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Access, Diamond Bank to wear new brand identity in next 6 days ... N6.11trn asset, 24% larger than tier-1 banks ... Diamond gets executive director slot in enlarged Board IHEANYI NWACHUKWU, HOPE MOSES-ASHIKE & DAVID IBIDAPO

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or shareholders and customers of both Access Bank plc and

Inside

As global bond markets signal slow down, Nigeria should take notice

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Paul Kagame (r), Rwandan president, in a private meeting with Bella Disu, executive vice chairman, Globacom, after the opening session of the Africa CEO Forum in Kigali, Rwanda, yesterday. The forum is an annual networking platform for government and business leaders in Africa to identify ways to improve intra-African trade and investments. See story on page 2

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Buhari sets May 29 target to pass law adjusting oil profit sharing contracts P resident Muhammadu Buhari is seeking the collaboration of the leadership of the National Assembly to pass a law amending regulations governing the deep offshore and inland basin production sharing contracts with oil companies before the end of the current legislative term in May this year.

He has accordingly directed the secretary to the government of the federation to as, a matter of priority, “liaise with the leadership of the National Assembly to pass the amendment to the deep offshore and inland basis Continues on page 34

Market

FGN BONDS

TREASURY BILLS

NIWA places stop-workorder on Apple Island project

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Diamond Bank plc, the much-expected new future that produces an enlarged single entity will Continues on page 34

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Analysts vote for a hold as MPC decides today …rate unchanged for almost 3 years HOPE MOSES-ASHIKE & ENDURANCE OKAFOR

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s the financial markets and businesses await the outcome of the ongoing meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), economists and analysts expect the MPC to retain the key monetary policy stance.

The MPC, which has the statutory duty to manage the central bank’s interest and exchange rate policies, is scheduled to announce its decision today at the end of a two-day meeting from Monday, 25th through Tuesday, 26th, according to a statement on CBN’s website.

Analysts at FSDH Research, the research arm of the FSDH Merchant Bank Limited, believe the decision of the MPC will be based on what will happen to price stability if there is an adjustment to the pump price of Petroleum Motor Spirit (PMS) and the electricity tariff sometime this year.

The analysts, headed by Ayodele Akinwunmi, however, believe the short-term outlook for the Nigerian economy justifies a hold decision on policy rates at the current levels.

In January 2019, the committee voted unanimously for an unchanged stance. This was, however, expected due to the then imminent elections.

“We see it repeated this week because we are in a domestic political transition, because the global landscape has improved from a Nigerian view and because inflationary pressures have calmed,” FBNQuest said in its Daily Note on Monday.

The CBN governor, Godwin Emefiele, said at the BusinessDay Post-Election Outlook Conference last week that Nigeria’s tight “monetary policy will continue in the near term and

the central bank will increase its funding to the agricultural sector”.

Emefiele said the apex bank would be able to maintain a stable exchange rate given the strength of Nigeria’s reserves.

“We believe the CBN would maintain all policy rates to manage the delicate balance between growth, inflation and exchange rate stability,” analysts at Afrinvest Securities Limited said.

The country’s highest interest rate at 14 percent has remained unchanged for almost three years since July 2016 when the committee voted by five to three for a 200 basis point hike to 14 percent in a response that was aimed to fight inflation.

Meanwhile, the rate at which the prices of goods and services increased in Nigeria (inflation) eased year-on-year to 11.31 percent in February 2019. This marked the third consecutive month of disinflation (slowdown in the inflation rate, though still positive) since December 2018, although the rate still remains well above the country’s 6-9 percent preferred band.

The most recent figures by the National Bureau of Statistics (NBS) revealed that the inflation rate for the review month is 0.06 percent points lower than the 11.37 percent recorded in January 2019.

The CBN governor said as from May 2019 when President Muhammadu Buhari’s second term formally begins, “Nigeria’s economy will witness more growth and reduced unemployment.”

Nigeria’s full-year 2018 real GDP growth rate stood at 1.93 percent, higher than the 0.82 percent recorded in 2017. However, the country’s highest quarter growth rate of 2.38 percent in Q4 2018 since its exit from recession in Q2 2017 is nothing close to Ghana’s 7.4 percent in Q3 2018 and Ethiopia’s almost 8 percent.

Minimum Wage: Buhari promises quick action as Rewane committee submits report TONY AILEMEN, Abuja

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resident Muhammadu Buhari on Monday assured the nation that his government would take quick steps to act on the report on the New National Minimum Wage submitted to him by the Bismark Rewane-led Technical Advisory Committee on the Implementation of an Increase in the Minimum Wage.

President Buhari said this when he received the committee’s report in Abuja. The committee was inaugurated on January 9.

The report is coming about one week after the Senate approved N30,000 minimum wage

for federal and state workers across the country.

The committee was set up “to develop, and advise government on how to successfully bring about a smooth implementation of impending wage increases”.

The committee was also asked to “identify new revenue sources, as well as areas of existing expenditure from where some savings could be made in order to fund the wage increases without adversely impacting the nation’s development goals as set out in the Economic Recovery and Growth Plan”.

The terms of reference also included to “propose a work plan Continues on page 34

President Muhammadu Buhari (l), receiving the report of the Technical Advisory Committee on the Implementation of the National Minimum Wage from the chairman of the committee, Bismark Rewane, at the Presidential Villa, Abuja, yesterday.

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As global bond markets signal slow down, Nigeria should take notice LOLADE AKINMURELE

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ond markets and dovish central banks are flashing warnings that a global economic slowdown could be even closer than initially expected.

Most sovereign bond yields are at their lowest levels in years.

Yields in Australia and New Zealand dropped to record lows after a closely-watched part of the US curve inverted on Friday as investors wager that the

Federal Reserve will need to cut rates. Trading volumes in Treasury futures were double the norm during Asian trading, while Japan’s 10-year yields fell to the lowest since 2016.

An economic slowdown does little favours for the oil market, where Nigeria expects over a third of its revenues between 2019 and 2021. Oil prices tend to fall in a slowdown on the back of softer demand.

Brent cr ude oil futures climbed 30 cents to $67.33 a barrel Monday, slightly pairing

losses from Friday when cautious remarks by the US Federal Reserve caused 10-year treasury notes to slip below threemonth yields for the first time since 2007, sparking fears of a recession in the world’s largest economy.

Historically, an inverted yield curve, where long-term rates fall below short-term ones, has pointed to an upcoming recession and there are signs that the oil market is getting worried.

Continues on page 34

Kagame, Bella Disu seek collaboration for regional integration at Africa CEO Forum

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wandan President Paul Kagame and Globacom’s Executive Vice Chairman Bella Disu on Monday began discussions on the use of digital technology to help the march towards economic prosperity in Africa. The two leaders held a private meeting after the opening session of the two-day Africa CEO Forum taking place in Kigali, Rwanda.

Globacom could use its massive infrastructure, including the Glo 1 international submarine cable, to drive digitalisation on the continent.

President Kagame said Africa’s hopes of achieving regional integration and economic growth would not be realised without modern technology. He also commended the success Globacom has made.

The Rwandan leader, who had in his opening remarks at the forum called for “open, responsive and accountable governance” on the continent, said the pri-

vate sector was critical to growth because of its ability to “envision on what needs to be changed to achieve desired improvement in the private and public sectors”.

Disu said Globacom’s Glo 1 armoured submarine cable and digital solutions, such as mobile money, artificial intelligence, EHealth, Smart Cognitive Learning and Smart Energy, could help Africa achieve a digitalised economy. “ I c o m m e n d P re s i d e n t Kagame for his exemplary leadership and for the tremendous success Rwanda has achieved under him. Like President Kagame, I have no doubt that greater integration will lead to continental growth and a more prosperous Africa. Globacom is committed to Africa’s economic renaissance,” Disu said.

The Globacom EVC also chaired a session on “Women in Business” on the opening day of the forum. She called for more gender parity on the

boards of companies and applauded Rwanda’s policy of 50 percent female representation in appointments as a good model.

“There are no two ways about it, women must continue to advance. After all, we make up more than half of the world’s population,” Disu said.

“My charge to women is to keep climbing the career ladder. Climb it anxious. Climb it confidently.

But just keep climbing. And when you get to the top, because you will – give a helping hand to the women coming behind you – this is how we grow,” she said.

The opening session was attended by Cote d’Ivoire’s Prime Minister Amadou Gon Coulibaly, Ethiopian President SahleWork Zewde, Togolese President Faure Gnassingbé, Congo Democratic Republic President Felix Tshisekedi, Rwandan Prime Minister Édouard Ngirente, and over 1,800 leading decisionmakers in the private and public sectors in Africa.

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BPP promotes transparency in public procurement with price checker MICHEAL ANI

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ureau of Public Procurement (BPP) says it will in the coming weeks unveil price checker to promote transparency and ensure that prices of commonly procured goods through the agency are uniform.

Speaking Monday during ongoing first batch of 2019 procurement conversion training for Ministries, Departments and Agencies (MDAs) in Lagos, Mamman Ahmadu, BPP director-general, said, “The price checker is to ensure that across all government agencies, commonly procured goods like stationary, are bought at a price that is uniform, not likely the same, so as to discourage malpractices.”

The agency is working very hard to digitise its operations, to reduce the level of human intervention in the public procurement process, Ahmadu said.

The ongoing procurement reforms has helped in preventing corruption in Nigeria, he said, adding that the BPP is taking the lead on the procurement reform process by developing the capacity for its workforce to implement the reforms using trainings.

“The reform is imperative for the purpose of good governance, which is the hallmark of any serious system. As it were, efficiency, transparency, accountability and value for money in the public procurement process ca only be achieved through concerted, sustained and consistent effort of government at skill acquisition needed for the process.

“Nigeria’s status as a signatory to the United Nations Convention Against Corruption (UNCAC) makes it necessary that all hands must be on deck to see to it that Nigeria escapes from corruption,” he said.

Ahmadu, who was represented by Babatunde Kuye, director, Energy Infrastructure at BPP, said the role of agency was to actually come out with systems to stop corruption in public Procurement and Contracting Process.

“Our area, is preventing corruption, while Economic and Financial Crimes Commission (EFCC) is investigating corruption when it has already occurred. So, in doing this, the BPP is the regulator, following up with the regulation, guidelines and ensuring that where there are problems, the problems will be escalated to sister agencies. Ours is to come out with systems, that will ensure that as far as possible, corruption is prevented in the procurement process,” he said.

