adding that sentiment also has been brightened by the thawing trade tension. China’s onshore renminbi hit its strongest point since July on Monday, climbing as much as 0.6 per cent to Rmb6.6718 per US dollar. The currency weakened by nearly 6 per cent in 2018. Last year, Mr Trump blasted “China, the EU and others [for] manipulating their currencies and interest rates lower”, while the US Treasury secretary warned China not to engage in competitive devaluations of the renminbi against a backdrop of escalating trade tension. The currency’s recovery and attractive stock prices have sparked strong flows into Chinese equities in 2019.

US-China trade talk extension boosts stocks on Merger Monday Peter Wells

tocks started the new week on the front foot, boosted by hopes for progress on USChina trade talks and a bout of takeover activity. Giving markets a big boost, particularly those in Asia earlier today, was US President Donald Trump’s announcement (via Twitter) there had been “substantial progress” in Washington’s discussions on trade with Beijing. He said he would now delay a planned increase in the tariff rate on Chinese goods, from its initial March 1 deadline. A bout of mergers & acquisitions typically helps get the blood pumping, and that arrived this morning in the form of Barrick Gold launching a hostile $18bn offer for Newmont Mining, and General Electric agreeing to sell its life sciences business to Danaher for $21.4bn. The other big macro mover was oil, with both Brent crude and West Texas Intermediate down 1.8 per cent after Mr Trump said on Twitter that Opec should “relax and take it easy” and warned the “World cannot take a price hike”.

The S&P 500 and Dow Jones Industrial Average were both up 0.6 per cent, while the Nasdaq Composite gained 0.9 per cent. Industrials were the top-performing sector in the S&P 500, likely helped by trade talk hopes. Financials and technology, up 0.9 per cent each, were next best. The defensive sectors - utilities, telecommunications and consumer staples - were the only segments in the red, according ot Refinitiv. Government bonds were weaker, with yields higher. The yield on the benchmark 10-year US Treasury was up 2.4 basis points to 2.6788 per cent. The US dollar was a touch softer, with the DXY index down 0.1 per cent at 96.398. News of the delayed US-China tariff deadline helped pushed European stocks higher, too. Germany’s Dax was up 0.5 per cent, while France’s Cac 40 gained 0.4 per cent. Looping back to delayed deadlines, UK Prime Minister Theresa May pushed back parliament’s next major vote on her Brexit deal to as late as March 12. It was initially slated for February 27.

This year’s performance for Chinese stocks is a sharp reversal of fortune after they fell into bear market territory last year © AFP

The nothingness value of cryptocurrencies Thomas Hale

he traditional financial approach to nothingness is clearly summarised in King Lear. The king has gathered his daughters and demanded that they praise him. When one of them refuses to play along and has “nothing” to say, he tells her that “nothing will come of nothing”. The idea that nothing breeds nothing is also widespread in critiques of cryptocurrencies. Last week, Martin Walker came up with an elegant way of thinking about them: as zero coupon perpetual bonds — something that pays no return, and never gets repaid. This is a sophisticated kind of nothingness, in the financial sense. Cryptos may be based on nothingness, but it doesn’t necessarily follow that they’re worthless. In fact, the value they provide might depend upon them being linked to nothing, rather than something. This is a kind of security that crops up very rarely, like precious metals, or great works of art. Financial securities have constraints that can be used to model their risk and define their value. Bonds are issued by highly trusted borrowers, and provide predictable cash flows and specified dates of maturity, when they are converted into money. Equities provide less predictable cash flows, in the form of dividends, that come at the discretion of company managers. In the case of currencies, the value is realised through buying goods or services – a role that cryptocurrencies have yet to properly assume.

