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news you can trust I **wednesDAY 26 june 2019 I vol. 15, no 340 I N300

MTN launches 4G+ advanced network in 3 cities …aggregates 800MHz and 2600MHz spectrums for faster internet speed …to impact businesses, economy Jumoke Akiyode-Lawanson

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NGUS nov 27 2019 361.38

NGUS may 27 2020 362.28

Lifting 100m Nigerians out of poverty:

Lessons from Brazil, India, China, Indonesia OLUWASEGUN OLAKOYENIKAN, OLUFIKAYO OWOEYE, ISRAEL ODUBOLA & SEGUN ADAMS

TN Nigeria is bullish on the impact of its 4G+ advanced Long Term Evolution (LTE) technology with increased broadband speed which has the potential to revolutionise the way Nigerian businesses work. The telco becomes the first to upscale its network for future demand and preparation for 5G in the digital revolution. The enhanced service, aimed at delivering a premium expe-

Continues on page 38

Inside Nigeria on the verge of bankruptcy, says Sanusi P. 2

fgn bonds

Treasury bills

L-R: wife of Speaker, House of Representatives, Salamatu Gbajabiamila; Ogun State first lady, H. E. Mrs Bamidele Abiodun; Edo State first lady, H.E. Mrs Betsy Obaseki; founder/host, The Handmaidens Women in Leadership Series, Dr Siju Iluyomade; Lagos State first lady, HE. Dr. Ibijoke Sanwo-Olu; Guest speaker, Dr. Olufunmilayo Olopade, during the Handmaidens Women in Leadership Series held at Eko Hotel and Suites, Lagos, yesterday.

ising poverty imposes an oppressive weight on Nigeria as its population growth rate continues to outpace the growth rate of its economy. However, the gains achieved by some countries with similar demographic and developmental levels (as at the 1980s) point to how Africa’s largest economy could lift almost 100 million inhabitants out of poverty. Concerns on poverty levels heightened in Nigeria in May 2018 after a report by the Brookings Institution revealed that the country took the baton from India to become home to the highest number of people living in extreme poverty in the world. Continues on page 38

Wednesday 26 June 2019

BUSINESS DAY

news How Apapa gridlock could slow economic growth in 2019 ENDURANCE OKAFOR

he ability of the Nigerian economy to move at a pace faster than it has reported in the last two years may be under threat in 2019 owing to the persistent gridlock in and around Apapa, the country’s premier port city. Nigeria is losing about N20 billion daily to the avoidable Apapa traffic, the Seaport Terminal Operators Association of Nigeria (STOAN) said. “Gridlock in Apapa is causing a great loss to the Nigerian economy as the major port is located there. The gridlock is causing a great setback to businesses in the state in particular and Nigeria as a whole,” Mohammed Musa, chairman, Lagos chapter of the Road Transport Employers’ Association of Nigeria (RTEAN). A country’s Gross Domestic Product (GDP) is measured by its net export; that is, the value of a country’s total exports minus the value of its total imports. Thus, any hindrance to the flow of export and import will affect the economic growth rate.

Apapa gridlock was a challenge to the country’s economic growth in previous years. Since 2015, Nigeria’s GDP growth rate has remained below its annual population growth rate of 2.7 percent, figures from the National Bureau of Statistics (NBS) show. Asked if 2019 would be different from the previous years, Ayo Teriba, CEO of Economic Associates, asked if anything has changed. “If not, why expect 2019 to be different?” he queried. The International Monetary Fund (IMF) in January projected a 2 percent growth rate for the country in 2019, even though it has marginally revised it upward to 2.1 percent. “Apart from the time wasted as a result of the Apapa gridlock, it increases cost and this slows down the activities of the many companies located in the area,” said Ayo Akinwunmi, head of research at FSDH Merchant Bank. “This will add up to the slowdown in the economy. Of course we are beginning to see it in the result of some companies,” Akinwunmi said.

Do Nigerian airports have free, functional WiFi? FRANK ELEANYA

ong check-in hours, frequent flight cancellations and transfers have contributed to keeping passengers longer than they expect at airports. As a result, passengers have come to expect to have access to free and robust WiFi when they are at the airport. In anticipation, many passengers come along with their laptops, tablets and mobile devices and eagerly whip them out once they are inside an airport terminal. In Nigeria, there are five functional international airports, 12 airstrips and 20 local airports operated by the Federal Airports Authority of Nigeria (FAAN). The airstrips or airfields scattered across the country are mostly built by the Nigeria Air Force and multinational oil companies. Of all the airports, the Murtala Muhammed International Airport (MMIA) in Lagos and the new Nnamdi Azikiwe International Airport (NAIA) in Abuja are the only ones that have functional public WiFi that is free for a short while. “We also have free and efficient WiFi in the new international terminals in NAIA and Port Harcourt International Airport,” Henrietta Yakubu, acting general manager, corporate affairs at FAAN, told BusinessDay in a WhatsApp message.

This writer was at the Port Harcourt International Airport on Saturday and could not access the free WiFi at the airport. He was also unable to find any passenger who said they had ever used it before. He also recently tried to access the WiFi at Sam Mbakwe Airport in Owerri but could not find any that belongs to the airport or FAAN. Any frequent user of MMIA would notice the many WiFi addresses once you put on your phone, laptop or tablet. Apart from the addresses owned by the airlines, there are a few WiFis that appear free. LOS which was installed in 2015 is the only truly free WiFi at the airport. It is also the first public airport WiFi in Nigeria and a legacy project of Osita Chidoka, former minister for aviation, in collaboration with the Lagos Airport Services. While most airport WiFis across the world have extended period of time you can access them for free, users of the LOS can connect for free sessions of 20 minutes. Passengers using any of the lounges at the terminal, including the Premium Lounge, Skyway Premium Lounge, Gabfol Lounge, British Airways Lounge, and First Lounge, among others, can access it for unlimited free hours.

FACT CHECK

•Continues online at www.businessday.ng www.businessday.ng

L-R: Dalu Ajene, deputy CEO/ head IBD, RMB Nigeria; Oscar Onyema, CEO, Nigerian Stock Exchange; Okechukwu Enelamah, former minister of industry, trade and investment/ founder, ACA, and Michael Larbie, CEO, RMB Nigeria & regional head, West Africa, during RMB Nigeria’s annual Economic and Business Breakfast Conference in Lagos.

Presidency misunderstood tribunal ruling on INEC server, says Atiku … PDP accuses INEC, APC of distorting facts over server INNOCENT ODOH & OWEDE AGBAJILEKE, Abuja

residential candidate of the People’s Democratic Party (PDP) in the February 23 election, Atiku Abubakar, on Tuesday debunked the claim credited to the spokesman of the presidency to the effect that the Presidential Election Petition Tribunal ruling on Monday on the issue the Independent National Electoral Commission (INEC) server was in favour of President Muhammadu Buhari.

In a statement issued by Paul Ibe, his media adviser, the former vice president said, “Our attention has been drawn to a statement from Aso Rock Villa, wherein spokesperson for General Muhammadu Buhari praised the ruling of the Presidential Election Tribunal, which ‘rejected’ the request by the presidential candidate of the People’sDemocraticParty,Atiku Abubakar, and the People’s DemocraticParty,tocompelthe Independent National Electoral Commission to grant access to their server used for the 2019 presidential election.” The tribunal had on Monday

rejected the request by Atiku and thePDPtocompelINECtoallow themaccesstotheserverusedfor the 2019 presidential election. “After praising the socalled ‘landmark ruling’, the statement went on to claim that ‘the existence of a purported server is being contested and if a purported inspection had been allowed at this stage, it would have amounted to the determination that it indeed existed even when its existence is being contested’,” Atiku said in the statement. He noted that his response and that of the PDP is to “plead vindication of our case that

not only did Atiku Abubakar win the February 23, 2019 elections, but that the administration of General Muhammadu Buhari lacks executive temperament and capacity as we will now establish”. In a related development, the controversy over the existence or otherwise of a server in the INEC assumed a new dimension on Tuesday as the PDP accused the electoral body of colluding with the All Progressives Congress (APC) to distort facts on the matter.

•Continues online at www.businessday.ng

Nigeria on the verge of bankruptcy, says Sanusi ISRAEL ODUBOLA

ormer Central Bank of Nigeria (CBN) governor and current Emir of Kano, Muhammad Sanusi II, said Tuesday that Nigeria was close to bankruptcy as a result of adverse economic policies such as petroleum products subsidy and electricity tariffs. Speaking at the 3rd National Treasury Workshop organied by the office of the Accountant General of the Federation at Government House, Kano, Sanusi said President Muhammadu Buhari’s administration should cancel subsidy on petroleum products and electricity tariffs for the economy to be stabilised. “The country is bankrupt and we are heading to bankruptcy. What happened is that the Federal Government does pay petroleum subsidy, pays electricity tariff subsidy, and if there is rise in interest rates, Federal Government pays,” Sanusi said. “What is more life-threat-

ening than subsidy that we have to sacrifice education, health sector and infrastructure for us to have cheap petroleum?” he asked. He argued that “if truly President Buhari is fighting poverty, he should remove the risk on the national financial sector and stop the subsidy regime which is fraudulent”. President Buhari announced on June 12 that government would over the next 10 years pull 100 million Nigerians out of abject poverty. But Sanusi said that Buhari musttellNigeriansthefactabout the economic situation and also act quickly on it because the nation was already bankrupt. “Since I have decided to come here, you have to accept what I have said here. And please, if you do not want to hear the truth, never invite me. “So let us talk about the state of public finance in Nigeria. We have a number of very difficult decisions that we must make, and we should face the reality. His Excellency, the President said in

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his inaugural speech that his government would like to lift 100 million people out of poverty. It was a speech that was well received not only in this country, but the worldwide,” he said. Hedeclaredthatthenumber of people living in poverty in Nigeriawasfrightening.According to him, by 2050, 85 percent of those living in extreme poverty in the world will be from the African continent. And Nigeria and the Democratic Republic of Congo will take the lead. “Two days ago, I read that the percentage of government revenue going to debt services has risen to 70 percent. These numbers are not lying. They are public numbers. I read them in the newspapers. When you are spending 70 percent of your revenue on debt services, then you are managing 30 percent. “And then, you continue subsidizing petroleum products; and spending N1.5 trillion per annum on petroleum subsidy! And then we are subsidizing electricity tariff. And maybe,

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you have to borrow from the capital market or the Central Bank of Nigeria to service the shortfall in the electricity tariff, where is the money to pay salaries, where is the money for education, where other government projects,” he said. The royal father lamented that for 30 years, successive governments have had this project called petroleum subsidy, insisting that this is the right time to stop it so as to save the nation’s economy. Speaking during the workshop, the Accountant-General of the Federation, Ahmed Idris, noted that “the overall objective of the workshop is to promote accountability and transparency in all facets of the nation’s public finance and management architecture”. “It is expected that participants should appreciate that accountability and transparency remain major watchwords for prudent financial management practices and are, therefore, major prerequisite for economic growth and development,” he said.

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NEWS Osinbajo woos global investors in Why l dealt with Onnoghen - Buhari BEDC explains constraints on to put on agbada and see,” he power distribution to Ondo South Tony Ailemen, Abuja power, agric, other sectors said. ... says Nigeria will surprise the world in technology Tony Ailemen, Abuja

ice President Yemi Osinbajo says Nigeria remains the best place to invest given its market and enterprising population, and lists Nigeria’s power sector as one of the most viable investment platforms among others available to foreign investors. Osinbajo, who is currently visiting the United States, states this while interacting with interested investors and foreign policy experts on Nigeria’s economic prospects and related matters at the Council on Foreign Relations in New York City. With huge power generation and distribution gaps, Nigeria’s population, put at over 200 million, has continued to suffer from poor electricity supply at less than 4,000 megawatts, according to the latest statistics. Osinbajo says the potential, effort and impact being made by Nigerians in technology can enable the country roll out indigenous technology solutions that can transform the global space. Osinbajo, who states that Nigeria is opening up the power sector, says: “We are asking power firms to come in and invest in

end-to-end power supply. Power Africa - a USAID project has made a commitment of $110 million over five years (2018 – 2023) to provide transaction support to the entire value-chain covering gas supply, distribution, transmission and generation activities with our population, and a market-driven power sector, so the next few years promise exciting prospects. “This is also the case with other infrastructure. We are embarking on the largest investment in infrastructureinourhistory,welcoming privateinvestmentsinconcessions and projects, rail, roads, airports, and other infrastructure.” He discloses that Nigeria has huge prospects also existing in investments in renewable energy, energy-efficient-processes and clean technology. According to Osinbajo, “Gas had been flared for almost 60 years by major oil companies but in 2017 government approved the Nigerian Gas Flare Commercialisation Programme, designed to eliminate gas flaring through technically and commercially sustainable gas utilisation projects. The Programme offers flared gas for sale through a transparent and competitive bidding process.”

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resident Muhammadu Buhari on Tuesday explained why he “dealt” with the formerChiefJusticeoftheFederation (CJN), Walter Onnoghen, saying government found “millions of dollars, euros” in his undeclared accounts. The President, who stated this when he received the leadership of the pan-Yoruba socio-cultural group, Afenifere, at the Presidential Villa, Abuja, said, “I had to deal thoughreluctantlywiththeformer Chief Justice, because there were millionsofdollars,eurosnottotalk of naira which were not declared.” The President, who was speaking on the challenges facing the country, hinged most of the challenges on corruption and poor management of the country’s resources “Again, I don’t mind repeating myself even though I sound like a broken record, as a military head of state, I took everyone to prison and pronounced them guilty until they can prove themselves innocent. We put tribunals in all geopolitical zones and they investigated those who were in charge of government money and took all of them in prison until they explained what happened to government’s money. “Even I was detained. This is Nigeria. That was why I decided

Explaining the current approach to the fight against corruption, Buhari said “what I do is, when a person cannot justify what he has or fails to declare as the constitution specifies, some of them swear to almighty God that their property doesn’t belong to them until we show them their bank accounts and their companies then we have some peace,” Buhari added. “I wonder what sort of conscience some of us have. How can you sit and preside and lock people up for years and even l sentenced some to death and yet you are not doing what the Constitution said you should do byoccupyingthatvitalinstitution,” he said. On the issue of insecurity, the President lamented the insecurity in different parts of the country, stating that although his administration made some progress, “there are still some problems and those problems we are trying to solve them within our physical and material resources.” The Afenifere group led by Pa Ayo Fasanmi and the National leader of the All Progressive Congress APC, Bola Tinubu, had appealed to President Buhari to tackle the challenges of insecurity, education, youth employment and power supply.

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DIPO OLADEHINDE

anagement of Benin Electricity Distribution Company (BEDC) has assuredresidentsofOndoSouththat itiscommittedtoprovidingpowerto theirvariouscommunitiesprovided the Federal Government through the Transmission Company of Nigeria (TCN) addresses the present technical constraints that impede power distribution to the areas. BEDC in its reaction to complaintsbyGovernorRotimiAkeredoluofOndoStateoverlackofpower supplytosomepartsofOndoSouth appealed to the Governor to put pressuresonTCNandotherFederal Government-related institutions to create an enabling environment for BEDC to serve its customers better by addressing these technical constraints. These constraints, according to the BEDC, include: the repair of the faulty breaker on the 30MVA TCN transformer, which affected voltage to Ondo South axis causing very poor and none useful power ‘candle light.’ BEDC also called for the replacement of the unstable Ife/ Oshogbo 132KV undersized line and the recommencing/completion of the proposed 132/33KV, 2x 60MVA at Erinje in Okitipupa, which will provide capacity for up

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to 90megawatts of power when completed. “In order to have a lasting and complete solution to Ondo South electricity need as well as have a lasting solution to Ondo state general power limitations, the permanent solution is for TCN to complete the proposed 132/33KV, 2x60MVA at Erinje in Okitipupa project which has been awarded by NDDC and abandoned as well as replace the unstable Ife/ Oshogbo 132KV undersized line,” BEDC said. When this is completed, BEDC said it will be able to take the transmitted power and distribute same tocustomersinotherpartsofOndo South,butnoted“thiswillonlyserve an additional 25% of the power needs in this area. This is because the estimated total power supply needed is 47.6MW and only additional 11MW will be available from thisTCNsource,hencetherewould still be a shortfall of about 36.6MW”. BEDC said in January it collaborated with Niger Delta Power Holding Company (NDPHC) using National Independent Power Project (NIPP) to restore power supply to Ode-Aye town in Okitipupa and Igbokoda in Ilaje local governmentareaofOndoSouthby rehabilitating the distribution network in a phased manner and by bypassingmajorloadusingcenters.

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Opening a business and keeping it open (2): Information management Small Business handbook

Emeka Osuji

e had, in the previous part, discussed the importance of research in the process of creating and lunching a new enterprise. Opening a business entails a number of activities that must be carried out by the promoter of the venture. One such activity is to search for and acquisition of significant knowledge of the business and its markets. Of course, information could be obtained by several means, including hearsay. However, for very important issues like setting up a business, which may involve taking risk with scare financial resources, direct research is advised. That is why we stated previously that research into the business is the first critical step the entrepreneur needs to take as he plans to launch a business and keep it running. The essence of research is to generate data on the subject of interest, without which the entrepreneur might not be different from a pilot flying blind and not assisted by technology. Other key responsibilities, which the entrepreneur must discharge, include the discipline of putting down in black and white, all that is going on in his head as

validated by his research findings into the business. This takes the form of a Business Plan that espouses his idea and its underpinning philosophy. This has been one of the greatest challenges of the entrepreneurial class, especially at the SME level, not just in Nigeria but also in other developing countries. It is generally easier to dream up an idea, and talk about it, than to put it down in the form of a plan – a leading issue in the search for solutions to the inability of SME projects to attract requisite financial support, especially from the deposit money banks. Dreaming up a business idea and documenting it properly in a plan sets the stage for other equally important activities. The entrepreneur has to decide on the corporate stature of the business. He has to choose whether the business Is going to have a personality of its own, in which case it would be a legal person, with its own rights and responsibilities; or it will be a mere extension of the promoter’s person – a business name registration, like Success Enterprises, John and Sons, etc. Businesses with legal personality are accountable for the obligations they create and promoters are not liable for losses beyond the capital they invested in the business. These activities normally precede the choice of name and raising of capital for the take-off of the business. The sources of the capital would depend on the nature of the business. If a firm with corporate personality is contemplated, issues of shareholding and the extent of members’ liability (limiting members’ liability) have to be sorted out. Most small businesses begin with the promoter’s personal savings and family resources.

The reward for good work, they say, is more work. Having opened a business and got it off the ground running, the real challenge begins – the challenge of keeping it open. . This is the issue of sustainability. It is when a business is successful that the challenge of keeping it going dawns. To get to number one in your line of business, they say, is not the big problem. The hard part is staying on the number one spot. A major requirement in the process of keeping the company open is information. It is not expected that anyone would be at a loss as to why information is so important in the sustenance of corporate success? Risk managers will tell us that we can only control what we can measure. Everything else is uncontrollable. In a similar vein, anything about which one knows nothing, one is most likely to either ignore or at best criticise. We need information to maintain our competitive edge. It is a good piece of information to know that a competitor has entered our market. Untamed competition is one of the killers of business. Even the giants in an industry would prefer a world of their own, in which competition is either non-existent of small. When competitors arrive on our turf, we must know within the shortest possible time what product or service they are deploying. This way, we are able to plan if we are to deploy appropriate countermeasures. We must know what they are bringing to the table. If it is the same old product we have been selling, we want to know their motivation for coming in. If it is a new product, we must respond immediately, either with our own version of the new product of

‘

Businesses with legal personality are accountable for the obligations they create and promoters are not liable for losses beyond the capital they invested in the business

upgrade our technology. It is information that sharpens the so-called peripheral vision that has made and marred many corporate giants in the last few decades. Not only do we need information, we also need the capacity to interpret data made available to us. The story of Kodak and digital photography is still fresh. The two-way nature of information comes alive when we give and receive it. Not only do we need information on all possible sources of competition, we also need to give out adequate information on our products and services. Information on the company must be properly managed and every effort must be made to prevent unnecessary media crisis. 1. Step 1: Do Your Research. ... 2. Step 2: Make a Plan. ... 3. Step 3: Plan Your Finances. ... 4. Step 4: Choose a Business Structure. ... 5. Step 5: Pick and Register Your Business Name. ... 6. Step 6: Get Licenses and Permits. ... 7. Step 7: Choose Your Accounting System. • Keep abreast of the competition. Don’t assume anything about the competition such as whether it’s stronger or weaker than your company. ... • Know your product inside and out. ... • Communication is key. ... • Take care of employees. ... • Strive to be better. ... • Stay within budget. ... • Don’t be greedy. Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

The winning habits of successful forex traders Who is a forex trader? forex trader is an individual who exchanges one currency for another in the global financial market. The financial market is an over-the-counter (OTC) market, where financial instruments are traded. It is considered the largest and most liquid market in the world, with a daily turnover of over 5.6 trillion dollars. Anyone who wishes to become a successful trader is responsible for honing their skills through education and consistent practice. At FXTM, we believe educated traders are successful traders, which is why we run very detailed seminars and workshops, both at an introductory and advanced level at our offices and training centers here in Nigeria. Anyone can train to become a disciplined trader, through self-analysis to see what drives their operations and also learning from their mistakes & forex psychology. It is a fact that successful traders think and act differently. They usually have specific habits and usually follow a series of steps or patterns which guide them daily as they trade in the markets. When you start trading forex, you know that it can be very lucrative and rewarding, but this does not mean that you do not have risks, or that 100 per cent of the time you will be successful. It is important that you master the basic concepts and understand the foundations necessary to excel to become successful. Get going! To achieve what you want, you must focus on trading and make it part of your daily actions. You must also understand that behavior is an integral part of the trading process and thus your attitude and mindset should reflect the following attributes. Let’s have a look. 1. Manage your money There is not a single successful trader who does not know how to manage their money. The art of understanding money management – knowing how much you can invest and afford to risk, in addition to being able to establish the appropriate losses and thus take profits at the right time, are skills that are indispensable and

that you must acquire. You must preserve your capital always and at all costs, in order to possibly generate wealth in the long-term. 2. Manage your emotions Remember that in forex trading there is no place for emotion of any kind. If both the winners and the losers act in the same way, the operations will be executed in a more professional manner and without drastic changes. You can achieve this with calmness and dedication; for example, if you are upset because one of your trades is experiencing losses, try to take a break from the trade. You can reintegrate once you have calmed down. Avoid making any emotional decisions, as this can lead you to commit commercial mistakes and disasters that will result in losses. 3. Take advantage of demo accounts and use them until you are ready Demo accounts are usually a great way to test the waters in a place where it is not risky since you do not lose real money. This applies above all if you are a newbie and so you can try different trading platforms. But once you feel very prepared to start a live account, you may try it, and take a chance. 4. Run your winners in order to have as many benefits as possible Now, in the financial markets, there are many beginners who think that the best traders are the ones who are always right. This is a myth because in the world of trading, not everything is theory. Then, once you have found an asset in which you are good, hold on to it and learn to polish that skill. You should always learn to obtain benefits that are significant enough as this is the only way in which you can cover your losses. 5. Cut losses early By taking into account how difficult it is to be profitable in the competitive forex world, you must keep an eye on them and are willing to cut losses ahead of time, even if they are your profitable trades. This means that when the market moves against you, you should not trust that it will return soon. Of course, unless there is a signal that is clear and precise and expresses what will

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happen in the market, in that case, leave soon and go to the next, always with the hope that it might be profitable. 6. Learn from your mistakes and see them as knowledge You learn while doing it. That is why you should not allow a bad experience to truncate the path to success. It is a learning curve that would allow better decision-making in the future. 7. Find the perfect strategy and repeat It is well known that trading can be like a big battle to take money out of the market. And to be able to achieve this in the most appropriate way, you will need a repeatable and efficient strategy that works for you in the long run. The market is always changing, which means that you will sometimes need to make adjustments to your strategy. That way, you will might have more chances to win if you can find a way to make your strategy works. Don´t waste more time. 8. Separate your life habits from the trading habits It is important that you can make time and maintain a balanced lifestyle to your life outside of trading. Having a healthy and calm lifestyle requires that you take regular breaks from trading during the day. This will help you to make better trading decisions and as a result, you will have more chances of being successful. 9. Search and use methods that have been tested and you can prove it Do not believe everything you read and see on the internet, remember that it is a minefield of lies and people seeking profits on the backs of frauds. That is why you should look for a real test of the methods that are being promoted to you and verify that they really work well. This insurance process can include going with current trends, also reducing your losses, in case you are seeing a benefit, or letting go. 10. Never forget the risk / reward Do not forget that there is always a risk before a reward. The ratio of risk to reward is not going to be the same all the time, due to the fast-moving nature of the financial market. There are times when it may seem that you are failing in the trade

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ABIOLA AKINYELE with the risk you see, only so that everything can become a reward in this way. Then you can proceed to make your withdrawals and they can be about half of your returns or even less. You must pay attention and definitely not expect for every trades to produce profits every time. 11. Keep a trade journal By having a trading diary, you can keep a record of your winning positions as well as the losing ones. It is also important to also point out the characteristics that led you to that position, and be able to analyse these results. It is necessary to be very orderly in the life of a trader, since keeping a record of trades gives the trader a really objective platform and thus be able to better understand both their options and their decisions. All of these are important in order to improve the process of trading. 12. Take responsibility for your movements This habit is linked to controlling your emotions, with the difference that this time you must not just control your emotions, but that you have to accept them. You must take responsibility for each of the movements/decisions you make, and you should not blame anyone for your losses. Equally, this means no one but you gets credit for your profits. Do not invest in more than what you can afford to lose. 13. It’s not just habits that make the trader, it’s the personality too Habits are important because they form a routine for the trader and make them a person who follows certain steps that will lead him/her to their next gains. However, personality also plays one of the most important roles in being a successful trader and it is the perfect complement for these habits to work in their entirety. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

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comment The six million dollar question Character Matters with Daps

Dapo Akande

ou will never attain any goal your wilful actions continue to take you away from and nor can you ever hope to catch up with something when your every step takes you further off in the opposite direction. It is not a curse. Neither is it that profound. It is simple logic. God has handed us abiding principles by which to live but they’re just not “supernatural” enough for the average African. Anything short of an inexplicable divine intervention is not good enough. Why put yourself through the arduous task of disciplined living, a non-negotiable requirement if you wish to adhere to strict principles? The fact that they are given for our benefit, to enable us live long, useful and fulfilling lives seems to be neither here nor there to many people. Miracles we want, so miracles we must have. We seek with endless hope that which will instantly rectify and make good something we consciously ruined with our own hands. As a people we need to appreciate the basic principle that all actions have consequences and that wrong actions, no matter how much

we fast and pray, will ultimately produce adverse consequences. Right actions on the other hand are far more likely to produce desirable results. Lee Kuan Yew it was who once said, “A soft people will vote for those who promised a soft way out, when in truth there is none.” While it may be true that most of the developed nations of the world are less ardent about religion now than they used to be, it is also true that having successfully imbedded many of the principles of God over the years in the rules by which they live and generally engage life - through their national ideologies - they will continue to progress. It therefore comes as no surprise that the average life expectancy in such nations is far higher than that in recalcitrant underdeveloped nations like ours. Many reasons can be adduced to this but all spawn from the same source; God’s principles. One of which is the pursuit of the common good. Wisely, they have aligned their value system to God’s enduring principles and it shows. A government which cares enough for its people to ensure life is worth living is governing by God’s principles. A government that provides social safety nets for its people by “feeding them when they were hungry... and clothing them when they were naked”(Matthew 25:35-40) beautifully exemplifies God’s principles. Doing the right things will produce the right results and living by God’s principles of equity and social justice will reduce the manic search for instant miracles. Like someone rightly said at a program I attended

the other day, an individual who stands up in church in well run nations like Germany or the US, to give a testimony of how God just blessed him with a brand new car would almost certainly be exposing himself as a possible head case worth further examination. Not because I doubt God is the source of all good wealth but because such benefits are just the natural consequences of a nation which abides by God’s principles to uphold justice and righteousness, treat others as one would want to be treated, gives unto Caesar what belongs to Caesar(by paying one’s taxes) and loves one’s neighbour as oneself. For such a society, prosperity is altogether guaranteed. With or without the calling of seven-day fasts, endless vigils and the casting out of demons, once one has a reasonable source of income, brand new cars, timely payment of school fees and owning one’s house become a fait accompli. In such a society, they recognize that the miracle indeed abides in the principle. Prospering and breaking through in life, contrary to what many Nigerians have been made to believe by their churches, is not determined by how many services you attend a week. It is also not by how many “Givers never lack” stickers we plaster on our vehicles or how many days we fast while calling down the fire of God to consume our enemies so they can instantly “fall down and die”. If it were so, the first victims of such prayers would often be those praying them. Truth is we are our own worst enemies. That tireless enemy in the village we are ever

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An individual who stands up in church in well run nations like Germany or the US, to give a testimony of how God just blessed him with a brand new car would almost certainly be exposing himself as a possible head case worth further examination

so quick to heap all the blame on can usually be found in ourselves. If we are truly sincere in our quest to prosper both individually and as a society, then we need to begin to fully understand and then start to live by God’s principles. Prosperity responds to an enabling environment, which these principles provide. A nation where injustice reigns and religion is worn as a garb rather than a way of life is doomed to stagnate or worse, regress. Pastor Mensa Otabil, in his book, Buy The Future, rhetorically asks this very pertinent question. “Are there some things we do that make us prone to success and others we do that make us prone to failure?” All actions, good and bad have consequences. As I conclude, kindly forgive me for saying this even though I’m not in anyway exempted. I’m one who strongly believes a major reason why our country finds itself in such a sorry state is not because we don’t see the problem. We do. But unfortunately, no-one sees himself as part of the problem so we look to correct the problem “outside” when the problem is actually “inside”. We readily point to those we see as the culprits while presenting ourselves as victims or helpless onlookers at best. So now, I put the question to you: “Are our actions as a people prone to success or failure?” That’s the six million dollar question. Changing the nation...one mind at a time Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Task before the ninth National Assembly leadership

ince the inception of democracy in 1999, the National Assembly has been in a battle of supremacy between its members and the apparatchik of the party in power at the centre. The members have been locked in a battle for the selection of their leaders as a way of asserting their independence, while the party leaders have always wanted to impose their own stooges on the top echelon, as a way of ensuring there is less friction between them and the executive. This, so that the ‘dividends of democracy’ can be better delivered to the hoi polloi. In 1999, the then ruling People’s Democratic Party (PDP) wanted Late Chief Evan Enwerem as the nation’s number three man but the majority of the senators wanted the charismatic late Dr. Wilberforce Chuba Okadigbo as the National Assembly’s Chairman. There was a great altercation between the two elephants with the former carrying the day. The Presidency of Chief Olusegun Obasanjo witnessed the ascension of five Senate Presidents because of his desire to control the national legislature. The last of the Senate President’s Ken Nnamani said he had taken care of the infamous banana peel that led to the sweeping away of his ‘capable’ predecessors. It was the same story in the lower chamber, which saw the emergence of Ghali Umar Na’abba as the Speaker after the ouster of Alhaji Salisu Buhari over an age and certificate forgery scandal. The Kano born Speaker was a thorn in the flesh of Obasanjo and he was not allowed to return in 2003 when he lost the primaries in very controversial circumstances. His successor,

Alhaji Aminu Bello Masari who is the current Katsina State Governor was more pliable and gave Baba Iyabo less trouble. In 2015 when Buhari first won the presidential elections, he concealed who he wanted at the helm of the National Assembly leadership. His inauguration speech ‘I belong to everybody and I belong to nobody’ portrayed him as not willing to impose his will on the legislative arm of government. However, the party leaders insisted on Senator Ahmad Lawan and Hon Femi Gbajabiamila as its leaders. The duo of Senator Abubakar Bukola Saraki and Hon. Yakubu Dogara outsmarted the party leadership and became the helmsmen to the chagrin of the bewildered leaders. In 2019, the party leadership still insisted on Lawan and Gbajabiamila. They were determined not to repeat the mistake of 2015 with the anointed ones reaching out to the opposition PDP in order not to leave anything to chance. Gbajabiamila went as far as promising them sixty chairmanship slots. In the end victory was theirs as they both defeated Senator Ali Ndume and Hon. Umar Bago with a landslide or ‘moonslide’ as the defunct Second Republic days re-echoes. Now that Lawan and Gbajabiamila have emerged as winners, there is the need to first and foremost extricate themselves from the vicious grip of the party leadership and assert their independence. They should not allow themselves to be pawns in the hands of the party leadership by being yes men and invariably having a rubber stamp legislature. Buhari in a recent speech said that he did not have a good working relationship

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with the eight senate. This does not mean that the ninth senate should not do due compliance in the interest of the masses who elected them there in the first place. There is the need to checkmate the tyranny of the executive through adequate checks and balances which the 1999 constitution duly provides for. There is the need for the leadership to show magnanimity to their opponents who they should not regard as foes. The APC National Chairman, Comrade Adams Oshiomhole was quoted to have said that the sins of the opponents would not be forgiven so soon. There is no need for this act of vindictiveness as it is totally unnecessary. There is the need for the leaders to behave like statesmen instead. The Zulu leader, Mangosuthu Buthelezi was giving Nelson Mandela hell on earth as the Minister for Home Affairs. The veteran liberation fighter responded with tact by not only giving him more powers but making him acting president when he and Thabo Mbeki were away on an official visit. The current National Assembly leadership should disregard Oshiomhole and co-opt Ndume and Bago by giving them the chairmanship of juicy committees in order to douse the tension that the election generated. Their supporters should also not be made to feel inferior, as they should be gracious in victory. National interest should supersede petty party or personal interest. There are many issues begging for attention ranging from insecurity to unemployment, poverty as we were recently declared the poverty capital of the world and an extremely terrible image abroad as our na-

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Tony Ademiluyi tionals are treated worse than dogs there. These issues should be on the front burner and the leadership should ensure that they are given the much needed attention that they urgently deserve. There should be topmost priority given to bills that have a direct impact in the lives of the people. Views from the opposition should be heartily welcomed. This is not the time for needless petty bickering along party lines. The needs of the nation should be put first before any other considerations. The other members of the National Assembly must not follow their leaders sheepishly or merely for the sake of getting chairmanships or memberships of juicy committees. The interest of the electorate must be put first. If the leadership doesn’t act right, nothing stops them from changing them as quality representation must be top of their agenda. When the dust finally settles, posterity is the ultimate judge. Like death, nothing can be altered when it judges. There will be no public relations specialists or spin-doctors to play any mind games. It is the final and harshest judge. I hope the ninth National Assembly members pass its litmus test when it is finally time to settle scores and the chickens come home to roost. Their time starts now! Ademiluyi writes from Lagos.

Wednesday 26 June 2019

BUSINESS DAY

Editorial Publisher/CEO

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

Stop this regular national stain over players’ bonuses

hile the world celebrated outstanding displays of skill and technical depth in the game of football, Nigeria was left to contend with the continual stain on her reputation over the management of funds between administrators and players. The female national team, the Super Falcons, refused to leave their hotel on Sunday, June 23. They insisted on the payment of bonuses and claims stretching over two years. They finally left after the intervention of FIFA and missing their initial scheduled flight. Nigerian Football Federation officials wore a straight, boldface in disclaimers. They asserted that there was no cause for the uproar. The explanation ranged from a denial of any outstanding bonuses to the players, to claims of a changed payment structure for it. FIFA intervened on Sunday, June 23, by warning that it would surcharge Nigeria for any additional costs incurred over the refusal of our ladies to leave camp. Many issues arise from the post-defeat action of the team and their performance in the

Women’s World Cup, France 2019. Integrity. Accountability. Credibility. Absence of trust. Underlining the action of the players are matters of the absence of trust and failure in communication. Lack of confidence creates channel noise that leads to communication failures. The players no longer trusted the words of their officials and acted to draw global attention to the issue; they extracted a firm commitment to the resolution of the problems once they arrive in Nigeria. The Super Falcons told the world press NFF owed them bonuses from two games, against Gambia and Senegal, dating two years back. The amount involved is a miserly N2million (approximately US$5600) out of which they claim NFF paid half. They also want five days of daily allowance at the World Cup yet to be paid and a share of the participation fee for the World Cup that FIFA pays teams. NFF President Amaju Pinnick asserted that the Federation had paid all outstanding allowances. He added, “The only thing outstanding is the participation fee from FIFA, which is not expected to come until after the tournament. But they insist that they want to get paid, as

they have spoken to players from Cameroon and France, who told them they have already been paid.” The NFF in a further statement detailed what and how it paid the Super Falcons. It claimed bewilderment at the subsequent demand by the players for payment of their 30 per cent share of the participation bonus FIFA pays teams. Then it tried the patriotism and respect card, after admitting that it had yet to pay the daily allowance for the additional five days stay of the girls following qualification for the round of sixteen. NFF stated, “After the team’s exit from the tournament due to defeat by Germany, the only money the NFF has to pay the players is the extra 5 days’ daily allowance of $500 to each player for the days spent from the end of group stage to the day they played Germany in Grenoble. The daily allowance is paid only when the days are known, as we could have defeated Germany and thus stayed more days in the tournament. Accordingly, these payments will be resolved within the next business days upon return of the team to Nigeria. “In truth, the NFF is very much bewildered as to why the Super Falcons chose to embark on this

route. His Excellency, President Muhammadu Buhari took time out of his busy schedule on Saturday to call the team prior to the match against Germany to wish them luck and assure them of Government support at all times. It is our view that whatever issues they had, they should have respected the President as a person and Nigeria as an entity and resolve to have their issues, if any, settled back home”. Enough of this slur on Nigeria each time our teams go outside for tournaments. It is difficult to understand the delay that resulted in the Presidential approval coming so late that the funds are only in processing while the competitions are already on. We had four years to plan and at least two years notice once our teams qualified! Unfortunately, leaders and organisations such as the NFF lack the trust of their teams. At the bottom is systems failure where the young people do not trust the managers of the team to do right by them. The sit-in in France is the third time that the players have embarked on work-to-rule over the same monetary issues. We plead with the NFF and similar bodies to ensure it does not happen again.

