BusinessDay 26 Jul 2018

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news you can trust I **THURSDAY 26 JULY 2018 I vol. 15, no 104 I N300

Sell

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FMDQ Close Foreign Exchange Spot $/N Market I&E FX Window 361.45 CBN Official Rate 305.90

Treasury Bills 3M 0.01 10.98

6M 0.42 12.50

fgn bonds 5 Years

10 Years

20 Years

-0.01% 13.90%

-0.02% 14.18%

0.00% 14.16%

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to NAICOM releases new capital Countdown February 2019: ahead requirements for insurers Aatlook Nigeria’s

CHATHAM HOUSE RESEARCH

Composite firms will require N5bn; N7.5bn; or N15bn

Modestus Anaesoronye

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nsurance regulator, the National Insurance Commission (NAICOM) has introduced new capital requirements for underwriting companies in Nigeria.

The new capital requirement classified in three tier levels, which will commence 1st January 2019, is to compliment the industry risk based supervision

framework started in 2009, targeted at making the insurance industry optmise its potential and contribute maximally to the Nigerian economy.

In the new Tier-Based Minimum Solvenc y Capital released by NAICOM in Lagos yesterday, companies will be classified based on their 2017 financial accounts. In this vein, Tier 3 companies are those that falls within existing

Gives January 1, 2019 as take-off date

paid up capitals of N2 billion for life business; N3 billion for non-life business and N5 billion for composite business.

Companies in this category will be limited to underwrite only risks in life business in the following areas - Individual Life, Health Insurance, Miscellaneous Insurances; while for non-life they will be limited to underwrite risks in these areas - Fire, Motor, General Accident,

Engineering (only classes covered by compulsory insurance), Agriculture and Miscellaneous Insurances. Tier 2 companies are those whose paid up capital has increased by 50 percent above the existing minimum capital.

For life business, their paid up capital will be N3 billion and they are to underwrite all Tier 3 risks and Group Life Assurance (GLA); while for non-life, their Continues on page 34

Again, Saraki writes police, dissociates self from Offa robbery … says plot to keep him in unjust party will fail … as Ortom rejoins PDP

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Continues on page 34

Matthew T. Page & Sola Tayo Introduction n February 2019 Nigerians will vote for their next president, deciding who will lead Africa’s largest economy and most populous country into the next decade. They will also elect many state governors, and all federal and state legislators. The elections will pit the governing All Progressives Congress (APC) against the opposition People’s Democratic Party (PDP) and many smaller parties.

In many ways, the process will serve as a referendum on President Muhammadu Buhari’s first term at the head of a civilian government.

The 2019 elections are shaping up to be of the ‘old school’, with APC incumbents likely to leverage their access to state coffers, their control over patronage mechanisms and their influence over security agents in their ef-

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Continues on page 34

OWEDE AGBAJILEKE, Abuja & Benjamin Agesan, Makurdi

enate President Bukola Saraki has written a second letter to the police disassociating himself from any role in the April 5, 2018 armed robbery incident in Offa, Kwara State.

The Senate President said he

elections

L-R: Joseph Adeniyi Olowofela, Oyo State Commissioner of Education, representing the state governor; Waklek Joshua Mutka, Pro-Chancellor, University of Ibadan; Halima Aliko Dangote, member of board of trustees, Aliko Dangote Foundation; Ahmed Mansur, executive director, Stakeholder, management and corporate communications, Dangote Industries Limited, representing the chairman/founder of Aliko Dangote Foundation; Zouera Youssoufou, MD/CEO, Aliko Dangote Foundation; Adenike Osofisan, director, University of Ibadan School of Business, at the unveiling ceremony of the N.3bn Aliko Dangote Business School, donated to the University of Ibadan Business School.

Inside Nigeria’s democracy under threat - Ekweremadu P. 35

NCC holds back approval for 9mobile takeover Jumoke Akiyode-Lawanson

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he Nigerian Communications Commission (NCC) is yet to grant regulatory approval for the finalisation of 9mobile takeover by teleology holdings limited, even after the company says it has successfully raised the $201 million bid balance and is ready

…Teleology left hanging as regulator declares meetings inconclusive to make payment, at the lapse of the 90days deadline given to close the transaction.

BusinessDay gathers that the meetings held by the telecommunications industry regulator with the owed banks and Security and Exchange Commission (SEC) on July 24, were

inconclusive and resulted in a further meeting held yesterday, July 25, 2018 which also yielded no result as Tony Ojobo, Public Affairs Director, NCC confirmed that “there is no update on the meeting held to finalise the sale of 9mobile.”

Teleology holdings limited,

had before now, successfully raised and made ready its balance of $251 million which was paid into an escrow account about two weeks before the July 25, 2018 deadline date. This is in addition to the initial $50 million paid as a non-refundable deposit on March 21 2018, to show com-

mitment on the sale of 9mobile.

After receipt of the $50 million, NCC said it will carry out due diligence on Teleology Holdings Limited to ascertain the company’s technical capabilities and financial strength to Continues on page 34

2 BUSINESS DAY NEWS

Finance cost rises to N51bn as firms grapple with MPR at 14% TELIAT SULE

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inance costs of some firms listed on the Nigerian Stock Exchange (NSE) rose from N46.29 billion in June 2017 to N51.48 billion at half year 2018, translating to an average increase of 10.5 percent during the period.

The analysis of the finance costs of 15 non-bank firms quoted on the NSE by BusinessDay Research and Intelligence Unit (BRIU) at half year 2018 follows the retention of the monetary policy rate at 14 percent for the umpteenth time by the Central Bank of Nigeria (CBN).

This decision of the CBN is against the wishes of the manufacturers in the country who want the monetary authorities to reduce the benchmark interest rate, following which it is expected to trickle down in the form of lower rates of interests on loans, particularly to players in the real sector of the economy.

A finance cost or borrowing cost refers to the interests and other costs which a firm incurs with regard to the borrowing of funds. Such costs may include account maintenance fees and costs of carrying the debt itself.

Caverton Offshore, Daar Communications, Lafarge Africa, Transcorp, Transnationwide Express and NAHCO recorded increase in finance costs in the first six months of 2018. Caverton Offshore expended N1.27 billion as finance cost at half year 2018 compared with N759.04 million it spent same period in 2017,

amounting to 67 percent increase during the period.

Daar Communications’ finance costs rose by 51 percent from N39.65 million in June 2017 to N59.7 million in similar period in 2018. Lafarge Africa’s finance cost rose 106 percent from N11.5 billion in June 2017 to N23.7 billion at H1 2018.

Similarly, Transcorp had its finance cost rise by 7 percent from N4.7 billion in June 2017 to N5.01 billion same period this year. The finance costs of Transnationwide Express rose by 25 percent from N964,000 in June 2017 to N1.21 million while NAHCO expended N42.5 million on servicing loans in H1 2018 as against N19.7 million in 2017, representing an increase of 116 percent during the period.

On the contrary, CAP, Dangote Cement, Okomu Oil, UACN Property and Unilever recorded significant decline in their finance costs during period. CAP’s cost of debt servicing in the first six months of 2018 fell by 74 percent from N9.05 million in June last year to N2.40 million same period this year.

Dangote Cement witnessed 24 percent reduction in its finance costs as a result of which it spent N18.6 billion in the first six months of 2018 as against N24.4 billion same period last year. Okomu Oil reduced its finance costs by 31 percent just as UACN Property and Unilever recorded 27 percent and 89.6 percent in their finance costs at H1 2018 respectively.

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FG to provide $55m needed to run Nigeria Air in first year of operation Emeka Ucheaga & Ifeoma Okeke

… Enterprise value estimated at $208m

he federal government has said that it plans to provide $55 million upfront grant/viability gap funding to finance start-up capital and pay commitment fees for aircrafts to be leased for initial operations in Nigeria Air and deposit for new aircrafts whose delivery will begin in 2021. The heavily discussed $8 million pre start-up fee is also included in the $55 million investment.

After the first year of operation, the government will do an initial public offer (IPO) on the Nigerian Stock Exchange subject to approval from Securities and Exchange Commission (SEC).

At launch date, FG will own 100 percent stake in Nigeria Air but plans to sell up to 95 percent stake in the company through the IPO. Majority of the shares will be sold to Nigerians and some strategic investors.

Nigeria Air requires $300m which is the entire airline cash flow funding requirements over the next 3 years

and the airline promoters have said there are on-going plans to raise this fund either through equity or debt.

The cash flow estimates contains a 20 percent buffer that was baked into the assumption that the airline may suffer an operating loss in its first year due to competition and need to build a brand.

The assumption that Nigeria Air will only make a loss in its first year of operation seems more like wishful thinking than plausible expectation as many airlines around the world have barely managed to be profitable in the past few years especially airlines in Nigeria which have struggled with significant losses and mounting debt.

Although Nigeria Air will be a welcomed addition to NSE main board, the promoters of the new airline will have an uphill task convincing investors that deploying capital in a thin margin airline business during a period of rising jet fuel prices and slow economic growth in Nigeria is a good idea.

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Airlines have a notorious reputation of multiple bankruptcies, excessive financial and operating leverage, volatile jet fuel prices and very thin profit margin. This dynamic and usually unfavourable structural makeup of the airline industry makes investing in commercial airlines highly risky for rational investors.

To convince investors to take the risk, investors must be convinced that they are buying into the new airline at a big discount to the value of investing in other African government established airlines.

According to John Ojikutu, CEO at Centurion Security and Safety Consults, there are currently seven government owned airlines in Africa. They are Kenya Airways, Ethiopian Airways, Royal Air Maroc, South African Airways, Rwandair and Tunisair established in Kenya, Ethiopia, Morocco, South Africa, Rwanda and Tunisia respectively.

Continues on wwwbusinessday online.com

Continues on wwwbusinessday online.com

Oando, Seplat to see revenue growth as oil rally continues Emeka Ucheaga, Omobola Adu, Sobechukwu Eze & Ibidapo David

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igerian oil exploration companies are set to benefit heavily from the sustained rally in crude oil prices this year. Brent crude is up around 10 percent this year and 61.6 percent over the last one year.

According to moody investors’ service report, “oil companies will continue to reap the benefits of a partial recovery in oil prices, and also continue to pursue efficiencies and maintain competitive cost structures in order to reap the benefits of higher prices.”

A combination of the crude oil price rally, improved production efficiencies and a series of divestments helped Seplat and Oando cut their net debt position and bolstered profitability last year. With oil prices still elevated, analysts expect that FY 2018 earnings will outstrip 2017 performance.

A manager at one of the top multinational oil companies in Nigeria, told businessday analyst that “when oil prices are down there is a negative effect on oil producing companies resulting in a tensed atmosphere. In an attempt to cut cost, workers are cut and contract that where meant to be done halted, but when oil prices rise there would be a reversal.”

Jubril Kareem, head of energy research, Ecobank Research talking about the effect of oil prices on the performance of Seplat said that the effect of oil prices on the company is very obvious, the

performance of Seplat was low in 2016 when the crude oil price was down. The company had a negative Profit after Tax at some point in that period, and now with the rising crude oil price and its production recovering from the Forcados incident the company has had a better performance which has led it to be able to pay dividends in the first quarter of this year to its shareholders.

2017 marked the year of recovery for the oil producers as production cuts by OPEC helped to lift crude oil prices during the year. Even though Oando daily production levels in 2017 dropped to 40,188 boe/day (barrel of oil equivalent) from 43,503 boe/day in 2016, revenue for the company still increased by around N41.7 billion marking a turnaround in the fortunes of the company which had been battling to cut down liabilities which reached almost half a trillion naira in 2015.

Thanks to the uptick in crude oil price, a series of divestments in several joint ventures and debt restructuring, Oando was able to bring down its debt pile by almost 50 percent to around N273 billion.

With crude prices sitting above $70 for most of 2018, analysts expect that Oando will continue to reduce their net debt position and post after tax profits this year.

The capital expenditure of Oando is also likely to maintain an upwards trajectory in 2018 boosted by the recovery in crude oil prices.

Continues on wwwbusinessday online.com

L-R: Tunde Owolabi, group executive, retail banking (Lagos & West), FirstBank; Li Pu, chief accountant, Lekki Free Zone Development Company; Ini Ebong, group executive, Treasury & Financial Institutions; Bashirat Odunewu, group executive, International Banking Group, FirstBank; Abdullahi Ibrahim, executive director, public sector, and Diana Chen, group chairman, CIG Motors, at the FirstBank Chinese Business Forum 2018 held in Lagos, yesterday.

COMPANIES

Beta Glass outperforms peers in Industrial goods index

…sees average annual profit growth of 23% in 5 years David Ibidapo

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nalysis on the industrial goods index reveals that amongst 10 currently listed companies, Beta Glass Plc recorded a 23 percent average growth in its earnings in the last five years. Beta Glass Plc saw its profit grow from N1.42 billion in 2013 to N4.12 billion in 2017 representing 180 percent growth making it the best performing company by earnings growth on the index.

Between 2013 and 2017, only 5 companies recorded positive growth in their earnings on the industrial goods index emerging as the top 5 best performing companies in terms of earnings growth.

Despite the economic headwinds that have stifled economic growth, caused the first recession in 25 years and hurt consumer spending, a few industrial goods companies still

managed to deliver stellar performances. In the earnings growth chart between 2013 and 2017, companies like Beta Glass (23%), Cement Co Northern Nigeria plc (16%), and Cutix plc (11%), stood out.

The industrial goods index comprises the most capitalized and liquid companies involved in industrial machinery, tools, constructions, cement etc. on the Nigerian Stock Exchange. The index is designed to provide an investable benchmark to capture the performance of the industrial goods sectors.

Companies who saw their bottom-line slow during the period are include Meyer plc (-2.41%), Lafarge Africa Plc (-1.90%), First Aluminium Nigeria plc (-15%).

Analysis shows that Beta Glass Plc shares outperformed its peers to be the best performing stock within the period. The firm’s stock price grew by about 255 percent from N14.43 in

2013 to N51.31 in 2017. Within these periods, growth in earnings lagged growth in share price. It could mean the market is sees Beta Glass stocks being undervalued thereby repriced at a higher price than its earlier price.

Other performing stocks in the index include: Dangote Cement plc by 8 percent from N212.8 to N230, Cutix by 12 percent from N1.79 to N2.01, and Berger Paints by 6 percent from N8 to N8.49 during the period.

Amongst worst performing stocks, Portland Paints & Product stood out within the period after its prices declined by 60 percent from N5.5 in 2013 to N2.2 in 2017 amongst its non-performing peers.

Other stocks that underperformed includes: Lafarge by -55% from N98.94 to N44.89; Chemical and Allied Products by -29% from N48.45 to N34; and CCNN by -11% from N10.78 to N9.5 during period Continues on wwwbusinessday online.com

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NEWS

Reps issue 48 hours to NERC to reinstate suspended Ibadan Disco board KEHINDE AKINTOLA, Abuja

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ouse of Representatives on Wednesday issued a 48hour ultimatum to Nigerian Electricity Regulatory Commission (NERC) to reinstate the suspended the Board of Ibadan Distribution Company (IBEDC).

Daniel Asuquo, chairman, House Committee on Power, who issued the ultimatum during the investigative public hearing on the ‘Need to save Ibadan Disco plc,’ harped on the need for the regulatory agency to desist from any act that could send wrong signal to investors.

The lawmaker, who cautioned against the utilisation of public fund to prosecute cases, underscored the need for all parties involved to put public interest above individual gains.

BusinessDay gathered that the Ibadan Disco Board was suspended by NERC sequel to the delay in the payment of $185.6 million facility given to Integrated Energy Distribution and Marketing Com-

Minister debunks report of compelling public officials to fly Nigeria Air IFEOMA OKEKE

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inister of state for aviation, Hadi Sirika, says there is no time he publicly or otherwise said public servants must fly the new Nigerian airline.

Sirika, while responding on his twitter handle @ hadisirika to a report on one of Nigeria’s electronic media (television), discredited the reports that he mentioned that public servants must fly the new Nigeria Air. The minister debunked the report and said, “I never said public servants must fly Nigeria Air.” The minister, on the other hand, said if there would eventually be a policy called “Fly Nigeria Act,” all Nigeria registered airlines would benefit, not only Nigeria Air. “If there will be such a policy, it will be to fly all Nigerian registered carriers,” he stressed.

The minister in his earlier clarifications on issues raised after the unveiling of the new national carrier, Nigeria Air, stated: “As part of efforts to make airlines viable in Nigeria, the ministry is making moves to have the National Assembly pass a fly Nigeria Act. “This Act will require that anybody travelling on a ticket bought with public funds must travel on a Nigerian carrier, unless the route is not served by a Nigerian carrier. However, with your private funds you can do, as you like.

Many countries including America have such as Act.”

pany (IEDC), obtained from consortium of six banks that financed the acquisition of Ibadan Disco facility and Yola Disco, respectively.

According to the document made available to the House, the facility was given to IEDC, parent company and holder of 60 percent equity of Ibadan Disco between May 2015 and May 2016.

The sponsor of the motion further observed that the loan to IEDM’s request for the N6 billion inter-company loan was on the reasonable expectation of receiving the Yola refund within five days of approval since the claim had already been approved

by President Muhammadu Buhari and same had been communicated to IEDM via a letter dated May 21, 2015 from the BPE. In its intervention, Bureau of Public Enterprises (BPE), holder of 40 percent of IBEDC equity on behalf of Federal Government wrote a letter to NERC requesting the Commission to give the Bureau two weeks to resolve

the matter amicably.

The Commission had on June 19, 2018, issued an order No. NERC/181/2018 suspending the executive and non-executive member of IBEDC. Asuquo underscored the need for NERC to maintain status quo as directed by an Abuja Federal High Court in a suit No. FHC/ABJ/CS/665/18, noted that the House is exercising its statutory power to initiate investigation the activities of any institution established by the Act of Parliament.

While responding to inquiry, James Momoh, NERC chairman and Olufunke Dinneh, general manager (legal), argued that the Commission was constrained by the ruling of the Federal High Court to maintain status quo, adding that presentation by the Commission before the Committee would be prejudicial.

He added also that the parties were also prohibited to desist from any action that would meddle with the litiga-

Liquid water ‘lake’ revealed on Mars MARY HALTON, BBC NEWS

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esearchers have found evidence of an existing body of liquid water on Mars. What they believe to be a lake sits under the planet’s south polar ice cap, and is about 20km (12 miles) across.

Previousresearchfoundpossible signs of intermittent liquid water flowing on the martian surface, but this is the first sign of a persistent body of water on the planet in the present day.

Lakebedslikethoseexplored

by Nasa’s Curiosity rover show water was present on the surface of Mars in the past. However, the planet’s climate has since cooled due to its thin atmosphere, leaving most of its water locked up in ice.

The result is exciting because scientists have long searched for signs of present-day liquid water on Mars, but these have come up empty or yielded ambiguous findings. It will also interest those studying the possibilities for life beyondEarth-thoughitdoesnot yet raise the stakes in the search for biology.

The discovery was made using Marsis, a radar instrument on board the European Space Agency’s (Esa) Mars Express orbiter.

“It’s probably not a very large lake,” said Prof Roberto Orosei from the Italian National Institute for Astrophysics, who led the study.

Marsis wasn’t able to determinehowthickthelayerofwater might be, but the research team estimate that it is a minimum of one metre.

“This really qualifies this as a body of water. A lake, not some kind of meltwater filling some space between rock and ice, as happens in certain glaciers on

Earth,” Prof Orosei added.

Radar instruments like Marsis examine the surface and immediate subsurface of the planet by sending out a signal and examining what is bounced back.

The continuous white line at the top of the radar results above marksthebeginningoftheSouth Polar Layered Deposit; a filo pastry-likeaccumulationofwater ice and dust.

Beneath this, researchers spotted something unusual 1.5km under the ice.

“In light blue you can see where the reflections from the bottomarestrongerthansurface reflection. This is something that istousthetelltalesignofthepresence of water,” says Prof Orosei.

Dr Manish Patel from the Open University explained: “We have long since known that the surface of Mars is inhospitable to life as we know it, so the search for life on Mars is now in the subsurface.

“This is where we get sufficient protection from harmful radiation, and the pressure and temperature rise to more favourable levels. Most importantly, this allows liquid water, essential for life.”

This principle of following the water is key to astrobiology - the study of potential life beyond Earth. So, while the findings suggest water is present, they don’t confirm anything further.

“We are not closer to actually detecting life,” Dr Patel told BBC News,“butwhatthisfindingdoes is give us the location of where to look on Mars. It is like a treasure map - except in this case, there will be lots The water’s temperature and chemistry could also pose a problem for any potential martian organisms.

tion.

Speaking earlier, Asuquo reiterated the commitment of the House towards playing the role of trouble shooter in the electricity supply industry and continually work to put out fires that could threaten the growth of the industry.

“One thing that is very clear to industry stakeholders is that Nigerian Electricity Supply Industry (NESI) is now at the point where successor companies (or DISCOs) are anxiously looking to raise further capital to rehabilitate their acquired assets and to invest for the future.

“Also to be noted is that the Independent Power Producers (IPPs) are looking to consolidate their positions in the new post-reform market.

“There can be no doubt that a complicated market such as the NESI calls for all-inclusive stakeholder engagement.

This will include a robust regulatory engagement that will not only be inviting to investors but will also discourage disinvestment of any kind,” he said.

Edo mulls reforestation programme with Presco, others

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do State governor, Godwin Obaseki, says his administration is committed to a comprehensive reforestation programme through collaboration with Presco Nigeria plc, and similar companies in the state.

According to Obaseki, the reforestation programme was conceived to correct the degradation and depletion of trees in forest reserves across the state.

Obaseki, who disclosed this at the pre-annual general meeting cocktail dinner organised by Presco at Obaretin Estate, in the state, said the reforestation programme had become necessary as an audit of forest reserves in the state showed that the reserves had been depleted.

He noted that his administration’s strategy would ensure that the depleted parts of the forest reserves are put to profitable use through partnership with companies that are ready to work with the state to cultivate oil palm and other

economic trees.

“In our private conversation with the chairman of Presco plc. I have received his assurance and we will be working with them on a reforestation programme in the state,” he said.

He explained that 50 y e a r s a g o, Ni g e r i a w a s the number one oil palm producing country in the world, noting that the state and nation want to restore that lost glory.

C h a i r m a n o f P re s c o, Pierre Vandebeeck, commended the governor and his team for finding time to attend the company’s preAGM cocktail dinner and lauded the growing investor confidence in the state resulting from the ease of doing business in all parts of the state.

“We enjoy working in your state because you have created the enabling environment for us to do business here. We are proud of you and pledge to continue to support your administration to enable you succeed in transforming the state.”

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NEWS Weak regulation seen fuelling illicit trade in Nigeria JOSEPHINE OKOJIE

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xperts in the trade sector say Nigeria has lost billions of naira in potential revenue over the years to illicit trade from weak regulations, as such inefficient law enforcement and inadequate sanctions by government at all levels to curb the act.

The country should focus more on strengthening its laws and regulations in order to curb illicit trade and improve government finances, the experts say.

“Countries that have been able to curb their illicit trade are as a result of improved regulatory laws that they adopted. The Nigerian government needs to learn from them,” Olajide Damilola, senior research fellow, Initiative for Public Policy Analysis (IPPA), said at a media roundtable in Lagos, Wednesday.

“Nigeria has to strengthen its legislation and agencies that carry out the checks against illicit trade as well as adopt a holistic approach,” Damilola said.

He defined illicit trade as the production and distribution of consumer goods that had failed to comply with governing rules, laws and regulations in the relevant industry and sectors, and in particular jurisdiction.

Apart from revenue loss by the government, he highlighted health risks to consumers, reduction in market share of local businesses and the fuelling of an underground economy as other effects of illicit trade on the Nigerian economy.

Also speaking at the roundtable, John Isemede, consultant with United Nations Industrial Development Organisation (UNIDO), said for Nigeria to maximise revenue opportunity from increased excise tax, an improved enforcement framework was required for successful policy actions to rein in illicit trade that must be complemented by robust and coordinated law enforcement activities.

“The strengthening of relevant law enforcement au-

thorities, such as the Nigerian Customs among others, is pertinent and greater inter-agency cooperation nationally and trans-nationally is necessary for effective enforcement that would stifle illicit trade,” Isemede said.

“Enhanced bilateral cooperation with major source and transit countries inclusive of cross-border coordination and cooperation is necessary with appropriate sanctions and guarantees,” he said.

According to Isemede, the overarching aim of these measures is to secure the legal supply chain, strengthen enforcement and address the incentives underpinning illicit trade.

Olusegun Sotolu, senior researcher, IPPA, said implementing effective enforcement initiatives against illicit trade would enable government realise revenue objectives to grow the economy and provide social infrastructure.

Terminal operators say 50% of trucks in Apapa belong to manufacturing firms, tank farms, not ports AMAKA ANAGOR-EWUZIE

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ore than 50 percent of the trucks plying Apapa roads are those owned by manufacturing companies located within and outside the Apapa and Tin-Can Island ports, terminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN), say.

A statement issued by Bolaji Akinola, spokesman of STOAN, in Lagos on Wednesday, said these manufacturing firms use trucks in evacuating their products from their factories located in Apapa and Tin-Can areas.

According to Akinola, “Little attention has been paid to the volume of trucks that call at Flour Mills Nigeria and another Sugar refinery inside the Lagos Port Complex Apapa and their operation have nothing to do with

the port, but strictly production concerns. They have annual production capacity of 600,000 tons and over 1 million tons, respectively.

“Everyday, no fewer than 700 trucks are required to move products from the manufacturing sites of both firms to Nigerian market.”

He pointed out that Honeywell Flour Mills and BUA Sugar Refinery, both located within the Tin-Can Island Port Complex, also attract a large number of trucks to Apapa and its environs.

He said Honeywell, with a daily production capacity of about 2,000 tons also required 200 trucks to move its products to the market daily, while BUA’s over 500-ton daily output required more than 50 trucks daily to move finished products to the market.

“The point that stands out here is that collectively, these manufacturing concerns located

within Apapa attract close to one thousand trucks daily,” he said.

If government compels the manufacturing concerns to evacuate their products from Apapa by barges, the Apapa gridlock “will ease considerably,” he suggested.

He said, “The issue really is about the failure of infrastructure in and around Apapa. It is about the failure of the roads and the failure of railways and inland water transportation.

“Apart from these manufacturing concerns, the preponderance of tank farms in Apapa is also a huge attraction for trucks.

“Everyday, more than 3,000 tankers are required to lift petroleum products from the numerous tank farms in Apapa. How about suspending the operations of these tank farms until they’re able to move products out of Apapa by rail and barges?”

ECA strengthens partnership with Nigeria on job creation HOPE MOSES-ASHIKE

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conomic Commission for Africa (ECA) will continue to support member states in their quest for sustainable development that promotes inclusive prosperity, economic opportunity and greater social well-being, Sylvain Boko, principal regional advisor on planning and statistics in the ECA’s Capacity Development Division, says.

Speaking at the beginning of a two-day national policy dialogue on Job Creation in Nigeria, Boko said the ECA had the mandate to promote socio-economic well-being on the continent.

“One of the ways we do this is to work directly with individual Member States to help think through their policy choices and development priorities consistent with their national aspirations,” he told the highlevel meeting participants.

“In this respect, ECA puts a premium on strengthening its relationship and partnership with Nigeria, and the support that it has provided to this National Policy Dialogue on Job Creation is just one manifesta-

tion of this interest,” he said.

He thanked Adeyemi Dipeolu, special advisor to President Muhammadu Buhari on economic matters, for inviting the ECA to be part of the dialogue to discuss Nigeria’s job creation policies as the country worked to improve people’s well-being through job creation initiatives, targeting the youth in particular.

“Job creation, especially for young people, is very important. The ECA will continue to work with Member States to ensure we have partnerships and proactive efforts that can help promote job creation or create a sufficient number of jobs as we seek to address employment needs for our youth on the continent,” he said.

The dialogue was necessitated by Nigeria’s jobless growth over the period 2000 - 2015. The growth was on the back of strong global commodity prices, especially the oil export boom.

The Nigerian government says it recognises this strong growth experience continued to be accompanied by several challenges, the most critical being unemployment.

“It is now well established that economic growth needs to

be inclusive, if it is to improve human welfare and ensure increasing social and political stability,” read the concept note for the dialogue.

“One important means through which growth can be inclusive is by creating jobs. This derives from the reality that the benefits of economic growth reach most people through employment income. Therefore, the challenge of economic management is to ensure that economic growth translates into stable wage-paying jobs that are the key to the continued expansion of the nation’s aggregate consumption, savings and investment.”

The main purpose of the policy dialogue was to conduct a comprehensive analysis of Nigeria’s employment landscape and come up with ways to significantly increase the number of new jobs in the country in the next five years.

Participants discussed the framework for generating a deeper understanding of Nigeria’s unemployment challenge in terms of its magnitude, dimensions and the key determining factors and proposed various steps to address the unemployment challenge.

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NEWS ‘Nigeria’s N208bn Green Bond issuance a step in right direction’

JONATHAN ADEROJU

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ollowing recent plan of the Debt Management Office (DMO) to issue N208 billion Green Bond for environmental projects in Nigeria, analysts say the plan is a step in the right direction for the country.

However, the government should still be cautious of its debt that is rising.

According to Henry Ogbuaku, group head, GDL Asset Management, “I do not think it is going to have any negative impact on the economy, it is a fund like any other fund. If you do the normal fund raising it is the same money you would raise. The key difference is that you will use the raised money to invest on projects that are environmental friendly, like the renewable energy, things that can not harm the environment.

“The only challenge is that it is still a debt looking at the amount of money we are owing as a nation, it will still fall under either domestic or foreign debt so it will increase our debt, but it will have a positive impact on the country if it is properly used for its course that was stated.

“The world today has embraced green bonds, everybody is headed to working on environmental friendly projects. On that account, it is a welcome decision more so in country as Nigeria that has a lot of pollutions, especially from industries and car fumes.

So, it will help a lot if properly deployed.”

According to Dolapo Ashiru, a stockbroker, in a statement to BusinessDay, said,

“Green bonds are not going to have a negative impact on the economy, green bonds are target specific. So, if Nigeria is going to raise N208 billion, the projects that this bond will fund will have to be listed.

Therefore, if properly allocated it would have a positive impact on the country.

“Green bonds are the future now, so many countries are embracing the green bonds and doing environmental projects. So, it is a good thing for the capital market, the environment and the economy. Some of these projects are projects that can help people in the rural areas as well to have a better life. It is a win win situation for us.”

Africa’s largest economy has a GDP of $500 billion, whereas the debt is still at 13 percent of the GDP. Nigeria’s tax GDP ratio 6 percent is one of the lowest in the world today, and this is to show that the tax collection rate is very poor and can also be grown exponentially.

The DMO put Nigeria total national debt stock at N22.72 trillion ($74,278.86bn).

The programme envisages another green bond placement by end-2018 that will be worth around N208 billion ($578m/EUR495m). However, the size of the issue is still not defined and will depend on the value of projects in need of financing.

Nigeria issued its maiden green bond of N10.69 billion at the end of last year. The placement of the five-year bonds with an annual coupon of 13.48 percent was slightly oversubscribed, attracting N10.79 billion worth of subscriptions.

L-R: Samagbeyi Temitope, tax partner (EY Nigeria); Owoseni Saliu, controller, West Africa Business Unit, Coca Cola Nigeria, and Sandra Momah, associate director, EY Nigeria, at the Country-by-Country Reporting Knowledge sharing session, organised by EY Nigeria in Lagos.

Naira gains marginally against dollar at parallel market … as NSE crucial indices decline further by 0.30%

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aira on Wednesday gained marginally against the dollar at the parallel market in Lagos,theNewsAgencyofNigeria reports.

The Nigerian currency gained 50 kobo to close at N358, stronger than N358.5 traded on Tuesday, while the Pound Sterling and the Euro closed at N480 and N418.5, respectively.

At the Bureau De Change (BDC) window, the naira closed at N360 to the dollar, while the Pound Sterling and the Euro closed at N480 and N418.5, respectively.

The naira, however, appreciated at the investors’ window, closing at N361.45, stronger than N361.68 traded on Tuesday, while it was sold at N305.90 at the Central Bank of Nigeria official window.

Meanwhile,GodwinEmefiele, CBN governor, said Nigeria per-

Buhari, common enemy of Nigerians - SDP OWEDE AGBAJILEKE, Abuja

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wenty-hours after 51 lawmakers in both chambers of the National Assembly defected from the All Progressives Congress (APC) to People’s Democratic Party (PDP), the Social Democratic Party (SDP) has paid a courtesy call on the PDP. Particularly, the PDP and SDP described President Muhammadu Buhari as the common enemy of the country.

SDP National Publicity Secretary, Goldba Tolofari, who paid a courtesy call on her counterpart PDP counterpart Kola Ologbondiyan at PDP National secretariat in Abuja on Wednesday said: “We have common enemy, Buhari is the enemy of Nigeria. He’s a common enemy to SDP and PDP, that is why we are here to rescue the nation.”

Tolofari, who said that she brought greetings from SDP Chairman Olu Falae, added that when Nigerians brought Buhari into power, they thought they were bringing in a messiah that will rescue the nation.

While lamenting the poor

state of the economy, the SDP spokesperson pointed out that other Africa countries have lost respect for Nigeria.

“They are not democrat that is why things are deteriorating and we cannot watch and see things going they way they are.

“Buhari is the Minister of Petroleum and the whole place stinks of corruption.

Graduates are taxi drivers, there is hunger everywhere and that is why our youths are carrying guns with killings everywhere,” she said.

Commending O logbondiyan for giving voice to alternative views, which the led Federal Government would rather muffle, Tolofari said, “We have come to show our appreciation for the professional way you have handled the task of speaking for the majority of millions of Nigerians who have been suffering under the yoke of the incompetence and heartlessness that have characterized the President Buhari administration since 2015. We admire your tirelessness, courage and the unassailable logic in your arguments.”

She, however, said that working together with Ologbondiyan would help to uproot the common obstacle holding down national growth and development.

On his part, Ologbondiyan said it was for the purpose of pushing the government of President Buhari out of power that Memorandum of Understanding (MoU) was signed with SDP and other 37 parties.

PDP spokesman said that the rescue mission is already on, adding that the result was the mass defection of lawmakers from APC to PDP at the National Assembly on Tuesday.

He pointed out that President Buhari has failed Nigerians and couldn’t fight Boko Haram, corruption and other vices bedevilling the nation.

He cited a case of the Minister of Finance, Kemi Adeosun, who was accused of certificate forgery, adding, “We don’t expect her to stay a day longer, but because Buhari body language encourages corruption that is why she is still there. Buhari must be voted out.”

formed very well among emerging markets in Africa.

Emefiele in an interaction with newsmen at the end of the Monetary Policy Committee (MPC) meeting in Abuja, added that the foreign exchange market had remained stable.

According to him, the apex bank had enough buffers to defend the naira.

Meanwhile, crucial indices of the Nigerian Stock Exchange (NSE) downgraded further on Wednesday, dropping by 0.30 percent due to political tension.

The market capitalisation shed N39 billion or 0.30 percent to close at N13.166 trillion against N13.205 trillion on Tuesday.

Similarly, the All-Share Index whichopenedat36,455.24dipped by 108.44 points or 0.30 per cent to close at 36,346.80, amid price losses. Forte Oil recorded the highest loss to lead the laggards’ table, dropping by N2.10 to close at N23.10 per share.

Lafarge Africa came second with a loss of N1.75 to close at N27.50, while Dangote Sugar Refinery dropped N1.50 to close atN15.50pershare.FlourMillslost N1 to close at N28.70, while Nigerian Breweries also declined by N1 to close at N104.50 per share.

Conversely, Betaglass led the gainers’ table, increasing by N5.10 to close at N78 per share. Unilever followed with a gain of 45k to close

at N52.55, while Cutix gained 36k to close at N3.99 per share.

United Bank for Africa appreciated by 35k to close at N9.50, whileCementCompanyofNorthernNigeriachalkedup20ktoclose at N26.20 per share.

NAN also reports that the volume of shares traded closed lowerasinvestorsboughtandsold 329.89 million shares worth N3.65 billion in 4,327 deals, a decrease of 12.89 percent.

This was against the 378.69 million shares valued at N4.42 billion exchanged in 4,551 deals on Tuesday. FBN Holdings was the most active stock during the day, trading 88.10 million shares worth N820.04 million.