In each of those cases, the value of the security is partly constrained by these realities, despite the psychological volatility of the markets where they are traded. Very risky equities might provide very high returns, but there is still something that anchors their worth – usually a particular business proposition. Bonds will very rarely provide high returns, unless they are bought at distressed values. Currencies that actually work as currencies are anchored to their own purchasing power measured against a collective basket of goods and services available in an economy, which is why they have no value on a desert island. In the case of something like bitcoin, there is basically no anchor. There are no discounted cash flow models, or estimated valuations in Chapter 11. If such things existed, bitcoin would be a far less effective medium for speculation. In its current form, it is a rare example of an unconstrained security, valued as a pure projection of psychological volatility in a secondary market. Such things are usually referred to as “bubbles”, but they can offer a perverse kind of value. The incentives for buying into nothingness Why would you want to invest in something that is unconstrained? The answer is that sometimes asymmetrical utility can be derived from large windfalls. If you have a small amount of initial capital, you might take on a less favourable risk-reward profile for a shot at a higher nominal windfall that is unachievable elsewhere. The classic example of this is the lottery (which former Alphavillian Kadhim Shubber compared to

bitcoin here, in relation to its entertainment value). Extreme returns are possible in unconstrained securities because there is no basis for their value in the first place. The upper bound is some unknown quantification of psychological appetite for speculation. Now let’s consider the psychology. Demand for cryptocurrencies is very high in urban centres where young people, mostly disengaged from other financial securities, are plagued by monthly cash-flow problems (often caused by high living costs). These individuals have tendencies to blow small windfalls on luxuries, like holidays. If they invest £200 in equities, the annual dividend returns are obliterated by their daily cash flows in a modern city. If they make £800 on that investment, they are liable to spend the proceeds, because the amount feels so distant from the lower boundary of urban residential real estate prices. This has little to do with discipline; it is better explained by the relative pricing of daily living costs, meaningful assets, and salaries. Individuals in these situations may prefer to speculate on nothingness, hoping their peers transfer wealth to them, than plough into markets for established securities, where the risk-reward profile is better but the upper limit on returns is nominally minuscule. This also explains why, often, they are more attracted to equities than look like zero coupon perpetual bonds (certain tech companies), which are similar to unconstrained securities, except that management can extract the proceeds.

JAB enters pet industry with bid for US veterinary clinics Coty backer buys majority stake Compassion-First Pet Hospitals that values group at $1.2bn Leila Abboud

AB Holdings, the investment company that has been on a $50bn acquisition spree across the consumer sector, announced its first acquisition in the pet care market, taking it into turf now dominated by Nestlé and Mars. JAB’s offer for a stake in Compassion-First Pet Hospitals, which operates 41 veterinary hospitals and emergency clinics in the US, values the company at $1.2bn, according to a statement from the seller, the private equity firm Quad-C Management Inc. The exact size of the stake was not disclosed, but a JAB spokesman said

it gave the buyer majority control. Quad-C has owned the stake in Compassion-First since 2014, and has helped it expand to 13 US states. It said the veterinary service providers who are now investors “will maintain a significant stake”, as would founder and chief executive John Payne, who was staying on to run the business. JAB will be investing equity capital from its consumer fund, which brings together capital from university endowments, rich families and sovereign wealth funds, as well as directly from the JAB Holding Company. Moody’s recently placed JAB Holdings’ credit rating on review for down-

grade over concerns that it was over-extending itself. The JAB Holding company was created as a vehicle to increase the wealth of the Reimann family, one of the richest in Germany. Since 2012, JAB chairman Peter Harf, who has been a close adviser to the Reimanns for nearly four decades, has embarked on an aggressive expansion into the coffee business, as well as casual dining. JAB now owns or backs a number of companies, including Keurig Dr Pepper, Pret A Manger and cosmetics maker Coty. It has raised more than $11bn from outside investors to back its deals, along with the Reimann fortune.

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Tuesday 26 February 2019

ANALYSIS The way to fix bias in economics is to recruit more women Study shows female economists are more open to new thinkers than their male peers Mohsen Javdani