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Wednesday 26 June 2019

BUSINESS DAY

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The myths and realities of the Nigerian economy Olanrewaju Rufai

sk a cross section of Nigerians if Nigeria is a rich country, and the more probable response would be in the affirmative. Not only does the typical Nigerian citizen hold the impression that Nigeria is a rich country, several eminent Nigerians and policymakers hold this belief. Here is a shocker however– Nigeria is not a rich country and does not qualify as a rich country by most acceptable measures. The “Nigeria is a rich country” myth is one of several myths, which have pervaded the psyche of Nigerians. Like other myths, it is one that needs to debunked. Myths are generally not uncommon in Nigeria. Millions of Nigerians have been regaled with the tale of a football match between Nigeria and India, which ended 100-1 in favour of India. Although the game never took place, it has remained widely popular over decades. It is therefore unsurprising that economic myths, chief of which is the “Nigeria is a rich country” myth, are also popular in Nigeria. According to the 2018 World Bank Country Classifications by Income Level report, a country needs to at-

tain the Gross National Income per capita (GNI per capita) threshold of at least $3,896 to qualify as an upper middle-income country, whereas a GNI per capita of at least $12,055 is required to be classified as a highincome country. Nigeria’s GNI per capita currently stands at $1,968, a figure which places the country firmly in the lower middle-income category, in cohort with the likes of Djibouti, Myanmar and Sri Lanka. Thus, by the commonest of globally acceptable indicators, Nigeria does not qualify as a rich country. An argument often put forward by proponents of the “Nigeria is a rich country” myth is that the country possesses vast reserves and deposits of crude oil and natural gas. However, the presence of natural resources within the borders of a nation does not automatically confer a wealthy status on such nation. Rather, such endowment indicates that a nation could potentially be wealthy if the available resources are judiciously managed. For instance, based on the fallacious premise that endowment with natural resources automatically translates into wealth, it could be argued that DR Congo is the richest country on the African continent due to the vast natural resource wealth it possesses, yet this far from reality. Therefore, while it is incontrovertible that Nigeria is resource rich, poor leadership and mismanagement of these resources have conspired to ensure that the nation remains a poor underachiever. To state the obvious, when majority of a nation’s citizens survive on less than $2 daily, and that same nation has recently been adjudged the poverty capital

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Nigeria’s GNI per capita currently stands at $1,968, a figure which places the country firmly in the lower middleincome category, in cohort with the likes of Djibouti, Myanmar and Sri Lanka. Thus, by the commonest of globally acceptable indicators, Nigeria does not qualify as a rich country

of the world, such nation can in no circumstance be regarded as rich. Another popular myth engrained in the psyche of Nigerians is that “Nigeria is an import dependent nation”. Several Nigerians, including President Muhammadu Buhari have alluded to this. Yet, nothing could be farther from the truth. The reality is that Nigeria has one of the lowest import to GDP ratios in the world at 13 per cent, even behind countries like Pakistan (18 per cent), and Ethiopia (19 per cent). In fact, the total value of goods imported into Nigeria in 2018 was $36.5 billion, which translates into about $200 for every Nigerian citizen. Nevertheless, this mythical belief that Nigeria is import dependent has been the bedrock of several official government policies, including the CBN’s exchange rate policy, as well the incessant bans on importation of various products. A consequence of accepting myths as reality is that official policies tend to be built around them, and such policies often exacerbate the problems they were created to resolve. For instance, in order to correct Nigeria’s inexistent import dependence, the government often places bans on imported products. However, over the years in Nigeria, importation bans have not had the desired effect of stimulating demand for local products. Instead, these bans in Nigeria tend to result in hikes in the prices of basic products, which further entrench poverty, as well as smuggling, which results in loss of government income in the form of custom duties. Basically, while economic myths might seem harmless on the surface, their conse-

quences tend to be far-reaching and significant, particularly if they lead to wrongly formulated government policies. Nigerians also tend to believe that public goods such as stable electricity and quality education can be provided free or obtained cheaply. Unfortunately, this is also inherently false as there is no such thing as a free lunch. The consequences of our belief in the myth that public goods can be provided for all free of charge are evident for all to see in the forms of the nation’s dilapidated infrastructure, substandard education system, and general underdevelopment. Overall, mythical beliefs held to be true by millions of Nigerians about the economy, and the policies often formulated based on them might seem harmless on the surface but tend to have dire consequences for the nation’s economy. If Nigeria is to depart the path of underdevelopment it currently treads and attain its position in the upper echelon of nations, there is a need to disabuse Nigerians of the various economic myths peddled around. In particular, there is a need to educate Nigerian policymakers on the effects of formulating official policies on hearsay, wishful thinking and bogus statistics. Other wise, we will continue to wallow in underdevelopment brought about by self-deceit. Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Public Private Partnership: Clustering small projects can boost regional prosperity in Nigeria

rivate participation in infrastructure is arguably the most reliable approach for alternative infrastructure financing; hence, the upsurge on government collaboration with the private sector to procure public infrastructures through Public Private Partnership (PPP). While attracting private investors to participate in infrastructure procurement has become notably demanding for frontier markets for reasons well-known, different suggestions have been put forward as the right avenue to gain investors’ confidence. One such advice underscored the need for Government to look more closely at their activities and strengthen drivers deterring private investments. Though the private sector can help make markets more efficient, it is the Government that provides the structure in which the markets work and the private sector willing to participate. As aforementioned, the focus is on how frontier markets, in desperate need of infrastructure and GDP growth, can capitalise on the opportunity investment in infrastructure provision to spur regional economic prosperity. To do this, the article supports developing appropriate structural strategies to strengthen the chances of those infrastructures –– critical to the growth of frontier markets –– but are not attractive to investors due to doubt on bankability issues. Structuring, in this context, connotes various strategies and measures Government can utilise to promote regional infrastructure to be attractive to investors for procurement through PPP. This area of discussion

has remained vastly unexplored in research because of limited standard practices or governance design that can fit into frontier market structures, methods and objectives. Nigeria, with its six geopolitical regions, is not left out of this challenge. Even though the country achieved modest economic growth since 1999 when democratic governance returned after a decade and half of the military rule; its potential to achieve higher growth is limited by lack of adequate economic and social infrastructure; especially in states outside the economic and administrative capitals of Lagos and Abuja respectively. Although, the Government is already determined to use PPP model to augment public sector procurements and has shown enough political commitment albeit rhetorically; attracting private capital to develop, upgrade and maintain its ageing large-scale infrastructures, in order to stimulate national economy requires more than rhetorical commitment. It requires establishing appropriate capacities, institutional settings and relevant regulatory frameworks. Of central concern in Nigeria’s regions is the fragmentation of the market with various small projects lined up for PPP adoption in multiple states with different governance structures. Admittedly, this experience is not limited to Nigeria alone as various developing countries within the frontier market in sub-Saharan Africa, the Middle East and Northern Africa and South-East Asia experience absence of uniformity of approach and governance structure. For positive results, it is recommended

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that the Federal Government re-structure the PPP settings and embrace uniformity of governance structure as well as develop a regional level approach that mandates regional or provincial clustering of all small projects within the region targeted towards PPP procurement. This will ensure all small infrastructures in one family unable to attract investors independently are grouped as a single large project to improve its chances of attracting investors and optimising good project investment. The idea is similar to bundling procurement –– not the prevailing bundling project stages. The core promises of this clustering would enable the realisation of economies of scale, the expansion of infrastructure development in neglected regions and stimulate regional economic growth. This is exemplified in the work undertaken by the author and his team of local PPP advisors, with interest in developing regional infrastructures in Nigeria. They met with few state governors’ representative in South-East region of Nigeria at the 3rd Southeast Economic Summit in December 2018 to discuss the potential benefits of regional clustering. Although, the state governors thought that the projects be executed within their respective states and not across the region due to their diverse PPP governance structures. Being practical, the team explained to the governors that PPP is a costly procurement option for small projects. Subsequently, we recommended that the state governments within the region come together and consider integrated transport infrastructure projects that will cut across all state capitals

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J. C. ANAGO and market hubs in the area, as investors would find such projects large and attractive due to its potential to meet required traffic demand that can optimise the return of good investment. Understandably, this approach has its demerits, such as other states economic infrastructure needs being at variance with that of the project originating State, multidimensional governance structures and reluctance to provide equity contribution in extreme scenarios. Providing a wellstructured clustering solution to regional infrastructures is an innovative strategy likely to produce higher numbers of PPP modelled projects and solve the severe shortage of economic infrastructure in the region to boost regional economic growth through infrastructure investment. Currently, the team is on the verge of setting up the South-East Council for PublicPrivate Partnerships (SECPPP) to oversee the structuring of this regional clustering of small projects, harmonise the governance structures and present to South-East Governors by March 2020. Subsequently, we plan to initiate a similar approach in all other geographical zones in Nigeria if the Government at the centre and regions show commitment and political support. Anago is a UK-trained PPP expert and a lecturer in Banking and Finance Department, University of Nigeria, Enugu Campus.

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Wednesday 26 June 2019

BUSINESS DAY

cityfile Group hails Buhari on distribution of seized goods to orphanages SIKIRAt SHEHU, Ilorin

L-R: James Odunmbaku, founder, James Omolaja Odunmbaku Foundation (JOOF); Saju George, Endodontist, University of Pennsylvania; Olumide Olayomi, coordinator, JOOF, with beneficiary, Nurudeen Segun, during the flag off of 4th free medical mission from USA on Cardiovascular and Dental Health sponsored by James Omolaja Odunmbaku Foundation (JOOF), in Ojodu LCDA Lagos on Monday.

Insecurity: Nigerians resorting to self-help – Arewa group Abdulwaheed Olayinka Adubi, Kaduna

group, Arewa Research and Development Projects, (ARDP), has decried increasing cases of killings, banditry and kidnapping in different parts of the country, saying the situation was forcing Nigerians to resort to self-help. The group also lamented that the Boko Haram insurgency has led to heavy casualties in many military formations in the north while hundreds are being forced to flee their homes daily. At a news conference titled: ‘the northern security’,

in Kaduna, Monday, the convenor, Usman Bugaje said assurances by the security agencies have become increasingly hollow, although he acknowledged the military has been overstretched with the deployment of soldiers in over 30 states in the fight against insecurity. According to him, the insecurity situation in the country is today the biggest single issue that faces the nation. “The security challenges is one issue that has over time continued to worsen and it is one issue that is about to ground the whole country. The one decade Boko Haram insurgency has sapped the human and material resources of the

federal and state governments and has yet remained protracted.” According to Bugaje, what started off as ‘localised rural banditry’ has now spread over the country, particularly the north, taking heavy tolls and displacing an increasing number of citizens. He decried ‘kidnapping for ransom’ which, according to him, has become an industry, even as ethnoreligious crises and the farmer-harder conflicts are not abating. “This means that various communities are securing their own weapons and organising their defences. This creates a whole new dimension to the security crisis,

for it leads to further proliferation of small arms among citizens and irredeemably leads to anarchy. Once anarchy sets in, it leads to total breakdown of law and order and as with other Africa countries it takes a whole generation to recover. “We therefore believe that the efforts of the security agencies need to be boosted by a robust and coordinated community support.” Against this background, Bugaje said the group has started consultations on how to overcome the security challenges. “Investigation is ongoing to unravel the circumstances surrounding their death,” Elkana said.

along Amikanle area, Alagbado. Four locally made rifles and 38 rounds of live cartridges were recovered from the bus. The suspect, an indigene of Ogun State, allegedly belongs to a gang of land grabbers and hired killers, terrorising Ogun andLagosstates.Membersofthe gang,itwaslearnt,actaswarlords, waiting to be hired by anyone who can pay for their services to take over lands by force. They engaged in series of killings and maiming of land owners. The suspect, the police added, claimed they were hired by someone to dislodge land owners at Epe and that he was on his way to pick the other members of the gang for the operation before he was arrested.

Elkana said that the police were on the trail of five other members of the gang who are still at large. In another development, the police are currently investigating the case of a 56-year man who was found dead with his mistress in his sitting room at his Ejigbo residence. Elkana said one Akorede Balogun (female) of Area 2, Igbehindun Estate, New Heaven, Iba, reported at Iba police station that her husband, one Rasaki Balogun of who resided in Victory Estate, Ejigbo, was found dead with his mistress in his sitting room. “A team of detectives led by the divisional police officer, Ejigbo, visited the scene. The

corpses of the man and his mistress were found in the pool of their blood with the woman laying on a knife. “The man is said to be living alone in the house, while his family lives in a different place. Identity of the mistress is yet to be established as he was said to have picked her about two days to the incident from unknown location. “The crime scene was sealed off for forensic analysis, while the corpses were evacuated to hospital for autopsy. Homicide detectives from the State Criminal Investigation Department (SCID), Yaba, have taken over the case on the instruction of the state Commissioner of Police (CP), Zubairu Muazu.

slamic orphanage foundation in Ilorin has applauded President Muhammadu Buhari for the directive to the Nigeria Customs Services (NCS) to be distributing seized items, especially foods and clothing materials to the registered orphanage in the country. Shefullahi Alege, the foundation chairman, who acknowledged the receipt of the gesture by Islamic orphanage foundation, appealed to the wealthy people in the society to come to their aid in putting smiles on the faces of orphans and make life meaningful for them. He spoke yesterday in Ilorin, the state capital at the annual orphanage foundation day, a period set aside to give succour to identified orphans that had went through training in a specific handiwork sponsored by the foundation. According to Alege, the annual orphanage day is a forum meant for rendering our stewardship about orphans in our care, financial situation of Islamic

NSCDC appeals to Tabara warring communities

T Police arrest land grabber with ammunition in Lagos JOSHUA BASSEY

he police in Lagos have arrested one Ojo Adesola, a suspected land grabber, with four locally made rifles and 38 rounds of live cartridges at Alagbado area of Lagos. Spokesperson of the state police command, Bala Elkana, who confirmed the arrest to newsmen, said the suspect was arrested on June 21 at about 7.00 a.m. following intelligence information. “The surveillance patrol team from Alagbado police station arrested Ojo Adesola, 45. The suspect was flagged down by the surveillance team while conveying arms in a white bus

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orphanage foundation and to intimate you with challenges and how to forge ahead. The foundation gave total numbers of two hundred and seventy six orphans under their care presently while one hundred and seventy nine of them are in primary and post primary skills acquisition centres, eighty four are in various higher institutions in the country while thirteen of them just graduated in 2018. The chairman identified funding as the major challenge confronting the foundation, making it difficult for them to effectively take care of the children’s needs especially paying school fees, maintenance of office, staff and accommodations. “Our centre if completed will be of assistance to the Foundation in terms of source of fund as well as proper training of our children. We therefore appeal for assistance of individual or bodies within or outside Nigeria for the completion of the centre as work has been suspended at the site for the past 3 years”.

he Nigeria Security and Civil Defence Corps (NS CD C ) has urged the warring communities in Taraba State to embrace peace. Aliyu Ndanusa, state commandant of the agency in Tabara, who gave the advice, said even though the command has deployed security agents in the troubled spots, there was need for the people to sheath their swords for lasting peace to take place. ‘‘All over the world, peaceful co-existence is the foundation for development,’’ he said. Ndanusa commended the state governor, Darius @Businessdayng

Ishaku for the enabling environment provided for the security operatives in the affected areas. Recall that the recent crisis in communities in Ardo Kola and Jalingo led to a curfew in Jalingo which is currently running from 6 p.m. to 6 a.m. daily. The commandant, however, said there were still pockets of crises between the Jukun and Tiv communities in Southern Taraba which he said had lingered for more than two months. Ndanusa appealed to the people to always feel free to provide accurate and timely information to security operatives.

Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

COMPANIES & MARKETS

PwC to drive technological advancement, establishes Experience Centre in Nigeria

COMPANY NEWS ANALYSIS INSIGHT

Pg. 18

Industrial Goods

Nigerian cement makers improve efficiency in Q1 amid slow growth ISRAEL ODUBOLA

igerian cement makers showed improved efficiency in first quarter of the current year despite feeling the pangs of a slowing economy, which has grown less than 1 percent on average in the last four years. Analysis of the first quarter earnings reports of Nigerian-listed cement producers, Dangote Cement Plc, Cement Company of Northern Nigeria (CCNN) Plc and Lafarge Africa Plc, showed betterment in key efficiency indicators namely return on assets, return on equity, asset turnover, cost margin and operating margin. The said companies showed improvement in converting each naira invested in total assets to higher profit as the industry’s return on asset (ROA), the ratio of net income to total assets, increased to 1.67 percent in the review quarter, 0.27 percent points higher than 1.40 percent recorded in the previous corresponding quarter. This connotes that for every thousand naira dissipated to assets, cement makers realized N167 as profit in first quarter, N27 more

than N140 generated a year ago. Nigeria’s most-capitalized firm, Dangote Cement, led the pack with ROA figure of 3.46 percent in the review quarter, compared to CCNN (1.01%) and Lafarge (0.53%). Lafarge Africa showed most improvement on this basis as its ROA figure moved from -0.37 percent a year ago to 0.53 percent in the review quarter. CCNN also jerked up from 0.31 percent to 1.01 percent, while Dangote Cement dipped marginally by 0.8 percent. A company can be financed either through debt or owners’ equity. Shareholders’ equity represents the amount of financing the company get through ordinary and preferred shares. Investors consider a return on equity to gauge a company’s ability to utilize

owners’ fund for profit generation. Return on equity (ROE) of the cement industry jumped 72 basis points to 2.74 percent in the review quarter from 2.05 percent in the previous corresponding quarter, with Dangote Cement (5.76%) leading peers, trailed by Lafarge (1.4%) and CCNN (1.08%). This implies for every thousand naira of owners’ funds in the industry, cement makers generate an average profit of N274 in three months to March 2019, N72 more than N205 last year. While CCNN and Lafarge’s ROE increased by 0.75 percent and 2.89 percent respectively, Dangote Cement slumped by 1.55 percent given a 16 percent contraction in its bottom-line and 6.1 percent appreciation in total equity. Further analysis into the ce-

ment maker’s balance sheet revealed that the capital structure of CCNN (94%) and Dangote Cement (60%) are majorly by financed by equity, while debt account for 62 percent in Lafarge’s capital ownership. Meanwhile, the industry’s asset turnover, which measures how much a firm generates as revenue from every thousand naira invested in assets, increased to 10.55 percent in the review quarter, from 10.25 percent in the previous period, championed by CCNN as it is the only firm to record positive growth in revenue in the review quarter. While CCNN tripled the amount generated as revenue from N155 to N471 from each thousand naira invested in total assets, Dangote Cement and La-

farge dipped 0.5 percent and 1.8 percent respectively. The industry players bettered operational profitability in the review quarter given the ample reduction in cost margin to 57.58 percent from 58.64 percent. Cost margin indicates the portion of each revenue naira expended on direct production of goods and services. Lafarge’s production cost accounted for 76.84 percent in revenue in 2018, the highest in the industry, albeit an improvement from 77.68 percent reported in the previous year. CCNN also saw cost margin improved from 58.04 percent to 54.47 percent in the review quarter, while Dangote Cement emerged the most efficient with 41.42 percent cost margin figure. The cement industry expanded at faster pace than the broader economy prior to recession-tainted year in 2016. The sector which mirrors growth in the broader economy, contracted 5.4 percent and 2.2 percent in 2016 and 2017 respectively, and rebounded to 4.6 in 2018, but growth has remained underwhelming compared to prerecession levels. The cement sector grew 2.4 percent in Q1 2019, according to the National Bureau of Statistics.

FINANCIAL SERVICES

NPF Microfinance’s profit shrinks to 5-year low, shows sluggish start to 2019 SEGUN ADAMS

PF Microfinance has started 2019 on a weak foot and would need to avoid the slowdown in momentum which saw its bottom-line slide to a 5 year low in 2018, earnings results from the micro-lender show. Formerly NPF Community Bank Ltd, the Microfinance bank had some difficulty in keeping its impairments and expenses under reins in 2018 and saw its bottom-line dwindle, even though its full-year gross earnings for 2018 is currently at a 5-year high. Q1 2019 figures show similar difficulties with impairment losses. NPF reported that its pared profit in 2018 by 69 percent to N195.75 million, although it had grown bottom-line for three straight years, while the company’s Q1 2019 figures show a profit decline of 6.8 percent to N194.34 million. In 2018 NPF had a strong start to the year, growing

profit by 7 percent in the first quarter of the year but lost steam as 2018 progressed. The Microfinance bank recorded a 96 percent plunge in profit, year-onyear, from N239 million to N10 million in Q3 2018 which ultimately affected its full-year result. For Q1 2019, the microlender posted revenue of N972 million, some 5 percent more than it had recorded in the same period of 2017. In the quarter NPF’s interest expenses rose faster than interest income at 32 percent compared to 6.9, resulting in a net increase of Net interest income by 2.6 percent to N598 million. NPF was unable to increase its revenue from fees and commission in the quarter as figures dipped by 8 percent, but saw an increase of about 27 percent in other income. Consequently, net operating income saw an uptick of 1.34 percent to N840 million in Q1 2019. While revenue dragged, expenses rose by 4.1 percent to N645.62 million owing

to a 58 percent surge in the company’s net impairment loss on financial assets, and a 22 percent rise in depreciation. Profit before tax in the quarter dropped by 6.79

percent to N194.35 million, and resulting in a reduction of the company’s earnings per share from N9 in Q1 2018 to N8 in 2017. Shares of NPF Microfinance Bank fell by 7.69 per-

cent on Monday to N1.2 per share after it had remained flat at N1.3 per share for seven trading sessions. NPF Microfinance Bank Plc was incorporated on the 19th May 1993 as a Limited

Liability company. The bank provides Banking services to both serving and Retired Officers and men of Nigeria Police Force, its ancillary institution and general banking public.

L-R: Oluwakemi Michael-Jabagun, public affairs and communications manager (Lagos/West) Nigerian Bottling Company (NBC) Limited; Olatomiwa Akande, external communications manager, Nigerian Bottling Company (NBC) Limited; Ifeoma Okoye, sustainability and community affairs manager, Nigerian Bottling Company (NBC) Limited; Ekuma Eze, public affairs and communications director, Nigerian Bottling Company (NBC) Limited; Nwamaka Onyemelukwe, public affairs and communications manager, Coca-Cola Nigeria, and Tokunbo Ibrahim, government and regulatory affairs manager, Nigerian Bottling Company (NBC) Limited, at a media parley held to launch the maiden edition of NBC’s Sustainability Report in Lagos.

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

Wednesday 26 June 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Technology

PwC to drive technological advancement, establishes Experience Centre in Nigeria

...Osinbajo, Sanwo-Olu, Ovia others makes case for technology adoption DAVID IBIDAPO

riceWaterhouse Coopers (PwC), a giant in the consultancy industry in a bid to improve its services and drive technological advancement across Africa has established an experience center with state of the art equipment in Lagos, the first of its kind among other consulting firms. While analysts have reiterated over the years the effect of technology in driving growth, Nigeria still seem to depend largely on proceeds from the oil and gas sector of the economy to drive growth. Speaking at the unveiling of PwC’s newest Experience Centre in Lagos, Nigeria’s Vice President, Yemi Osinbajo stated that Nigeria needs to diversify from the oil and gas sector and join the trend

of digitalization adding that Nigeria’s economic breakthrough would be driven by technological innovation not oil and gas. Osinbajo, who was represented by the Director-General of the Budget Office, Ben Akabueze, said the center is in line with the present administration’s plan to improve the ease of doing business, transform the economy and boost technology adoption. “The PwC Experience Centre is in line with the smart technology initiative of the government. As an administration, we recognize that Nigeria’s future does not lie in oil and gas but more in technology and innovation. This is anchored on moving the economy away from a resource-based to a peoplebased model. We must take this seriously going forward,”

Osinbajo said. Also present was Babajide Sanwo-Olu, Governor of Lagos state who commended the move of PwC towards technological advancement. “I think the PwC initiative is the way to go. It is in line with what Lagos state government is doing to boost the economy. I encourage other companies to see it as a challenge and begin to tap into the opportunities the government is creating” Sanwo-Olu said. Also, Sanwo-Olu, who took out time to experiment with the virtual reality solution of the center, stated that the center reflects the state government’s plan to transform the city’s economy with smart solutions. He charged other corporate entities to take a cue from PwC and take advantage of the government’s technology agenda.

L-R: Dianabasi Akpainyang, director of alumni affairs; Regina Inem, director of external affairs; Abimbola Olashore, chairman board of governors; Taiwo Olashore, vice chairman, board of governors, and Ayo Ogundele, brand manager, all of Olashore International School, during the schools 25th Anniversary lecture and Gala Night press conference in Lagos.

Industrial Goods

Julius Berger grows net income 59 percent in 2018, proposes N2.64bn pay-out HARRISON EDEH

ulius Berger Nigeria Plc has recommended a dividend of N2.00 per 50 Kobo Ordinary share, resulting in a total gross dividend pay-out of N2.64 billion. Confirming the company’s stance ‎at the Annual General Meeting on last Thursday, Mutiu Summonu, Chairman, Board of Directors told shareholders that the company The company’s net income or profit after tax surged 59 percent to N6.1 billion in 2018, compared to N2.5 billion in the previous year. Last year, the company’s

subsidiaries have also shown marked progress. Most notably Julius Berger Services Nigeria Limited saw a tremendous positive improvement, with a 75% increase in port operations considering the number of vessels serviced. Summonu at the meeting also attributed the advancement of the company ‎to a proactive strategic approach to project acquisitions. “Although the construction industry was still sluggist in 2018,Julius Berger Nigeria PLC could advance its project portfolio by means of a proactive and strategic approach to project acquisitions.”Summonu said.

Speaking further, “In the year under review, the company succeeded in securing significant public and private sector projects including the Main contract for second River Niger Bridge in Asaba/Onitsha and Abuja-Kano road, on which innovative Cold recycling Methodology is being implemented for the first time in Nigeria” Some of the Shareholders who spoke ‎at the Annual General Meeting lauded the effort of the company in job creation; this is even as they called on the federal and state governments to ensure consistent support for the company.

L-R: Tosin Adefeko, managing partner, AT3 Resources Limited; Udeme Onofiok Ufot, group managing director, SO&U Group; Austin Okere, founder, Ausso Leadership Academy (ALA), and Theresa Adeyinka, commercial director, Signal Alliance Limited, at the Ausso Leadership Academy Masterclass which held in Lagos.

Safety

Experts urge organisations to imbibe safety as a culture JOSEPHINE OKOJIE

xperts have urged organisations to imbibe safety as a culture in order to eliminate major risks that expose employees to dangers in the workplace. The experts who spoke at a Work Place Safety Summit held in Lagos recently, said that safety is all about prevention and doing the right thing at the right time to save lives. “Safety is like a school that contributes and it should be a culture which organisations should imbibe. The more we see ourselves as people who are practitioners; safety then becomes a culture that lives in us,” said Hakeem Olaogun Dickson, director general and CEO, Lagos State Safety Commission (LSC).

Dickson stated that compliance from organisations in Lagos state has continued to increase and its now at about 54 percent while awareness of safety measures is 60 percent. “We are well accredited with other countries both in Europe and America to learn from their experiences on what they are doing right and what we can learn to get to their level in terms of safety, bearing in mind that our cultures are different,” he said. He noted that much more will be achieved in the state in terms of compliance once the occupational health and safety policy is signed into law by the governor. Also, speaking at the summit, Lola Adetona, chairman, Nigeria Institute of Civil Engineer said engineers are more exposed to

major risks in the workplace than other professionals, while calling on organisations to make workplace safety a priority. “Organisations should have standard safety procedures written clear and boldly for employees to know how to address emergencies,” Adetona said. “It is important that the workplace knows what the safety law says and it should be a top priority for every organisation,” she further said. She called on individuals to be conscious of their environment and be a safety change agent. Adetona appreciated the Lagos state safety agency for ensuring compliance in safety standards especially in the construction of buildings in the state.

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L-R: Bhushan Akshikar, outgoing MD; Kunle Oyelana, new MD both of GSK Nigeria Plc; Sam Ohuabunwa, president, Pharmaceutical Society of Nigeria; Ejiro Foyibo, deputy president, South, and Adefolake Adeniyi, national treasurer, PSN, during a courtesy visit to GSK recently.

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Wednesday 26 June 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

Political, economic uncertainties weigh down on capital raised by African issuers ...capital declines 28% to $341 Mln in H1 2019 MICHAEL ANI

he total amount of capital raised by African issuers in the first half (H1) of the year declined 28 percent to $341m compared with the $472m raised the same period in 2018, The decline is attributed to the 80 percent drop in domestic capital raising in Africa standing at only $85m from four Initial Public Offerings (IPOs), compared with $419m from the same number of IPOs in H1 2018, according to data tracked by Chicago-based law firm, Baker McKenzie. “The drop in African IPO values in H12019 was mostly because of political and economic uncertainty on the continent. Investors wanting to raise capital in Africa are thinking twice and waiting for political and economic stability to return before going ahead.” Wildu du Plessis, Head of Capital Markets at Baker McKenzie in Johannesburg, said “Also eroding investor confidence in Africa are the escalating global trade tensions, which have culminated in, for example, the

so-called United States (US) China trade wars and the possibility of a “no deal Brexit” – both have the potential to impact African economies significantly.” The report compiles latest Cross-Border IPO Index for H1 2019 using data sourced from Refinitiv. According to the Index, the largest IPO to come out of the region so far in 2019 is Carbon Holdings, which is expected to raise as much as $250m in London and Egypt sometime in June. Egypt is generating buzz around its pipeline of IPOs with some speculating this could be the busiest year for listings in Cairo since the uprising in 2011. Growing confidence in economic policies introduced since the currency float has boosted the EGX and is prompting companies to consider share sales. One large pipeline IPO is expected from Banque du Caire SAE in Q3 2019. According to Du Plessis, in South Africa, capital raising has decreased substantially in recent years, due mainly to economic and political uncertainty.

“Political stability will hopefully begin to return now that country’s elections are over, but there is still a lot of work to do to stabilise the economy. The World Bank recently downgraded South Africa’s growth rates and I think there is at least another year of hard work before the economy starts to recuperate and capital markets in South Africa recover,” Du Plessis said. “However, there is good news in other jurisdictions in Africa. In addition to the healthy pipeline of IPOs in Egypt, there are also signs of life returning to Nigeria’s capital markets. Political instability was also to blame for a big collapse in capital raising in Nigeria in recent years, but the country looks to be recovering and, according to Baker McKenzie’s recent Global Transactions Forecast, there is a predicted return of IPOs in Nigeria in the next three years.” “A case in point, Airtel Africa announced recently that it is seeking to raise as much as $750m in London and Nigeria, but the company has yet to release more information about when it plans to go public this year. “Hopefully this is the start of a long up-

swing in capital raising activity in the country,” said Du Plessis. The top cross-border IPOs by African issuers were South African company Renergen Limited’s listing in Australia, which raised $7m; and Egyptian company Carbon Holding’s pipeline dual listing in London and Egypt, which is expected to raise $250m. Both of these cross-border IPOs are in the energy and power sector. In terms of domestic IPOs, technology company BMIT Technologies PLC raised $55m when it listed in Malta, real estate company ICON Properties PLC’s listing in Malawi raised $20m, industrial company Skyway Aviation Handling Co raised $6m when it listed in Nigeria and healthcare company Speed Medical SAE raised $3m in a domestic IPO in Egypt. A major deal that is excluded from African figures is Jumia Technologies’ debut on the NYSE, which raised $225m in April. Jumia is a pan-African e-commerce startup but its parent company, Jumia Group, is incorporated in Germany, so it is not included in the Africa report.

Egyptian transportation startup ‘Swvl’ eyes Nigerian market raises $42 Mln MICHAEL ANI

wvl, an Egyptian-based transportation startup company, has raised $42 million in fresh Series B-2 funds and is eying to enter the Nigerian market next month. The funding would give the online transportation firm the right footing to compete with its main rival, Uber by deepening further its operations in the African continent. “We see a huge opportunity in Africa and we are planning to launch our services across the continent. This year we will start in at least two to three countries. Also, we will expand aggressively in Egypt in the next three months, by focusing on increas-

ing users by adding more buses, timings,” Mostafa Kandil, Co-founder and CEO of the firm said. The deal was led by a consortium of investors including Swedish VC Vostok Ventures and Dubai-based BECO Capital, with China’s MSA, US-based Endeavor Catalyst, Oman’s OTF Jasoor Ventures, Egypt’s Sawari Ventures, Kuwait’s Arzan VC, Dubai-based Blustone, San Francisco-based Autotech, and Property Finder’s CEO Michael Lahyani joining in. The investment comes almost seven months after Swvl announced its tens of millions of dollar of Series B at a valuation close to $100 million. Started just two years ago, Swvl has now

raised close to $80 million so far which makes it one of the best-funded startups in the region. The firm was founded in early 2017 by Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh, and is currently available in Cairo, Alexandria, and Nairobi. Swvl was one of the first startups in the region to introduce app-based mass-transportation but now it faces competition from Uber & Careem; both of which launched a similar service in Cairo last year. Careem, which is being acquired by Uber, has since expanded Careem Bus to Alexandria and Saudi as well. The startup connects commuters with private buses, allowing them to reserve seats

on these buses and pay the fare through company’s mobile app. The buses available on Swvl operate on fixed routes (or lines). Swvl does not own the buses or employs the drivers but has signed differnet partnerships to help drivers and operators with financing of the vehicles. The company has recently also partnered with Ford to have its operators use Ford Transit minibus as preferred vehicle of choice. Swvl currently operates in Alexandria and Nairobi in Kenya. It has close to 320 employees and aims to create more jobs as well by scaling up the numbers.”This year we will expand our team aggressively and will have a team of around 500 employees by end of the year,” Mostafa said.

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

Email the PE & F team loladeakinmurele@gmail.com

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Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

TRANSPORTATION Motoring

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Roads

Motoring

Yutong buses debuts to enhance commuters comfort …As Kojo Motors premiers multiple coomercial range MIKE OCHONMA Transport Editor

igeria’s domestic and cross-border passengers, transporter operators, corporate fllet owners and commuters are in for comfortable and stress-free travelling experience and good returns on their investment with the presentation of the latest Yutong range of commercial passenger buses on the roads. This follows the recent premiere and public presentation of Yutong range of commercial buses which Kojo Motors Limited, sole franchise owners and assemblers of the brand say is suitable for use by transport operators, corporate fleet operators, schools, churches and other blue chip organisations. Yutong’s luxury bus model range public reveal which comes in diverse configurations, also witnessed the presentation of awards to Kojo customers and localisation of the world premiere of the Yutong 14 meter long luxury bus that has been fortified with Mercedes-Benz powertrain, double rear axle. These buses which have been customised for the African region and presented to an enthusiastic audience that defied the early morning rain to gather at the Civic Centre, Victoria Island, Lagosa according to Chinedu Oguegbu, executive director, Kojo Motors Limited also has the new 14 meters long commercial bus leading other Yutong super luxury model on display which is being launched for the first time is positioned to benchmark any competitor in the segment. Apart from the 14 meter T139HDH premiere during the day, some of the Yutong range of buses on display during the day includes the 7 meter, 25 seater city bus ZK6729D and DG city bus versions that

comes with more space and the ZK6858h, 33 and 35 seats upgraded coaches respectively. The advantage of some of the buses is that it fits perfectly into the BRT lanes in some of the megacities like Lagos. The 7 meters bus version is good for schools and church logistics needs and shuttles. There is also the 8 meter bus models which in terms of seating capacity is about half of the 14 meters bus range that carry’s 33 passengers with luggage compartment. The Kojo executive director disclosed that, both the 14 meter high capacity luxury passenger bus and other model line-up comes equipped with more re-inforced tonnage to carry more of customers and traders luggages who would want to go back the same day. It is also strengthened with double rear axle which are are the critical key requirement for the local market considering the bad conditions of the Nigerian roads. According to him, rather than taking a high acapcity bus, operators have the choice of buying the

small and medium range buses in case, there are fewer passengers and luggages to carry especially for interstate shorter distances like Benin and Onitsha. The executive director said that the buses can travel up to 1000 kilometers without any breakdown, even as passenger has the opportunity to travel in safety and comfort with all the facilities for entertainment and powerful airconditioning system. They are very durable and designed for Nigerian roads. Among the unique selling points of the new Yutong buses is the durability which places the Chinese bus maker as among the top manufacturers in the world that does not compromise in spending huge resources in the development of their buses in terms of craftsmanship and engineering proficiency. Yutong is no longer competing in the Chinese market; rather, they are at par with other established European brands. In terms of interpretation of the latest technology such as artificial

intelligence into the brand, Chinedu Oguegbu maintained that, some of buses is equipped with drive recorders some of which have cameras and other additional features which the both the transport companies and the travelling are beginning to embrace as a preferred bus brand of the future. He expressed the view that what has been hindering an efficient and effective commercial bus transport system where the operations of the company are still done manually with leakages is the lack of adoption of road technology. The absence of technology he regretted leads to loss of time and revenue, the industry stands to lose and commuters lack the confidence of travelling safely. Apart from the Yutong Mercedes-Benz powertrain which Kojo Motors does not assemble presently, the company said it is currently assemblying other models in the country and plans to increase the number of buses it is currently assemblying once the demand for the models increases.