Thursday 26 July 2018

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Thursday 26 July 2018

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Is the BRICS future on track: 10TH BRICS summit at critical crossroads

DAN STEINBOCK Dan Steinbock is the founder of Difference Group and has served as research director of international business at the India, China and America Institute (US) and a visiting fellow at the Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup. net/

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he 10th BRICS Summit will take place in Johannesburg, South Asia.

Led by Brazil, Russia, India, China and South Africa, the international conference highlights the rising power of large emerging economies in the world economy.

When the first BRICS Summit took place in Yekaterinburg, Russia, after the global crisis, the combined economic power of the major BRIC countries amounted to some $10 trillion, or about a third of the largest economies of the West, as reflected by the US, the core European countries (Germany, UK, France, Italy), and Japan – the so-called G6 economies.

Today, the BRICs are coping with a fragile global recovery that is overshadowed by America’s new protectionism.

China and India on track, Russia and Brazil penalized by politics In 2000, China’s economy was barely a tenth of the US GDP. Brazil was stabilizing after years of turmoil. Russian economy had been crushed by the US-led “shock therapy.” And reforms were intensifying in India.

A decade later, the world economy looked very different. The US economy was still more than twice as big as that of China but Japan’s growth had been penalized by stagnation. Chancellor Merkel’s Germany and President Sarkozy’s

MUHAMMAD AJAH Muhammad Ajah is an advocate of humanity, peace and good governance in Abuja. E-mail mobahawwah@yahoo.co.uk.

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s different governmental and non-governmental organizations continue to talk tough and proffer solutions over the cases of indiscriminate killings and political marginalization in Nigeria, the Supreme Council for Shari’ah in Nigeria (SCSN) and the Senate have added voices on the two scourges partly militating against the development and peaceful coexistence in the country.

The SCSN was led recently by Sheikh Abdur-Rashid Hadiyyatullah and Sheikh Adam Abdullah Idoko to visit President Muhammadu Buhari at the Aso Villa, Abuja to express some of the concerns and worries of the Muslim Ummah of Nigeria. The team was made

France led the ailing Europe.

In Brazil, the Lula era brought about a dramatic catch-up, while reducing historical income polarization. In Manmohan Singh’s India, growth was accelerating. In Russia, President Putin had multiplied the size of the economy by almost six-fold.

Is the world economy’s structural transformation on track? The short answer is an emphatic yes, but there are significant differences among the BRIC economies.

Let’s use the largest economy, the United States, as a benchmark to compare the original BRIC assumptions in the early 2000s with the real economic development in the past two decades and the expected decade.

According to this simple exercise, China’s economic expansion accelerated dramatically, even word-historically, in the course of the 2000s, when its share of the US economy more than tripled from 12% to 40%. The original BRIC estimate was that China would surpass the U.S. in the late 2020s; and that remains the case under Xi Jinping’s leadership. If current trends prevail, Chinese economy would be 13% larger than that of the U.S. by 2030 (only 1% less than the original BRIC projection).

While India’s growth trajectory slipped in the past few years, it has been largely restored by Prime Minister Narendra Modi. If things go right, India’s economy would double relative to the U.S. in the next decade. It could also soar to about a third of the U.S. by 2030 (4% higher than the original BRIC projection).

However, Brazil and Russia have slipped significantly from the original projections.

Under Lula’s visionary leadership, Brazil’s GDP grew even faster than expected by the original BRIC projection. And the first term of Dilma Rousseff was still not far behind the projection.

Nevertheless, since the mid-2010s and Rousseff ’s contested impeachment, political turmoil has harmed Brazil’s growth trajectory,

If current trends prevail, Chinese economy would be 13% larger than that of the U.S. by 2030 (only 1% less than the original BRIC projection) which has penalized middle classes, working people and the poor. If Brazil had been steered by Lula’s administration, its economy would have been almost a fifth of the US GDP by 2030. Now, Brazil’s economy is positioned to be about 13% of that of the US by 2030 (more than 40% smaller than originally expected).

In Russia, President Putin was able to reverse the economy’s drastic fall in the 1990s and restore the growth trajectory in the 2000s. For all practical purposes, Russian economic prospects are very much in line with the original BRIC projection; it is the sanctions by the West that account for the negative difference. Without the controversial sanctions, the Russian economy would have been about a fifth of the U.S. economy by 2030. Thanks to the US-led new Cold War, Russian economy could be less than a tenth of the US GDP by 2030 (some 55% smaller than expected).

Two caveats There are two major caveats to the BRIC future projections. The first involves international trade prospects amid rising US protectionism. The second has to do with the impact of these trade actions on the consequent global prospects.

After a year of threats, the Trump administration initiated a tariff war against China last March. The measures became effective in early July.

What began with “national security reviews” on steel and aluminum soon spread to intellectual property rights and technology. Moreover, the bilateral friction with China soon broadened to US trade conflicts with the NAFTA, Europe, East Asia and

the rest of the world.

If the Trump administration will keep moving away from the postwar trading regime, these bilateral frictions will broaden and multilateralize. And if a full-scale trade war cannot be avoided, then the nascent tariff wars have potential to spread across industry sectors and geographic regions.

After the first half of 2018, the IMF growth projections have already been revised down for Europe, Japan and the UK, and for Brazil and India. As economic uncertainty is rising, investors can no longer ignore it. Given the right adverse triggers, a “sudden reassessment of fundamentals and risks by investors” is now a viable possibility.

Yet, in the long-term, even negative turns – if they remain short-term– cannot alter – but can slow - the relative rise of the large emerging economies. If trade risks grow elevated, secular stagnation in major advanced economies will deepen as well. Second, amid the 2008 global crisis, China accounted for almost 50% of global growth and continues to account for some 30% of global prospects today.

The implication is that how China goes, so will the world go. In positive scenarios, such economic spillovers support global growth. In negative scenarios, such spillovers would penalize those growth prospects – and the collateral damage would likely be the worst in emerging and developing economies.

What will the catch-up by the BRIC economies under these conditions mean in terms of global economic power?

BRICs positioned to surpass G6 in early 2030s The peak of the advanced economies’ global power was in the 1980s and ‘90s. Despite continued absolute expansion, their relative erosion has increased. In 2000, the economies of the major advanced nations of the “West,” as reflected by the G6, were still almost ten times bigger than the BRICs. However, the global crisis sped up their

relative erosion.

By 2010, the G6 were almost three times bigger than the BRICs. Today, their edge has shrunk to about 30 percent.

Despite trade war against China, India’s struggle against poverty, Brazil’s internal turmoil and sanctions against Russia, the BRICs are still likely to surpass the major advanced economies around the early 2030s. By 2030, the G6 economies will be about 5 percent behind the original estimate; the BRICs a bit more, about 7 percent.

Indeed, if G6 were to be balanced with six large emerging economies – rather than just four BRIC nations – by including Indonesia, Mexico or Turkey, or Nigeria or South Africa, the trend line would prove even more prominent.

While advanced economies have been penalized by their sovereign debt crises, large emerging economies have been harmed by political turmoil in Brazil and sanctions against Russia. In other words, the challenges in these two countries are political by nature and both have had to cope with external efforts to shape their sovereign future.

In contrast, as advanced economies have not even begun to reduce their debt burden, their economic leverage may decline relatively faster sometime in the future. In other words, their challenges are largely economic by nature.

There is only one viable way to deliver the economic promise of the BRICs (and the G6), and that is economic development. Any political, quasi-political (e.g., sanctions, regime changes) or military efforts that undercut development will penalize the economic future of both set of countries.

• The original commentary was released by China Daily on July 24, 2018.

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As Shari’ah council decries killings, marginalization up of the shurah members – the consultative team of the council, cutting across all Islamic organizations and notable Ulama across Nigeria including Jamilu Mu’azu Haidara and Dr. Khalid Abubakar Aliyu scribe of Jama’atu NasrilIslam (JNI). SCSN has Dr. Datti Ahmad as President and Mallam Nafiu Baba Ahmad as secretary general. Both were, however, indisposed to attend. The meeting also had in attendance some members of the Federal Executive Council, including the Chief of Staff, Abba Kyari, Minister of FCT, Muhammad Musa Bello, Minister of Information, Lai Muhammad, Minister of Education, Adamu Adamu, Minister of Communication, Adebayo Shittu, Minister of Justice and Attorney General of the Federation, Abubakar Malami as well as the Senior Special Assistant to the President on Media and Publicity, Garba Shehu.

The council was frank to the

President on two major things, amongst others, that are key factors to the challenges facing Nigeria. The two points, President Buhari noted in response, have been the claims of the Nigerian Christian counterparts.

This meant that he is doing his best as the highest organs of the Muslims and Christians of Nigeria are making same claims. Buhari said that there are matters he would have tackled headlong and resolve immediately if not for democratic bottlenecks.

He narrated his experiences as a military head of state and now as a democratic President. He sought for God’s guidance and continuous prayers from fellow Nigerians so that he can surmount the challenges and put lasting smiles on the faces of especially the Nigerian masses.

On its part, the Senate was thrown into a rowdy session on Thursday July 19, 2019 over the long lingering allegations of lopsidedness in the federal appointments.

Senators argued for and against

it until they agreed to direct its committee on federal character led by Senator Tijjani Yahaya Kaura, to probe all appointments of President Buhari. The Deputy President, Ike Ekweremadu, supported by Sen. Chukwuka Utazi, had sparked the argument by raising a point of order alleging favour for a particular region of Nigeria.

The federal character in Nigeria’s constitution stipulates: i) reflection of all ethnic and other sectional groups ii) the need to promote national unity, and iii) command of national loyalty in that Government or in any of its agencies. And I wish to earnestly ask the Presidency and the Senate: Where are the Igbo Muslims in Buhari government or any federal government that has existed in Nigeria? That is not a problem, anyway, because they are “nobody” in their own fatherland and nation-building.

Though President of the Sen-

ate, Dr. Bukola Saraki, said that the allegation could only be considered as the personal opinions, but relying on another point of order, the Leader of the Senate, Ahmed Lawan, countered Ekweremadu on the point that where appointments may seem to favour a region in an agency, other appointments may favour other regions in other agencies.

Saraki said that when the committee submits its report, the lawmakers would have a basis to make allegations, if the need is established. His intervention did not immediately douse the tension raised by members of the upper legislative chamber.

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COMMENT INWALOMHE DONALD Inwalomhe Donald writes from Benin City via inwalomhe.donald@ yahoo.com

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mong the list of goods that are prohibited from being exported to the country or are otherwise restricted in 2017 are Sanitary Wares of Plastics and Domestic Articles and Wares of Plastics (but excluding Baby Feeding bottles) and flushing cistern and waterless toilets. A way the government can help improve menstrual hygiene is by removing sales tax on feminine hygiene products and regularly distributing free menstrual pads in schools There is need for Nigerian government to scrap the tax on the sanitary napkins. The move will help more girls to go to school during their periods and also boost their job prospects. It will help schools and government to regularly include menstrual hygiene education in any health programme organised in communities or the larger society as a whole, It will promote girl- child education in Nigeria. It will boost girl- child education in the rural areas in the current economic development process of Nigeria. It will help Nigeria to realise its greatness globally, she must make strong impact by boosting girl- child education in our rural areas. He further said when we harness the potentials of our girl – child education in Nigeria; we will reduce poverty, provide jobs and create wealth as well as create opportunities for future entrepreneurs.

Scrapping of sanity pads tax will help girl-child in proper menstrual education and hygiene that is es-

KEHINDE AKINFENWA Kehinde Akinfenwa of the Lagos State Ministry of Information and Strategy, Alausa, Ikeja

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port is a globally recognized and increasingly utilized vehicle to achieve development. It’s potential as a tool to reach personal, community, national and international development objective is today being appreciated through series of sporting activities where individuals and group of varying identities interact. Aside the passion accruing from sporting activities, the unifying force and sense of belonging offered by the system promotes global affection, the more reason why it is regarded as a universal language.

To ensure sport enjoy a pride of place in Lagos, the focus of the State Sports Commission has been on the intentional use of sport as a tool in advancing inclusive and sustainable development. The current administration of Mr. Akinwunmi Ambode has in fact remodeled the anatomy of sport in the state by building network of opportunities around the industry.

Early this year, the state government illuminated its path to sport development in the state with the

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Promoting girls’ education: Need to drop tax on sanitary pads in Nigeria sential to boost the confidence of female child in contributing positively to the society. The scrapping of sanitary pads will help in tackling biggest barriers of education for girls. We all know that girls in many schools are forced to stay back home during their periods as there are lack of toilets and sanitization facility which creates a big problem to them during these painful days. Periods are one of the leading factors of our country where every girl has to go through pain for five days of every month.

However, due to lack of money and high prices of sanitary pads, four out of five women avoid using sanitary napkins. Sanitary pads were taxed at 12 percent under Goods and Services Tax (GST) that was launched in 2017 The scrap of tax on sanitary pads will help more girls to go to school during their periods and boost their job prospects. Removing the tax on pads will tackle one of the biggest barriers to education for girls, who are often forced to stay at home due to a lack of access to clean hygiene products, while also facing stigma and a lack of toilets in schools.

Periods are among the leading factors for girls to drop out of school in a country where four out of five women and girls are estimated by campaigners to have no access to sanitary pads. I am sure all mothers and sisters will be very happy to hear that sanitary pads are now 100 percent exempt from tax, Sanitary pads were taxed at more than 5 percent under Nigeria’s Goods and Services Tax (GST) that was launched in 2017.

Nigerian girls and women face many challenges when they have

Removing the tax on pads will tackle one of the biggest barriers to education for girls, who are often forced to stay at home due to a lack of access to clean hygiene products, while also facing stigma and a lack of toilets in schools their periods, especially in rural areas where a lack of awareness and the cost of pads mean many instead use unsanitary cloth or rags, increasing the risk of infections and disease.

The tax exemption will be a massive boost for girls education in Nigeria.

More than a third of girls in Africa miss school during their periods, as they lack access to toilets or pads, and many receive no education about menstruation before reaching puberty, according to a recent report by charity WaterAid and UNICEF. Simply having access to sustainable sanitary pads, the school attendance of many adolescent girls in some rural primary schools of Nigeria is improving.

It is now reasonable for me to say that the distribution of sustainable sanitary pads will make a substantial contribution to the support for girl to stay in school. At first, many girls abscond classes when menstruating, fearing the unknown.

In this article I want to promote and advocate for socioeconomic and emotional wellbeing of ado-

lescent girls and young women by influencing positive social change and build girls leadership to improve their quality of lives. Nigerian government must produce the sustainable sanitary pads which are freely distributed to vulnerable girls. The pads are coupled with menstrual hygiene management which are both helping to keep adolescent girls in school.

The sustainable sanitary pads are made of cotton layers with a water proof layer at the bottom in order to guarantee reasonable absorbing capacity. A package contains 4 pads and a panty with small hooks to keep the pads in place. These are packaged in an attractive small bag. And the washing is straight forward: rinse in cold water, wash with soap in lukewarm water, rinse again and hang to dry.

There is one other reason for the introduction of sustainable sanitary pads which is an environmentally one: Non-sustainable sanitary pads represent a waste problem, they cannot be recycled and they are poisonous towards the environment because of the plastic component.

In northern Nigeria majority of adolescent girls do not go to school when menstruating due to reasons ranging from culture to lack of sanitary facilities and menstrual hygiene management. This eventually leads to a sharp increase in dropout rates among girls after 4, 5 and 6 years of primary education.

There are many reasons for the increased cases of Adolescent girls’ absenteeism and dropping out of school but one is that girls tend to stay at home when menstruating, missing 4 or five days out of every school month.

According, to a 2012 Water Aid

report entitled “School menstrual hygiene management in Africa: More than toilets”, lack of separate and adequate sanitation and washing facilities in schools also discourages girls from attending school, particularly during menstruation, affecting their school performance and increasing their risk of dropping out.

Menstrual hygiene issues were accountable for 12 to 36 days of absence annually per girl. When their cloths leaked at school, most girls left class to change, and then returned to lessons. However, 11% went home and stayed home and 7% said they didn’t come to school at all on heavy days, according to Save the Children.

To promote girls’ education, after puberty, however, it takes more than exercise books and toilets. They also need materials like sustainable sanitary pads and critical information on how to cope with menstruation.

In Nigeria, the introduction of free primary education in 2004 with the introduction of universal basic education has seen a large increase in the number of pupils going to school but this increase in access has also brought about major infrastructure problems and a big decline in quality. This mostly impinges on poor adolescent girls.

For most girls in rural areas, menstruation is connected with a number of mistaken beliefs, which brings about negative results on their lives and education. The reason why a girl-child stops going to school during menstruation is the pre-conceived myths and misconception about this natural event.

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On Lagos’ fresh sports development initiatives inauguration of Boards of Lagos Sport Trust Fund whose significant role as an interface between the private and public sectors in raising funds for sports is presently expanding opportunities for the growth of the sector in the state. The concept which grew from the conviction that well-designed sport-based initiatives can be powerful, practical and cost effective in achieving development goals.

To this end, the State Government has already commenced the development and rehabilitation of sports facilities across the State as well as promotion of sporting activities in the five administrative divisions. This is evident from the facelift given to Agege township stadium to meet the standard of Confederation of African Football where the CAF Champions league matches were staged early this year as well as furnishing of the Mobolaji Johnson Sports Complex Rowe Park Centre, Yaba with world-class facilities.

Governor Akinwunmi Ambode’s persistence on the bequeathal of the historical National Stadium at Onikan to the Lagos State government acquiesce his promise to resuscitate and make all desolated monuments across the state relevant for social

and economic prosperity. Interestingly, the Federal Government is on the verge of entrusting the management of the memorial edifice to the state government after years of persuasion.

The iconic stadium which used to be the citadel of African football holds overwhelming inspiration and memories of African football legends, coaches and football enthusiasts.

From the enchanting atmosphere induced by the colorful spectators, to the golden moments of players’ dexterity, sprawling the warble of supporters.

The sigh of expectation that holds the stadium spellbound, the delightful duration that propels the triumphant lyrics provides the stadium a distinct appeal.

With the Governor’s assurance of its remodeling, Africans should start counting down to series of football rhapsody where spectacular national and international competitions will be hosted. This undoubtedly will reignite the passion and enthusiasm of football lovers in Nigeria thereby promoting aggressive investment in the state’s sport industry.

Recently, the Lagos State Sports Commission has been organizing and supporting a spectrum of domestic and international sporting events geared towards expanding the horizons of the sector and providing plat-

forms for aspiring sportsmen and women in the country to come alive with their dreams. The 2018 Lagos International Squash Classics staged at the Molade Okoya-Thomas Indoor Sports Hall of the Teslim Balogun Stadium epitomized the distance the state government has covered for the tranquility of sports in the state and the country at large.

With the return of the Championship to the Professional Squash Association (PSA) listing as a reward for the impressive staging of the last two editions by the State Government, this year’s edition witnessed classical display from international players from fifteen highly ranked squash playing countries. Players from France, Egypt, England, Germany, Switzerland, Portugal, Ireland, South Africa, U.S., Pakistan, India, Czech Republic among others thronged the state for the six-day tournament to amass points for their global ranking.

One major event that has find reference in global sporting calendar is the Lagos Open Tennis Challenge. Since the tournament joined the ITTF World Tour in 2014, it has remained a model of carrier transition for tennis player, advancing the project of the sport in Africa. The event co-sponsored by the State gov-

ernment and the International Table Tennis Federation remains the highest prize-money tournament among the ITTF Challenge Series as the last edition set a new record of having the largest turnout of over 22 countries where 180 world class and amateur tennis players participated to amass points for their world ranking.

Significant improvement has also been recorded at the Access Bank Lagos City Marathon, the 2018 edition of the race was certified as a Bronze label marathon by Association of International Marathons and Distance Races (AIMS), with its routes officially measured.

Athletes who qualified at this year’s edition were offered automatic slot to the 2018 Commonwealth Games which was held in Gold Coast, Australia in April this year. Governor Akinwunmi Ambode has assured that his government will amplify its commitment towards the event as the goal to achieve the Gold label within the next two editions is paramount.

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

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

Thursday 26 July 2018

The coming summit on education

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ometime in last year, President Mohammed Buhari charged the Ministry of Education to convene a ministerial summit on education to tackle the challenges facing the education sector in Nigeria so as not to miss the globally Sustainable Development Goals (SDGs) train, the driving force of which is education. Education of the citizens is key to other sectors of the economy because “any success recorded in education will have a ripple effect on every other sector of our life,” the President said then.

Statistics provided by the Minister of Education show that as at 2017, over 65 per cent of Nigerian population are illiterates. If we peg the population of Nigeria at 200 million, this means that over 130 million Nigerians are illiterates, a situation the minister described as ‘unbecoming.’ But beyond the illiteracy figure is the quality of education given even to those who are fortunate to attend school.

Although the summit was supposed to have been held way earlier, maybe weeks after the president made the charge, we are still glad it is holding at all and wish to draw attention of policy makers to the following nagging issues in education in the country.

Besides the real issue of access to education for all Nigerians, one urgent area to fix is the mismatch between what is currently taught in schools and the real needs of the outside world. Currently, our education curriculum emphasis es more of rotlearning, factual knowledge and specific subject matter.

We must de-emphasis those and instead emphasise the learning of fundamental, technical and inter-personal skills (language, mathematical reasoning, scientific and s ocial enquir y, analysis, communication, inter-personal skills and general emotional intelligence) to enable the individual function in socially and professionally heterogeneous work settings.

The Nigerian education curriculum has to change or be reinvigorated to emphasise the teaching of entrepreneurship, vocational skills, critical thinking, leadership, communication and s oft skills from inception.

The problem may be that there is, as yet, no any form of collaboration between educational institutions and employers to allow employers communicate clearly their skills requirements to the educational institutions.

Hence, the educational institutions churn out graduates that do not have the skills required by employers and have no skills to become self-reliant or entrepreneurs

themselves. Perhaps, we have a lot to learn from the German model.

Germany’s vocational education programme is a dual system whereby students learn in the classroom and also learn by doing. Typically, trainees attend vocational school one or two days per week, studying the theory and practice of their occupation as well as economics and social studies, foreign languages, and other general subjects. They also do a working apprenticeship in their chosen field where they receive about one-third of the salary of a trained skilled worker.

Germany policy-makers know that not all students like or flourish under the traditional studies system. They realise some clearly don’t have aptitude for college or academic work but are great with their hands. But they see all the kids as potential assets who will shine if they are matched with the right vocation. And it created a system – a strong partnership of employers and unions with government – to do the matching and provide the necessary training. It is not surprising that a majority of German students (some 51.5 per cent) choose this path and Germany has perhaps, one of the lowest unemployment rates in the world.

Second, we must tackle the issue of quality in our univer-

sities. Sadly, in recent times and despite the proliferation of universities and so-called academics, there has been a noticeable drop in the quality of our academics and their contribution to global knowledge base in their disciplines.

Yet these are the people that are supposed to train Nigerians to be competitive globally in their various fields of endeavours.

We will not mince words.

Most of our universities are now a caricature of what a university should be. They are now bereft of any serious academic endeavour and our so-called academics are lost in the conversations within their disciplines due to constant strikes, poor funding and continuous watering of standards. Haven cut themselves off from ‘the conversations’ with their global colleagues, they now create illusory ‘fiefdoms’ in the various universities where they are lords, create their own journals where they ‘converse’ with themselves, assess themselves and award themselves professorships with relish. Meanwhile, the degrees from the universities are almost meaningless.

Until the universities and standards are brought back, we may continue to miss out in the global market place of ideas and will continue to churn out school leavers that are not fit to compete in the modern world.

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Thursday 26 July 2018

BUSINESS

COMPANIES & MARKETS

13

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NEM Insurance consistent earnings growth driving share price appreciation

Pg. 14

Co 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

PZ Cussons sees a challenging year as profit drops on weak Nigeria sales ...PAT down by 21.5 percent.

Cynthia Ikwuetoghu & Jonathan Aderoju

S

oaps and Cosmetics maker, PZ Cussons Plc posted a doubledigit drop of 21.5 percent in annual pre-tax profit, on Tuesday and expects another tough year ahead, hit by lower sales in Nigeria and weak consumer spending in the UK. Very tough trading conditions in Nigeria accounted for the majority of the reduction in adjusted operating profit, which was 18.2 percent lower.

After higher interest charges for the year, the group’s adjusted profit before tax (PBT) was £80.1million, a 21.5 percent decline from its prior year result of £102 million.

According to Caroline Silver, PZ Cussons’s chairperson, “Macro-conditions in Nigeria have resulted in a sharp decline in Africa profits for the year and hence a disappointing result for the

Group as a whole” However, a sustained lack of liquidity at both consumer and trade level has resulted in a significant contraction in the size of the market, resulting in lower volumes, prices and margins across most areas of its portfolio in Nigeria.

PZ Cussons stated that as higher oil prices have contributed to increased foreign exchange reserves for the country and a relatively stable exchange rate regime, liquidity has not flowed down into the economy. In addition, wage inflation has continued to remain well behind the significant cost inflation of recent years, resulting in consumer disposable income under pressure with subdued buying levels.

Africa generates the highest revenue in PZ of 36 percent out of which Nigeria represents about 90 percent of the revenue. Among its products, personal care represents about 57 percent of revenue generated; home

NPA advised against waiver to illegal STS operators JOSHUA BASSEY

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he Nigerian Ports Authority (NPA) has been advised against granting waivers to illegal Ship-To-Ship (STS) operators in the maritime industry to avoid revenue leakages to the Federal Government.

Ifeanyi Mazeli, president, Maritime Workers Union of Nigeria (MWUN), NPA branch, in an interview in Lagos, expressed concern that some operators within the sector were engaged in illegal midstream trans-loading of petroleum products without paying accurate charges.

According to Mazeli, this is becoming rampant in the West and Central Africa offshore waters, and creating huge gaps in revenue that should accrue to Nigeria, just as he stressed that the NPA monitors Tropical West Africa Limited.

“If Tropical West Africa is involved in importation of products, then it should pay in foreign currency. The union does not want issues that will

distabilise the industry. “We (maritime workers) know that there is no refinery in the main sea even if the company claims to be bringing their products from Lagos shore or Cotonu shore. The workers know that every product that Tropical West Africa brings into the country comes from oversea, he said.

The union branch chairman said that the NPA management does not have the power to grant a waiver except through the Federal Government. He said that the union would support directive of NPA management that STS operations in offshore waters and offshore Tropical West Africa vessels calling at the ports as foreign be invoiced appropriately.

Emeka Nwaiwu, a port worker who spoke on the issue said it was necessary for the company to pay the right charges to boost government revenue from the port. He also expressed that that importers were paying huge demurrage for their goods due to traffic gridlock in Apapa and environs.

care about 16 percent, food & nutrition about 17 percent, Electricals is 9 percent and

others which is 1 percent.

Africa’s results showed a decline in reported revenue

of 9.8 percent to £275.6 million from £305 million and on a constant currency basis

L-R: Seye Awojobi, registrar/CE, Chartered Institute of Bankers (CIBN); Ken Opara, 2nd vice president, CIBN; Herbert Ingo, consul general of the federal republic of Germany; Uche Olowu, president/ chairman of Council, CIBN, and Deji Olanrewaju, national treasurer, CIBN at the farewell dinner in honor of Herbert Ingo in Lagos.

of 2.0 percent. Adjusted operating profit was 77.7 percent lower on a reported basis from £28.3 million in May 31 2017 to £6.3 million in the corresponding period in 2018 and 76.1 percent lower on a constant currency basis.

The sharp decline in adjusted operating profit was caused by a significant market contraction in Nigeria resulting in competitive trading conditions and lower volumes, prices and margins. Whilst the Nutricima milk business was hardest hit by these conditions, resulting in an operating loss for the year, profits were also lower across the rest of the portfolio.

PZ Cussons expect macro conditions to remain challenging in most of the markets of their operations with general elections in Nigeria falling in the second half of their financial year. Commodity costs and exchange rates are expected to remain volatile.

AXA Mansard launches First Responders Service Modestus Anaesoronye

I

n line with its commitment to enhance customer experience, AXA Mansard Plc, a member of AXA Group; the global leader in insurance and asset management, has launched the first responder service which aims to support customers whose vehicles are insured with the company whenever they are involved in road accidents.

The First Responder Service is an initiative meant to provide immediate assistance to customers on AXA Mansard’s retail

motor insurance plan right at the scene of an accident. The service also aims to reduce turnaround time for service delivery to customers.

With the introduction of the new service, customers with vehicles worth a minimum of N3, 000,000 (Three million Naira) will have access to trained First Responder Officers. The First Responder Officers will provide on-the-spot assistance to eligible customers at the scene of an accident, assess damage to customers’ vehicles and start the claims settlement process with a view to concluding it rapidly.

Rashidat Adebisi, division-

al director, Retail Solutions, AXA Mansard Insurance, commenting about this new service, said “We are delighted to introduce AXA First Responder service to our motor insurance subscribers. Customer experience is very important to us and we are ensuring that we provide services that would be customer oriented.

The service would help our customers to get both service and support in the event of a road traffic accident. We assure our customers that they would receive the needed support as they navigate their ways around town.”

According to her, “With the First Responder service, eligible customers will have access to the First Responder Officers who will provide on-the-spot assistance to them should they be involved in an accident. This is another benefit of being on the AXA Mansard comprehensive motor insurance plan. The First Responder Officers will be accessible to customers between the hours of 7:00am and 7:00pm on weekdays; and access to the service is absolutely free. The service is currently only available in Victoria Island, Ikoyi, Lekki, Ikeja, and Surulere areas in Lagos with a view to expand.”

Innovative drive to reposition, recapitalize earns FMBN boss recognition

T

he aggressive and innovative efforts being made by the executive management of the Federal Mortgage Bank of Nigeria (FMBN) led by Ahmed Dangiwa, the managing director and chief executive officer, has earned him and the bank recognition by the Nigeria Housing Awards.

The award, ‘2018 Mortgage Finance Person of the Year’ in the male category, which was given and received at the just

concluded Abuja International Housing Show (AIHS) in Abuja, was in recognition of Dangiwa’s drive and efforts at ensuring that the apex mortgage bank functions more effectively in order to deliver on its mandate to catalyse the provision of affordable social housing for Nigerian workers.

The organizers of the award also considered the planned N500billion recapitalization of the bank aimed to boost its capacity in creating affordable

mortgages which has received federal government’s and stakeholders’ support.

FMBN has recorded other milestones including zero-equity contribution for mortgage loans that are up to N5 million and below, reduction of equity for loans of up to N15 million from 30 to 10 percent as well as increased tempo in the provision of housing loans to Nigerian workers under the National Housing Fund (NHF).

“We thank the organizers of the Nigeria Housing Awards for the industry recognition and we dedicate this award to the executive management team and staff of FMBN for their support, contribution and hard work which are driving the very important work to restructure our bank, not just to play the leading role in tackling the high housing deficit but, also in building a strong and robust mortgage finance market”, Dangiwa responded.

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Thursday 26 July 2018

COMPANIES & MARKETS

NEM Insurance consistent earnings growth driving share price appreciation …as H2 net income rises 20.96% BALA AUGIE

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EM insurance Nigeria Plc’s consistent earnings growth in the last two years amid a tough and unpredictable macroeconomic environment validates its share price appreciation on the floor of the bourse.

Investors reward an insurer with an efficient underwriting capacity, high return on equity, diversified product base, healthy balance sheet and a high solvency margin.

NEM Insurance’s performance has continued to gather momentum, as evidenced in an impressive half year results that showed improvement in key ratios.

For the first six months through June 2018, the company’s net income increased by 20.96 percent to N1.50 billion from N1.24 billion the previ-

ous year.

The growth at the bottom line (profit) was largely driven by investment income and increase in premium income.

Gross premium written (GPW) increased by 12.82 percent to N9.15 billion in June 2018 from N8.11 billion the previous year; driven by 154.30 percent surge in revenue from the oil and gas business.

There are upside potentials for the insurer as its associate in Ghana, RegencyNem Insurance Ghana Limited, is riding on the synergy of the merger as the company is presently making waves in the Ghanian insurance industry, and is set to contribute significantly to our bottom line in the years ahead.

NEM insurance has been able to turn each unit of premium income into higher profit as profitability ratio increased to 40.36 percent in June 2018 as against 28.44 percent the previous year.

While NEM’s finance conditions have been improving

amid low penetration, experts say it is important for operators to pursue digital transformation in order to meet the needs of the young and future generation.

Digital technology is becoming a disruptor to the traditional insurance business model as tech savvy firms are selling products to policy holders or customers through the online medium.

“The big difference in insurance in the future is going to be Service,” Eldes Mattiuzzo, CEO of Youse Seguros, an online and insurance sales platform.

NEM insurance’s underwriting profit increased by 10.31 percent to N2.78 billion in June 2018 from N2.52 billion as at June 2017.

NEM’s shares have gained 170.28 percent since the last year (using Monday’s closing price), outperforming the Nigerian Stock Exchange (NSE) All Share Index (ASI) of 12.35 percent.

L-R: Dennis Okoro, director, MTN Foundation; Angela Uwakwem, commissioner for health, Imo State; Abasi-Ekong Udobang, senior manager, MTN Foundation; Ben Bernard Uchenwangbe, director of Adminstration, IMSUTH, and Victor Orie-Ononogbu, Manager, Health Portfolio, MTN Foundation, at the Handover ceremony of the MTN Foundation Emergency Ward Intervention project in Imo State.

FBNInsurance earns ‘A+’ from Agusto & Co. rating agency Modestus Anaesoronye

F

ast-growing life insurer, FBNInsurance limited, has confirmed its continuous growth amongst the comity of insurers by bagging the prestigious ‘A+’ credit rating from the foremost research and credit ratings company, Agusto & Co. In the final rating report, the credit ratings company

acknowledged FBNInsurance as a “financial institution with satisfactory financial condition and adequate capacity to meet its obligations as and when they fall due.” The report states further that: “the rating reflects its (FBNInsurance’s) strong capitalization, good profitability, moderate exposure to underwriting risk, good cash flow and liquidity as well as an experienced management team.”

Industry watchers believe that while the company’s affiliation to FBNHoldings has helped her business development and risk management initiatives, her association with the Sanlam Group (SA) on the other hand has clearly aided the insurer’s technical capabilities thereby making it a vibrant business concern. This much was acknowledged by her recent announcement as the 2018 AIO/AfricaRe Insur-

ance Company of the Year in Accra, Ghana.

It will be recalled that FBNInsurance has consistently been rated A+ for the past three years. With a growing retail network of over 2000 retail sales agents operating from 42 sales outlets and 3 branch offices nationwide, the company is poised to increase her market share with unique product offerings and a commitment to customer relationship.

Transcorp Hilton Abuja leverages on technology to elevate guest experience …launches ICEapp by Intelity OBINNA EMELIKE

A

s part of its ongoing efforts at elevating guests experience and ensuring value for money offerings, Transcorp Hilton Abuja has introduced a digital guest solution from Intelity that enables its guests to control their experiences and engage with the hotel from their personal iOS and Android mobile devices even before their arrival at the hotel.

In addition to that, they are already offering its guests a variety of hospitality technology amenities, such as complimentary high-speed Internet access in guestrooms and public areas, the new ICEapp powered by Intelity, will equip

the award-winning, five-star hotel with a direct connection between guests and the hotel team to improve guest service and communication.

With the ICEapp, all hotel services are made available on a guest’s personal iPhone, iPad, or Android smartphone or tablet. Guests can access the information needed to personalize a stay and place requests that are sent directly to appropriate hotel team members. Top among the mobile hotel services are pre-arrival requests, dining information, housekeeping, valet services and maintenance requests.

“We believe strongly in the digital guest experience, which includes offering a mobile app, so guests have easy access to information everywhere during their stay,”said Valentine

Ozigbo, managing director/ CEO, Transcorp Hotels Plc, the owning company of Transcorp Hilton Abuja. “We are excited to present this innovative solution and establish our hotel as forward thinking when it comes to using mobile to meet our guests’ needs.”

Commenting on the introduction of the mobile solution, Etienne Gailliez, general manager, Transcorp Hilton Abuja, said, “Guests want a more personalized experience, and ICEapp provides the digital engagement we need to start listening to their requests before, during, and even after their stay. We are delighted to introduce this new hospitality technology which enables us to deliver personalized experiences to our guests.”

David Adelson, Intelity

CEO, said ICEapp is not replacing personalized service, it is enhancing it.