E Media: US ‘ghost newspapers’ struggle for life Alden’s $1.4bn bid to buy Gannett has revived questions over the role of hedge funds in a sector that has lost thousands of jobs Anna Nicolaou, James Fontanella-Khan and Lindsay Fortado

t the start of 2018, Denver Post journalists felt optimistic for the first time in years. They were about to move headquarters from downtown, where they had conducted their business for a century, to the site of their former printing plant, a 20-minute slog outside the city. But the explicit downgrade came with an implicit hope: this was rock bottom. After several years of crushing lay-offs, costslashing and penny-pinching by the newspaper’s owner, it wasn’t possible to sink any lower. However, Alden Global Capital, the New York hedge fund that owns Denver’s paper of record, had other plans. A few months after the move, Digital First Media, controlled by Alden, announced it was laying off a third of the newsroom — leaving fewer than 70 reporters to cover a population of 3m people. According to the Alliance for Audited Media, the circulation of the Denver Post has more than halved from 413,676 in 2013 to about 170,000 today. DFM employees across the country — from San Francisco to New York — protested against their owners. “We wanted to let [the public] know. People were still blaming [the paper’s demise] on Craigslist, and the internet,” says Chuck Plunkett, former editorial director at the Denver Post who resigned last year after criticising Alden in the newspaper. “But . . . Alden is what was killing us”. More than 1,800 US newspapers, including century-old titles that made it through the Great Depression, have closed over the past 15 years, while many of those still printed are shells of their former selves, thin papers filled with wire copy and adverts — which observers have labelled “ghost newspapers”. The Denver Post now qualifies for ghost paper status, says Penny Abernathy, chair of the University of North Carolina’s school of journalism. She estimates that between 1,000 and 1,500 of the remaining US newspapers meet that definition — many of them owned by private equity and hedge fund investors. While Amazon founder Jeff Bezos and other billionaires have bought newspapers under grandiose notions of supporting democracy, Alden’s strategy has been simple and blatant: once it takes over a company it strips out assets and in the process extracts as much value as possible. It also charges its portfolio companies, such as DFM, fees for managing the business.

“It’s just a winding down of the business and taking profits along the way. If they end up shutting down or running them as zombie papers, they will,” says Matt DeRienzo, former editor of the New Haven Register, a weekly paper in Connecticut sold by DFM to Hearst Corporation in October. “It’s their actual modus operandi, which is the alarming thing.” Hiwot Nega, founder of the tech platform Clewed, and an expert on private equity investment, says such buyouts are done in a way that might extract great value for investors, but often conflict with the long-term sustainability of a business. Alden, dubbed a “vulture” investor by critics, refuses to speak to the media or grant interviews, including to the Financial Times for this article. Yet it may soon own the majority of America’s local daily newspapers after it targeted USA Today owner Gannett, the largest regional daily newspaper company in the US and second worldwide to News Corp. Media News Group, also owned by Alden, in January bid $1.4bn for Gannett, an offer that was swiftly rejected, with Gannett arguing that MNG is not a credible buyer. But the battle is far from over. Although Gannett has been in cost-cutting mode for decades, Alden sees more fat to trim. The rejection has emboldened MNG, the largest shareholder in Gannett, which in a statement in January said it was planning to overthrow the newspaper group’s entire board and nominate new members “who agree that Gannett shareholders should decide for themselves”. Local news advocates are horrified at the prospect of a GannettAlden deal. In the past decade and a half, the US has lost more newspaper jobs than coal mining jobs. According to the US Bureau of Labor Statistics, the newspaper industry employed 174,000 people in 2016, down from 412,000 in 2001. In recent years, the New York Times, like the Financial Times and other global titles, has convinced people to pay for its digital version, enjoying a rise in subscriptions since the election of President Donald Trump, who has criticised parts of the media as the “enemy of the people”. At the same time, billionaires with a predilection for journalism and philanthropy have bailed out the Washington Post and LA Times. Neither of these business models have extended to local titles, which have historically been the main source of information for rural, lower-income communities across the US. Dean Baquet,