BMW owners get free 5 year/100,000km auto care

ervice delivery is looking up at some of the local automobile dealerships as Coscharis Motors; the sole franchisee of BMW in Nigeria has commenced the complimentary 5 year service or 100,000km BMW care package, whichever comes first for all its new 2019 BMW models. The new BMW Service Inclusive Plan (BMW SIP) enables customers to enjoy an even more effortless and convenient experience when having their vehicles serviced at Coscharis motors. All service costs for regular maintenance, including vehicle health check, engine oil change, air filter service, fuel filter service, micro filter service, spark plug service, brake fluid service are covered by the package even as genuine parts have also been discounted by 25 percent until July 31, 2019. According to Cletus Aregbeshola, marketing manager, Coscharis BMW, , the objective of this offer is to increase customer peace of mind and enhance ease of ownership regarding maintenance. The offer will only apply to 2019 model year vehicles and will exclude all older model years and pre-owned vehicles. All BMW vehicles sold from January 2019 are entitled to this special package. According to the marketing manager, ‘’We believe peace of mind should never be compromised neither should ownership be a struggle. That is why every 2019 BMW now comes standard with complete peace of mind’’. Coscharis Motors has also now optimized its service delivery to genuine service performed by highly trained technicians who only use genuine parts and accessories on customers’ vehicles, and with BMW Service Inclusive Care, customers are guaranteed total convenience and complete peace of mind.

Midsize Sonata undergoes complete makeover …gets new platform for improved driving feel

ot much may have been heard of the Hyundai automakers, but the piece of good news is that, Hyundai’s midsize Sedan-Sonata has undergone total makeover, incorporating third-generation vehicle platform to give the 8th generation Sonata an amazingly inspiring appearance and improved performance. Expected to debut in Nigeria soon, Hyundai Motor Company said the new platform will improve the market competitiveness of Hyundai’s newest Sonata and its future models, which are already being infused with greater flexibility, enhanced overall design, safety, efficiency, power and driving performance. The all-new Sonata begins a fresh

chapter for the automaker’s longeststanding model, continuing a global success story that started in 1985. www.businessday.ng

Quite unlike any of its predecessors, this particular model is a fourdoor-coupe style that showcases the

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brand’s new ‘Sensuous Sportiness’ design language. As a signature product for the brand, it represents Hyundai’s future design vision, while also incorporating advanced safety systems and cutting-edge technology, engineered to be effortless and intuitive in function. It is the first model to be based on brand’s new, innovative ‘thirdgeneration’ modular vehicle platform, which delivers increased strength and reduced weight to enable improvements in design, safety, efficiency and driving performance. The car uses an extensive application of advanced technologies to boost comfort, convenience and active safety. It is also the first model to premiere a new collaboration with @Businessdayng

Bose to deliver an exceptional audio experience According to Hyundai, the platform builds on the former platform’s core advantages, enabling a stable design with a lower center of gravity that allows Hyundai to implement sporty and stylish design elements to the new version. It is also offering reduced weight and improved fuel efficiency while achieving stronger durability with the new platform. The platform is also expected to deliver significant improvement in collision safety through the adoption of a multi-load path structure, ‘Hot Stamping,’ and super-high tensile steel plate. Continues on page 23

Wednesday 26 June 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Commuters count loses as LagosBadagry face extinction

African continent faces $130bn infrastructure deficit …forum discourses challenges facing sector MIKE OCHONMA Transport Editor

takeholders gathered in South Africa last week to take a very critical look at the several challenges facing Africa’s rail industries. The event was put together by global events company Terrapinn during the 22nd annual Africa Rail exhibition and conference, which aims to tackle these challenges. Athena Maharaj, Terrapinn business development manager states that “massive inadequacy” characterises infrastructure in Africa. She adds that the continent is facing a $130-billion infrastructure deficit, while in some cases; resources are completely stranded in countries that are landlocked. In some cases where there is infrastructure, the maintenance is so poor that it renders the railway lines useless, she laments. Both in Nigeria and South Africa perceived as the two economic heavy weights, rail networks either remains neglected as is the case with Nigeria and South Africa

where it remains underused and need upgrades to better facilitate the movement of goods throughout Africa. In South Africa for instance, state-owned enterprises, such as logistics group Transnet and the Passenger Rail Agency of South Africa (PRASA), have recognised this and are investing billions of rands in renewing lines and procuring locomotives and wagons, she points out. Another challenge is safety and security – from a passenger and an asset perspective. All of these challenges are key topics that shape the content of Africa Rail.” Meanwhile, a big focus of Africa Rail this year looked ahead to the role of railways in the next 20 years and how to prepare Africa for a new era of mobility. Africa is looking to integrate into a global economy. With the massive flow of goods out of many African countries and the flow of people throughout the continent, there is a concerted push towards railway development.” Maharaj notes that there will be exponential growth in intermodal

transport, and improved connectivity across the transport sector is expected to change the dynamics of trade in the region. She states that investment through the signed African Continental Free Trade Area will boost intra-African trade, which is vital to advance the continent’s economic growth, allowing it to integrate into the global economy. An estimated 200 speakers attended attend the conference, including former Nigerian Federal Ministry of Transportation Minister Chibuike Rotimi Amaechi. Others are the parastatal railway National Railways of Zimbabwe chief engineer Alfred Gunzo, Eswatini National Railway Corporation Eswatini Railways engineering director Bhekithemba Dlamini, Kenyan ministry of transport commuter rail unit head Mucemi Gakuru and Terrapinn. The event was attended by 7,500 attendees from more than 70 countries, VIP buyers and many exhibitors. Africa Rail was held at the Sandton Convention Centre, in Gauteng, between June 19 and 20.

Oman Airports welcomes World Travel Award arrivals

his autumn World Travel Awards (WTA) will head to Oman for its annual Grand Final. The highlight of the hospitality calendar, the luxury showcase will this year be hosted at the Royal Opera House Muscat. Taking place on November 28, the red-carpet event will welcome hundreds of industry leaders from around the world as they celebrate the best-of-the-best. Among them will be the winners from each of the regional events World Travel Awards is currently hosting around the globe as part of the 2019 Grand Tour. As preparations get underway for the grand finale, the prestigious event is expected to paly host to who is who in the world travel industry. World Travel Awards was established in 1993 to acknowledge, reward and celebrate

t is no longer news that the large section of the Lagos-Badagry road is a complete right-off. The real situation this time around that is that a lot of businesses are suffering with commuters along the corrodor counting their loses on minuteby-minute basis as it takes almost five ours travelling from Badagry to Lagos Island where the access even exists. Worst on this axis which appears not to bother both the state and the federal governments despite the regular occurances of road crashes are the casualties that occurs so often that are most times not captured and documented by the concerned authoritis as a result of failed portions of the road and lamenations,

This is the Lagos-Badagry road in front of the Lagos International Trade Fair complex completely abandoned by both the state and federal governments

On daily basis, the story of despair, disenchantment and frustration rign supreme in the psych of commuters, yet, it remains a big surprise that, both the Federal and Lagos State government under the control of the same party; the All Progressives Congress are not giving the required level of attention to this all important corridor that connects Nigeria to its West African neighbours. Only last Wednesday, the Federal Roads Maintenance Agency (FERMA) announced the commencement of repair works ffrom Okokomaiko section to Agbara section of the Lagos-Badagry expressway raisng further question as to what would happen to the Agbara-Badagry section of the highway which has

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celebrate individual and collective success within each key geographical region. The event’s gala ceremonies are widely regarded as the best networking opportunities in the travel industry, attended by government and industry leaders, luminaries and international print and broadcast media.

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He said that the Federal Government also had plans to remodel the section but was working on modalities for the relocation of gas pipelines, communication cables and other utilities in the Right of Way (RoW) portion of the project. He said that the government awarded the contract in May and was committed to making the portion under contract from Igbo-elerin to Agbara junction motorable. Rafindadi said that the contract sum was about N3.6 billion. He said that measures were in place to ensure that the rainy season does not affect construction works. He disclosed that for the next 12 km, FERMA will be doing repair maintenance works on the road and

Midsize Sonata undergoes.... Continues on page 23

excellence across all sectors of the tourism industry. Today, the brand is recognised globally as the ultimate hallmark of quality, with winners setting the benchmark to which all others aspire. Each year, WTA covers the globe with a series of regional gala ceremonies staged to recognise and

become travellers nightmare Nurudeen Rafindadi, managing director of FERMA had assured during the start of the general maintenance of the Lagos-Badagry-Seme dual carriageway, OkokomaikoAgbara sections at Igbo-Elerin on the highway assured motorists of speedy completion of repairs on the LagosBadagry Expressway. He said that both the Federal Government and the Lagos State government were doing repairs of the highway simultaneously from three sections to reduce hardship on the road. Rafindadi said that assured strict supervision of the rehabilitation works will be followed, saying that the contractor was on the ground and ready to quickly complete the work.

Hyundai said the platform has been designed to allow the tyres to move outward during a small overlap collision to maximize customer safety. Such technology inhibits vehicle from spinning and prevents possible secondary collisions. The Korean automaker also noted that the extended application of Hot Stamping will prevent deformation of the passenger room, thereby improving vehicle safety just as it is expected to improve power, driving performance, which would all be fused into Hyundai’s next-generation engine called the Smartstream Powertrain. Featuring a system that controls the flow of air, the new platform improves air movement to the engine bay and heat dissipation, which enhances stability in the lower part @Businessdayng

of the vehicle thus minimizing air resistance to deliver excellent efficiency and power performance. Stability has also been enhanced by lowering the position of heavy equipment in the platform, which reduces weight and lowers the center of gravity. This transformation will enhance handling by dramatically expanding lateral stiffness, while positioning the steering closer to the wheel center and providing stable and balanced driving performance through tyreoptimization technology. What’s more, Hyundai has reduced offensive cabin noise, using reinforced sound-absorbing systems in vibration-sensitive parts. “Starting with the new Sonata model, Hyundai will gradually expand the use of new platform in order to provide joy of driving and comfort to the customers,” he added.

Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

PENSION today

In Association With with contributions from

That phase of life when you fall back on your pension savings

licensed to open Retirement Savings Accounts for employees, invest and manage the pension funds in a manner as the Commission may from time to time prescribe, maintain books of accounts on all transactions relating to the pension funds managed by it, provide regular information to the employees or beneficiaries and pay retirement benefits to employees in accordance with the provisions of the Pension Reform Act 2004” as amended in 2014. Retirement funds are invested PFA’s manage your pension contributions on your behalf. They invest the monies in equities and other investment securities and assets to ensure that you have increased value for your contributions when you retire. Portability There’s nothing to fear or worry about when changing employment. It’s as simple as your current employer stopping contributions which can then be taken up by your new employer. Easy access to information from your PFA PFAs provide online and offline tools to enable you gain access to all the information regarding your funds and their present values so you can easily get abreast of your pension situation. They provide every depositor with a Personal Identification Number linked to their accounts. Tax Exemption The current Pension Reform Act 2014 clearly mentions that any interests, profits, dividends, investments and other income accruable to pension funds or assets are not taxable. Regular payment of retirement benefits

Since the contribution into the Retirement Savings Accounts is the property of the individual, he or she is no longer at the mercy of government and is assured of regular payment of benefits. Transparency The scheme promotes transparency because it is a requirement that PFAs publish their rates of return, regular statements of contributions, earnings and annual audited accounts. Robust Monitoring The scheme entails the establishment of the National Pension Commission (PenCom) to regulate, supervise and ensure the

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Currently 8.6 million workers in the formal sector have registered in the Contributory Pension Scheme as at the end of March 2019, leaving over 57 million workforce still uncovered, which means that a lot of people still needs to be covered to achieve the set target

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hether you like it or not, you are sure to retire one day. A time will come when you are not expected to work long hours trying to make ends meet. As one gets older, age begins to catch up and by the time we attain the age of fifty year up, we are already in the retirement phase of life where we are expected to do much less. Planning for one’s retirement should not be delayed because it is a period one needs to be comfortable. This is the time one is expected to survive on what one has kept, saved or invested. As a matter of fact many personal finance experts opine that a retired person must ensure that retirement does not bring substantial lifestyle changes, where one begins to live on less than what one was accustomed to. You must plan for your retirement right from the first day you start work. Now the Contributory Pension Scheme (CPS) already in place in Nigeria is one vehicle to effectively plan your retirement. According to experts, pension is a fund into which money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.” Please find below range of benefits on why you need to sign up for the CPS today: It’s saving towards your future You will require resources to navigate through life even in retirement. Enrolling in a pension scheme enables one to start putting money aside in a special account towards retirement. While retirement might seem a long way off, you need to start taking steps towards it now as your earning capacity will drop as you get older. These funds can hardly be touched before retirement We all face challenges keeping money aside, not to talk of keeping them till we retire. A pension scheme deducts a certain percentage of your earnings and keeps them in a Retirement Savings Account (RSA) which you can only access if you are fifty years old, or if you are unemployed for at least four months then you may access twenty-five percent of it. Joint contribution by you and your employer Your employer is bound by law to contribute the equivalent of ten percent of your earnings, while your contribution is eight percent. This means a healthy eighteen percent is channelled towards when you can no longer work. Funds are kept with PFAs According to the National Pensions Commission(PenCom), the “Pension Fund Administrators (PFAs) have been duly

effective administration of pension matters in Nigeria. The Commission will ensure the safety of the pension funds by issuing guidelines for licensing, approving, regulating and monitoring the investment activities of Pension Funds Administrators. Separation of PFAs from Custodians Although they both deal with pension fund assets, the functions of the PFA and Custodian are so clearly delineated that it is difficult for either to misuse the pension funds assets to the detriment of the contributor. At no time will the PFA have the custody of contributions of the employee. The contributions go directly from the employer to the Custodian. On the other hand, the Custodian will not invest the pension assets except at the order of the PFA. Nearly every organisation is eligible The law provides that organisations with three or more staff are eligible to establish a pension scheme for their staff. It is a violation of the law not to do so. It is a right of every employee to be paying pension contributions while in active employment. Vehicle for additional savings The Retirement Savings Account can also accept additional voluntary contribution from the employee apart from statutory contribution of 8 percent by the employee. This can be arranged with the employee’s accounts or admin departments for inclusion into the payroll. No Investment Risk A big advantage of this pension plan is that it’s heavily protected from investment risks. You won’t see a drop in your retirement benefit. Even if your employer goes bankrupt, your pension is still safe. Payments for Life When you reach retirement, your pension plan will give you monthly payments for the rest of your life. It’s as if you’re still getting paid by the company even though you’re no longer working. Currently 8.6 million workers in the formal sector have registered in the Contributory Pension Scheme as at the end of March 2019, leaving over 57 million workforce still uncovered, which means that a lot of people still needs to be covered to achieve the set target. There is also the expectation that the informal sector through the recently launched micro pension scheme will bring a turnaround. It is important at this time that more employees engage their employers to enrol them into the pension train as the benefits of registering all employees in the current pension scheme in Nigeria will be of utmost benefit to all parties. Employers will get more committed employees due to the addition of this benefit as their morale will be increased. Pension enrolment is definitely a win-win for both sides.

RC634453

Diamond Pension Fund Custodian Limited with contributions from

1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com www.businessday.ng

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

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Wednesday 26 June 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

SUNU Assurances chairman, others commits to raise $80m for IDP

L-R: Anu Shobo, company secretary; Baba Gana Kingibe, chairman and Biyi Otegbeye, managing director, all of Regency Alliance Insurance Plc during the Company’s Annual General Meeting in Lagos

Allianz Nigeria targets increased penetration on motor insurance in new marketing campaign …launches ‘CARdiology’ July Stories by Modestus Anaesoronye

llianz Nigeria Plc is set to boost its motor insurance penetration with the planned launch next month of a new marketing campaign that is expected to attract thousands of vehicle owners across the country. The campaign tagged ‘CARdiology’ which will be launched in July 2019 as the name implies is to undertake free health check on motor cars plying Nigeria roads at no cost to the owners, Owolabi Salami, executive director, Allianz Nigeria said. Owolabi who disclosed this during a press conference in Lagos said 2,000 car

owners will benefit at this first phase at 20 designated garages across Lagos. Owolabi noted that this is one of Allianz Nigeria’s initiatives to internalize the Allianz brand across every home in the country. “Each vehicle check will cost us N10, 000.00, and that is what we are offering to car owners, and at the same time indirectly helping to enhance safety on our roads, he stated. Owolabi stated that when the campaign breaks, people will be expected to indicate interest via a dedicated telephone or email, and though a raffle draw 2,000 people will be selected and given access to any of the selected garages of their choice. According to him, “participating in the diagnostic does not make it compulsory for anyone to insure with the company, but anyone who finds it worthy after this relationship could have reasons to do

quite a lot with us either for motor or other products we offer, Owolabi said. Allianz Nigeria Plc is a member of the Allianz Group, one of the world’s leading insurers and asset managers with more than 92 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 673 billion euros on behalf of its insurance customers while their asset managers - PIMCO and Allianz Global Investors - manage more than 1.4 trillion euros of third-party assets. In 2018, over 142,000 employees in more than 70 countries achieved total revenues of 131 billion euros and an operating profit of 11.5 billion euros for the Group.

ent queries. So far, the platform has actually helped insurers deliver 20% faster claim resolution and avoid over four calls per claim. Insurers, reinsurers, and brokers are striving to improve efficiency while at the same time trying to both remain and increase their relevance in a rapidly changing world. Greg Heerde, Head of Americas Analytics for Aon’s Reinsurance Solution’s unit, commented: “As a broker, we see both sides of the insurance equation so we know what insured’s are asking for and the challenges carriers are facing. “Hi Marley’s platform and proven team stood out with their focus on insurancespecific situations. Hi Marley is bigger than just texting – it is connecting the entire insurance ecosystem in a simple, clear, and meaningful way. We are excited to www.businessday.ng

bring this innovation to insurers globally.” The platform is designed to improve customer engagement and insurers also stand to benefit from increased efficiencies from the platform’s tech that is easily integrated into existing systems. Mike Greene, chief executive officer (CEO) of Hi Marley, said: “We are excited to have the support and endorsement of Aon as we work to wow customers and improve carrier outcomes. We’ve been in the insurance industry – and in tech – for quite a while, so we know the ins and outs. This is custom-designed for the insurance space, because people in insurance should get dedicated, advanced tools, too. “As we look to embrace the entire insurance ecosystem, including agents and brokers, we are helping insurance companies deliver a modern experience that puts customers first.”

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AIICO empowers LASU students on entrepreneurship skills

Global reinsurer leverages partnership for technology, customer engagement lobal re/insurance brokerage Aon has entered into a strategic alliance with Hi Marley, an insurance-focused conversation platform that leverages industry-specific artificial intelligence (AI) and functionality to improve customer engagement. In response to policyholders demanding faster and more efficient ways to speak with their insurance company through the cycle of their policy, Hi Marley’s technology looks to provide a seamless conversation platform which connects various stakeholders in the insurance chain. Aon has partnered with Hi Marley to offer its conversation platform. Of course, chatbots that simulate human conversation have been around for some time, but Hi Marley claims that with the use of AI the conversation can be far more predictive and help solve more cli-

he chairman of SUNU Assurances, Kyari Abba Bukar and private sector actors under the aegis of the Nigerian Humanitarian Fund Private Sector Initiative (NHF-PSI), along with the United Nations, UN, have visited Borno state for the second time to assess the condition of internally displaced persons as part of efforts to provide an indigenous support to them. Kyari Abba Bukar reinforced his commitment to raise the sum of $80 million in financial aid to support thousands of displaced people currently living in IDP Camps spread across Maiduguri state. Bukar led the delegation of Nigerian entrepreneurs and CEOs who paid a visit to the state’s IDP Camps this week on a second assessment tour of the facilities. The delegation was in Maiduguri in May for the first visit, led by UN Country Director, Edward Kallon the co-chairmen of NHF-PSI, Kyari Bukar who is also a former chairperson Nigerian Economic Summit Group. Speaking about his experience visiting the Camps last May, Bukar said, “It is quite encouraging to see how Nigerian corporates are responding to what the United Nations is doing. It was a day trip but at the same time, it had touched their lives. As we were returning, many of them didn’t realise how dire the situation is over there. He expressed delight about the private sector in Nigeria’s enthusiasm in mobilizing resources and expertise to provide home-grown humanitarian assistance to the IDPs in the North East.”

IICO’s free Entrepreneurship Development Programme has recorded a milestone with the invitation by the Lagos State University, to train and empower students of the institution on Entrepreneurship. About 250 students of the institution participated in the workshop, which was fully sponsored by AIICO Insurance Plc. The aim was to ignite their passion and drive for success in their journey through entrepreneurship. AIICO recently commenced the free Entrepreneurship Development Programme as part of its Corporate Social Responsibility programmes with the goal of empowering Nigerians with the requisite knowledge and skills for success as entrepreneurs. AIICO Insurance Plc., a leading composite insurer in Nigeria, commenced operations in 1963. AIICO provides life insurance, health insurance, general insurance, wealth management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.

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Wednesday 26 June 2019

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

With insurance, we are solving rental problem in Lagos – CEO Rent Small-Small.Com Tunde Balogun is the CEO of Rent Small-Small.com, a Lagos based property Technology Company helping people get accommodation without having to pay one or two years rent upfront. In this interview with Modestus Anaesoronye, he shares his thoughts on challenges facing house renters in Lagos, what the tech product is doing, and plans to solve Africa’s housing problem. Excerpt: What is Rent SmallSmall.com and what does the company do? ent Small-Small.Com is a property technology company (Proptech Company) and is a phenomenon that is happening around the world right now, which we believe we need here in Nigeria more than ever before. Why do we need it? The reason is simple. The property and real estate market as a whole is in shambles. There is the sales market and there is the rental market, but I will speak on the rental market because that is where we are focusing. In Nigeria today, if you were to rent a property, you will be expected to pay a year or two years rent and it’s been like that for a long time. If you speak to older people, they will tell you that it was never like that in the 80’s and early 90’s and a lot of things brought us to where we are today. But what we have realised is that things have changed, and the market is now driven by young people and if you don’t have a solution to meet the huge demand and expectation of this set of people that are coming into the rental market, then we have a huge national crises in our hands. With Rent Small-Small our model is to allow people to pay flexibly – monthly, quarterly or biannually depending on what is convenient for them. But our focus is on that monthly payment, which is what is operational in most developed countries across the world, so that as people earn they should be able to allocate on monthly basis what is meant for their rent, instead of paying the year upfront and now struggling to meet other needs. So, Rent Small-Small is moving the space away from the traditional model of renting, to a modern way of renting that makes life convenient and affordable for renters, improves livelihood and productivity of young people starting life in our cities. That is what we do really, and we use technology to drive all of this right from finding to payment, everything happens on our platform, Rent Small-Small.Com. You know there is already a culture here among landlords and property owners about collecting upfront rents. How do you begin to change this psyche? There are two customers we are serving, the landlords and the tenants. For the tenants, it is not as hard because the demand is already there. But for the landlords, it is a bottleneck because now, it’s about changing a mindset, changing culture and it takes time. So, we are in it for the long haul and we are not one of the companies that want to make money quickly. This is not MMM, this is a solution that will take us time, but we know we can do it. For the landlords, what we have done now is to focus on the value we give, we put on the table that no other company has offered or there has not been such a solution here. A lot of the values we propose are being well received by a lot of the landlords we have right now. For instance, they earn more than what they have been earning, we don’t do the traditional agency and agreement, and we do a mark-up model. With mark-up on the base

Tunde Balogun

rent, the landlord earns more than he would ordinarily have earned. Beyond that, we have rent insurance in place. We have done our research and discovered that one of the major challenges that landlords are usually having is rent default. The default rate is very high across the cities. People pay for the first rent and after that struggle to pay subsequent rents, and a lot of the landlords spend so much to evict the

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If we discover that a property brought to us does not offer good qualities for livelihood, we turn it down. Just as we have turned tenants down, we have also turned landlords down. In fact, it’s been a success story all the way and we are just starting

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tenants, some hire lawyers and the tenant still stay in the house as long as the mater remains in court. There is maintenance of the house, which is also the responsibility of the landlord, and when the tenant is eventually evicted, the landlord now again has to spend so much to put the house in a tenantable state. So what we have done now is to bring insurance to cover that rent default either as result of loss of job, accident, disability, or death insurance covers all of that and we pay the premiums upfront. On the maintenance of the property, we inspect our properties every quarter. Property agents will always say is in the agreement of tenancy to inspect tenant’s house but they don’t keep to it, on our own we follow through to make sure the landlord is also protected. I must mention that we have standing order in place. What that does is that when the rent is due we automatically take it from the tenant’s bank account, through direct debit. This is not the case of taking cash or moving cash around. At the point of entering into the tenancy agreement, the tenant goes through our payment solution which captures their bank details and all that because they already know that that is what they are going into. And lastly, I should mention that we do proper vetting on the landlords. Our verification system is very thorough. We establish that whoever we are giving the house to can actually afford them and that is one of the problems upfront rent has caused us in Nigeria. So we try

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to protect the landlord by making sure we verify the tenant and make sure he has the capacity to pay subsequent rents. Give us more details about the rental insurance, and if you are partnering with any of them? We are partnering with one of the most reputable insurance companies in Nigeria, that is AXA Mansard Insurance. They believe in what we are doing and know that this is the future. When we put the card on the table for them to see, they said they have not done this before but they believe it is the future. So we are working with them. How long has this Rent Small-Small be in operation? Officially, we will be one year in October this year. But we have had better time, which is the testing time for the product where we also had tenants and also landlords. Measuring from the time you started till now, how would you rate the product? Every time I wake up, the energy and excitement that pushes me out is amazing because when we came up with this product a lot of people doubted it. Many people said to us, no landlord will accept this partnership; no landlord will agree to collect their monies in bit. But today when I look back and see the grounds we have covered, it gives me joy. Like I said, we are here for the long haul. It’s not just a Nigeria problem, a lot of African cities including those in Ghana, Kenya collect rent upfront. So Rent Small- Small is not just for Nigeria, our target really is Africa. We have identified a number of cities in Africa that will need this service, but we are kicking off with our country, Nigeria. The success story is good. For example, there were these two young guys from Ilorin who got a job in Lagos with a Tech Company, and you know, not having a relative to accommodate them here is a problem. They needed a place to stay and came to Rent Small-Small and we provided them accommodation. Ordinarily, they would have been expected to pay a year upfront. They are living in Lekki Phase One here and their work place is alas in Lekki Phase One, and they are paying a relatively small amount of money monthly. Imagine there was no solution like Rent Small-Small. That means they would have lived far away from their work place, or travel every day, waste time in traffic, and all that. There are some people that travel as much as six hours every day to their work place. They wake up as early as 4am, waste man hours in traffic and of course low productivity. The time you would have used to be creative you have wasted it on the road and livelihood is affected. So, we are conscious of livelihood, and make sure that properties we put on our platform offer closeness to work place, have good space for relaxation and all that. We do a lot of vetting on our landlords and the properties. If we discover that a property brought to us does not offer good qualities for livelihood, we turn it down. Just as we have turned tenants down, we have also turned landlords down. In fact, it’s been a success story all the way and we are just starting.

@Businessdayng

Wednesday 26 June 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

How home-based primary care can reduce expensive hospitalizations PAUL DI CAPUA, VIVEK GARG AND SACHIN H. JAIN

t’s common knowledge that health care spending in the United States is on target to reach 20% of GDP — and that the 5% of patients who are the most expensive to treat account for half all health care spending. These patients tend to be frail and elderly and have multiple chronic illnesses; many have unmet behavioral and mental health needs as well. A CareMore Health program in Connecticut has proved that a different approach can reduce the expensive hospitalizations that largely drive the high cost of caring for these patients. How? By treating these patients at home. For more than a quarter century, CareMore Health, the care delivery organization where we are physicians, has successfully built a model for treating highcost, high-needs patients. In communities across the country, CareMore invests the capitated payments (a set fee per patient) it receives from Medicare and Medicaid in prevention and early intervention programs, and on supplemental benefits that fee-for-service programs typically don’t cover. Under this model, CareMore spends half what traditional Medicare programs spend on the sickest patients. Much of the savings result from keeping patients healthy enough to avoid highcost hospitalizations. In 2017, CareMore entered the Connecticut market with the goal of bringing our model to high-cost, high-needs patients in the state. As we’d done in other markets, we looked at opening office space in locations that would be convenient for our patients. And while mapping our patients’ home addresses we noticed an interesting trend: Many of them lived in clusters, often within a 30- to 45-minute drive of one another. The map sparked an idea. High-cost, high-needs patients tend to spend almost all of their

time at home. They’re often elderly and live alone. Many lack access to reliable transportation or report that they can’t get convenient, immediate appointments with doctors. Instead of demanding that patients come to us to receive care, what if we went to them? In doing so, we reasoned, we could eliminate many of the barriers to access. But to be successful, we’d have to reinstitute the lost practice of making house calls. Except for the basic services offered by home care agencies, health care in the United States has largely abandoned using the home as a viable site for care. Under CareMore’s model, the members of what we call the Home Team provide integrated physical and mental health care to our patients in the place where everyone feels the most comfortable — at home. We treat the patients we see just as we would in a medical office setting. We fine-tune medications, examine and dress wounds, and make diagnoses. Our care teams are made up of primary care physicians, nurses, case managers, medical assistants, social workers and other professional caregivers who work in concert to provide comprehensive preventive, chronic

Partnership our core value

through 125 years

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condition, urgent and postdischarge care. When we visit patients, we assess their mental and physical health. We ensure that they’re filling prescriptions and taking their medications appropriately. If not, we’ve developed strong relationships with local pharmacies who deliver prepackaged medications to our patients and can ensure timely alterations in medication regimens. Seeing patients at home adds a certain familiarity to the doctor-patient relationship, often with positive results. Before meeting us, Oscar*, who suffers from multiple chronic diseases, including advanced kidney disease, was in the emergency room almost weekly. At our initial visit with Oscar, we used his kitchen strainer to explain to him how his kidneys filter blood. During a series of conversations in Oscar’s living room, we spoke with one of his close friends from church, his personal care assistant, who is with him every weekday, and his brother in Puerto Rico. Together we created a medical regimen focused on aggressively managing Oscar’s diabetes and blood pressure, two factors that often cause kidney damage. Today, Oscar’s kidney function has stabilized. In our patients’ homes we

are in a position to more readily view the “social determinants of health” — the economic and social conditions that can significantly influence a patient. In her home, we learned that Lucy* is socially isolated, and had no regular contact with others. We surmised that her social isolation was at the root of many of her behavioral health issues and introduced a social worker to connect her with community-based organizations that brought her into contact with others. In the 18 months that she has been our patient, Lucy has yet to be readmitted to the hospital. Had we not visited her at home, it’s not clear that we’d have recognized the underlying social dynamics that were affecting her health. We recently compared the 10-month period after we launched Home-Based Integrated Care in Connecticut (from September 1, 2017 to June 30, 2018) to the previous 10-month period (from September 1, 2016 to June 30, 2017) for the 105 patients who had engaged with CareMore and continuously had the same health plan throughout the whole period. During that time, hospital admissions and emergency room visits were down 12.5% and 27.2%, respectively. Those numbers seem to demonstrate that we are suc-

As your trusted advisor and business partner, we stay true to our promise to always deliver the ultimate ‘gold standard’ of value and excellence. Let’s journey to the next 125 years together.

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ceeding in our goal to reduce hospitalizations and produce better outcomes at a lower cost. Today, CareMore serves 2,100 patients in Connecticut solely under the Home Integrated Care model. Nevertheless, our health system has created a hospitalbased delivery system focused on acute illness at the expense of growing and building systems of care to manage chronic illness. As the cost of caring for the frail and elderly approaches 10% of our GDP, we as a country need to reflect on how our health system is largely failing these patients, at great expense. The vast majority of hospitalizations, which cost $3,000 to $4,000 per day or more, are for exacerbations of chronic illness that could have been treated more effectively and less expensively had the patient’s care team taken a personalized approach to managing the patient’s condition. What we’re doing in Connecticut is actually quite oldfashioned. Doctors used to make house calls all the time. They were comfortable walking into their patients’ homes; they and the members of their community knew each other and trusted each other. What the modern, transactional health system has done is more than just create a cumbersome system riddled with inefficiencies, high costs and mixed results; it has removed health care from our communities. So we’re putting it back. And pretty soon, we think others will too. *This name has been changed for reasons of patient privacy.

Paul Di Capua, MD, is regional medical officer in Connecticut at CareMore Health, a division of Anthem, Inc. Jay Mathur, DO, is the associate regional medical officer in Connecticut for CareMore Health. Vivek Garg, MD, is chief medical officer at CareMore Health. Sachin H. Jain, MD, is president and CEO of the CareMore Health System.

Wednesday 26 June 2019

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

Fostering an ethical Culture on your sales team KRISTEN BELL DETIENNE AND BRADLEY R. AGLE, ALICE ALEO AND ALBERTO ALEO

ales scandals can take a large toll. Beyond devastating consequences to the company in the form of negative publicity and penalties, workers may be held personally liable. Companies must take steps to protect themselves from the risk of sales fraud. Our research with over 1,000 sales professionals in 50 companies has uncovered some best practices to that end. The good news is that interventions to improve sales ethics should pay for themselves — and not just in the form of risk mitigation. Companies with higher ethical standards experience greater customer loyalty, satisfaction and referrals. All of these lead to greater long-term profits. Several studies have found that greater adherence to ethics also leads to higher commitment from employees, improved operational efficiencies and better financial performance. In our experience, one of the biggest dangers in selling is a narrow perspective — focusing on immediate profits and sales goals at the expense of broader gains. With a narrow perspective, sales professionals may make deals that are bad for the customer, misrepresent products or services or make promises that internal departments cannot deliver. In each of these situations, the company risks losing more than it gained. Conversely, a broad perspective that focuses on organizational purpose and not just money motivates employees and need not undermine profits. Employees suffer when they are caught in a struggle between their internal values and company pressures to meet sales quotas. Research shows that stress related to ongoing ethical dilemmas decreases job satisfaction and is a leading cause of employee turnover, burnout and fatigue. Potential employees are less attracted to firms with poor reputations for ethics. We suggest several measures to help sales forces keep a broad

perspective and avoid ethical lapses: — MEASURE ETHICAL BEHAVIOR: Not all companies have effective systems for handling ethics complaints. At Wells Fargo during its recent sales scandal, calling the ethics hotline was reportedly like submitting a letter of resignation. In our experience, a good reporting system is sponsored and promoted by executives, rewards honest and sincere reporting and responds appropriately to complaints. — STRENGTHEN WEAK SPOTS: Leaders need to understand how situations — like an economic downturn, a difficult industry or changing regulations — are likely to affect employees across different functions. Having a blanket code of ethics is not enough: Department leaders should develop guidelines that specify how the company’s ethical principles are enacted day-to-day in each function. Managers can collect and share on-the-job stories of ethical behavior by their teams to create awareness and provide guidance on common ethical dilemmas. — CREATE A CULTURE OF ETHICAL VALUES: Employees can suffer if told to do things that conflict with their ethical values. Meanwhile, companies can suffer negative consequences from employees not living up to the organization’s values. Managers can help by involving sales associates in conversations about personal and organizawww.businessday.ng

tional values and by helping employees reconcile discrepancies and honor both their personal and organizational values. During one of our ethics training sessions with a U.S.based corporation, employees first described their own values and the company’s values. In teams, they set goals for sales achievement, then wrote a code of conduct that would promote that achievement while still respecting both individual and company values. One associate’s value was “not to push the clients too much when they need time to decide.” This seemed at odds with the company’s values to “finalize the sale” and “never abandon an opportunity.” So, the employees created a rule that honored both values: “Give your customers the time they need to think about your offer, but immediately fix the next appointment.” This hybrid rule brought peace of mind to employees — and a better sales experience to their customers. — REWARD THE RIGHT BEHAVIOR: The expression “you get what you pay for” is especially true in a sales function. Whatever the incentive plan, it should align the interests of the employee with the long-term interests of the organization — and should keep the sales associate involved throughout the entire selling process. First, quotas and sales expectations must be realistic. Rather than motivating sales

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efforts, unrealistic targets tend to result in undue stress on sales associates, increased turnover and unethical behavior. In the case of Wells Fargo, if 5,300 of your employees start cheating, it’s a good sign your expectations are too high. Second, align goals between sales and other functions. In many sales organizations, the volume-related goals of sales reps conflict with the cost-curbing goals of the employees who will be servicing the new accounts, ultimately harming return on investment. In one communications company we worked with, a mismatch in reward structures prompted salespeople to withhold negative information about potential consumers from the creditissuing department. Eventually the departments swapped rewards: The sales team was rewarded for bringing in customers with good credit, and the credit team was rewarded for efficiently approving good borrowers. Soon sales people were asking the credit team to “describe the optimal customers, and we’ll go after them.” The teams became further aligned when the sales regions were remapped to match customer service regions, with joint responsibility for success. Third, ideally, companies should base sales-associate compensation on several factors that the associates can control or influence. For instance, rewarding for customer satisfaction encourages @Businessdayng

employees to be truthful in their promises to customers and also provides an incentive for sales employees to ensure the commitments to the customer are properly communicated to the company. Rewards for bringing in more profitable customers or for retaining customers long-term helps associates focus their efforts on the types of sales that create the most value for the company. It’s best, from an ethics standpoint, if someone besides the sales team collects and reports on these metrics. — PROMOTE THE RIGHT PEOPLE: Employees quickly learn which behaviors get rewarded in an organization. If the sales professionals who cheat to get the “best” numbers are the ones being promoted, it sends a clear signal to the rest of the employees that cheating is a good way to get ahead. Wells Fargo experienced this vicious cycle when employees opened false accounts to meet quotas, the quotas were subsequently raised and employees felt compelled to commit even more fraud to keep up with demands. Leaders protect themselves and their companies when they create a culture of ethics that supports, inspires commitment to and rewards ethical behavior. In the process, they will achieve longer and more loyal customer relationships as well as happier, more productive, more successful and more committed employees.