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Cyclones: Why Africa must wake up to realities of climate change - NLC JOSHUA BASSEY

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frican governments have a responsibility to quickly rise to the challenge of climate change (global warming) and adopt measures that can at best, mitigate its devastating impacts on their citizens, the Nigeria Labour Congress (NLC) says.

Four African countries Mozambique, Malawi, Zimbawe and Madagascar are still in rude shock and battling to recover from large

scale damage visited on them after a landfall Cyclone Idai bared its fangs in different parts of these countries, leaving hundreds dead and thousands others in near hopeless conditions.

Climate change refers to the environmental phenomenon through which the solar energy, which is responsible for heating the planet, is prevented from being reflected back into space because of the presence of greenhouse gases in the atmosphere.

It is believed to be largely caused by human activities including emissions into the

atmosphere, deforestation, among others. The resultant effect is that the planet grows hotter and hotter, leading to a host of other environmental changes, such as killer heat waves, wildfires, droughts and flooding.

According to the National Aeronautics and Space Administration (NASA) of America, the global temperature has risen by 1.8 degrees Fahrenheit since 1880, with most of the warming taking place during the last 35 years. An assessment by the International Energy Agency also showed that unless miti-

gating actions are continually taken, global emissions would rise 130 percent by 2050. The NLC in a solidarity message to the workers and people of the affected countries said it was high time African governments came to term with the realities of global warming and put measures in place to mitigate its impact.

According to the labour centre, the cyclone affords Africa a moment of quiet reflection, as it becomes clearer no part of the world may be entirely saved from the impact of climate change.

“As devastating and painful as Cyclone Idai is, it affords all of us a moment of quiet reflection. Climate change is real! We can only mitigate and adapt to its realities.

“We call on all governments in Africa and beyond to be alive to the challenge posed by climate change especially with regards to making provisions for climatic early warning systems and robust architecture of rescue initiatives cum resources to deal with disasters of this nature,” the labour union said on Monday.

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A thriving capital goods sector is essential to industrialization STRATEGY & POLICY

MA JOHNSON

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t is sad to remember that after 250 years of the first industrial revolution, Nigeria cannot have a thriving capital goods sector. Nigeria finds it very challenging to build and maintain textile mills, sewing machines and other machines used in the textile industry. Interestingly, most Nigerians wear expensive clothes and enjoy looking smart and good always. The clothes we wear, and machines used in sewing gorgeous and stylishly stitched kaftan, long wrappers and blouses, including agbada/babaringa on our politicians are not being made in Nigeria, and may not be produced in the country soon.

In fact, any country of about 200 million people that prides itself as the seventh most populous country in the world with abundant mineral resources, must have a lot of capital goods in its economy. A thriving capital good sector is imperative to enhance the production of “madein-Nigeria” goods if the current government meant business. Otherwise, the country will face foreign exchange challenges because it depends solely on imports.

Today, the world is characterized by the fourth industrial revolution. In 2015, a sharp drop in crude oil price took Nigeria’s economy into recession. This writer has heard economic experts say that it was increase in the price of crude oil in the international market that

took Nigeria out of recession in the last quarter of 2017. With the price of crude oil oscillating like a pendulum in motion, and dropping like an orange, Nigeria’s dependence on crude oil for its industrialization agenda will not work. If crude oil was to be the determinant for industrialization, Nigeria would have been an industrialized country for more than 40 years. This writer is aware that to be an industrialized nation is complex but not complicated.

Industrialization, according to Wikipedia, is “the period of social and economic change that transforms a human group from an agrarian society into an industrial society, involving extensive re-organization of an economy for the purpose of manufacturing.” For the purpose of manufacturing, Nigeria needs to improve its ease of doing business ranking, develop infrastructure, ensure availability of raw materials locally, reduce management and production bottlenecks, improve industrial linkages, and provide viable investment opportunities for those willing to invest in Nigeria. Until the country is able to ensure these requirements are met and sustained with appropriate legal and regulatory frameworks, no one should be in doubt that Nigeria is not an industrialized nation.

Nigeria can best be regarded as an oil producing nation with agrarian ambition. If Capital goods sector is that sector of the economy which builds machines for all the other sectors.

Karl Marx, in his book, “Capita: A Critique of Political Economy,” classified goods into two broad categories namely, producers’ goods and consumers’ goods. The producers’ goods is further subdivided into those proposed for making producers’ goods, that is steel used in making machinery or machine

tools; and producers’ goods used for making consumer goods, for example, industrial sewing machines.” Simply put, all machine tools, machines, engines, equipment, plants, aviation, shipbuilding, railways, armament, telecommunications, microelectronics, biotechnology, nanotechnology, 3-D printing, robotics, and other emerging technologies have to be designed and built by the capital goods sector. The capital goods sector when developed has the greatest potential for expanding a nation’s productive capacity and also, accommodating most Nigerian unemployed graduates. The chain of businesses that would have supported a thriving capital good sector is unquantifiable.

A measure of Nigeria’s industrial backwardness can be gleaned from the fact that even to manufacture a safety pin or better still, a madein-Nigeria pencil, will require the nation importing the capital good for these purposes. That is why the reactivation of steel projects in Nigeria becomes very relevant. Using the nation’s low foreign reserve, coupled with increasing local and domestic debts at state and federal levels, and a double digit inflation, Nigeria cannot sustain the importation of all capital goods required to drive the economy of the seventh most populous country in the world.

I remember a story one uncle “Sam” once told me in Warri in the mid-1990s. Uncle “Sam” said that in the 1980s, if you were a graduate from Warri, Sapele and Benin axes and you did not have the opportunity of working in Delta Steel Complex, then you were regarded as not having a job. Even those working in Shell Petroleum at that time were not given much recognition in the Delta Area.

The iron and steel plants such as the Delta Steel Complex, Ajaokuta

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A vibrant steel sector is the starting point of any industrialization effort in any country and it is the core of economic development

Steel complex and all rolling Mills is an assembly of capital goods.

All known products loved by Nigerians such as cars, motorcycles, aeroplanes, railways, ship electricity, tractors and military hardware can only be built after the appropriate capital goods have first been manufactured and deployed for use in manufacturing the intermediate and consumer goods. These are products of modern industry which must follow the capital goods sector.

That is, to say, if Nigeria wished to be part of the industrialized world as chorused by those in the government then a thriving capital goods sector must first be established and not vice versa. Nigerians generally including those in the government cannot love products of modern industry without first producing the machinery and equipment that are used to produce them.

A vibrant steel sector is the starting point of any industrialization effort in any country and it is the core of economic development. Those who are in favour of the resuscitation and completion of the Ajaokuta Steel Complex are in order. But how to go about reactivating these moribund edifices is the challenge.

Nigeria should privatize these steel complexes and their rolling mills.

The federal government should not waste money repairing them.

This writer subscribes to a publicprivate-partnership (PPP) in order to reactivate Nigeria’s steel industry. Nigeria must develop machine tool industry to build machines that are of economic significance to the country.

• The article was first published in this column by BusinessDay on Mar13, 2018.

Johnson is an author and a retired naval engineer who has passion for African development and good governance

As CBN’s Emefiele bemoans N-billion spent on palm oil importation

Oduche Azih

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o? One would wonder if the palm oil industry value chain is the only segment of the agricultural sector that exhibits such a huge demand/ production gap. The Goodluck Jonathan administration had led a largely unacknowledged intervention in rice. After first denying and upsetting the work of Akinwunmi Adesina for about a year, Audu Ogbe and his boss finally woke up and resumed to build on that foundation. Good. Then it claimed all the credit. No problem! We must move on, right?

Now, does the Buhari administration and the current leadership at the Central

Bank have access to the records concerning the efforts over the past 30 odd years to keep pace with the demand for crude palm oil via local husbandry? I doubt it.

Apparently CBN Gov Godwin Emefiele has not gotten himself fully briefed. Otherwise instead of lamenting to the Nigerian public, he would have been telling us what was done during his (yes) brief tenure and the previous ones in supporting the work of committed organizations like Okomu Oil PLC and Presco PLC. There are others, but these two are the major players. Unlike in the case of rice, the lead time from planting to harvesting and processing is in the neighborhood of seven years. This is not your typical glamorous activity where the initiator government gets to harvest to the wild adulation of the adoring masses. Emefiele should have done a proper homework instead of disturbing our peace.

I concede that Emefiele regaled his audience with a historical excursion to the 1950s and 60s. That was a useless exercise in the light of the work at hand. In 1958 my late father worked hand in hand with the operators of the Eastern Nigeria Regional Bulk Oil

Plants, in Port Harcourt, Igwenga Opobo (now Ikot Abasi) and a couple of other locations. These comprised actual tank farms of Palmoil. All these were ruined during the war. Emefiele and most of his listeners were probably not born then. Since the narrative must have sounded like ancient history, the CBN Governor would have better spent his time discussing the misadventures of the 1980s to 1990s when the governments of the day declared interest in advancing the Palmoil industry, only to renege on its unforced promises to protect the growers.

There is no reason why Okomu Oil Plc and Presco Plc together with the others would today not have say three times the current acreage and production, with the appropriate processing capacity for the higher yield. All the growers had developed cold feet immediately the government started granting all sorts of waivers to its friends to bring in bulk crude and refined Palmoil under all sorts of funny names.

That government policy flip-flop prompted the banks, bad lenders even in the best of circumstances, to pull their tattered cover.

New and tentative entrants in the industry

collapsed. The name of Ferdinand Industries PLC keeps resounding in my mind. . Are we going to have a repeat? Who knows?

If Emefiele understands the sector, there is so much he should have done before this public outing. I doubt if most of the investing public will put much premium on those statements prefaced with, “We will . . .”

Once beaten, they say, twice shy!

The other issue of bad governance and debilitating interference by the various state administrations that hobbled the Risonpalm, Adapalm, Ohaji palm, Ile-Oluji Palm, etc, of this world is a story for another day.

State governments in the southern Rainbelt suited for palm oil cultivation should stay out of the business. They must concentrate on humanely removing as many obstacles as possible inhibiting land acquisition by the prospective investors. The Land Use Decree/ Act comes to mind. We must however recognize that the high population density in the Rain Belt complicates this matter. Production of other food and cash crops must not be compromised. But confront it, we must.