executive editor of the New York Times, has called the hollowing out of local news “the biggest crisis in American journalism”. With online news sites often unable to fill the gap, the decline of local news providers has consequences beyond journalists losing their jobs. Studies have found that people without access to news are less likely to vote, and the loss of newspapers overwhelmingly hits poor, less educated rural communities. Since 2004, more than 500 rural papers have closed or been folded into another title. Some 62 per cent of voters in these rural counties voted for Mr Trump in the presidential election, compared with 46 per cent of the total population, UNC found. Alden has an opaque corporate structure. Its website features a company logo placed over a picture of an evergreen forest. It has only 19 employees, according to SEC filings. But its influence on American journalism is far greater. From its headquarters in Manhattan’s Lipstick building, where Bernard Madoff used to conduct his business, Alden has seized on deteriorating newspapers across the country, ranging from the small Alaskan town of Kodiak to large metro areas such as Denver. The company owns almost every newspaper in Los Angeles and San Francisco, except the LA Times and San Francisco Chronicle. Gannett, owner of more than 100 titles, has said it wants to remain independent and last week won the backing of US Senate minority leader Chuck Schumer, a Democrat from New York. “MNG has been unwilling to publicly provide relevant details regarding the proposed acquisition,” he said last Thursday. “Fuller disclosure regarding how the acquisition of Gannett would impact the viability of a free press is in the public interest.” However, in an industry of “unending downturn . . . all bets on the conventional wisdom of newspaper ownership are off”, says Ken Doctor, a veteran industry analyst. “Anyone with the appetite and dollars to buy can, whether it’s a Patrick Soon-Shiong [the pharmaceuticals billionaire who owns the LA Times] or an Alden.” Behind Alden is its founder Randall Smith, a godfather of investing in distressed assets who has trained legions of hedge fund portfolio managers. Heath Freeman, one of Mr Smith’s protégés, runs Alden’s day-to-day operations. Neither has any long-term experience in media, only in buying assets out of bankruptcy and targeting struggling companies.

conomics is having a #MeToo moment. The profession has long lagged behind other social sciences, and even most hard sciences, in recruiting female students, faculty hiring and promotion. Female economists often face hostile teaching evaluations, more exacting reviewing processes by journals and less credit for co-authoring. A recent paper by Alice Wu of Harvard University also documented a particularly toxic culture of misogyny on an

Varoufakis, the leftwing former Greek finance minister. These strong patterns of biases actively contradict the image economists have of themselves: 82 per cent of those surveyed agreed that in judging a statement, one should only pay attention to its content not its author. On a positive note, female economists were 40 per cent less likely to be swayed by author names than their male colleagues, so the profession is likely to become less biased as it becomes more gender balanced. However, we also found sharp differences between the way male

Janet Yellen, the former Federal Reserve chair, has talked about her own struggles with gender bias and discrimination in economics © Reuters

economics jobs website. At this year’s American Economic Association meeting, several top female economists, including Janet Yellen, the former Federal Reserve chair, talked about their own struggles with gender bias and discrimination in economics. But male economists, who held 72 per cent of US assistant professorships and 87 per cent of full professorships do not view the profession’s gender problem as seriously, as shown by a recent study that I conducted with Ha-Joon Chang of Cambridge university. We used an online experiment to identify biases among economists from 19 countries. They were asked to evaluate statements from prominent economists on different topics, including the profession’s gender problem. In the experiment, the source for each statement was randomly changed without the participants’ knowledge. Some participants were told it was from a well-known mainstream economist, others were told the speaker was someone who is considered ideologically different. We uncovered a strong ideological bias: participants were 7 per cent less likely to agree with a non-mainstream economist. For example, participants faced by a scathing comment on the current state of macroeconomics were 9.5 per cent more likely to agree if they thought it was from Lawrence Summers, ex-US Treasury secretary, than if it was from Yanis

and female economists perceive the profession’s efforts on gender equality. When faced with the statement “economics has made little progress in closing its gender gap over the last several decades. Given the field’s prominence in determining public policy, this is a serious issue. Whether explicit or more subtle, intentional or not, the hurdles that women face in economics are very real,” women were 26 per cent more likely to agree than their male peers. On top of that, male agreement with the statement fell by an extra 5.8 per cent when they were told that the statement was made by the leftwing British feminist economist Diane Elson, rather than the real source, Carmen Reinhart, a mainstream Harvard economist. Female levels of agreement with the statement did not change with the author’s identity, suggesting that on this issue they were able to put aside their biases and focus on the content of the statement. Ideological biases make the economics profession ill-equipped to engage in balanced debates regarding politically controversial economic issues that characterise our time, such as inequality, austerity and climate change. We found female economists exhibit less ideological bias to begin with and were able to set their biases aside when dealing with an issue that they had personally experienced. That suggests that solving the profession’s gender problem would be an effective way to address the broader issue of ideological bias.