Kristen Bell DeTienne and Bradley R. Agle are professors in the Marriott School of Management at Brigham Young University. Carrolyn McMurdie Sands works on organizational fitness and agility at GE. Alice Aleo and Alberto Aleo are the founders of Passodue.

Wednesday 26 June 2019

BUSINESS DAY

AGRIBUSINESS

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Nigeria’s capacity to tackle hidden hunger hangs on fertiliser fortification, plant breeding Stories by Josephine Okojie

igeria’s capacity to tackle its high rate of micronutrient deficiencies among its population depends on the country’s ability to ensure the usage of fortified fertilisers and bio-fortified seeds in the production of farm produce. In Nigeria and the rest of Sub Saharan Africa, micronutrient deficiencies are common among its people due to over farmed, depleted and nutrient lacking soils as well as high acidity problem among others. This has put adults and children at risks from infection and developmental problems. Experts say micronutrient-deficient in the population could lead to weakened immune systems and thyroid problems. “Nigeria is the country with the third highest absolute number of children who are stunted globally. The root cause of this is soil deficiency of micronutrients and inadequate dietary intake,” said Ismail Cakmak, a professor of Plant Nutrition, Sabanci University, Istanbul, Turkey at training organised by OCP Africa for Agricultural reporters in the country. “For Nigeria to reach targets levels of micronutr ients in food, the countr y needs to combine fertiliser fortification with plant breeding. This approach is sustainable and the most effective solution to micronutrient deficiency in

L-R: Caleb Usoh, country manager;Aniss Bouraqqadi, head of agronomy, OCP Africa and Mohammed Hettiti, managing director all of OCP Africa durining a one day training programme organised for agricultural reporters by OCP Africa recently in Lagos.

food,” Sabanci said. He estimated the yearly loss of nutrients on Africa soil to worth about $4 billion annually. “The soil is depleted at every plant cycle and nutrients removed by crop plants must be replaced annually, otherwise, a serious depletion problem will occur on agricultural soils,” he said. He defined hidden hunger as the inability for people to get all the vitamins and minerals their body requires over a period of time despite consuming sufficient calories. Hidden hunger occurs when people do not get all the vitamins and minerals they need over a

time, despite consuming sufficient calories. He identified that low nitrogen in most African soil is responsible for micronutrient deficiencies, while also saying that most countries on the continent have acidity problem with is soil which is responsible for low phosphorus retention. The plant nutrition said that good soil nutrition for plants will help address issues of heat stress on plants and climate change. Also, he noted good plant nutrition helps in pest and disease resistance, adding that high plant nutrition resist high pathogenic attacks on crops.

“By adding agronomy compound to the breeding process in plant, it will help double the micronutrients requirement for human consumption,” he said. He stated that low fertiliser usage on the continent has limited yield gaps in Africa, while calling for increase in fertiliser application in Nigeria to increase farm yields per hectare. He states that Nigeria and Africa at larges have to adopt a holistic approach that is sustainable and efficient in increasing its farm yields, saying the country cannot afford to wait any longer as its population keeps growing at a faster rate.

Mohammed Hettiti, managing director, OCP Africa said that his organisation will continue to support training for agricultural reporters to help improve their reporting. Hettiti noted that it had become pertinent to properly report human nutrition and soil nutrients as well as crop micronutrient requirements to help improve farm yields and drive growth in the sector. Similarly, Aniss Bouraqqadi, head of agronomy, OCP Africa, stressed that the prominent position of agriculture with its enormous opportunities to create wealth, jobs and enhance livelihoods. He stressed the need for partnerships, collaboration and networking and particularly public-private partnerships that will not only ensure that technologies reach farmers and stimulate innovation but also encourage growth of agriculture as a business, nurture private sector growth, which will, in turn, growing interest and employment opportunities. Bouraqqadi said collaboration was key to ensuring good nutrition for all, even in the face of climate challenges. He said OCP Africa is focused on educating growers to enhance crop yield through improved agronomy practices. “We are ready to partner universities and research institutions to strengthen research capacity to meet the challenge of access to nutritious food for the growing population,” he added.

Ghana, Ivory Coast cocoa floor price agreement lacks support of other producers, says CAN

he Cocoa Association of Nigeria (CAN) has said that the recent cocoa floor price agreement reached by the two leading growers of the crop lack the support of other top producers of the commodity. In a statement made available to BusinessDay, CAN questioned the rationale behind the world’s two largest producers in determining the commodity floor price at the international market. “We are concerned that the decision of the two countries, without prior consultation with other producing countries could portend unintended grave distortions in the global cocoa economy,” Sayina Riman, president, CAN said in the statement.

“The decision was taken unilaterally by the governments of the two countries without even consulting with the producers and other private sector stakeholders in both countries, let alone other producing countries’ governments and private sector,” said Rima World Cocoa Producers Organisation. While acknowledging that cocoa farmers have remained poorly remunerated in the global cocoa market, he said that $2,600 per ton agreed price is still a far cry from what should have been the bench mark based on the production cost. He drew attention to a previous initiative in the 1960s championed by Nigeria and Ghana, then the two largest producers that did not www.businessday.ng

have the buy in of other critical stakeholders. He noted that in contrast to the

1962-63 move, which produced the Cocoa Producers Alliance, the 1st International Cocoa Agreement

L-R: Yemi Odusanya,executive director -south & corporate banking, Keystone Bank; Tola Gbogboade, chairperson, Lagos Chamber of Commerce and Industry (LCCI) Professional Practice Group;Babatunde Ruwase, president, LCCI; Soboma Ajumogobia, vice president, LCCI, and Okemini Otum, CEO, Rabbington Media, during a digital training and networking session organised by LCCI in collaboration with Keystone Bank and Facebook recently in Lagos

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and establishment of International Cocoa Organization, this latest move did not have the buy-in of the other critical stakeholders. He asked if both countries have the capacity in terms of structures and funding to withhold stocks and not create greater problems for growers. “Will they not create more problems for the producers that will make farmers lose more money than is intended? Will they be able to cope with the distortions that this move may cause for economies of other producing countries?” Riman asked. Ghana and Cote D’Ivoire jointly account for about 67 percent of the global bean output, while other growers account for the remaining.

Wednesday 26 June 2019

BUSINESS DAY

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Repositioning Ogun for sustainable agric development …Oyekoya chats way forward Stories by Josephine Okojie

gun state, located at t h e S ou t h West region of the country is endowed with substantial landmass and has a good climatic condition that can make agriculture strive. With an estimated 7.2 million people, its proximity to Lagos, the commercial nerve centre of the country, and this gives it advantage over other south-west states, with the ready-made market for agricultural produce. A s a n a g ra r i a n s t at e, successive growth target initiative in the state have hinged on boosting agricultural productivity to produce more food, generate employment and drive sustainable economic growth through strategic crop and livestock production. But most of the initiative has failed to actualise growth through the sector. Compared to other administrations, the former administration led by Governor Ibikunle Amosun formulated several policies aimed at the transforming the fortune of the sector for the overall interest of the state, but like the situation in the past, little was recorded compared to the huge investment put into the sector. At the onset, the former governor of the state came up with five-Cardinal Programmes that made up the “Mission to Rebuild” Ogun State (MITROS).

Then, the governor disclosed that he sees agriculture as the fulcrum for achieving the much desired wealth creation, employment generation and attainment of self-sufficiency in production of the food for which the state has a comparative advantage. To actualise this, the state embarked on an Agro-Politan Development Strategy. The strategy provides multiple opportunities in agriculture and agri-business. It emphasises the localisation of the entire value-chain that agriculture offers, namely: “ This will ensure that millions of our citizens will be engaged in the agricultural value chain and will be able to prosper wherever they are,” Amosun said during the launch of the state MITROS rice in Abeokuta in 2017. The MITROS rice project is one of the positive outcomes of this strategy. But despite this, findings showed that not much was achieved in the sector, as other areas where the state has cumulative advantage were left to rot away. At a time, the state experimented hybrid tomato, through the use of greenhouse technology, in Kotope area of Osiele, but due to inconsistency, the technology has been idle since the first and only harvest. It also claimed to have invested heavily on cashew cultivation, but a lot was not achieved in the last eight years. Some farmers and other stakeholders operating in the

Wale Oyekoya

state, who are saddened by the wasted opportunities in the state, said the problem stems from government policies and choice of appointees into the ministry. They noted that putting round pegs in round holes should be the standard in the state if truly any administration wants to create employment and drive growth through the sector. “The incoming governor needs to choose technocrats; those who know about farming, agro processing, export to be agric commissioners or special advisers on food security,” an indigene of the state said who does not wants his name mentioned on print. “Someone that has passion for the sector and not just a political appointee that does not know anything about

agriculture or what the farmers are going through,” he adds. Going by what farmers and stakeholders operating in the state are saying, an indigene of the state that suits the position of Agric Commissioner or Special Adviser to the Governor on Agr ic is Pr ince Wale Oyekoya, an agriculturalist, a commercial farmer and food processor and former head of the agric-group, Lagos Chamber of Commerce and Industry (LCCI). Aside being a bonafide indigene and a technocrat, his vast experience in the sector qualifies him to turn around the fortune of the near moribund agric sector, if given the opportunity by the governor, Dapo Abiodun. An experienced and practicing farmer, he is also a Consultant. He attended

the Alabama Agricultural & Mechanical University, Huntsville AL USA, graduating with Bachelor of Science in Accounting/Agriculture. “I can make positive change in the agric sector if given the opportunity to bridge the gap between the farmers and government through my uncommon experience with the real farmers,” Oyekoya said while speaking to journalists if he is given the responsibility as the next governor. “Policy somersault will be the first thing to tackle since there are fantastic policies on ground; the implementation is a big challenge.” He stated that declaring state of emergency in the state’s agric sector will be his top priority, while adding that value addition will be prioritise through industrial farm estates in all the senatorial districts. Raising state bonds to fund the sector will be encouraged and I will be more concerned to create wealth and employment through the sector, he said. “Stakeholders meeting of farmers will be done quarterly to listen to farmers’ problem will be order of the day. Providing silos and storage facilities to reduce post-harvest losses will be my priority,” he added. He noted that capacity bu i l d i ng f o r f a r m e r s o n standards and good farming practices will be carried out regularly in all local government areas of the state. Oyekoya linked the failure of past administrations to what

he termed policy somersault and lack of political will. “They meant well by their policies, but they do not have the political will to do the right thing by supporting the policies with adequate funding and putting the right person to oversee the affairs of such an important ministry like agriculture,” he said. He noted that the sector would have created more wealth for Ogun citizens and increase the state’s internally generated revenue (IGR) as well as provide employment opportunities for youths, but for selfish interest of some individuals has deny the successes. “The so-called MITROS rice revolution in Ogun State is a failure, where the government collected N4b from Central Bank of Nigeria (CBN) to develop rice production, but citizens were deceived with the staging of phony bags of rice, which the Economic and Financial Crimes Commission (EFCC) is investigating.” “The incoming governor in the state needs to do is to revamp all the abandon projects by privatising them and give them tax break. Support the projects with good enabling environment. “The incoming administration ne e ds to increase the funding of the sector from two per cent to eight per cent if they cannot even meet the expectations of 10 per cent by the Maputo agreement to increase funding of the sector,” he added.

Experts offer insights into investment opportunities in Nigeria’s aquaculture production

xperts in the aquaculture have said that enormous investment opportunities abounds in the country’s aquaculture industr y that are yet untapped. The experts say that investment in the country’s aquaculture industry is important in changing the fortunes of the economy with attendant exponential gains by way of earnings, employment generation, food provision and other spin offs. The experts spoke at a conference organised by Business Innovation Facility (BIF) in partnership with the UKaid to chat away forward for Nigeria’s aquaculture industry. “The investment opportunities in Nigeria’s aquaculture industry are enormous and yet to be untapped. The industry is huge and can create lots

of other subsectors with adequate investments,” Haruna Waziri MuhammedZukrana, co-founder of Largo Farms said. “There are opportunities in fish feeds and vaccines as we currently import them, thus making cost of production high,” he said. Muhammed-Zukrana who is also the general secretar y of Fresh Fish Sellers Association of Nigeria, Abuja Chapter said that numbers of fish farmers in the country have grown from 49,000 in 2015 to about 7 million in 2017, noting that the industry is attracting new farmers owing to huge potential. He called for investments in quality feeds to drive down farmers production cost, saying that feeds cost accounts for 78percent of total cost. He urged farmers to adopt hydroponics and aquaponics technology to www.businessday.ng

boost productivity. Speaking also, Sejiro Michael Oke-Tojinu, vice p re s i d e nt, L ag o s St at e Catfish Farmers Association ( L A S C A FA N ) s a i d t hat the demand of Nigerian processed cat fish is on the increase in the West African region, Europe and America. “The demand for process catfish is on the increase and glut is no longer a challenge to us again. Ghana

is requesting 120 tons of processed catfish from us monthly,” Oke-Tojinu who is also the director and CEO of SejiFarms Ventures/Farmers Solution Consult said. “There are huge opportunities in hatchery, production of smoking kiln, nutrition and other value change. Investors can invest in any of these. The demand for fingerlings from hatchery is on the rise daily,” he said.

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He highlighted limited research, extension and inadequate access to finance as factors limiting the industry from growth and expansion. He urged the government to resolve the banning issue of the country’s catfish from US and Europe to allow access to other markets. Speaking about the BIF Programme in the country, Soji Apampa, country director,

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said that the initiative which is in its fourth years of operation is focus on the development of dairy, maize, cassava and aquaculture production in Nigeria. “The target was to reach 160,000 beneficiaries over five years; we have reached 480,000 in four years. We were supposed to raise their income sustainably by an aggregate of £16million over five years; we are in year four and have clocked £25million,” Apampa who is also the cofounder of Business Integrity which runs the initiative said. “In terms of the target we have reached the target and we have set new ones. We are Nigerians and we have ruined the program based on foreign aid but believe we can push the envelope more and spur greater development so we are look for national scale change not just change through our program,” he adds.

Wednesday 26 June 2019

BUSINESS DAY

FEATURE

Agribusiness: Notore’s Green Schools Initiative to the rescue After Nigeria caught the crude oil virus over six decades ago, one of the segments of the economy that received the hardest hit was the agricultural sector. OSA VICTOR OBAYAGBONA writes that agriculture had hitherto laid the foundation for Nigeria’s industrialisation, contributing the largest share to an economy that was experiencing very boisterous growth.

efore now, commercial farms blossomed and farming was seen and practiced as proper business. However, after decades of abandoning agriculture, dwindling hydrocarbon revenue and the need to rearticulate the economy have made going back to the farm a priority for government and many others looking to drive sustainable development. The resort to re-jig agriculture is cast against the backdrop of the sector’s immense potential to absorb a large workforce. In fact, even with low productivity, agriculture still accounts for two-thirds of Nigeria’s working population, according to the Food and Agriculture Organisation (FAO). Unfortunately, there still exists the belief that farming is a profession for the poor and illiterate, which entails gruelling toil in the farmland with a pittance as returns. These notions have been fuelled over the years by lack of proper training for those who go into agriculture, causing them to demonise and abandon the venture, leading to an ageing farming population that is dying away gradually. In recent time, this narrative is being changed by Notore Chemical Industries, Nigeria’s leading agro-allied company and fertilizer manufacturer, through its Green Schools Initiative. The initiative, a novel national programme, rallies stakeholders in the agricultural and educational sectors to expand the secondary school curriculum with the intention to get students to practice agriculture in dedicated farmlands in their school premises. The priority is to get young Nigerians acquainted with the nittygritty of agriculture at an early age, introduce them to the business and money-spinning aspect of the practice and at the same time, make schools self-sustaining in food production. Keen on setting the right mood for the programme’s national rollout, Notore launched the Green Schools Initiative at Aliyu Musdafa College, in Yola, Adamawa State, on June 11, at a ceremony graced by Nigeria’s First Lady, Aisha Muhammadu Buhari, as well as her counterparts from Niger Republic, Chad, Ghana and The Gambia. Meanwhile, Femi Solebo, managing director/CEO, Notore Power and Infrastructure, satates the Green Schools Initiative is timely because it

is coming at a period when Nigeria’s population is growing faster than there are farmers to feed the nation. Noting that agriculture still remains the largest sector of the Nigerian economy and employs two-thirds of the labour force, he says, “Agriculture accounts for approximately 22 percent of Nigeria’s GDP.” However, in the past, many of the youth have not been interested in going into agriculture as a career due to previous misconceptions about the sector. “This is something we are working to change as we highlight the various benefits of agriculture as a business,” he states. He adds that Nigeria’s rapidly ageing active farmer population is due for a baton-change, noting, “When the current farmers retire, Nigeria will face a major crisis in food production because without a strategy a new generation of sustainable farmers will not exist.” Breaking down the concept of the Green Schools Initiative, he says the programme aims to ignite the interest of school students in agriculture and encourage them to pursue agriculture-related careers www.businessday.ng

instead of banking and oil &amp; gas sector careers. According to Solebo, “The Green Schools initiative involves Notore

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The Green Schools initiative involves Notore partnering with Secondary Schools across Nigeria to establish demonstration farms that will be used to teach students modern agricultural techniques and best practices

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partnering with Secondary Schools across Nigeria to establish demonstration farms that will be used to teach students modern agricultural techniques and best practices. The hands-on approach of demonstration farms accelerates the adoption of these international agricultural best practices, which will give the students a competitive edge over their counterparts in other sectors.” Notore’s launch of the Green Schools Initiative reflects its commitment to enhancing the quality of life as aptly captured in the company’s mission statement, he notes, noting that the initiative is a strong testament to Notore’s quest to be a significant contributor to the development of Africa, and especially Nigeria, as it targets the youth. He discloses the company also supports food security in Sierra Leone, Niger Republic and other West African nations. Tijjani St. James, head of Notore’s Commercial Division, says the Green Schools Initiative will start off with 120 Unity Schools and top state-owned colleges across the country, stating that the company aims to significantly increase the @Businessdayng

number of participating schools and include relevant NGOs and state governments in the quest to lay the foundation for Nigeria’s future agricultural development. “Notore will see to it that this initiative makes maximum impact and endures for a long time by working with the Federal Ministry of Education to expand the Agricultural Science subject curriculum to include agri-business at the SS3 level. “As we progress, we will expand the sizes of the demonstration farms so that each school cultivates a minimum of two hectares annually to help minimise Federal Government’s spend on grain purchases to feed the students,” according to St. James. St. James also revealed that the First Lady of Niger wants Notore to replicate the initiative in her country by including it in the existing MOU that Notore has with Niger. Nigeria’s First Lady, Hajiya Buhari said she was pleased that the initiative was kicking off at her former school, Aliyu Musdafa College, noting that the programme contributes immensely to President Muhammadu Buhari’s quest to stimulate youth interest in agriculture. According to her, “I have always expressed my desire to see that women and young people become self-reliant; this is why I welcome the effort of Notore Chemical Industries to introduce a Green Schools Initiative, which is aimed at inculcating the love of agriculture and especially farming among Nigerian youth. “ith the commissioning of the pilot this afternoon at Aliyu Musdafa College, I hope that it will be replicated in all schools in the country. Our young people need to see agriculture as a business and a way to grow the Nigerian economy. I therefore commend Notore for this initiative.” She said it was delightful that Notore’s Green Schools Initiative would ignite the interest of school-age youths in agriculture and encourage them to grow up to take agriculturerelated careers. Noting that there was a need to support such causes, she called on the private sector, non-governmental organizations and extension agencies to invest in agriculture because “The potential is enormous, and the foundation is the youth, as they are the future of the nation. I also call on the youths to embrace agriculture and turn our economy around.”

Wednesday 26 June 2019

BUSINESS DAY

Markets + Finance

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Zenith Bank deepens financial inclusion with mobile technology

ince Zenith Bank Nigeria Plc introduced the zero account opening balance, Muhammed Sanni no longer buries his income from grilled meat in his backyard. The 49-year-old has been spreading the good news to traders at the Mile 12 Market, who are now following suit. “I had thought it was a joke when someone told me about the new development. I now use the Bank’s mobile applications that are userfriendly,” said Sanni. In an effort to make banking facilities inclusive to all, especially those operating in the rural, semi-urban settings and operators in the informal sector, Zenith Bank, the largest lender by asset rolled out the zerobalance account. Customers can now open a Zenith Bank account with a Zero Balance (N0.00) as opposed to its initial range of N50, 000 – N250, 000. It is the first Nigerian lender to successfully integrate and launch Unstructured Supplementary Service Data (USSD) payments on Point of Sales (USSD on POS), enabling customers to pay for goods and services via POS terminals in merchant locations or on ecommerce websites without the use of cards. The innovative payment solution, which is powered by CoralPay, allows Zenith Bank customers to use the *966# Eazy Banking (USSD) to pay for goods and services on POS terminals in merchant locations or on ecommerce websites through the generation of a payment code on the POS terminal which is then confirmed

by the customer using their USSD pin. With market penetrating mobile applications and aggressive policy to attract more retail customers, the lender is at the forefront of deepening financial inclusion in the country. With market penetrating mobile applications and aggressive policy to attract more retail customers, the lender is at the forefront of deepening financial inclusion in the country. “With a wide suite of electronic products, our customers can now enjoy convenient banking services on-the-go. We place a very high premium on our customers’ user experience and ensure that all our platforms allow users to perform transactions seamlessly,” said Ebenezer Onyeagwu, group managing director and chief executive officer (CEO), Zenith Bank. “We have introduced payment solutions via social media such as zedstores on Instagram; Scan to Pay (QR payment) using QR codes for account opening and for making payments at merchant locations; electronic mandates for payments on merchant websites wherein debits are made against subscribers accounts,” said Onyeagwu. Out of a population of 200 million people, 38.60 percent, representing 36.60 million of the adult population in the country are excluded from the financial umbrella. But the latest survey by Enhancing Financial Innovation & Access (EFInA) showed that Nigeria has a chance to achieve the 20 percent exclusion rate target for adults by 2020. Low financial awareness and literacy levels, dampened consumer confidence,

Ebenezer Onyeagwu, GMD/CEO, Zenith Bank Plc

cumbersome and unnecessary rigour in opening account balance and proximity of financial institution to places where people live, especially in the rural areas, is undermining policymakers’ financial inclusion strategy. A lot of Nigerian traders

have closed their bank accounts and have resorted to stashing cash in their back yards because they were tired of standing on a long queue for hours to cash money. Some sub-Saharan African countries are ahead

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With a wide suite of electronic products, our customers can now enjoy convenient banking services on-the-go. We place a very high premium on our customers’ user experience and ensure that all our platforms allow users to perform transactions seamlessly

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BALA AUGIE

of Nigeria using a mobile phone to access financial service. According to a recent by EFG Hermes, an Egyptian investment bank present in the Middle East and North Africa region, revealed that only recorded 8 percent Nigeria’s population used their mobile phone mobiles to access their bank account in 2018. The report further shows that Kenya remained the continent’s leader in mobile banking. The 2018 report published by the Egyptian investment house shows 72 percent of the banking population used their mobile phones to access their accounts, nearly three times global average of 25 percent. Uganda was the lowest to Kenya with 47 percent while Tanzanian followed with 37 percent. However, Nigeria has gone from 100,000 working fixed line phones in the early 2000s to 170 million today. “Our vision is to be the leading retail bank in Nigeria. Our strategy is to ensure that Zenith Bank is the preferred go- to bank for all financial needs. As an institution, we have done well with our corporate segment and continue to claim more grounds in the retail space by providing cutting- edge solutions that cater for the strategic, operational and financial targets of our clients,” said Onyeagwu. Educating customers about various latest banking applications like payment system in the era of digital financial service is paramount. A total of N80.4 trillion had changed hands through the NIP channel in 2018, representing 43 percent increase from N56.17 trillion that was transacted via the

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channel in 2017, according to a recent report by Nigeria Inter-Bank Settlement System (NIBSS). According to the report, average daily transactions on the channel doubled from N1 million to N2 million in 2018. While the total bank account rose by 17.9 percent, the number of individual bank accounts rose by 18.5 percent and active bank accounts rose by 12.1 percent. Total bank accounts rose from 100.2 million to 118.1 million as at the end of December 2018, while active bank accounts 71.2 million from 63.5 million and individual accounts from 59 million to 69.9 million. About Zenith Bank Zenith Bank Plc was established in May 1990, and commenced operations in July of the same year as a commercial bank. The Bank became a public limited company on June 17, 2004 and was listed on the Nigerian Stock Exchange (NSE) on October 21, 2004 following a highly successful Initial Public Offering (IPO). Zenith Bank Plc currently has a shareholder base of about one million and is Nigeria’s biggest bank by tier-1 capital. In 2013, the Bank listed $850 million worth of its shares at $6.80 each on the London Stock Exchange (LSE). Headquartered in Lagos, Nigeria, Zenith Bank Plc has over 500 branches and business offices in prime commercial centres in all states of the federation and the Federal Capital Territory (FCT). In March 2007, Zenith Bank was licensed by the Financial Services Authority (FSA) of the United Kingdom to establish Zenith Bank (UK) Limited as the United Kingdom subsidiary of Zenith Bank Plc.

Wednesday 26 June 2019

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Dilapidated road, illegal checkpoints threaten businesses along Lagos-Benin corridor …As FERMA begins rehabilitation of Lagos-Badagry Expressway amaka Anagor-Ewuzie

he deplorable state of the Lagos -Badagry Expressway and the existence of multiple illegal checkpoints are presently enhancing difficulties experienced by business owners, particularly bilateral trade between Nigeria and other Western African countries. Lagos -Badagry Expressway is the major route or road leading to Nigeria’s biggest border station, which connects Nigeria to many other Economic Community of West African States (ECOWAS) countries including Benin Republic, Togo, Ghana and Ivory Coast. A recent visit by BusinessDay to the road showed that the long stretch of road is presently covered with potholes such that going from Mile 2 to Seme, which formerly took about 2 hours, now takes a minimum of 5 hours or more, thereby encouraging long man-hour loss on the road. Also, over 21 illegal check-

points mounted by uniformed security operatives including Police, Immigration and Customs along the route, and numerous potholes and gulley that frustrate commercial activities along the road on a daily basis, were also sighted. The security personnel, who force motorists to part with money, issue numbers to commercial vehicles after collecting between N300 to N500 from each of the vehicles

to allow them passage. This development confirms the outcome of a survey conducted by the Task Force on ECOWAS Trade Liberalisation Scheme (ETLS) in 2018, on doing business in Nigeria, which identified collection of illegal fees by government agencies and existence of multiple checkpoints as major inhibition to a smooth trade across borders. ETLS survey further re-

About 80% of Nigeria’s territorial waters yet to be surveyed – Bala Usman amaka Anagor-Ewuzie

bout 80 percent of Nigeria’s territorial waters are yet to be surveyed while 90 percent are yet to be charted, according to recent data, Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), has said. According to her, a holistic hydrographic knowledge of Nigerian maritime space chart in the least possible time is critical to effective maritime operations. Speaking during the celebration of the 2019 World Hydrographic Day at Naval Dockyard in Lagos, Usman observed that efficient management of the maritime environment through plausible knowledge of the water ways would evolve critical strategies that would secure and regulate activities in the sector for sustainable use and exploitation of the water resources. Usman, who commend-

ed the Nigerian Navy for taking the lead in producing the first navigational chart of the Nigerian waters, said lack of basic hydrographic details would make it difficult, even near impossibility to acquire necessary knowledge for exploration and exploitation of the maritime environment. She called for collaboration through information sharing, especially joint survey projects that would leverage the Local Chart Production Capacity already developed by the Nigerian Navy’s Hydrographic Office (NNHO). She however said more maritime information would be made available to government and maritime operators in an internationally acceptable manner, adding that these would in turn stimulate effective governance of the nation’s territorial waters. “Hydrography assisted the NPA management in deepening its channels by enabling the authority to expand its marine services to www.businessday.ng

Ijegun Egba channel, which was critical to the successful navigation and anchoring of the famous EGINA FPSO vessel. It helped in the completion of remedial dredging of Escravos channel, frequent wreck removals along the channels and the unveiling of Simulation Center at Dockyard,” she disclosed. She further said that safety, security, and the biodiversity of the environment play important roles in the maritime environment, which is why the United Nation (UN) sustainable development Goal 14, lays emphasis on the conservation and sustainable use of the ocean, seas and marine resources. In his address, vice admiral Ibok Ekwe Ibas, the chief of Naval Staff, said the Nigerian Navy was the first to produce navigational chart for the nation’s waters and expressed hope that the launching of the chart would take the nation’s maritime sector to greater heights.

vealed that civilians usually manage these checkpoints as the point men used in extorting and collecting ransom from drivers of trucks. “We are really suffering loses that include both economic and health loses due to the bad state of the Lagos-Badagry Expressway. Formerly, it used to take me between 18 to 24 hours (one day) to get to Nigeria from Ghana by road but today, I spend nothing less

than three days,” said Cletus Moses, an Abijan-based Nigerian trader. According to Moses, the state of the road has had several implications as traders pay more as transportation fare to haul cargoes, which suffer delay before arriving destination and more to commute as well as to maintain one’s health. Meanwhile, the Federal Government through the office of Federal Roads Maintenance Agency, (FERMA) last week, assured motorists of speedy completion of repairs on the Lagos-Badagry Expressway. Nuruddeen Rafindadi, FERMA managing director, who flagged off the work at Igbo-Elerin area, gave the assurance during the start of the general maintenance of the Lagos-Badagry-Seme dual carriageway, OkokomaikoAgbara sections at Igbo-Elerin on the highway. He s a i d g ov e r n m e n t awarded the contract in May and was committed to making the portion under contract from Igbo-Elerin to Agbara junction motorable.

The 70-kilometer road repair works would commence from Kilometre 20 up to kilometre 32, according to Rafindadi. He said the contract was awarded to WIZCHINO Engineering LTD at the cost of N3,609,968,772.35, with a completion period of 18 months given. The road had been divided into three sections to enhance the repair works, which are in progress close to Oko-Afo axis. The first phase from Eric Moore in Lagos to Okokomaiko (Channel zero to 20) is being handled by the Lagos State Government; the second phase- Kilometre 20 to 32 (Okokomaiko- Agbara is being undertaken by FERMA, while the Federal Ministry of Works is to handle the largest chunk of the project from Agbara (kilometre 32) up to Seme Border. Meanwhile, the Seme Border Customs command has raised an alarm, saying the state of the road had affected its revenue generation as transit cargoes now go through Idiroko border instead of Seme border because of the bad roads.

INTELS graduates 80 women under community empowerment scheme amaka Anagor-Ewuzie

NTELS Nigeria Limited, an oil and gas logistics giant, has graduated fresh batch of 80 women from the first set of beneficiaries admitted into the scheme in January 2019, under its Women Empowerment Programme Scheme Synergy (WEPSS). Speaking at the graduation ceremony held at the Federal Lighter Terminal, Onne, Rivers State on Friday, Mike Epelle, general manager, legal and corporate ser vices of INTELS, who represented the company’s managing director, expressed delight with the impact of the programme on beneficiaries since inception. “This is a programme that the management of INTELS holds very dear to its heart. It was the dream of the wife of the founder of INTELS that there should be something for women to achieve gender balancing, and that was how this programme started,” he said He advised the beneficiaries to make necessary sacri-

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fice required to put the skills they acquired to good use. “Many people are making a huge living out of fashion. So, invest your earnings in the business. There will be enjoyment as the years go by. From the little you will start with, you can multiply and employ people. Do not let the training you have acquired here go down the drain. If you apply yourself well to what you have learnt and develop yourself even more, you will certainly be a success story,” he said. In her remarks, Nancy Freeborn, WEPSS project head, said apart from the tailoring skills acquired, the programme also inculcated “soft skills” including personal hygiene and how to run successful businesses after graduation to trainees. “The skill you have been given is a gift from INTELS through WEPSS. That skill is what has allowed you to explore new ideas to create and design. Make INTELS proud by putting into use the skills that you have acquired. It gives us a lot of joy when we go on our followup exercise and see people who are really putting into @Businessdayng

use the skill they have acquired,” she advised them. Esther Osarodanwi, the best performing beneficiary, was provided with a startup kit which included an industrial sewing machine, steam iron, chair, scissors, seam ripper, box of tailors’ chalk and a measuring tape. Osarodanwi, who broke down in tears, while receiving her certificate and the start-up kits, thanked INTELS for impacting positively on women through the acclaimed empowerment scheme. She said the skill she acquired during the training had helped develop her passion for tailoring and fashion design. WEPSS, which is a Corporate Social Responsibility (CSR) programme of INTELS, was established in 2013 with the vision of empowering 5,000 women drawn from various parts of Nigeria over a 20- year period through training in fashion designing and tailoring. So far, more than 1000 women drawn from various communities have been empowered through the project.

Wednesday 26 June 2019

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Tema new port terminal ready to begin full operations on June 28 …As port successfully berths first simulation vessel

amaka Anagor-Ewuzie

he management of the Meridian Port Services (MPS), promoters of newly built Terminal 3 in Port of Tema, Ghana, said it’s ready to begin full operation of the port on June 28. This was as the port recently docked its first vessel, a container vessel to be used for training simulation in preparation for smooth run of the terminal from day one. Tema Port expansion project is spearheaded by MPS, a joint venture between Ghana Ports and Harbours Authority (30 percent); APM Terminals (35 percent) and Bolloré Transport and Logistics (35 percent). On completion, it will be the largest and most efficient container terminal on the Western Coast of Africa with a deep-water draft of 16 meters and potential to catapult Africa into a different level in the world shipping industry by creating new service

L-R: Mike Epelle, general manager, Legal and Corporate Services of INTELS Nigeria Limited; Esther Osarodanwi, best graduating beneficiary; Nancy Freeborn, WEPSS project head, and Cluadio Moruzzi, operational risk manager of INTELS, during the graduation of 80 women beneficiaries of the first batch of 2019 INTELS Women Empowerment Programme Scheme Synergy (WEPSS) at the Onne Oil and Gas Free Zone, Onne, Rivers State, on Friday.

routes and connections, and opening up the market for Africa. It is expected that the port, with annual throughput projection of 2 million

Twenty-foot Equivalent Units (TEUs) at the opening of phase 1, and 3.7million TEUs when fully completed, will also reduce freight costs and position Ghana as a

model maritime nation. “Chartering the test vessel will cost around $250,000. Over the coming weeks it will be used to run a full-scale test of the port and for final

staff training. When it comes to training, the benefits significantly outweigh the cost involved,” said Mohamed Samara, CEO of Meridian Port Services Ltd. He said the MPS operation team is shifting gear, from systems and equipment commissioning, and integrated testing, to simulating a full-fledged container terminal operation between yard and vessel. “Testing will not only involve operations at the waterfront and yard, but also more importantly the Terminal Operating System (TOS) and the full planning process for receipts and delivery,” says Cyrille Lemee, head of business transition. To Lemee, MPS will pull together, results from this trial operation, analyse them, identify all gaps and prepare for the next vessel call. On how prepared the operations team was for the scheduled Go- Live, Emmanuel Ohene Addo, operations manager, reassured that the right team was

in place for the beginning of operations. “For the Go- Live, every member of the operations team has undergone training and retraining. So far, the training process has yielded the expected results and we anticipate improvement going forward, especially as result of running simulations using test vessels. I can confidently say that the team is ready and come June 28, we will Go-Live,” Addo added. Mark Nolet, project director, said in the run up to GoLive, the construction team would hand over the facility – including all installations in the yard space, quay side and offices – fully to the operations team. “This is a continuing project, the construction process will continue, but will have no impact on daily operations once the port goes live. We hope to achieve our target of completing phase two of the project in record time as we are already two years ahead of schedule,” he added.