“We are delighted to expand our relationship with Hilton Hotels & Resorts by bringing ICEapp to Nigeria,” Adelson said. “This solution gives Transcorp Hilton Abuja guests more control over their stay by turning their mobile devices into guest service tools, whether they are physically on premises or offsite – literally anywhere else in the world.

It also enables the hotel’s management and marketing teams to better engage their guests and take hospitality to even greater heights.”

Transcorp Hilton Abuja’s ICEapp, is available for download on Google Play or the App Store.

Air Peace scales IOSA renewal hurdle, pledges to sustain safety standards IFEOMA OKEKE

O

ne of Nig er ia’s leading carriers, Air Peace has again passed the rigorous International Air Transport Association Operational Safety Audit (IOSA), pledging to sustain the high standards of its flight operations.

The airline set a record when it secured its initial IOSA certificate barely two years into its operations and was admitted as a member of the global aviation body.

Samson Fatokun, area manager (South West Africa) of IATA, presented the IOSA renewal certificate to Allen Onyema, the chairman/chief executive officer of Air Peace, at the carrier’s corporate headquarters in Lagos at the weekend, describing the fresh exercise as much tougher than the first audit exercise the airline’s operations were subjected to.

Fatokun congratulated Air Peace on scaling the tough test, urging the carrier’s management to remain uncompromising in ensuring the safety of its flight operations.

Receiving the certificate,

Onyema commended IATA for insisting on strict safety requirements for flight operations. The carrier, he assured, would continue to raise the bar of service in the aviation industry.

Air Peace, he said, was ready to receive guidance from IATA to ensure its operations always accorded with global best practices and standards.

Onyema confirmed that important aviation and corporate players across the world were amazed at the huge growth of Air Peace, which recently increased its fleet size to 24 aircraft to cater to the expansion of its domestic operations from 12 routes, regional flights to more West Coast cities besides Accra, Freetown, Banjul and Dakar as well as launch of its long-haul flights to London, Dubai, Sharjah, Guangzhou-China, Mumbai and South Africa.

The carrier says it is set to launch its flights to Makurdi, Warri, and Nigerian Air Force Base in Port Harcourt, Kaduna and Monrovia and restart its Asaba and Sokoto services under its subsidiary, Air Peace Hopper.

Thursday 26 July 2018

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BUSINESS DAY

15

COMPANIES & MARKETS FRC bars CEOs from becoming chairmen of their companies

Business Event

…new national code scheduled to be released in August 2018 Endurance Okafor

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ompanies are not to allow a Managing Director (MD)/Chief Executive Officer (CEO) or an Executive Director (ED) to go on becoming Chairman of the same Company, according to the new code of corporate governance of the Financial Reporting Council (FRC This was disclosed by the Financial Reporting Council (FRC) of Nigeria, a federal government Parastatal under the supervision of the Federal Ministry of Industry, Trade and Investment in Lagos, during the public hearing/sensitization of the Nigeria code of corporate governance.

The new guidelines were unveiled by the team led by the executive secretary of FRC/ chief executive officer, Daniel Asapokhai, when the council rounded off its nationwide draft presentation and consultation that was carried out in all the geo-political zones in Nigeria.

Tomi Adepoju, partner at KPMG and a member of the Nigeria corporate code committee, while speaking on the new guideline said a CEO not becoming a chairman of the same company is one of the best practiced standards around the world because while a person occupied the position of a CEO, there would have been many policies and decision laid down in the organisation and when the CEO moves to the position of a chairman and a new one comes in and is reviewing things based on the current circumstances the former CEO may feel he

or she is been reviewed and this may start a friction in the company.

“In a case of a domineering chairman, he may expect the new CEO to come to him to be granted permission before taking decision and as such the CEO position may become hijacked by a person who is also playing the role of an executive. As a result, there could also be a situation where other members of the organisation will be undermining the new CEO,” Adepoju said.

This practices where by a CEO becomes a chairman or in some cases plays the role of both positions is most common in the U.S, and it is one of the reasons why it is not considered as an exemplary country to look at when making reference to good corporate governance Although the new guideline in Nigeria’s code of corporate governance also cited an exception “if in very exceptional circumstances the Board decides that a former MD/CEO or an ED should become Chairman, a cool-off period of three years should be adopted,” as compiled from the code.

The need for a new and better corporate governance code for Africa’s largest economy was born out of the suspension placed on the previous code in October 28, 2016 by the federal government as a result of the nationwide uproar it had caused during the period.

A fifteen-man technical committee was therefore set up in January 18, 2018, comprising of representatives from regulatory agencies, industry professionals and experienced individuals constituted by the board of the FRC to review and come up with new code such

as the drafted.

The new code aims to standardise the practise of good corporate governance and induce voluntary compliance with the highest ethical standards across the Nigerian market.

In line with this, it applies to a wide range of companies, specifically to the following interest entities, which are required to adopt the code; all public companies ( whether listed or not), all private companies that are holding companies of public companies and other regulated entities, concessioned and or privatised companies, and regulated private companies One major difference of the drafted code from the former is that the new code to be approved would start immediately but it would take up to 2020 for companies to report how far they had implemented the principles.

Speaking at the event in Lagos, Asapokhai said “it is our belief that this Code will promote ease of doing business, attract local and foreign investments and enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability. In addition, this Code will raise public awareness of good corporate governance practices.”

Meanwhile, the government agency also disclosed that there is no punitive measure for non-compliance but rather the market would punish companies that failed to operate by the new codes because such companies would not be regarded as standard firms and would hardly pass due diligence tests.

L-R: Laurence Griffin, head international coach, Chelsea FC Rexona Academy; Ayobami Adekunle; Ayobami Jegede; Ebuka Anumba, all are winners of Rexona Africa XI Street to Stamford Academy, and Kennedy Boboye, head coach, Rexona XI Street to Stamford Academy, at the unveiling of the winners for the Rexona Africa XI straight to Stamford competition in Lagos. Pic by Olawale Amoo.

L-R: Seyi Osifalujo, chief technology officer, Precise Financial Systems (PFS) receiving an award from Christabel Onyejekwe, executive director, technology & operations, Nigeria Inter Bank Settlement Systems (NIBSS) Plc, at the celebration of the successful completion of National Automated Clearing Systems (NACS) hosted by Nigeria Inter Bank Settlement System (NIBSS) in Lagos.

L-R: Margaret Banasko, country marketing lead West Africa, Lola Kassim, general manager West Africa, and Tayo Oyegunle, driver operations manager Nigeria, all of Uber, at the interactive media parley to commemorate Uber’s 4th anniversary in Lagos.

Dana recognized for social responsibility impact

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ne of Nigeria’s leading airlines, Dana Air has clinched another award for being the most socially responsible airline contribution to the fight against sickle cell anemia and cancer in Nigeria across the country since its inception in 2008.

The award was at the 22nd League of Airport and Aviation Correspondents (LAAC) seminar and awards held recently in Lagos.

The LAAC seminar and

awards brought together stakeholders, airline operators, industry professionals, security agencies, aviation support service providers, and international airlines to brainstorm on the theme of the seminar – “Financing Aviation Development through Private Sector Partnership,’’ Kingsley Ezenwa, the media and communications manager of Dana Air, while reacting to the award said, “at least our CSR efforts and contribution to the fight against sickle cell anemia

and cancer is being recognized by a credible body. This is the 3rd award and we are happy that our media partners actually believe in our commitment to continually give back to the society. We thank LAAC for not only supporting the industry, but for being a credible watchdog.’’

Meanwhile the airline has commended the Federal Government for launching a campaign against fake news in Nigeria, stating that the campaign is timely and in the right direction.

L-R: Adepetu Olayinka, senior manager, Protocol Liaison Officer, Rural Electrification Agency; Njide Ndili, country director, Phamaccess Foundation, and Tope Dare, executive director, sales and strategy (Infrastructure Business Division), Inlaks, during the inaugural Solar Power Stakeholders Networking programme, in Lagos.

16

BUSINESS DAY

Thursday 26 July 2018

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Investor

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (13 – 07–18)

38,278.55

N13.866 trillion

2,720.42

1,719.17

949.59

Week close (19 – 07–18)

36,603.44

N13.260 trillion

2,663.89

1,609.44

798.75

Percentage change (WoW) Percentage change (YTD)

-2.11 -4.29

-0.16 3.89

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

927.72

323.22

2,626.59

2,008.70

1,490.07

858.39

309.15

2,512.08

1,864.82

1,383.86

NSE Banking Index

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

1,746.68

475.44

139.37

1,739.08 1,642.22

476.05

150.44

449.05

143.63

NSE 30 Index

-3.83

-5.12

-2.92

-6.08

-26.54

-5.98

-3.59 -5.55

0.08 3.06

976.10

-3.72 -12.06

-2.22

-1.93

-3.26

-4.07

-6.51

-1.89

-5.61

0.30

H1’18: Foreign investors pull N419bn out of Nigerian stocks market … Investors seen taking position as H1 earnings season rolls on HEANYI NWACHUKWU

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espite that, foreign portfolio investors (FPIs) at the Nigerian stock market had an inward investment of about N380.65billion in the six months period to June 2018, the market witnessed remarkable outflows of N419.06billion by foreigners in the same period.

Nigerian stock market has recorded increased sell-off lately as both foreign and domestic investors keep eyes on possible risks ahead of the nation 2019 general elections.

Analysts expect record sell-off which recently brought the market to an eight-month low to taper slightly by the end of this month hoping that first-half (H1) scorecards of many listed corporates will exceed analysts’ expectations.

“In the week ahead, we expect investors to start positioning for corporate releases as the H1-18 earnings season rolls on. Also, on a technical standpoint, with the Relative Strength Index (RSI) currently in the oversold region (about 30points), we anticipate a near term market rebound”, according to Kayode Tinuoye-led research team at United Capital Plc. After a negative performance last week driven largely by sell pressures in bellwether stocks, the Lagos Bourse kicked-off this with on a positive note as investors moved to take position in fundamentally sound stocks as more first-half earnings trickle in.

According to Nigerian Stock Exchange (NSE) data on domestic and foreign portfolio participation in equity trading , stock valued at N1.597trillion were exchanged on the Lagos Bourse, of which N799.70billion worth of equities trade were done by foreign investors while domestic investors

traded stocks worth N797.47billion in H1’18.

The domestic composition of transactions on the Exchange between January and June 2018 shows domestic institutional investors still stronger with record stock trades valued at N483.65billion while domestic retail investors exchanged N313.84billion worth of stocks in the six months period.

Foreign transactions which reached N1.539trillion in 2014 declined to N518billion in 2016, but increased significantly by 133percent to N1.208trillion in 2017.

Domestic transactions decreased by 62.46percent from N3.556trillion in 2007 to N1.335trillion in 2017.

However, there was a significant increase in 2017 by 111percent, from N634 billion recorded in 2016.

Month-on-month (mom), the institutional composition of

the domestic market reduced by 38.88percent, from N92.03 billion in May to N56.24 billion in June 2018; while the retail composition decreased by 12.52percent, from N33.29billion to N29.12 billion within the same period.

This indicates a significantly lower participation by retail investors over their institutional counterparts.

“We anticipate more interest from domestic retail and institutional investors who understand the political terrain better by taking advantage of cheaper valuations in the fourthquarter (Q4)”, according to Ayodeji Ebo, Managing Director/CEO at Lagosbased Afrinvest Securities Limited.

Total transactions at the nation’s bourse reduced by 41percent from N318.27 billion recorded in May 2018 to N187.78billion (about $614.1 million) in June 2018. The cumulative transactions from January to June increased by 70.78percent from

N935.26 billion recorded in 2017 to N1.597 trillion in 2018.

According to the NSE trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows, foreign investors outperformed domestic investors by 9.07percent in June 2018.

Total domestic transactions reduced by 31.87percent from N125.32 billion in May to N85.37 billion in June 2018. Foreign transactions also reduced by 46.92percent from N192.95 billion to N102.41 billion within the same period.

There was a 22.71percent decrease in foreign inflows from N62.06 billion in May 2018 to N47.96 billion in June 2018.

However, there was also a significant reduction in foreign outflows which reduced by 58.40percent from N130.89 billion to N54.45 billion within the same period.

Market leaders forecast IPO resurgence

A

fter geopolitical uncertainty and shifting trade policies impacted first-half (H1) activity, global market leaders have forecasted resurgence in Initial Public Offering (IPO) activities in this second half (H2) of 2018.

Global IPO activity declined in second-quarter (Q2) of 2018, resulting in 660 IPOs in H1 2018, a 21percent decrease from H1 2017.

However, despite this slowdown, global IPO markets raised $94.3billion in the first half of 2018, a 5percent year-onyear increase and the highest proceeds for the first half of a year since H1 2015.

These and other findings were published in the EY quarterly report, Global IPO trends: Q2 2018.

“Global IPO figures for the first half of 2018 dipped by volume compared with the same period in 2017, despite higher valuations on some of the world’s largest markets. The good news is that economic conditions continue to be encouraging, equity valuations are high in many parts of the world and interest rates remain low. As a result, we expect a resurgence in IPO activity during the second half of 2018,” said Martin Steinbach, EY Global and EMEIA IPO Leader.

“Strong macroeconomic fundamentals and investor appetite act as a counterbalance to the otherwise volatile performance of IPO activity across the region. Following the general declines in IPO performance in the first six months of 2018, largely resulting from recent interest rate increases, global political and economic uncertainties, we expect to see a rebound in the deal size of the IPOs in the second half of the year as a number of mega IPOs begin to hit the market,” said Ringo Choi, EY Asia-Pacific IPO Leader.

“The second quarter of 2018 was marked by an influx of technology IPOs entering the US market. From 2013 to 2017, we saw health care companies dominate the markets in terms of deal count, but since then we’ve seen technology companies slowly gaining.

Deal count and proceeds raised are up compared with last year, and post-IPO share price performance is solid, creating momentum heading into the second half of the year,” said Jackie Kelley, EY Americas IPO Markets Leader.

Thursday 26 July 2018

C002D5556

BUSINESS DAY

17

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United Capital investment views

Investor’s Square

Local bourse extends bearish streak

…sheds 2.1%

T

he Nigerian local bourse extended the prior week’s bearish sentiments as the NSE-ASI trended southwards on 4 of the 5 trading days during the week.

The negative performance was largely due to price declines in bellwether Banks.

Thus, the benchmark Index fell 2.1percent week-on-week (w/w) to 36,603.4 points (pts) while year-to-date (YtD) return diminished to -4.3percent.

Also, market capitalisation lost N285.9billion in value to end the week at N13.3trillion.

Activity level was mixed as average volume traded advanced 36.6percent w/w to 333million units while average value traded fell 14.4percent w/w to N3billion.

Sector performances were also broadly bearish as 4 of the 5 sectors we track declined w/w. The Consumer Goods (-3.7percent), Banking (-3.6percent), Industrial Goods (-3.3percent) and Oil & Gas (-2.2percent) indices all closed the week in the red territory, consequent on significant w/w losses in NESTLE(-6.4percent), Nigerian Breweries (-2.3percent), FBNHoldings (-13percent), UBA (-4.5percent), GUARANTY (-4.4percent), ZENITH (-4.2percent), SEPLAT (+6.2p ercent), WAP CO (-13.3percent) and OANDO (-13.3percent) while the Insurance (+0.1percent) Index was the week’s only gainer on the back of price appreciation in LINKASSURE (+9.7percent) and CONTINSURE (+3.4percent).

Investors’ sentiment remained downbeat at 0.3x (previously 0.3x); 15 stocks advanced while 48 declined w/w. In the week ahead, we expect investors to start positioning for corporate releases as the H1-18 earnings seasons rolls on. Also, on a technical standpoint, with the Relative Strength Index (RSI) currently in the oversold region (c.30points), we anticipate a near term market rebound.

Money Market : DMO fills only 60percent on underwhelming demand at longer tenors System liquidity was relatively liquid in the week to 20th of July-18, as money market rates averag e d 9.3percent (Previous week: 13.8percent). The weeks’ liquidity profile was impacted by provisioning by banks for FX sales by the CBN, as well as net outflows from OMO and PMA T-bills.

During the week, the Apex Bank conducted its bi-monthly Nigerian Treasury Bill (NTB) auction, wherein it was only

able to re-finance N107.2bn of the N178.6bn initially offered for subscription. Demand was soft with an average bid-tocover ratio of 1.0x. Similar to the prior auction, the auction was carried out at an average stop rate of 10.7percent (previously 10.6percent). In terms of liquidity profile, N404.3billion maturing bills are expected to hit the system this week.

Furthermore, we believe that if the CBN sustains its current pace of OMO auctions, money market rates will continue to trend within a tight band.

Yields: Amid a tussle of bulls and bears, the sellers dominate A mix of both bearish and bullish themes guided sentiments all through the week to the 20th of July. On the sell-side, continued OMO mopups by the CBN, NTB auction as well as FX sales helped to curtail the excess liquidity in the system. On the buy-side, players were guided by expectations

respectively. The outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market.

Global stocks largely bullish in the second week of earnings season In the week that ended 20th July 2018, major global equity indices closed the week bullish as trade war fears moderated on the back of the Japan/E.U trade agreement, as well as statements from the White House which suggests that the US could be signing a new trade deal with the European Union (EU) as well as Mexico and Canada.

Furthermore, equities were also supported by H1-18 earnings results that started to trickle in, and comments

by President Trump on his “dislike” for hikes in interest rates. Amid of all this, the S&P 500, NASDAQ and DJIA were up 0.1percent, 0.1percent and 0.3percent w/w respectively.

RSA fund price of PFAs as at July 13, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions SigmaVaughn Pensions Leadway Pensure PFA AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard Veritas Glanvlls Pensions OAK Pensions Investment One Pension Mgrs.

IEI Anchor Pension Managers Radix Pension NPF Pensions

around the upcoming MPC meeting (23rd and 24th of July), as well as T-bills maturities that came through on Wednesday.

Overall, average T-bill yield declined 50bps w/w to close the week at 11.9percent (91-day (down 33bps to 11percent), 182-day (up 45bps to 12.3percent) and the 364-day (down 108bps to 12.4percent).

On the other hand, average bond yield closed the week flattish at 14percent. Looking ahead, we believe sentiments in the FI space is tied to the stance the CBN assumes in its OMO auctions, as well as fiscal paper supply and system liquidity.

Currency Market: Naira appreciates in the parallel market The currency market witnessed a mixed theme in the week ending 20th July after appreciating by 28bps in the parallel to end the week at N358.5/$1, while the naira depreciated in both the official and NAFEX window, down 2bps and 12bps to finish at N305.9/$1 and N361.6/$1

CURRENT PRICE 3.9864 3.9705 3.8994 3.7408 3.6349 3.4473 3.4430 3.2980 3.2830 3.1608 3.0733 3.0479 2.7911 2.7407 2.7040 2.6523 2.5712 2.4770 2.3381 2.0434 1.4687

In Europe, amid rounds of upbeat H1-18 corporate earnings, and the uncertainty surrounding Brexit negotiations, most of the region’s equities index we track closed the week in the green territory. Consequently, save for France’s C AC (-0.6percent) which closed in the red territory, the Pan European STOXX, UK’s FTSE and Germany’s DAX all trended northwards, up 0.2percent w/w.

Emerging markets indices was however mixed to bearish in the prior week.

Brazil’s IBOV (+3percent) and South Africa’s JALSH (+1.1percent) were the week’s only gainers. On the other hand, massive profit taking was recorded in Russia as the World Cup tournament hosted by the country was drawn to a close the week before, thus Russia’s RTSI was down 6.3percent while China’s SCHOMP and India’s SENSEX recorded 0.1percent loss w/w respectively.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Vetiva Research

Dangote Cement: On track for a strong FY’18 performance Solid operations underline decent result angote Cement Plc (DANGCEM) released its first-half (H1) of 2018 result, reporting a 3percent year-on-year (y/y) profit after tax (PAT) growth to N113 billion versus our N123 billion estimate.

The earnings growth was supported by strong Nigerian and Pan African operations, with Group EBITDA rising 21percent y/y to N246 billion ahead of our N226 billion estimate – translating to a 51percent margin versus 49percent in H1’17.

Earnings Before Interest Taxes and Amor tization (EBITDA) was particularly strong in the Nigeria operation, rising 19percent y/y to N227 billion, supported by healthy cement prices (following a price hike in April) and continued improvement in fuel efficiency.

T h e re g i o n ’s E BI T D A was however 3percent weaker quarter-on-quarter (q/q), following a minisurge in operating costs in the quarter, with EBITDA margin consequently falling 80basis points (bps) q/q though remaining strong at 65.5percent (H1’18: 65.9percent). Operations in the Pan African business also remained strong within the period, with EBITDA r i s i n g 3 2 p e rc e n t y / y t o N26 billion. Similarly, the region’s EBITDA was 2percent weaker q/q, taking EBITDA margin 80bps lower q/q to 18.3percent (H1’18: 18.7percent).

Meanwhile, Net finance costs rose 89percent y/y to N15 billion (Vetiva: N6 billion), weakened by a N15 billion FX loss in Q2’18 from Pan African operations that use the CFA as a functional currency. Overall, PAT rose 3percent y/y, weakened by a higher effective tax rate of 39percent (H1’17: 29percent, Vetiva: 31percent).

Strong demand sustains impressive topline Cement demand strengthened in Nigeria, with volumes rising 14percent y/y to 7.81 million metric tonnes (MT) in H1’18 (Q2’18: 3.84 million MT, Q1’18: 3.97 million MT, Vetiva : 3.77 million MT). Combined with higher prices, topline rose 18percent y/y in Nigeria to N344 billion. Revenue from

D

Pan African Operations also rose 11percent y/y, despite a 4percent y/y drop in cement volume to 4.57 million MT (Q2’18: 2.33 million MT, Q1’18: 2.24 million M T, Vetiva: 2.64 million MT). We understand that Revenue was boosted by higher cement prices across certain regions and translation gains from stronger currencies.

However, volumes remained u n d e r p re s s u re, m a i n l y due to weak output from Ethiopia (sustained civil unrest), Tanzania (shut down operations from February to May for maintenance and due to high costs) and Ghana (operations halted pending the completion of Dangote j e t t y ) . We u n d e r s t a n d however, that operations are back up in Ethiopia amid relative stability and expect Tanzanian operations to pick up following the delivery of gas gensets (expected in August). Exports to Ghana are however expected to resume anytime from Q4’18 when sea-based exports would be operational. Overall, Group re v e nu e ro s e 1 7 p e rc e nt y/y to N482 billion (Vetiva: N481 billion), supported by a 7percent y/y rise in volumes to 12.36 million MT (Vetiva: 12.61 million MT).

Positive outlook maintained despite mild miss in H1 Following better than expected volume roll out in H1’18, we revise our Nigeria volumes estimate to 15.4 million MT (Previous: 15.3 million MT) for the year.

With management hinting

at no plans to change prices any time soon, we estimate an FY’18 Revenue of N685 b i l l i o n ( P re v i o u s : N 6 8 1 billion).

Meanwhile, we note the sustained dow ntime across certain Pan African operations and thus, revise our F Y ’18 volume expectation to 10.8 million MT from 11.2 million MT. However, after adjusting for the impact of FX movements, we reduce re v e nu e m i l d l y t o N 2 7 3 b i l l i o n ( P re v i o u s : N 2 7 9 billion). Overall, we cut ou r vo l u m e f o re ca st f o r the Group to 26.2 million MT (Previous: 26.5 million MT) and our FY’18 revenue estimate to N958 billion (Previous : N960 billion).

We also adjusted our FY’18 cost estimates to reflect H1’18 run rate. Following this, we arrive at a reduced F Y ’18 Group EBI TDA of N490 billion (Previous: N499 billion). Furthermore, we raised our interest expense from N27 billion to N39 billion, after taking into account the FX losses in Q2 and the recently issued Commercial papers (Series 1: N12.04 billion at 12.40% per annum (PA), Series 2: N37.96 billion at 12.65% PA). We understand that the proceeds from the notes would be used to fund some local projects and improve working capital. After adjusting for tax, we revise our PAT to N243 billion.

With a revised target price of N276.28 on the stock, we maintain our BUY rating.

18

BUSINESS DAY

C002D5556

Thursday 26 July 2018

Investor

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Unilever Nigeria: FBNQuest favours ‘underperform’ rating as Vetiva retains ‘sell’ IHEANYI NWACHUKWU

D

e s p i t e Unilever ’s impressive outing in the first-half of 2018, analysts at FBNQuest still rate the stock ‘underperform’, while their counterparts at Vetiva favour ‘sell’ rating for the stock.

The recently published unaudited interim financial statements of Unilever Nigeria Plc for the six months ended June 30, 2018 show revenue increased by 13 percent to N48.125billion as against N42.629billion in same period of 2017.

Gross profit increased by 15 percent to N15.322billion from N13.275billion in H1’2017.

Operating expenses rose by 27 percent to N9.1billion against N7.1billion in H1’17. Operating profit of N6.209billion in H1’18 also shows an increase from N6.091billion in H1’17.

Profit before taxation (PBT) increased by 57percent to N7.54billion, from N4.815billion

in H1’17; while profit for the period stood higher at N2.819billion, representing 60percent i n c r e a s e f r o m N2.073billion in H1’17.

Fo r F BN Qu e st, t h e i r ‘ u n d e r p e r f o r m’ r a t i n g is given to stocks which their analysts expects will underperform the NSE All Share Index over the next 12 months or a specified investment horizon.

Ve t i v a ‘s e l l ’ r a t i n g i s g i v e n t o s t o c k s t hat the analysts consider over valued, “but with good or weakening fundamentals, and where p otent ia l return b el ow + 5 p e rc e n t i s e x p e c t e d to be realised between current price and analysts’ target price”.

Unilever Nig er ia Plc is Nigeria’s largest Home and Personal Care (HPC) manufacturing company.

The company’s operations span across the HPC and Food s e gments. Parent company, Unilever O v e r s e a s H o l d i n g B .V. owns 60.04percent share in Unilever Nigeria Plc. As at Tuesday July 24, 2018, Unilever Nigeria Plc stock was priced at N52.1.

The company listed on consumer goods sector (Personal/Household Products subsector) of the Nigerian Stock Exchange has market capitalisation of N299.314billion and shares outstanding of 5, 7 4 5 , 0 0 5 , 4 1 7 u n i t s. Th e share price attained 52week high of N65 and 52week low of N36.10.

Uwadiae Osadiaye-led team at FBNQuest said “we expect a neutral-toslightly positive reaction

by the market. Sales grew by 9percent year-on-year (y/y) to N22.3billion, which we largely attribute to unit volume growth.”

“Our channel checks reveal that product pricing has remained largely unchanged for key business segments.

Management continues to focus on attaining 100percent sourcing of its packaging materials locally by 2019 and has begun engaging local far mers

to reduce impor tation.

Our estimates are under review. We rate Unilever Nigeria ‘underperform”, according to FBNQuest analysts.

“Positive earnings outlook maintained, rating remains a SELL”, said the Ifedayo O lowoporoku-led team of res earch analysts at Vetiva Capital. Following the approval of the sale of its Spreads business at the AGM held on May

1 0 , 2 0 1 8 , U N I L E V E R’s H1’18 financial results refle ct restate d figures that exclude the Blue Band brand across the C o m p a n y ’s f i n a n c i a l statements”.

Vetiva further noted: “The Blue Band unit appears to be a lower margin unit relative to the whole business w i t h PAT m a r g i n f o r the unit printing at 5.1percent and 6.7percent versus 11.6percent and 8 . 2 p e rc e nt f o r e x- Bl u e Band in H1’18 and H1’17 respectively. As such, d e s p i t e t h e d o w n w a rd revision to our estimates, we expect margins to remain fairly sturdy.”

“Meanwhile, we revise o u r F Y ’ 1 8 PAT f i g u r e 6percent higher to N11.0 billion (Previous: N10.4 billion) supported by an upward review to interest income given the outperformance observed in H1’18. Overall, U N I L E V E R’s 1 2 - m o n t h Fair value is revised to N37.99 (previous: N34.15), with current market price of N52 implying a SELL rating for the stock”, Vetiva analysts said.

OTC market records 36.49% increase in fixed income, currency turnover IHEANYI NWACHUKWU

O

ver-the-Counter (OTC) market summary for the first-half (H1) to June 30, 2018 shows turnover in the Fixed Income and Currency (FIC) market was N17.23trillion, a 20.53percent (N2.93trillion) MoM increase and a 36.49percent (N4.61trillion) year-on-year (YoY) increase on the turnover recorded in June 2017.

The Treasury Bills (T-bills) and Foreign Exchange (FX) segments jointly accounted for 79.35percent of total turnover in the FIC market in June, representing a marginal increase of 3.44 percentage points (ppts) from the 75.91percent recorded in May. FX market turnover recorded the highest MoM increase, growing by 34.50percent (N1.79trillion), while Unsecured Placement/ Takings turnover recorded the highest MoM decrease, falling by 42.54percent (N30billion).

In June, the total turnover in the fixed income (FI) market was N7.85trillion, representing a 19.73percent (N1.29trillion) MoM increase in turnover, according to FMDQ OTC monthly report.

The increase in turnover was driven mainly by an 18.13percent (N1.02trillion) MoM increase in T.bills turnover, as it remained the major driver of liquidity in the FI market, accounting for 84.95percent of the total FI market turnover, albeit 1.15 points (ppts) lower than its contribution in May. Total T.bills outstanding as at June 30, 2018 stood at N13.76trillion, representing a 1.75percent (N240billion) MoM decline, driven by a net redemption of T.bills in the month of June. Conversely, total FGN Bonds outstanding increased marginally by 0.41percent (N30billion) MoM to close at N7.83trillion, suggesting the FGN refinanced some of its short-term obligations with longer term FGN Bonds while increasing cash liquidity in the market.

Trading Intensity in the T.bills and FGN Bonds markets increased from 0.41 and 0.11 in May, to 0.48 and 0.15 in June respectively, while Trading Intensity for T.bills and FGN Bonds in H1 2018 were 2.67 and 0.71, compared to 3.75 and 0.79 in H1 2017 respectively.

T.bills within the 6-12 months maturity remained the most actively traded, accounting

for 28.28percent of the total FI market turnover in June, despite decreasing from the 37.42percent contribution reported in May. Weighted average yields across the short, medium and long-term maturities on the sovereign yield curve increased by 0.72ppts, 0.03ppts and 0.16ppts respectively, leading to a flatter sovereign yield curve from its Nig e r i a’s Inv e s t o r s & Exporters (I&E) FX Window saw a turnover of $30.28billion, data at FMDQ OTC Securities Exchange showed. In June, the local currency (Naira) depreciated against the dollar at the I&E FX Window, losing

35kobo to close at $/N361.32, from $/N360.97 as at May 31, 2018.

FX Spot remained the main driver of total FX turnover, with a MoM increase by $2.80billion (29.70percent), while FX Derivatives recorded a MoM increase of $2.25billion (41.59percent) driven mainly

by FX Futures turnover which increased MoM by $2.39bn (292.68percent).

Tu r n o v e r a t t h e I & E FX Window in June was $3.93billion, representing a 38.59percent $2.47billion month-on-month (MoM) decrease from the value recorded in May ($6.40billion), which resulted to a decrease

in its contribution to the total FX market turnover to 19.85percent from 43.33percent in May. Analysis of FX turnover by product type showed that turnover in FX Spot and Derivatives increased MoM in line with the trend in total FX turnover, with both increasing by 29.82percent and 46.60percent respectively.

In June, the 24th Nairas ettle d OTC F X Futures contract (NGUS JUN 27, 2018) with a contract size of $638.87million, matured and was settled, whilst a new $1billion 12-month contract (NGUS JUN 26, 2019) was offered by the CBN at $/ N362.60 According to the FMDQ OTC monthly report, the depreciation of the Naira at the I&E FX Window resulted in a lower spread of 68kobo between the green back and the Naira rate at the I&E FX Window and the parallel market, a development linked to the appreciation of the Naira by N1 at the parallel market in June which closed at $/N362, from $/N363 as at May 31, 2018.

The Central Bank of Nigeria (CBN) Official Spot rate appreciated by 20kobo to close

at $/N305.75, from $/N305.95 as at May 31, 2018. Total FX market turnover in June was $19.80billion, a 34.04percent ($5.03billion) increase from the turnover recorded in May ($14.77billion).

Analysis of FX turnover by trade type showed that turnover increased across all trade types, with InterMember trades recording the highest relative MoM grow th in t u r n ov e r, i n c re a s i n g by 82.65percent ($1.35billion), while Member-Clients trades recorded the highest nominal MoM growth in turnover, increasing by $2.52billion (28.97percent).

Member-CBN trades also recorded a MoM increase in turnover by 26.11percent ($1.16billion). In terms of contribution to total FX turnover, Inter-Member trades contributed 15.05percent to total FX turnover in June, a 4.01percentage points (ppts) increase from the 11.04percent contribution recorded in May. Me m b e r- C l i e nt a n d Member CBN trades both contributed 56.62percent and 28.28percent to total FX turnover in June, decreasing from 58.90percent and 30.06percent in May respectively.

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BUSINESS DAY

Thursday 26 July 2018

19

Two things Osinbajo must address before Silicon Valley arrives FRANK ELEANYA

N

igeria’s Vice President, Professor Ye m i O s i n bajo may go down in history as the most vibrant political advocate for the tech ecosystem in Nigeria. He has shown in various ways that he truly cares about the growth of the space. The VP’s recent trip to Silicon Valley early July remains one of the most topical issues among stakeholders in the space.

The goal of the visit, according to the Presidency, was to emphasise the Buhari administration’s policies such as the Ease of Doing Business reforms, which have improved the country’s ranking in the World Bank’s Ease of Doing Business Index 2017.

In the course of the tour, Osinbajo visited CEOs like

Sundar Pichai of Google and Allen Blue, co-founder of LinkedIn, over 20 “important” tech investors and some of the notable players in Hollywood such as Universal Studios, Warner Bros, 20th Century Fox, IMAX, and Disney.

While many people had a lot to say about it, what have

stand out is the increasing ambassadorial role the VP has taken to encourage players in the space. He has actively led from the front with programs such as N-Power which seeks to empower young people with innovative ideas. He has also led several delegations of investors to visit different innova-

tive hubs across the country to see the potential of the burgeoning ecosystem.

His interest and foreign trip to Silicon Valley while commendable, they do not negate the crushing struggle players in the space go through to access basic infrastructures such such as electricity and broadband.

Silicon Valley investors may be looking for new frontiers to exploit, but like every investor they expect certain guarantees for success. A mere visit to convince them to invest will not force them to bring out cheque books for Nigerian startups. The VP can actually bring his office to address two major problems the ecosystem faces on a daily basis.

Tech clusters weighed down by poor electricity access Many tech startups have suggested to the federal government to give electricity priority to tech clusters like Yaba. The challenge however is the country barely generates enough to feed other sectors that are considered critical to driving the economy. Nigeria is only able to generate around 4,000 megawatts of power so far which is insufficient for both big and small businesses, much less the 180

million population.

Tech clusters across the country are therefore exposed to the vagaries of procuring diesel and petrol to run heavy duty generators that power their enterprise.

The consequence is that high cost of running the startups and the pricing of the products.

Internet speed is still ridiculously low The failure to address the problems infrastructure companies (InfraCos) face in providing broadband is one area the Osinbajo may want to intervene. Nigeria is expected to hit 30 per cent broadband penetration by the end of 2018, but it appears to have stalled at 22 per cent. Some experts are saying the country may not hit the target come December. A good way to start convincing Silicon Valley is to address broadband penetration and internet speed.

build for family, friends and neighbouring countries.

Young entrepreneurs and software developers should start with a product that will go to market and sell -not minding limited features- by boosting it with great design thinking. It means that a great deal of thought, planning and strategy must go into building an app, even if it has just a few features. On leveraging the said technologies, you do not for instance; need data scientists to build predictive models for excellent user experience. These days you can build those from the comfort of your homes.

Local Investors should seek these products out, keep abreast with the local technology news and international trends. They must stop waiting for start-ups to become hugely profitable before investing. If people like Peter Thiel and Larry Ellison waited for start-ups to become huge, they will not be the billionaires they are today. Risk appetite must be varied and not so set in its ways. Moreover,

investments should be in wads and not in pennies as if giving out handouts.

As a nation, we must invest hugely and effectively in technological Research and Development. We do not need ineffectual labs, hubs or centres nor do we need public officers that journey from one end of the world to another, clueless on how to create wealth.