Azih writes from Ikeja, Lagos

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Positioning African philanthropy for greater impact Rafiq Raji

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n mid-May, the Africa Centre on Philanthropy and Social Investment (ACPSI) at Wits Business School of the University of the Witwatersrand in South Africa, in collaboration with the Centre for African Studies at Harvard University and others, would host a conference on philanthropy. The effort, the first for the new centre at Wits, highlights not only the increasing importance of giving on the continent, but the even greater imperative of systemising such efforts.

The focus here is on giving in a way that benefits the most Africans in need. It also encompasses how to channel the giving of wealthy

Africans to such ends in the most optimal way. Ultimately, the ideal should be that charitable giving, whether by Africans or non-Africans, be directed towards what Africans really need help with.

With poverty levels stubbornly high, amid abundant wealth in land and minerals, the rich few are self-interestedly beginning to see the wisdom of giving back. More than 300 million Africans, about 30 percent of the population, suffer from severe food insecurity; based on data by the Food and Agriculture Organization (FAO). And “Africa has the highest prevalence of undernourishment” in the World.

Unemployment is high, especially among young Africans, and has been linked to armed conflict.

According to the World Hunger Education Service, a non-profit organisation, factors adjudged to be responsible for this sorry state of affairs include poverty, conflict, environmental challenges, governance, and population growth.

Thus, aid and philanthropic efforts on the continent must aim to address these issues.

A systematic approach is necessary for success and meaningful impact. And almost certainly, an indigenous intellectual base has

to be part of any such approach.

So, the establishment of the ACPSI

by Wits University is a welcome development.

What are the specific areas philanthropic efforts on the continent could focus on right away? The Bill and Melinda Gates Foundation could be a role model in this regard. The aspect of interest is its efforts towards combating infectious diseases like malaria and polio.

According to the World Health Organisation (WHO), 90 percent of the more than one million people that malaria kills annually are Africans. And most of these are children. The success recorded with polio, cases of which the WHO reports “have decreased by over 99% since 1988, from an estimated 350,000 cases in more than 125 endemic countries then, to 29 reported cases in 2018”, is proof systematic thinking and effort can make a huge difference.

How can such systemisation be adapted by less endowed institutions for less prominent but equally important issues? That is a constraint easily resolved by having intellectual bases like the ACPSI. Still, such resolutions need not come from the ivory tower

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A survey of these philanthropic efforts suggests many engage in more or less the same things

of academia. For instance, since it is abundantly clear that a lack of jobs underpins the poverty in most African countries, the Tony Elumelu Foundation’s focus on entrepreneurship demonstrates such systematic thinking does not require much ceremony.

The foundation trains bright young and driven Africans to set up and manage businesses, who upon completion of the programme, get seed capital to fulfil their dreams. It is an approach, which if copied by other well-meaning rich Africans, could be tremendously impactful.

Aliko Dangote, Africa’s richest man, has also set up a foundation.

His aims to “reduce the number of lives lost to malnutrition and disease.” And via “investments in health, education, and economic empowerment”, it aims to lift people out of poverty.

A survey of these philanthropic efforts suggests many engage in more or less the same things. There is thus a strong case for greater systemisation and collaboration for greater impact.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Nigeria looks for a brighter future as election row continues The vote had been originally scheduled for 16 February, but was postponed at the last minute by the Electoral Commission until 23 February.

ANDREW SKIPPER

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ollowing his controversial reelection, President Muhammadu Buhari faces the challenges of transforming the country’s economy and fighting corruption.

Muhammadu Buhari has won reelection as president of Nigeria, defeating businessman and former vice-president Atiku Abubakar in a result announced on 27 February.

Abubakar has claimed electoral fraud and is challenging the result in court, but as it stands Buhari has won a mandate to continue working to develop the country’s economy, which has been slow to progress and battling corruption.

Buhari, the nominee of the All Progressives Congress (APC), received 15.1 million votes – 55 percent of the electorate, while Abubakar of the People’s Democratic Party (PDP) received 11.2 million votes, 41 percent of the electorate. It was the lowest turnout – 35.6 percent – in the 20 years since the country returned to democracy.

Economic implications Looking ahead to the country’s postelection economic prospects, as President Buhari seems likely to remain in power, Nigeria’s credit challenges remain and include a low growth environment, very high exposure to fluctuations in oil prices of government revenues and export earnings, weak institutions, and high levels of corruption.”

The 2014 oil crash still casts a shadow, however, with high unemployment and slow growth. The government has made positive noises about diversifying, by getting into other industries, such as bitumen production and iron ore mining, but progress has remained limited.

Buhari needs to take the lead on developing the economy: Continued regulation under Buhari’s administration will be key.

There is an appetite for public private partnerships in Nigeria, with several countries already seeking to partner on various infrastructure and development projects.

The president should work with those companies and countries to help put a stop to declining FDI rates in the country, by putting in place the right framework and policies that will create an enabling business environment. Fintech, start-ups, big data and digital health are all new industries that need regulation and policy in order to grow.

There were more entries from Nigeria than any other country in the recent London Stock Exchange Companies to Inspire Africa report, reflecting a great deal of economic potential within the country’s small and medium-sized enterprises (SMEs), which could help greatly with the diversification and modernisation efforts, if properly harnessed.

Similarly, Buhari came to power in 2015 on the promise of tackling corruption, but progress has been slow and Nigeria was 144th on Transparency International’s 2018 Corruption Perceptions Index, having shown no improvement over the past four years.

To trade or not to trade?

An important item on the agenda will be whether or not to commit Nigeria to joining the African Continental Free Trade Agreement (AfCFTA), which will create an African single market.

As the continent’s largest economy and its most populous country, Nigeria is a glaring absence from the agreement, which was signed by the majority of the continent’s 54 countries in March 2018.

South Africa was the other high-profile absentee, but has since signed the agreement, as have several others, leaving Nigeria as one of only three not to have signed up.

Buhari and his government have repeatedly said that it is just a delay, not a refusal to sign, but the feeling within the country was that Buhari could not do so before the election, as Nigerian unions

and manufacturers have opposed AfCFTA and he could not afford to alienate their support before the election. There will now be scrutiny on Buhari to see if he signs the agreement.

Nigeria plays a crucial role in the growth trajectory of sub-Saharan Africa, especially in pan-African trade and its participation in AfCFTA. It has to be seen as a forward-looking country, creating opportunities and leading the way for others to follow.

The importance of stability The result is an affirmation of the confidence Nigerians have in democracy and the rule of law and Nigerians are optimistic about the growth potential of Nigeria, as one of Africa’s largest and arguably most important economies.

The three C’s in Africa: currency, corruption and certainty. By continuing to focus on creating an economy that has certainty and transparency, a stable currency and is void of corruption, Nigeria will be key to encouraging investment and this will help to grow the economy.

What is needed now is a swift return to political and economic stability and certainty. In his victory speech, Buhari spoke of the need to prioritise security, the restructuring and diversification of the economy and fighting corruption. If he can address these issues successfully, Nigeria will cement its position as an increasingly attractive investment destination in Africa.

Andrew Skipper is a partner at Hogan Lovells

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Tuesday 26 March 2019

The cesspit that are Nigerian refineries

A

fter spending over N90 billion on Turn Around Maintenance (TAM) of the nation’s refineries without much result from 1999 to 2003, the administration of former President Olusegun Obasanjo, decided to sell 51% equity stake in the Port Harcourt and Kaduna refineries to a consortium – Bluestar Consortium Limited for a sum of $721m. The consortium, made up of Dangote Oils (55%), Zenon Oil (25%), Rivers State G overnment (15%), and Transnational Corporation (5%), promised to get the refineries working at full capacity within months.

The process, which started in 2003, ended at the twilight of Obasanjo’s regime making people to suspect it was a parting gift to his associates.

The Nigerian Labour Congress, NUPENG, PENGASSAN, and the NNPC strongly opposed the deal and, after a two-day strike that completely shut down the economy, the

barely two-week old government of late President Yar’Adua was forced to cancel the sale.

The unions, as well as the NNPC, unanimously agreed that the NNPC was capable of turning around the fortunes of the refineries to make them function at 100% capacity within months.

Yar’Adua consequently directed the NNPC to revamp the refineries. Also, in withdrawing from the deal, the consortium challenged the NNPC to resuscitate the refineries within one year or they (the consortium) will bid again for the refineries.

But that was never to happen as the labour unions prevailed on the late President not to privatise the refineries.

Twelve years down the line, the refineries are still in a comatose state and the nation continues to reel under the heavy cost of importation of refined petrol.

But trust Nigeria never to learn from history or is it a conscious decision to turn the dead refineries into cash cows to finance political activities and politicians in the name of turnaround maintenance?

A cursory look at the NNPC books shows that the NNPC sustained a loss of N95.09 billion in running the refineries alone in 2017. In the first nine months of 2018, it again sustained a loss of N96.34 billion. The loss for 2018 is expected to reach N132 billion when the full year financials are released.

Meanwhile, new refineries are being built at a fraction of that amount. For instance, in 2013, Comico Oil built a 100,000 barrel per day refining capacity refinery for $250 million in Serbia.

This is besides the fact that the refineries are old and obsolete and it will take less to build new ones than to make them operate optimally. The Port Harcourt refinery was built in 1965 and upgraded in 1989. The Warri refinery was built in 1978, while the Kaduna refinery was finished in 1980.

Our refineries have an average age of over 30 years. Since they were built, new technology has been introduced that has made much of their operating systems near obsolete.

Other nations are building brand new refineries for less the price we are devoting to servicing our old and dilapidated ones that never seem to work.

The decision to pump more money into turning around the refineries rather than selling or discarding them, as aptly described by the common sense advocate, Ben Murray Bruce, is akin to taking for servicing a Mercedes Benz 450SEL 6.9 in the year 2019. The cost of the service will be more than the car is worth because Mercedes Benz stopped making the 450SEL in 1981. Any part required for the service would have to be custom made from Germany or cannibalised from another Mercedes Benz 450SEL. The repairer, if he were to be honest, will advise that the person buy a new Mercedes because there is nothing as expensive as an old Mercedes.

Nigerians must rise up and prevent the waste of public funds in the name of operating these dead refineries. We need to sell-off these refineries or better still discard them as scraps.

GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

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Tuesday 26 March 2019

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COMPANIES & MARKETS

BUSINESS DAY

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Meyer announces changes to board, confirms appointment of new MD

Pg. 14

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

CONSUMER GOODS

SET Plc records biggest bottom line decline in 6 years ISRAEL ODUBOLA

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ecure Electronics Technology (SET Plc), holder of the first National Lottery License in Nigeria, posted an unexciting 2018 financial outing, as bottom line fell the most in six years since 2013.

The Lagos-based lottery firm ended its five-year profit streak with an aftertax loss of N152.1 million in FY 2018 compared with a profit of N62.6 million posted the year before.

Gross income of SET Plc, which comprises of lottery sales and gaming products, was six-year low at N4.3 billion in FY 2013, as it shed 34.2 percent from N6.6 billion reported in the previous year.

The drop in revenue is most likely associated with the weakened purchasing power of customers given the fragile posture of the Nigerian economy.

The company noted that the Board of Directors did not recommend any payment of dividend for FY 2018.

Check into the dividend payment profile of SET Plc revealed that shareholders were not paid dividends in the previous five financial years.

Despite the cost of prizes/winnings, dealer commission and administrative expenses dropping by 34 percent, 32 percent, and 6 percent respectively, SET Plc posted a big decline in profit before tax, fuelled by the big decline in revenue.

Current assets of the company contracted marginally by 0.57 percent to N370.6 million compared with N372.7 million in the previous financial year, triggered by reduced trade receivables and prepayments Non-current assets trended southwards to N6.06 billion in FY 2018 as against N6.15 billion in FY 2017. Consequently, total assets fell slightly by 1.37 percent to N6.44 billion in the review year compared with N6.57 billion reported in the year before.

Total liabilities were up by 8.63 percent to N768.9 million triggered by el-

Source: Company’s financials

evated trade payables and income tax.

Shares of SET Plc remained dormant at 20 kobo for the past six months, the lowest in five years. The stock was among those affected by the removal of par value price floor of 50 kobo by

the Nigerian Stock Exchange fifteen months ago.

Analysis of the shareholding of the company revealed that 73.55 percent of its 2, 957 shareholders in the review period have 3.6 million shares, less than a percent of 5.97 billion total shares outstanding.

Only five shareholders including ICM Limited, Nujuum Ventures Limited and Strand Capital Partners Limited have at least 5 percent equity stake in SET Plc. SET Plc was incorporated in 2001 with an exclusive 30-year license by

the Federal Government to operate the National Lottery in Nigeria.

The company’s business model cut across lottery and gaming, trivia promo syndication and provision of central database for information processing.

BANKING

Unity Bank wins CBN/NIBSS’s ‘most extensive fraud channel coverage efficiency award ISRAEL ODUBOLA

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nity Bank has won the Efficiency Award as the financial service brand with the “Most Extensive Fraud Channel Coverage” at the 4th Electronic Payments Incentive Scheme (EPIS) Efficiency Award 2019 powered by Central Bank of Nigeria (CBN) and Nigerian Inter-Bank Settlement System (NIBSS).

The Bank won the award in recognition its outstanding compliance in fraud and cyber crime reporting and for being the financial institution with the most fraud channel coverage on the Central Antifraud System in 2018.

The CBN has a central Antifraud Channel which monitors the number of fraud cases and the percentage of such cases reported. Not only

was Unity Bank rated as the Bank that is most compliant in fraud reporting, the Bank was also acknowledged for deploying efficient tools for monitoring fraud across all her electronic channels.

At the just concluded EPIS Award, Unity Bank was commended for promoting epayment system and fraud prevention initiative in a manner that boost market confidence on CBN’s cashless policy.

Receiving the Award, the Head of E-business, Unity Bank Plc, Oluremi TinuoluGabriel, commended EPIS, NIBSS and CBN for the award of recognition for the Bank which he noted as being special and remarkable. He added that “this honour is being received in a category where the Management of the Bank has been very passion-

ate not only with compliance directives but also to support with constant ICT infrastructural upgrade as well as effective information and cyber security practice to deliver optimum performance”.

For the Bank, the award is a motivation to all end users of e-payment channels who have kept faith in this journey to sustaining the cashless initiative. As a Bank, the award also inspires us to continually raise the bar of all compliance standards in fraud reporting.

Unity Bank has before this time developed and deployed comprehensive suite of eproducts while subscribing to collaborative initiative to ensure effective, efficient and secured network for the sustainability of its e-payment systems.

In the Q4’2018, Unity Bank also won two outstanding

awards of excellence; namely, the CBN’s Award as the ‘Sustainable Transaction of the

Year in Agriculture’ and Presidential Award in recognition of the Bank’s participation

in Anchor Borrowers Programme.

L-R: Steve Omojafor, chairman, STB McCann; Oluyinka Esan, associate professor, University of Winchester, and Odion Aleobua, chief executive officer, Modion Communications, during the 3rd UNILAG Mass Communication Alumni Association Distinguished Lecture Series in Lagos.

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

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Tuesday 26 March 2019

COMPANIES & MARKETS MANUFACTURING

Meyer announces changes to board, confirms appointment of new MD GBEMI FAMINU

M

eyer Plc, one of Nigeria’s leading brands in the manufacturing industry recently announced some effected changes in its administrative structure.

In a public statement sent to the Nigerian stock exchange (NSE), the company stated that, “We hereby notify the exchange that the board of directors at its meeting held on Tuesday, 19th March 2019 appointed Mr. Devashish Nath as the new managing director with effect from 1st February 2019.”

The notice further stated that, Kehinde Yusuf who was appointed as the company’s Chief Financial Officer (CFO) on the 3rd of September 2018 has tendered his resignation which became effective from

December 31st 2018.

The recently appointed managing director has over two decades of experience in the manufacturing and production space, having served in various positions and diverse companies in India and West Africa Including Berger Paints India where he served as the general manager for manufacturing from April 2011 till January 2019, rainbow paints and chemicals sierra Leone where he served as the general manager for operations.

Meyer’s financials for nine months 2018 showed that the company’s revenue recorded a decline by 3.34 percent having had N778 million in 2017 and N752 million in 2018. The company recorded another decline it its cost of sales by 11.6 percent with N556 million in 2017 and N491 million in the correspond-

ing period of 2018.

Gross profit for the company grew by 17.64 percent having had N221 million in 2017 and N260 million in 2018, while its profit for the period recorded a growth of 19 percent to N186million as against the N221 million the company recorded the previous year.

Nath has an M.B.A in marketing and systems from the Sikkim Manipal University Health Medical and Technological Sciences and also an M.Sc in organic chemistry from the university of Lucknow India.

Meyer Plc was founded in 1940 and was formerly known as DN Meyer Plc, until the company changed its name in August 2016 to Meyer Plc. The company was incorporated may 20th 1960 and was listed on the Nigerian Stock Exchange (NSE) in 1979.

Business Event

L-R: Adeyemi Alex, assistant director, ICT, ministry of science and technology; Ayo Adegboye, managing director, Business Connexion; Austin Odey, deputy director FIRS Support Services, and Ahmed Shehu, director Cartography, National Population Commission, during the official Opening BCX/Canon Showroom in Abuja

AVIATION

Boeing reiterates commitment to ensuring safety in letter to airlines and passengers MIKE OCHONMA

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ennis Muilenburg, chairperson and chief executive officer of Boeing Company has reiterated the company’s commitment to ensuring safe and reliable travel on its airplanes. The statement was contained in a letter addressed to airlines, passengers and the aviation community this week Monday.

The letter follows after the crash of two of its 737 MAX aircraft in recent months. In October 2018, Lion Air Flight 610 crashed off the coast of Indonesia, killing all passengers and crew.

Earlier this month, Ethiopian Airlines Flight 302, which was travelling from Ethiopia to Kenya, crashed minutes after take-off, again killing all on board the flight.

At the time of filing this report, a Boeing team is on site with investigators to support the investigation and provide technical expertise.

The Ethiopia Accident Inves-

tigation Bureau will determine when and how it is appropriate to release additional details.

He noted that, this all-encompassing focus on safety spans and binds together the company’s entire global aerospace industry and communities..

While investigations into the latest plane crash continue, questions have since been raised about the safety of the 737 MAX aircraft, and the entire fleet has been grounded across the world.

Muilenburg said the company was united with its airline customers, international regulators and government authorities in efforts to support the most recent investigation, understand the facts of what happened and help prevent future tragedies.

Based on facts from the Lion Air Flight 610 accident and emerging data as it becomes available from the Ethiopian Airlines Flight 302 accident, the company is taking actions to fully ensure the safety of the 737 MAX, he averred.

“We also understand and regret the challenges for our customers and the flying public caused by the fleet’s grounding.”

Boeing has been working in full cooperation with the US Federal Aviation Administration, the US Department of Transportation and the National Transportation Safety Board on all issues relating to both the Lion Air and the Ethiopian Airlines accidents since the Lion Air accident occurred, he stated.

He indicated that work was progressing “thoroughly and rapidly” to learn more about the Ethiopian Airlines accident and understand the information from the airplane’s cockpit voice and flight data recorders.

Muilenburg emphasised, however, that the company would continue to providing “the best products, training and support to our global airline customers and pilots, pursuant to an ongoing and relentless commitment to make safe airplanes even safer”.

L-R: Vickram Gopaal, category head (Apple Africa) Redington Gulf FZE; Imran Sidi, marketing manager (Africa), Redington Gulf FZE; Niyi Adeleke, assistant unit head enforcement, National Lottery Regulatory Commission, and Jude Ehidiamhen, branch manager, Slot Systems Limited, at the second SLOT-Phone-A-Car raffle draw in Lagos

HOSPITALITY

Hospitality industry experts to leverage social media to transform business GBEMI FAMINU

H

arnessing the potential in the social media could help old and upcoming businesses attain position of growth and profitability, experts in hospitality business have said.

They believe that social media is an important tool to harnessing business growth, if players in the industry and the wider economy could understand its use and application towards driving their businesses.

These were the outcomes of panellist discussion during the HospitaliTEA forum hosted by Women in hospitality Nigeria held weekend in Lagos.

Bukola Arowosafe, director

of the women in hospitality initiative and Principal Consultant at LodgeIntel Consulting, while speaking said the HospitaliTEA program was a platform to bring together experts and professionals in hospitality and other affiliated sectors, to speak on trends and issues in the hospitality sector as well as rubbing minds to see how to push hospitality to a higher level.