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INSIGHT/INNOVATION

A peep into the in tray of Nigeria’s next President

OGHO OKITI

s at the time of writing this piece, it is too early to call the Presidential elections held last Saturday. Thoughit appears the election is a marked improvement over past elections, at least from the perspective of INEC. However, the violence experienced in some areas, underpinned by desperation and the connivance of some sections of the security agencies, is a reminder of both the high stakes of this election, and the politics of the past we would really like to put behind us. Nonetheless, despite that two major presidential candidates in President Muhammadu Buhari of the All Progressive Congress (APC) and Atiku Abubakar, of the People’s Democratic Party (PDP) projects different visions of the future, either of them will have to deal with serious short and long term economic problems whoever is sworn in on May 29th. Lets start with the long-term problems. Long-term problems are so defined here because the problems and the solutions go beyond the election cycle of four years. While whoever

becomes president will be judged on these issues in 2023, it is also the case that the problems will remain in some shape or form. I will focus on five of the problems – poverty, unemployment, poor education, infrastructure deficit, and economic diversification. Poverty will always be important in politics, both in the long and the short run. It is now a desperate situation, especially because Nigeria overtook India to become the country with the largest number of people living in extreme poverty in 2018. What also makes the situation more desperate in Nigeria is that while very large sections of the world are making progress and increasing their standard of living, Nigeria has retrogressed in the last four years of President Buhari’s presidency. A third reason for the desperation is that there is currently no semblance of the understanding required to drive down poverty, except you regard trader moni as some serious kind of policy. So, reducing, and continuously reducing the estimated 87 million people living in extreme poverty should be a priority for the next President. Tied to the reduction in poverty is reduction in the number of those unemployed. To understand the connection and start to solve the twin problems of poverty and unemployment, we should bear in mind the conclusions ofthe report. The authors argued that the rise in poverty in Nigeria is caused by low economic growth, high inequality, and population growth. To deal with unemployment and poverty therefore, the

next President must seek to grow the economy beyond the miserable under 2% we had grown in the last three years, reduce inequality through a broad based economic growth, and deal with Nigeria’s continued rise in population. What will deliver high economic are sound economic policies that drive up investments in critical sectors of the economy, changes to the way businesses operate and invest, and increase in the productivity of Nigerians. Indeed, growth, investments, jobs, and prosperity depends on seriously thought through economic policies that address the dearth of both domestic and foreign investments and skills. Forever also, successive governments have made an issue of physical infrastructure in Nigeria. Yes, without sustained investments in physical infrastructure, it will be very difficult to improve on the ease of doing business, reduce business costs, and drive up productivity. When successful, the reduction in the costs of doing business and the improvement in productivity that follows should make us more competitive. But there is one more thing. We also need serious and sustained improvements in education and skills. Currently, our poor education system is exemplified by the millions of out of school, and the poor education received by many more millions in school, especially those in public schools. It is an albatross that needs to be dealt with by the next President. Finally, for the long-term economic problems, which is about making progress with economic diversification. The summary here for now is

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I think everyone has come to the realisation that fuel subsidies is tantamount to giving Nigerians kobo, while the bosses at NNPC keep the naira

that making progress through economic policies that address the four issues above will also simultaneously address Nigeria’s dependence on oil and gas for our foreign exchange. So, from May, the new President can proceed either by resigning to fate or realise that without necessary reforms, growth will continue to slow, and unemployment continues to rise. Economic policies are powerful, and we should pursue ones that are thorough, have depth, and provide incentives that link solving the problems to associated rewards. Now, in the immediate term, three issues are urgent. The rising national debt will have severe implications for fiscal policy and expenditure in the coming years. The President must note that we do not have the capacity to borrow like we have done in the last three years. The next President will also have to deal with the issue of fuel subsidies. I think everyone has come to the realisation that fuel subsidies is tantamount to giving Nigerians kobo, while the bosses at NNPC keep the naira. It is not sustainable, and totally removing the subsidy is best for the country and its finances. Finally, there is a decision on the power sector, to be made. Specifically the multi-year tariff order (MYTO) needs reforms in order to drive up investmenst and remove the strain on the power sector. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Elections and the bigger picture PROPHYLAXIS