We need brilliant and fluid minds, entrepreneurs who know how to turn nickel to gold. We need easy accessibility to favourable taxation laws; like the Pioneer Status tax, so that entrepreneurs are pushed to innovate rather than “copy and paste.” We need to promote and encourage patenting to protect intellectual property and rights.

We have an immense opportunity on our hands, and we can join other countries on the race to a whole new world. We can be pioneers, we can be kings, but then we can also be the dregs of the new world, feeding off the leaders. The choice is ours.

Commentary

The race to lead in a new world

EUCHARIA AMANAMBU Amanambu, a technology enthusiast is the CEO of KariXchange, a technology start-up geared towards building scalable empowerment platforms. She is on twitter as @ euchariAmanambu and can be reached via email; eucharia@ karixchange.com

I

t was Peter Thiel who said that “The most valuable businesses of the coming decades will be built by entrepreneurs who seek to empower people…”As a nation, as entrepreneurs and investors, we are not doing enough to ensure this.

Around the world, our counterparts are leveraging on certain technologies

to create value, empower people, and usher in a new future. These technologies, which include artificial intelligence, bio/nanotechnology, internet of things, big data, will shape the future from the world as we see it now, and create immense wealth.

The U.S and China especially are making big leaps in these technologies, by investing heavily in research and development; for they know that these technologies are the future. They understand that gone are the days when the global economy relied on material assets such as gold mines, wheat fields and oil wells. Today, the main source of wealth is knowledge. They are moving from material-based economies to knowledgebased economies, and their European counterparts are fast at their heels.

Notwithstanding the political atmosphere of our country at present, an allimportant question must be posed. Where do we see ourselves on the global

scale in years to come?

Are we going to join in the race or are we just going to look on from the sidelines, occasionally throwing in pebbles?

As a nation, we do have many challenges. It is about time we began to combat them by leveraging on these technologies. It is time we began to innovate to boost our economy to improve living standards. It is time we began to innovate in priority sectors like real estate/ housing, agriculture/food processing, healthcare, employment, transportation.

Some African countries are waking up to these, Kenya, South Africa, and Angola among others.

It is a race for world domination. How does the largest black nation on earth position itself for leadership? How do we ensure we create value for our society, the world and ourselves? How do we win?

Technology entrepreneurs must be strategic in positioning for the future.

The application of one or more of the aforementioned

technologies to software development cannot be overemphasized. When we strategically innovate to drive our economy, we win, for we also create value for ourselves. It is important to note that the key word is “innovate”. Our pathetic “copy and paste” attitude should be tiresome by now.

It has to stop. It is a new world and there are boundless opportunities for innovation. Entrepreneurs must ensure that software and platforms are built to scale globally. It is not enough to

We do not need ineffectual labs, hubs or centres nor do we need public officers that journey from one end of the world to another, clueless on how to create wealth

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

20

BUSINESS DAY

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Thursday 26 July 2018

‘VAT waivers will translate to better experience, fairer pricing for air passengers’ Stories by IFEOMA OKEKE

B

abatunde Irukera, the director general, Consumer Protection Council has said that the removal of Value Added Tax (VAT) for airlines will amount to better experience and better pricing for the passengers.

Recall that barely three weeks after indigenous airlines in Nigeria threatened to stop remittance of VAT to the Federal Government, the government last month bowed to the demand of the local carriers.

Speaking during the 22nd Annual Seminar & Awards of the League of Airport and Aviation Correspondents (LAAC) at Sheraton Hotels and Suites, Lagos, last week, Irukera said he was in support of the VAT waivers given to the airline.

“I don’t look at things from a tax stand point, which is more from a business stand point. But if that trickles all the way to benefit to consumers, both from a service stand point and a pricing stand point then I think it is an excellent idea,” he said.

On CPC’s efforts to enhance ser-

L-R: Allen Onyema, chairman, Airpeace, Airlline: Nick Fadugba, chief executive officer, African Aviation, and Ayo Obilana, managing director, Selective Security, during the 22nd Annual Seminar of the League of Airport and Aviation Correspondents, (LAAC) held at Sheraton Hotel, Ikeja, Lagos.

vice delivery and customer relations, Irukera said there has been some improvement but there are still a lot of challenges, most of which are on soft infrastructural issues.

He noted that regardless of all these challenges, the airlines have to measure their responsiveness and sensitivity indexes with respect to their consumers.

Air Peace Chairman calls on review of the open skies policy

A

llen Onyema, the chairman of Air Peace has called on the federal government to review the open skies policy which allows easy entry and exit of African airlines to the airspace of each country without immigration hindrances in order to enhance connectivity and trade among African nations.

Onyema said there is total absence of reciprocation in the operations as other African countries put stringent rules to frustrate Nigerian airlines from coming into their countries.

Speaking during the 22nd League of Airports and Aviation Correspondents (LAAC) Seminar, he lamented that domestic airlines are not being protected by government and this has contributed immensely to foreign carriers pillaging the Nigerian market.

He gave examples of how government officials choose not to protect Nigerian carriers but open up advantages to others especially African airlines that end up stifling Nigerian carriers.

“ASKY was established in Togo and their population is not as much as Lagos, yet they are flying into Nigeria and other countries, meaning their market is not Togo yet when we wanted to go there, we were given approval in Nigeria only to get there and we were told we cannot fly. I threatened to file legal action.

“This is supposed to be where the country stands up for the airline.

Eventually they decided to give us the approvals we need to fly. They charged us $5000 landing and yet we say we are protecting our own.

Up until now, we are not flying into

Côte d’Ivoire because of their ludicrous charges, yet Air Côte d’Ivoire flies here, so how have we protected our airlines from being fleeced?” he quarried.

He said, “There was a debate that for airlines to survive, they have to be forced to merge or have twenty aircraft. I say and pardon my words, those are balderdash. You cannot force airlines to merge. You need to try to create synergy by interline not force them to merge or say they need to have 20 aircraft. All over the world there are airlines with two, sometimes one aircraft and they operate within their capacity. If it’s only Lagos- Abuja they can fly to, let them fly. You do not say because they have one aircraft they have to die.”

Onyema advised the airlines to leverage on cooperation to survive. “Airpeace, Medview, Topbrass can come together and survive, we have failed to cooperate because there is a bit of mistrust among airlines but the sky is too

big for us not to thrive. We have everything it takes to make an airline survive and that tells you we need to come together.”

On the national carrier just announced at the Farnborough Airshow in London, Onyema welcomed it but stressed that the new airline must not be used to frustrate the operations of domestic airlines.

He said, “If you say it’s a national carrier and it is private investors driven are you not saying they are just investors like me, Muneer Bankole and other investors? So you are simply saying that government is just supporting another private airline?

I do not have a problem with the national carrier per se. It is welcome but it must not be given any undue advantage over other airlines as the owners are investors too. Now, as this airline is coming on stream are they going to take routes already allocated to other airlines and give it to this carrier? These are the things government has not told us.”

“One thing is that they don’t even have the appropriate mechanism for people to call in and have complaints resolves. For airports and the airside or the terminal side, their

experiences are vital to consumer experiences also, even if you have the best airports but there is poor responsiveness, then consumers will still be displeased.

“Airline industry is one place where you can easily satisfy consumers. Nobody wants to fly when it is unsafe to fly, so if there is delay for a legitimate safety reasons, consumers will actually appreciate that. But what needs to happen is that first, those delays have to be for legitimate reasons and your responsiveness and sensitivity to the issues must be such that you are upfront, you provide the information and then you provide options or find a way to mitigate whatever inconveniences consumers will be experiencing,” he explained.

In addition to these, he suggested that in working with the sector regulator, it is going to be important to truly provide the kind of 360 degree protection that is required. “I am also grateful that the sector regulator has agreed to work with us and has invited me to their meeting and we had an opportunity to jointly confront the airlines, so I think that is a good thing,” he added.

South African Airways wins ‘Best Airline Staff’ in Africa

S

outh African Airways (SAA) continues to set the bar in customer service by winning once again the ‘Best Airline Staff in Africa’ award at the annual World Airline Awards hosted

by Skytrax, the Oscars of the aviation industry, held on Tuesday, July 17, 2018 in London.

In SAA’s sixth triumph, this award recognises service excellence covering a spectrum of front-line customer service touch points; highlighting SAA’s rating as offering the best service in terms of airport staff and on-board experience.

The awards rate customer satisfaction across staff service efficiency, friendliness, hospitality, language skills and overall quality consistency across front-line staff.

Under the category ‘Best Airline Staff in Africa’ SAA also won for Best Business Class Lounge in Africa, Best Cabin Crew in Africa and Best Airline Cabin Cleanliness in Africa.

Mango Airlines secured the Best Low-Cost Carrier in Africa carrier top spot for the third time at this year’s prestigious awards.

SAA also retained its 4-Star rating for the 16th year, a seal of quality approval awarded to airlines supplying good quality performance across a range of rating criteria.

According to Edward Plaisted, Skytrax CEO, “The South African Airways brand of service continues to delight customers across their network. This award, which is voted

for by SAA passengers, is excellent recognition for the dedicated frontline staff.

“We’re exceptionally pleased to be rated as having the Best Airline Staff in Africa for the sixth time, this speaks to our level of consistency with regards to service excellence throughout our customers travel journey. It’s a significant pat on the back for us to see our employees’ hard work being recognised on such a global scale, particularly in light of strong competition from other African Airlines,” Tlali Tlali, SAA spokesperson said.

“Our customers have very high expectations and the ability for SAA to constantly meet those is phenomenal. We continue to enhance our consumer experience under the current turnaround strategy to ensure that expectations are not only met but are exceeded on every flight,” Tlali added.

The World Airline Awards, now in their 18th consecutive year, are the epitome of excellence in the aviation industry and illustrate a vote of confidence from millions of global travellers annually.

Through a consumer survey, travellers have the opportunity to rate their experience over a 10-month period in-flight and on the ground, allowing them to make their own personal choice regarding which airline they consider the best across a range of categories.

BUSINESS DAY

Thursday 26 July 2018

Harvard Business Review

21

Global Business Perspectives Connec ting

Th e

World

One

Bus iness

at

a

time

Replacement fertility declines worldwide Joseph Chamie

T

he fertility rate, or the average number of births per woman, is typically of little concern for government and business leaders until it brings about population decline, shrinking the labor force and substantially increasing the proportion of the elderly population. Decline begins when fertility falls and remains below the replacement level of about two births per woman A half-century ago six countries — Czechia, Estonia, Hungary, Japan, Latvia and Ukraine — reported fertility rates slightly below replacement level. Today a record high of 83 countries, representing about half of the world’s population, report below-replacement level rates.

By 2050 more than 130 countries, or about two-thirds of the world’s population, are projected to have fertility rates below replacement level.

Many countries manage low fertility rates for decades. The fertility rates of Canada, Germany, Italy, Japan and the United Kingdom, for example, have been below replacement level for more than 40 years.

Future rebounds in fertility cannot be ruled out, but once fertility falls below replacement level, the trend endures. This pattern has been especially evident in countries where fertility has declined to 1.6 children per woman. Among the factors responsible for below-replacement fertility levels are lower child mortality rates, widespread education, increased urbanization, improvements in economic opportunities for women, availability of modern contraceptives, delayed childbearing as well as the decline of marriage and the increased costs of childrearing. Available demographic evidence suggests these factors will persist and become widespread globally.

In many developed countries significant numbers of women remain childless. The percentage of childless woman aged 40 to 44 years in the United States, for example, doubled from 1976 to 2006. In 2010 no less than one-fifth of women aged 40 to 44 years were childless in Austria, Germany, Japan, Spain and the United Kingdom.

A homeless encampment at Seattle Pacific University, in Seattle, Feb. 9, 2018. Amazon has surprised officials in cities vying for the company’s new headquarters by quizzing them on how, if Amazon chooses to settle there, the company could avoid the problems it confronts in Seattle, like traffic and affordable housing. (CREDIT: Ruth Fremson/The New York Times)

Among women having children in developed countries, most have one or two children, with a smaller number choosing to have three or more. Countries with the lowest proportion of births after a second child in 2015 include Spain (11%), Greece (13%) and Italy (14%.)

Since the start of the 21st century, close to 20 countries have declined in population size and are aging rapidly due to low fertility levels.

If current below-replacement fertility rates remain unchanged, the populations of 40 countries are projected to be smaller by midcentury.

More challenging for governments are projected declines in working populations aged 20 to 64 years. Sharp declines in the working-age population are expected in some of the world’s largest economies, such as China and Japan.

Expected population declines are accompanied by rapid population aging.

As a result of below-replacement fertility and increased longevity, populations are becoming the oldest in human history. By midcentury, the elderly are expected to account for more than a third of the population in Germany, Italy, Japan and South Korea. The relative increase of the dependent older

population has repercussions, especially regarding retirement ages, pensions, taxes, voting, health expenditures and elder care.

Some political leaders acknowledge the challenges. Paul Ryan, outgoing speaker of the U.S. House of Representatives pointed to a need for higher U.S. birthrates in this country: “Baby boomers are retiring, and we have fewer people following them in the workforce.” At the start of the year, Prime Minister Shinzo Abe labeled Japan’s dwindling birth rate alongside an aging society as a “national crisis.” Sultanka Petrova, deputy labor minister of Bulgaria, described the country’s projected decline in its working-age population as “a social and economic bomb that will explode unless we take adequate measures.”

Commenting more circumspectly, President Xi Jinping of China said in his report to the 19th National Congress: “We will work to ensure that our childbirth policy meshes with related social and economic policies, and carry out research on the population development strategy.”

Nearly 2 out of 3 countries with below-replacement fertility have policies and programs to raise birthrates. In addition to public

programs promoting marriage, childbearing, parenting and gender equality, governments have various incentives to raise fertility rates including baby bonuses, family allowances, maternal and paternal leave, tax breaks, flexible employment schedules and family-friendly work environments. Costs of those incentives can be substantial. While public spending on family benefits in some countries, such as Mexico and the United States, is well below 1% of gross domestic products, other countries, including Denmark, France, Sweden and the United Kingdom, family benefits amount to 3% to 4% of GDP. Pronatalist incentives may encourage some couples to have additional children or start families earlier than planned. Such measures by and large tend to be costly, modest at best in terms of impact and insufficient at increasing fertility rates above replacement levels.

Powerful forces overwhelm pronatalist policies, especially economic uncertainty related to the decline of good jobs and the high costs of having children.

Some governments rely on selective immigration to maintain the size of their workforce and slow the pace of population aging. However,

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

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a United Nations study concluded that current immigration levels cannot offset expected demographic declines and population aging for most countries with below-replacement fertility rates. Countries worldwide increasingly aim to reduce immigration levels and stem record flows of refugees by strengthening border controls, tightening asylum policies and restricting citizenship.

Attempts by regional and international organizations to encourage acceptance of immigrants encounter fierce political resistance, public opposition and nativistic policies.

To confront decades of belowreplacement fertility, governments must adjust to demographic and economic realities rather than simply promote political wishful thinking about increasing family sizes. A significant boost in fertility levels is unlikely, at least for the foreseeable future.

Certainly, below-replacement fertility resulting in smaller populations can lead to benefits including conservation of natural resources, enhanced educational opportunities, higher labor force participation rates and in some instances higher standards of living. At the same time, however, the expected demographic changes for low-fertility countries pose challenges for economic growth, retirement and health care systems.

Despite more countries facing population decline and rapid population aging, the world’s population continues to increase, likely reaching 8 billion by 2023. This growth is largely due to the high rates of demographic growth in sub-Saharan African countries, where fertility levels are generally in excess of five births per woman. While the populations of 40 low-fertility countries are projected to be smaller by midcentury, some 25 high-fertility countries, nearly all in Africa, are expected to see their populations more than double by 2050.

For most countries, sustained below-replacement fertility rates will lead to population decline.

Communities that refuse to adjust will only exacerbate the consequences.

•Joseph Chamie is an independent consulting demographer and a former director of the United Nations Population Division.

22

BUSINESS DAY

Luxury

Malls

Companies

Deals

C002D5556

Thursday 26 July 2018

Spending Trends

Petrol price across Nigeria fell 22.4 percent in first half 2018 BUNMI BAILEY

T

he average price of Premium Motor Price (PMS) referred to as Petrol fell by 22.4 percent to N148.2 between January and June across states in Nigeria BusinessDay analysis of National Bureau of Statistics (NBS) data released Tuesday indicates.

BusinessDay analysis showed that the average price of petrol paid by consumers from January to June has been on a decline.

Industry players in the oil industry attribute the decline to the abundance of supply by the Nigerian National Petroleum Corporation (NNPC) who has been doing the bulk of importation of petroleum

products following oil marketers withdrawal over a control price for the product implemented by the Petroleum Products Marketing Company (PPMC).

Johnson Chukwu, CEO, Cowry Asset Management Limited said, “PPMC has significantly increased the volume of supply of petrol in the market beyond the demand that prices have been stabilized. They have really done so much to meet the demand of petrol and also ensure that their products are in different localities and even in the up countries locations where they are no coastal supplies.”

In January, the average price of petrol was N190.9, in February it was N172.5, in March it was N163.4, in April it was N151.4, in May it fell to N150.2 and in June it was at N148.2 per litre.

PPMC was set up as a subsidiary and​ strategic business unit of the Nigerian National Petroleum Corporation (NNPC). PPMC

is run in conformity with the management culture of total quality in pursuant to the directive of the parent corporation the Nigerian

National Petroleum Corporation (NNPC).​ PPMC is the dominant supplier of refined petroleum products to the exist-

the Bright Future project, an initiative which offers work placements to freed slaves.

Alibaba invests in AsiaThe global giant has partnered with Japan’s Kyushu Railway and will sell their tour packages and rail tickets through its travel site ‘Fliggy’. The online behemoth is also increasing its investments in tech startups, with facial recognition developer Megvii being the latest benefactor. Meanwhile, Alibaba’s Ele.me is shelling out a hefty EUR 112 per month over summer to lift its market share.

Deal sealed Carrefour Indonesia has signed an agreement with the country’s mosque body to open 300 mini supermarkets in the mosque districts of cities

such as Jakarta, Bandung and Depok.

Applying pressure in US & South America Amazon is leading the charge and quietly rallying like-minded companies to lobby President Trump and dissuade him from exiting trade agreements and introducing more tariffs which could hurt their businesses.

Meanwhile, the tech titan is planning to open a 600,000 square foot robotics-based fulfilment centre in Washington.

Walmart acquires The retail giant has purchased Costa Rican stores Perimercados, Super Compro and Saretto. Regulatory approval is still pending, but once approved, more than 1300 employees of the acquired stores

will join the Walmart group.

Double the delicious Doughnut major JAB-backed Krispy Kreme is acquiring a majority stake in Insomnia Cookies, a move that allows the chain to diversify and offer more than its famed glazed doughnut treats.

Responsible Food Carrefour Brazil has unveiled a new EUR 320,000 ‘social gastronomy project’ designed to develop zero-waste recipes and productions lines. The multi-national retailer will also introduce a new product line to reflect the work achieved through the project.

Wine and welfare in Europe Aldi has beaten out the Big Four supermarkets for its excellence in wine retailing and has been named ‘Supermarket of the Year’

ing domestic and growing export markets within West African sub-region.

Ayodele Oni, an energy partner at Bloomfield Law Practice said that so far there have been no problems with the supply of petrol in that period.

“Between January and now, oil prices have gone up so it cannot be because of crude oil prices. So I think, it is the local market forces of demand and supply. Supply has been quiet good compared to demand. And also a lot of people now use alternative energy like solar.

It recalled that in January this year, the Nigerian National Petroleum Corporation (NNPC) said it had deployed more of its depots and other throughput facilities to enforce the N133.28 per litre ex-depot price of petrol to marketers directly.

Global retail update

F

astfood major Chickfil-A is shaking up the meal-kit arena with its entry into the highly competitive market. Amazon is once again the target of Donald Trump’s wrath, with the president’s twitter rage causing the retail giant’s shares to dive.

For now, speculation is mounting that Tesco is to open 60 discount stores under the name ‘Jack’s’ in an attempt to solidify its position as market leader.

Also, Amazon is working behind the scenes to align companies and push back against the American government’s tariff agenda. Aldi has teamed up with animal welfare groups and is also celebrating a retail wine award.

Meanwhile, Alibaba and Tencent are collaboratively seeking a stake in the world’s largest advertising company, WPP. Below are the recent updates from the world of retail.

Newest competitor in America Chick-fil-A has become the first major US fast food chain to enter the mealkit market and looks to take Blue Apron and Hello Fresh head on. The food giant is trialling the new service in 150 Atlanta stores and will offer five different chicken-based take home kits.

Politics and pursuit Amazon’s shares plummeted 2.4% following tweets from the American President condemning the company and calling the Bezos-owned Washington Post an ‘expensive lobbyist’ for the e-commerce provider. Meanwhile,

the race is heating up between Amazon and Apple to see who will cross the USD 1 trillion finish line first.

Innovation station McDonald’s and Starbucks have paired up to launch the ‘NextGen’ cup project which will see industry experts and innovators collaborate to end cup wastage. The entire global industry will have access to the technology if the project is successful.

More money Nike is set to increase the salaries of 7000 employees and review the company’s bonus structure. Although the pay increase will apply to all both genders, the shift comes after Nike was embroiled in its own #metoo movement, and an internal review revealed action needed to be taken to address pay parity and corporate culture.

Competition heats up in Europe Rumours are rife that Tesco is close to unveiling ‘Jack’s’, a new discount store chain that could open in the coming months, as the supermarket major tries to regain some of the market it has lost to discount dominators Aldi and Lidl.

New direction France’s largest food retailer, Leclerc is diversifying its offerings and plans to start selling electricity to French consumers later in the year. The French retailer will be the second major retail outlet to enter the power game, following Casino’s move in 2017.

Fresh start John Lewis has become the latest retailer to pledge its support to victims of modern slavery by joining

by The International Wine Challenge Merchant Awards.

The German discounter is also making headlines for its alliances with two major German animal welfare groups Neuland and Fairfarm and will extend its own-label free range selection.

No horsing around Marks & Spencer is releasing a podcast series centred around the 2013 horsemeat crisis and the impact it had on supply chains. Meanwhile, the British retailer has teamed up with Octopus Energy to launch a new ‘green’ strategy through its M&S Energy brand.

Spending big in Asia▪ China’s tech majors Alibaba and Tencent are reportedly in discussions to buy a minority share in advertising giant WPP’s Chinese operations.

Meanwhile, Alibaba has contributed significantly to the latest round of fundraising by China’s Suning Sports, which saw the group raise USD 600 million overall.

New opening Anticipation and social media hype have surrounded the opening of the Victoria’s Secret Hong Kong flagship store. It’s not the lingerie giant’s first foray in the Chinese city, but they have extended their range significantly to cater to the growing market.

Tapping into potential ▪ Fashion brand Farfetch has acquired tech company CuriosityChina as part of a move to grow its Chinese presence and target customers through digital communication channels such as WeChat.

Compiled by Chinwe Agbeze

Thursday 26 July 2018

C002D5556

BUSINESS DAY

23

Retailers use discounts to woo consumers

W

ith the squeeze in consumers’ purchasing power, brick-and-mortar retailers in Nigeria are increasingly turning to discounts and promotional offers to entice consumers to buy more.

Some retailers that have integrated this approach into their sales strategy to drive sales include SPAR, Grocery Baazar, Infinix, multichoice, Cadbur y, Nestle. ‘‘We have managed to hold onto our ground by doing aggressive promo that is helping people come back to SPAR We also have plans to do more innovative promos,’’ John Goldsmith, SPAR Nigeria marketing manager told BusinessDay earlier. ‘‘Prices have gone up so much. People are downgrading to lower priced goods. Volumes are dropping, revenues going down.

It has been very flat,’’ Gold-

smith said.

According to the hypermarket, consumers who shop for items from N5,000 and above at their store, qualify to spin and win amazing prizes.

Infinix is aggressively wooing its Nigerian consumers by encouraging them to get a ticket to purchase any of Infinix devices in accredited stores to stand a chance to win big.

The phone manufacturer also notified consumers through the twitter handle, @InfinixNigeria, of 100 percent data bonus for six months on MTN lines when used in Infinix Note 5.

Glaxo opens the door to some radical surgery

R

akesh Kapoor likes to play a long game.

When it comes to consumer healthcare, the Reckitt Benckiser Group Plc. boss’s patience may be about to pay off.

GlaxoSmithKline Plc is weighing a spinoff of its consumer healthcare arm, according to the Financial Times. In a statement on Monday, the drugmaker didn’t exactly rule the idea out, saying its “No. 1 priority” is improving the performance of its pharma opera-

tion. Its current three-prong structure “is subject to each business continuing to perform competitively and having access to capital.” So the door is open, at least in the longer term.

For Kapoor, the maker of Panadol painkillers would be just the medicine he needs after walking away from buying a similar business that Pfizer Inc. had put up for sale.

The snag is that the GSK division is big, with an enterprise value of about 25

billion pounds ($33 billion), according to analysts at Bank of America Merrill Lynch. It might be a stretch for Reckitt to buy it outright, particularly after its acquisition of infant formula maker Mead Johnson in 2017 ratcheted up borrowings.

That the Pfizer business came onto the market so soon after the Mead Johnson purchase was one of the reasons that Reckitt walked away. But the integration is now more advanced, with Mead recently showing

some signs of improvement in performance. Reckitt still throws off cash, so borrowings should also be coming down too.

In the meantime, he could offload some of Reckitt’s hygiene and home unit, which includes brands such as Vanish and Airwick.

While suffering from lower growth, the cash generative operation could appeal to a private equity buyer. It has an enterprise value of 16 billion pounds, according to Martin Deboo, an analyst at Jefferies. That would go some way toward offsetting the cost of acquiring the Glaxo unit.

Given the size, he would probably have to structure the deal as a merger of Reckitt’s consumer and health business with that of GSK. If executed carefully, this could eventually put the combined company in a good position to snap up other consumer healthcare divisions being offloaded by the likes of Pfizer.

With growth in their traditional strongholds sputtering, consumer goods giants like Reckitt and Nestle SA are trying to ramp up their offerings of health products. For Kapoor, who sprinkled the Reckitt magic dust on brands such as Nurofen, there’s an opportunity to perform some radical surgery in the industry. If he doesn’t, someone else such as an ambitious private equity group or even Nestle CEO Mark Schneider might.

The mobile retailer who launched its first official exclusive store in Delta state, last week, promised consumers a lot of giveaways. ‘‘First 30 consumers, who buy smartphone, get a picture of first experience with super flagship store,’’ said the retailer via its twitter handle. ‘‘The first 50 consumers can get free amazing gifts. First 30 consumers buy Note 5, get Bluetooth light speaker.’’

At Grocery Bazaar, consumers are encouraged to shop for more than one similar item, to get discounts of between N5 to N100, depending on the item purchased.

BusinessDay findings reveal that this strategy has compelled some consumers to make some purchases, and retailers are smiling to the bank. ‘‘The offer is good. So, I decided to buy,’’ said Stella Obasi, a consumer in Lagos. ‘‘I don’t need the item now, but I can keep for the future.’’

Another consumer who gave her name simply as Bimpe said she was motivated to spend more money. ‘‘We all want to save money no matter how small,’’ Bimpe said. ‘‘I always look out for opportunities like this to buy.’’

Multichoice commenced a promo in May that saw the price of DSTV decoders drop to N8,500 from N9,900 with one-month free subscription of N6,300 plan and the price of GOTV decoder which comes with an antenna and one-month free subscription ease to N5,900.

Funmi, an attendant at a Multichoice branch in Lagos said this strategy helped push up sales. ‘‘Between last week and now, more people have bought our decoders and it is not only in this branch,’’ Funmi, an attendant at a Multichoice branch in Lagos told BusinessDay earlier. ‘‘We have also seen more people renewing their subscriptions.’’

French based retailer opens 70 oulets in Nigeria David Ibemere

F

rance-based top end cosmetic and personal care provider, Yves Rocher is seriously looking into Nigeria market as it has again opened a retail outlet at Palm’s Mall Lekki, taking its total in the country to around 70 retail outlets.

Since 2016, the company has opened one retail outlet a year in Lagos, the latest development is part of the retailer according to a statement is part of its plan to further tap into the fast-growing beauty and personal care market across Africa aside South Africa market.

Last month the company opened a fully-fledged dedicated retail brand in Hub Mall, Karen, Nairobi, as it has continued to expressed commitment in South Africa.

The brand moves into Nigeria with a pilot launch of a boutique retail store in Jabi in Abuja and continue

Culled from Bloomberg

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

its expansion in Lekki, Lagos.

Despite the economic down turn in the country last year Nigeria beauty and market continue to register positive growth according to Euro Monitor.

The urban areas like Lagos, Port Harcourt and Abuja amonth others have become a birth place for international beauty and personal care brands who have been raising their game by targeting growth opportunities.

While South Africa is by far the most advanced market for beauty and personal care on the African continent, Nigeria and Kenya have been playing catch up in recent years, as the beauty landscapes continue to flourish against a background of urban growth that has led to a more substantial middle The hair care category has proved to the fastest paced and biggest category in Nigeria and most but the skin care categories is also growing at a faster pace, albeit from a smaller base.

Currently the big global brands such as Unilever, PZ Cussons are leading the way in the country but another multinational Procter & Gamble is also making significant inroads to tap from the 93 million Nigerian Women.

24

BUSINESS DAY

C002D5556

Thursday 26 July 2018

Interview ‘There is not yet an institutionalized experience Martin Emodi, partner at Africa Wealth Partners, a Swiss based advisory firm, shared insight on family businesses, the global challenges that hinder multigenerational businesses, the peculiar problems to Nigeria family businesses and the way forward to successfully pass on businesses to next generation in this interview with BusinessDay’s Endurance Okafor. Excerpt:

T

ell me about yourself and what does your company do?

My name is Martin Emodi, partner at Africa Wealth Partners. We are a Swiss based advisory firm, one we are a multi-family office. So we work with wealth African entrepreneurs across three dimensions; the private situation - which includes all their private wealth, but we are not investment/wealth managers. We do not manage any money, we are strategic managers who work in multi-generational contexts for 10 to 30 years and engage the children involved.

It is about the private side, it is about family and we also advise them about the company, but from the perspective of the entrepreneur. So what we do on the private side is that; entrepreneurs are often very good in building wealth, just like in football, they are the attackers, they are trying to score goals, but they do not have defenders.

So if we use the football analogy, they are the scorers, we are the defenders, so we are trying to help them optimize, organize, structure in an optimal wealth they have already created while they are mostly focusing on creating more, because very often once they have created it, they just put it somewhere and do not look at it anymore and this has many angles to it.

A lot of it is about risk management, this is not a Nigerian thing. The majority of entrepreneurs’ wealth is their company, but they are not organized in a way, so if the company typically goes ‘belly up’, they go with the company, and we help them get organized so the family can survive even if the company goes in that southwards. When it comes to family we help really with the generational transition of business and family wealth.

Family businesses outperform non-family businesses by a factor of more than 4, but family businesses typically, very rarely make it to the second generation. From generation 1 to generation 2, only 30 percent of the companies make it, while about 10 percent and 3 percent make it from the 2nd to the 3rd and 3rd to 4th respectively.

This is even more important because in this part of the world, you have share of family businesses of the economy higher than anywhere else in the entire Africa. So if we do our job right, it will have a great impact on the Nigerian economy.

Impact will be that if you have long term surviving family business, because they do better than other businesses, they will create more jobs, they will contribute better to the economy, and then positive economic impact comes in.

Because once the trust in the relationship between the family business consultant and the entrepreneurs exits, then very often you have the entrepreneurs asking us to help them with things. Meanwhile on the company side, raising capital is the most sought after service, because our entrepreneurs are very successful in their own rights, but very often they are at the point where they want to go from being strong in Nigeria, to being strong in West Africa/PanAfrica or they even want to do more in Nigeria, but they need capital.

We are not the capital brokers, so we work with the entrepreneurs, but for our entrepreneurs, we also try to help them on the right projects.

Why are the survival rates low, and what do companies that have survived do right?

The answer is in two folds, number one; do that do survive acknowledges that this is not just happening by itself. So generational transfer needs to be planned, and you need to support and often very well, you need to carry the family along. So by just thinking that this

Emodi

happen by itself which is the key reason, often it does not happen.

It is like a lawn in your garden, it is not going to grow itself. It is taking a conscious effort to plan with the help of experts. The thing there is that there is no right or wrong, let me give you an example, let us use a very large company say Dangote of Germany.

One of them have chosen to say that no management comes out of the family, family owns the business, they receive their dividends, but only professionals run the business, no family member is in the management. That is their own choice of what works for them, but there is an equivalent company, same size, the other Dangote of Germany, they have concluded we will only put family in management.

So none is more right for the other, it is just what works for you; it is just a tough process which requires a conscious effort and planning. Say for example, you have a son that you want to take over your company, you need to let him get trained, do an internship, get excited about the business, come learn about a role, so it is really things like that in simple terms.

But the one thing is, this is a problem, you need to think through and work with people outside of the family, specialists who have done this before, because each family thinks, I am alone in this, but you are not, it is just like going to a doctor, you have only one foot, but the doctor sees a thousand feet, so he has experience from treating a thousand feet.

So in this topic it is important that you engage specialist, it could be local or international, it does not matter, but people who have the knowledge and experience from many matters like yours can work with you and they can help you. It is really about making a conscious effort and making this a topic which is continuously worked on.

Have you ever worked with any Nigerian Client?

Sure we have, so I will say this is probably my 35th trip to Nigeria, because of I have worked in Nigeria, for some years now. I come to Nigeria on a monthly basis; I spend a lot of time here, so I know Nigeria quite well.

Compared to other African countries, are Nigerians ready to let experts come on board into their family business to help sustain it?

I think Nigerians are educated and aspirational people, what I like about Nigeria is that you see virtually no beggar on the street, because nobody is begging, you are just taking your life in your own hands. You do not see a lot of people begging, you can buy something and try to start to sell something and then you start making money and I like that.

I feel the country needs stability, unfortunately, these things move a bit very slowly, it has a bit of a wrong image at times outside, I think CNN is not always helping with Boko Haram and all of these issues. I always say, Nigeria has problems, but it is completely different

problems, than the outside world thinks. Remember when I came the first time, people said, Boko Haram is going to kill you, and I said, you do not understand, there is no Boko Haram in Lagos, but there are other things in Lagos which are problematic. So it is a lot of ignorance. I am here by choice How do you tend to achieve your aim and objective of ensuring viable businesses are adding to the Nigerian economy?

I will say there is a two-phased approach. First, we need to raise the awareness; we need to make the families aware that there is a challenge. Many of them are already aware and I am not say there is nothing here, but we see many who say I am aware, but I really do not know what to do and I do not have time.

The first part of it is really raising awareness, getting people to really think about the topic. And it is obviously about the right support, the right solutions for these families and there is a whole range of things.

We are working with Lagos Business School (LBS) and Kunoch, championed by Pascal Dozie and they have this topic on their agenda, they already have some of it in their curriculum. We are working also with Chris Ogbechie, professor of strategic management at LBS to support and build out the curriculum.

As a first step, we are planning a workshop later this year, where we will invite between 15 to 30 families together with LBS and we are also in partnership with Pascal Dozie.

Also we as a multi-family office, equipped to help families and their many other resources. But first there is really the awareness raising and then showing the families all the tools they have to help themselves. We are not coming in to tell families to do it. We are more sparring partners assisting them in the thought process.

Very often in the families, there is always the sensitivity, the older brother gets selected by the father and sometimes it could be very difficult for families because they always feel the other guy has some rested interests, we do not have any rested interest, we only here to help you out. It is like going to the doctor and he asks you to pull your pants, but you give some excuses, but the doctor does not care, I am not judging you, I am just a doctor, I will tell you what you have and how to go about it.

We are just like doctors, we are neutral, we are just here to help and fix the problem. Very often having such a third party in the discussion is very important, because you may not listen to your brother because you feel he has an interest, he may say the right thing, but you feel that there is a hidden agenda somewhere, but If I say it because you know I’m not part of the family, I will get some audience.

The difference between a single family office and a multi-family office is that the single family works with one family, it is like the luxury version, because you have a team of people only working with you.

The drawback is it is extremely expensive, it only happens for multi millionaire because it is really expensive. Multi-family is very good, I will not say it is a compromise but it is a good solution because you are sharing a team of specialist with other families, which has some benefits, although there is Chinese wall between the information but you can benefit a bit from the learning, because the team is working with several families.