She described hospitality in Nigeria as a promising sector but still requires more to be done especially in the areas of skilled workforce. She advocated the need for more training schools and other academy adding that those in the hospitality business need

skilled manpower to succeed.

She said the hospitality space is a call to serve and therefore requires a natural environment.

Regarding social media marketing she said it is relevant in the business space but it is necessary for business owners to understand how it can positively affect their business, ranging from what kind of influencers is needed , which is the most suitable platform, what constitutes the target market.

Okeke Chinyelu, manager Fourways Hotel, said customer satisfaction is always important in any business especially in the hospitality space. She said the key determinant of business growth is customer satisfaction and feedback.

L-R: Olubunmi Odufuwa, chief compliance officer, Rand Merchant Bank Ltd receiving her certificate having successfully fulfilled the requirements for the one week training and examination program leading to the award of Certified Compliance Profession (CCP) from the Abimbola Adeseyoju, managing director of DataPro Limited.

L-R: Ayo Shote, non-executive director, TES Ltd; Raphael Adebiyi, group MD/CEO, TES Ltd; Manouel Samper, channel account manager, Infor and Gbenga Fapohunda, executive director, JTI, at Tabor/Infor Lunch and Learn seminar in Lagos recently.

Tuesday 26 March 2019

BUSINESS DAY

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BUSINESS DAY

Tuesday 26 March 2019

Tuesday 26 March 2019

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Communal living

How residents grapple with challenges of communal living in serviced estates ISRAEL ODUBOLA

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part from income, people also put into consideration the availability and functional infrastructure such as good roads and drainage, waste management, security, serenity and attractiveness of environment as well as adequate supply of power and water when deciding where to live.

Gated estates are generally upscale residential communities designed for affluent individuals. They provide a lot of benefits to the residents that live within them, but services are not free lunch.

Every gated estate has a central management authority, an outsourced facilities managing firm or Home Owners Association that maintains the facilities and ensures residents enjoy them to the fullest.

Olumide Akinyemi, project manager at Global Limited, posited that why high profile individuals reside in gated communities goes beyond comfortable access to facilities and amenities, but issues of security, privacy, and exclusivity of the amenities are of concern to them.

A report by AfrAsia Bank, an institution authorized and regulated by Bank of Mauritius, titled ‘2018 Wealth Report’ affirms that an increasing number of High Net Worth Individuals (HNWI) prefer to live in gated communities and estates.

The institute cites security, facility, quality and design of houses, views, scenery and wildlife as well as price growth potentials as factors influenc-

ing the decisions of HNWIs to inhabit gated communities.

But these upscale communities, as attractive as they seem, are not without challenges of varying degrees for residents, landlords, estate developers and facilities managers who provide and manage facilities and services used by the residents.

Most of these estates are serviced, meaning that services are provided and paid for by the residents either collectively or individually.

The payments are made in form of service charge which has become a major feature of most estates and a source of contention. In most cases they pose challenges.

“The private estates or residential housing requires the services of facilities managers because a lot of the people who live there are middle income professionals who live there hoping to leverage economy of scale to get the kind of services they need”, explained chief executive of a frontline facilities management and services firm, who pleaded to be anonymous.

The economic downturn in the country is, however, making it difficult for some of these residents to meet their obligations in terms of rents and service charge payments, leading to serious frictions between residents and landlords or residents and service providers as the case may be.

“Many of these mid-come professionals who worked in oil and gas companies or banks have lost their jobs, the income of some of them has reduced and they are therefore struggling to pay their service charge.

Even many of them are defaulting in paying their rents”, the chief executive revealed.

In some cases, however, frictions arise not from loss of job or income, but from rising costs which has in turn jerked up service charge in many estates. “Rising cost of maintenance has increased sharply to between 30 percent and 40 percent”, according to Mojisola Akingbade, an estate manager, who expressed fear that sooner than later, cost of maintaining a building might outstrip the rents.

BusinessDay findings on four key facilities including power, water, sewage disposal and security in three gated estates in Lagos namely Osborne Foreshore Estate,

Ikoyi; Cable Point Estate in Lekki Phase I and 1004 Estate in Victoria Island reveal near-common experiences by residents.

Though residents have their comfort and enjoy serenity, attractive landscape, tight security, and clean environment with slight variations in terms of power and water, service charge payments remain a major issue the service providers have to contend with.

In terms of security, a visit to these estates shows that they are well secured for habitation.

A domestic staff who has been working in 1004 Estate for six years, told BusinessDay that tight security in the estate was a major selling point.

The staff, who did not want

to be named, explained that a significant number of occupants of the estate are foreigners (particularly Chinese and Indians) and a major reason for this, according to him, is because the environment is safe.

“About 90 percent of the residents are Chinese and Indians. The estate appeals to them because they are confident that their lives and valuables are secured; you cannot enter here anyhow; there are protocols. You cannot find these foreigners in non-gated areas where there are often cases of armed robbery. Things like that scare them,” he said Talking about the service charge for security, he said residents are billed and pay-

ments are remitted to the Home Owners and Residents Association (HORA) office.

Efforts to get the amount paid by residents were fruitless as the HORA office was reluctant to provide such information.

A visit to Cable Point Estate, Lekki Phase I gave a similar picture of 1004 estate as regards security. One of the estate residents, who introduced himself simply as Biodun, told BusinessDay that the estate management office does not joke with security.

“This is how we operate here. It is mandatory for everyone to sign-in before they get access into the estate. You cannot find people wandering

Continues on page 18

Interior Decor

Fusing furniture with appliance sourcing to deliver modular kitchen goals TEMITAYO AYETOTO

A

FP Furniture Production, a business division of Julius Berger Nigeria, is using a model that fuses furniture

production with appliance sourcing to deliver the modular kitchen goals trending in luxury demand.

Under collaboration with Miele Nigeria, an organisation that focuses on the supply

of premium domestic range of appliances, AFP ensures that kitchen layout designs are tailored to house smart devices in functional and flexible positions.

BusinessDay check on

AFP’s recently launched showroom at the heart of Victoria Island saw a smart cooking space built with fitfor-purpose cabinets, accentuated by dishwasher, oven, cooking hoods, microwaves and a mini dining arena among other handy devices.

The sharp layout reflects a departure from a core cooking arena where nothing but essential food preparation was performed to a centre filled with an expression of lifestyle preference and fashion statement.

Observers of interior design trends believe that while consumers with modern orientation want to simplify cooking processes using highend gadgets for efficiency, they equally want to bond in interaction.

As a result, the modular embrace has seen kitchen concepts split into wet and dry sections.

The dry modular kitchen, on the one hand, typically

includes all the latest gadgets for built-in kitchen appliances like a built-in three-door refrigerator, wine chiller, built in coffee machine, warming drawer, built in combi oven or an induction hob. The wet section doubles as a guest dining table or bar table, having a little breakfast counter table for instance and sometimes a television set. The layout affords the opportunity to do away with the greasing and untidiness that comes with food items The dry kitchen, on the other hand, focuses purely on the moisture or greasiness that comes with preparing food items that need a lot of cleaning like meat, chicken or fish. The design is however structured in a fashion that prevents water from seeping into cabinetry from the countertop and sink area.

Modular kitchen, otherwise known as ready-to-install kitchen cabinets market

is one of the fastest growing segments in the kitchen furnishings markets across the globe, according to Research Nester.

Kitchen market is anticipated to record a significant 7.5 percent compound annual growth rate between 2018 and 2027 on the rising trend of shifting modular kitchen structures across the globe with advanced functional features.

The rising urbanization in developing nations and modification for interiors in developed countries is also expected to boost the market during the forecast period.

Many multi-national companies are concentrating on new technological advances in ready to install kitchen cabinets, especially as the rising food and service industry across the globe accounts for the rising demand of modular ready to install kitchen cabinets.

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Housing

MTR Gardens: New urban community where OPIC offers affordable luxury CHUKA UROKO

W

hen the moving construction machines of the Ogun State Property Investment Corporation (OPIC) arrived Isheri area of the state in August 2015, many did not believe in their ability to deliver what stand today as luxury homes, and also an urban community offering strong value propositions.

This was because, Isheri, a sleepy rural community, had huge environment challenges that devastated property values. The part of the community where MTR Gardens is sitting today was a waterlogged waste land that posed a security risk being a hideout for miscreants.

The terrain was difficult to access, leading to a tough and difficult development process that involved different stages of reclamation, flood channelization and raft foundation to ensure structural stability of the coming buildings.

Today, the Isheri story has changed and, according to Jide Odusolu, the OPIC managing director and special adviser to the Ogun State governor on property and investment, “what we are doing here, apart from creating homes, is also a form of economic expansion in which we

are creating economic urban communities and resolving environment challenges”.

OPIC has been in existence for over 30 years, but in the last eight years, has been a veritable tool in the state government’s infrastructure development, economic expansion and internal revenue generation.

“Before this administration came on board, OPIC in over 30 years delivered a maximum of 200 housing units, all of them in Agbara.

They also built about three kilometers of roads; but in the last eight years, OPIC has delivered about 2000 housing units and also done over 40 kilometres network of roads in our various estates”, Odusolu disclosed to journalists on tour of the facilities recently.

MTR Gardens, located on KM6 along Lagos-Ibadan Expressway Way, is the corporation’s latest housing development. It is a 180-unit premium apartment-styled community comprising 150 units of 3-bedroom apartments and 30 units of 2-bedroom apartments in 25 and 3 blocks respectively.

The estate which targets upper middle class buyers boasts dedicated power supply, paved roads/walkways, portable water, packaged sewage plant, and sit-out areas.

The rooms are very specious for both the 3-bedroom and 2-bedroom, each with ensuite

maid-room and three parking spaces for each apartment.

Recreational facilities include multi-purpose gym, swimming pool, basketball court and a neighbourhood mall to answer to the domestic needs of residents.

Apartments in this Garden which offers both investment and residential opportunities attract competitive market prices. Buyers and investors have the option of buying fully completed apartments or shells in which case they have to do the finishing by themselves. But there is price differential.

Whereas a completed 3-bedroom apartment sells for N32 million, the shell vari-

ant goes for N24 million. As for 2-bedroom, a completed apartment sells for N18.5 million while the shell goes for N14 million.