AYULI JEMIDE

rrespective of your political or party leanings all right thinking Nigerians must all agree that the regretful events that were recorded during the 2019 elections still does not represent the Nigeria of our dreams. The Saturday 23rd February elections was obviously marred by killings, ballot burning, hostage taking and violence in every form imaginable. Several lives were lost – police count says 16 fatalities nationwide, but other reports state that 15 people were killed in Rivers state alone.There were stories of politicians laying siege on INEC collation centres or holding INEC staff hostage in several states. The mother of all ills during this election is the fact that there are allegations that both the military and the police have been overtly or covertly involved in laying sieges or burning ballot boxes or fomenting violence. Nigerians have too many questions to ask about what is going on: How does Demola a known OPC thug beat the movement restrictions and in broad day light move to a given location in Lagos to burn ballot boxes in full glare

of the voters? How come there were no policemen in the vicinity on election day? How come we have not heard about any action taken subsequently by the Nigerian police despite the fact there are videos of Demola in hospital and there were videos of the scene. How do we read on social media that Rotimi Amaechi has used his military might to detain an INEC official in Rivers state and no one is rebutting this? Even if it is a rumour or fake news does this not warrant a statement from INEC or the police or even the army itself? How come social media has carried the fact that Rochas Okorocha has detained an INEC official in Imo State with the help of the Commissioner of police and no one has said it is not true – not Rochas, not the police, not INEC and not the military. How could a Youth Corper in Anambra state be abducted from her duty post in broad day light and later resurfaces and the story end there – Who abducted her? Why was she abducted? What is the police doing about this? There are stories of parts of Lagos where thugs took the polling booth and made sure you did not vote unless you were there to vote for a named party of their choice. This is in Lagos, not a rural area. How does this happen? I thought policemen were deployed to all polling units? Elections in Lagos have also been escalated to a tribal war between the Igbos andYorubas. The word on the street is that votes from parts of Lagos with high Igbo residents’ density had a lot of voter suppression with ballot boxes burnt or Igbo names deleted from the voter

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By the next election, political parties will factor into their planning the need to harass INEC officials and have a budget for this activity

register or mayhem caused by thugs of Yoruba extraction. This is surely not a good dialectic and should not be encouraged. Some politicians have prior to the elections made inflammatory statements that bandies tribal sentiments as a reason to vote for one party or the other. Obviously, people believe that this has played out on election day. In my view the loss of lives and property is bad enough, but what constitutes a real danger is the perception or reality that our institutions have been compromised. If the institutions are failing then we can be assured that for as long as institutions are compromised, we would never have free, fair and credible elections. We would also never guarantee the right to life and other freedoms that come with a democracy. So, whilst I am sad that lives have been lost, my greater fear is that if the police and military continue to go to the highest bidder then we can be sure that Nigerian lives will continue to be lost in and out of election season. The deeper consequence of this is that when citizens no longer trust the state to guarantee their security, people will resort to self-help and we must note that anarchy is the next junction after self-help. We already saw this at play when you watch the gory video of the notorious OPC thug Demola being stoned on the street by citizens whose ballot papers he set on fire. Ordinarily, Demola should have been handed over to the police. But this is no ordinary situation, so we are resorting to extraordinary measures. INEC as an institution needs to be protected, but

as it seems neither the police nor the military are giving enough protection to INEC. INEC officials are being held against their will and threatened by political bigwigs. What does this say of a country where the players can beat up the referee in front of the crowd and the same referee is expected to continue being a referee in that same match. Which spectator will trust the outcome of the match? If INEC officials are treated in this manner and perpetrators no matter how highly placed can get away with it, we are not only destroying the fabric of the election umpire but settingdangerous precedent for future elections in Nigeria. By the next election, political parties’will factor into their planning the need to harass INEC officials and have a budget for this activity. By the next election we would have good INEC staff who can’t stand the heat stepping aside whilst those who intend to deal will readily lobby for postings. Politicians will come and go, but our institutions will remain. Our institutions are the hub of a thriving democracy. Any actions that weaken our institutions will never augur well for the country.

Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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