Multi-family offices are completely independent, we are not a bank, and we are not selling products.

We are employed by the family, we work with the family and we are only accountable to the family and we get a long term relationship as we know the family really well.

The beautiful thing with the family offices is that they are trusted are trusted advisers, they really know and understand the family, and all the secret of the family. Against that knowledge of the family, you know what the patriarch likes and does not like, so you have that deep knowledge of the family. So as life changes, you know them, because you follow the kids growing up, you can constantly apply the knowledge

Thursday 26 July 2018

C002D5556

BUSINESS DAY

25

Interview in society about passing on businesses’ in helping them and adopting strategies to make sure that they are best positioned There is another misconception, which is people think I have set up a trust and I am done. No! but the problem is, you know, I and my partner Mario Marconi, used to run the trust of UBS which is the largest trust business in the world, and he used to say to his client when they sign a trust, he will say, I will call you tomorrow, they will say why, we just signed this, he will reply, we need to start reviewing.

In your period of helping families, what are the challenges that are peculiar to Nigeria?

I am very optimistic, Nigeria is challenging with political issues, and it is like a place with opportunities has a lot of challenges otherwise you will not have the opportunities. I am absolutely bullish about Nigeria in the long run, it is going to bumpy, and you have elections and all such of things going on. So sometimes you go two steps forward, three steps backward, but I also it as this is a marathon, this is not a sprint, so 10/20 years this is going to be better. Somebody once said Nigeria is like an elephant in a straitjacket; we just need to take the jacket off now. So the elephant can really come out now and start playing.

My conviction is the Nigerian entrepreneur top family has a lot with the Colombian, Greek and Chinese top families. They have more often in common with them, than with normal Nigerian people.

So the peculiarities are not necessarily Nigerian, it is very often that they are universal peculiarities among them. Typically what I see here, from user observations, this is a challenging environment to do business, and so the people who have succeeded obviously, cracked the Nigerian nuts so to say.

So very often, we see situations here where the first generation struggle letting go, because they feel the kids do not know it, they have no clue and all. But you could argue, look at the UK, the Queen and Prince Charles, he is 70 and he is still not King.

Is it something peculiar to Nigeria? I see it a lot here, but I see great examples of businesses where people allow the next generation to take over at earlier stage which I find very impressive.

But I have seen a lot of this and I hear a lot of this from the second generation. My old man, he thinks he is the only one that understands Nigeria, he built his business and that is a big risk, to a degree, I completely understand, I will probably do the same, probably say such, are they really ready. But I always say to them the following, be careful, imagine you have a car, a very nice sports car and your kids can never drive that car, because you think they are just going to kill your car, you know, it is a silly analogy.

The moment you go to the other place where we will meet someday, the kids are going to say, now the car is mine, let us go and he is going drive crazy and he is going to wreck the car almost immediately, because you have never allowed him to drive the car.

But what if you take the kid, while you are still alive now you are holding up, let us go and drive the car together, let me drive first, you sit next to me and you say to the son, look, I am still here, I will watch you, tell you it is done, give you some advice on how to drive it, and the kid is going to feel such a responsibility, my old man now trusts me, he allows me to drive his car. So what do you think he is going to take it for a ride? He is going to say No! I was allowed to drive this car, my father has given me the responsibility of this car, so he is certainly not going to kill the car because he has the responsibility which the father has now gently passed on to the next generation. So this responsibility gives respect and trust, but very often I see somehow this not letting go.

Also in Nigeria, I see that this environment gets to be more complex from a family setup, maybe and others because there is more kids, and you have the aspect of entitlement and we discussed with is Professor Fabian Ajogwu (professor of corporate governance) from LBS and he said this is what is found here. Maybe when you stop in the other part of the world, maybe it is more clear cut, the father the mother and you have two kids, but in Nigeria, you have the father the mother and eight kids and you have the first wife and the second wife and then you have all the fifty cousins and all the twenty uncles and all of that, if somebody is wealthy, everybody is

there and they want a piece of it this makes it more complex, which I will say is a peculiarity.

The third thing I will say is, a lot of it is first generation, so there is not yet an institutionalized experience in society about passing on businesses. Pascal Gozie cited this, saying you have all these Lebanese families having their family businesses lasting to the 3rd generation here in Nigeria, and then we have all the Indians business in Nigeria produce 5th generation businesses and then we have us Nigerians we not as good as these two countries, although they are as Nigerian as we like, but they just have different origins.

So those key things, sometimes not being able to let go of your ‘the next generation is not ready’ topic of entitlement in the line race of the family which is peculiar to Nigeria and the other thing is, it is still the first generation, so family do not yet have experiences as family to transfer businesses very often, and because this is the generation who created the wealth and in other part of the world, you have families who are already in the second or third generation. But many of the challenges, I want to reemphasize are global challenges, are more akin to all the entrepreneurs and not only Nigerian or Chinese or Portuguese entrepreneurs. They often take a very similar pattern.

From a KPMG report I read, just 3 percent of Nigerian family businesses have a strategy for leadership transition.

So what’s the best strategy to transfer the leadership succession?

I tell you, the best strategy is to roll up your sleeves and start discussing within your family, identifying what is the solution which works for your family, then how that solution looks. So again as I said, there is no right or wrong, one family goes left, the other goes right and both are right because the family needs to figure out for itself, how do we want to do this?, what do we feel comfortable with? Then you could choose contrary routes, some people like to go swimming in the lake for vacation and others climbing the mountain, I am not saying one is better than the other, it is just a matter of taste and preference.

The best strategy is to have that discussion,

not to ignore that topic to sit down and involve the next generation and get the next generation a seat at the table so they can be part of shaping this, just like a relay race and both need to be synchronized and harmonized in the handing over, so therefore the whole discussion on how to do it, should not just be from the top, you should also listen to the next generation, so therefore, there is no right or wrong, the only right is to tackle the problem and get experienced people to help you to get your next generation sit at the table so they can be part of finding the solution because that’s your best way of making sure it gets implemented.

Some families take the rigor of training their wards both in school and in practice, why should they still need adviser for succession planning?

You can choose not to, many people choose not to, it is a bit like, I am never sick, why should I go to the doctor? You do not have to go to the doctor, it is the same analogy. I am a believer that if you have your precious good, which is your family business which you have worked so hard to build. I believe for every topic there is a specialist, it could cost you some money, and that is fair.

If you have a hundred dollar business by engaging people who have helped many other businesses in solidifying in doing this, you can say whatever it cost. But you want to risk your business?

The most precious thing for an entrepreneur is two things, which are his business and family. So when your kids get sick you will not say I will save the money for the doctor, of course not, you are not going to do that, because you care about your baby.

Your company is a baby too, so are you going to save the money for the doctor for the company? I mean you could do that, because everyone has their own choice, but I will not do that, because this has far reaching consequences, if you do not get it right, you may lose your whole business, you could lose all your fortune, saving on it and trying to do it by yourself.

If you look at it globally, on average, you will not find important families who operate without help. If you now do the study, you will

take 100,000 wealthiest families in the world and then you will start who amongst them operate completely out of help, you will find out that every significant family has an army of support around them because they are protecting something valuable, which are the family business and the family wealth. So sometimes it involves you having specialist and paying for it. It is part of how things are.

If the survival rate of family businesses increase, in a long run how beneficial is it to the economy?

It is hugely beneficial. Think about it, family businesses are more successful than nonfamily businesses, they tend to die earlier and they play an over proportionate role in this part of the world, just quite cultural and history. So if they are more successful and we can get them to survive more, by logic that means, we have more jobs, we have more growth, more stable economy, more happy people, more welfare, increasing wages and we have all the benefits which Nigeria is looking for.

I feel we have the finger on a very important point and you always have the same thing with all these things. You have people who are very skeptical and say look, do not buy this. It is fine, wait, watch and see. But then you have people who says, I should be doing this, they are the early movers and then others will see and others will start following. I think what is really important is that we also enable the local environment with as much knowledge, there should not just be a few people holding the knowledge, we should share the experience, in a way that once we create the movement and we step the way it keeps rolling by itself, that is the objective.

What other one thing will you like Nigerian Family business to learn, just as you have experienced from other parts of the world?

I come back to one thing all the time, which is to acknowledge that this is a challenge and let us roll up our sleeves and look at it. You see sometimes in life, you have to spend a little money to save a lot of money and to be open minded as African entrepreneurs tend to be mistrusting and careful. It can be that if you do not like me, you can always do it with the other guy that you like, but you have to recognize that this is a problem that needs tackling.

Just be open to specialist, they will help fix your problem then you pay them and you are done, because he will do it better than you and he will save you the time which is more valuable to you. So this actually helps you focus on your back seat, because he helps you and you focus more on your business and make more money, grow the business further, it is probably a good investment, rather than trying to do it yourself.

What are your future prospects for Nigerian family businesses, if they accept the generational transition as a challenge?

I see a huge opportunity. Because I see this is a topic which is more timely and when you talk to many families, many of them feel the topic is important. But if you ask, has enough been done on the average in this field? Probably not, which means it is great. So we have an important problem where we have not done enough. So that means we can therefore make a real change.

If you come into a house which is already perfectly built and you are going to improve it, but if you come into a house which already has beautiful location, wonderful potential, but there is potential to do something, then for me that is much more exciting.

For me I look at Nigeria and this particular thing looks like that. Many people will say this is not for me, but then some people will and improve their situation and lower their risk and increase the probability of longevity of their family business, and they will benefit which is good for the Nigerian economy and they will create more jobs.

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BUSINESS DAY

Thursday 26 July 2018

CityFile

Oyo releases N201m for gratuity payment to 90 retirees AKINREMI FEYISIPO

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y o St a t e g ove r n m e n t has released N201.585 million to offset outstanding gratuities of 90 retirees in the state.

The sum covers workers who retired from 2011 to January 2012, as well as teachers under the payroll of the state government across all grade levels.

O lawumi Ogunesan, the Head Of Service (HOS), while disbursing the cheques to the beneficiaries at the in Ibadan, assured that payment of gratuities to pensioners in the state would continue.

Ogunesan, represent-

ed by Adejoke Eyitayo, an acting permanent secretary, said that government was making efforts to ease the pains of the pensioners.

The HOS appealed to those yet to receive theirs not to lose hope, noting that efforts were ongoing to capture them in the next batch of payment.

She advised the beneficiaries not to venture into a business without having in-depth knowledge in such business and to abstain from fraudsters who may want to dupe them.

Owoeye Taiwo and Adewuyi Ajani, two of the beneficiaries thanked the government on behalf of others, for releasing the funds.

Edo, NGO empower Libya returnees

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do State government in partnership with a nongovernmental organisation (NGO), Have n f o r Re hab i l i t at i o n and Reintegration Foundation, has completed a two-day empowerment programme for ten Libya returnees.

Paul Ohonbamu, the state commissioner for communication and orientation, who disclosed this, assured that the government would sustain training programmes to restore the dignity to the returnees in the state, as part of initiatives to reintegrate the returnees into the society.

He said “The state government places premium on the lives of every Edo s o n a n d d au g ht e r. We will continue to deliver s er vices to the people and remain committed in ensuring that the people enjoy the dividends of d e m o c ra c y . He n c e, a s we receive returnees, we are partnering with wellmeaning members of the society to prepare them to be useful to themselves and the society at large.”

Ohonbamu said steps taken by the governor so far show that he wants the best for Edo people, noting, “Obaseki is working hard to ensure prosperity for the people as he restores their hope and pride as a people.”

C E O, Hav e n f o r Re habilitation and Reint e g ra t i o n Fo u n d a t i o n , Queen Klopper, a G ermany- ba s e d Ed o i nd igene, said she was mot i vat e d t o su p p o r t t h e

government’s initiatives in training and providing means of employment for the returnees.

She noted, “I am here to support the Edo state Government in training, empowering and resettling 10 Libya returnees as part of my contribut i o n t o e n c o u ra g e t h e government to continue to do more for Edo people.

“After the training, the best five persons would be taken to Abuja for a two-week further traini n g . At t h e e n d o f t h e training in Abuja, these best five persons will get financial reward and start-up kits.”

She said, “We thank the Edo State government for taking care of our stranded brothers and sisters in Libya. We are ready to support, partner and play our roles in helping the government achieve its goals to make life better for all Edo people.”

O ne of the trainees, Deborah Agbonwanetien, expressed appreciation to the Oba of Benin, the s t at e g ov e r n m e nt, t h e foundat ion, and other concerned Edo citizens who contributed in one way or the other to restore their hope and pride.

She said the gesture has restored their sense of being, after the harrowing experience they went through tr ying to s e e k g re e n e r p a s t u re s abroad. “I am really happy t hat I have t h e o p portunity to start again as this will empower us, keeping us busy and occupied,” she added.

Bukola Saraki, entrance of senate president house which was seal by Police at Lake Chad Crescent Maitama Abuja in respect of the invitation by the IGP to appear at the intelligence response team (IRT) office, over the robbery incident that took place in Offa, Kwara State in 5th of April 2018.

Picture by TUNDE ADENIYI.

Police bust robbery, kidnap syndicate, kill one in Ogun RAZAQ AYINLA, Abeokuta

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he police in Ogun has shot dead a member of a kidnapping and armed robbery syndicate and arrested three others during a gun duel on the outskirts of Abeokuta, the state capital.

Ahmed Iliyasu, the Commissioner of Police (CP) in charge of Ogun command, paraded the sus-

pects and the corpse at the command’s headquarters, in Eleweran, Abeokuta, on Tuesday.

The suspects paraded were 35-year-old Yussuf Abdullahi and Audu Isa, while the third suspect, Ali Mohammed, said to have been wounded in the exchange of fire with the police was hospitalised.

He said: “On Thursday July 12, 2018, the command got an intelligence report

that some armed bandits who were specialists in kidnapping and armed whose operations cut across the northern and southern parts of the country had arrived the state.”

The police boss added that the gang was in the state to kidnap two businessmen, identified as Shehu and Kabiru. On getting intelligence, Iliyasu said he mandated the men of the Federal Special-Anti Robbery Squad

(F-SARS) in the state to trail and round up the hoodlums.

In compliance with the directive, the FSARS operatives technically trailed the bandits and accosted in Abeokuta, before they got to their targeted victims.

He, however, added that on sighting the policemen, the suspects engaged the policemen in gun battle but later they later fell to the superior firepower of the police.

Obiano’s impersonator lands in trouble EMMANUEL NDUKUBA

A

30-year-old suspect, John O kw u d i l i f ro m Delta State, who specialises in using fake facebook accounts and impersonation of prominent persons including Willie Obiano, governor of Anambra State, to defraud his victims has been arrested by the police.

Garba Umar, Commissioner of Police in Anambra told newsmen in Awka that Okwudili was arrested by the Special Anti-Robbery Squad (SARS) in on July 9.

According to Garba, the suspect is an internet fraudster popularly known as “Yahoo Boy” who fraudulently obtains money under false pretense from innocent victims.

He said that several criminals were also arrested in the last month under review.

“In our continued efforts to further stem the tide of crimes and criminality to its barest minimum, the command dur ing the per iod under review took proactive steps which included but not limited to visibility policing.

“Others are criminal mapping, intelligence led policing, constant raids of black spots and criminal hideouts in accordance with the recent directives of the police high command,” he said.

According to him, the m e a s u re s y i e l d e d a n d continue to yield remarkable results in the arrest of robbery suspects and cultists.

The police boss said the

command also arrested one Ojiakor Chike male aged 25 years of Umuezeawara in Ihiala LGA of Anambra State, a suspected notorious cultist and a robbery gang member operating along Uli/ Ihiala axis.

Garba said that discreet investigation led to the arrest of his accomplices- Izuchukwu Ikueze, Nwabueze Ikwueze , Chukwudi Obi, Tochukwu Obi and Cheta Obi all males and members of Aiye and Vickings confraternity.

Also arrested was one Obi Benjamin (male) from Umuoma Uli, a local arms manufacturer in whose possession one Berretta pump action gun with No a 302-CAL, 84 assorted single/double barrel guns, ten live cartridges and other working tools used in servicing the guns were

found.

Equally arrested was a six-man robbery syndicate which members include Uzochukwu Chukeuewuzue, Chukwujekwu Ogbuchi, Nnalue Eke, and Kosiso Ozor, all males.

He explained that the suspects conspired on July 11 to rob one Blessing Nwannli (female) along Umumli Ihitte, Azia in Ihiala. Garba said exhibits were recovered and investigation ongoing.

He added the suspects would be charge to court for prosecution.

The CP said the successes were made possible through cooperation borne out of implicit confidence from well meaning members of the public and sheer patriotism to engender a safe and secure environment for all residents in the state.

Thursday 26 July 2018

C002D5556

BUSINESS DAY

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FEATURE

Nigeria’s disturbing high fertility rate, causes, impacts and solutions than 500 million people out of poverty. India in the past ten years has a lot to reduce the incidence of poverty in their country,” Johnson Chukwu, CEO of Lagos-based financial advisory firm, Cowry Assets, said.

“Unfortunately both Nigeria and Congo are on the opposite side of development in the sense that their poverty levels is worsen. We are seeing poverty level in Nigeria decrease as GDP per capita is detetorating,” Chukwu told BusinessDay on phone.

BUNMI BAILEY

O

ne of the most serious problems facing many developing countries especially Nigeria is the rapid and uncontrollable increase in their population. This is attributed to bearing of many children by women especially in the rural areas because of lack of education and awareness, poverty, marriage at early ages. Consequently, their family sizes increase and population grows rapidly.

Currently the country’s population is growing Nigeria at a rate of 2.6 percent annually, lower than the growth rate of 1.95 percent .

“Currently we are growing at 1.95 percent with a population growing at 2.6 percent annually. Our growth rate does not exceed the population growth rate. So as we progress, Our standard of living will be impacted significally,” Ayodeji Ebo, MD, of Lagos-based financial advisory, Afrinvest securities limited said.

The population in Nigeria is increasing by the minute and high fertility rate is one of its major determinants, especially in the northern part of the country. According to the National Bureau of Statistics (NBS), Out of the 36 states in Nigeria, Jigawa recorded the highest level of fertility rate in 2016.Followed by while Kano and Kebbi state And also according to a statistical survey, Nigeria is among the top 20 countries in the world with a high fertility rate of 5.13 in 2016 Fertility, as a demographic indicator is referred to as the actual reproduction performance in a population based on the number of live birth that occurs in a population. It indicates the actual number of children born alive. Child bearing, by itself, is dependent on so many factors including social circumstances such as culture, tradition, education and the overall level of development of a society or community. Also, the age of entry into a union and the availability of contraception are two key proximate determinants of fertility.

High fertility is defined as a total fertility rate (TFR) of 5.0 or higher while a lower fertility rate is below 5.0 The most commonly used measure or indicator of fertility is the total fertility rate (TFR), which is, the number of children that a woman bears over her entire childbearing years, provided at each age during the childbearing years. She also experiences the age-specific fertility rate (ASFR). The fertility age bracket for women is between ages 15 to 49 years. Age specific fertility rate, in turn, is the number of births given to by women of a specific age group per 1,000 women in that age group.

In 2015, total fertility rate was 5.5 births per woman but increased in 2016 to 5.8 based on the NBS report It has been a normal tread in the northern parts of the country where teen girls once they see their menstrual period they have become

women and are ripe for marriage and can bear as much children as they want to not minding the negative impacts.

Fertility rate, total (births per woman) in Nigeria was reported at 5.526 in 2016, according to the World Bank collection of development indicators, compiled from officially recognized sources.

“Northern states usually have the highest fertility rate in the country.

By tradition once a girl sees her menstrual cycle the family or parents of the lady will just marry her out. They hardly use contraceptives because it is against their Islamic believe,” Okechukwu Ekemezie, a medical doctor, Dangote oil and refinery said on phone Even while walking in the streets of Lagos, you would see the bike riders who are usually northerners of very young age already married with children .The large population of beggars in the streets are the children from the north. You would see mothers as young as 13 years old begging in the streets with their children having no means to feed them themselves How it began Historically, Fertility norms, usually reflected by the demand for children, are most often measured by the number of children desired under prevailing social and economic conditions. Although it is sometimes influenced by the number of living children, patterns of changes and differentials in desired fertility sometimes provide valuable insight into probable future course of fertility.

Fertility rate, total (births per woman) in Nigeria was reported at 5.53 in 2016, according to the World Bank collection of development indicators, compiled from officially recognized sources. Uncontrollable fertility is one of the determinants of population growth in Nigeria.

Causes of high fertility rate Causes of high fertility rate The following are the factors that

causes high fertility rate in Nigeria Motivational Factors In pre-industrial societies and in agricultural social groups, there is emphasis on cooperative activities, joint families, joint occupations and community living. These are the basic motives for high fertility rate. In agricultural societies children are valued due to economic, social, religious and cultural factors.

Economically they start earning and helping the parents at very young age. Several wives having dozens of children are assets to a male in backward societies.

In most of the primitive societies, the bigger families leads to higher social status and manpower. Wars also motivate higher birth rate.

Another motivating factor is the fatalistic attitude, that children are gifts of god. The countries professing Hinduism, Islam and Judaism religion has motivated high fertility and encourage high birth rates in the developing countries Economic Factors Poverty leads to illiteracy, low standard of living and promote fertility rate. The children in lower economic group very soon start helping their parents in earning their living. So, increase in number of children leads to increase in income. It means the

Fertility rate, total (births per woman) in Nigeria was reported at 5.526 in 2016, according to the World Bank collection of development indicators, compiled from officially recognized sources

low economic status leads to high fertility.

Social Factors Social factors encourage fertility which include joint family, caste system, and lack of social mobility, lower status of women, community life and joint occupation. So, the above factors are responsible for high birth rate in the developing countries. The government and other private agencies have launched family planning programmes to control the high birth rates in these developing countries. However, most of the developing countries particularly the Islamic countries, are still showing high fertility rates.

Consequences of high fertility rate High fertility and birth rate contributes positively to high population growth while further findings revealed that high population growth rate in Nigeria exerts negative consequences on the Nigeria’s economy. These negative consequences can be appreciated by high poverty, inadequate housing, poor sanitation, low standard of living, high unemployment rate and inflation, high pressures on existing infrastructural facilities etc.

According to a world bank study, nearly 70 percent of the world’s population live in just five countries, those of whom are subsisting on less than $1.25 a day and are concentrated in five areas which are India, China, Nigeria, Bangladesh and the Democratic Republic of Congo.

These countries have similar characteristics in terms of their rising population but based on world poverty clock, a non-governmental organisation in Vienna that shows real-time poverty estimates of different countries and their policies, countries like China, India and Bangladesh are on track of ending extreme poverty.

“The difference is that if you look at china and India, these countries are doing a lot to pull people out of poverty. For instance, china within the last 30 years has pulled more

Solution The current growth rate of Nigeria population is now a significant burden to human well being.

The use of contraceptives which is a birth control method is not encouraged in some parts of Nigeria; statistic shows that only about 38 percent of those that reside in the South West use contraceptives and 3 percent in the North East. Contraceptive use in urban areas is three times that of rural areas. because of their level of education.

According to the demographic report from NBS, 86.6 percent of Nigerian women who are currently married or in a union are not using any contraceptive method to prevent unwanted pregnancy. A break down of this figure shows that Ebonyi State had the highest 97.0 percent of women who are married and are not using any contraceptive methods to space their child while Oyo state had the least 65.7 percent In 2011, the Federal Ministry of Health in her efforts to achieve the millennium development goals which is now sustainable developmental goals distributed free contraceptives to states to enhance child spacing.

This free distribution of contraceptives has continued to achieve the current sustainable development goals for all women in the reproductive age in Nigeria to space their children for healthy living.

However the attitude of people towards this modern method of contraceptive is still poor The poor attitude of people towards contraceptive and the current explosive population growth affects the ability as a country to plan for adequate resources to meet the needs of every Nigerian. For the health sector, it is incredibly problematic, especially in light of the paucity of current resources .

Doctors have suggested that improving access to education and family planning methods will contribute positively to lowering fertility rates and hence managing population growth in the near future.

According to the National Population Commission(NPC), Nigeria as at 2017 has an estimated population of over 198 million. The United Nations (UN) World Population Prospects (2017) said that the country’s population could be the third most populated in the world reaching 410 million by 2050.

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GARDEN CITY BUSINESS DIGEST NIMASA reformed to deliver new revenue targets, to help Nigeria maritime lead Africa, attract FDIs •••Unprecedented revenue delivery to FG coffers •••Agency targets N109Bn in 2018 •••Positioned to play in $100Bn annual African maritime industry

•••Eyes $159Bn maritime opportunities in Nigeria

IGNATIUS CHUKWU

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xperts are reviewing how the Nigerian Maritime Administration and Safety Agency (NIMASA) has carried out critical reforms that may have repositioned the Agency to rake in huge revenues delivered into Federal Government coffers by blocking leakages, attracting foreign direct investments (FDIs), and networking the Agency into global recognition. These reforms in the past three years are said to have been very eventful, leading to higher targets for 2018, hoping to capture a large chunk of the $100Bn annual maritime revenue in Africa.

After appointment of the new Executive Management of the Agency led by the Director-General, Dakuku Peterside (PhD), the team is said to have understood the critical need for overall reform in the Agency to break away from the old ways of doing things and conform to the mantra of the present administration of President Muhammadu Buhari, which required a new and purposeful start for Nigeria in all sectors of our national economy.

BusinessDay gathered in Port Harcourt at the week that a survey has put Africa as capable of generating $100Bn per year if the continent could put its maritime administration acts together, and the NIMASA under Peterside has reformed its operations to capture at least 60 per cent of this estimated revenue.

Peterside recently told newsmen thus: “About 60 per cent of cargo coming to West and Central Africa will end up in Nigeria, meaning we are a major stakeholder. We have more wet cargo traffic than any country in Africa.

It is important that we take

Dakuku Peterside

leadership.”

Nigeria is said to have rich maritime resources that need to be carefully and strategically tapped. As at 2016, the Nigerian Maritime Industry was estimated to exceed $15Bn, representing about 30 per cent of the country’s GDP. And with a vast coastline of over 850 kilometres, the possibilities are said to be truly endless.

Now, NIMASA is said to target N109Bn as the DG says the Agency was optimistic it would generate this target in 2018 due to strategies put in place.

NIMASA made waves in 2017 when in less than one year of the Peterside takeover, remitted unprecedented revenues of N9.97Bn and $38m to the federal coffers.

Now, the Agency is working on starting the Cabotage Vessel Financing Fund (CVFF) with $100m as well as change the Nigerian terms of trade from Free-on-Board (FOB) to Cost Insurance and Freight (CIF).

Various strategies have so far been initiated in the past

three years to achieve the laudable feats for which NIMASA and Peterside are known in the maritime industry. The paper made available in Port Harcourt recently said: “Beginning with a quick Strategic Implementation Plan (SIP), in alignment with the programme of the federal government, according to Peterside, he and his team had series of management performance briefings and critical reform intervention sessions.”

Under the new leadership, strategic priorities to guide the Agency’s objectives were captured as ‘five pillars’ for the repositioning and restructuring of NIMASA and the maritime sector in Nigeria. The five pillars are: Survey, Inspection & Certification Transformation Programme; Environment, Security, Emergency Search & Rescue Transformation Initiative; Digital Strategy Reforms; Capacity Building & Promotional Initiatives; and Structural & Cultural Reforms.

Since the faithful implementation of theses reforms, NIMASA has achieved tre-

mendous successes in several ramifications. They include: Increased Compliance Level on ISPS Code; Since the last two years, the Agency as the Designated Authority for the implementation of the International Ship and Port Security Code (ISPS) has achieved over 80% compliance rate, from 10% rate three years ago. This is indeed a major breakthrough.

According to Peterside, NIMASA’s goal is to attain a 100% compliance level within the next twelve months. The Agency’s efforts have attracted commendation from the United States Coast Guard Team that visited Nigeria early last year.

Participation in Foreign Expos; In order to attract foreign Direct Investments (FDIs) and international collaborations and partnerships towards maritime capacity building as well as gathering knowledge on the latest technology and maritime innovations, the Agency participated in various Maritime expos during the period under

review like the Oil Trading Conference (OTC), Norway Shipping Week and London Shipping Week. Benefits of the interaction are: agreement to sign Joint Declaration on Economic Cooperation between The Government of the Federal Republic of Nigeria and the Governments of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (the “EFTA States”).

Signing of MoU between NIMASA and GMA; Due to the Agency’s performance and its roles in the issues concerning regional collaboration, the Ghana Maritime Authority (GMA) signed a Memorandum of Understanding (MoU) with the Agency as part of efforts to improve on their operations. The MoU has a life span of four years and renewable. It covers: Knowledge Transfer and sharing Initiative between both Agencies; Joint Capacity Building Initiative; Cabotage Enforcement Joint Study Initiative; Joint Comparative Research Initiative and Joint Efforts to combat Piracy and Terrorism Initiative.

Signing of MoU between NIMASA and WMU; On April 10, 2018, the president of World Maritime University (WMU), Cleopatra DoumbiaHenry and the Director General of the Nigerian Maritime Administration and Safety Agency, Peterside, signed a four-year renewable Memorandum of Understanding setting out the areas of cooperation between WMU and NIMASA. Anti –Piracy Bill; The Bill has been approved by the Federal Executive Council and forwarded to the National Assembly for Legislative action.

It is our hope that the Bill will be passed into law in 2018.

Critical Satellite Surveillance Infrastructure/Security; The Agency has profited

significantly from the deployment of the satellite surveillance infrastructure. The primary purpose is to enable the Agency monitor shipping activities and the marine environment in real time for safety, security and administration of the maritime domain of the nation.

Increased Compliance Level on ISPS Code; Since the last two years the Agency as the Designated Authority for the implementation of the International Ship and Port facility security Code (ISPS) has achieved over 80 per cent compliance rate, from 10 per cent rate three years ago. The data below substantiates the compliance rate and effectiveness of our activity.

Ma r i t i m e Inv e s t m e nt Promotion at One-Stop Investment Centre (OSIC); NIMASA’s desk has attracted 60 visitors so far.

Nigeria’s Maritime Industry Forecast 2018 – 2019: Towards the effective discharge of its role and help to other industry participants in their planning, NIMASA in February 2018 published its Outlook and Forecasts for the Nigerian Maritime Sector covering 2018 and 2019. This milestone publication became the first ever Maritime Industry forecast coordinated by government. The Outlook publication included: A Review of developments in the Nigerian Maritime Industry In 2017; Expected international and local developments in Policy and Regulatory Environment for the Maritime Sector In 2018 and 2019; and Emerging Opportunities and Challenges - Implications for the Maritime Industry.

With all these steps, the Nigerian Maritime Sector is said to be set for greater heights, considering the level of developmental strides in the last three years, under the Peterside-led Management.

BD Best Governor Award 2018: What marked Wike out at Transcorp Hilton week Thursday and Gov Nyesom Wike of Rivers was clearly the star award winner as Best Governor 2018.

The epoch-making event was marked by very important highlights especially the presence of the Ooni of Ife, King Jaja of Opobo, and some governors.

Port Harcourt by Boat With IGNATIUS CHUKWU

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usinessDay conducted its States Competitiveness and Good Governance 2018 Award event at the Congress Hall of Transcorp Hilton last

One major point to note was the heavy presence of the Rivers State team lead by the former minister, Kenneth Kobani (SSG) who collected the prestigious plaque from the Ooni. Despite appeals that it was strictly by invitation and for few tables, top Rivers personalities trooped in from all parts of the country, at their expense. They simply could

not be stopped. Emmah Okah (Information), Glory Emeh (SA Politics and Strategy) and Isaac Okemini (SA Investment) worked extra hard to ensure that the outflow of love for their governor fit into the tight flow.

All through the ceremony, my little corner at the back of the hall turned into a Mecca of sorts by experts and media men who came to greet and inquire how things were shaping up in Port Harcourt. Each wanted to know the likely outcome in 2019, and none forgot to warn, ‘you people should make sure he returns oh’. I wondered how it was my duty. Maybe, mine is to pass this to the voters and

shakers in Rivers State, but not anywhere near the new improved opposition secretariat on Aba Road.

When it was time for the Ooni to hand the trophy

to Wike’s Kobani, all in the royal presence of King Jaja V, the Ooni carefully selected words that indicated that Wike is special to Nigerians at this moment and the masses needed him around for far longer. The crowd roared in huge applause. Was this a national endorsement?

When it was time for footage of projects that led to the award for each winner, the difference seemed miles away; Tall buildings adorned the large screen: Cultural Centre that was commissioned by the Ooni, Mother and Child Hospital complex on Aba Road, Doctors Quar-

ters, Civil Servants Quarters, G.B Warmate House, schools, and roads upon roads. The governor just unveiled 100 roads in three years.

The argument at home from the opposition has been that most of the projects were started by the previous administration, but Wike has severally argued that starting a project was easy but that completing it and putting it to use is the more difficult.

What is true is that in Abuja last Thursday, Wike stole the show; in 2019, will he also steal the day? Who is reading the royal lips?

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FEATURE

Securing Nigeria’s payment systems Efforts to stem the growing tide of electronic fraud in Nigeria are beginning to yield positive results. The Nigeria InterBank Settlement System, NIBSS reported a 24 percent decline in losses to fraud in 2017. This decrease, which it says is occurring for the third year in succession, also salvaged about N2.4billion. In this report, CHINWE AGBEZE looks at the efforts by financial institutions to safeguard the integrity of e-payment channels.

O

n Wednesday, June 7, 2017, Idongesit Umoh, an entrepreneur in Lagos, said she moved N1.5million from one of her business bank accounts to another.

According to her, she had requested for PTA from her bank for a trip to the United States, and the money she transferred was for that purpose.

The next day, Umoh said she tried to carry out a transaction, but got a message saying the credentials she had put in, were invalid. She typed in her mobile bank app a second time and got the same message before notifying her bank. The woman who picked the call told her to re-activate the call told her to re-activate her app.

She did and typed in her PIN, but it said it was invalid again.

Umoh was told to visit the bank, but she resolved to do so the next day since it was almost 4pm and she was not close to the bank. Few minutes after she hung up, Umoh said she received debit alert messages with strange names. At that point, it dawned on her that her account had been hacked.

While hurrying to the bank, she instructed her bank through the customer service to block her account.

Sadly, Umoh said her account was cleared of N2.1million with thirty minutes. After frequently the bank for a month, they refunded N668,000 and closed the case.

Umoh is just one out of the many victims of e-fraud in Nigeria. Available statistics by FITC puts the number of reported electronic fraud cases between 2001 and 2015 at 39,714.

Available data from NIBSS revealed that e-fraud accounted for more than 60percent in value and 90 percent in volume of total fraud loss between 2015 and 2016.

To curtail the high incidence of e-fraud in the country, Nigeria electronic Fraud Forum, NeFF was created to actively and proactively react to the challenge to protect the e-payment channels.

Before the introduction of electronic banking, traditional payment systems using cheques and bank orders were the predominant means of payment in Nigeria. With the ad-

vent of E-banking, Nigerians swiftly embraced e-payment channels in carrying out their financial transactions.

The reason for the adoption is not farfetched. The thought of performing transactions round-the-clock without having to visit the banking hall was enough attraction.

With increased acceptance, the e-payment systems grew and this was captured in NIBSS E-payment Fact Sheet for 2017. According to Fact Sheet, the total value of transactions from NIBSS Instant Payment (NIP), NIBSS Electronic Funds Transfer (NEFT), Points-of Sale (PoS) and Mobile transactions grew by 37.1 percent to reach N70.63trillion in 2017 compared to transactions value of N51.52 trillion in 2016.

The electronic payment system has continued to grow within the Nigerian payments industry. This exponential growth has been supported

by CBN’s cashless policy initiative in 2012, to create an enabling environment for the paradigm shift within the Nigerian financial industry. The effective implementation of this policy created a ripple effect, with the increase in e-commerce businesses, innovative payment methods, rise of FinTech companies and mobile payment products.

As e-payment systems continue to grow with continuous adoption and

various electronic payment technology and solutions, electronic fraud has also seen some growth. The advancement in technology, Fintech and payment systems to automate processes has shown that financial transactions have become increasingly vulnerable to hackers and cyber-criminals.

In NeFF’s 2016 annual report, 77 percent of the 19,531 fraud volumes reported in 2016 were related to electronic fraud. The growth in e-fraud keeps increasing, such that NeFF stated that, ‘‘It is evident that fraudsters still leverage more on the electronic platform to carry out their illicit acts.’.’