Buyers also have the option of paying outright or going through mortgage facilities provided by Gateway Mortgage Bank, Homebase Mortgage Bank and Trustbond Mortgage Bank Plc at 18 percent interest rate repayable in 15 years .

The managing director informed that MTR Gardens, which is designed to have the same scale of what obtains in 1004 Estate in Lagos without the stress and pressure there, is the first of a three-phased development, disclosing that

the second phase promises 600 apartments.

“The third phase of this project is going to be a commercial city with office building and shopping mall; the concept of what we are doing is to recreate this area in such a way that it is not just enough to live in Ogun, but to also work and thrive in the state.

We want to make people start seeing this place as home where they can live, work and play”, he said.

Odusolu, whose eight-year stint in OPIC shall be elapsing in May this year, says it is gratifying for him to have been a part of the journey that made the transformation that Ogun has seen within this period.

Project

NIWA places stop-work-order on Apple Island project CHUKA UROKO

T

he Nigeria Inland Waterways Authority (NIWA) has placed a stop-work-order on the Apple Island project being undertaken by the Nigeria Army Property Company Limited (NAPCL) and its development partner, Tauraf International Limited.

Apple Island is to be developed on 43 hectares of land to be reclaimed from the Lagos

Lagoon adjacent to Banana Island, Nigeria’s most exclusive and expensive residential real estate destination. The proposed island estate which has Julius Berger and Van Oord as main contractors, is planned as a mixed-use development that will deliver 100 housing units.

The promoters of the island project, which has been a subject of contention since its conception, is alleged to have apparently violated the rules guiding project development

on the Nigerian waterways by commencing dredging activities for the projects without following NIWA’s guidelines.

A statement obtained by BusinessDay at the weekend alleges that NAPCL and Tauraf International are yet to present to the waterways authority the project’s environmental impact analysis; obtain approval from Federal Ministry of Environment to create the Island; hold a public hearing; present a survey plan and Certificate of Ownership\Occupancy and make payments which are pre-conditions for such development.

All these, according to the statement signed by Adelowo Adesola, undermine the powers of agencies of government at both the federal and state levels and, in particular NIWA, leaving it with no choice but to impose the stop-work-order on the project a few days ago.

Lagos State, a sprawling city in Nigeria, is in dire need of land for real estate activities, especially housing which is grossly in deficit in the state to the tune of three million units.

This explains the surge in land reclamation activities in the state to create new urban communities to absorb the emerging middle class popu-

lation in the state who need modern housing in exclusive neighbourhoods.

But unlike others before it, there are so many things wrong with the approach to developing Apple Island as another urban community in the state. Besides the failure of the promoters to create a well delineated access road to the proposed island, development experts argue that the proposed island will be wrongly located if it is allowed to succeed.

“If the Island has to be created, it should not be where it is currently located as it is mainly within the general channels used for navigational purposes; the development of the Island in its current location obviously can cause accidents on the waterways because of dredging activities”, said an who travels on Lagos waterways.

A professional town planner affirmed, noting that what NAPCL and its partners were doing violated all urban development rules. He wondered how an island development could be created without the state government knowing or being part of it. “What would be the impact on the road in its location; what are the disaster management plans; what fa-

cilities –schools, hospitals, etc are going to be provided to make it less exerting on existing facilities somewhere else?” the town planner queried.

The promoters of the island estate have pitched themselves against the residents of Banana Island by choosing to make an existing road in Banana Island the main access road to their new development.

But residents of the exclusive Banana Island are already resisting that plan to the point of a legal action, contending that they don’t see the workability of an access to the new Island without an encroachment that would involve creating a thoroughfare through their estate.

“Nobody can come here to do a development of this magnitude without letting us know.

We are not saying you should not do your development but access to that development is going to be a problem. Besides, this road is already servicing two estates within. So, allowing another estate use the same road will not augur well for residents of this estate,” said one of the residents in their complaint to Tukur Buratai, the Chief of Army Staff and chairman of NAPCL.

Tuesday 26 March 2019

How residents grapple with challenges of communal...

Continued from page 17 aimlessly here”, Biodun said.

At Osborne Foreshore Estate, Ikoyi, it is the same trend. Fortune Olakunle, who works in one of the hotels within the estate, told BusinessDay that visitors were scrutinized before gaining access. “There are guards stationed at the gate, both armed and unarmed. A car search is conducted before motorists are allowed in “Non-residents are required to call their hosts before being allowed into the estate. This is why there are no known recorded cases of armed robbery or violent crimes within the estate”, Olakunle said.

Power is supplied to the sampled estates by Eko Distribution Company, but reliance on public power supply varies among the estates. At 1004, it was gathered that the estate has a central generating plant beside Civic Centre that supplies power to the estate.

“Before, the estate relied on public electricity, but not anymore. If public electricity goes off, within the next 20 seconds, the power plant picks up”, a resident in the estate disclosed.

Asked about the service charge for power, the resident who pleaded anonymity explained that apartments were metered to individual residents and payment is commensurate with consumption.

The same thing applies to Cable Point estate. The resident explained that although the estate gets power from public sources, it is not dependent on them because of frequent outages associated with public power. “You know the country we live in. Power is epileptic.

The estate has its own plant that serves residents. The plant runs 24 hours in the absence of public power supply”, he said.

Checks at other areas around Cable Point estate revealed that residents were not impressed with the power situation. Emmanuel Nweke, a resident at Lai Yusuf Crescent adjacent Cable Point, said “sometimes we live two days without power. They also give us three straight days without interruption, but this is rare. We are not happy.”

Unlike 1004 and Cable Point, it was gathered that Osborne has no central generating plant that serves residents in case of power interruption.

“Majority of residents complement public power with generators and inverters”, a resident confirmed to BusinessDy. “There is nothing like crazy bills. All buildings have prepaid meteres. For instance, in my office, we pay huge sums to get certain units of light that can sustain us a month. You know that prepaid meter is a not a friend of heavy gadgets”, the resident added.

Tuesday 26 March 2019

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19

Interior Decor

Corporate furniture: Metal, plastic fittings steal show from wood TEMITAYO AYETOTO

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rom executive chairs down to top management staff and task operators’ seats, wooden furniture took the lead among options available in the corporate furniture world for long.

But recently, metal and plastic furniture have not only caught up with wood; they are a substitute that has outstripped it almost completely as manufacturers now seek wood the least in their bid to reinvent trend and expand the base of varieties.

Most of the components that come together in seat furniture now have about 80 percent of it as metal and plastic, with the rest of the 20 percent shared between wood, fabric and foam among other fixtures.

Wood’s loss of ground to metal and plastic, experts say, does not just derive from a mere change in trend but also from the fact that manufacturers have found a way to infuse huge flexibility into the configuration of their products. They now offer advanced and innovative designs with a focus on health, comfort and technological enhancement.

BusinessDay checks of office furniture offerings showed that health, comfort benefits, as well as mobile flexibility options, lead the promotional captions aimed at attracting potential buyers of corporate seats, needless to say, are metal and plastic

made.

At the Chair Centre Limited, for instance, Birdy (BY0111), a corporate chair brand for the task and operators category is labelled as an armchair made of high density moulded foams for long hours use, featuring adjustment of the mechanism to suit the weight of the individual users.

It is also described as a mono-moulded shell for long term back support and underknee tilting mechanism which allows the user’s feet to remain firmly on the floor when leaning backwards.

Sedna Swivel (SP77/52), an executive high backrest armchair with headrest and a synchronised mechanism is made finished with Polish aluminium base and armrests.

It is a high back chair with height adjustable headrest and multi-position locking and anti-return safety.

These benefits are what dealers say have been driving the shift to metal and plastic but the sad part is that they have to rely on import when many local furniture makers were still short of capacity to give flawless finishing.

According to Sombef Furniture Nigeria Ltd, regular office chairs were currently high in demand from companies, schools and workstations than executive types but were largely sourced from countries including China, Dubai, turkey and occasionally Egypt.

Even as the ban on imported furniture makes ports clearing of the goods higher than expected, Chisom Nwa-

chinemere, Sombef CEO said it has to overlook the regulatory hurdle to ensure its array of products was spiced with varieties that clients look for.

“Ordinary office chairs are more in demand because, in most places of work, the numbers of workers are more than the management staffs.

It is not that the local people cannot do the job but you cannot compare the quality of the finishing that comes from the imported. They don’t have enough capacity for production,” the importer told BusinessDay.

Okeke Nnaoma of Gojevi Furniture and Interiors said also affirmed that 80 percent of most of the trending furniture in the market were imported. He attributed the change in the demand to the urge of clients to stay attuned with trending style.

“Office furniture is really moving very fast because a lot of people want to upgrade and people who have old furniture want to change to new ones in the market,” he said.

“It is a trend. For example, the wooden kind of dining table is no longer in vogue as

people want to change to the new leather on metal.”

According to Research Nester, a market research and consultant service, the seating segment accounted for the largest market share in 2016 out of the global office furniture market segmented by product type into seating, overhead bins, storage units, tables, accessories and workstations.

In its report, “Global Office Furniture Market Outlook: Industry Demand Analysis & Opportunity Evaluation 2016 – 2024”, the seating category

is predicted to augment the growth of the market with CAGR of 6.7 percent in terms of volume over the forecast period.

The firm sees increasing construction activities, expansion of multi-national companies, rapid urbanization and establishment of new office buildings in urban areas and growth of real estate in developing nations is anticipated to foster the growth of the office furniture market all over the globe. It is however not clear if Nigeria is brazing to partake of the growth.

Building collapse

ARCON woos states with APRN initiative as antidote to building collapse CHUKA UROKO

T

he lack of political will by various state governments to implement the National Building Code

and enforce other building regulations, coupled with the mutual suspicions and denials among building industry professionals whenever there is a building collapse incident have

given birth to Architects Registration Council of Nigeria’s (ARCON) new APRN initiative to prevent building failures.

APRN is an acronym for ARCON Projects’ Registration Number which the Architecture profession regulatory council introduced into the building industry to, among other things, reduce building collapse incidents in Nigeria which are fast becoming a feature of the country’s built environment.

With this initiative, all architectural projects/drawings are prepared only by fully registered architects, submitted to ARCON and assigned APRN before submission for planning, implementation and approvals.

ARCON is therefore wooing all states in the country to adopt its initiative in order to reduce the menace of building collapse in Nigeria.