PTML offers discounted tariff to importers’ of overtime cargo

he Port and Terminal Multi-services Limited (PTML) has called on importers of overtime cargoes on its terminal to secure clearance from the Nigeria Customs Service (NCS) and take delivery of their cargo directly from the terminal

latest July 15 at a discounted tariff rates. PTML in a public notice sighted by BusinessDay, said it had concluded plans to transfer all overtime Rollon Roll-off (RoRo) cargo discharged at its terminal located at the Tin-Can Island Port Complex, Lagos

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on or before June 30, 2018 to the Customs’ facility at the Ikorodu Lighter Terminal. Overtime cargoes are cargoes that stay in the ports for up to 30 days and more. According to the public notice, the importers of such cargoes had one last opportunity to secure delivery

directly from the terminal at a heavily discounted tariff per unit, which include cars N75,000; vans, N100,000; trucks/trailers/bus N150,000 and plants N300,000. “This special tariff is effective immediately for only a short period of time. Importers are expected to

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secure Customs clearance and exit the units latest by 15/07/ 2019. All remaining cargo would be transferred to Ikorodu terminal immediately thereafter,” PTML stated in the notice. Recall that Nigeria Customs recently said it had commenced the process of

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evacuating overtime cargoes from the seaports to Ikorodu lighter terminal, beginning with PTML. Kaycee Ekekezie, zonal coordinator in charge of Zone A, NCS, said the service had received the Uncleared Cargo List (UCL) from port terminals in Lagos.

Wednesday 26 June 2019

BUSINESS DAY

Solid Minerals business

Kian Smith Gold Refinery & the first West Africa gold conference ….conference to develop Nigeria’s gold value chain JOSEPH MAURICE OGU

ian Smith Gold Refinery, which is setting up the first gold refinery in Nigeria, is a key sponsor of the first ever West Africa gold conference, Tuesday and Wednesday. Tagged Gold West Africa, the regional conference by MinVest, which will bring together players from different countries, is a strategic collaborative effort between Kian Smith Gold Refinery and Noemdek. “This is the first regional conference in West Africa on gold” Nicole Smith, Gold West Africa event manager, told BusinessDay recently. “West Africa has a thriving underground gold economy that if regulated, could unlock the West African region as the gold market centre of Africa” she noted. Smith said the event will bring 150 critical gold sector stakeholders from over 14 countries together with the aim of establishing a strong West African public and private sector lobby around the precious metal that could become the economic game changer for the region. According to the official information made available on its Twitter handles @KianSmithCo and @GoldWAfrica, the company said some of the speakers expected at the two-day event include Olufemi Babem, associate

director, Mining Centre of Excellence, KPMG, Nigeria; Yves Bertan, executive director, Alliance for Responsible Mining (ARM) and Uwe Naeher, head, Conflict Mineral Certification Project, Democratic Republic of Congo (DRC) for the Federal Bureau of Geosciences and Natural Resources. Others include Lara Smith, managing director and founder, Core Consultants, United Kingdom; Rodica Ella Ivan, Industrial Development Officer, Environment Department, United Nations Industrial Development Organization (UNIDO) and Amanda Lumun Feese, Technical Adviser on mining strategy and governance, Mineral Sector Support for Economic Development (MinDiver),Ministry of Mines and Steel Development (MMSD). Also expected to give their mind blowing insights are Toussaint Bamouni, director general, Chamber of Mines, Burkina Faso; Segun Lawson, chief executive officer and director, Thor Explorations Limited; Dauda Yakubu, director of operations, Standards Organisation of Nigeria (SON), Nigeria and Yomi Jemibewon, co-founder, Cardinal Stone. According to Smith, the company is playing a part in finding solutions that ensure Africa benefits from its own resource wealth. www.businessday.ng

By doing this, the company positions itself as solution-oriented to the gold market challenges and equally stands to contribute significantly to the economy of Nigeria and Africa. “Creating an internationally recognised gold market centre in Africa is important,” said Smith, adding that “Africa must start to benefit from its own resource wealth.” He added that formalising the small-scale gold sector as well as creating a favourable trade environment will go a long way to developing the gold economy of Africa. According to Smith, critical to the conference is to explore important issues around gold policy and how to strengthen the gold value chain. Also, the conference will explore gold trade and its impacts on monetary policy as well as examining the status and trends of West African gold consumption, and how this market can be encouraged. In addition, the conference will explore strategies to develop world-class gold projects from exploration to production; the need and benefits of formalising the artisanal gold mining sector and the importance of facilitating investment and funding throughout the value chain. Kian Smith Gold Refinery, located in Ogun State, will be operational soon. https://www.facebook.com/businessdayng

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Wenesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

news Lessons from Brazil, India, China... Continued from page 36

At that time, Nigeria had

87 million people living in extreme poverty compared to 73 million in India. The figures worsened to over 93 million in June 2019 in Nigeria, thereby accounting for 47.7 percent of the country’s population. President Muhammadu Buhari, while addressing Nigerians at the maiden June 12 Democracy Day celebration this year, expressed optimism that the country has the potential to lift a large number of people out of extreme poverty. “With leadership and sense of purpose, we can lift 100 million Nigerians out of poverty in 10 years,” Buhari said. Plans by the Federal Government to disburse N5,000 to the poor through the social intervention programme (SIP) would translate to N465 billion for each month. This means the government would spend N5.58 trillion to cater for the poor in a year. For a country challenged with revenue inflows as its major source of income has come under pressure owing to developments in the international market, the move could further worsen the nation’s current debt stock and make its plan to reduce poverty counter-productive. To ascertain the feasibility of the government’s goal to lift 100 million out of extreme poverty in the next 10 years, an international comparison of countries like Brazil, India, China, and Indonesia with remarkable wins against extreme poverty in the last few decades would help. Brazil is an upper middleincome country, and just like Nigeria, is the largest country in South America, with an estimated population of over 200 million people. The country has achieved some successes in complementing market-oriented reforms with progressive social policies which have helped it achieve a significant growth rate, bring more people into the economy, and create jobs to meet the growing demand and expectations of an expanding labour force. The new policy by the Brazilian government from the 1990s similar to the “Washington Consensus” include far-reaching reforms on macroeconomic stability, and privatisation of some stateowned enterprises thereby opening the country up for capital inflows to revive moribund state’s assets. Also implemented were fiscally prudent policies through a low government borrowing strategy. The idea was to discourage it from having high fis-

cal deficits relative to GDP, diversion of public spending from subsidies to important long-term growth supporting sectors like primary education, primary healthcare, and infrastructure, implementing tax reform policies to broaden the tax base and adopting moderate marginal tax rates. Part of the trade reforms adopted include selecting interest rates that are determined by the market, encouraging competitive exchange rates through freely-floating currency exchange, adoption of free trade policies. Currently, lawmakers in Brazil are debating the government’s pension reform bill, which aims to generate savings of around 1 trillion reais ($262 billion) over the next decade, shore up the public finances and stimulate investment and economicgrowthinthecountry. Also, India, the world’s second-most populous country, with the majority of poor people living in villages and rural communities, has halved its poverty rate in 10 years from 55 percent in 2005/06 to 28 percent in 2015/16. As of June 2019, less than 3 percent of Indians are below the poverty line, according to the World Poverty Clock. Until the first quarter of 2019 when the country recorded a sluggish growth rate of 5.8 percent, the Indian economy was the fastest growing major economy in the world ahead of China. This made the nation achieve a significant reduction in its poverty rate. The achievement came on the back of improved living standards through investments in human capital, better sanitation, and increased household assets propping up the country’s per capita GDP, a measure of a country’s wealth relative to each individual, from less than $400 in 1990 to $2,036 in 2018, according to the International Monetary Fund. Although there had been some efforts by India in the 1980s to create jobs and shore up its economy, the major factors that trigger poverty reduction in any economy, India’s reforms and policies for an inclusive economic growth started in early 1991. In 1991, India had an economic crisis owing to its external debt, rendering its government incapacitated to make the payments for the borrowings it had made from the foreign countries. This led the government to adopt new policy reforms to reposition the economy. The reforms were geared towards supporting the private sector players which eventually opened up the Indian economy to foreign

MTN launches 4G+ advanced... Continued from page 1

rience to more people across the country, has launched in three major

cities in the country, Lagos, Port Harcourt and Abuja, the

major business hubs where most commercial and financial activities are carried out and the administrative capital of Nigeria. The difference between 4G and 4G+ is the maximum www.businessday.ng

L-R: Oremeyi Akah, chief core operations officer, Interswitch; Elohor Aiboni, Bonga Asset operations manager, Shell Nigeria; Folake Sanu, executive director, Wema Bank plc, Ezinne Ezeani, founder, SheCan Nigeria, and Olive Emordi, event host, at Wema Bank-supported SheCan Nigeria Conference 2019.

investment, even as some other reforms focussed on restructuring the public sector. Major steps were taken in trade and industrial policy. These include a reduction in import tariffs, deregulation of markets, and reduction of taxes, making the country record increased foreign investment. As a result, foreign direct investment into the country began to increase, rising from less than $10 billion in 2005-06 to $42 billion in 2018 on the back of robust inflows into manufacturing, communication, financial services and cross-border merger and acquisition activities, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2019. This placed the country as the 10th highest recipient of FDI inflows in the world. Growth in cross-border mergerandacquisitionsinIndia grew to $33 billion in 2018 compared with $23 billion recorded a year earlier, this was driven by $16 billion worth of transactions in retail trade which includes e-commerce and telecommunication ($13 billion). Consequently, the size of the nation’s economy spiked from $1.3 trillion in 2009 to $2.6 trillion in 2017. China’s rise from a poor developing country to a major economic powerhouse has been spectacular. Since opening up its economy to foreign trade and investment and implementing free-market reforms, the Asian giant has been among the world’s fastest growing economies, with an average annual growth of 8 percent in the decade between 2001 and 2010. China’s growth miracle is buoyed by open-door economic policy and market-oriented reforms implemented. The Chinese government established several zones for foreign investment, including special economic zones, open coastal cities, the economic and technology development zones and high-tech develop-

ment zones among others. The creation of these zones provided the trigger for massive inflows of foreign direct investment (FDI), particularly from companies in Taiwan and Hong-Kong. Additional reforms, which followed in stages, sought to decentralize economic policymaking in several sectors, especially trade. Economic control of various enterprises were given to provincial and local governments, which were allowed to operate and compete on free market principles, rather than state planning control. China’s trade and investment reforms led to a surge in FDI. Such flows have been a major source of China’s productivity gains and rapid economic and trade growth, with inflows rising from $3.5 billion in 1990 to $136.2 billion in 2017, making the Asian nation the third-largest recipient of FDI worldwide. There has been a consensus that productivity gains (increased efficiency) have been another major factor in China’s rapid economic growth. The improvements to productivity were caused largely by a reallocation of resources to more productive uses, especially in sectors that were formerly heavily controlled by the central government, such as agriculture, trade, and services. Agricultural reforms boosted production, freeing workers to pursue employment in the more productive manufacturing sector. China’s decentralization of the economy led to the rise of non-state enterprises (such as private firms), which tended to pursue more productive activities than the centrally controlled enterprises and were more market-oriented and more efficient. Additionally, a greater share of the economy (mainly the export sector) was exposed to competitive forces. Local and provincial governments were allowed to establish and operate various enterprises without interfer-

ence from the government. In addition, FDI in China brought with it new technology and processes that boosted efficiency. The Indonesian economy is the largest in South East Asia and simultaneously the 16th biggest global economy by nominal Gross Domestic Product. Its economy expanded some 5.2 percent in 2018. Indonesia’s poverty elimination success has seen the percentage of the country’s population living below $1.9 per day plunge between 1999 and 2017, falling from 41.7 percent to 5.7 percent according to World Bank figures. According to the world poverty clock, 5.6 Indonesians escape poverty every minute. This is above the target escape rate of 1.9 people per minute. Whereas Nigeria has 4.5 people fall into absolute poverty every minute, completely missing its target of lifting 15.5 people out of the povertytrap everyminute. Indonesia’s economic reform started when it began liberalizing its economy and shifted its economy to a non-oil export oriented one with an increased focus on a broad-based economic growth that had at its center, rural development. The government focused its attention on raising productivity (of rural areas especially) by focusing on agriculture, education and transport infrastructure with little emphasis on direct transfer programs, consumer subsidies, and public employment. The government spent about a third of its development budget on improving agriculture especially rice farming in the period. The government also committed 49 percent of its oil windfall to creating social and physical infrastructure and a result, Indonesia was able to cut down the number of people in absolute poverty to 40 percent by 1976. Indonesia also embarked on a currency devaluation by the late 1970s which resulted in increased competitiveness and improved exports of non-

oil commodities. The rupiah was allowed to float from late 1966 to the end of 1968, during which time it depreciated from Rp 85 per U.S. dollar to Rp 326. The move reduced the incidence of export smuggling and increased its export receipts as well as boosting the confidence of potential aid donors and of foreign investors and residents, who repatriated capital that had previously been in flight. As a result by the late 1980s, Indonesia was able to stand on equal footing with Nigeria given its export-oriented and labor-intensive growth that increased employment and private investment. Indonesia also passed into law two policies to encourage foreign investment. In addition, rural development strategy of improved spending on education, health and water hygiene proved to be a success as rural areas where most of the poor lived, grew at a faster rate than in urban centers. The current national framework for poverty reduction Rencana Pembangunan Jangka Panjang Nasional (RPJMN) which started in 2015 and is expected to end in 2019 focuses on reducing poverty by making economic growth more inclusive. The plan anchors on job creation and improving the business environment to increase investment in laborintensive industries and small enterprise. The government also outlined plans to develop basic infrastructure which would support economic activities as well as aid rural settlements and hinterlands. In addition, the government noted it would improve on the delivery of basic social services including education and health to the poor as well as roll out more comprehensive and better targeted social protection programs. The plan outlines an ambition to reduce income disparity between income group.

theoretical speed, bandwidth and minimum latency customers can get. 4G can reach speeds up to 100Mbit per second, while the 4G+ (LTE-A) can reach up to or over 1GBit per second, with less than a few milliseconds of latency. With the faster speeds and

lower latencies, 4G+ will allow MTN’s over 64 million subscribers to watch a lot of HD movies at once, do some live online gaming, and much more. 4G+ works through carrier aggregation, which allows 4G phones to receive data from multiple bands in

the 4G spectrum. So, while 4G uses only one band at a time, 4G+ can combine two bands for increased speed. In a statement sent to BusinessDay, the telecommunication service provider says its MTN 4G+ runs on 4G LTE Advanced Technology using

a combination of the recently acquired 800 MHz spectrum from Visafone and the 2600 MHz it acquired as a sole bidder during the Nigerian Communications Commission’s (NCC) spectrum sale.

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Wednesday 26 June 2019

BUSINESS DAY

news Opposition lawmakers urged to live above board OWEDE AGBAJILEKE, Abuja

embers of Public Accounts Committee (PAC) of African Parliaments have been urged to live above board in the discharge of their constitutional responsibilities. Mohammed Ladan, a professor and director, Legislative Support Services, National Institute for Legislative and Democratic Services (NILDS), stated this in Abuja while delivering a keynote address at a one-week benchmarking workshop for members of Ugandan Parliament. Specifically, Ladan called on them to remove the beam out of their own eye before removing the speck out of government’s eye. “PAC members must be prepared to go with clean hands for oversight and demand for accountability on public financial management by ministries, departments and agencies. You cannot be probing corrupt government officials when your hands are deeply soiled in corrupt practices and abuse of office,” he said. He also advised them to establish good working relationship with Auditor-General of the their country. He submitted that to make Public Accounts Committees in African Parliaments vibrant, there was need to enhance their capacities through financial, material, human and technical resources. He listed the challenges hindering PAC’s optimal performance to include: inadequate resources; poor relationship

management between committees and MDAs; time constraints and membership turnover. Declaring the workshop open, Abubakar Sulaiman, a professor and director-general of NILDS, said the objective of the workshop was to strengthen the capacities of the opposition in the Ugandan Parliament in undertaking oversight of government programmes and projects. The workshop, he said, provides a forum for Ugandan MPs to deliberate with resource persons and their counterparts from the National Assembly on strategies for constituting an effective opposition. “It is my hope that through this benchmarking visit you will learn and be re-acquainted with strategies for constituting effective opposition in parliament; sharpen your knowledge of and evolve ways of undertaking oversight of government programmes and projects, and consider approaches to developing shadow structures and functions to enable regular and timely assessment of government policies,” he said. Earlier, Leader of Opposition in the Ugandan Parliament, Aol Betty Ocan, said Nigeria offered one of the best avenues to draw lessons of change management and the role of opposition, as the ruling People’s Democratic Party (PDP) lost power to the All Progressives Congress (APC) in 2015, having ruled for 16 years. She said: “We are here for capacity building in areas of legislation, democracy, good governance. And in my department, my main work is to see to it that the shadow cabinet performs.”

CHANGE OF NAME

I formally know and addressed as Agu Adaora Nwabundo Now wish to be addressed and know as Ugonwa Adaora Nwabundo. All former documents remain valid. General public please take note

I formally know and addressed as Roland Matthew Chukwuebuka Now wish to be addressed and know as Roland Matthew. All former documents remain valid. General public please take note

CHANGE OF NAME

I, formerly known and addressed as Onyekwere Tochi Constance now wish to be known, and addressed as Anomah Tochi Constance. All Former documents remain valid. General public please take note.

I formally know and addressed as Miss Anaele Juliana Chisom Jessica Now wish to be addressed and know as Mrs Onyekuru Juliana Chisom. All former documents remain valid. General public please take note

CHANGE OF NAME

I formally know and addressed as Babade Sango Paul Now wish to be addressed and know as Babade Sogo Paul. All former documents remain valid. Banks General public please take note

CORRECTION OF NAME This is to inform the general public that my name was wrongly written on my GCE result as Ogbona Opeyemi Ayisat. instead of Ogunbona Opeyemi Morayo. GCE and the general public should take note

I formally know and addressed as Taiwo Matthew Now wish to be addressed and know as Taiwo Matthew Oluwakayode. All former documents remain valid. General public please take note

CHANGE OF NAME I formally know and addressed as Ezenne Chidimma Mary Now wish to be addressed and know as Ebo Chidimma Mary. All former documents remain valid. General public please take note www.businessday.ng

Book building for Airtel Africa ECOWAS 42nd Mediation, Security Council meeting to strengthen security share offer closes Friday Innocent Odoh, Abuja

ediation and Security Council (MSC) of the Economic Community of West African States (ECOWAS) at its 42nd session on June 24, 2019, in Abuja, Nigeria, deliberated on ways to improve the security situation of the region, according to a statement issued on Tuesday by the communications division. Addressing the Council at the opening of the session, the President of the ECOWAS Commission, Jean-Claude Kassi Brou, stated that the greatest challenge facing the region today and thus holding back economic, social and human advancement, was the issue of regional security. “Almost every month, our region is hit by terrorist attacks which plunge our populations into mourning. The problem has become more complex with ruthless inter-communal clashes that pose a threat to the social cohesion of our countries,” Brou said. Brou called on Member States to implement the Lomé Declaration on Peace, Security,

Stability and the Fight against Terrorism and Violent Extremism, which was adopted during the joint ECOWAS-Economic Community of Central African States (ECCAS) summit in July 2018. He stressed the need for ECOWAS to consider other patterns of relationships and strengthen cooperation with geo-political blocs with which it shared same vulnerabilities, given the transnational nature of security threats and the porosity borders in the region. On the political front, he highlighted the ECOWAS Commission’s continuous efforts to support Member States in the conduct of inclusive, transparent and credible elections. The president presented to the Council Memoranda on the Political and Security situation in the region, which included the status of the ECOWAS Mission in Guinea Bissau (ECOMIB) and the ECOWAS Mission in The Gambia (ECOMIG) as well as one on the issuance of ECOWAS Exemption Certificate by the President of the Commission in case of “extreme” emergency.

… to determine Offer Price

Iheanyi Nwachukwu

he Book Building for the planned Initial Public Offering (IPO) of Airtel Africa, which opened June 18 closes June 28. Book Building is the process by which the underwriters attempt to determine the price at which the IPO will be made. The offer price ranges from N363 to N454 per share, according to the offer document. The price is still an indicative price subject to the outcome of the ‘Book Building’ exercise by the company. The number of shares at the lower price range is 676.406 million units while at the top of the price range are 541.12 million units. The Offer size ranges from $501.12 million to $716.40 million. The market capitalisation of the company is $4.18 billion. The official announcement of the offer price, offer

size, and publication of the pricing statement and allocation of ordinary shares will be done on same day (June 28). On June 29, new ordinary shares will be allotted to the shareholders, while the shares will be admitted for trading on the Nigerian Stock Exchange (NSE) on July 4. Airtel Africa had announced plans of an IPO of shares worth $780 million (N270bn) on the premium board of the London Stock Exchange (LSE) and subsequently, the NSE. The proceeds from the offer will be used to offset the company’s net debt. Participation is restricted to Qualified Institutional Investors and High Net worth Individuals. Meanwhile, some market operators are setting up Special Purpose Vehicles (SPVs) to aggregate the demand of retail investors. Upon successful completion and listing on July 4, 2019, all shares will be crossed into investors’ CSCS account.

L-R: Seun Deoye Oduntan, team lead, corporate action, Custodian; Abimbola Ibrahim, relationship manager, United Capital Limited; Tadeni Balogun, head, legal services/CIS; Taiwo Olashore, managing director, Lead Asset Management Limited, and Bunmi Jolayemi, vice president, sales and marketing, Lead Asset Management Limited, during the 2nd AGM of Lead Asset Management Limited, held recently in Lagos.

Turkish Airlines lands inaugural flight into Port Harcourt airport … as Governor Wike advocates for more international flights IGNATIUS CHUKWU

overnor Nyesom Wike of Rivers State says the commencement of Turkish Airlines flight to the Port Harcourt International Airport will lead to greater economic development for the state. Speaking at a ceremony marking the maiden flight of Turkish Airlines to Port Harcourt on Tuesday, Governor Wike said Rivers State government was ready to partner Federal Airports Authority of Nigeria (FAAN) for more airlines to operate international flights from the state. He said: “We are happy that Turkish Airlines is now

operating from the Port Harcourt International Airport. This will positively impact the economy of the state. “O u t s i d e L a g o s a n d Abuja, Port Harcourt International Airport should be the next destination for international flights and other business opportunities. The Rivers State government is willing to partner with key stakeholders to ensure that more airlines operate from the state.” Rivers has great economic opportunities that will be beneficial to investors, he said, noting that the economy of the state can sustain itself. He reiterated his approval for the dualisation of the road leading to the Port Harcourt

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International Airport, saying engineers of the state Ministry of Works took the road measurements on Tuesday. According to Karem Sarp, senior vice president of Turkish Airlines, the Port Harcourt route is the 324 destination of the airline in 124 countries, and its 57th destination in Africa. Turkish Airlines is committed to improving socioeconomic connections in different parts of the world, Sarp said, saying, “We are recognised for our unique flight services. We will continue to grow and this is an important destination.” He said the Port Harcourt route would link India, United States, China and other im@Businessdayng

portant global destinations. Managing director of FAAN, Usman Sadiq said the Port Harcourt International Airport deserved more flights, saying FAAN would continue to work towards more flights for the state. Nigerian Ambassador to Turkey, Audu Paragalda said the new destination would improve relations between Turkey and Nigeria. General manager of Turkish Airlines Lagos/Port Harcourt, Yunus Ozbek, thanked the Rivers government and FAAN for creating the opportunity for Turkish Airlines to operate from Port Harcourt, and assured that the Airlines would live up to the expectations of the people.

Wednesday 26 June 2019

BUSINESS DAY

tax issues Still on the landmark judgment between Nexen Petroleum, LIRS Iheanyi Nwachukwu

ollowers of development in Nigeria’s tax system and its appeal tribunal will not forget so easily the June 18, 2019 judgment in Lagos by the Tax Appeal Tribunal (TAT). Specifically, it is in the case of Nexen Petroleum Nigeria Limited (the Appellant) and Lagos State Internal Revenue Service (LIRS) –the Respondent to the effect that Voluntary Pension Contribution (VPC) is a valid deduction for calculating Pay-As-You-Earn (PAYE) tax on employee’s emoluments. KPMG’s Tax Dispute Resolution Team had provided support to the Appellant in the resolution of the tax appeal. How it started The Joint Tax Board (JTB) and Lagos State Internal Revenue Service (LIRS) had issued separate public notices on their position on the adverse effect of Voluntary Contributions (VC) on tax revenue. What the law says Section 4(3) of the Pension Reform Act 2014 provides that any employee to whom the Act applies may, in addition to the statutory contributions, make voluntary contributions to his retirement savings account. Section 10(1) of the PRA provides for the

tax-deductibility of pension contributions – including Voluntary Contributions (VC). Section 10(4) of the Act, however, provides that any income earned on VC made and withdrawn within 5 years would be subject to tax at the point of withdrawal. This is in contrast to Section 7(2) of PRA 2004 which taxed

VC withdrawn less than 5 years after the date of contribution, and not merely the income earned from it. Were the notices triggered by common tax avoidance practice? The notices appeared to have been triggered by the common tax avoidance practice of employ-

ees making uncapped Voluntary Contributions from their monthly salaries, claiming reliefs on the contributions made, and subsequently withdrawing the VC from their Retirement Savings Account (RSA). JTB position The position of the JTB is that such practice is inconsistent with

Section 16 of PRA 2014; and would be treated by tax authorities as an artificial transaction based on the provisions of Section 17 of the Personal Income Tax Act, as amended (PITA). LIRS had same view The LIRS reflected the same view in its notice, but also stated that only withdrawals from Retirement Savings Accounts that fall within the ambit of Section 16 of PRA 2014 would be treated as tax-deductible. The section covers pension withdrawals by employees above 50 years old and those below 50 years old with specified health or employment challenges. The Tax Appeal Tribunal delivers judgment While delivering judgment in the case of Nexen Petroleum Nigeria Limited and Lagos State Internal Revenue Service, the Tax Appeal Tribunal noted that VPC is statutorily exempted from PAYE tax by the provision of Sections 4(3) and 10 of the Pension Reform Act 2014 (as amended) and Section 20(1) of the Personal Income Tax Act 2011 (as amended). Also, the TAT ruled that the Appellant in not under statutory obligation to account for tax payable on the amount of VPC withdrawn by its employees. The responsibility to recover the tax due on such withdrawals is that of the Respondent.

How shifting tax rules can complicate M&A deals EY Global

rowing uncertainty isn’t stunting worldwide deal making, but changes in the tax environment pose challenges. For many businesses, mergers and acquisitions (M&A) drive growth. Consider the history of Luxottica Group S.p.A. in the eyewear industry. The Milan, Italy-based company, founded in 1961, has assembled much of its portfolio of branded eyewear, retail networks and eyewear distributors through acquisitions. “M&A has always been a crucial activity for the group,” says Luxottica M&A Director Pierluigi Longo. It remains very much rooted in our corporate culture and is a key driver of our growth. M&A has become increasingly global and competitive in nature”, says Bridget A. Walsh, EY Global Head of Transaction Tax. Over the past two decades, Luxottica has expanded globally through regular, strategic purchases starting with the acquisition of the LensCrafters retail chain and Persol eyewear brand in 1995 through the pending combination with France’s Essilor International SA, announced this year. Along the way, Luxottica acquired global brands including Ray-Ban sunglasses, the Sunglass Hut retail

chain and Oakley, the maker of athletic eyewear. It has also bought additional retail chains and brands in Australia, Asia, Europe and North and Latin America. While strategic business goals are the catalyst for Luxottica’s acquisitions, tax is nevertheless an important issue that should always be addressed, according to Luxottica Tax Director Giacomo Soldani. In every country there is a different tax regime and some are more cumbersome than others; the company depends on advice from its tax team to verify that it is proceeding in an appropriate way. Tax becomes even more critical in large deals, as there are many issues that can impact valuation and risk. “We get involved early and work

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very closely with the M&A team,” Soldani says. “If you get things wrong or overlook something early in the process, it can create significant problems later on.” Proceed with caution Despite growing complexity and uncertainty, respondents in an EY survey had predicted that deal making would remain robust in 2017. Our Global Capital Confidence Barometer, a survey conducted earlier this year of more than 2,300 executives in 43 countries, found that 56% of executives surveyed planned to make an acquisition within the next year. “Geographical expansion to secure supply chains and increase customer reach will accelerate cross-border M&A,” Steve Krouskos, EY Global Vice Chair Transaction Advisory

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Services, wrote in the report. “Private equity is returning to replenishing mode. Lastly, corporates are increasingly reassessing and reshaping their portfolios, creating a natural pipeline of deal opportunities.” Tax is among the risks that companies must address today when making acquisitions. Our M&A survey found that 76% of respondents had failed to complete or had cancelled an acquisition over the past year, and tax implications was cited as the primary reason by 33% — behind issues discovered during due diligence, and concerns about cybersecurity and regulatory or antitrust reviews, but ahead of economic and political instability. Amid widespread change in the tax world, “there is no time in memory where pricing the risk and cost of taxation within M&A deals has been so challenging,” says Bridget Walsh, EY Global Head of Transaction Tax, who is based in London. The changes begin with a global tax reform plan, developed by the Organisation for Economic Cooperation and Development (OECD), aimed at increasing transparency and consistency. “Nations have access to vastly more information about each company doing business within their borders stemming from expanded reporting requirements [e. g., countryby-country reporting],” Walsh says. @Businessdayng

“The information is being used to reevaluate transfer pricing — essentially where profits can be taxed — and that creates uncertainty within M&A.” Changing rules Another new guideline stemming from the OECD initiative limits the amount of interest businesses can deduct, reducing the degree to which companies can use leverage within transactions. The objective of the guidelines and regulation is to prevent profit shifting from jurisdiction to jurisdiction by financial means. This has particular implications for the private equity (PE) industry, which often uses substantial leverage within its transaction financing structures. “Private equity investors are having to rethink their approach to the M&A marketplace,” says Erica Lawee, EY Global Development Leader, Transaction Tax, who is based in London. For the most part, this means looking for ways to generate value through less leveraged deal making. Certain aspects of M&A transactions may be dramatically affected by other changes in the tax environment. Tax rates are changing, as are rules related to grants and incentives as well as the transferability of loss carryforwards. And tougher enforcement actions and uncertainty about tax rates make the modelling of deals much more difficult.

Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

NEWS FG fails to file response in $2bn tax dispute against MTN as case resumes ISAAC ANYAOGU

he Nigerian government is yet to file its response to the suit MTN Nigeria filed challenging the legality of the Attorney General of the Federation’s assessment of its import duties, withholding of tax and value-added tax in the sums of N242 billion and $1.3 billion as at the close of business on Tuesday, a situation that could well torpedo its suit against the company, BusinessDay has gathered. With the absence of a minister of justice following President Muhammadu Buhari’s inability to speedily assemble a cabinet, the task of going ahead with the case lies with the solicitor-general but there are speculations that even the solicitor-general may be unavailable, which has led to an inability to file court papers on Tuesday. “It could be that the Federal Government is not taking the suit as seriously as it once did on account of widespread pressure or they could also be considering a negotiated solution. Either way, we will know more after today,” said Ayodele Oni, partner

at Bloomfield law firm. In the suit, MTN contends that the revenue assets investigation allegedly carried out by the Federal Government for the period 2007-2017 violates Section 36 of the Constitution that stipulates fair hearing for the accused. It also claims that the government’s decision conveyed through the office of the AGF, by a letter dated August 20, contravenes the provisions of the section. However, for the beleaguered telecommunications giant, the suit has wide implications for its business. The South Africa-based telecommunication multinational listed its shares on the Nigeria Stock Exchange (NSE) trade floor by introduction in May but had been unable to complete an Initial Public Offer (IPO). Investors are holding their breath to see the direction of this suit, as it would materially affect the company’s valuation. MTN put 20.33 billion ordinary shares up for purchase on the secondary floor of the NSE at a value of N90 per share, which puts the value of its shares at $5 billion. If the Nigerian government succeeds in obtaining a $2 billion court judgment against

it, the valuation of the company will substantially change. At the resumed hearing of the case on May 7, a Lagos Division of the Federal High Court rejected a preliminary objection filed by the Attorney General of the Federation, Abubakar Malami, seeking to dismiss the N3 billion suit filed by MTN against the Nigerian government. Tijani Gazali, who represented the attorney general, said MTN did not file its legal opposition to the demand within the required three-month timeframe, whereas Wole Olanipekun, representing the telecoms firm, said that was not the case. Chukwujekwu Aneke, the judge, ruled that the suit was filed in accordance within the required timeframe. The judge adjourned till June 26 for the hearing of the substantive case. MTN had filed a suit last year challenging the AGF’s claims of unpaid import duties and withholding taxes between 2007 and 2017 amounting to N242 billion and $1.3 billion. MTN is demanding for N3 billion as general and exemplary damages and legal costs.

‘Holistic curriculum needed to address Nigeria’s education challenge’ SEYI JOHN SALAU

here is an urgent need to overhaul the education curriculum in Nigeria as a means of addressing the current educational challenge and inequality for a holistic academic system that promotes soft skills, critical thinking and survival skills. “All-round education is holistic education; it is not only about academics, but also about the ability to survive, to thrive and excel in the world outside the classroom or lecture room. It is about developing soft skills, like being a good team player or being able to relate with other people constructively. “Soft skills are so important, because the ability to survive in the world is more important that our certificates. That’s why all-round education is both about academic excellence and developing soft skills,” said Ebi Obaro, president, Maple Canadian College and CEO of Maple Education Canada, a frontline education marketing company. Obaro stated this at the unveiling of Maple Canadian College (MCC), a college that promotes Canadian education and curriculum that offers the Grade 12 or pre-university programme that prepares students for universities. “Hopefully, by 2 September, we will start academic work at our campus in Lekki, which has boarding facilities. “…Canadian education is very practical, has lots of discussions, assignments, lots of opportunities for developing writing and other skills. And at the end of the day, you understand what you are taught; it involves basically acquiring skills and knowledge, as well as learning team work,” she stated. www.businessday.ng

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Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

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Wednesday 26 June 2019

BUSINESS DAY

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NEWS Wema Bank partners SheCan in empowering women

Wednesday 26 June 2019

BUSINESS DAY

n line with its commitment to support Nigerian women in achieving their goals, Wema Bank is proud to partner SheCan Nigeria Movement to support young women across Nigeria. SheCan Nig er ia is a movement designed to support today’s women to realis e their poten tials and develop their capabilities in achieving success through collaboration and empowerment to become active players and contributors in society. The initiative is set up to empower adolescent girls and women through strategic training, mentoring, counselling, skill acquisition and community empowerment programmes. In its second year, the Ezinne Ezeani-led initiative held its annual conference on June 21, 2019, at MUSON Centre Lagos w ith ke ynote sp eakers charging women to take responsibility for growth in their careers, professions and businesses. Speakers at the event included Oremeyi Akah, chief core operations officer, Interswitch ; Elohor A iboni, Bonga Asset Operations manager, Shell Nigeria; Helen Paul, founder, Helen Paul Theatre and Film Academy; Abi mb o la Ab o la r i nwa, surgeon and urologist, LASUTH. Wema Bank’s executive director, Folake Sanu, who also delivered a lecture on financial management for women at the conference, was awarded the SheCan Finance Woman of the Year 2019. The bank will also be pa r t o f t h e i n i t i at i ve’s post-conference activities such as SheCan Charity Fair, Pick Up a Child Challeng e, Mentor ing, and Counseling for Adolescent Girls, Back2School Initiative, Booth Camp and Vocational Skill Acquisition Programs. I n Ma rc h t h i s y e a r, Wema Bank showed its continuous support for Nigerian women through its partnership with Songversation with Aramide in celebration of the 2019 International Women’s Day. At the concer t-style event, the bank launched its women’s proposition Sara by Wema, designed to support women in all sectors to realize their personal and business goals. Wema Bank remains passionate in its drive to constantly participate in and suppor t platforms that are geared towards the advancement of the entrepreneurial prospects of women in Nigeria.