In addition, the Centre for Strategic and International Studies estimated that cybercrime alone cost the global economy $445 billion in 2015.

However, the Nigeria Inter-Bank Settlement system (NIBSS) has cheery news for bank customers. NIBSS reported a 24 percent decline in losses to fraud in 2017. This decrease, which NIBSS says is occurring for the third year in succession, also salvaged about N2.4billion, which would have been lost over the same period. ‘‘No testament can be stronger than the indices rolled out by NIBSS than their acknowledgement that the industry was able to salvage much more than last year through its counteractive and collaborative approach,’’ said Dipo Fatokun, chairman, NeFF.

As part of the strategy of fashioning out new measures for protecting Nigeria’s payment system, Fatokun, who is also the director, banking and payment system, CBN, said the Forum held the 3rd in the series of annual retreats with the theme, ‘‘Operationalizing a four sided Approach to preventing Fraud’’, with special focus on Banking, Ecosystem, Law Enforcement and Telecommunication.

He said the ensuing engagement led the Forum to reach a resolution on how to battle e-fraud in 2018.

According to him, the Forum considered the speedy extension of the BVN to Other Financial Institution (OFIs) important to stem fraud in the industry, and the need to encourage the inclusion of e-payments as a course in the curriculum of the Law enforcement agencies.

Other resolutions include the need to fast track the initiatives with the Telco regulator (NCC), to find a lasting solution to SIM Swap and SIM recycle issues, establishment of coordinated Bank-Telco fraud desks to strengthen the handshake between financial and telecommunication industry, and the need for the CBN to encourage payments insurance as a way of enhancing customer fund protection and trust in the system.

Fatokun stressed the need for collaborative efforts to reduce electronic

fraud in the banking industry. ‘‘We must all work together in ensuring that the payments environment remains strong and safe, by taking every reasonable step in ensuring that payment services are delivered not only fairly and transparently, but also safety,’’ the NeFF chairman said. ‘‘We are aware of the negative impact fraud has on consumer trust, which is an essential ingredient in building a sustainable payments system. We remain committed in ensuring that the Nigerian payments system is not only easy to use, but also reliable and trustworthy,’’ he added.

Adebayo Adelabu, deputy governor, operations, CBN stressed the essence of collaboration and how it has brought critical players in the payments system (banks, consumers, telecom operators and law enforcement) together under one umbrella objective, which is to fight electronic fraud. ‘‘This collaboration will no doubt bring to bear, increased knowledge and information sharing and deepen the payments industry’s capacity to succeed in this fight against e-fraud,’’ Adelabu said.

The Central Bank of Nigeria in collaboration with banks, NIBSS and other stakeholders have made giant strands in combating electronic fraud.

However, there is need for improvement as fraudsters are getting wiser by the day.

Despite the anti-fraud efforts to subdue its monstrous growth, fraud is still pervasive. The positive impact of developments and improvements in technology on banking business is constantly being threatened by the activities of fraudsters, who daily evolve new devices to circumvent banks’ internal control systems. There is therefore need for collective industry effort to tame e-fraud.

Banks should not relent in enlightening customers on the changing tactics of scammers in electronic transactions. Anti-fraud education campaigns must use indigenous languages and also take into consideration the fact that some bank customers are not literate. Banks must show their customers how their cards work and how to get help when in trouble. Security officers who are not bank staff should not be allowed to deal with customers.

Automatic Teller Machine, ATM users should be taught to change their passwords sometimes. They must also be cautious about when and where they withdraw money to reduce the risk of attacks.

Despite the surge in fraud volume, the significant fall in actual los value established the fact that Nigeria is gradually winning the fight against electronic fraudsters.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Paul Usoro appeals to stakeholders in communications sector to harmonise telecommunications laws

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t a stakeholders’ forum held recently at the Nigerian Air Force Conference Centre, Jabi, Abuja, the Prince of Telecommunications Law in Nigeria, Paul Usoro, SAN presented a paper titled “Legal Framework for Telecommunications Infrastructure Rollout”.

Usoro the ICT Law expert, who has been involved in virtually all major transactions and regulatory reforms in the Nigerian communication sector, highlighted the challenges plaguing telecommunications infrastructure rollout in the country and the role of stakeholders in resolving the issue.

“With the privatization of the telecommunications industry, there have been major investments in the telecommunications industry, which till date continue to be utilized by the citizenry. Private participation in the telecoms industry came with its attendant consequences, such as activities of GSM service providers that are suggestive of customer exploitation. This necessitates continual government intervention in the area of telecoms infrastructure roll out, licensing, and operation”, he said.

On the challenges plaguing telecoms infrastructure rollout, the Senior Advocate of Nigeria emphasised that multiple taxation and duplicated regulation are major factors militating against telecoms infrastructure rollout. For him, “this is a major hindrance to the satiability of the telecommunications industry, which stifles infrastructure rollout and is a threat to broadband penetration”.

Paul Usoro enumerated other militating factors to include - lack of requisite investment and funding for massive roll out ; land tenure system and procurement of Governor’s consent; lack of adequate security of the infrastructure, exemplifie d by vandalism and theft; disruption by communities; destruction during other infrastructural developments, especially engineering

INSIDE Lawyers in Lagos and across the nation eulogize Nigeria’s oldest practicing lawyer

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NBA LAGOS AGM: George Etomi briefs Lagos branch on forthcoming national conference in Abuja

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Consumer Protection Council advises on anti-hypertension medication, Valsartan

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Paul Usoro

constructions; low technical expertise, among others.

Speaking further on the major challenge plaguing telecoms infrastructure rollout, he said “Multiple governmental levies are major disincentive to investors, consequently threatening investment opportunities, which stifle telecoms infrastructure rollout and expansion. Taxation in Nigeria is statutory, and any tax liable to be paid by an individual or corporate entity must be authorized and governed by a written statute”.

Usoro therefore called on stakeholders in the sector to play their roles in resolving the issue. He commended

the efforts of the NCC in setting up an Industry Working Group on multiple taxation in 2016. “Stakeholders should champion the cause for review and harmonization of all information technology and telecommunication laws in order to ensure that they are streamlined to wholly support and facilitate telecommunications infrastructure rollout”.

He recommended that a sector focused legal taxation framework similar to the Petroleum Profit Tax, under the Petroleum Profit Tax Act, should be adopted for telecommunications. Usoro added that beyond the measures proposed to eradicate

multiplicity of levies/tariffs, Government should also improve on measures to protect/ secure telecommunications infrastructure as well as eliminate and remove all barriers to telecom operations and developments.

Paul Usoro further enthused that “Government needs to stimulate rollout expansion to the rural and underserved areas, particularly those areas that may not be considered profit-centers by private sector service providers. Incentives and pilot schemes should be promoted and Nigerians should be educated on the need to co-operate with government and other stakehold-

ers in eradicating hindrances to telecoms infrastructure roll out and expansion”.

Telecoms infrastructure is the platform on which ICT networks and ser vices rest therefore Stakeholders should be more proactive towards taking necessary steps to protect telecoms infrastructure. Government should be conscious of the role telecommunication plays in the socio-economic growth and development of the nation.

He also mentioned that government should develop incentives for investors that will encourage rapid expansion of telecommunication infrastructure across the nation.

30 BUSINESS DAY TheBar

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NBA LAGOS AGM: George Etomi briefs Lagos branch on forthcoming national conference in Abuja

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he Chairman Technical Committee on Conf e re n c e Pl a n ning (TCCP), George Etomi FNIALS was at the Annual General Meeting of the Nigerian Bar Association (NBA) Lagos branch to unveil plans for the National NBA conference in Abuja.

Speaking at the meeting which took place at the foyer of the Lagos State High Court Igbosere, Etomi disclosed that the annual gathering of over 10, 000 lawyers in Nigeria will take place in the Federal Capital Territory (FCT, Abuja.

He said, “The President of Ghana, His E xcellency, Nana Akufo-Addo, has graciously accepted to be our keynote speaker while His Excellency, Muhammadu Buhari, GCFR; Vice President Yemi Osinbajo, GCON, and Hon. Justice Walter Samuel Onnoghen, Chief Justice of Nigeria are scheduled to be there as Special Guests.”

Also billed to be there are, General Abdusalami Abubakar (r td); For mer Head of State, Prof. Attahiru Jega, Hon. Justice BA Adejumo, President, National Industrial Court (NIC); Aliko Dangote; Aisha Ahmad, former deputy governor, Central Bank ; Femi Falana, SAN; Dr. Ibe Kachikwu; Senator Ita Enang, S.A to President on National Assembly Matters ; Senator Ike Ekweremadu, Deputy Senate President ; Jim Ovia, CEO Zenith Bank; and Comrade Isa Aremu, Former Vice Predient Nigerian Labour Congress.

Others are Dr Kate Meagher; MD Microsoft Nigeria; Laurie Kleiman; Daniel Onwe, President Association of Lawyers with Disability in Nigeria; Chief Mrs Folashade Tinubu- Ojo, Iyaloja General of Nigeria; Dr Yemi Kale, DG Nigerian Bureau of Statistics; Amb. Ibrahim Gambari; Ayo Obe and Philip Hackett, QC As part of activities for

George Etomi, Chairman, Technical Committee on Conference Planning (TCCP) addressing members of the Nigerian Bar Association, Lagos branch at the branch’s Annual General Meeting.

L-R: Paul Usoro, SAN, Moyosore Onigbanjo, SAN and Abimbola Akeredolu, SAN

the conference, foremost Nigerian Journalist, Kadaria Ahmed will in a special chat session, engage the on a broad range of hot topics

L-R: Efe Etomi with Mfon Usoro

bothering on national and economic issues.

Themed ‘Transition, Transformation & Sustainable Institutions,’ the five-

day event will cover a broad range of legal, regulatory and economic issues, such as, Political Transition and Governance; Diversity and

Inclusion; Technological Disr uption; Sustainable Economic Development ; and Rule of Law and Security.

Speaking further, Etomi outlined the sessions where various topical issues would be discussed by renowned experts in these fields.

“There are some tailored sessions being sponsored by certain organisations including the Amer ican Bar Association, Nigerian Deposit Insurance Corporation, etc.,” he added.

He also confirmed that several social events were lined up for the week.

These according to him, include, a blockbuster movie titled The Witness Box produced by Roots Media Ltd is to be premiered during the conference; UnBARed Reloaded Concert with an Annual Bar Dinner to wrap up the conference.

The TCC Chair further disclosed that there would be conference folders designed with African fabric/ textile, which will contain branded notepads, pens and several other confere n c e mat e r i a l s f o r d e l egates. “ We hav e b e e n a p proached by an online/ offline legal research company who is willing to offer its mater ials to all delegates during the conference. There will also be a conference mobile app that will allow delegates review each session during the conference and also seem like a feedback form for the NBA on the success or otherwise of the conference,” he added.

The evening would be capped with raffle draws and mouth-watering prizes for lucky delegates.

Etomi, who is also the pioneer chairman of the Nigerian Bar association Section on Business Law (NBA-SBL) urged members of the premier branch (i.e.

Lagos branch) present at the AGM to take ownership of the Conference as indubitable pacesetters and leading bar in Nigeria.

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BDLegalBusiness

Lawyers in Lagos and across the nation eulogize Nigeria’s oldest practicing lawyer

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he Nigerian Bar Association (NBA) Lagos branch duri n g i t s A n nu a l General Meeting on Monday July 23, 2018 took out time to pay special respect to one of its key members, the late Pa Tunji Gomez - a ‘Life Bencher’ and foremost advocate against the revere rank of Senior Advocate of Nigeria.

Pa Gomez’ who until his demise was Nigeria’s oldest practicing lawyer passed on, last Wenesday and his death was officially announced by the Chairman, NBA Lagos branch, Chukwuka Ikwuazom on the branch’s platform.

Since his passing last week, several prominent lawyers in Nigeria have continued to extol the virtues of the late

Gomez.

Human Rights campaigner, Ebun-Olu Adegboruwa, described his demise, as Nigeria’s loss of a great nationalists and a foremost activists.

“Coming in the mould of the first Nigerian lawyer, Alexander Sapara Williams, Pa Gomez was a man of honour, who stood for truth and justice all the time, and became famous for his principled lifestyle of “It’s a matter of conscience.

“He was a faithful Bar man, who championed the democratization of law, by canvassing for an all inclusive Bar; he always attended meetings and functions of the NBA, with a resolve to keep attending court, till his final breath; he did exactly that.

“Pa Gomez will be missed, for his frankness, for his candour, and for his assertive roles, in achieving equity at the Bar,” he said The immediate past Deputy Director-General of the Nigerian Law School, Enugu campus, Prof. Ernest Ojukwu, SAN said: “I join our legal Community to mourn the passing of Pa Tunji Gomez; Pa Gomez made tremendous impact in the Nigerian Legal system.

“He defined his principles and lived by them; hs presence on earth, gave hope to so many persons in Nigeria, that a fight for justice and fairplay will never be in vain. Adieu Pa Gomez.”

On his part, second Vice President of the NBA, Mr

The Late Pa Tunji Gomez

Onyekachi Ubani, made his remarks: “The conscience of the legal profession is recalled from active duty by the Almighty God; We will miss Pa Gomez greatly and I wish him eternal rest in the boosom of the lord,” Born in 1928, Pa Gomez was enrolled into King’s College, Lagos in 1944. His activism manifested early in his eventful life, as he is reputed to have led the 1948 strike at the College, which significantly turned around the fortunes of the students.

​Late Tunji Gomez and Family

Gomez who was called to the Nigerian Bar in 1961 was also at the forefront of the call for the abolition of the rank of Senior Advocate of Nigeria (SAN). He As a junior, Gomez was in the team of lawyers that defended late politician Chief Obafemi Awolowo in his trial in the celebrated treasonable felony case of 1962.

Among other mass action, Gomez, was also reputed to have institued a class action on behalf of other lawyers in 2013, challenging an increase in practising fees of lawyers in Nigeria.

RIGHTS WATCH

Consumer Protection Council advises on anti-hypertension medication, Valsartan Theodora Kio-Lawson

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i g e r i a’s C o n s u m e r Protection Council on Tuesday July 24, 2018 sent out an ‘advisory’ message to the public regarding the National Agency for Food and Drug Administration and Control (NAFDAC)’s recall of Valsartan, an anti-hypertension medication.

According to the statement by CPC, this recall by NAFDAC was made pursuant to Section 2 (b), (c) (e) and 9 of the Consumer Protection Council Act 2004, in exercise of its powers.

The statement read, “NAFDAC’s recall of the drug was based on a notification from the United

Kingdom authorities about the potential contamination of Valsartan tablets, manufactured by Accord Healthcare, previously known as Actavis Group.

Following this development, NAFDAC had directed all importers, wholesalers and retailers to immediately stop the importation, distribution and sale of these products”. NAFDAC further directed that “…Healthcare providers should stop the administration of these products to patients… because the drug is contaminated with genotoxic and carcinogenic potentials on account of changes in the manufacturing process of the active substance manufactured in China. Specific products included are; all Valsartan drugs in 40mg, 80mg, 160mg capsules

and film coated tablets of 40mg, 80mg, 160mg and 320mg.

The Consumer Protection Council (CPC) has thus advised all persons currently under high blood pressure medication or hypertensive care to check their medications and ask questions of relevant professionals to ensure immediate discontinuation of the affected drugs; if currently under the administration of the same.

“We encourage all citizens to conduct the necessary inquiries with respect to family members who may be taking this medication but may be unaware of the recall, or this Advisory,” the CPC advisory read.

The Council further advised distributors of the product(s) of

their statutory obligation to notify the public of the risks associated with consumption and immediate withdrawal from the market, pursuant to Section 9(1) of the Consumer Protection

Council Act. Violation of this obligation is an offense liable to a term of imprisonment upon conviction.

In the interim, the CPC has taken steps to identify all such importers and distributors to ensure their full compliance with the law.

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GREYMATTER

Thursday 26 July 2018

BDLegalBusiness

Legal and regulatory implications of the GDPR on business organizations …Basic compliance strategies for non-EU entities

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he Europ ean Union (“EU”)’s General Data Protection Regulations (“GDPR” or the “Regulations”), adopted by the European Parliament and the Council of the EU in April 2016, finally came into force on the earlier agreed date of May 25, 2018. The GDPR is a landmark in the global history of regulatory regimes. The Regulations apply extraterritorially to all business entities that target EU citizens and residents, anywhere in the world. It also prescribes heavy penalty for noncompliance. Whilst enforcement of the GDPR on affected entities has commenced with full and instant compliance within the EU territory, efforts at compliance among many organizations outside the EU remain an ongoing process.

This article highlights the core provisions of the GDPR, analyses the legal and regulatory implications of the Regulations on affected entities, and provides hints on compliance strategies for non-EU organizations, particularly Nigerian business entities.

Scope and Objectives of the Regulations At its core, the GDPR is a set of rules made to give EU citizens and residents more control over their personal data. Prior to the adoption of the GDPR, the applicable data protection regulation in all EU Member States was the EU Directive 95/46/EC. Whilst the EU Directive has similar objectives and provisions to the GDPR, it was implemented in fragments across EU Member States. The GDPR is therefore developed to apply uniformly across the EU territory in protecting sensitive personal data of EU data subjects.

Essentially, the Regulations repealed and replaced the EU Directive 95/46/EC as the new rules applicable uniformly to the collection and processing of the data of all natural persons across the European Single Market (“Eurozone”); and apply extra-territorially to all persons and entities offering goods and services to EU citizens and residents, and in the process collect, process, and store data of the citizens/residents.

As provided in Article 3 of the GDPR and paragraph 23 of the recitals, the Regulations are binding on: All EU organizations, with presence/offices either within the EU or outside of the Eurozone, that collect, process and store data of natural persons within the EU;

All non-EU organizations, situate anywhere in the world, that collect, process, store and control the data of natural persons who are citizens or residents in the EU, for the purposes of offering goods and/or services. It does not matter whether such goods or services are paid for by, or offered free of charge to, the data subjects.

Also, in accordance with Article 3(2) & (3) of the GDPR, the territorial scope of the Regulations is activated where personal data; are processed in anticipation of the offering of goods or services to data subjects in the EU, irrespective of whether a payment by the data subject is required; are processed for the monitoring of the behavior of data subjects, as far as their behavior takes place within the EU; are processed by a controller not established in the EU, but in a place where Member State law applies by virtue of public international law.

For the purpose of the GDPR, mere accessibility to a data processor/controller’s website or that of its intermediary by EU data subjects, does not amount to sufficient intention to offer goods and/or services. Same goes for accessibility of data processor/controller’s email address or other contact details.

In the same vein, the use of a language generally used in the foreign country where a data processor/controller is established, is insufficient to ascertain an intention to offer goods and/ or services.

However, pursuant to Article 3 of the GDPR and paragraph 24 of the recitals, where a data processor/controller uses a language or a currency generally used in one or more EU Member States, with the possibility of ordering goods and services in that other language, it becomes apparent that the data processor/controller envisages offering of goods or services to data subjects in the EU. In this case, the provisions of the GDPR will apply. Same goes for situations where a data processor/controller mentions customers or users who are in the EU. Similarly, the Regulations will be applicable where a data pro-

cessor/controller who, not being established in the EU, processes personal data of EU data subjects for the purpose of monitoring how such data subjects behave within EU territory. A processing activity is considered as monitoring the behavior of data subjects, if it is ascertained that it is done to track natural persons on the internet, including potential subsequent use of data processing techniques which consist of profiling a natural person, particularly in order to take decisions concerning the data subject for analyzing or predicting his or her personal preferences, behaviors and attitudes.

From the foregoing, the provisions of the GDPR are binding on all non-EU (including Nigerian) entities offering goods and services to persons within the EU territory, irrespective of whether or not they have offices within the EU. Such entities are bound by the Regulations in so far as they collect, process, store and control “personal data” or “sensitive personal data” of EU citizens and residents. Compliance is therefore required from Nigerian entities, such as banks, law firms, accounting firms, and consulting organizations among others, offering services to foreign clients who are European citizens or residents.

Core GDPR Prescriptions CONSENT & DATA SECURITY The GDPR prescribes more control for EU data subjects over their personal data. In essence, data processors/controllers across the globe must show that data subjects not only consented to the collection, processing, storing, and transmission of their personal data but that the consent was freely, genuinely and absolutely given, without restrictions. Hence, Article 7 of the GDPR requires that consent must be freely given, specific, informed and unambiguous. Request for consent by a data controller should be separate from other terms, and be in clear and plain language. In addition to this, a data subject’s consent to processing of their personal data must be as easy to withdraw as it is to

give; consent must be explicit for sensitive data. A data controller is required to be able to demonstrate that consent was given; where personal data is processed for direct marketing, the data subjects will have a right to object. This right must be explicitly brought to their attention by a data processor/controller; and provision for parental consent is to be given when data of children is involved. This will not be necessary only in the context of processing the data of a child for preventative or counselling services offered directly to the child.

RIGHT OF ACCESS TO PERSONAL DATA The GDPR provides in Articles 15 and 16 that data subjects should be given the right and opportunity to access their data or update them at any time, in the data base of processors and controllers.

RIGHT TO DATA PORTABILITY The GDPR provides in Article 20 for the “right to data portability”. This is the right to receive personal data previously provided by a data subject to a processor/controller in a structured, commonly used and machine-readable format.

This also includes the right to transmit those data to another processor/controller without hindrance from the existing processor/controller.

RIGHT OF ERASURE OF PERSONAL DATA In accordance with Article 17 of the GDPR, where a data subject withdraws prior given consent, at any stage of a collection process (whether at the beginning, middle or after the completion of a transaction), such data subject has the right to request that his/her personal data be completely erased from the data processor/controller’s data base, storage or system.

This is otherwise known as “right to be forgotten”. This right is however limited by instances in which processors/controllers are required by law to keep the data.

DATA SECURITY AUDIT The GDPR requires that data processing be carried out in a

manner as to ensure appropriate security of the personal data, including protection against unauthorized or unlawful processing and against accidental loss, destruction or damage. To this end, the use of appropriate technical or organizational measures (Integrity and Confidentiality) is prescribed in Article 5(1) f ) of the Regulations. Similarly, organizations are to establish a culture of monitoring, reviewing and assessing data processing procedures in order to forestall unnecessary retention of data in the system. In this connection, adoption of a compliant Binding Corporate Rules (“BCR”), as provided in Article 47 of the GDPR, is prescribed for affected entities. In line with the provisions of Article 32 of the GDPR, organizational BCR should emplace an IT architecture that supports “pseudonymisation” and encryption of personal data; ongoing confidentiality, integrity, availability and resilience (CIAR) of processing systems and services; as well as a process for regularly testing, assessing and evaluating the effectiveness of technical and organizational measures for ensuring the security of the processing.

DATA BREACH NOTIFICATION The GDPR in Article 33 requires a data controller to report any case of a personal data breach to the appropriate supervisory authority at once, or if impracticable in phases, without undue delay and where feasible, not later than seventy-two (72) hours after having become aware of the breach. Where the notification to the supervisory authority is not made within the stipulated period, it shall be accompanied by reasons for the delay. The notification shall describe the nature of the breach, categories and approximate number of data subjects and personal data records concerned, likely consequences of the breach, and measures taken or proposed to be taken by the controller to address the breach, including possible measures to mitigate the likely adverse effects of the breach. In Article 34, the GDPR further mandates data processors/controllers to communicate to affected data subjects, without undue delay, any personal data breach likely to result in a high risk to the rights and freedoms of natural persons.

To be continued next week.

•The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo

Thursday 26 July 2018

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BUSINESS DAY

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34 BUSINESS DAY NEWS

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NAICOM releases new capital requirements ...

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paid –up capital base will be N4.5 billion and they will underwrite all Tier 3 risks, Engineering (All inclusive), Marine, Bonds Credit Guarantee and Suretyship Insurances.

Tier 1 companies are those whose paid up capital has increased by 200 percent, above the existing minimum requirement. Life companies in this category will have capital of N6 billion, and will underwrite all Tier 2 risks and Annuity. While for non-life business, the paid up capital will be N9 billion, and will underwrite all Tier 2 risks and Oil & Gas (oil related projects, exploration & production), and Aviation Insurances.

Composite companies in Tier3 will maintain N5 billion; Trier 2 N7.5 billion and Tier 1 will have N15 billion.

Transition guideline according to the Commission will be released 3rd August 2018; Issuance of notification letters (Tier assessment Advice to all Operators) on assessed Capital level will be given on 13th – 17th August, 2018; while submission of Board’s decision by Operators (on choice of Tier-Level) to NAICOM will be not later than 14th September 2018.

Sunday Thomas, deputy commissioner for Insurance, Technical who briefed the press after the Insurers Committee Meeting said what has happened today, is a major development in the history of insurance and the financial services industry in Nigeria because it will reposition the insurance industry to optimize its full potential and impact significantly on the Nigerian economy.

“Thomas said one of the challenges NAICOM as a regulator has had is being able to align the drive for penetration with operators living up to their bids.

He stated that “after the meeting of Insurers Committee Retreat held on 15th and 16th February, 2018 in Abeokuta the industry unanimously in consensus agreed to come up with a desirable recapitalization that will enable the industry achieve its potential.”

Thomas stated that the Commission has identified all the affected stakeholders including the board, management and their key officers as well as shareholders and will carry them along to ensure smooth implementation of the programme.

He however noted that the Commission has not compelled any insurance company to in-

crease capital, but operate within their choice area where they have adequate capital.

He said reinsurance companies are not affected by this development, as theirs will be considered in the near future, but stated also that the new capital will stimulate appetite for new licensing to investors willing to operate in Tier 1.

Barenaka Thompson, director, Supervision at the National Insurance Commission who presented details of the capitalization said Tier-Based Minimum Solvency Capital” (TBMSC) structure is a complimentary measure to the ongoing implementation of the Risk-Based Supervision (RBS) programme “The recapitalization scheme is aimed at developing and applying appropriate tools that consider the nature, scale and complexity of insurers, as well as non-core activities of insurance groups, to limit significant systemic risk and thereby achieve soundness of insurance companies and contribute to the achievement of stability of the financial system.”

He stated further that it will allow insurer’s to focus on their areas of strength; Improve claims settlement ; enhance local retention; encourage market discipline, prudence and appropriate pricing; encour-

Thursday 26 July 2018

Again, Saraki writes police, dissociates ...

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believed that his letter to the police was enough hence there was no need for him to present himself physically on the same issue.

The nation’s Number Three citizen gave the explanation on Wednesday through his Special Adviser Media and Publicity, Yusuph Olaniyonu.

He noted that after answering all the questions raised by the police in his letter, he did not believe that there was any further need for him to go to the police personally.

It would be recalled that the Inspector General of Police, Ibrahim Idris, had on Monday asked the Senate President to physically report to the head of the Investigation Team at the Intelligence Response Team at Guzape Junction, Asokoro Extension, Abuja on Tuesday, July 24 by 8am. This was contained in a letter of invitation personally signed by the police chief.

The invitation titled: ‘Case of Offa Bank Robbery and Gruesome Murder of more than 31 Persons and Snatching of 21 AK47 Rifles on the 5th of April, 2018’, pointed out that some of the robbers had admitted to being political thugs of Saraki.

Although Saraki was summoned by the police last month, the invitation was abruptly withdrawn, as he was asked to submit his response to the allegations in writing. On Tuesday, the Senate President failed to appear before the police and presided over Senate plenary.

Saraki said that the invitation to him by the Police to report to a station in Guzape over the Offa robbery investigation was “a mere afterthought which is designed to achieve political purpose”.

He said that he had it on good authority that the Police had already

decided on the suspects to arraign in court in Ilorin, Kwara State on Wednesday based on the advice of the Director of Public Prosecution (DPP), Mohammed U.E. and that the turn around to invite him was a ploy aimed at scoring cheap political points.

He said, “I have been reliably informed that the police invitation was planned by the IG as a ploy to stop an alleged plan by some Senators and House of Representatives members from defecting from the All Progressives Congress (APC). It was also said that if I was detained between Tuesday and Wednesday, that will abort the so-called defection plan.

“While I continue to maintain that the issue of my position on the 2019 elections is not a personal decision for me alone to make, it should be noted that all these concoctions and evil plot cannot deter me. Those behind this fresh assault will fail as I have nothing to do with the robbery incident or any criminal matter for that matter.

“This plot aimed at compelling me and my associates to stay in a party where members are criminalised without just cause, where injustice is perpetrated at the highest level and where there is no respect for constitutionalism is an exercise in futility and it will fail.

“Once again, my confidence in God and our judicial system remains intact and unshaken. The truth shall

also prevail in this case.”

Meanwhile Benue State Governor, Samuel Ortom, has again announced his resignation from the All Progressives Congress, APC. He said he had rejoined the People’s Democratic Party, PDP. Continues on wwwbusinessday online.com

Countdown to February 2019: A look ahead...

Continued from page 1

forts to fend off opposition challengers. Such tactics recall those used by the PDP to hold on to power for 1 6 years (1999–2015),

L-R: Olorundare Sunday Thomas, deputy commissioner, technical, National Insurance Commission (NAICOM); Tope Smart, chairman, Nigerian Insurers Association; Mohammed Kari, Commissioner for Insurance, and Eddie Efekoha, president, Chartered Insurance Institute of Nigeria, during the presentation on Tier-Based Minimum Solvency Capital at the emergency meeting of the Insurer’s Committee in Lagos.

NCC holds back approval for 9mobile...

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take over operations of the debt ridden telecommunications company. However, the regulator has been unable to reveal details of its findings.

It was clearly stated in a letter written to Teleology in March 2018, that the non-refundable deposit would be forfeited in the case where the company fails to pay up the balance on or before 90 days which elapsed yesterday July 25, 2018.

Although the final decision on when 9mobile licenses and operations will be legally transferred to Teleology lies in the hands of the NCC, teleology has played its part by fulfilling all obligations as directed by Barclays

Africa, the financial adviser to the owed banks.

However, analysts say that even though the board of NCC recently approved a new flexible regulation for transfer of license rights and obligations between operators, there may be a delay in regulatory approval for takeover by Teleology until all debts by the telco, including owed spectrum fees have been fully cleared.

“9mobile which formerly operated as Etisalat owes NCC spectrum fees of about N8 billion which should be two and a half percent of its gross profit.

However, the company has been able to pay N2.4 billion out of the N8billion and has arranged

a payment plan for the outstanding N5.5 billion. NCC might on this ground decide to delay approval for the new owners until all debts have been cleared,” a source familiar with the matter told BusinessDay. Notwithstanding, it has been observed that the ability for 9mobile to pay out the sum of N2.4 billion to the telecoms regulator, even after recent strain on the business shows that the company is still viable and must have strong cash flows at the top line.

Teleology is said to have submitted a financial bid of $301 million dollars which saw it emerge as the preferred bidder in 9mobile’s sale process, leaving Smile Telecoms which bid a lower sum of $150 million cash as the reserve bidder.

and reflect the strong similarities between Nigeria’s two main parties.

Virtually indistinguishable in terms of their ideology, policies and conduct, both parties function as patronage-fuelled coalitions of fractious elite networks that share one objective: to achieve political power and the financial rewards that come with it.

Like the 2015 elections, next year’s polls will have a colossal impact on Nigeria’s economic future and stability prospects. The outcome will determine the extent to which its government makes progress in fighting terrorism, reining in corruption, resolving communal conflicts and addressing the country’s significant socio-economic challenges. The 2019 elections also represent an important milestone in Nigeria’s democratic development: will they be as credible as the 2011 and 2015 polls, or deeply flawed like those in 2003 and 2007?

2019: Buhari’s last hurrah President Buhari and his party will attempt to assemble the same geopolitical coalition that propelled them to victory in 2015. Then, the APC relied on a powerful electoral alliance between the country’s southwest economic heartland, the voterich northwest – President Buhari’s home region – and parts of Nigeria’s northeast and north-central regions.

Buhari’s key campaign prom-

ises – to rein in corruption, defeat Boko Haram and revive the ailing economy – resonated with a plurality of Nigerians in the wake of 16 years of increasingly corrupt and ineffective PDP leadership.

Since that time, public opinion polls show that President Buhari’s popularity has waned considerably.

For the first half of his term, he was suffering an undisclosed but clearly serious illness. Although he appears to have since recovered, he remains an aloof and disengaged leader, ‘walled off ’ from his own government and party, and from Nigerians themselves.

Halfway through his first term, Buhari and his government had fulfilled just seven out of his 222 campaign promises, and had made no progress at all on a further 96, according to analysis by the Buharimeter project.

President Buhari’s critics claim he has done little to tackle unemployment, boost the country’s anaemic power supply, or address the worsening violence between pastoralists and farmers in the volatile Middle Belt. Even the results of his signature policy issue

– fighting corruption – are mixed.

During his tenure, Nigeria’s anti-corruption agencies have assiduously investigated former government officials, while at the same time sparing sitting officials and ruling party ‘bigwigs’ from close scrutiny.

Continues on wwwbusinessday online.com

Thursday 26 July 2018

Industrial Council moves to improve operation of free trade zones HARRISON EDEH, Abuja

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he Nigeria Industrial and Competiveness Advisory Council has moved to review fiscal arrangements and incentives applicable to the country’s free trade zones (FTZs).

Okechukwu Enelemah, minister of industry trade and investment, who doubles as the vice chairman of the Council, said while speaking on the council’s latest meeting held in Abuja.

Enelemah said in a statement issued on Wednesday that the Council had been working to review the fiscal arrangements and incentives available to operators in the zones vis-a-viz the custom territory with the view to ensuring competitiveness of goods produced in the FTZs in the local and export markets.

Currently, there are many free trade zones at different stages of development in Nigeria; 14 are operational, 12 under construction, while the development of 11 others is yet to start.

Also, the ongoing Special Economic Zones project is developing six special economic zones across the geopolitical zones, the minister said in the statement issued by his media adviser, Bisi Daniels.

According to Enelemah, the approved enterprises within FG-owned FTZs are entitled to the following incentives: Exemption from legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations; full repatriation of foreign capital investment with capital appreciation of the investment at any time; up to 100 percent of foreign ownership allowable, and no import or export licences required for operations, among others.

Over the years, since the promulgation of the NEPZA Act of 1992, changes have been made to the operational guidelines of the zones.

The minister further revealed that a study by the Council had identified some areas that need redress. For example, manufacturers outside the zones have complained about unfair competition as the tax concessions available to FTZ operators do not take into cognizance the fact that up to 100% of goods produced in the free zones can be sold into the Nigeria customs territory; inadequate definition of value addition and certification; and cash flow advantage to free zone operators who pay duties on constituent raw materials equivalent of finished goods after production and processing, while manufacturers outside the zones pay duties and other relevant levies upfront.

He remarked in the study, that free zone operators raised concerns over their inability to effectively compete in the export market; high administrative charges on turnover and exclusion from export incentives.

To address these issues and

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Nigeria’s democracy under threat - Ekweremadu OWEDE AGBAJILEKE, Abuja

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eputy Senate President, Ike Ekweremadu, has given more details on the siege to his Abuja residence by men of the Economic and Financial Crimes Commission (EFCC) and other security agencies, warning that Nigeria’s democracy was seriously on the decline.

Ekweremadu was, however, full of praise for National Assembly members, the press, civil society organisations, and the Nigerian youth and public for rising in defence of democracy.

He spoke to reporters when Senators paid him a solidarity visit in their numbers and across party lines at his Apo Legislative Quarters residence.

The PDP lawmaker disclosed that security operatives numbering over 200 besieged his residence on Tuesday to prevent him from presiding over plenary.

He said: “They anticipated that a number of our colleagues in All Progressives Congress (APC) would defect and join Peoples Democratic

Party (PDP). In anticipation of that, the APC leadership had tried to stop them. When that didn’t happen, the first thing they did was invite President of the Senate to come to the Police. They believed that once the President of the Senate goes to the Police, I would be the one to preside and probably give effect to the letter of defection.

“In anticipation of that, the Police, EFCC, and other security agencies came together, about 200 of them, to stop me from going to the National Assembly. They said I should come to the EFCC to give explanation over the things I was accused of. I agreed to follow them even though there was no prior invitation, but they were not eager to let me go to answer the invitation.

“The plan was to stop me and the President of the Senate from going to the National Assembly. Unfortunately for them, the President of the Senate was already at the Senate to preside over the plenary session.