“We want to collaborate with state governments to

ensure that APRN becomes operational in all over the country. And we have been creating awareness on this,” DIPO Ajayi, the ARCON President, disclosed to newsmen in Lagos recently.

Ajayi spoke in his reaction to building collapse incidents in Lagos and other parts of the country.

A couple of weeks ago, a four-floor building at ItaFaaji area of Lagos Island, Lagos State used as residential and school premises collapsed. This incident led to the death of some, while several others were injured.

Few days after that, another building collapsed in Ibadan, Oyo State capital.

Ajayi, who led Kayode Anibaba, former Commissioner for Physical Planning and Environment in Lagos, Adebayo Dipe, Permanent Secretary, Lagos State Ministry of Housing, Ohioma Andy, Director, Federal Ministry of Power, Works and Housing, Ladi Lewis,

former chairman, Nigerian Institute of Architects (NIA), Lagos and Tiwalola Fadeyibi to the Ita-Faaji collapsed building site, noted that it was high time states of the federation embraced its APRN initiative.

It is hope of the regulatory body that the APRN system, which entails numbering all architectural projects in Nigeria, will further tighten loose ends in monitoring building projects in Nigeria.

The ARCON boss, who commiserated with the families of the deceased, hoped that those directly involved in this despicable act would be brought to book, explaining further that APRN, in addition to reducing the scourge of building failures by eliminating quackery, will also ensure that only fully registered and financially current architects/ architectural firms prepare, produce and submit designs for planning/implementa-

tion approval and receive such approvals when they are given.

According to him, architects and architectural firms that are registered with the council are to submit architectural building plans for approval/implementation and will be responsible for the supervision of their designs.

He said that this measure was aimed to complement the old practice of submitting building with a copy of the architect’s current practice licence, the affixing of ARCON stamps, signed by the architect and sealed (with the architect’s ARCON seal) on each sheet of the drawings submitted for approval.

He revealed that building can collapse due to non-involvement of professionals and poor designs; over- loading, adding that because of the present development, there must be re-engeering, rebuilding and re-planning of the entire Lagos Island space.

20

Tuesday 26 March 2019

BUSINESS DAY

How onboarding schemes from employers result in happier staff and improved retention ANDREW JACK, FT

W

ith his firm but compassionate gaze, it is easy to imagine Sean Maywood in his previous career as a teacher at a secondary school in south-east England.

Since 2016, however, he has been the “first-five-year manager” at PwC, the auditing and consulting firm, where he supports hundreds of graduates recruited each year in the UK. The creation of the post reflects a growing recognition among employers of the need to do more to support young recruits.

Like other accountanc y firms, PwC not only hires a high number of graduates, it also experiences significant turnover among their ranks because so many quit early in their careers.

Justine Campbell, managing partner for talent at EY UK and Ireland, one of PwC’s rivals, says: “We have just launched a new student recruitment process that aims to make ‘onboarding’ a smoother process.

Our research showed that employers can make a difference in bridging the transition from education to employment for the next generation of employees.”

This year’s data from Britain’s Healthiest Workplace underline the extent of pressures being suffered by some of the youngest members of the workforce.

25.7% of employees aged 18 to 20 smoke

The research shows 18- to 20-year-olds are the most vulnerable of all age groups, with disproportionately higher mental health concerns, and lower performance and engagement.

The study reveals that 17.2 per cent suffer from depression — more than double the average for other age groups in the workforce.

They are more than twice as

likely to say they have been the victims of bullying and are more likely to say they have serious financial concerns.

The study found the 18-20 age group shows the greatest proportion of other risk factors for health and wellbeing.

A quarter smoke, more than half report sleep problems and three-quarters confess they do not eat the recommended minimum of five portions a day of fruit and vegetables.

It is not surprising, given the other data, that this age group loses more productive time than any other because of absenteeism and presenteeism (when employees come to work but are ineffective due to ill health or distraction), at nearly 46 days a year; the average for all other age groups is just over 35.

Maywood at PwC believes today’s young adults have begun to show certain traits that are different from those in previous generations, including a greater sense of entitlement and increased dependence on others because their parents have been more involved in directing their lives than their predecessors’ parents were.

53.3% of 18- to 20year olds have problems with sleep

He also singles out the negative consequences of “permanent connectivity” of mobile phones and the internet, along with growing financial pressures.

Like many businesses of its type, PwC has an employee assistance programme and career coaches.

Yet Maywood says recruits can feel hesitant talking to managers and others who also oversee their performance and professional development.

He therefore provides an additional “unofficial, confidential service”.

He points to the importance

of integrating young employees into support networks, including ones at PwC for people from different backgrounds, such as Chinese and Russians.

“They need to build their own networks that connect outwards to their peers in other departments so they link to others at their own level, as well as upwards and downwards,” he says.

Campbell says EY is responding in a similar way. “Increased stress is often synonymous with starting a new job, so we also provide our student recruits with a buddy and a counsellor to help them navigate the organisation in their early days,” she says.

“They can help them to access the support mechanisms we have in place.”

She also stresses the importance of preparing recruits from the start with job simulations and a chance to meet their peers and other employees.

“This helps to set their expectations before they even walk through the door on their first day,” she says. Doing so might also mean fewer turn round and walk back out too soon in their new careers.

The office worker you love to hate - 1 JESSICA, the millennial manager

H

ey, Alistair! Thanks for dropping in.

Yes, I know I fixed the meeting. Make yourself comfy: lip-cushion, beanbag — your choice — oh, ouch! I should have said: not the purple one.

It seems to have lost all its beans. So. Weekly touch-in time!

Yes, we’re calling it that, because — news flash! — appraisals are so tired. Something a bit more wired seemed right for the “DF Crew” here at Digital Fulfilment.

Well, I wouldn’t say “incessant” is quite the right word.

But DF-ers don’t want to wait six months to find out they screwed up on day two, right? No, you didn’t. Don’t worry. First, how

am I doing? Sure, we’ll come to you.

But do you have any feedback for me, beyond your input to the

DF Luurrv app? Actually, I’m looking at Luurrv and I don’t see a single emoji, ping, or backscratch from you.

Do you need a refresher? I’m pinging Luurrv Actions that you and Jake should workshop when he’s back from surfing. Talking of

surfing, we’ve all noticed you’re in the office, like, a lot.

DF doesn’t just stand for Digital Fulfilment. It’s about being Downright Flexible.

We just need you to deliver your best work, anytime, anywhere. You prefer it here? But, I mean, nine to five!

That’s so old school. Anyway, back to me. Is there anything I can do better? Anything at all: this is a safe space.

Okaaaay.

Little bit personal, but no problem. Yes, I could “cover my tattoo up with a scarf”. I mean I see it could be “distracting”.

But you do know, this isn’t a tattoo, it’s a birthmark?

Omigosh, Alistair, don’t be embarrassed. Shall we ping each other about a new touch-in via Luurrv later? Yay! Fist-bump?

BUSINESS DAY

Tuesday 26 March 2019

21

Demand for business education rising Business schools now know that students in Africa but hurdles of cost remains need soft skills as well as hard knowledge

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h e n I l e r i o l u wa Akinkugbe decided early in his career he wanted to specialise in marketing communications, he researched MBA courses in Africa and Europe as the most rapid way to advance.

“I was based in Lagos and looking for an MBA closely tied to the industry there,” he says, explaining his decision to study at Lagos Business School.

“I looked at Insead and Iese, but I was drawn to training in the market I wanted to play in: Nigeria and Africa.”

If relevant expertise and local networks were important reasons for his final choice, funding was another: tuition fees at home in Nigeria, let alone living and other costs, were a fraction of those he would have incurred by going abroad.

Akinkugbe’s experience is typical of a rising demand for business education from Africans, but also of constraints such as the cost and structure of courses at a growing number of local and international institutions.

There is little doubt about the appetite for MBAs. Alongside established business schools in South Africa, the Maghreb, Nigeria and Kenya, there are newer providers such as the African Leadership University in Rwanda.

Leading business schools from outside Africa have been keen to capitalise on the interest.

Duke Fuqua School of Business in the US has forged events, partnerships and executive education programmes, for instance. France’s HEC has established a regional office in Ivory Coast.

China Europe International Business School (Ceibs) has been recruiting Africans to its programmes in Shanghai but has also set up an operation in Ghana.

“The middle class is growing and is interested in international exposure,” says Mathew Tsamenyi, Ceibs’ executive director for Africa.

Richard Higgs, a South African now working at German engineering group Siemens, attended Ceibs in Shanghai.

Previously, he had studied accounting at the University of Stellenbosch in South Africa, and was inspired to develop expertise on China after being impressed with the country while backpacking on a career break.

He also observed its companies expanding their presence in Africa.

“There is so much Chinese influence in Johannesburg, so my goal in going to Ceibs was to build connections,” he says.

“I’m still figuring out my longerterm career, but there’s definitely going to be some sort of links between China and Africa.” Higgs was able to cover his costs with a mixture of savings, Ceibs scholarships and lowinterest loans.

For many others on the continent, costs remain prohibitively high.

“There are two strata in Africa,” says Alejandro Lago, head of The Africa Initiative at Spanish business school Iese, which has supported the development of Lagos Business School, Strathmore Business School

I

of three delivering rapidt is just after 8am on a fire questions at each other, Saturday morning — before writing down three time for breakfast, or positive and one negative desleeping. But in censcription in turn. The course tral London more than 100 followed feedback from the students have gathered to school’s career centre. obsess about themselves.

“Recruiters say students This might not be such a were not self-aware”, says Mr stretch for a group of highly ambitious graduates who are Jolly. “They said they are arrogant [and] don’t listen.” He mainly MBAs and Executive hopes the lessons do more MBAs. However, London Business than find students new jobs.

“As you become more senior School’s “interpersonal dyall you do is relationships. namics” course is not about When you’re in the boardrampant narcissism.

Rather, it encourages room you’re not doing Excel. participants to develop selfJust building relationships.” awareness, practise mindSuch programmes reflect fulness and handle difficult business schools’ awareness conversations in the workthat they need to produce place. graduates who have soft skills At the front of the subas well as technical, strategic terranean hall is lecturer and financial knowledge.