Manufacturing PMI records slower growth at 57.4 index point in June HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN)onTuesdayreleased the Purchasing Managers Index (PMI) which saw manufacturing sector growing at 57.4 points in June. This represents slowerexpansioncomparedto57.8 pointsrecodedinMay2019. The Manufacturing and NonManufacturingPMIReportonbusinessesisbasedonsurveyresponses, indicating the changes in the level of business activities in the current month compared with the preced-

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ingmonth. Thereportrevealedthatproductionlevel,supplierdeliverytimeand employment level grew at a faster rate,whilenewordersandrawmaterialsgrewataslowerrateinJune2019. FSDH Research, headed by AyodeleAkinwunmi,statedthatthe levels of PMI figures in 2019 so far are higher than the corresponding periodoflastyear. Atotalof12outofthe14subsectorssurveyedreportedgrowthinthe review month. These include transportation equipment; petroleum and coal products; cement; chemi-

cal and pharmaceutical products; electricalequipment;food,beverage and tobacco products; printing and related support activities; fabricated metal products; paper products; furnitureandrelatedproducts;textile, apparel, leather and footwear; and plastics and rubber products. The non-metallic mineral products and primary metal subsectors recorded declinesinthereviewperiod. Theproductionlevelindexofthe manufacturing PMI at 59.3 points grewforthe28thconsecutivemonth inJune2019. The index indicated a faster

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growth in the current month when comparedtoitslevelinthemonthof May2019.Twelveofthe14manufacturingsubsectorsrecordedincreased production level, 1 remained unchangedwhile1recordeddecline. The manufacturing sector inventories index grew for the 27th consecutive month in June 2019. At 55.0 points, the index grew at a slower rate when compared to its level in May 2019. Ten of the 14 subsectorsrecordedgrowth,2remained unchanged,while2sectorsreported declined raw material inventories in thereviewmonth.

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Accordingtothereport,thecomposite PMI for the non-manufacturingsectorstoodat58.6pointsinJune 2019,indicatingexpansioninthe26th consecutive month. The index grew ataslowerratewhencomparedtoits levelof58.8indexpointinMay2019. The June 2019 PMI survey was conducted by the Statistics Department of the CBN during the period June 10-14, 2019. The respondents were purchasing and supply executives of manufacturing and nonmanufacturing organisations in all 36 states in Nigeria and the Federal CapitalTerritory(FCT).

Wednesay 26 June 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 25 June 2019

Top Gainers/Losers as at Tuesday 25 June 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N510

N495

-15

N32

N29

-3

N130

N129

-1

STANBIC

N40.65

N40

-0.65

GUARANTY

N31.1

N30.6

-0.5

Opening

Closing

Change

N12.15

N13.3

1.15

SEPLAT

GUINNESS

N46.6

N47.55

0.95

CHAMPION

N1.56

N1.69

0.13

MTNN

AFRIPRUD

N3.41

N3.52

0.11

N6.6

N6.7

0.1

CCNN

BERGER

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

29,668.68 3,836.00 253,389,529.00

VALUE (N billion) MARKET CAP (N Trn)

4.117

…Nigerian Breweries eyes N15bn from Series 3 & 4 Commercial Paper Programme Stories by Iheanyi Nwachukwu

session of negative trading on Wednesday. “Investors with medium to long term investment horizon may begin to cherry pick based on attractive prices across the board”, said equity research analysts at Vetiva. In 3,836 deals, stock investors exchanged 253,389,529 units valued at N4.117billion. GTBank Plc, Zenith Bank Plc, Custodian Investment Plc, Access Bank Plc, and UBA Plc were actively traded stocks on the Bourse. Seplat topped the decliners’ league after its share price moved down from

N510 to N495, losing N15 or 2.94percent; while Cement Company of Northern Nigeria Plc advanced most, from N12.15 to N13.3, adding N1.15 or 9.47percent. Nigerian Breweries Plc on Tuesday June 25 informed the Nigerian Stock Exchange (NSE) and the investing public of the continuation of its Commercial Paper (CP) programme with the launch of Series 3 and 4 of the programme. Earlier this year, the Company had successfully concluded the Series 1 and 2 of its renewed N100 billion CP programme. The Series 3 and 4 of the

FTSE 100 Index 7,422.43GBP +5.74+0.08% S&P 500 Index 2,934.45USD -10.90-0.37% Generic 1st ‘DM’ Future 26,687.00USD -75.00-0.28%

13.074

Stock investors lose over N80bn in two days tock investors at the Nigerian Bourse have lost approximately N81billion in just two trading days into this week. The stock market’s benchmark performance indicator has decreased by 0.61percent since this week. The stock market opened this week with capitalisation of N13.155 trillion but at the sound of trading closing gong on the 9th floor of the Exchange on June 25, the value of listed stocks decreased to N13.074trillion. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) lost 0.47percent to close at 29,668.68 points from a preceding trading day high of 29,809.20 points. The NSE ASI opened the week at 29,851.29 points. Despite that prices of stocks across the board remain deflated and present an attractive entry point for bargain hunters, the market activity still slows down as investors’ sentiment on Custom Street becomes evidently bearish. In the absence of any catalysts to sway the NSE benchmark index, market watchers foresee another

Global market indicators

Commercial Paper programme opened on Monday June 24, 2019. While Series 3 would be for a tenor of 91 days, Series 4 would be for 172 days, and the aim is to raise up to N15billion to support the Brewer’s short terms funding needs. In addition to providing an opportunity for nonequity investors to invest in the Company, the CP programme continues to support the Company’s cost management initiatives with the overall aim of reducing its cost of fund. The CP also serves as an additional source of funding for the Company.

Deutsche Boerse AG German Stock Index DAX 12,228.44EUR -46.13-0.38% Nikkei 225 21,193.81JPY -92.18-0.43% Shanghai Stock Exchange Composite Index 2,982.07CNY -26.07-0.87%

SUNU Assurances chairman visits IDP camps, commits to raise $80m

he Chairman of SUNU Assurances Kyari Abba Bukar and private sector leaders under the aegis of the Nigerian Humanitarian Fund Private Sector Initiative (NHF-PSI), along with the United Nations (UN) visited Borno State last Tuesday. During the visit which was part of efforts to provide indigenous support and the second time to assess the condition of internally displaced persons, Kyari Abba Bukar noted his commitment to raise the sum of $80million in financial aid to support thousands of displaced people currently living in IDP Camps spread across Maiduguri state. Bukar led the delegation of Nigerian entrepreneurs and CEOs who paid a visit to the state’s IDP Camps last week on a second assessment tour of the facilities. The delegation was in Maiduguri in May for the first visit, led by UN Country Director, Edward Kallon the cochairmen of NHF-PSI, Kyari Bukar who is also a former chairperson Nigerian Economic Summit Group. Speaking on his experience visiting the Camps last May, Bukar said, “It is quite encouraging to see how Nigerian corporates are responding to what the United Nations is doing. It was a day trip but at the same time, it had touched their lives. As we were returning, many of them didn’t realise how dire the situation is over there. He expressed delight about the private sector in Nigeria’s enthusiasm in mobilizing resources and expertise to pro-

vide home-grown humanitarian assistance to the IDPs in the North East.” Bukar’s philanthropic activities have seen him play an active role in assisting the United Nations’ fundraising goals and encouraging Nigerian Corporates to contribute towards the United Nations Nigerian Humanitarian Fund. “He said over $83 million have been donated to the UN Nigerian Humanitarian Fund by 17 different countries. This has thrown a challenge to the private sector as they have set a target of raising USD80 million as Nigerians also to commit to various humanitarian causes. Sometimes it’s bringing the people in touch with how we can impact people’s lives”, he further noted. On both occasion, the delegation visited NYSC IDP Camp where close to 7,371 IDPs are ‘sheltered’. They were

Kyari Abba Bukar, Chairman of SUNU Assurances

also at Stadium IDPs Camp, where 10,673 were similarly camped. At the NYSC camp, the delegation interacted with local leaders of the displaced persons, including women groups on their needs.

CWG seeks to maximise growth opportunities for increased shareholder value

he Board of Directors, CWG Plc said the company has been positioned to take advantage of improving macroeconomic conditions to grow its business for increased shareholder value. Philip Obioha, chairman of CWG Plc who disclosed this during the firms 14thAnnual General Meeting in Lagos said the organisation remains resolute in taking advantage of these

opportunities to grow earnings, enhance profitability and deliver returns to her esteemed shareholders. Obioha said the strategic initiatives already implemented by the company will strengthen its revenue beyond the N7.4 billion recorded in 2018. Adewale Adeyipo, group managing director, CWG Plc commenting during the meeting said the company’s business engagements and results reflect strongly on www.businessday.ng

the underlying performance and leadership positions it held across virtually all activities. “We created significant partnerships, through which we can aggressively launch out most of our platform businesses and subsequently grow revenue.” He stated that as a result of relative stability in the foreign exchange, the company has also taken strategic initiatives to re-introduce the

profitability traditional business models of IT services. This will help to improve the revenue and profitability in our ever-changing market environment while we continue to develop our platform businesses.” “We put our customers to heart in all that we do through the CWG 2.0 platforms as we are always seeking to create an enabling business environment for all.”

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He said that CWG today, has been able to acquire 22 new customers in 2018 showing a 21 percent growth from 2017, and there are several business engagements ongoing with these customers and we are positive that it will yield some significant results for the company’s revenue in 2019. Adewale stated. “Our managed services business recorded growth and it is our expectation that in 2019, we will experience @Businessdayng

a substantial profit margin. Our objective for 2019 is to expand and acquire new partnership both locally and internationally that will align with the strategic thrust of the Group, he said. According to him, CWG Plc is changing the narratives on how business activities are carried out by developing more innovative products and harnessing with the power of SMEs in our economy.

Wednesday 26June 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 25 June 2019

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 234,598.49 6.60 0.76 223 20,461,631 UNITED BANK FOR AFRICA PLC 210,326.44 6.15 -3.91 169 17,449,781 ZENITH BANK PLC 626,360.05 19.95 -0.25 355 22,195,779 747 60,107,191 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 247,677.52 6.90 -0.72 145 7,495,747 145 7,495,747 892 67,602,938 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,625,732.18 129.00 -0.77 200 3,450,285 200 3,450,285 200 3,450,285 BUILDING MATERIALS DANGOTE CEMENT PLC 3,135,453.36 184.00 - 58 60,903 LAFARGE AFRICA PLC. 186,045.04 11.55 -3.75 224 5,454,590 282 5,515,493 282 5,515,493 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 291,280.06 495.00 -2.94 20 71,283 20 71,283 20 71,283 1,394 76,639,999 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 2 270 OKOMU OIL PALM PLC. 63,530.41 66.60 - 11 59,673 PRESCO PLC 52,000.00 52.00 - 18 44,964 31 104,907 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 3 20,100 3 20,100 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,680.00 0.56 5.66 8 630,900 8 630,900 42 755,907 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 2 1,100 JOHN HOLT PLC. 182.90 0.47 - 1 180 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,338.71 1.14 -1.72 102 5,437,865 U A C N PLC. 17,431.84 6.05 0.83 81 5,864,194 186 11,303,339 186 11,303,339 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 27,588.00 20.90 - 10 61,904 ROADS NIG PLC. 165.00 6.60 - 0 0 10 61,904 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,027.51 1.55 2.65 8 413,030 8 413,030 18 474,934 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 8.33 35 958,570 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 104,152.70 47.55 2.04 39 5,639,409 INTERNATIONAL BREWERIES PLC. 143,550.89 16.70 - 21 226,322 NIGERIAN BREW. PLC. 463,820.32 58.00 -0.85 87 5,732,125 182 12,556,426 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 87,500.00 17.50 0.29 89 890,067 DANGOTE SUGAR REFINERY PLC 136,200.00 11.35 -0.87 62 516,727 FLOUR MILLS NIG. PLC. 57,405.31 14.00 - 50 3,316,088 HONEYWELL FLOUR MILL PLC 8,168.10 1.03 0.97 13 367,800 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 - 9 48,960 UNION DICON SALT PLC. 3,321.07 12.15 - 1 50 224 5,139,692 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 17 68,781 NESTLE NIGERIA PLC. 1,109,084.63 1,399.20 - 27 71,722 44 140,503 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,753.21 3.80 - 20 259,814 20 259,814 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 28,190.39 7.10 -0.70 50 621,581 UNILEVER NIGERIA PLC. 183,840.17 32.00 - 34 294,878 84 916,459 554 19,012,894 BANKING ECOBANK TRANSNATIONAL INCORPORATED 188,082.90 10.25 - 21 22,860 FIDELITY BANK PLC 49,836.65 1.72 0.58 68 2,235,892 GUARANTY TRUST BANK PLC. 900,594.08 30.60 -1.61 233 50,437,653 JAIZ BANK PLC 13,848.20 0.47 4.44 8 529,518 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 69,672.81 2.42 -0.41 39 3,225,936 UNION BANK NIG.PLC. 200,933.19 6.90 - 27 54,810 UNITY BANK PLC 8,065.64 0.69 -2.82 10 428,748 WEMA BANK PLC. 25,459.15 0.66 3.13 35 1,688,397 441 58,623,814 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 1,000 AIICO INSURANCE PLC. 4,573.93 0.66 -4.35 13 282,550 AXAMANSARD INSURANCE PLC 20,370.00 1.94 - 18 2,448,000 CONSOLIDATED HALLMARK INSURANCE PLC 1,788.60 0.22 9.09 10 1,575,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 53,110 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 20 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,270.26 0.31 -3.23 9 10,550,300 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 - 5 54,010 LINKAGE ASSURANCE PLC 5,280.00 0.66 - 2 800 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 4 30,400 NEM INSURANCE PLC 12,145.16 2.30 -8.73 19 479,200 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,906.58 0.54 -8.47 5 2,003,070 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 80 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 9.52 9 941,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 1 25,000 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 100 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 1,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 4 182,000 WAPIC INSURANCE PLC 5,754.58 0.43 - 21 246,303 128 18,872,943

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 2,743.97 1.20 - 10 228,679 10 228,679 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 3 625 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 6 60,100 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 9 60,725 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,040.00 3.52 3.23 58 1,101,788 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 -0.82 10 21,421,223 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,882.36 1.61 - 71 1,971,472 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 STANBIC IBTC HOLDINGS PLC 409,622.12 40.00 -1.60 45 2,511,640 UNITED CAPITAL PLC 14,100.00 2.35 0.43 77 7,808,589 261 34,814,712 849 112,600,873 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 2 46,000 2 46,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 1 14,179 1 14,179 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 1 150 GLAXO SMITHKLINE CONSUMER NIG. PLC. 11,898.97 9.95 -2.93 81 2,204,242 4,140.56 2.40 2.13 17 830,075 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 987.56 0.52 - 1 1,000 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 100 3,035,467 103 3,095,646 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 4.76 44 12,448,175 44 12,448,175 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 250 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 - 1 5,000 TRIPPLE GEE AND COMPANY PLC. 2 5,250 PROCESSING SYSTEMS CHAMS PLC 1,408.82 0.30 - 15 1,476,090 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 1,000 16 1,477,090 62 13,930,515 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 1.52 13 81,374 CAP PLC 19,250.00 27.50 - 10 18,071 174,808.56 13.30 9.47 31 302,489 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 1 200 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 55 402,134 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,553.92 1.45 -1.36 15 738,670 15 738,670 PACKAGING/CONTAINERS BETA GLASS PLC. 36,847.94 73.70 - 5 37,542 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 37,542 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 75 1,178,346 CHEMICALS B.O.C. GASES PLC. 1,565.08 3.76 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 1 100 1 100 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 1 100 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 4.35 33 5,532,776 33 5,532,776 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,725.65 4.00 - 98 2,712,798 98 2,712,798 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,301.19 170.00 - 13 3,870 CONOIL PLC 15,024.06 21.65 - 8 2,293 ETERNA PLC. 4,760.13 3.65 1.39 14 384,366 FORTE OIL PLC. 37,771.95 29.00 -9.37 223 2,628,069 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 1 100 TOTAL NIGERIA PLC. 50,928.28 150.00 - 39 19,713 298 3,038,411 429 11,283,985 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 1 40 1 40 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 300 1 300 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 1 100 1 100 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 2 2,250 2 2,250 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,702.44 1.30 - 5 1,620 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 1,500 6 3,120 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 1 200 1 200 PRINTING/PUBLISHING ACADEMY PRESS PLC. 163.30 0.27 - 4 11,450 LEARN AFRICA PLC 1,033.74 1.34 - 8 125,002 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 798.11 1.85 -2.63 30 1,602,864 42 1,739,316 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 447.58 0.27 - 2 32,000 2 32,000

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Wednesday 26 June 2019

BUSINESS DAY

BANKING

In Association with

Return mutilated naira notes for re-issue, CBN tells banks Stories by HOPE MOSES-ASHIKE

n line with a directive from the Central Bank of Nigeria (CBN), Deposit Money Banks (DMBs) are expected to, as from June 3rd to September 2nd, return all mutilated naira notes in their possession for re-issue. Isaac Okorafor, director corporate communications department, disclosed this in Lagos at an interactive session with stakeholders at the weekend. The regulator had since last year been engaging with banks to withdraw the mutilated currency notes in circulation for destruction. “We are telling customers including labour to return all the dirty notes to their banks and the banks will bring those notes to us for reissue and that if any bank is refusing to take those notes, they should call us and we will take action on that”, Okorafor said. The CBN in collaboration with key currency management stakeholders developed banknote fitness guidelines and clean note policy documents for the industry. The CBN on Wednesday released the

Godwin Emefiele. CBN governor

banknote guidelines and clean note policy document intended for the use of all cash handlers such DMBs; Micro Finance Banks; third party service providers and general public. All cash handlers are expected to comply with the quality standards as set therein to sustain public confidence in the national currency.

The Nigerian Currency Structure comprises eight banknotes and three coin denominations in circulation. They are the N1000, N500, N200, N100, N50, N20, N10 and N5 banknotes as well as N2, N1 and 50k coins. The four higher denomination banknotes are printed on paper, while the four lower denominations are on polymer substrate. The objective of a banknote fitness standard is to ensure the banknotes meet the expectation of the public in terms of cleanliness and appearance; ensure the basic security features on the Banknote remain visible and are easily recognized by the public to deter counterfeiting; and facilitate automated dispensing, counting and sorting of banknotes. According to the CBN, demand for cash continues to grow despite technological advances. Consequently, the volume of currency in circulation as at end 2012 rose significantly by 10.34 percent to 7,914.70 billion pieces, as at half year of 2018.A large proportion of the notes in circulation were dirty and mutilated and not fit for ATMs and over the counter payments. The Clean note Policy enunciated by the Bank, entails a spectrum of diverse currency management activities geared towards

Access Bank opens call-for-entry to support women in business … Launches Womenpreneur Pitch-A-Ton 201

s part of efforts to provide financial and business skills to female entrepreneurs, Access Bank Plc has announced the launch of its Womenpreneur Pitch-A-Ton 2019, a capacity building initiative which will provide financial grants as well as mini-MBA in conjunction with the International Finance Corporation (IFC), a member of the World Bank Group), for fifty winners. The Womenpreneur Pitch-A-Ton is targeted at women above the age of 18 years who have been in business for at least one year. Speaking on the initiative, Ayona AgueleTrimnell, coordinator, W Initiative, Access Bank, stated that the Pitch-A-Ton is an expansion of the Womenpreneur business workshop, under the bank’s women proposition, the W Initiative. She said, “In line with our value proposition as the number one bank of choice

for women in Nigeria, we are happy to announce the launch of the Womenpreneur Pitch-A-Ton 2019 which will provide up to N10 million financial grant and a unique capacity building program aimed at empowering women entrepreneurs.” “The Pitch-A-Ton is designed as a 3-month programme incorporating pitching sessions and 3 weeks of mini-MBA training in collaboration with the IFC. “Access Bank has been a leading advocate for women’s economic empowerment in Nigeria and this is the key motivation for the W Initiative which caters to the women economy particularly in the areas of capacity building and creating networking opportunities for women” she added. Explaining the mechanics for participation, Ada Udechukwu, Head, Women Banking said: “Interested persons who meet the criteria are required to fill an online application. The five hundred candidates

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selected from this pool will then send in a sixty seconds video pitch which will be screened by a credible panel of business experts to select fifty finalists.” She added: “As part of the graduation requirements, the fifty finalists will pitch their businesses, infusing learnings from the mini-MBA and will stand an opportunity to win financial grants up to N5 million. As a leading commercial bank in Nigeria, Access Bank has made significant investments aimed at enhancing growth in the Small and Medium-size Enterprise sector. The Bank is also a major advocate for women in business through innovative offerings like the W Power Loan, a discounted financing at 15 percent interest per annum, for women to grow their business as well as other Business Support Services. The Womenpreneur Pitch-A-Ton is the first women-in-business support initiative of its kind in the industry.

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the efficient circulation of premium quality banknotes and withdrawal of unfit/soiled banknotes to guarantee public confidence and usage of the Naira banknotes as a medium of exchange. Okorafor explained that the meeting with the leaders of the organised labour is part of the CBN’s communication campaign to constantly engage with most important group in the country who have stakes in the economy. Here we have met with organised labour from the south west. Last week we were in Owerri or South South and South East. We have engaged them on the entire gamut of CBN activities, what its duties are, what we have tried to do in the last five years and what we are going to do in the next five years, and to also get feedback from them that will form part of our programme for the next five years”. The leaders of the organised labour expressed support for the CBN going forward because they are satisfied with what CBN has achieved in the last five years. “We should partner with the CBN as organised labour to realize its vision in developmental finance and other policies”, Issa Aremu, Vice President industrial trade union, said.

Fidelity Private Banking engages clients on education advisory

idelity private banking division has organised an exclusive advisory forum to provide sufficient information and guidance for select clients who wish to have their children study abroad. In her opening remarks, Chioma Nwankwo, divisional head, private banking, noted that “Studying abroad is becoming more popular among Nigerian students as the country itself continues to pursue integration into the international landscape. The demand for professionals with global experience is rapidly increasing amongst local employers. “Our Private Bank has therefore partnered with Quelu Advising Center over an interactive education advisory session to better equip our high net worth and ultra-high net worth clients for future engagements in this respect,” she said. Quelu Educational Center is an advisory company operating under Shore Light Group of companies working with top-tier universities to offer services to prospective students who wish to study abroad.

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Wednesday 26 June 2019

BUSINESS DAY

BANKING Ecobank, NIRSAL N70bn partnership deepens agric finance scheme Stories by HOPE MOSES-ASHIKE

cobank Nigeria has entered into a strategic partnership with the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) with a N15 billion agricultural investment scheme, being the first tranche in agricultural value chain financing. The partnership is in line with the Central Bank of Nigeria’s (CBN) request that banks provide more funding to the agriculture sector. NIRSAL was set up by the Federal Governmental as an innovative mechanism targeted at de-risking lending to the agricultural sector. It is designed to provide the singular transformational and one bullet solution to break the seeming jinx in Nigeria’s agricultural lending and development.

Announcing the partnership in Lagos during a business meeting with the management of NIRSAL, Patrick Akinwuntan, managing director, Ecobank Nigeria, also said the bank had concluded plans to invest at least N70 billion in agriculture financing within the next three years.

The N15 billion dedicated funding with NIRSAL guarantee is for an initial take-off tranche and rollovers will be done at the completion of each cycle, Akinwuntan said. “Agriculture is pivotal to the success and development of any nation’s economy. We are therefore committed to working with NIRSAL to open

up the vast opportunities that abound in agriculture. Ecobank has done it in other countries across the continent, so we can do the same in Nigeria. This will give us the opportunity to create employment and enable farmers to finance their children’s education with ease. We prefer people to see us not just as a bank, but also as a partner who will help them succeed. We are part of the community and we meet the people at the point of their needs,” he noted. Further, he noted that with a larger African footprint than any other bank in the world operating in West, Central, East and Southern Africa, “Ecobank is the only bank that spans 36 African countries yet operates a truly integrated African network. “Ecobank’s unique and largest pan-African platform is designed to help unlock the opportunities of the continent and for the continent, through standardisation,

Sterling Bank supports teachers’ capacity building programme

terling Bank Plc, has said it is lending support to a programme organised by The Teaching Network Foundation (TTNF) in a bid to improve the quality of teachers in Nigeria’s education sector. The programme themed “Introducing and Developing a Sustainable Assessment Strategy to Improve Teaching and Learning,” was held at the Scholars Crest International School, Ikeja in Lagos over the weekend. The guest speaker was Nicholas Dunn, the International Assessment Resources Manager, Hodder Education, United Kingdom (UK). Speaking on the programme, Eniola Obe, Education Sector Lead, Sterling Bank, said the bank decided to support the programme as part of a deliberate effort to contribute to the welfare of teachers and improve them professionally because they are the most important factor in the school system. She said the bank is focused on education with a view to improving the quality of infrastructure in schools by providing modern technological equip-

ment to teach children who are already technologically savvy. According to her, the bank is also interested in the education sector because it seeks to create a conducive environment for teaching as well as improve the quality of teachers. Eniola said, “In Sterling Bank, we are focusing on five sectors of the Nigerian economy that are facing serious challenges.” The sectors which are regarded as the HEART of Sterling are Health, Education, Agriculture, Renewable Energy and Transportation.

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She remarked that the bank is focusing on increasing and improving the number of children in schools because many children are unable to attend school as a result of being displaced while others stay at home because their parents cannot afford to pay the ever-increasing school fees charged by private schools. Also speaking, Dolapo Ogunbawo, the Founder and Director of TTNF commended Sterling Bank for partnering with the foundation on the programme.

She noted that the outcome of the training was wonderful, fantastic and beyond her expectation. She explained that the foundation came into being as a result of her passion for the teaching profession, saying she is an advocate for teachers. “I know for us to raise the quality of education in Nigeria, we need to do a lot of work on the teachers,” she added. “We need to give them what they need because teachers want to learn but they do not have the resources to do so because they are poorly paid.” She described TTNF as her own way of coming up with a strategy, a model that will help teachers to develop. Nicholas Dunn of Hodder education, United Kingdom who was the guest speaker noted that he was excited at the idea of teachers working with teachers because of the peer to peer knowledge sharing it offered. He added that there is a lot of investment coming into the education sector in the country and that parents should pay more attention to the education being provided their wards.

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fuelling regional integration, trade and investment across borders. “Due to our sterling performance, we have been severally recognised; Most recently as ‘Best Retail Bank in Africa 2019’ at African Banker Awards and also as Most Admired Financial Services Brand in Africa 2019 by Brand Africa 100.” In his remarks, Aliyu Abdulhameed, managing director/CEO of NIRSAL, urged the bank to harness the opportunities available in financing the agricultural sector leveraging on NIRSAL’s template of geo-cooperatives of 250ha with a ticket size as much as N65 million, where all the players in the agricultural value chain were locked-in with an end-to-end approach and near-zero cash handling system under a de-risked ecosystem to optimise agricultural value chain financing. This unique approach to agribusiness creates value

for both farmers and financiers, he said. “At NIRSAL, we work primarily to create value for both financiers and farmers. It is in view of this that we have created innovative tools, techniques, methodologies and established strategic partnerships like this, to create a symbiotic relationship between all actors along the Agricultural value chain,” according to Abdulhameed. The CBN has been at the vanguard of investment in agriculture as a key contributor to the country’s economy. It would be recalled that President Muhammadu Buhari recently sought the collaboration of Ecobank Group to “institute a special fund to develop agriculture, which will cement its legacy as a bank that helped to transform this region’s economic fortunes. President Buhari spoke when he met with the ETI board led by the Group chairman, Emmanuel Ikazoboh.”

Afreximbank wins African Bank of year award

he African Export-Import Bank (Afreximbank) in Malabo received the award for the African Bank of the Year at the African Banker Awards 2019 ceremony held on the sidelines of the Annual Meetings of the African Development Bank. Amr Kamel, Afreximbank’s executive Vice President for Business Development and Corporate Banking received the award on behalf of the Bank. The award to Afreximbank was one of two big ones that went to development finance institutions as Admassu Tadesse, President of Trade Development Bank, was also named African Banker of the Year. The organisers, in explaining the award to Afreximbank, said that, in the past 18 months, the Bank had launched a number of game-changing products. According to them, the African Bank of the Year award is presented to the bank in Africa that has demonstrated a high performance across various metrics and which has considerably changed @Businessdayng

the banking landscape by reaching out to new customers, offering new services and helping to drive growth through a stronger financial sector. Other awards given out during the ceremony included: Central Bank Governor of the Year presented by to the awardee Tarek Amer of the Central Bank of Egypt (CBE) by Kamel; Lifetime Achievement to former First Rand Group CEO Sizwe Nxasana; African Banker Icon to Mitchell Elegbe, founder of Interswitch; Finance Minister of the Year to Romuald Wadagni of Benin; Investment Bank of the Year to Absa; and Retail Bank of the year to Ecobank. CBE is one of the biggest beneficiaries of Afreximbank’s funded financing, especially, its Counter-Cyclical Trade Liquidity Facility under which it availed CBE financing during the recent economic reforms in Egypt. The African Banker Awards, organized annually by IC Publications, celebrate excellence in banking and finance on the African continent.

Wednesday 26 June 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper LOUISE LUCAS

he keys to the house that Jack built are being handed over. Alibaba, founded by Jack Ma 20 years ago, has now paved the way for the two men who built the Chinese ecommerce giant to exit: Mr Ma steps down as chairman in September, and executive vice-chairman Joe Tsai is decanting some of his responsibilities. Last week, less than a year after Mr Ma announced his departure, Alibaba said that Maggie Wu, chief financial officer, would take on strategic investments, working alongside Mr Tsai. Messrs Ma and Tsai are inextricably linked with the company, which has grown to a market capitalisation of $400bn-plus and last year generated revenues of $56bn. Mr Tsai, said Duncan Clark, a tech consultant who wrote a book on Alibaba, is “the alter ego to the more unpredictable Jack” — an urbane, Yaleeducated lawyer as comfortable talking with the heads of sovereign wealth funds as with local merchants. His retirement is not imminent : instead, the moves highlight Alibaba’s famously long-term succession planning. “We started talking about succession in 2002 because we were expanding so fast,” said an early executive. That planning, said Alibaba, has created a deep bench of talent. Those include Jeff Zhang, whose mandate has expanded rapidly in the past year to include the fast-growing cloud business, and Wang Lei, who is in charge of food delivery business Ele.me. Both men symbolise the new breed of ba ling hou, or post-

How Alibaba’s succession plan has paved the way for Jack Ma’s exit Chinese ecommerce giant has lined up deep bench of talent ahead of chairman’s departure 1980s-born, taking up top-ranking roles as the external landscape shifts. Economic growth at home is slowing, fewer new internet users are coming online, and competition — not least because Alibaba spawned a thousand copycats — is escalating. Beijing is keeping its tech giants on a tighter leash, and the expanding trade war with the US has hobbled M&A and jolted supply chains. The immediate challenges fall to Daniel Zhang, chief executive and chairman-elect, and Ms Wu. The pair, both accountants, are expected to run a more administrative-style management that is more domestically focused — the latter also partly due to the USChina tensions. Ms Wu, who joined Alibaba in 2007 and has been chief financial officer since 2013, “is one of the most accessible and reliable executives I have worked with,” said an industry executive who, as an analyst, spent 15 years following her. Latterly, he said, he’d taken to referring to the “Maggie Wu Leadership Standard” to evaluate chief financial officers and other investor-facing executives. The additional responsibilities she now assumes, which essentially see the investment

Three Chinese banks hit by US probe into North Korea links

hares in three of China’s largest banks fell on Tuesday in response to fears they could be singled out for US penalties over alleged breaches of North Korean sanctions. Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank were found in contempt by a US court for failing to comply with subpoenas related to investigations into North Korean sanction breaches, according to the Washington Post. The report, which refers to a document posted to a US district court website on May 15, also said that Shanghai Pudong Development Bank could lose banking privileges in the US after violating a subpoena issued under the US Patriot Act. The three banks — which have not been named by the US court — allegedly worked with a Hong Kong-registered front company to launder more than $100m on behalf of a sanctioned North Korean bank. The US has previously sought to sanction small Chinese banks, such as Bank of Dandong, due to alleged

familiar with the company’s thinking. However, in taking on strategic investments, she is entering a key engine of the business. Alibaba’s 350-or-so-strong portfolio is roughly half that of rival Tencent’s, but it is still large enough to rank alongside those of private equity firms. It has a team of roughly 100 people and, on last year’s numbers, contributed 30 per cent of

group profits. While bankers who have worked with the team say it is stamped with Mr Tsai’s imprimatur, the company insisted it is the same DNA that already infuses the finance function, once headed by Mr Tsai himself. That function is “much more than keeping the books and taking care of taxes,” said the person familiar with the company.

FSB chair Quarles calls for co-ordinated action on digital coins such as Libra

illegal business activity with North Korea. But any move to cut off a large Chinese bank’s access to the US financial system would represent a strong escalation in such measures. Blocking Shanghai Pudong Development Bank from processing US dollar transactions would be a heavy blow to the lender, which has $900bn of assets. It has no branch in the US, but it has an account to handle US dollar business. The news comes as the US and China face off in a bitter and intensifying trade war. The Trump administration has also attempted to cut off access to US markets for several Chinese technology companies, including telecoms equipment maker Huawei. Shares in the Chinese banks fell on Tuesday with state-owned Bank of Communications, China’s fifth-largest bank, closing down more than 3.7 per cent in Hong Kong. Shares in China Merchants Bank, the country’s largest lender owned by state and private investors, were down 7.6 per cent. Shanghai Pudong Development Bank, the largest local lender in the financial hub of Shanghai, closed down 3 per cent. www.businessday.ng

team heads report to her rather than to Mr Tsai, is a small step — and one Alibaba deems logical given the importance of not just acquiring stakes in companies but also integrating them within the ecosystem. Nor do they imply she is necessarily being groomed to step into Mr Tsai’s shoes. “Maggie’s strengths are more in the traditional CFO area,” said a person

Global regulators deal blow to Facebook’s Libra currency plan

Shares in 3 of China’s largest lenders drop after report on US contempt of court ruling DON WEINLAND

KIRAN STACEY AND CAROLINE BINHAM

acebook’s hopes of launching a new virtual currency have suffered another blow, as two more financial regulators said on Tuesday they are paying close attention to the social media company’s plans. Both the international Financial Stability Board and the UK’s Financial Conduct Authority have said they will not allow the world’s largest social network to launch its planned digital currency without close scrutiny. Facebook is hoping to upend the global payments market with its new currency, called Libra, which the company promises will be instantaneous and almost free. The company is working with other internet and payments groups, including Uber, Lyft, Visa and Mastercard, each of which has pledged to invest $10m in the project. Executives were hoping the company would be able to operate without the kind of strict international regulation encountered

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by banks and other payments companies. But the FSB and the FCA have now joined the Bank of England and the G7 in warning that might not be the case. In a letter to G20 leaders ahead of their summit in Osaka, Japan this weekend, Randal Quarles, the head of the FSB and vicechairman of the Federal Reserve in charge of banking oversight, warned of the potential risks posed by digital currencies that become widely used. “Though cryptoassets do not currently pose a risk to global financial stability, gaps may occur where cryptoassets fall outside the scope of regulators’ authority or from the absence of international standards,” Mr Quarles said in the letter on Tuesday. “A wider use of new types of cryptoassets for retail payment purposes would warrant close scrutiny by authorities to ensure that they are subject to high standards of regulation.” He added: “The FSB and standard setting bodies will monitor risks very closely and in a co@Businessdayng

ordinated fashion, and consider additional multilateral responses as needed.” A senior FSB official said: “If we’re to have something like Libra, if it were to become a widespread retail payment mechanism . . . we would obviously be looking at that very closely.” At the same time, Andrew Bailey, the head of the FCA, confirmed his organisation is working with the UK Treasury and the Bank of England to scrutinise Facebook’s plans. “We will have to engage domestically and internationally, with Facebook and this other [Libra] organisation. They are not going to walk through authorisation without that,” Mr Bailey told the Treasury select committee on Tuesday. Their warnings come less than a week after Mark Carney, the governor of the Bank of England, said that if Libra was successful in attracting users, “it would instantly become systemic and will have to be subject to the highest standards of regulation”.

Wednesday 26 June 2019

BUSINESS DAY

NATIONAL NEWS

Fed chair says risks to global growth have risen Jay Powell’s comments reinforce market expectations of an imminent rate cut KIRAN STACEY, MATTHEW ROCCO AND ROBIN WIGGLESWORTH

ay Powell, US Federal Reserve chairman, has warned that risks to global growth have increased in recent weeks, reinforcing expectations that the central bank is likely to trim interest rates next month. In a speech on Tuesday, Mr Powell warned that businesses and farmers are becoming more concerned about trade tensions, resulting in a drop in business confidence. His comments suggest the Fed is unlikely to return to raising rates any time soon and could cut them, despite what he described as “solid fundamentals . . . supporting continued growth”. Mr Powell said: “When the FOMC [Federal Open Market Committee] met at the start of May, tentative evidence suggested these cross-currents were moderating, and we saw no strong case for adjusting our policy rate. “Since then, the picture has changed. The cross-currents have reemerged, with apparent progress on trade turning to greater uncertainty and with incoming data raising renewed concerns about the strength of the global economy.” The Fed last week decided to keep interest rates on hold, while striking a dovish tone and warning about “uncertainties” to the economic outlook. On Tuesday Mr Powell repeated that “an ounce of prevention is worth more than a pound of cure” — a hint that the Fed is moving towards embracing

the argument for precautionary “insurance” cuts to interest rates. However, the chances of a bigger-than-usual half-point lowering of rates faded somewhat on Tuesday, after James Bullard, the president of the St Louis Fed, told Bloomberg TV that a rate cut of 50 basis points at the Fed’s next meeting in July “would be overdone”, adding that he would be willing to back a cut of 25bp. The lack of enthusiasm for a half-point rate cut from one of the Fed’s biggest doves — and the only one to vote for lower rates at last week’s meeting — led traders to ratchet back bets on a large move at the next meeting in July. The markets-implied odds on a 50 bps cut fell from 40 per cent earlier on Tuesday to 27 per cent. It also weighed on the S&P 500, which was down 0.9 per cent in afternoon trading in New York, and handed the US dollar index its biggest gain in almost two weeks. The US central bank’s dovish shift comes amid strident and sustained attacks on its actions from Donald Trump, the US president, who has pushed publicly for the Fed to reduce rates since last year. Mr Trump renewed his criticism of the central bank on Monday, tweeting: “Despite a Federal Reserve that doesn’t know what it is doing — raised rates far too fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in US history.”