“This is not good for democracy. We must respect the law, respect institutions because that is the only way we

can make progress as a nation.

This is total embarrassment to our nation. I hope this will not happen again”.

Ekweremadu expressed worries for the nation’s democracy, saying: “I am very worried. This is a decline in our democracy. I want to call on the media and Nigerians to stand up for Nigeria and ensure we save our democracy. This is a dangerous development. The whole world expects Nigeria to lead in democracy in Africa. We need to make progress and show the world that Nigerians are indeed leaders in every aspect of life.

“This is my official quarters.

Invading my official quarters is like an invasion of an aspect of the National Assembly. When you invade the National Assembly, you are invading the temple of democracy. That is exactly what has happened today. This is a major assault on democracy. This is not the type of attitude we should be encouraging. The principal thing in a democracy is dialogue, discussion, and networking, not through threats. We need to have a rethink”.

Akinwunmi Ambode, governor, Lagos State (r), with Kamorudeen Animashaun, Oloja of Epe (l); Tajudeen Elemoro, Onitedo Oke Odo Iwerekun (2nd l); Rafiu Salami, Onibeju of Ibeju (3rd l), and Adetunji Akinloye, Ojomu of Ajiranland (2nd r), during the 3rd Quarter 2018 town hall meeting (12th in the Series), at the Community Primary School, Iberekodo, Ibeju-Lekki, yesterday . Pic by Pius Okeosisi.

The academia: A season for the examination of conscience Continued from back page

most recent, the Lagos State University, has just assisted a female student to catch in the act, an associate Professor, who was trying to reap where he was not the registered farmer and thus, had no PIN! In this instance, the lecturer invited a female student to his office on a Saturday to rewrite a course which she had purportedly failed and immediately pounced on the lady and was caught in the very act! I am not aware that the university has concluded its investigations but the fact that the system facilitated the apprehension of the lecherous lecturer is good enough.

The other matter was a similar case of sexual harassment at OAU, in which the university acted with commendable dispatch, as the highest university body composed of professors agreed to throw their follow professor into the dustbin of academic history.

We also await the outcome of a similar case at UNILAG, involving a high ranking professor, (former VC, former commissioner, former…) who was so powerful that his student named him the head of the principalities in the department of English! In these cases, the universities did what they should do, without minding that their colleagues and vicariously, their collective image, is at stake.

I believe these are heartwarming developments. The university community is examining itself and undertaking some self truth-telling.

At least, when we undertake another ALUTA, the variables with which people blackmail us would have been drastically reduced.

Other matters When, in 2015, I said that the APC was not a political party but an agglomeration of desperate and disparate individuals, some people accused me of talking too soon. When

two months ago, I prophesied the imminence of the nAPC, some of my friends asked me to face my face. Well, the wind has blown… In the article on impending arrival of nAPC, I had asked and then what?( From nPDP to nAPC and then what?: BusinessDay, 25/5/18).

That is the question I am still asking today( 24/7/18), following the political abracadabra that occurred at the National Assembly as I was concluding this piece. How can we allow people to eat their cake and have it? How can a group of greedy unprincipled fellows jump from PDP to APC, enjoy the unmerited dividends for four years and then jump back into the PDP with the hope of seizing power and enjoying political dividends for another four years? And we allow them to do so effortlessly? Abi, our mumu never do? Meanwhile, I call on everybody to note the role of the security agencies in the whole sordid affair. This is just the beginning!

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Elected leaders are making the...

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tom of the list, here are the democracy scores for every country in V-Dem’s index.

The extent of the recent decline in V-Dem’s scores is more striking when you consider that, in total, most of the world’s countries have at least slightly lower democracy scores than they did in 2012.

Would-be autocrats are taking note of the tools other leaders have implemented to tighten their grip on power.

Emboldened leaders have contributed to the steep drop in democracy scores in many countries.

Just earlier this month, Poland’s governing Law and Justice party forced the retirement of a third of the country’s supreme court judges, including the top justice, in the party’s latest move to consolidate control.

Abolishing the institutions and norms of a thriving liberal democracy “took a little under a decade in Hungary, and Poland is now able to emulate a very similar course of action in the course of a year or two, because the government can basically just copy the playbook Viktor Orban and others have written for it,” said Yascha Mounk, a Harvard lecturer who has written extensively on the decline of democracy and populism’s rise.

In contrast to military coups or violent revolutions in the 20th century or the foreign invasions that toppled democracies ahead of World War II, most countries that are now experiencing a democratic decline have elected leaders. The integrity of those elections has been called into question at times, but citizens in many countries have gravitated toward these strongmen in the first place.

And once elected, leaders keep up regular elections.

“What happened over time was that authoritarian regimes learned elections were actually a very useful tool to control their populations, to divide the opposition and to maintain power,” said Brian Klaas, fellow in global politics at the London School of Economics and author of books on democracy, authoritarianism and electionrigging. Klaas added that he found “authoritarian leaders who hold elections are more stable and more likely to stay in power than those who don’t.”

In democracies in Europe and North America, young people are more open to the idea of a strong leader. Responses in other countries are more consistent among age groups.

Polling suggests the election of more strongmen leaders around the world is more than just a fluke—people born in recent decades, particularly those in many established democracies, say they’re more open to strong leaders than people born in decades influenced by World War II or the Cold War. “When you have gridlock in many countries, growing partisanship, a failure to deliver on the basic goods and services that citizens want, it’s not surprising that some citizens start to say perhaps this system isn’t delivering properly,” said Mounk.

Young people in some established democracies are more likely to say that living in a democracy is not important.

After World War II, many democracies experienced a rapid improvement of living standards.

“If you wanted to have liberty, if you wanted to have collective self-rule, but also if you wanted to be affluent and powerful, it was pretty clear that you wanted to live in a democracy,” Mounk said, “because democracies were the most successful at creating a thriving middle class, the most successful at having military power in the world.”

But in the past several years, other states such as China and the United Arab Emirates have offered alternate models of prosperity and global power, while many established democratic nations have backed away from democracy-building in other countries and saw periods of economic stagnation.

The concept of autocratic regimes pretending to be democracies has also taken a toll on democracy’s brand around the world.

“You ask people, ‘Do you think you live in a democracy?’ and a lot of people in some very authoritarian states say yes, because they hold elections,” Klaas said. “Then you ask them, ‘Do you support democracy?’ and they say no. That’s not surprising, right? If you live in the Democratic Republic of Congo and you’re mired in extreme poverty and constant violence, and you think that’s what democracy is? You wouldn’t want it either.”

And while social media on one hand has facilitated prodemocracy protests, Mounk said, “it also allows people who have very hateful views, people who want to spread false information to bypass gatekeepers, especially at a moment when a lot of citizens are otherwise frustrated with the ability of their government to deliver for them. That becomes a very dangerous cocktail.”

Some leaders have built so much momentum from a confluence of these forces that they’ve been able to clear the term limits—a fundamental democratic tool to ensure frequent turnover in leadership— set in their countries’ laws.

Often—as in the case of President Nguesso of the Republic of Congo or Rwandan President Kagame—they’re able to do so through popular referendum and claim to enact the peoples’ will while simultaneously making it more difficult for opposition voices to gain ground.

With the quality of many global democracies sinking, the question remains: Will leaders of more countries embrace brash authoritarian moves?

“We don’t know whether this is a long but mild recession that got worse before it finally started improving or whether we are on the cusp of something much more dangerous and long-lasting,” said Larry Diamond, co-founder of the Journal of Democracy.

“I’m not good at the future, but I can tell you that if we don’t get very resolute and very smart about improving our own institutional defects in the United States and Europe, and defending democrats and democratic principles worldwide, I have little doubt that this will get worse.”

A1 BUSINESS DAY

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Thursday 26 July 2018

NEWS

MMIA records over 12,000 visas on arrival in 6 months IFEOMA OKEKE

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o fewer than 12,000 Visas on Arrival (VOA) have been issued at the Murtala Muhammed International Airport (MMIA) in just six months.

Sources at Immigration reveal that no fewer than 500 foreigners are issued visas on arrival on a weekly basis with the number climbing to 1,000 on several occasions if approved by the Comptroller General Immigrations in Abuja.

The VOA scheme started in 2012 with Nigeria and nationals of Kenya until in 2017, under the Ease of Doing Business government decided to extend the scheme to cover all countries travelling into Nigeria on two categories, business and tourism.

An immigration source, which spoke Wednesday, explained that the VOA had been very helpful and was not just given willy-nilly to anyone who just came into the country without follow-

ing due process.

She said, “The VOA is issued from outside the country, it is something you apply for and it goes through a process before approval is given. That is done in Abuja, we here just issue once we see the approval signed by the Comptroller General.

“We at immigration do our homework before we issue the visa to ensure you are not on any criminal or terrorist network or watch list, and we ensure that a reputable organisation writes an undertaking that they are responsibility for the invitation.”

On the requirements to get the VOA, the source said, “There must be a letter from a company seeking approval and taking responsibility, then there is also a business permit letter as well as a certificate of incorporation and most importantly, an airline ticket.

“Whoever applies, we look for their approval letter, evidence of payment and passport validity which must not be less than six months.

And we issue two types of

visas business and tourist visas which usually does not exceed a month.”

She also explained on unique situations where mothers fly out to give birth overseas, the NIS gives the child a visa on arrival pending when the parents can get the documentation (Visa) of the child as that child is considered a dual citizen.

On the spate of deportation of Nigerian citizen, she frowned on it but enumerated some challenges the service face when some of these things happen, “you know, when you are deported. It is a law that your travel documents are relieved of you according to Section 57 of the Immigration Act. “Anybody deported for any crime has his/her passport withdrawn. The act states that the passport does not belong to the individual but belongs to the Federal Government of Nigeria. The passport is seized for 2-5years.”

Also for airlines that carry passengers without the right document, $2,000 is charged per passenger as a sanction on the airline.

AAAN outlines direction for advertising body DANIEL OBI

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he new president of the Association of Advertising Agencies of Nigeria (AAAN), Ikechi Odigbo, has outlined new direction for the body under his leadership.

Odigbo, managing director of DBB Lagos, and the immediate AAAN vice president, was elected last weekend at the body’s 45th annual general meeting/congress in Abeokuta, the Ogun State capital.

Under the association’s new leadership, Odigbo said the major objectives would be the promotion of performance, professionalism and prestige of the AAAN. “There is a dire need to reposition AAAN as a thought leader in the creative industry, improve our brand assets and social media platforms as well as drive the visibility, appeal and strategic relevance for the Association through disciplined execution of the PR/ Media plans.

“As brand builders, we must pay quality attention to the image of AAAN in order to foster confidence and pride in our distinguished profession among all relevant stake holders,” he said.

To surmount the challenges being faced by the association, he said in a statement the new leadership would adopt a more entrepreneurial approach, which had the potential to yield greater value to members, protect and advance collective strategic interests with clients and improve the reputation of the association.

“We will embark on value adding initiatives by leveraging the strength of our corporate collective. As an association, we will negotiate discounted rates for software licenses, so that member agencies can have access to work at reduced cost.

This could be extended to other areas of common need,” he said.

The new leadership, he added, will also strive to raise the financial profile of the body optimising the delivery of its revenue generating activities such as the LAIF Awards, training programmes and AGM events. In similar vein, there are plans to push for the proper constitution of the Advertising Practitioners’ Council of Nigeria (APCON) Council and push strongly for reforms through intense lobby and leveraging influencers with the regulatory ministry and other relevant government institutions.

He stated that huge invest-

ments have been made to ensure take off of the Advertising Academy and that the new leadership will ensure that the academy becomes operational during its tenure. He equally disclosed that professional training programmes would be reviewed to further align with requirements for APCON certification and bridge gaps in the quality of content and delivery.

In addition, Odigbo said the body will initiate and pursue collaborative relationship with relevant educational institutions such as O2 Academy, universities and reputable organisations like Miami Ad School, Google as well as Facebook to ensure greater subscription to the training programmes of the association and deliver up-to-the-moment, beyond advertising trainings.

The new President also said the leadership of the body will tap into the energy and zeal of young members of the association to drive initiatives.

He equally disclosed plans to celebrate and inspire members through the introduction of a Special Industry Nite of Honours, where deserving agencies and individual practitioners will be recognized for outstanding service and contribution to the association.

Sterling Bank appoints two new directors

Folasade Kilaso

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terling Bank plc has announced the appointment of Folasade Kilaso and Michael Ajukwu to its Board of Directors. Kilaso was appointed to the Board as a non-executive director while Ajukwu joined as an independent director in June, following the approval of the Central Bank of Nigeria (CBN).

Welcoming the senior business leaders, Asue Ighodalo, chairman, Board of Directors, Sterling Bank said, “Mr. Ajukwu and Mrs. Kilaso are respected business leaders with proven track record of performance and a very welcome addition to our Board.

“They bring with them invaluable experience, expertise and passion that will help the business deliver on its vision and commercial goals. I look forward to working with them at this exciting time as Sterling Bank breaks new grounds.”

A solicitor of the Supreme Court of England and Wales, Kilaso is a subject matter expert in the areas of corporate and regulatory affairs in sectors that include Banking, Asset Management, Energy, Real Estate, Insurance, Immigration and Risk Management. She

Michael-Ajuwku has delivered on cross-border transactions for both local and international clients.

Currently serving as Principal Partner, Berkeley Legal and managing director of Berkeley Training and Recruitment Services Limited, Kilaso is a qualified solicitor in the United Kingdom (UK) and in Nigeria.

She studied Law at the University of Kent, Canterbury and holds an LLM degree from the University of Cambridge, specializing in International Corporate Law and Finance.

On his part, Ajukwu holds a B.Sc. in Finance from the University of Lagos and an MBA in Accounting and Finance from New York University.

He worked for 21 years in the banking industry before retiring in 2002 as an executive board member of United Bank for Africa.

He is currently a non-executive director on the boards of Intafact Beverages Limited, Nigerian subsidiary of SABMiller in Nigeria; Mobax Nigeria Limited, a South African company and Novotel, a member of ACCOR (a French Hotel Group) and also an independent director on the board of Tiger Brands SA.

L-R: Seyi Iwayemi, group head, channel management, MaxiMedia Global Limited; Olufemi Adefowokan, managing director, and Adeola Ajewole, advert manager, BusinessDay, at the MaxiMedia media partners parley in Lagos, yesterday.

Pic by Olawale Amoo

Gridlock: FG orders opening of Trailer Park as Apapa gets messier CHUKA UROKO

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he complete mess Apapa, Nigeria’s premier port city, has become has compelled the Federal Government to order emergency opening of the Trailer Park being constructed on the Apapa-Oshodi Expressway for the deployment of trucks as part of efforts to decongest the expressway.

The Trailer Park, a 300-400 capacity loading bay, has become a project in perpetual construction as Borini Prono, the contractor handling the project whose cost and delivery date are hidden from public knowledge, has been on site for over five years.

The opening of the park, which is not quite ready for

use, has become imperative following the siege on Lagos by trailers and tankers from all over the country, which has blocked every entrance to Apapa and, by extension, short down businesses and locked in residents of the port city.

In the last two weeks, all roads leading to Apapa have become ‘highway to hell.’ Motorists spend upwards of four hours to enter and same hours to leave the port city. All businesses are operating at less than 50 percent capacity. The only thriving business in Apapa today is motorcycle (Okada) business whose risk potential is second to none. But Apapa commuters have no choice.

“As part of efforts to decongest the Oshodi-Apapa Expressway, in the short term,

we have directed the immediate deployment of trucks to the trailer park being constructed by our ministry with the capacity to accommodate about 300 trucks while construction works for the shoreline protection continues,” Fashola said in the statement obtained by BusinessDay. The minister assured that the ongoing palliative work on the sections of the Apapa-Oshodi Expressway, the ongoing construction of the road leading to the Apapa Port from Ijora would soon be completed while the main exit route through Tincan–Oshodi–Oworonshoki was under procurement for award.

“When completed, the project will enable free flow of traffic in the axis,” he said.

Following the visit of Vice

President Yemi Osinbajo to Lagos in connection with the Apapa ports gridlock, the Federal Government has said that, as a short-term measure, a call up system in the control of truck movement would be introduced, adding that it would be initially manual while the longterm digital and ICT-based system would be developed and deployed.

The Association of Truck Owners has agreed to manage the manual system with their members who are truck operators, government also said.

Meanwhile, the Federal Government has announced a shift in the proposed date for the closure of the Third Mainland Bridge in Lagos, which was to undergo major Investigative Maintenance Test.

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Edo JAAC records N5m increase in councils’ IGR, declares N2.9bn for June

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do State Joint Acc ou nt A l l o cat i o n Committee (JAAC) ha s re c o rd e d N 5 million increase in internally generated revenue (IGR) of the local councils for the month of June, which formed part of the N2.9 billion declared as the total allocation that accrued to the state for the sixth month of the year.

This was disclosed by the chairman, Oredo Local Government Area, Evbarekhe Jenkins Osunde, at the end of the JAAC meeting presided over by Governor Godwin Obaseki.

Osunde noted that the IGR in local councils increased from N206 million recorded in May to N211 million recorded in June 2018, saying, “Teachers’ salaries

deducted for the month was N1,081,654,814.22, contribution for pension stood at N264,115, 845.36, while pension arrears paid was N100 million.”

He said the total deduction was N1, 979, 354, 951.11, while net allocation was N1,001,089,151.83, and lauded the governor for assisting local councils with the payment of workers’ salary for the month of June.

“It is important to note that because of the deadlock in the Federation Account Allocation Committee (FAAC) meetings over the revenue for June, Governor Obaseki made money available for the payment of staff salary in the local government councils in the state.

We greatly appreciate him for that,” he said.

L-R: Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI); Olayinka Akeredolu, state director, Ministry of Agriculture and Rural Development, Lagos State; Monisola Udoh, director, ICT, Federal Ministry of Communication Technology, representing the minister; Lanre Kolade, MD, Vodacom, and Toki Mabogunje, deputy president, LCCI, at the 4th edition of LCCI 2018 ICTEL Expo, with the theme, Development Efficiency and Competitiveness in the Digital Age in Lagos. Pic by Pius Okeosisi

Apapa gridlock: Ambode tells FG to revive ports in other states … says chaos beyond traffic issues JOSHUA BASSEY

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ngoing discourse on how to find a lasting solution to the gridlock in Apapa and its environs is being narrowed to an issue that has been of concern to stakeholders in maritime industry, as Akinwunmi Ambode, governor of Lagos State, has joined in telling the Federal Government to revive the seaports in other states in order to free Lagos of its present encumbrances.

There are ports in Onne, Rivers State; Calabar, Cross River State; Warri, Delta State, but the Nigerian government seemed over the decades to have encouraged the concentration of import and export activities at the premier Apapa port and Tin Can, all located in Apapa, Lagos, as both account for more than 75 percent of shipping activities in a country of 200 million people.

Stakeholders say the major challenges with other ports leading to their abysmal utilisation have to do with shallow water,

which makes berthing of bigger vessels impossible, as well as insecurity posed by pirates. They insist, however, these challenges are surmountable by a serious and determined government.

Emmanuel Nted, immediate past president of Maritime Workers Union of Nigeria (MWUN), emphasised the need for the Federal Government to dredge water channels to other ports and up its game in securing the Nigerian waters.

Governor Ambode, who spoke at a town hall meeting (12th in the series) with Lagosians, Tuesday, at Iberekodo, Ibeju Lekki, said the federal authorities must do everything to revive existing ports in other states if the perennial traffic congestion in Apapa must be addressed. According to Ambode, the chaos in Apapa is beyond traffic management.

“It would be unfair to Lagosians if I don’t talk about issues relating to traffic management and integrated transport management, most especially what we have witnessed in the last one

week in Apapa.

“It is bad that we still use trucks to lift petroleum products from Apapa to other parts of the country. As it is now, other ports in Nigeria must begin to work immediately to decongest gridlock in Lagos.‎ What has led to continual use of trucks to lift fuel, which is, vandalism of pipeline should be addressed immediately.

“We believe that this will allow the roads to become free.

We don’t need to continue to use taxpayers’ money to build road that were destroyed by tankers. We call on the minister of Petroleum and Department of Petroleum Resources (DPR) to work towards reviving the pipelines,” he said.

According to Ambode, beyond getting other ports up and running, the issue of tankers queuing up to lift petroleum products from tank farms in Apapa, is also a major issue, as this damages road infrastructure in the area, which according to him was inimical to the economic growth of not just Lagos,

but Nigeria in general.

“But again, this issue has become perennial and in the last six years, it’s always been there, it comes and goes, but the challenge is to be able to find a permanent solution and in that reason Mr. President had directed the Vice President to come and see what the situation is and to actually give us a permanent solution. We believe strongly that every layer of government should collaborate to be able to resolve this Apapa crisis,” he said.

The governor expressed concern about the approval for the development of tank farms in Ijegun area of Lagos, saying that as much as the state supports redistribution of tank farms, such should be located in areas that are not populated.

“We don’t need tank farms within Lagos metropolis anymore. There are 68 tank farms in Apapa alone. That is a serious danger waiting to happen.

Beyond Apapa, they have approved tank farms in Ijegun axis and that is where we have huge population.

Africa loses 38% pedestrians to road deaths yearly - FRSC MIKE OCHONMA

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orps Marshal of the Federal Road Safety Corps (FRSC), Boboye Oyeyemi, says 38 percent of all African road traffic deaths occur among pedestrians.

Oyeyemi said this at a presentation on Non-Motorised Transportation (NMT) at the general assembly of the West African Road Safety Organisation (WARSO) at Dakar, Senegal.

According to Oyeyemi, half of the world’s road traffic deaths occur among motorcyclists (23%), pedestrians (22%), cyclists (5%), 31 percent of deaths among car occupants and 19 percent among unspecified road users.

The corps marshal said the major reason for the rate of deaths recorded among pedestrians and cyclists was because, “84% of the roads in lowincome and middle-income countries where pedestrians are present with a traffic profile of 40km/h and above and is due to lack of footpaths.

“But where the footpaths exist, there is the concern of encroachment, truncation, abuse/misuse by motorist and lack of protective features that totally segregate pedestrians and prevent its usage by other road users.”

Other reasons, he gave, are

that pedestrians have a 90 percent chance of surviving car crashes at 30km/h or below, but less than a 50 percent chance of surviving impacts at 45km/h or above.

He also said pedestrians risk about 80 percent chance of being killed at a collision speed of 50km/h, as opposed to a 10 percent risk at speeds of 30km/h.

He also noted that at a particular point in history, bicycle in Nigeria was a mobility of pride, a dream come through for the lower class and a celebrated mode even for the “well to do” in the society, but the oil windfall of 1973 brought about prosperity, especially for the working class and opened up the transportation space.

He also said as more cars came in, bicycles began to disappear from the streets.

Cars became spotlighted as symbol of strength, affluence and freedom, car owners now see those cycling and walking as less privilege, and in turn, those walking and riding bicycles now look forward to when to graduate from their mode.

As communities grew economically with provision of infrastructure, there was no corresponding growth in NMT infrastructure, promotion, law, policies and usage by the upper class.

Int’l community, others watching developments in Edo – NTA DG

FOU Customs impounds contraband items with over N1.1bn DPV

… as state mulls partnership with NTA on EBS revamp

AMAKA ANAGOE-EWUZIE

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ire ctor-general of the Nigerian Television Authority (NTA), Yakubu Mohammed, has commended the developmental initiatives of the Governor Godwin Obaseki-led administration in various sectors of Edo State.

Mohammed gave the commendation during a courtesy visit to the governor in Benin City, the state capital.

The NTA boss, who led management staff of the Benin Network Centre on the visit, said feedback from the station’s global audience showed that Nigerians and the international community were watching the developmental strides of the governor closely through the NTA. Assuring the governor of

the media organisation’s support, Mohammed said: “We remain committed to your cause and that of Edo people.

We will continue to support you as you continue to impact positively on the lives of the citizens of the state.”

He recalled what he described as memorable experience and the hospitality of Edo people, which he enjoyed while working in the state as the zonal director of the Benin Centre between 2008 and 2009.

In his remark, Governor Obaseki lauded the role of the NTA in mobilising Nigerians towards nation building, and said that its zonal office in Benin City was one of the first zonal offices established in the country with considerable broadcast experience.

“I want to thank NTA for being the only voice through which the people across the nation heard me during my electioneering campaign for the governorship position in the state.

“We will continue to support you, work and collaborate with you to give us technical support as we revamp our own radio and television stations. We need our own stations to tell our story,” the governor said.

On governance, he said, “My position as a governor is to elevate our political experience and build on the foundation laid by my predecessor to ensure even development across the state and create the enabling environment for businesses to thrive.”

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igeria Customs Service (NCS) Federal Operations Unit (FOU) Zone ‘A’ Ikeja, Lagos, said on Wednesday that it had intercepted various contraband items with Duty Paid Value (DPV) of over N1.1 billion in the last six weeks, June 13 to July 24.

The seized items include 21 exotic vehicles; 15 trailer-load of rice amounting to 9,504 bags of foreign parboiled rice; 436 jerry cansofvegetableoil;333cartonsof frozen poultry products; 287 bales of used clothing, and 198 pieces of used tyres.

Speaking with newsmen in his office on Wednesday, Mohammed Uba, area controller of the command, said it was the obligation of NCS through the command, to support the Federal Government’s policy on rice aimed at encouraging local rice farmers and millers in order to

createemploymentopportunities.

Uba listed the arrested vehiclestoincludeone2016Mercedes Benz G-500; six 2018 Toyota Hice buses; three 2017 Lexus GX 460 and LX 570; one 2017 Toyota Hilux; one Toyota 2016 Land Cruiser PradoSUV;one2014ToyotaHilux bullet proof, and one 2018 Toyota Corolla car.

Uba, who disclosed that the 21 exotic vehicles had DPV of over N484 million, listed other arrested vehicles to include two 2016 Toyota Camry; one 2016 Honda Civic; one 2016 Honda Accord, and one 2016 Dodge Charger.

He however urged the owners to bring the original Customs document forward to claim ownership of the vehicles in order to avoid total forfeiture in line with the provisions of the Customs and Excise Management Act (CEMA).

“Remarkable among the sei-

zure was the interception of an IVECO Truck with registration number LAM 283 LG along the Ijebu Ode-Ore Road carrying 498 cartons of CSP Codeine cough syrup with each carton containing 200 bottles against the Federal Government ban on importation of cough syrup with codeine,” he said.

According to Uba, two suspects have been arrested in line with the illegal import, valued at over N199 million. He added that the suspects and the products would be handed over to the National Food Drug Administration andControl(NAFDAC)forfurther investigation and prosecution.

“Thecommandwithintheperiod under review also recovered over N67.4 million from demand notices issued on items with underpaid values in the ports and land borders with the intention of short-changing the government of its revenue.

Thursday 26 July 2018

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FINANCIAL TIMES Why even a tweak from the BoJ can shake global markets

Iran’s Hassan Rouhani sacks central bank governor

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Page A4

World Business Newspaper

CNN publishes secret Cohen-Trump audio tape President and ex-lawyer discuss whether to make cash payment for Playboy model’s story Kadhim Shubber

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n audio tape of Donald Trump apparently talking about buying the story rights of a former Playboy model who has claimed she had an affair with him was published on Tuesday, a clear sign the president’s one-time personal attorney has turned against his former client.

The recording of a September 2016 conversation between Mr Trump and Michael Cohen, his former lawyer, was published

by CNN, which said Mr Cohen’s attorney had provided the audio.

The surreptitious recording, made by Mr Cohen, is brief and difficult to hear in places, but towards the end of the tape, Mr Cohen and Mr Trump discuss arrangements for the transfer of information and whether to make a payment in cash.

The conversation appears to relate to American Media Inc, the publisher of the National Enquirer, which in August 2016 paid $150,000 for the story rights of Karen McDougal, a former Playboy model who said she had an affair with Mr Trump in 2006. No story was ultimately published.

“I need to open up a company for the transfer for all of that info regarding our friend David,” Mr Cohen tells Mr Trump in the recording, in an apparent reference to David Pecker, the chairman of AMI and an ally of the president.

The brief recording does not make explicit reference to Ms McDougal, but lawyers for Mr Trump and Mr Cohen have indicated it refers to a discussion to buy the rights to her story from AMI. Rudy Giuliani, the president’s personal attorney, has said no transaction ultimately occurred.

In November 2016, when the Wall Street Journal first reported AMI’s arrangement with Ms McDougal, Hope Hicks, then Mr Trump’s spokesperson, said: “We have no knowledge of any

of this.”

Towards the end of the tape, Mr Trump can be heard referring to a payment in cash in an unclear exchange that is a point of strenuous disagreement between Mr Trump’s and Mr Cohen’s lawyers. Lanny Davis, the attorney for Mr Cohen who CNN said had provided the recording, told the network that Mr Trump had suggested paying AMI in cash.

On Fox News, Mr Giuliani said the tape should be listened to three times. “The third time you play it will become clear,” he said.

“This tape is crystal clear when you listen to it. I’ve dealt with much worse tapes than this,” he added.

In the recording, Mr Cohen raises the issue of financing and Mr Trump asks, “What financing?”

Mr Cohen says a payment will have to be made. Mr Trump’s full response is unclear, but he can be heard saying the words “pay with cash”. Mr Cohen replies, “No, no, no, no” and Mr Trump says “cheque” before the recording ends abruptly.

“The only people who use cash are drug dealers and mobsters,” said Mr Davis on CNN. “Believe your own ears.”

The recording was one of several made by Mr Cohen, who is under criminal investigation by the Manhattan US Attorney’s office.

Prosecutors are looking into matters including a $130,000 hush money payment Mr Cohen made shortly before the election to porn star Stormy Daniels, who also claims to have had an affair with Mr Trump. The president’s representatives have denied that Mr Trump had affairs with either Ms Daniels or Ms McDougal.

On Friday, a court official conducting an independent review of documents seized when the FBI raided Mr Cohen’s office and home turned over 12 audio recordings to prosecutors. It is unclear if the taped conversation between Mr Trump and Mr Cohen was one of those tapes.

US airlines cave in to pressure from China over Taiwan Carriers ignore White House calls to disregard Beijing’s demands Demetri Sevastopulo & Edward White

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S airlines that fly to China have caved in to Chinese pressure over how they refer to Taiwan, ignoring calls from the White House to refuse to comply with the demand.

United Airlines, American Airlines and Delta Air Lines were in the process of changing their websites on Wednesday to comply with a July 25 deadline mandated by China, according to the three US carriers.

The Financial Times reported Continues on page A4

Lawyers have indicated that the conversation between Donald Trump and his former lawyer Michael Cohen in the recording refers to a discussion to buy story rights of former Playboy model Karen McDougal © Reuters

EU court rebukes Poland in landmark extradition ruling ECJ says Ireland must consider bloc’s fight with Warsaw over rule of law Mehreen Khan & James Shotter

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russels’ battle with Poland over the rule of law must be taken into account by EU member states when considering extradition requests from Warsaw, the EU’s highest court has ruled.

The landmark ruling by the European Court of Justice came in response to a decision by Ireland’s high court to block the extradition of a Polish national, citing Warsaw’s interference in the independence of the judiciary and concerns over whether the individual would receive a fair trial.

In a judgment on Wednesday, the ECJ said Ireland was right to block the extradition order if it deemed there to be “a real risk that the individual concerned would suffer a breach of his fundamental right to an independent tribunal”.

In a significant part of the judgment, the Luxembourg court said judges in EU member states should take into account Poland’s long-running battle with the European Commission as a “relevant” factor when assessing an extradition request.

The ruling Law and Justice party has been locked in a tussle with Brussels over the introduction of sweeping changes to Poland’s judicial system, including forcing about one-third of the country’s supreme court’s judges to retire early.

Last year the commission launched an unprecedented “Article 7” procedure against Poland for breaching the rule of law — a move that could ultimately lead to sanctions against Warsaw.

“The Court considers that information in a reasoned proposal recently addressed by the commission to the Council on the

basis of Article 7(1) TEU is particularly relevant for the purposes of that assessment”, the ECJ said.

Zbigniew Ziobro, Poland’s justice minister, on Wednesday played down the significance of the court ruling, saying it was “close to the point of view of Poland”.

“First, at no point in its ruling does the ECJ determine a breach of the rule of law in Poland. Second, despite what the Irish court wanted, the ECJ did not agree to an automatic rejection of the extradition,” he said.

“The ECJ indicated that the rejection of an extradition of a suspect . . . has to be an absolute exception, and has to take place after it has been checked and proved that the changes taking place in Poland’s judicial system could in this particular case have an unfair impact on the trial of this particular suspect,” Mr Ziobro added.

Bloomberg snatches trade data partner from rival Thomson Reuters Deal with BrokerTec for rates benchmarks opens new front in war of the terminals Joe Rennison

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loomberg is aiming to tighten its grip over pricing information for issuers in the $8tn corporate bond market, following the defection of a data provider from rival Thomson Reuters.

The trading platform BrokerTec will start providing data to Bloomberg for a new service on its ubiquitous terminal that will show benchmark interest rates on Treasuries, interest rate swaps and other financial instruments, according to people familiar with the plan.

The aim is to wrest market share from Thomson Reuters’ famous “19901” page, from which market participants can glean information vital to pric-

ing corporate bonds and other products. The challenge comes at a sensitive time for Thomson Reuters, following the purchase of a majority stake in the company’s financial and risk unit by private equity group Blackstone.

Bloomberg’s new reference interest rates will be produced from transactions on two electronic trading platforms. BrokerTec will provide it with details of electronic trades in the Treasury market and Trad-X, the platform provided by Tradition which has headquarters in Switzerland, will provide electronic interest rate swap data.

Thomson Reuters’ dominance as the go-to screen for US dollar-denominated interest rate benchmarks dates back two decades. Known as 19901 because

of the Thomson Reuters Eikon terminal page it is posted on, the service has most recently pulled in Treasury trading data from BrokerTec and interest rate swap prices provided by ICAP. That three-way agreement is due to come to an end on July 29 and only ICAP has renewed the deal. Thomson Reuters plans instead to use Treasury trading data from Dealerweb, run

by Tradeweb Markets in which Thomson Reuters is a majority shareholder. BrokerTec will still provide Treasury data to Thomson Reuters but it will not be part of the 19901 benchmark service.

“Our clients will continue to have access to the same service and reliable data they always have had from us,” a Thomson Reuters spokesperson said.

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FT US airlines cave in to pressure from China...

Ryanair cuts Dublin fleet 20% after pilot strikes

Continued from page A3 last month that Trump administration officials had urged US carriers to ignore a Chinese demand to say “Taiwan, China” instead of Taiwan on their websites.

The Chinese government had threatened to cut market access for 36 foreign airlines unless they changed language on their websites that implied that Taiwan, a democratically ruled independent island claimed by Beijing, was not part of China.

United said it had begun making changes to comply with the Chinese requirement and that it “abides by and respects local laws and regulations”. Delta said it was “in the process of implementing website changes” and American said it was also “implementing changes to address China’s request”.

Aviation experts said that the airlines were caught in a bind because while they did not want to antagonise the White House, and possibly provoke a critical tweet from President Donald Trump, they were concerned at losing the ability to service what is one of the fastest growing aviation markets in the world.

“The US airline industry is a global business that must contend with a host of regulations and requirements,” said Airlines for America, an industry lobby group, which added that it and the airlines “appreciate the engagement and counsel we have received from the [Trump] administration”.

A Taiwanese government spokesperson said Taipei was exploring possible litigation on the issue. Taiwan “appreciates efforts from like-minded countries and individuals that have called on the world to stand up against the Chinese government’s bullying”.

After China issued the demand in May, the White House described it as “ Orwellian nonsense” and asked carriers to leave negotiations to the US government. But one industry expert said China had refused to engage in talks with the US administration.

The capitulation to Chinese pressure comes as the US and China are locked in an escalating trade war sparked by Mr Trump’s decision to put tariffs on Chinese imports. Some China experts say the trade tensions have reduced US leverage with China — over everything from the fracas over Taiwan to dealing with North Korea.

While the White House tried to convince the airlines that it could protect them, carriers were worried that Beijing would respond to non-compliance by denying them landing spots in China.

The US airlines are following in the footsteps of other foreign carriers that have made changes to satisfy Beijing. Air Canada’s website says “Taipei, Taiwan, CN” for flights to Taiwan, while Qantas uses, “Taipei, Taiwan, China”. British Airways uses “Taipei, Taiwan — China”.

Thursday 26 July 2018

More than 100 pilots and 200 cabin crew could be affected by the move Josh Spero

R Iran’s currency market reacted positively to the replacement of Valiollah Seif with Abdolnaser Hemmati, with the rial strengthening 3% against the dollar © Bloomberg

Iran’s Hassan Rouhani sacks central bank governor Move seen as a prelude to broader reshuffle in face of economic crisis and US sanctions Najmeh Bozorgmehr

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resident Hassan Rouhani has dismissed Iran’s central bank governor as the Islamic republic grapples with a currency crisis and braces for tough US sanctions.

Analysts believe the decision to replace Valiollah Seif with Abdolnaser Hemmati, who headed the state insurance company, is a prelude to a broader reshuffle of the government’s economic team.

“New changes in the cabinet are needed to handle the current economic crisis and US sanctions,” said the editor of an Iranian economic journal. “Mr Hemmati may not be the best person under the circumstances but he is 100 per cent better than his predecessor who was not a man for a crisis.”

The Islamic regime has been facing mounting economic pressure since President Donald Trump in May withdrew the US from the 2015 nuclear deal Iran signed with world powers and reimposed sanctions on the republic. Washington designated

Mr Seif a terrorist that month alleging he helped transfer millions of dollars to Hizbollah, the Lebanese militant movement.

The central bank denied the allegations.

In August, the US will impose sanctions targeting trading in cars, gold and other metals.

In November, it will introduce sanctions designed to curb Iran’s oil exports — the country’s economic lifeline — and transactions with the central bank.

The measures will deepen the sense of economic crisis in the republic. The rial has plummeted more than 50 per cent this year.

A severe shortage of hard currencies has pushed up prices of goods, while panicked Iranians have rushed to buy gold coins, cars and small apartments to preserve their savings.

Mr Seif was criticised for poor management of the crisis. In recent months, the central bank has sold 60 tonnes of gold coins in local markets to stem the rise in the price of the precious metal, but the contentious decision has had little impact.

Mr Rouhani said over the weekend that the US’s sanc-

tions on Iran’s oil and banking sectors would be tantamount to “declaration of war”. He was a principal architect of the nuclear deal, which brought sanctions relief in return for Iran limiting its nuclear activities. After winning a second term last year, he hoped to use the accord to attract muchneeded foreign investment to the country.

Iran was able to double its oil exports that helped drag the republic out of a deep recession and bring inflation down from a high of more than 40 per cent after the deal was implemented in the beginning of 2016. The fear is that the new US sanctions will cause those gains to be reversed at time of rising public dissent over economic grievances and corruption.

Iranian analysts expect the new central bank governor to better manage the country’s limited access to its hard currency in overseas banks and prioritise the import of basic commodities. Iran’s currency market reacted positively to Mr Hemmati’s appointment, with the rial strengthening 3 per cent against the dollar.

GSK invests $300m in gene profiling group 23andMe Equity stake in Google Ventures-backed group comes as drugmaker unveils ‘major restructuring’ Clive Cookson & Adam Samson

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laxoSmithKline has announced a wide-ranging partnership with 23andMe, including a $300m equity investment in the Silicon Valley gene testing company and a four-year exclusive collaboration in drug discovery.

The 23andMe deal was the centrepiece of a new research strategy presented on Wednesday by Hal Barron, GSK’s chief scientist, alongside the UK pharmaceutical group’s secondquarter results, which beat market expectations.

Shares in GSK rose 1.5 per cent after the announcement.

Mr Barron, who joined GSK in January after a career in drug development based in San Francisco, said the company would in future identify new medicines through three complementary

approaches: modulating the human immune system, analysing genetic data from 23andMe and other sources such as UK Biobank, and applying artificial intelligence and machine learning to the discovery process.

23andMe, founded 12 years ago with funding from US west coast investors such as Sequoia Capital and Google Ventures, has a chequered past, including a run-in with the Food and Drug Administration over the way it marketed DNA tests to consumers.

It has since made peace with the regulators and now has a customer base of more than 5m people, 80 per cent of whom have agreed that their genetic data can be used for research.

Their information would be “de-identified” to safeguard individual privacy, GSK said.

Anne Wojcicki, chief execu-

tive of 23andMe, said: “This collaboration will enable us to deliver on what many customers have been asking for — cures or treatments for diseases.”

To help fund the new R&D programme, GSK will carry out what Emma Walmsley, chief executive, called a “major restructuring programme” that aims to cut costs by £400m a year by 2021. She said the savings would be achieved through “supply chain optimisation and reductions in administrative costs” but declined to disclose where cuts were likely.

GSK boosted its full-year earnings forecast after “an encouraging first half-year of trading” with the vaccines business performing especially well — Shingrix, its new shingles vaccine, is on course for £600m-£650m sales this year, far ahead of analysts’ estimates.

yanair has announced it will cut its Dublin-based fleet by 20 per cent this winter, following through on a threat it made to stop its Irish pilots striking.

More than 100 pilots and 200 cabin crew could be affected by the move, the low-cost carrier said on Wednesday.

Ryanair said its board had decided to remove at least six of its 30 aircraft in Dublin, sending them to its Polish charter airline, because of “a downturn in forward bookings and air fares in Ireland partly as a result of recent rolling strikes by Irish pilots”.

The low-cost carrier said strikes had “disturbed” consumer confidence in its Irish flight schedules.

It also cited improvements in its Polish business.

Irish pilots staged strikes on July 12, 20 and 24 over pay and conditions.

Peter Bellew, Ryanair’s chief operating officer, said the move would “result in some aircraft reductions and job cuts in country markets where business has weakened or forward bookings are being damaged by rolling strikes

by Irish pilots”.

He added: “Ryanair operates a fleet of over 450 aircraft from 87 bases across Europe. We can only do so if we continue to offer low fares and reliable flight services to our customers, and if our reputation for reliability or forward bookings is affected, then base and potential job cuts such as these at Dublin are a deeply regretted consequence.”

The company will consult on redundancies, which “will be determined by Ryanair’s assessment of flight performance, productivity, attendances, and base transfer requests”, but will also offer transfers to Poland.

In response, Forsa, the union representing Ryanair’s Irish pilots, announced a fourth strike for August 3, saying the airline’s move had escalated the dispute.

Forsa said Ryanair’s decision was “reckless and unnecessary” and showed management was either unwilling or unable to negotiate with unions.

It added: “It is normal practice for airlines to reduce activity in the winter months. In light of this — and of Ryanair’s recent difficulty in recruiting and retaining enough pilots to fulfil its schedules — it remains unclear if today’s provocative move heralds a significant change in normal practice.”

Daniel Roeska, an analyst at Bernstein, said: “Antagonising the workforce in the context of labour disputes is a very risky strategy and will likely lead to greater union membership and higher strike participation, effectively increasing a union’s bargaining power.”

He added that unions would now put employment guarantees on their negotiating agenda, on top of pay and adopting local labour laws.

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FINANCIAL TIMES

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COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Why even a tweak from the BoJ can shake global markets

Speculation the central bank may scale back stimulus programme has investors on edge

Leo Lewis; Kate Allen & Robin Wigglesworth

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he July 30-31 meeting of the Bank of Japan was sitting on the calendar as an ‘interesting’ event for markets. Important because it is Japan, but nothing too whiteknuckled.

That perception began to be challenged late last week after several reports suggested that policymakers were mulling some tweak to the central bank’s monetary stimulus — most likely in an effort to alleviate the side effects of the current easing on Japan’s visibly strained banking sector.

A surge in Japanese bond yields rippled out to US and European markets, where Japanese investors have turned in recent years in an effort to escape the measly returns available domestically. Although that initial reaction had played itself out by Tuesday, next week’s meeting has now become a global mustwatch.

As investors try to work out how deeply within the BoJ runs the feeling that its stimulus — which includes a yield curve control (YCC) measure designed to keep the yield on the benchmark 10-year bond at close to 0 per cent — is unsustainable, the market reaction is a reminder of the role the BoJ has had in anchoring global bond yields.

“The 10-year Treasury yield has been eerily subdued around 3 per cent since the start of the year,” said Ed Yardeni of Yardeni

Research. “That’s because global investors are attracted to US government bonds given that comparable yields in Germany and Japan are near zero.”

Last week, surveys showed that the majority of economists expected the central bank’s next move to be in the direction of a tapering of its quantitative easing policy, but fewer than a quarter reckoned anything was likely to happen this year, let alone this month. Some speculative investors, reflecting that mood, had been building long positions in JGB futures.

The unwinding of those positions, said traders, contributed to a jump in yields on Monday, and the BoJ’s announcement that day of a rare operation to buy an unlimited amount of 10year JGBs if the yield hit 0.110 per cent — an offer that, in the event, produced no sellers as yields subsided slightly.

Many remain convinced that this is still premature for the BoJ to consider a policy change with inflation stubbornly below the bank’s 2 per cent target. Scott DiMaggio, co-head of fixed income at AllianceBernstein, said “we think this is too early for the BoJ to change policy. With inflation still lagging it’s hard to see why they would change the stance. So we think this is a move to fade,” he said, adding that while the BoJ tightening together with the ECB and the Fed was a “bond market armageddon scenario” it was not something he expected until late 2019.

Clean tech unicorn Bloom Energy limps on to stock market Valuation of $1.6bn is a 75% discount to what it was said to be worth two years ago Richard Waters

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ne of the most vaunted ‘unicorns’ created during Silicon Valley’s venture into clean technology limped on to the stock market on Wednesday, the latest sign of how Wall Street has become a haven for privately owned tech companies that failed to live up to the hype.

Bloom Energy was valued at $1.6bn when its shares began trading on Wednesday, a discount of about 75 per cent to what it was judged to be worth two years ago, when it last issued equity as a private concern.

Bloom was once held up as an emblem of the “clean tech” revolution intended to reduce energy consumption and help tackle climate change.

The company, whose “Bloom boxes” are used as back-up energy sources for data centres, was one of the stars in a portfolio as-

sembled by Kleiner Perkins, the blue-chip venture capital firm that backed online giants such as Amazon and Google.

Kleiner largely turned its back on the consumer internet more than a decade ago to focus on clean tech, a bet that failed when higher taxes on carbon did not materialise and many of the new technologies proved uneconomic.

“Down rounds”, or fundraisings that value a company below their previous rounds, have long been a stigma among private tech companies and were once rare in initial public offerings.

They have become more common since payments company Square and online storage company Box went public at discounts of 30-50 per cent in 2015.

Bloom represents a more recent phenomenon, as private tech companies have accepted deep discounts to gain access to a new source of funding through the public market.

Haruhiko Kuroda, Bank of Japan chief

ECJ removes trademark protection from Nestlé’s KitKat bar Ruling leaves four-fingered chocolate bar open to imitators after long-running battle Rochelle Toplensky

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urope’s top court has ruled that the shape of Nestlé’s KitKat is not protected by trademark, leaving the four-fingered chocolate bar open to imitators after a long-running battle with rival Cadbury.

The European Court of Justice on Wednesday upheld a 2016 decision by the lower General Court to annul the Swiss company’s EU-wide trademark of the KitKat’s shape — dismissing the appeals filed by Nestlé and the European Union Intellectual Property Office against that ruling.

“The decision does not prevent Nestlé from applying for national trademarks in EU countries where KitKat bars are well known,” said Rachel Wilkinson-Duffy, a lawyer at Baker McKenzie, “although multiple national filings are more expensive and local courts may take a more restrictive approach”.

Nestlé originally obtained pro-

tection for the KitKat’s four-fingered shape in 2006, when it was granted an EU-wide trademark by the EUIPO based on public recognition of the bar’s distinctive form in 10 EU markets — Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the UK. In 2 0 0 7 , r i va l Ca d bu r y Schweppes — now part of US foods group Mondelez International — demanded that the EU declare Nestlé’s trademark invalid.

The company makes similarly shaped Leo and Kvikk Luns bars.

The EUIPO rejected Mondelez’s claim in 2012, only to have its decision annulled by the General Court in 2016 on the grounds that while the bar was distinctive in the 10 EU countries, the EUIPO should have considered the public’s perception of the shape in Belgium, Ireland, Greece and Portugal.

Nestlé and the EUIPO appealed against that decision in an attempt to reinstate the EU

trademark but were denied, with the judges concluding that the distinctive character must be shown throughout the EU, and not only in a substantial part of the bloc.

“This is definitely a benchmark case,” said Imogen Fowler of lawyers Hogan Lovells. She added that the “very pragmatic decision” would come as a “huge relief to brand owners”, as they will not have to bring evidence for all 28 countries as long as they can prove distinctiveness in some markets and show that other EU markets are analogous.

Nestlé plans to continue to seek EU-wide protection. It said: “Today’s judgment is not final and concludes that the distinctiveness of a trademark (in this case, the shape of our four-finger KitKat) does not need to be established in each and every EU country but rather globally in the EU using a variety of evidence . . . the case will now be sent back to the EU Board of Appeal to examine the evidence that Nestlé has filed.’’

Facebook blocks pages of Brazilian political group Andres Schipani & Hannah Kuchler

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acebook has blocked the pages of a Brazilian political group for allegedly disseminating fake news ahead of presidential elections in Latin America’s largest country.

The social media company, which counts Brazil as one of its largest markets, targeted the Movimento Brazil Livre (MBL) or “Free Brazil Movement”, a rightwing group that championed the impeachment of leftist former president Dilma Rousseff two years ago.

Facebook was deactivating 196 pages and 87 accounts in Brazil, which it said were part of “a co-ordinated network that hid behind fake Facebook accounts and misled people about the nature and origin of its content, all for the purpose of sowing division and spreading misinformation”.

MBL supporters decried the move on social media as “censorship”.

The move highlights concerns that fake news could play a critical role in an election that has polarised Brazil.

The country’s most popular politician, former president Luiz Inácio Lula da Silva, of the leftist Workers’ Party, or PT, is in prison, leaving far-right politician Jair Bolsonaro leading early polls.

He has proven skilled at using social media to promote his campaign in a country in which television, led by the Globo media group, has traditionally dominated election coverage.

In a note posted on Twitter, MBL said several of its coordinators “had their accounts arbitrarily removed from the air by Facebook” and attacked Facebook as a “socialist” entity.

It said the social media com-

pany also deactivated pages with a national reach of half a million people. Their purpose was to “inform and spread liberal and conservative ideas — which is not a crime”.

“Facebook’s goal is to silence rightwing political voices and critically interfere in this year’s elections. A socialist and foreign entity is attacking Brazilian democracy,” said Rubinho Nunes, the national co-ordinator for the MBL and one of the movement’s founders, on Twitter Brazil is Facebook’s fourthlargest market after India, the US, and Indonesia. Polarisation spurred by anger at the political class has made Brazil a breeding ground for “fake news” and disinformation, analysts say.

A recent study by the Reuters Institute for the Study of Journalism shows Brazilians are the most “concerned” in the world about what is real and fake online.

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Live @ The Exchanges Lafarge says operational stability boosts earnings in Nigeria Stories by Iheanyi Nwachukwu

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afarge Africa Plc on Tuesday released its unaudited financial statements for the halfyear (H1) period ended June 31, 2018. The results at the Nigerian Stock Exchange (NSE) show group earnings increased to N162.291billion against N154.839billiion revenue recorded in the corresponding half-year of 2017.

The Board of Lafarge Africa Plc has approved the extension of existing shareholder loan and a Right Issue of up to N90billion, subject to all corporate and regulatory approvals. The restructuring is aimed at reducing the Company’s leverage position as well as strengthening its profitability.

Lafarge is listed on the Premium Board of the Nigerian Stock Exchange.

Its market capitalization stood at N281.886billion with shares outstanding of 8,673,428,240 units. Lafarge Africa Plc stock price closed at N32.5 on Monday July 23, after reaching a 52-week high of N47.

“Our company saw strong market growth in Nigeria reflecting the end of the recession in the cement market. Cement demand has been on the rise since the beginning of 2018. We saw a 22percent increase in volume, benefiting from export to Ghana which began in Q4 2017. EBITDA for our Nigeria operations was

N19.1 billion and EBITDA margin of 32.2percent, thanks to robust operational performance and continuous effort to reduce cash costs,’’ said Michel Puchercos, CEO of Lafarge Africa Plc. Thanks to a stable pricing and a favorable economic environment, Lafarge reported a profit of N1.9 billion in its Nigeria operation for the second quarter of 2018. Strong market growth as well as operational stability, success of the turnaround plan implementation indicated the end of the recession in the cement market.

Puchercos added that the lack of large infrastructural projects impacted volumes in the company’s South Africa operations, but revenues improved by 7.7percent on the back of price increase in all segments in Q1 and FX translational effect. ‘’Aggregates, however, turned positive in Q2 despite low infrastructure spending. Success in the Nigeria operations has been due to operational stability, success of the turnaround plan implementation and volume improvement,” he added.

Comparing overall results to the corresponding quarter in 2017, net sales increased by 11percent to N81.6 billion with Nigeria accounting for 73percent of total sales; Nigeria operations delivered net sales of N59.3billion and EBITDA of N19.1billion.

Strong sales in Nigeria increased volumes in Q2 2018 by 18.7percent (inclusive of export) and 9.6% in ReadyMix.

In total, 68 kilotons (kt) of cement have been exported to Ghana with 28kt shipped in Q2 2018.

The building solutions provider expects the Individual Home Builder segment to remain resilient.

The Board of Lafarge Africa Plc has approved the extension of existing shareholder loan and a Right Issue of up to N82billion, subject to all corporate and regulatory approvals. The restructuring is aimed at reducing the Company’s leverage position as well as strengthening its profitability.

Speaking on its refinancing plan, Bruno Bayet, CFO of Lafarge Africa said, “It’s aimed at preparing for future development in Nigeria, improving the company’s leverage as well as strengthen its profitability. The proposed refinancing plan includes an extension of existing shareholders dollar-denominated loan of $315 million and a new right issue of N90billion.”

Looking forward, Puchercos expects, “New route-to-market initiatives to deliver and continuous focus on cash cost reduction will drive operational performance in H2.

Our South Africa management is focused on executing the turnaround plan implemented in Q1; the target for H2 is to deliver volumes. The focus is on growing the contribution margin. Actions around efficiency and cost management are on track and will contribute to significant savings in production costs across all the segments in H2”.

Stanbic IBTC wins best investment bank in Nigeria at Euromoney Awards

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tanbic IBTC Capital Limited, a member of Stanbic IBTC Holdings Plc reaffirmed its position as the leading investment banking institution in Nigeria by winning the Best Investment Bank in Nigeria award at the Euromoney Awards for Excellence 2018 held in London on July 11, 2018.

Standard Bank, to which the Stanbic IBTC belongs, was also voted Africa’s Best Bank for Wealth Management. The award ceremony had almost 700 leading bankers from around the world, including from Stanbic IBTC and Standard Bank, in attendance.

Yinka Sanni, Chief Executive, Stanbic IBTC

Holdings Plc expressed delight with the recognition. According to Sanni, the award is a demonstration of the growing hunger and capacity of Stanbic IBTC, drawing on Standard Bank’s expertise, to provide game-changing financial and advisory solutions to clients across market segments.

“We are delighted to be recognised as the foremost investment bank in Nigeria. The award speaks to our implacable commitment to deliver innovative investment banking solutions to clients across various sectors,” Sanni said.

Sanni added that even though Stanbic IBTC has its roots in wealth management and investment

banking hence its market pedigree and leadership in the space, the group has since grown competency across the entire financial solutions value chain as a leading end-to-end financial services provider and intends to sustain the legacy in the foreseeable future.

Euromoney Awards for Excellence announced that the 2018 awards recognised banks in almost 100 countries, in all regions and in 20 global categories.

Euromoney noted that “Stanbic IBTC, Nigeria’s best investment bank, closed 38 investment banking deals in 2017, despite macroeconomic conditions that while improving, remain challenging.”

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APC loses Benue as Ortom rejoins PDP ...youths stop governor’s Abuja trip, remove APC flag BENJAMIN AGESAN, Makurdi

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enue State Governor, Samuel Ortom, has finally announced the resignation of his membership of the All Progressives Congress (APC) He said he had rejoined the People’s Democratic Party (PDP). He made the declaration on Wednesday at the Benue People’s House Makurdi during a meeting with the chairmen as well as leaders and other members of legislative councils across the state. Fourteen of the 23 council chairmen in the state and majority of the councillors in the 276 council wards in the state pledged to follow him.

The governor stated that he took the decision after due consultations with major stakeholders in the state.

His announcement came a few hours after a coalition of Benue youths stopped him from travelling to Abuja to attend a scheduled meeting with the national leadership of the All Progressives

Samuel Ortom

Congress to resolve his differences with the leadership of the party in the state.

The governor was leaving Government House, Makurdi for the trip when they blocked his route, carrying placards.

Some of the placards read “Ortom don’t go back to APC,” “We don’t have land

Agbakoba endorses Ojukwu as next NBA president

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lisa Agbakoba, a senior advocate of Nigeria (SAN) and former president of the Nigerian Bar Association (NBA), has said that the erudite group would be doing itself a world of good by voting Ernest Ojukwu, a professor and SAN, as its next president from the list of contestants, stressing that he “is the most qualified”.

The endorsement was contained in a statement he signed, a copy of which was sent to BusinessDay. Explaining the rationale for the endorsement, Agbakoba said: “Ernest worked closely with me on many thematic subjects of reform when I was NBA president.

Olisa Agbakoba

He was extremely resourceful. I also know he immensely contributed to the success of past presidents such as Chief Okpoko, SAN, OCJ Okocha, SAN; Chief Wole Olanipekun, SAN; Bayo Ojo, SAN, Prince Lanke Odogiyan; Governor Rotimi Akeredolu, SAN, etc.

“He has clear vision and understanding of the workings of the Bar and the legal profession at the highest level. NBA needs Prof. Ojukwu’s leadership experience, integrity, sincerity and courage.”

According to the Maritime lawyer, “I believe that the Bar needs a president who can stand as did Thomas Erskine, in England, and declare bravely that ‘I will at all hazard, protect the independence’ of the Nigerian Bar and the legal profession.

“We need a man of courage and conviction who has a full grasp of issues not just of the Bar, but also of our nation and will be able to speak out with courage, conviction and candour. I have read the manifestos of all the candidates. Prof Ojukwu’s is inspiring. I endorse him.”

to donate for ranching,” “APC is Miyetti party,” Our farms are not for cows,” “You must leave APC,” “Ortom is our party”, and “2019: On Ortom we stand.”

Their spokesmen, Terrence Kuanum, and Dave Ogbole advised the governor not to make the trip for further discussions with the

APC leadership on his membership of the party but to rather look for an alternative platform.

They threatened that if he attended the meeting they would vote him out in 2019.

To underscore their anger they ordered that the APC flag should be removed from the governor’s official car

immediately and the governor’s driver complied.

The governor announced his decision to rejoin the PDP after displaying his resignation letter from the APC which he said had been tendered to the ward chairman of the party in his ward.

He said 10 of the 17 APC members in the state assembly had also left the party for the PDP. While briefing newsmen shortly after his declaration, he described the PDP as familiar terrain which was a better platform which would protect his interest and that of the Benue people.

Chairman of the Association of Local Governments of Nigeria (ALGON) in the state, and Guma Local Government Council, Anthony Shawon, and several of his colleagues, as well as Chairman of the forum of Legislative Councils, Tom Hanmakyur, with many of his colleagues all pledged support for the governor’s decision.

Shawon noted that public opinion was in favour of the governor leaving the APC.

Afenifere, Babatope condemn invasion of Saraki’s residence …Says defection part of democracy INIOBONG IWOK

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eader of pan Yoruba socio-cultural organisation, Afenifere, Reuben Fasoranti and a former minister of Transport, Ebenezer Babatope, have condemned yesterday’s invasion of the residence of the Senate President, Bukola Saraki, by the police, describing it as a danger for democracy in the country.

The residence of the Senate President was early on Tuesday morning besieged by men of the Nigerian police force, after ordering him to appear before it by 8am same day to answer to allegations against him in connection with the Offa bank robbery which claimed the lives of more than 20 persons.

The Senate President however, took a different route and gained entrance into the floor of the Senate, presided over plenary in which 14 senators defected to the main opposition People’s Democratic Party (PDP).

But speaking in a separate interviews with BusinessDay

yesterday, they stressed that such action by the police could degenerate into anarchy, while giving the impression that it was being used by the ruling All Progressives Congress (APC) against opposition politicians in the country.

Babatope stressed that it would be difficult for the executives to stop the defection within the APC as long as it was the will of the lawmakers.

The former Minister said that the PDP was working actively to convince Nigerians to vote for the party and return it to power in the 2019 general election.

“Whoever ordered the police to invade and laysiege to the residence of the Senate President is sad.

In a democracy such act is wrong and should not be condoned; it is a rape on democracy. We have to order the police to shift their ground,” he said.

“You cannot stop what happened in the National Assembly, as long as they did it freely. What happened on Tuesday was a normal occurrence in a democracy and this would not be the last. As

long as we are concerned in the PDP we are working to convince Nigerians to take over power from the APC. What they have done is good, we know if election is free and fair in the country the PDP would win and we would see that in next year’s general election.

Fasoranti said that lawmakers had the right to defect and that defection was part of any democracy in the world. He reminded the APC not to forget how several of the politicians initially defected from the PDP. “ They have the r ight to defect, it is part of democracy; don’t forget how this government came to power, through these polit i c i a n s w h o d e ca mp e d from the PDP. But whatever they are doing must be reasonable.

“The invasion of the residence of the Senate President is dangerous for our democracy. The police must not allow themselves to be used by the APC, we are heading to a brick wall; everybody is doing what they like everywhere, and we should allow reason to prevail,” Fasoranti said.

Thursday 26 July 2018

Probe of past government, a waste of time – Accord guber aspirant IFEDAYO OGUNYEMI, Abeokuta

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gun State gubernatorial aspirant on the platform of the Accord Party, Tope Tokoya has said that his administration would not probe past governments if elected as the governor in the 2019 election.

He made the statement at his declaration of interest to contest for the Ogun State governorship seat.

According to the one-time financial expert and sports administrator, “probing a past government will only cause a distraction for any serious government.”

Tokoya promised that his administration would ensure continuity by completing all uncompleted projects in the state embarked upon by the previous administration and will ensure youth’s inclusion in governance to promote the #NotTooYoungToRun bill.

“We will not probe past government but we will ensure that all uncompleted projects are completed in the state.

Youths will be given great opportunities just as you can see that our party has the largest percentage of youths.

“We will look at the books and when things are not done rightly, we will ask questions but we will not probe so as not to distract our government, we will ensure that we satisfy our people.

“Our party is here to take corrections, we will ensure orders are followed and enforce financial discipline. From my experience, probing past government is a distraction for any serious administration,” he said.

While speaking on his choice of Accord Party, Tokoya said that 99 percent of the party membership has the fear of God which aligns with his spirit.

The 66-year old politician affirmed that the state chapter of party has the wherewithal to contest any election and that no coalition will be welcomed.

“I have a bright chance to become the next governor.

Accord is a party of God-first.

We all know the perception people have about the other two big parties; I don’t want to mention names. People are now looking for a new platform, a responsible and reputable platform that will satisfy the needs of the people and that is Accord for you.

“Whatever is needed to execute 2019 elections, I have it and Accord party has it too.

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NEWS YOU CAN TRUST I THURSDAY 26 JULY 2018

Opinion LAUREN LEATHERBY & MIRA ROJANASAKUL

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ately, voters in established democracies seem eager to shake things up. Brexit revealed underlying cracks in the European Union.

An anti-immigration backlash led to a wave of right-wing populist victories in Europe. And U.S. voters elected President Donald Trump, who has lavished praise on several strongmen leaders.

Last week, he sided with Russia President Vladimir Putin over the U.S. intelligence community (he later said he misspoke—and then walked back his walk-back).

Around Africa, elected leaders are either plotting to extend their tenure or are not quite sure which court orders to respect as in the case in Nigeria.

On the surface, these shifts in governments show precisely what a functioning democracy is capable of—voters dictate what they want at the ballot box.

But not all elections are equal. While voters in Hungary, Russia, Turkey and Venezuela went to the polls this year, their votes didn’t count for much.

Incumbent leaders in those countries only consolidated power. More elected leaders are starting to take note, implementing their own sweeping changes to weaken checks on executive power.

Organizations that monitor the health of democracies are converging around a similar idea: On average, the world is becoming less democratic for the first time in several decades.

The surprising twist is that it’s happening as more and more countries hold elections.

That trend is evident based

Elected leaders are making the world less democratic on an index from Varieties of Democracy, or V-Dem, which shows the number of elected leaders in the world has been climbing.

But more voting does not necessarily equal more freedom.

On average, the quality of democracy has started to decline from its recent peak, according to V-Dem’s liberal democracy index. The index monitors dozens of factors to determine how democratic a country is, such as whether elections are fair and competitive, what limits are placed on government and how well countries protect civil liberties and minority rights.

“Most of the core aspects of elections—whether officials are subjected to elections, whether they are multiparty, suffrage— have actually improved in general and across many countries,” said Anna Luehrmann, deputy director at the V-Dem Institute and former member of the German National Parliament.

“Where the backslide has happened are all these aspects that make elections actually meaningful, and that’s the most worrying, actually.”

Some of the places that have seen the biggest drop in their score had elections this year.

President Recep Tayyip Erdogan, modern Turkey’s longest-serving leader, further tightened his grip on power in elections held under emergency rule just last month.

A year earlier, Erdogan used a referendum to dismantle the office of the prime minister and make the presidency the supreme seat of political power, rolling back an almost centurylong tradition of parliamentary rule. Turkey jailed dozens more

journalists than any other country last year.

International election observers found that Hungary’s April elections, in which President Viktor Orban won re-election in the EU country, were conducted in an orderly fashion, but far from fair: Since coming to power in 2010, Orban and his party have rewritten the constitution, curbed media freedom and encouraged fake candidates to split the opposition vote.

Russian President Vladimir Putin has used similar tactics.

The outcome of the 2018 vote was never in doubt; the question was the margin by which Putin would win. Restrictions on political freedoms stifled “genuine com-

being stuffed.

Even before Venezuelan President Nicolas Maduro’s re-election this year, several countries— including the U.S.—pledged not to recognize the results of the widely boycotted election.

Maduro had imprisoned opponent candidates, stripped the opposition-led legislature of power and filled a new legislature with his supporters to rewrite the constitution in his favor.

The oil-rich nation once had the highest gross domestic product per capita in Latin America and a much stronger democracy, but the country’s democracy scores began a sharp slide in 1999 after Maduro’s predecessor, Hugo Chavez, came to power.

“more voting does not necessarily equal more freedom. On average, the quality of democracy has started to decline from its recent peak…” petition,” according to election observers. The bar to become a candidate is prohibitively high, while a court decision rendered the most popular opposition politician, Alexey Navalny, ineligible to run. The state has direct or indirect control of the majority of media outlets. Even so, videos showed ballot boxes

Venezuela is now plagued by a rapid economic collapse and a subsequent humanitarian crisis in which Venezuelans reported losing an average of 24 pounds last year.

Democratic institutions are eroding in Cambodia, which holds an election later this month. Last September, the

country’s main opposition leader was arrested for treason and a major newspaper, the Cambodia Daily, was forced to close after being fined $6.3 million for unpaid taxes. The paper says the move was politically motivated under long-term Prime Minister Hun Sen. In Africa, Nigeria, the continent’s most populous nation, presents a very interesting case.

The current government of Muhammadu Buhari came to power in 2015 via historic elections which saw the defeat of an incumbent. However, many believe the country has never been more divided than it is today and the failure of the government to respect court judgment ordering the release from detention of a former intelligence chief gives fillip to those claiming a gradual deterioration in liberties.

In the Philippines, the expulsion of the country’s chief justice was described by a United Nations expert as an attack on judicial independence. The justice’s removal came after public threats from President Rodrigo Duterte, who has taken other actions to silence critics. His war on drugs has led to thousands of extrajudicial killings.

There are bright spots— though mostly in countries that were not very democratic to begin with. Gambia had its first peaceful transfer of power last year since independence in 1965.

And although the path has been bumpy on Nepal’s slow transition from absolute monarchy to democratic republic, the country held local elections last year for the first time in 20 years.

Western Europe, the U.S.

and Canada are ranked among the most free, open societies in the world—and have been for most of the past century. But even there, scores have declined in nearly every country since 2012. In contrast to places where constitutional changes and major institutions have been hijacked by individual leaders, the reasons for decline in these countries have been more subtle.

Take the U.S., for example.

While the U.S. had the fifthhighest democracy score in 2012, its score had fallen to 31st place five years later. Indexes from both V-Dem and Freedom House, another organization that evaluates how free countries are, have downgraded U.S. democracy scores sharply since 2016, citing reasons that include possible foreign election interference, a reduction of government transparency, weakening legislative constraints on the executive, a decline in the range of media perspectives and other decreases in election fairness.

Although it has been ranked the most open and free society for much of the past century, Denmark has been grappling with rising nativism. The antiimmigration Danish People’s Party won 21 percent of the vote in 2015, up from 12 percent in 2011. Denmark recently introduced a law—primarily affecting low-income, Muslim neighborhoods—that would separate children from their families for instruction in “Danish values.”

From Norway, which currently has the highest democracy score, to North Korea, at the botContinues on page 35

The academia: A season for the examination of conscience

IK MUO Ik Muo, PhD. Department of Business Administration, OOU, Ago Iwoye, Ogun State muoigbo@yahoo.com

S

ome 2018 years ago, Jesus Christ declared that only the truth could, (and still can) set us free John,8:32)and not long after that declaration, the Pilate asked him: what is the truth (Jn, 18:38). Still on the issue of truth, our people say that the best truth is the one which somebody says to himself. This self-truth comes from introspection

or what we call examination of conscience in the Catholic Church. This is the process through which one reviews his actions and inactions, behaviours, speeches or silence and even thoughts, to sincerely ascertain, using the ten commandments, other divine injunctions and the teachings of the church, how far he or she has run foul of the divine law to love God and man. The process is very similar to what Moslems call Muhasaba, or self-reflection.

This write-up is not about the theology of truth or a foray into the spiritual and religious realms. However, it is noteworthy that most often, the various dimensions of our existential reality are intertwined Back to our elders, they also say that people commit regularly several jail-able

offences and that the only reason why we are not all in jail is that there are not enough jailors around or that the jailors are tired of jailing people. Nigeria is a country where government officials and institutions work overtime to ensure that their employees always have more than enough reasons to go on strike. The only saviour we have in this matter is that the workers are tired of going on strike. Once in a while, ASUU gives the government a little bit of what it deserves by declaring total, comprehensive, and indefinite aluta. In doing so, they usually catalogue the failings and failures of government officials and institutions and they take a longitudinal view of such issues, telling everybody who cares to listen how long each particular

infraction has been going on.

On such occasions, I usually expect the commentators, including my friends in the media, to dispassionately examine the issues at stake, call the government to order and encourage the ASUUists to fight to finish under a noretreat-no-surrender regimen. However, most often, they would ask the ASUUists and university administrators, to be considerate and in particular to remove the log from their eyes before shouting about the speck on their neighbours eyes. In such instances, they mention sexual harassment (as if it does not happen in media houses or in ASO Rock!), declining quality of outputs, totalitarian tendencies of some kabyesis (sorry, VCs) in the system and other allied failings of the university

system.

Well, I believe that the universities have harkened to these admonitions, have undertaken deep examination of conscience, and are acting accordingly. I have three evidence to support my assertions. On 16/4/18, a former vice chancellor of Michael Okpara University of Agriculture, Umudike, Prof.

Ikenna Onyido, publicly blamed the drastic drop in quality in Nigerian universities, on internet or China Professors, who plagiarised their way up the promotion ladder in an absurd situation in which traditional rulers and men of influence lead delegations to Vice-Chancellors, in order to plead for their son or daughter to be made a professor.

That was in his keynote lecture at the 55th meeting of

the Committee of Deans of Postgraduate Schools in Nigerian Universities (CDPGS), which held at the Nnamdi Azikiwe University, Awka. He also bemoaned the increasing churning out of “counterfeit PhDs,” which he believed posed a greater threat to the country than Boko Haram and herdsmen, in the long run. Strong words indeed!

While I may not agree with the TKO (technical knockout) given to professors by a follow professor, this surely evidences an examination of conscience and self truthtelling of the first order. But that is at a personal level.

At the institutional level, two recent developments evidence this new trend of self-examination and truth telling. Starting from the Continues on page 35

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