Atrocities in Sudan are a reminder the regime never left The removal of president Omar al-Bashir was designed to ensure the autocracy’s survival

YOUSRA ELBAGIR

he atrocities committed in Khartoum in recent weeks against pro-democracy demonstrators have left many believing the security state has returned in full force to Sudan, a little more than three months after Omar al-Bashir, the dictator of 30 years, was ousted by the military. In reality, the regime never left. The cogs of its machine were oiled and polished. The face was replaced. Then it continued to tick away — recalibrated and renewed. The end of the Bashir administration did not usher in democracy but signalled one thing to protesters and opposition leaders: that the revolution has only just begun. In the hours after Mr Bashir was deposed on April 11, a secret meeting took place inside a compound housing the military headquarters. As thousands of Sudanese waited outside the walls for a formal announcement of Mr Bashir’s resignation, consultations were held inside over the formation of a transitional military council. The room was full of Mr Bashir’s old allies: former spy chief Salah Abdallah Gosh, former inspector general Abdel-Fattah al-Burhan, former vice-president and defence minister Awad Ibn Ouf, and a Janjaweed militia leader and rebellion

crusher Mohamed Hamdan Dagalo, better known as Hemeti. Lieu t e na nt G e n e ra l Ou f stepped out to announce the president had been deposed and arrested, and that he would be leading a transitional military council. The masses of demonstrators parked outside the compound didn’t flinch — simply replacing Mr Bashir’s name in their anti-government chants with Lt Gen Ouf ’s. It took just 24 hours before the new leader resigned and Lt Gen Burhan was made his replacement. Shortly thereafter, Hemeti was announced as deputy. Hemeti’s transformation is now complete. The leader of a small faction of the Janjaweed militia in Darfur has become Lt Gen Hamdan, a cornerstone of government. His job was once to squash rebellion in all corners of Sudan. His forces killed many thousands of Darfuris. Gunshots were still echoing out of Darfur as celebrations were under way in Khartoum. From 2013, his Rapid Support Forces underwent training by Sudan’s secret police, the National Intelligence and Security Service, who deployed with them in the Nuba Mountains in the southern state of South Kordofan. This was new territory and the security apparatus gave them new guns and a new enemy to conquer. www.businessday.ng

Senegal president’s brother resigns over gas deal allegations

Aliou Sall steps down as fallout from contract involving BP and Frank Timis builds NEIL MUNSHI

he brother of Senegal’s president Macky Sall has resigned from a government post, as the fallout from a report into alleged improprieties relating to a natural gas deal involving BP continued to roil the west African nation. The BBC report last month alleged that a company run by Aliou Sall received secret payments from a company that secured two offshore gas licences, which have been the source of controversy in Senegal since they were first awarded seven years ago. The report has consumed Senegal since it aired, with protesters gathering in Dakar to demand better stewardship of some of the world’s biggest gas reserves. The report alleged that BP agreed to pay Timis Corp, a company run by controversial Romanian-born businessman Frank Timis, $250m for a stake in the licences in 2014, along with $10bn in royalties over the coming decades. BP said the royalty payments were far lower,

and that it did thorough due diligence before signing the deal. On Monday evening, Aliou Sall resigned from a national body related to the treasury, although he remains mayor of Dakar suburb. He left Timis Corp’s Senegal subsidiary in 2016 but continued to work for logistics subsidiaries that operated in other west African countries. Oil and gas companies had long considered Senegal a no man’s land between the treasure troves of north and west Africa. Then in 2014, the UK’s Cairn Energy discovered the biggest oil find anywhere in the world that year off Senegal’s coast and the country became a key destination for investment. US-based Kosmos Energy then discovered the largest offshore gas deposits in west Africa between Senegal and Mauritania. Many hope Senegal, a model of relative stability in a region that has been wracked by coups and war, can avoid the resource curse that has afflicted many African countries. The discoveries could transform the economy of the country, where nearly half the population lives in

poverty, as it tries to position itself as a business-friendly gateway to Africa. However, its early brush with hydrocarbons was inauspicious. In 2012, Aliou Sall led Frank Timis’s Senegal subsidiary when the administration of President Abdoulaye Wade awarded it two offshore permits. That same year, Mr Wade was ousted by a popular, peaceful protest movement, and Macky Sall was elected to replace him, riding a surge of anti-corruption fervour. The BBC report also alleged that Mr Timis secretly paid Aliou Sall $250,000, along with a further $1.5m in salary over five years. It also alleged that he was offered $3m in shares in Mr Timis’s companies. BP, Aliou Sall and Timis Corp have all denied any wrongdoing. In 2014, Mr Timis sold the assets to Kosmos, which in 2016 announced a partnership with BP that would see the British company invest almost $1bn to develop the fields. That year, hundreds took to the streets to protest the role President Sall’s brother had played in the deal.

Ethiopia’s ethnic infighting threatens Abiy liberal reforms Prime minister’s efforts to turn autocracy into democracy put in jeopardy by ‘coup’ attempt DAVID PILLING

rigadier General Asaminew Tsige was released last year from a life sentence for plotting to overthrow Ethiopia’s government — one of tens of thousands of political prisoners to be freed by prime minister Abiy Ahmed. Last weekend, the brigadier was named as the alleged ringleader of another coup, this one aimed at toppling the regional government in Amhara. By Monday, security forces had shot him dead. Asaminew’s story encapsulates the high-wire act of Mr Abiy, who is attempting to turn one of Africa’s most authoritarian but effective states into a liberal democracy. The 42-year-old former army intelligence officer, the most exciting leader in Africa, may yet succeed. But this weekend’s events show the perils of his enterprise. Clionadh Raleigh, an Ethiopia expert at the University of Sussex, wonders whether Mr Abiy has taken his liberal principles too far too quickly. “He is,” she says, “trying to move from a functioning autocracy to a competitive autocracy.”

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Mr Abiy is trying to revamp the system created by the Ethiopian People’s Revolutionary Democratic Front (EPRDF), which has ruled since a 1991 revolution. The four-party coalition has overseen one of the most remarkable transformations on the continent, conjuring years of near-double-digit growth from an economy once known principally for famine — but it did so at an authoritarian price. Mr Abiy wants to preserve economic growth, but to ditch the EPRDF’s jackboots and spies. He also intends to liberalise the economy by loosening the state’s grip on its commanding heights. Before he came along the EPRDF was dominated by Tigrayans, the ethnic group that led the 1991 revolution and makes up just 6 per cent of the population. That rule became unsustainable when the Oromo, the largest ethnic group, which has always felt marginalised, made common cause with the people of Amhara, Ethiopia’s traditional ruling class and the second-largest ethnic group. The appointment of Mr Abiy, the first Oromo leader in Ethiopia’s history, acted as a safety valve. He took things @Businessdayng

further. He embraced the values of liberal democracy, freeing up the press, unbanning political parties (even ones with guns), releasing political prisoners and promising competitive elections in 2020. He made peace with Eritrea, ending two decades of smouldering hostilities. The result has been liberating. It has also been chaotic. Mr Abiy has unleashed a torrent of pent-up ultranationalism in which the rights of the country’s nine ethnically based regions threaten to supersede those of the unified Ethiopian state. Fighting has broken out. About 3m people have been displaced. Brig Gen Asaminew waded into the mire. An Amhara nationalist, he whipped up anti-Tigrayan sentiment and even cast aspersions on Mr Abiy and his Oromo heritage. On Saturday, perhaps under threat of dismissal, he took things further. Amhara’s regional president was killed, allegedly under his orders. In a separate incident, which the government has also linked to the brigadier, the head of the national security apparatus was murdered in Addis Ababa, the federal capital.

Wednesday 26 June 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Markets ‘bullying’ Federal Reserve on interest rate cuts

US economic data look solid but investors are piling up wagers

ROBIN WIGGLESWORTH

arkets seem convinced that the Federal Reserve is going to cut interest rates next month. The only questions investors are now debating is to what extent the central bank will trim rates in July — and how low it will ultimately go. Jan Hatzius, Goldman Sachs chief economist who long defied consensus by predicting the Fed would keep rates on hold, has now pencilled in two cuts for 2019 on the basis of hints from chairman Jay Powell and his fellow rate-setters. Meanwhile, the Fed Funds futures market, which allows traders to bet on the direction of US interest rates, is pricing in three quarter-point cuts by the end of the year, beginning in July. Positioning in eurodollar futures, another popular contract for US rate wagers, is now at its highest levels since the peak of the European crisis, implying a strong conviction that easier monetary policy is just around the corner. “I just don’t see the case for rate cuts, but [the June Fed meeting] was the most dovish outcome we could have had [without] an actual rate cut,” said Gregory Peters, a senior portfolio manager at PGIM Fixed Income. “Markets are bullying the Fed, and the Fed is responding.” This raises a series of thorny questions. What would happen if policymakers refrain from cutting interest rates? If the Fed does cut, will it do so by the customary quarter point, or a more decisive half a percentage point? And assuming the central bank does trim rates, will this be a precautionary move to bolster growth at a time of passing weakness, or will it solidify concerns over the slowing economy, leading markets into browbeating the Fed into a full rate-cutting cycle? Not everyone is convinced lower rates are a done deal. Sceptics note that while economic data have softened over the past year and that resurgent trade tensions have cast a pall over the global economy, there is little to truly alarm officials at the Fed. Unemployment is at a half-century low, and interest rates — in a target range of 2.25 per cent to 2.5 per cent — are only barely higher than the main US rate of inflation. Assuming that these figures do not deteriorate markedly, it is plausible that the Fed decides against trimming rates next month. More than half of Fed policymakers still forecast no cuts in 2019, and most of the doves are non-voters this year. Richard Clarida, Fed vice-chairman, has

previously stressed that the central bank “can’t be handcuffed” by markets. However, the Fed does appear to have painted itself into a corner. Given the rock-solid confidence that looser policy is now coming, markets could suffer a severe shock — similar to the turmoil witnessed last December — if the central bank does hold fire. “There would be a lot of volatility,” warned Nancy Davis, chief investment officer at Connecticut-based firm Quadratic Capital Management. “The market has gone over its skis in pricing in rate cuts.” The central bank itself appears to have been building a case for what economists have termed “insurance” rate cuts, to tide over a period of uncertainty. Back in April, Mr Clarida pointed out that the central bank lowered rates in 1995 and 1998, even though there was no recession on the horizon. This was the rationale of James Bullard, president of the St Louis Fed, for voting for a rate cut in June to “provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks”. Mr Powell may have voted to keep rates steady, but he also seems receptive to the argument. “An ounce of prevention is worth more than a pound of cure,” he said at a press conference. The question then becomes whether the Fed opts for a forceful half-point rate cut, as a number of investors and economists now expect. Financial markets indicate that would be only the start, with at least a full percentage point of rate cuts priced in over the next year or so. Encouragingly for the Fed, interest rate futures indicate that traders think this will be enough to buttress the economy, leading to renewed rate increases from 2021, according to Morgan Stanley. The blitheness of the US stock market, which hit a record intraday high on Friday, indicates that equity investors also think the Fed will manage to forestall a recession. However, it will be a fine line to tread, between giving the markets the rate cuts they crave and spooking them, through sending out too-gloomy signals on the global economy. The margin for error is thin, warned Mark Haefele, chief investment officer of UBS Wealth Management. “Since 2009, the Fed has proven generally successful at pivoting the right way, but we are wary of positioning for perfection,” he said. www.businessday.ng

Markets’ clashing signals make big bets dangerous Investors bemused by mixed messages emanating from stocks and bonds LAURENCE FLETCHER

hat do you do when two big markets are sending you seemingly very different messages? That has been the conundrum facing many hedge funds and other investors, as they try to work out whether to listen to a doom-mongering bond market or to upbeat stocks. The 10-year Treasury yield has plunged from 2.69 per cent to below 2 per cent, its lowest level since late 2016, as expectations grow of interest rate cuts to combat a sharp economic slowdown or recession. Such a move is more common in times of full-blown crisis. Stocks, however, tell a different tale. The S&P 500 index hit a new record high last week and is now on course for its best half-year since 2010. The ugly pullback of late 2018 and a mini sell-off last month are now distant memories. The two markets are of course taking the same cues. Both have

heeded dovish noises from the US Federal Reserve and European Central Bank, which have led to hopes of further stimulus. The question is why that stimulus is needed. If it is a response to a technical failure to hit inflation targets, that is one thing. If, however, it reflects central banks’ anticipation of deep economic malaise, risky bets on stocks make little sense. That leaves equities “in flux”, according to Lloyd Harris, a credit fund manager at Merian Global Investors: caught between the benefits of low borrowing costs for companies and the headwind of a potential economic slowdown. And that confusion comes before you add in the fallout from the US-China trade war. With both markets at such extremes and apparently telling different stories, then, positioning is not straightforward. So what should fund managers do? “It’s very difficult to be long bonds [own bonds],” said Michele Gesualdi, chief investment officer

at Kairos Investment Management, who has little exposure to government bonds. Very low yields meant investors should avoid assets of longer maturities, he said, “no matter what you think of the economy”. Graham Neilson, investment director at Fulcrum Asset Management, is neutral on stocks but owns Treasuries and expects them to be supported by half a percentage point of interest-rate cuts by the Fed this year. Any investors chasing asset prices higher simply because of the tailwind of more monetary stimulus face potential dangers. Bonds look vulnerable to the return of long-lost inflation or, more likely, to disappointment from central banks. The support given to stocks by cheap borrowing costs has its limits, meanwhile, and much is surely now priced in. David Lafferty, chief market strategist at Natixis, said investors had become “completely addicted to very easy monetary policy”.

US stocks fall while havens shine as investors wait for trade talks US drinks maker and Chinese milk group in one of sport’s biggest corporate sponsorships MATTHEW ROCCO, MICHAEL HUNTER AND ALICE WOODHOUSE

S stocks dropped on Tuesday, while the dollar retested its recent lows and gold extended its six-year high as investors remained shy of riskier assets and sought safety ahead of an expected meeting between the presidents of China and the US. Hopes that the encounter on the fringes of this week’s G20 meeting in Osaka could produce a breakthrough in the trade dispute remained, but sentiment became notably more cautious. Confirmation from China that vice-premier Liu He discussed trade in a phone call with Steven Mnuchin, US Treasury secretary, and Robert Lighthizer, US trade representative, in the run-up to the summit was not enough to soothe the sense of unease. The yen, seen as a haven in uncertain times, strengthened to levels at which it last regularly traded around in March 2018, although it touched them in January’s brief flash crash. Japan’s currency firmed by 0.4 per cent on the

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session to ¥106.88 per dollar. Gold took its advance since the start of the month to over 9 per cent, with a 0.8 per cent rise to $1,430.24. The yield on 10-year US Treasuries was back under the 2 per cent mark amid continued demand for the safety of the debt. The yield slipped 3.2 basis points to 1.9867 per cent, having fallen below 2 per cent last week for the first time in Donald Trump’s presidency amid alarm at the implications for global economic growth from the dovish turn taken at global central banks. Wall Street pulled back further from record highs seen last week. The S&P 500 was down 0.3 per cent around midday in New York. The technology-heavy Nasdaq Composite slipped 0.7 per cent, with the tech sector expected to be at the centre of any further tariff battle in the dispute between the world’s two biggest economies. Homebuilders helped lead the sell-off after data showing a slower pace of price growth and new-home sales that fell to a five-month low, @Businessdayng

despite a decline in mortgage rates this year. Lennar, which reported better quarterly earnings than expected, shed early gains to slide 4.6 per cent after the company said tariffs on Chinese goods caused headwinds amounting to about $500 per home. The Dow Jones US home construction index was down 3.4 per cent. Meanwhile, the imposition of deeper sanctions by the White House on Iran added to the wider sense of unease, with Brent crude rising 0.7 per cent to $65.34, leaving the international oil marker about 9 per cent above its June lows. The dollar index touched a threemonth intraday low, but bounced back to climb fractionally, with the sense of caution accentuated by comments due from a range of the Federal Reserve policymakers including the central bank’s chairman, Jay Powell, who will speak at New York’s Council on Foreign Relations. Frankfurt’s Xetra Dax 30 was down 0.4 per cent, while London’s FTSE 100 ticked up 0.1 per cent per cent.

Wednesday 26 June 2019

BUSINESS DAY

ANALYSIS

Iran and the US are locked in a dangerous dance Starting a diplomatic process, if only to drag it out, is the only sensible path to de-escalation ROULA KHALAF

t was perfect choreography, with impeccable — if dangerous — footwork from Iran. Confronted with overwhelming pressure from Donald Trump’s US administration, Tehran resorted to the military tactics that have long been its hallmark. The Iranians poked, tested and delivered warnings, so America and its allies in the region could be in no doubt about its offensive abilities. The recent attacks on oil tankers in the Gulf and last week’s downing of a US surveillance drone were designed, in Iranian minds, to deter American military aggression, rather than spark it. Other messages came through rocket attacks on oilfields in southern Iraq, where Iran is the most powerful power broker and the US has multiple assets. Mr Trump blinked, calling off

significant diplomatic achievement in the region for decades. But the US’s internal divisions on Iran and the lack of a strategy pose too high a risk. And Tehran’s shift from an earlier policy of restraint to escalation is reaching its limits. Starting a diplomatic process, if only to drag it out, is the only sensible path to de-escalation. Despite the defiant rhetoric coming out of Tehran, Iran is in a bind. Until recently, it had counted on the other signatories of the nuclear agreement — France, the UK, Germany, Russia and China — to deliver some of the economic benefits promised in return for curbing its atomic programme. But when the choice for European companies and financial institutions is between the US market and the Iranian, they inevitably pick the former. They cannot be forced to act against their commercial interests.

Critics say President Donald Trump provoked an escalatory cycle with Iran while also signalling his aversion to conflict

at the last minute the series of military strikes on Iranian targets he had just ordered. I doubt he was swayed by his stated reason: to avoid collateral damage. For all his bluster, he is an isolationist by instinct. He knows all too well the history of US interventions in the Middle East: it is easy to start a war there but far more difficult to win it — or end it. On Sunday, he went as far as to praise Iran’s restraint, noting that its military had spared a manned US spy plane flying next to the drone. What may prove to be Mr Trump’s wisest foreign policy decision to date handed Iran a rare victory. Yet Tehran still faces the same dire conditions, with sanctions devastating its economy and no hope of respite. More sanctions were announced by the US administration on Monday, this time directly targeting the supreme leader, Ayatollah Ali Khamenei. The threat of war persists, whether through American miscalculation or Iranian over-reach. One wrong move by either side could easily spiral out of control. If Iran’s military ploys have worked so far, it is time to deploy its diplomatic skills. The country’s leaders should seize on the aborted US attack to justify contact with the White House. Admittedly, there is something of the irrational in talking to the administration that sparked the crisis by withdrawing from the 2015 Iran nuclear deal, the most

Meanwhile, the US has been piling on the pressure, aiming to deprive Iran of all its oil export revenues and designating the Revolutionary Guard Corps, the elite force that is part of the armed forces, a terrorist organisation. In May, Iran’s patience ran out. Hassan Rouhani, the centrist president and architect of the nuclear deal, warned that Tehran would stop abiding by elements of the accord within a period of 60 days that expires in early July. Breaching the agreement might give Iran more leverage in future negotiations, but it would also alienate the European powers that have been sympathetic to its cause. However distasteful dialogue might appear to Iran, bringing the US back into the nuclear accord should be the primary objective. Europeans can help by acting as intermediaries or persuading Mr Trump to name an Iran envoy from outside the group of hawks who surround him. Given Mr Trump’s aversion to military intervention, ultimately a new accord may be achievable through tweaks rather than substantive change. Mr Trump has shown he can change course when opportunity arises, or rip apart an agreement and then declare victory by signing up to suspiciously similar terms. If he can put his stamp on an Iran accord, what he has labelled the “worst” deal ever could miraculously become the “best” deal of all time. www.businessday.ng

Why China fell out of love with New York property After a crackdown on foreign deals by Beijing, Chinese investors have all but disappeared from the market JOSHUA CHAFFIN AND DON WEINLAND

u Xiaohui was shopping in New York. For buildings. “He didn’t really care — he’d point out the window and say: that one!” recalls a real estate executive who met Mr Wu, then chairman of China’s Anbang Insurance. The acquisition strategy — to the extent there was one — appeared to be “the bigger, the better”, the executive recalled. Among the baubles Mr Wu snapped up was the fabled WaldorfAstoria Hotel, the preferred Manhattan lodging of visiting kings, presidents and Frank Sinatra. Anbang paid $1.95bn for it in late 2014 — the biggest ever sum for a US hotel. These days Wu is in jail in China, sentenced to 18 years for fraud and embezzlement. Anbang, meanwhile, is under the control of the Chinese government and looking to unload US properties worth billions of dollars. The reversal is part of a dramatic exodus by Chinese companies that stormed the Manhattan property market — paying record-breaking sums for trophy buildings and filling the pockets of opportunistic sellers — only to beat a hasty retreat a few years later. “It’s like a tsunami that came rushing in and then the waters went back out to the sea,” one developer says. What pushed back the tide was not the poor performance of those investments. Rather, it was events in Beijing. With concerns rising about a slowdown in their own debt-laden economy, the Chinese government imposed capital controls to clamp down on splashy overseas property deals. The Communist party’s shift has rippled through global property markets far beyond the Middle Kingdom, prompting sales of office towers and apartment buildings from London to Vancouver. A recent report by Cushman & Wakefield cited a “frenzy of disposal activity”, with mainland Chinese investors putting overseas property worth an estimated $12bn up for sale. Nearly two-thirds of Chinese respondents told Cushman that it had become either impossible or extremely difficult for them to transact outside the country. “The Chinese are absolutely netsellers now,” says Douglas Harmon, Cushman’s head of capital markets. Nowhere has that trend been more visible than New York, which has long served as the gateway for foreigners pouring money into US

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real estate. The Chinese pullback has hardly capsized the market. But it has removed one of the most prominent sources of fuel from a rally whose sheer duration has convinced many that it must soon be coming to an end. In the meantime, it is being felt by the developers of several luxury towers sitting empty on the fringe of New York’s Central Park, the sellers who can no longer count on an aggressive Chinese bid and the brokers who profited from headline-grabbing deals. “There’s nothing that struck fear into the heart of a bidder as [much as]: ‘the Chinese are looking at this’,” a New York broker recalls, sounding wistful about those frothy days a few years ago. While Anbang’s travails have been highly visible, some of the carnage has been out of view. A New York real estate lawyer recently disclosed that he was unwinding a multibillion-dollar US property fund bankrolled by a Chinese fund. The fund had rented multiple floors of New York office space but was being quietly shuttered before it ever opened its doors. “We’re in the process of giving the keys back,” the lawyer says. “There’s no money coming out of China.” How different from a few years ago. Investors from mainland China announced their arrival in Manhattan in 2015, when they poured $5.4bn into property in the New York metropolitan area, according to Real Capital Analytics. In 2016, that sum jumped to $8.8bn, topping the list of the city’s foreign buyers. Some of that money seeped in via the EB-5 visa programme, which grants green cards to foreigners who invest at least $500,000 into approved, job-creating projects. Chinese nationals came to dominate the programme in recent years, with US developers bundling their contributions into billions of dollars in funding. The family of Jared Kushner, President Donald Trump’s son-in-law, attracted scrutiny in 2017 when an executive appeared to tout their White House connections while pitching a project to EB-5 investors during a meeting in China. The Kushners also crossed paths with Anbang. Not long after completing the Waldorf deal the Chinese group talked to Mr Kushner about bailing his family out of a $1.8bn investment in the commercial tower at 666 Fifth Avenue made on the eve of the 2008 financial crisis. The talks were abandoned as sentiment was changing in Beijing. In late 2016 controls on outward flows of investment began to be tightened. Then came the re-election of Xi Jinping @Businessdayng

to another five-year term as China’s leader in late 2017, and a pledge to rein in lending that had fuelled the likes of Anbang. “At that moment there was a marked change,” recalls a New York real estate executive who dealt extensively with Chinese investors. Deals of more than $300m suddenly became a rarity. Overall, Chinese investment in New York property dipped to $2.2bn in 2017. Some predicted a rebound. Instead it fell even further in 2018, slumping to a mere $336m as Washington and Beijing engaged in what has become an increasingly tense trade fight. The Chinese have fallen so far down the New York league table — behind the Canadians, the Germans and the Dutch, among others — that Cushman & Wakefield did not even bother to list them in a recent presentation on the market. Instead, Cushman grouped them under the “other” category. When they do buy, according to Mr Harmon, the deals tend to be “under the radar”. Instead of famed hotels and office towers, they are focusing on properties such as industrial warehouses and student housing — the type of assets that do not tend to garner newspaper headlines or attract the notice of Communist party bosses. In the Chinese financial centres of Beijing and Shanghai, the mood among state financiers and their biggest private clients became palpably gloomy in the second quarter of 2018. Not only had the central government cracked down on outbound investments, financial regulators were putting the brakes on shadow banking, a key channel for accessing liquidity. By early 2019 growth in shadow banking, a $9.1tn industry that includes trusts and wealth management products, slowed for the first time in a decade. Since then, many large companies have found their ability to pay back or roll over domestic debts under pressure. For some, sales of newly purchased property overseas have become a last-ditch source of cash. “Tightening cash flows mean that they just don’t have the same access to credit that they did a few years ago,” says Sam Xie, head of research at CBRE China. The tightening, according to CBRE data, has helped transform what was a $35.4bn outflow from China into global real estate in 2017 into a net sell-off this year. For investors accustomed to competing against Chinese companies for global property assets, the sudden disappearance of Chinese investors has been noticeable.

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Angola: Angolan oil struggles to sell on demand fears, weak margins Page 56 GAS

Debrief

Morocco: Study findings boost Chariot’s Morocco plan Page 57 Market Insight

Why Mozambique LNG FID breakthrough should pile pressure on NLNG Train 7 FRANK UZUEGBUNAM

Oil prices up on US Iran tensions Page 61 OPEC weekly basket price DAY

PRICE

21/6/19

65.29

20/6/19

63.95

19/6/19

62.21

18/6/19

61.43

17/6/19

61.6 Source: OPEC

fter numerous years of challenges, Mozambique liquefied natural (LNG) project reached its final investment decision (FID), making the $20 billion project one of the largest investments in Africa and also one of the largest Greenfield LNG facilities to have ever been approved. “At $20 billion, the FID is the largest sanction ever in sub-Saharan Africa oil and gas,” said Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team. Meanwhile, there is still uncertainty on when the FID on Nigeria LNG Limited Train 7 will be taken after the signing of the Front End Engineering Design (FEED) contract

in 2018. The NLNG Train 7 expansion project aims to increase the company’s production capacity from 22 metric tonnes per annum to over 30 MTPA. As a result of the delay on NLNG Train 7, here are reasons why the Mozambique LNG FID should pile more pressure on Nigeria; Being on the African east coast, the Mozambique LNG will be quite competitive and they can sell LNG to both the lucrative Asian market, home to 75 percent of global LNG demand, and to the flexible European market, which helps balance global LNG trade by soaking up excess supply. Also, delay in reaching FID on Train 7 may lead to further construction delays and cost blowouts as there are a limited number of contractors able to handle the huge projects, experts say. “Unless you are in FID in

the next two years, there is going to be no one to build your project,” Ian Munro, Oil Search executive general manager said at Australian Energy Conference. Also, Martin Houston, cofounder of Tellurian Inc, said LNG developers who fail to sign major contractors, such as Bechtel Corp or Chiyoda Corp, who can offer fixed price construction contracts are likely to struggle to make much profit. According to estimates by consultants Wood Mackenzie, around $200 billion in projects across the globe are racing to be approved, vying to provide around 65 million tonnes of new annual supplies that are needed by 2025. The Mozambique LNG project is based on natural gas from Area 1 in the Rovuma Basin making it the country’s first onshore LNG development with total capacity of 12.88m tonnes per year. It in-

volves building infrastructure to extract gas from a field offshore northern Mozambique, pump it onshore and liquefy it, ready for further export by LNG tankers. The project is led by US energy firm, Anadarko Petroleum, that was subject of takeover tussle between Chevron and Occidental recently. Other members of the consortium include Mozambique’s state energy firm ENH, Japan’s Mitsui, Thailand’s PTTEP and ventures in which Indian firms ONGC, OVL and Bharat Petroleum have stakes. The project is expected to transform Mozambique’s economy, especially as the poor nation is plagued by economic crisis, conflict stemming from a civil war and serious governance malady. The government of Mozambique expects the project to create more than 5,000 direct jobs and 45,000 indirect jobs.

Wednesday 26 June 2019

BUSINESS DAY

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Outlook

Angola: Angolan oil struggles to sell on demand fears, weak margins

ngola, a key provider of oil to China, has suffered its slowest trading month this year as poor refining margins, high freight rates and subdued demand amid the trade war between Beijing and Washington curbed its sales. Angolan crude had been selling out easily each month, with heavier grades

especially coveted since similar Iranian and Venezuelan varieties evaporated due to US sanctions. But a surplus of 8 cargoes struggled to find buyers as a new August programme was released, the first overhang of the year, traders said. China typically purchases about twothirds of Angolan barrels each month,

Brief

making Africa’s second-biggest oil exporter an important barometer of the Chinese market. Crude purchases especially among Chinese independent refineries slowed down, East Asian market sources said, as they continued to digest inventories purchased in previous months. “May data has thus far pointed to sluggish demand, with imports contracting sharply and this is before the new round of bilateral (US-China) tariffs kick in,” consultancy Energy Aspects wrote in a note, which still put demand up at 500,000 barrels per day on the year despite the weakening outlook. China ramped up imports of Iranian oil in April before cutting them off due to tougher US sanctions, and Energy Aspects said it expected new commercial storage to come online. “The global economy and trade issues are a bit macro for us,” one Chinese buyer said, noting July purchases closer to home than Angola such as from Gulf producers. “But anything signalling lower growth and demand, none of this geopolitical stuff is good.” China’s lack of interest became clear early in the trading cycle as Chinese state oil trader UNIPEC declined to make any bids, setting the stage for a price slide that has now prompted somewhat buying by Chinese state and independent refiners. More worrying for sellers, China repeatedly sought to sell West African cargoes it was assigned through long-standing agreements with producers via the publicly visible Platts Window instead of shipping them home, but attracted little enthusiasm.

Africa Oil & Power to honor Senegal President as “Africa Oil Man of the Year”

frica Oil & Power will present the award to President Macky Sall at its annual conference in Cape Town for his efforts to revive Senegal’s economy and create an attractive market for oil and gas. Sall will be bestowed with the prestigious “Africa Oil Man of the Year” award during the Africa Oil & Power conference, to be hosted October 9-11, 2019 in Cape Town during which he will also present the keynote address. Senegal is a global hotspot for oil and gas discoveries, well-known as the place in Africa to make major oil and gas finds, due in large part to a decades-long campaign by Sall to improve transparency, create an attractive investment environment and spark new growth. “As African countries across the continent aim to spur growth and diversify economically, Senegal is a prime example of a country making energy work, creating an enabling environment for business to succeed, attracting huge international investments, while providing for a strong local capacity and downstream investment options,” said Guillaume Doane, CEO of Africa Oil & Power. Sall first worked as the CEO of Petrosen from 2000 – 2001, before becoming the country’s Minister of Mines

BP, partners confirm investment in deepwater

P and partners confirmed they have agreed further investment into deepwater Block 15, offshore Angola as part of an agreement with Angola’s National Agency for Petroleum, Gas and Biofuels (NAPGB). The agreement will extend the production sharing agreement for the Block 15 through 2032 The deal will also give the

state-owned company Sonangol a 10 percent equity interest in the block. Operated by Esso Angola, Block 15 has produced more than 2.2 Bbbl of oil since 2003. The new investment is expected to result in an additional 40,000 bopd and increased subsea flowline capacity. It also includes a multi-year drilling program.

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“This is a major step forward for Block 15, unlocking significant future investment and production opportunities, and extending the life of the asset. BP is proud to be a significant partner in block 15 and we welcome Sonangol as a new partner. We acknowledge and thank the block operator Esso, Sonangol, the Agency, the Ministry and partners for their collaboration and hard work in achieving this agreement,” said Stephen Willis, BP Angola Regional President. The extension is an important milestone for BP’s Angola business and is well-aligned with the Angolan government’s new legislation, which enables the development of marginal fields and allows companies to assess and evaluate the develop-ability of additional fields adjacent to existing acreage. Under the agreement, Sonangol joins the contractor group with a 10 percent interest, block operator Esso Angola retains a 36 percent stake, BP Angola has a 24 percent interest, ENI Angola Exploration 18 percent and Equinor Angola 12 percent.

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Energy and Hydraulics in 2001. After a long political career in Senegal, Sall was elected president of Senegal in 2012, and pushed through a series of reforms to revive Senegal’s economy and attract international investors. “In a continent where border disputes have held back the development of offshore resources, President Macky Sall insists on a more productive outcome. He worked with his counterpart of Mauritania, Mohamed Ould Abdel Aziz, to secure an agreement to jointly develop offshore resources for the mutual benefit of both countries” said Jude Kearney, former Deputy Assistant Secretary for Service Industries and Finance at the US Department of Commerce during the Clinton Administration and currently President of Kearney Africa Advisors.

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Wednesday 26 June 2019

BUSINESS DAY

gas Brief

Mozambique: TechnipFMC wins $1bn subsea contract

echnipFMC said it has been awarded a number of subsea contracts by US-based Anadarko Petrleum for its Golfinho/Atum development offshore Mozambique. The UK-based firm said it was awarded a contract worth more than $1 billion for the engineering, procurement, construction and installation (EPCI) of the subsea hardware system through its wholly owned UAE incorporated subsidiary, Technip Middle East FZCO. TechnipFMC will execute the offshore installation scope with its consortium partner Van Oord, through their wholly owned UAE incorporated subsidiary, Van Oord Gulf FZE, and in cooperation with strategic major subcontractor Allseas. In addition, TechnipFMC has been awarded separate contracts under its wholly owned US incorporated subsidiary FMCTI (FMC Technologies Inc.), to provide subsea hardware in support of well construction and the EPCI scope. “We are extremely pleased to have been selected for the majority of the Mozambique LNG subsea scope. TechnipFMC will execute its scope utilizing our integrated model (iEPCI) and will highlight our industry leading subsea capabilities to help maximize Anadarko’s overall project value. This award is a testament of our 25-year partnership with Anadarko and will further expand our presence in Mozambique,” Arnaud Pieton, President Subsea at TechnipFMC, said. Further to these awards, TechnipFMC and Allseas have entered into a strategic collaboration agreement aimed at jointly pursuing specific deepwater projects where the assets, products and capabilities of both companies are complementary. In support of these awards, TechnipFMC is increasing its footprint in Mozambique and opened a new office in Maputo, Mozambique, in February 2019. Through extensive cooperation agreements with local universities such as UEM and Uni Lurio, TechnipFMC will offer training opportunities to young Mozambican engineers that will continue building on our local expertise. The Anadarko-operated Mozambique LNG project will be the country’s first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.88 million metric tons per annum (Mtpa) to support the development of the Golfinho/Atum fields located entirely within Offshore Area 1.

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ENERGY intelligence

Morocco: Study findings boost Chariot’s Morocco plan

hariot Oil & Gas has announced the completion of the development feasibility study and gas market assessment for one of its gas fields in Morocco as the company inches closer to a full-blown hydrocarbon development program in the North African country where it now holds three permits. The study on the Anchois gas field in the Lixus offshore license concluded development of the acreage “is technically feasible with the potential for either a single phase or a staged development to commercially optimize access to different parts of the gas market.” Completion of the study and the findings is a major boost to Chariot’s drive toward achieving its latest growth strategy that focuses on securing large acreage positions in new and emerging basins and ensuring the company takes operatorship position in early phases of developing a gas and oil project. Apart from the Lixus permit, already Chariot is pursuing exploration programs in the Mohammedia Offshore and Kenitra Offshore permits in Morocco where it previously expressed optimism it would drill an additional exploration well in late 2019-2020. “The results of these studies demonstrate the technical feasibility and com-

mercial attractiveness of developing the Anchois gas discovery with the potential to offer a strategically important indigenous source of gas into Morocco’s developing energy market,” said company CEO, Larry Bottomley. “We believe the combination of a derisked resource base in a fast-growing energy market, with high gas prices and a need for increased supply remains highly attractive to a wide range of potential strategic partners throughout the energy value chain,” he said. Chariot’s future in Morocco’s up-

stream space looks good and chances of the company’s achievement of a breakthrough in the search for gas are high on the back of the current “excellent commercial contract terms, the high gas prices in a developing market and the growing energy demand.” Apart from the Lixus permit, already Chariot is pursuing exploration programs in the Mohammedia Offshore and Kenitra Offshore permits in Morocco where it previously expressed optimism it would drill an additional exploration well in late 2019-2020.

Global LNG: Producers see cost risks looming over next wave of projects

onstruction delays and cost blowouts could hit the next wave of liquefied natural gas (LNG) projects as there are a limited number of contractors able to handle the huge projects, three developers say. Around $200 billion in projects across the globe from Australia to the United States are racing to be approved over the next two years, vying to provide around 65 million tonnes of new annual supplies that are needed by 2025, according to estimates by consultants Wood Mackenzie. The race is not just to make final investment decisions (FIDs) on projects, but to enter front end engineering and design (FEED) work to lock in contractors before others snap them up, the three developers said at Credit Suisse’s Australian Energy Conference. “Unless you are in FEED in the next six to nine months, unless you are in FID in the next two years, there is going to be no one to build your project,” Oil Search Executive General Manager Ian Munro told the conference. www.businessday.ng

Oil Search aims to enter FEED in the next few months with its major partners Exxon Mobil Corp and Total SA on a $13 billion expansion of the PNG LNG plant in Papua New Guinea. Martin Houston, co-founder of Tellurian Inc, which wants to make FID this year on a $30 billion LNG project in the United States, said LNG developers who fail to sign major contractors,

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such as Bechtel Corp or Chiyoda Corp, who can offer fixed price construction contracts are likely to struggle to make much profit. To win project approvals, developers are pushing to line up long-term buyers, but with spot prices LNG-AS stuck at three-year lows and a flood of cheap US LNG, buyers are holding out for lower prices from new projects worldwide.

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Wednesday 26 June 2019

BUSINESS DAY

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ENERGY intelligence

Ghana: Opposition disputes Akufo-Addo’s $5.2bn energy debt claim

Nigeria: Diesel genset market to record 4.1 percent growth

he Minority in parliament has disputed President Nana Akufo-Addo’s claims that he inherited a $5.2 billion debt in Ghana’s energy sector from the Mahama government. The President reportedly made the claim during a meeting with the Ghanaian Community in Canada recently. “We inherited a $5.2 billion debt in Ghana’s energy sector from the previous Mahama-led National Democratic Congress (NDC) administration, half of which has been paid, while the remainder hanged on the neck of his administration like an albatross,” Akufo-Addo said adding that “the situations responsible for the constant power outages Ghanaians were forced to endure, were from the previous Mahama-led administration.” But Adam Mutawakilu, a ranking member on the mines and energy committee, refuted the claims saying the statements are inaccurate and also an attempt by the president to shirk responsibility for the incompetence he has displayed in the management of the country’s energy sector which remains a backbone to the Ghanaian economy.” Mutawakilu explained that in February 2017, when President Akufo-Addo delivered the state of the nation address to parliament, he disclosed that “the power sector debt stood at $2.4 billion at end 2016.”

He added that, in June 2017 when the President addressed the opening of the 2017 World Bank Development Finance Forum in Accra, he disclosed that government would soon issue a $2.5 billion bond to offset the Legacy Debt of the energy sector in order to create space for

increased investment. The Minority also wants “President Nana Akufo-Addo to take responsibility and address the liquidity and operational challenges in the country’s energy sector instead of carrying on with his nauseating blame game.”

he Nigerian diesel genset market will record a 4.1 percent growth between 2019 and 2024, according to a new study conducted by research firm Prescient & Strategic Intelligence. Revenue generation within the market is expected to reach $527.4 million during the forecast period. Factors driving the genset market growth include the need to address substantial energy transmission losses, deficiency of high base power, and increasing demand for electricity for commercial, residential, and industrial applications. Consumers are increasingly relying on diesel generators to meet their energy needs. Nigeria is facing a huge gap in energy demand and supply due to: aging energy transmission and distribution systems unable to efficiently supply the required capacity; energy demand outrunning local generation. In 2018, energy demand in Nigeria was 40,000MW of which the country was only able to produce between 7,000MW and 8,000MW mark. Based on application, in 2018 the industrial genset sector dominated other segments, namely residential and com-

Kenya: Kenya slashes 2030 power production targets

enya has cut its target for expanding its electricity output by 2030 by nearly 30 percent as demand is growing more slowly than expected, its energy minister was quoted as saying. The country now plans to add 7,200

MW of installed electricity capacity to its grid by 2030, down from an original target of 10,000 MW, energy minister, Charles Keter was quoted as saying. The government estimated in 2018 that demand for electricity will grow by 9 percent a year until 2021 and then ease

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back to 7 percent annually. Kenya had installed generation capacity of 2,712 MW as at end 2018. “It is not necessary to have in our records these targets that we cannot achieve so we have revised it down to 7,200 megawatts and this will be achieved through various innovative approaches to power generation,” Keter told reporters. The energy ministry said in December that 75 percent of Kenya’s population had access to electricity, up from 32 percent in 2014. “We need to focus on demand growth, developing industrial parks to spur the economy. Currently, of the about 6.7 million power consumers that we have, more than 6 million are domestic whose use of power is low at about 10 units per month,” Keter said. The energy ministry said in December that it aims to achieve universal access by 2022, connecting another 5 million customers to the grid and that this would cost about $2.75 billion from both public and private financing. Geothermal power is Kenya’s second largest source of electricity, after hydroelectric power.

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mercial. In addition, the proposed Economic Recovery and Growth Plan (ERGP) of the Nigerian government is projected to attract huge investments in the manufacturing sector, thereby, encouraging the adoption of diesel gensets for operations and setting up of various industries. The industrial sector generated more than 40 percent of the market’s total revenue. This can be attributed to the huge demand for comparatively expensive highpower generator sets in the industrial.

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Wednesday 26 June 2019

BUSINESS DAY

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ENERGY intelligence

Libya unveils big plans to double oil production …concerns for OPEC, Nigeria DIPO OLADEHINDE

eport from London-based global information provider IHS Markit Ltd said Libya’s oil production could double to two million bpd by 2023 despite frequent oil field outages and increasing concerns around the impact of the ongoing civil conflict. According to IHS Markit Ltd, although Libya’s performance so far this quarter has not been anything we have seen at the end of 2018, however, the country’s liftings have been close to 960,000 bpd on average between early April and midJune which has seen growth reached almost 40 per cent since the first quarter of this year. “Libya’s production could surpass 2 million bpd by the end of 2023, assuming there are no future disruptions which would allow the country to secure required investments to improve the technology used and start more projects in near future. The country has already been in discussions with some of the major oil companies’ in terms of procurement contracts worth $60 billion,” IHS Markit Ltd said in a note. In terms of destinations, European importers have continued to absorb most of the Libyan output. There has only been a marginal decline in volumes reaching Europe since 2018. IHS Markit Ltd noted that bigger losses have been reported for Asian destinations, with a 12.2percent decline for the region. “This decline is even larger when we exclude China, as the total trade flows for the rest of Asia has dropped by

about 25percent.” IHS Markit Ltd said China continues importing more than 100,000 bpd, only marginally lower than 2018’s levels. However, the flows from Libya to China have been characterized by rather high volatility so far this year. “This suggests that most Chinese importers have been simply trying to fill any gaps by importing more from the North African producer, adjusting levels according to price differentials developing,” IHS Markit Ltd said. OPEC’s concern Brent the benchmark for Nigeria crude oil has risen by 20 percent this year due to supply curbs led by Organization of Petroleum Exporting Coun-

tries (OPEC) and other large producer’s agreement to reduce output by 1.2-million barrels a day in the first half of 2019 to avert a supply glut as US sanctions on OPEC members Venezuela and Iran restricted supplies further. The news from Libya’s will be huge concern for OPEC and its allies who now faces a dilemma on either to include or exclude Libya which was previously exempted from production cuts because of its internal turmoil which affected oil production “We should keep in mind that apart from Libya’s oil production, the global oil industry has been going through severe changes recently. Almost within a month, oil prices reported severe losses,

Snapshot

We should keep in mind that apart from Libya’s oil production, the global oil industry has been going through severe changes recently. Almost within a month, oil prices reported severe losses, with a barrel of Brent crude oil falling sharply from more than $70 to levels marginally above $60 per barrel

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with a barrel of Brent crude oil falling sharply from more than $70 to levels marginally above $60 per barrel,” IHS Markit Ltd said in a note. After a scuffle over a precise date, OPEC and its allies are scheduled to meet in Vienna on July 1 and 2 to discuss whether to continue the supply reductions in the second half of 2019. OPEC pumps about a third of the world’s crude, and the biggest of its 15 members is Saudi Arabia, one of America’s closest friends in the Middle East. While the group does not target a specific oil price, it adds or removes supplies in the market and therefore can affect the cost of crude. Since January 2017, the group and allies including Russia have cut production by about 1.2million, helping to lift international prices and prop up weak oil prices. Nigeria’s concern More than any other country, Africa’s biggest oil producing country needs the oil price to rise and in the worst case, remain steady at any price above the $60 benchmark of the 2019 budget. To achieve this, the country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective, even though many are yet to comply with the output cut, including Nigeria. Contrary to a production benchmark of 2.3 million barrels per day (mbpd) used for the 2019 budget estimates by the Federal Government, Nigeria needs to cut production down by 53,000 barrels to arrive at a new quota of 1.685 million bpd down from the reference production figure of 1.797m bpd recorded in January.

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Wednesday 26 June 2019

BUSINESS DAY

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ENERGYintelligence

Total hopes new supercomputer will help it find oil faster, cheaply

Brief

Vitol building Malaysian oil refinery to meet new lowsulphur ship fuel rules

itol, the world’s largest independent oil trader, has started building a small oil refinery at its storage terminal in Malaysia that will provide low-sulphur fuel for ships, a senior company official said. The project consists of a crude distillation unit that can process 30,000 barrels per day of crude and is located on the same site as Vitol’s oil storage terminal at Tanjung Bin in the southern Malaysian state of Johor, Vitol Asia’s President and Chief Executive Officer Kho Hui Meng said. A construction unit under China National Petroleum Corp (CNPC) is handling the project which will involve moving a second-hand CDU from China

Snapshot

The global shipping industry will switch to marine fuel, known as bunker fuel, containing 0.5 percent sulphur or less from the start of 2020

to the site, he said on the sidelines of the Asia Oil & Gas Conference. The project is expected to be completed in May 2020 and will augment Vitol’s refinery in Fujairah in the United Arab Emirates in providing low-sulphur fuel oil for ships, Kho said. The global shipping industry will switch to marine fuel, known as bunker fuel, containing 0.5 percent sulphur or less from the start of 2020, down from the current 3.5 percent, as mandated by the International Maritime Organization. Companies such as Germany’s UNIPER and the United Arab Emirates’ Brooge Petroleum and Gas Investment Co (BPGIC) are either expanding their plants or building a new refinery in Fujairah, a ship refuelling hub on the east coast of the UAE, to meet rising demand. The new Malaysian refinery will be able to process a wide variety of low-sulphur oil available in the market including US West Texas Intermediate crude that Vitol trades in, Kho said. Production of low-sulphur fuel from Vitol’s new refining unit will be just in time to meet rising demand as current stockpiles of such fuel in the region would have been drawn down by the middle of next year, he said. Major oil companies and trading houses are stocking up low-sulphur bunker fuels in anticipation of a surge in demand for the fuel in 2020. www.businessday.ng

nergy major Total said its new supercomputer, which has propelled it to a world ranking as the most powerful computer in the sector, will enable its geologists to find oil faster, cheaper and with a better success rate. The Pangea III computer build by IBM will help process complex seismic data in the search for hydrocarbons 10 times faster than before, Total said. The computing power of the company has been increased to 31.7 so-called ‘petaflops’ from 6.7 petaflops in 2016, and from 2.3 petaflops in 2013, Total said, adding that it was the equivalent of around 170,000 laptops combined. Petaflops is a measurement of computing power. The computer ranks as number 1 among supercomputers in the oil and gas sector, and number 11 globally, according to the TOP500 table (www.top500.org) which ranks supercomputers twice a year. Total’s European peer Eni’s HPC4 supercomputer is ranked number 17 in the global top 500 list. Oil and gas companies,

along with other industrial groups, are increasingly relying on powerful computers to process complex data faster. This enables them to cut costs while boosting productivity and the success rate of projects. Total did not say how much it had invested in the new supercomputer. They said the new algorithms can process huge amounts of data more accurately, and at a higher resolution.

It would also help to locate more reliably hydrocarbons below ground, which is useful in complex environments where it is exploring for oil trapped under salt, such as Brazil, the Gulf of Mexico, Angola and the Eastern Mediterranean. McLachlan expected the increased computer power to affect Total’s success rate in exploration, because of the better imaging, and in oil well appraisals, development and drilling.

Qatar Petroleum enlists Chevron for huge petrochemical project

atar Petroleum signed an agreement with US oil major Chevron to develop a new petrochemicals complex at Ras Laffan Industrial City. Chevron will own a 30 percent stake in the complex, with the rest owned by Qatar Petroleum, the Qatari energy company’s chief executive Saad al-Kaabi told a news conference in Doha. Middle East oil producers are expanding further into pet-

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rochemicals, seeking to capture new growth markets and find new sources of income beyond exporting crude oil. The Saudi Arabian and UAE national oil companies, Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC), have both announced massive plans to boost their refining capacity and petrochemicals business. Kaabi said the plant, which will start in 2025, will include

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an ethane cracker with an annual ethylene capacity of about 1.9 million tonnes, making it the Middle East’s largest and one of the biggest in the world. The plant will increase Qatar’s polyethylene output capacity by 82 percent, Kaabi added. Qatar produces about 2,300 tonnes of polyethylene, which is widely used in the packaging industry, a year and the plant will raise its output potential to about 4,300 tonnes. Kaabi said it was too early to give an estimated cost for the project as the engineering study was not over yet but added that the complex’s cost would be in the “billions of dollars”. Feedstock for the complex will be ethane produced primarily from QP’s new North Field expansion project, Kaabi said. Qatar lifted a moratorium on the development of the North Field, the world’s biggest natural gas field, which it shares with Iran, in April 2017 and announced a new project to develop its southern section, increasing output in five to seven years.

Wednesday 26 June 2019

BUSINESS DAY

marketinsight

WEST AFRICA

ENERGY intelligence

Oil prices up on US - Iran tensions

OPEC Flakes OPEC+ proposes mid-July meeting to settle dispute over dates

il prices rose, extending vast gains prompted by tensions between Iran and the United States, as Washington was set to announce new sanctions on Tehran. Brent futures were up 11 cents, or 0.17 percent, at $65.31 a barrel. West Texas Intermediate crude was up 40 cents, or 0.7 percent, at $57.83 a barrel. Oil prices surged after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory. US President Donald Trump said that he called off a military strike to retaliate for the incident, saying the potential Iranian death toll would be disproportionate, adding that he was not seeking war.

But US Secretary of State Mike Pompeo said “significant” sanctions on Iran would be announced aimed at further choking off resources that Tehran uses to fund its activities in the region. Meanwhile, global supply may remain tight as OPEC and its allies including Russia appear likely to extend their oil cut pact at their meeting July 1-2 in Vienna, according to analysts. “An extension of OPEC+ production cuts through the end of the year seems highly likely given recent price action”, US investment bank Jefferies said in a note. “The market expects an extension though, and any failure could see oil price gap down. The probabilities favor restraint however,” it added. Russian Energy Minister Alexander Novak said international cooperation on crude produc-

tion had helped stabilise oil markets and is more important than ever. “There is a good example of successful cooperation in balancing the oil market between the OPEC countries and non-OPEC. Thanks to joint efforts, we today see a stabilisation of world oil markets,” Novak said. Boosting oil demand, prospects of a near-term interest rate cut by the Federal Reserve aimed at bolstering the US economy have weakened the dollar. Oil is usually priced in dollars, and a slide in the value of the weaker greenback makes it cheaper for holders of other currencies. Meanwhile, Baker Hughes said that US energy companies added an oil rig last week, the first increase in three weeks, bringing the total count to 789.

Iran, Venezuela may complicate global oil deal talks - Kazakhstan

alks between OPEC and its allies about whether to extend their pact on cutting oil supplies “won’t be easy” and may be complicated by the situation facing Iran and Venezuela, Kazakh Energy Minister Kanat Bozumbayev said. The Organization of the Petroleum Exporting Countries and other large oil producers,

including Russia and Kazakhstan, meet in Vienna on July 1-2 to discuss whether the oil output deal, which expires after June 30, should be continued. “I think it won’t be easy,” Bozumbayev told reporters about the talks, citing “different positions” among parties to the deal. He said Iran and Venezuela both faced US sanctions. “Will they want to (extend) or not? It’s

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hard (to say),” he said. Kazakhstan wanted the deal extended into the second half of the year, he said, describing the oil price in a range of $60-$70 per barrel as “suitable”. Benchmark Brent oil is now trading at about $65. He said there was no need for higher oil prices, adding: “No one needs it as production in one big country will increase. A country which does not enter any agreements,” referring to the United States, which is not party to the production deal. The United States is now producing about 12 million bpd. Bozumbayev said this month that Central Asia’s biggest oil exporter had cut more production than required by the pact so far this year, reducing output to 1.76 million barrels per day (bpd), well below its 1.86 million bpd quota.

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PEC proposed midJuly meetings with its allies in Vienna to discuss extending production cuts, after talks between Russia and Iran made some progress toward resolving a standoff over the date. The oil producers group, which pumps more than half the world’s crude, has been bickering for a month about the timing of ministerial talks. Their failure to agree a date just weeks before their production cuts expire gives turbulent markets little reassurance as crude prices extend their slump. After discussions with his Russian counterpart, Iran’s Oil Minister Bijan Namdar Zanganeh said he was willing to hold a meeting on July 10 to 12, a week later than most other members had wanted. While this marked a small victory for Zanganeh, Iran had to drop its previous insistence that OPEC should gather next week. “I don’t have a problem with July 10 to 12,” Zanganeh told reporters in Tehran. “I cannot meet 3rd or 4th of July. It’s not that I’m opposed to it, I can’t meet then.” Five delegates from the group, who asked not to be named while discussing internal deliberations, said that they were not certain that Iran’s proposal would be accepted by other members. Russian Energy Minister Alexander Novak said he is ready to consider holding the meeting on July 10 to 12, but has not yet discussed the dates with his Saudi counterpart Khalid Al-Falih, ac-

cording to reports. The original request to shift the date of the meeting from June to July came from Russia, which despite being an outsider has exerted a strong influence over the group since joining forces almost three years ago. Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic spat that pitted long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis, and the US, accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under US sanctions, denied culpability. Algeria, like Iran, initially opposed pushing the meeting to July, saying the new date would conflict with a planned election in the North African country.

Oil cooperation more important now than ever - Russian energy minister

nternational cooperation on crude production has helped stabilise oil markets and is more important now than ever, Russian Energy Minister Alexander Novak said. The Organization of the Petroleum Exporting Countries and other leading oil producers had agreed to cut their combined oil output but that deal expires at the end of this month. Talks on whether to extend the deal are scheduled for July in Vienna. “Today, more than ever, international cooperation is important,” Novak said in a speech at an energy forum in the Russian city of St Petersburg. “There is a good example of successful cooperation on balancing the oil market between the OPEC countries and nonOPEC. Thanks to joint efforts, we today see a stabilisation of world oil markets, an increase in the investment attractiveness of the sector, and the re@Businessdayng

turn of investment.” Novak also said rivalry on global markets was heating up. “At the same time, we are encountering wider use of noneconomic methods in the battle for consumers,” he said. Russian officials have accused Washington of using tariffs and sanctions to try to carve out market share for its energy exports.

Wednesday 26 June 2019

BUSINESS DAY

WEST AFRICA

talking points

ENERGY intelligence

Nigeria becoming Africa’s largest petroleum refiner requires huge private investments STEPHEN ONYEKWELU

he Nigerian National Petroleum Corporation (NNPC) efficiently took the country’s petroleum refining capacity to its peak performance three decades ago but has since lost the ability to either fund or efficiently run these four refineries creating a deep need for private sector involvement. Despite evidence that Nigeria needs massive injection of private capital to attain local refining sufficiency, the country’s economy managers still show disrespect and lack of confidence in private actors. This shows in the data on foreign direct investment (FDI). Foreign direct investment in Nigeria, Africa’s top oil producer, plunged by 43 percent to $2bn in 2018, according to a United Nations report. Reuters reported that investors were put off by a dispute between the government and South African telecom giant MTN over repatriated profits. Banks HSBC and UBS both closed representative offices there in 2018. Lack of investment inflows has stalled development in the oil and gas sector, particularly the refining sector. “The Federal Government and NNPC

do not have the funds to turn around Nigeria’s falling refining fortunes and there are other issues that are legal and legislative in nature” Maikanti Baru, NNPC’s outgoing group managing director said at his induction as Fellow of the Nigerian Academy of Engineering on June 20, at the University of Lagos. In a 2017 report on Nigeria’s petroleum refining, PricewaterhouseCoopers (PwC) had projected that by 2019, Nigeria would become Africa’s 3rd largest refiner of petroleum products (behind Egypt and Algeria) and a net exporter of refined petroleum products. The report titled “Nigeria’s Refining Revolution” stated that the country’s exports are estimated to exceed 37,000 barrels per day (approximately 6 million litres daily). The modular refineries were expected to bridge a supply gap of 53,000 bpd (approximately 8.5 million litres daily) in Nigeria. This was based on the assumptions that Dangote refinery (650,000 bpd) opens its gates mid-2019, operating at 50 percent utilisation, existing refineries (445,000 bpd) are operating at 20 percent utilisation and modular refineries (combined capacity of 200,000 bpd) also come on stream early 2019, operating at 90 percent utilisation. These ramp up to

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90 percent, 30 percent and 90 percent respectively by 2030. Anyone who has observed closely would see that Nigeria has missed these marks. Dangote refinery comes on stream second quarter of 2020. Existing refineries have consolidated utilisation of less than 30 percent. Of 39 licences issued for modular refineries since 2015, seventeen licenses to establish (LTE) have expired in the last four years, which represents 44 percent of the total. Fifteen licenses are active and another seven out of the 39 can still break ground. Only the Niger Delta Exploration & Production Plc (NDEP) Ogbele modular refinery seems to be function at over 90 percent capacity but currently does 1, 000 barrels per day as it awaits upgrade to 11, 000 bpd. This modular refinery has gulped $150 million of private capital already. To cut a long story short, Nigeria is still a massive net importer of refined petroleum products and still subsidises these products at the retail point. Landing cost of premium motor spirit (PMS) is put at N185 but the current pump price is N145. The Federal Government carries the burden of the difference by subsidising consumption. The subsidy or under recovery programme has gulped N1.8

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trillion since 2015. The continued regulation of the downstream sector by government through price control of PMS which accounts for more than 70 percent of fuel consumption in Nigeria makes the economics of refining unprofitable. It scares investors, creates an inefficient marketplace and an incentive for rent seeking. “Being in the financial business over the last twenty years of my career, I know that this country gets broker by the day. The system as we see it today is not sustainable at some point it will crash” said Afolabi Oladele, partner at the Africa Capital Alliance, Fellow of the Nigerian Academy of Engineering and general manager downstream at Nigerian National Petroleum Corporation in 1995. To reverse its dwindling refining fortunes, Africa’s largest crude oil producer needs to deliberately woo private capital. There was a time when Nigeria’s problem was not necessarily how to earn money but rather how to spend it but this is no longer the case. “We are just barely out of a recession and if nothing is done to fix the petroleum sector, we might be headed the way of Venezuela” said Oyindamola Adedokun, outcome lead, revenue stream at FOSTER, an Oxford Policy Management programme.

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Wednesday 26 June 2019

BUSINESS DAY

POLITICS & POLICY

S’West governors vow to tackle security challenges in the region REMI FEYISIPO, Ibadan

he South West governors yesterday put their political affiliations aside and vowed to confront head on the security challenges facing the South West region in recent times. Governor Rotimi Akeredolu of Ondo State who doubles as the chairman of the Western Nigeria Governors’ Forum while declaring open a security summit said the meeting had become necessary considering the spate of insecurity in the country. “The anxiety of our people is palpable. The growing fear among the populace makes nonsense of any plans conceived for the development of our God-given space,” he said. Speaking at the summit, christened, ‘Stakeholders’ Security Summit: Focus on Western Nigeria’, held in Ibadan, the Oyo State capital on Tuesday, Akeredolu said: “It is my fervent hope that this engagement will not be limited to the current challenge which threatens to wreck our collective peace. I look forward to future interactions on matters as important and affective as this one which compels this assembly. There is no gainsaying the obvious; the issue of socio-economic integration in the region must be taken seriously for any aspiration towards development to be meaningful. No remarkable progress can be achieved amidst chaos. No state in the region can achieve greatness in isolation.” Akeredolu and his counterparts in Oyo, Seyi Makinde, Babajide Sanwo-Olu (Lagos State), Kayode Fayemi (Ekiti), Dapo Abiodun (Ogun) and Gboyega Oyetola (Osun State) who were at the summit , noted “We should extend the possibil-

L-R: Rotimi Akeredolu, chairman, South West Governor’s Forum and Ondo State Governor; Gboyega Isiaka, Osun State Governor; Dapo Abiodun, Ogun State Governor; Babajide SanwoOlu, Lagos State Governor; Kayode Fayemi, Ekiti State Governor and Seyi Makinde, Oyo State Governor, during the Southwest Governors’ stakeholders’ security summit with theme: “Focus On Western Nigeria”, in Ibadan, on Tuesday, June 25, 2019.

ity of cooperation on other socio-economic fronts. Our people stand to benefit from our resolve to ensure that they remain at the centre of all permutations and considerations,” adding that no sacrifice is too much for the governors in the region to protect their people. “ Pa r t i s a n c o l o rat i o n should not limit the extent of collaboration aimed at maximum service for our people. With shared yearnings for the development of the region, there should be no difficulty in agreeing to provide the best services possible in the interest of our people. “There should be no disagreement in aspiration for service, if altruism is the focus. Our seeming difference, considering political platforms, should not stand in the way of commitment to promote the collective well-being of our people. Convinced of our shared heritage, propelled by the desire to proceed on the enviable tradition of excellence for which our ancestors are reputed, we cannot

harbour any extraneous preferences to this inherited and established course of development.” According to them, “We are particularly lucky; we have many examples to draw from history considering exemplary courage in the face of adversity, uncommon display of hospitality, even in privation, industry and distinctive virtues, all of which mark us as a unique people. The influx of people from other parts of the country and beyond attest to our urbanity and humane disposition which accommodate divergence. The evidence of great successes recorded by those who seek refuge in our geo-political space is sufficient reason for the sustenance of our hospitable disposition, provided that our people’s interests are not in jeopardy. “Again, our history compels us to be cautious when confronted with strange occurrences. Our past experiences should teach us that understanding a phenomenon will assist us,

tremendously, in proffering useful solutions. As leaders of our people we cannot afford to be emotive in taking decisions for their benefit. Any step taken must reflect the collective will to protect them. No sacrifice is too much to preserve this heritage of peace and prosperity.” Akeredolu charged that “we should be particularly worried by the current spate of an insidious phenomenon, hitherto unknown and uncommon in our immediate clime, creeping into our erstwhile peaceful and prosperous ambience. The incessant perpetration of anti-social behaviours, occasioning pervasive despair, and the seeming helplessness of our security agencies to stem the tide of these aberrant attitudes, which threaten the very existence of our region as an autonomous socio-political entity, call for serious scrutiny. We must review these unfortunate incidents individually and collectively. Every state must be able to ascertain the extent of this current threat.

We must locate the sources of compromise within our space with a view to curtailing same effectively in both the short and long run.” “O u r c o l l e c t i v e g o a l should be the security of our space and safety of our people in all ramifications. On this, there should be no compromise. We must, consequently, be proactive in tackling the current security issues. The adoption of a scientific approach towards the resolution of the current crisis will bear far-reaching effects. Our state will be looking forward to working with other states in the South Western Region to eradicate the menace of armed robbery, drug abuse, cultism, kidnapping, among others,” he added. He noted that “There can be no argument on the assertion that insecurity has become a major issue in the polity today. There is virtually no part of the country which is spared at the moment. All the six geopolitical zones experience one form of crisis or the other. From Zamfara to Katsina, the current trends are banditry and cattle rustling. Kano, Sokoto and Bauchi are not spared. Kaduna faces an uphill task in combating security challenges. “The Middle Belt Region is also affected seriously. The crisis between the Jukun and Tiv in Taraba State appears intractable. Jos has witnessed a serious upheaval recently. Benue State was practically under siege at a moment. The North East has been waging a seemingly endless war against insurgents who have now introduced an international dimension to the mindless killings and destruction of properties. The South East and South-South battle with communal clashes, banditry, armed robbery and kidnapping. “There have been at-

tempts by some to create disaffection among Nigerians. Others have tried to take advantage of the unfortunate crisis to further compound the problems. A traditional ruler and a pastor have been accused of feigning kidnap to extort money from sympathisers. Crime, of varying hue, is gradually becoming a very lucrative business in Nigeria.” Akeredolu however, advocated for proper coordination of the activities of all formal and informal security groups, free flow of information regarding crime from members of the public, need for a toll-free line for crime reporting in the states across the region and need for joint border patrols with neighbouring states. In his welcome address, Makinde maintained that as governors, their role was to ensure that everyone living in the region is safe. According to him, “As governors, it is our responsibility to ensure that everyone in our midst, indigene or alien resident is assured of security of their life and property. We also know that there are barriers preventing us from carrying out this constitutional responsibility to the fullest measure”. On his part, Fayemi said that drone system has been deployed to tackle some of the security challenges facing the region. Babajide Sanwo-Olu, Dapo Abiodun and Gboyega Oyetola in their addresses maintained that security issue has been the major discussion of the governors in the region. They corroborated the earlier speakers, Akeredolu and Makinde, that they had decided to cooperate with one another in tackling security challenges in the region.

tee on Judiciary, Human Rights and Public Petitions, inaugurated shortly after presentation of the lists and urged them to deliberate and report to the House in a week’s time. The governor had earlier said that he would not make any changes in the composition of the executive

council. Observers say it is part of the move to ensure continuity as well as stability of his administration. Others have however, expressed concern over the retention of some nominees who have spent more than eight years as members of the state executive council.

Udom submits commissioner-nominees list to state assembly ANIEFIOK UDONQUAK, Uyo

kwa Ibom State Governor, Udom Emmanuel has forwarded a list of nominees for appointment as commissioners and special advisers to the state House of Assembly. The list attached to a let-

ter dated 20th June 2019 and presented to the House by the Clerk, Mandu Umoren during plenary showed that over 90 percent of the nominees were members of the recently dissolved state executive council. Among the nominees according to the list include, Akan Okon, Ime Ekpo www.businessday.ng

NSE Essien, Uwemedimo Nwoko, Monday Uko, Linus Nkan, Okpulupum Etteh, Ephraim Inyaneyen, Ekong Sampson, Charles Udoh, who were members of the dissolved state executive council. Also on the list are Orman Esin, Iniobong Essien, Dominic Ukpong and Gloria Edet,

Udo Ekpenyong, Ukpong Akpabio, Uno Etim, Rapheal Bassey,Victor Bassey. The nominees for appointment as Special Advisers include, Sunny Ibuot and Ekemini Umoh. Receiving the letter and list of nominees, the Speaker, Aniekan Bassey committed same to the commit-

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Thebigread

BUSINESS DAY Wednesday 26 June 2019 www.businessday.ng

US risks handing Africa’s e-commerce sector to China Washington’s efforts to isolate Huawei could shut out US tech giants from the continent Edward George

frica has long been a battleground for influence between China and the US, and the latest phase in this rivalry is digital. Huawei — as the largest builder of mobile phone masts in Africa (about 70 per cent of them), the maker of Africa’s most popular handsets and the key player in developing 5G technologies in the region — stands in the way of America’s digital ambitions in Africa. This makes it a natural target for the Trump administration’s ire. Huawei’s dramatic growth in Africa is not an isolated phenomenon but part of a broader Chinese digital strategy that is only now reaching maturity. China has spent the past decade building the region’s digital infrastructure. Two Chinese companies — Huawei and Transsion — hold nearly half of Africa’s handset market. Transsion has gone to great lengths to understand African consumers, setting up research centres in Nigeria and Kenya and an assembly plant in Ethiopia. These have enabled it to produce handsets that are adapted to local market demands and income levels. Transsion’s “smarter phones” (internet-enabled feature phones) cost as little as $20 and their quality is improving with each iteration. They come with dustresistant screens, long battery life and multiple Sim card slots, which are critical in African markets. Transsion sold more than 10m of its Tecno and Itel handsets in Africa last year, giving it a third of the region’s smarter phone market. The falling cost and ready availability of Chinese mobile phone technology have been key drivers in boosting mobile connectivity in Africa. The proportion of Africans with mobile phones has surged from about 1 per cent in 2000 to about 50 per cent now, and in many cities it is 100 per cent or greater (as many Africans have multiple Sim cards). Mobile phones also provide a platform for 10 per cent of Africans to receive financial services, and this proportion is rising every year. This has made Chinese tech a key component in digital and financial inclusion and has bred credibility for Chinese companies in Africa. The much-trumpeted Belt and Road Initiative (BRI) is also a digital play by China. Each physical hub in the BRI chain is a digital hub, routing data through a vast network feeding back to China. Much of Asia is being integrated into this digital network, with land hubs in Bishkek and Tehran and maritime hubs at Kuala Lumpur, Jakarta, Kolkata and Colombo. East Africa — focused on Kenya — is the next link in this digital chain. With a trade infrastructure that is well integrated into eastern, central and southern Africa and one of Africa’s most digitised and mobile savvy economies, Kenya’s place in the digital BRI could provide an entry point for China to access all African markets digitally. With the digital network in place and millions of Africans being connected to it every year, the groundwork has been laid for the next wave of Chinese tech giants waiting in the wings — the BATs.

A Huawei mural in Lusaka, Zambia. The Chinese company has established a presence in Africa that will challenge any US incomers © Bloomberg

Baidu, Alibaba and Tencent have more than 1.5bn users on their platforms and are the key reason that more than half of all e-commerce in the world takes place in China. The BATs’ digital offering is unrivalled, combining on a single platform the kinds of services provided by Amazon, eBay, Uber, Google, Airbnb and many others, while providing chat, payments and, more recently, digital banking. All three BATs own their own e-banks — aiBank (Baidu), MYbank (Alibaba) & WeBank (Tencent). Their strength and experience in delivering services in China positions them strongly to serve Africa’s emerging generation of e-consumers. Alibaba was the first mover, in 2017, setting up an Alipay service for Chinese tourists in South Africa. WeChat was not far behind, last November launching a partnership with Kenya’s ubiquitous payment platform, M-Pesa. The two companies’ combined networks have the potential to capture the lion’s share of the billions of dollars of goods and payments that flow between China and east Africa every year, much of it handled by lone traders and SMEs. In the process, they

The fight to control Africa’s digital revolution

could help digitalise billions of dollars of informal trade that is currently transacted in cash, by barter or by the hawala system of informal money transfer. In this context, the efforts of the Trump administration to isolate Huawei could backfire in Africa, where US companies face serious competition. Chinese mobile brands are entrenched and the low cost and ready availability of Chinese handsets have given them a dominating market edge. The BATs are poised to strike and can rely on a network of over 1m Chinese entrepreneurs, who have set up shop in Africa over the past decade, to promote Chinese platforms and connect them to African businesses and consumers. The US also faces opposition from African governments who are unenthusiastic about winding back their relationship with China. The African Union has shrugged off allegations that China harvested confidential data from its HQ in Addis Ababa and in May signed a three-year agreement with China on ICT co-operation. This programme has a strong focus on bleeding-edge technologies such as 5G, AI and cloud computing,

all areas where China will compete with US tech giants in the coming years. The likely losers In this digital stand-off will be US tech giants. Google has pledged to limit the Android services it offers to Huawei after the executive order issued by President Donald Trump, which will affect millions of African users of Huawei handsets. Facebook and its wildly popular WhatsApp could also find themselves in the crosshairs. WhatsApp has become the key means of communication for millions of Africans and is the platform over which Facebook plans to roll out chat-based financial and other services (including its own cryptocurrency, the Libra). But WhatsApp’s dominance and Facebook’s ambitions could be thwarted by efforts to block Huawei from using US software or tech. Such a move would achieve the opposite of curbing Huawei’s influence. Instead, it would remove competitors such as Google, Facebook and WhatsApp from the race to conquer Africa’s e-commerce market. For the first-time African buyer of a mobile phone, the choice between a handset they can afford that doesn’t use WhatsApp and one they can’t afford that does, is the choice between having a phone and not having one. The BATs stand ready to provide every conceivable data, search, e-commerce or chat service over their own platforms, enabling the next generation of African e-consumers to migrate seamlessly on to China’s digital network. Partnerships like the one between WeChat and M-Pesa enabling African consumers to buy goods directly from China rather than from western companies will further shut out US e-commerce platforms. Africa’s e-commerce sector is poised for dramatic expansion over the coming decade. No company has the upper hand at the moment. By effectively barring US tech giants from competing just as the battle is about to start, Washington could end up handing it to China on a plate.

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