Richard Jolly, an The FT’s 2018 adjunct professor Skills Gap survey of organisational found that employIf you have behaviour, who ers preferred cannotes wryly that didates who as well self-awarestudents might ness — that as being able to find the arrival of problem solve and [helps] the Buddhist monk prioritise, could later in the term work in a team, you handle challenging. with a wide variety yourself.

“Some of you of people and build Emotional might think it’s a network. ‘fluffy, vegetarian Warren Teiself-control bullsh*t’.” But he chner, a senior is important implores them to partner who is also in developgive it a go. After the lead partner for all, “he was a Buding relation- global recruiting at dhist monk before McKinsey, the conships. it was cool”. sultancy, says that This is a tough some candidates audience. Later, he asks overlook the value of “comagain. “Any reactions? Is this munication, collaboration, flaky, psycho bullsh*t?” This and relationship-building”. session, a mix of theory and He adds: “Candidates team exercises, is about first often focus on the problemimpressions. solving aspect of consulting “Most of us think we and our interview process.” are very self-aware,” says Once they are hired, they Mr Jolly. “If you have selfare expected to participate in awareness — that [helps] you communication, teamwork handle yourself. Emotional and leadership training. self-control is important in Adam Grant, Saul P Steindeveloping relationships.” berg Professor of ManageThe session addresses the ment at the University of problem summed up by the Pennsylvania’s Wharton social psychologist David A School, says schools need to Kenny, of people typically teach soft skills to MBAs. having “just a tiny glimmer Not doing so “is a bad of insight into how they are idea, and probably a dangeruniquely viewed” by others. ous one”. There is plenty of The first task for students hard evidence, he says, that is to find three adjectives to soft skills “aren’t only valudepict themselves followed able — they’re teachable. by the descriptions a friend We have a responsibility to and a stranger might use. teach the skills that matter This is followed by groups most.”

‘

Rose Wanjiku Muturi studies while working in Nairobi

in Nairobi and MDE Business School in Abidjan, Ivory Coast.

“The elite can afford education abroad and has done so since independence, but that is a small group,” he says. “Now we are seeing an uptake by the middle class who would like to go abroad but often lack the funds to do so.”

Rose Wanjiku Muturi, a Kenyan, preferred to remain in her own country and study part-time at Strathmore both because it would be more affordable and she wished to continue working and earning while learning.

She looked for an institution that offered efficient, high-quality training with motivated colleagues.

“I wasn’t interested in a public university,” she says.

“They get disrupted when the students or lecturers go on strike.”

George Njenga, the founding dean of Strathmore, says: “Most of our students come from poor families.

Theyhavetojugglemoney,andfind it hard to work, go abroad and leave their families behind unless they have scholarships to bring them along.”

He argues that his school also offers training that is more relevant to the region than overseas rivals.

“You can learn a lot in the US and Europe, then you suddenly come back and find yourself in a developing economy which is a far cry from the developed world,” he says. “You realise your knowledge is far too impractical to apply.”

Like Njenga, Enase Okonedo, dean of Lagos Business School, has ambitions to expand her school’s capacity and reputation as a regional hub for students from African countries.

But both deans stress the need to use more Africa-focused case studies in teaching, to build deeper research expertise and to attract experienced,

well-qualified faculty.

“We can’t pay the salaries of advanced economies and we have no funding from government,” says Njenga. They also point to the different entrance standards of African students, who perform worse on average than their peers on the GMAT scores widely used by business schools.

That might reflect the nature of the widereducationsystemandthelimited infrastructure locally to help prepare for the tests. In 2017, fewer than 5,000 African citizens took the exams.

A little more than half went on to study at US business schools. Some schools have offered their own alternative tests, while Ali Elquammah, chairman of the Association of African Business Schools, says he is developing an accreditation system more targeted to the capacities of the institutions on the continent.

Many business schools in Africa are also focusing on executive education for more experienced students as an easier way to build support from local companies for business training.

Offering MBAs, by contrast, means entering a crowded, competitive international market. Prof Elquammah, who teaches at HEM Business School in Morocco, argues that the greatest demand is for high-quality undergraduate business courses.

“A lot of western schools come with the vision of training future leaders,” he says. “That’s fine, but the real need in Africa is to train managers who will execute plans, not just those in the ivory towers.

Regardless of the MBA hotshots developing the strategy, someone will have to implement it.”

Current trends suggest growing demand and supply in Africa across the full range of business education, despite the considerable constraints and local twists.

22

BUSINESS DAY

Tuesday 26 March 2019

Tuesday 26 March 2019

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BUSINESS DAY

23

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Decaying infrastructure, teacher - shortfall expose gaps in public education system

Human Capital

Foundation pushes for improved reading culture among students ...Donates books to over 100 students Desmond Okon

KELECHI EWUZIE

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A

gainst the backdrop of on-going outcry over the issues bedeviling basic education across the country in the wake of the collapsed school building in Lagos, stakeholders who spoke to BusinessDay express concern that providing a lasting solution to decaying physical infrastructure and teacher shortfall in many public schools remain the most effective way of addressing the challenges of basic education.

Basic education in the views of education experts is the very foundation of cultural production. It is the producer, not only of value, but also of the ethos of a nation, especially in its fundamental link to nationalbuilding.

It is also expected that as nations make stride in development, education should plays a pivotal role in such strides because it has a direct impact on every other sector of the economy.

As important as education is globally, the opposite appears to be operational manual in Nigeria judging by the condition the primary and secondary levels of education are at the moment. Reports show that these levels of education in the country remain underfunded with teachers fighting for survival.

The poor state of education especially the primary and secondary levels in Nigeria is aptly captured in the National Empowerment Development Strategy which reveals that the delivery of education at those levels has suffered from years of neglect, compounded by inadequate attention to policy frameworks within the sector.

Adesola Adedeji, an education stakeholder, noted that educational system in the country has collapsed, calling

Higher

Back Row, L-R: Kenneth Adejumoh, corporate communications manager, Nosak Group; Irene Udosen, founder, Lead-out Education Foundation in a group photograph with students at an event in Lagos.

on government to urgently overhaul the system so that primary and secondary education can produce candidates fit for tertiary education.

This, he said, could be done with the establishment of a national quality assurance and monitoring system in primary and secondary education system.

“If, as a nation, we are still aspiring to join the rest of the world in the march to greatness in science, technology, literary excellence and economic breakthroughs, these inadequacies must be addressed without delay,” he added.

Recent reports show that access to basic education is inhibited by gender issues and socio cultural beliefs and practices while wide disparities persist in educational standards and learning achievements.

Analysts observe that the growth rates in the economy bandied by government officials have failed to capture the stark reality on ground in the face of the ordinary Nigerian. Today about 13.2 million children are still out of school. Products from the school system at all levels are of such appalling quality that employers of labour hesitate

to touch them with a 10-metre pole.

Furthermore, facilities in public schools are in deplorable condition, complicated with the non-payment of teachers salaries and allowances, a situation that has made strikes the order of the day; the lack of necessary teaching and learning materials at all levels of the educational system; poor working conditions of all teachers in the country, among other factors have led to the collapse of this all-important development index.

This situation in the opinion of education stakeholders have no doubt brought the system to it kneels. Analysts observe that a weak primary education system automatically produces weak students for the secondary schools, which are no better either, and so the chain of mediocrity continues up to the higher education level and the cycle completes itself with the same garbage fed back into society with serious implications for national competitiveness and productivity.

Peter Okebukola, an educationist, in analysing the current state of primary and secondary education chal-

lenges identified shortfall in teacher training as a major challenge and recommends reformatting teacher education as a way forward.

Okebukola disclosed that poor quality of teachers in the Nigerian school system is a major force steering education in the wrong direction.

According to him, “Until our teachers are better trained and well motivated, all efforts to improve the quality of the education system will be severely compromised.”

He further pointed out that the National Teachers Institute, the colleges of education and the faculties of education must carry the blame for unleashing the army of poorly-trained teachers on the nation’s educational system.

“Reformatting teacher education means major curriculum overhaul. It means improving the quality of the processing of the poor quality intake into our teacher preparation institutions.

“We should begin to train a new breed of 21st century teachers who are steeped in the use of modern methods of instruction and are at the cutting edge of knowledge in their subject matter,” he said.

ead-out Education Foundation, a Lagosbased non-profit organisation committed to raising competent, functional and transformationconscious students and youths has donated books to over 100 students in commemoration of World Book Day 2019 as a way of promoting, and reviving reading culture which could be described as poor in Nigeria.

The donation was done at an event it held recently at Word Bible Church, Lagos, following the preview of a movie titled ‘Gifted Hands’, which details a story of how Ben Carson, former neurosurgeon and current United States Secretary of Housing and Urban Development, rose to prominence by being committed to reading.

Through the movie, the students present at the event, themed “The Value for the Book” and organised in partnership with Nosak Group, drew lessons on the benefits, significance of developing a culture for reading. Students were given note books, and other literary works.

NIGERIA was rated by the World Culture Score Index as one of the countries in the world that has the lowest reading culture in 2017, “hence, it behoves us to take advantage of World Book Day, which is a global initiative to celebrate reading and books,” said Irene Udosen, Founder, Lead-out Education Foundation.

“Knowledge is power; knowledge is education, not certificate or other stuff seemingly it that are not it. This is what our event is intended to emphasize. Hence we have converged to reaffirm the value for the book. To help students see reading as a bridge that connects them to their dreams so that they realize when they pick up a book to read, they’re building their

future. To obtain an education that serves personal and societal needs as well as bring wealth, we need to go back to the value for the book. Exams questions also need to be reviewed. We need more of critical thinking questions so as to kick out malpractices, and help pupils develop problem solving skills,” she further said, explaining the essence of the gathering.

Speaking to BusinessDay, Udosen who assessed the reading culture in Nigeria as frail said the current reality is as result of society’s derailment from emphasizing the value for the books to emphasizing certificate, materialism, and connections.

“So, students have now adjusted to what seems to be most important to society rather than what will matter for productivity. ‘Why study when it won’t matter at the end’ is the mind-set! Though, it back fires at the end. Unqualified graduates and misfits are the result,” she said.

There is a serious decline in our reading culture today.

Although the advent of technology has made it easy, and more interesting to read, many students are not utilising technology much. They would rather play video games than read a book on their gadgets.

So it is important to find ways on how to improve reading, and inculcate reading culture in the younger generation, said Kenneth Adejumoh, Corporate Communications Manager, Nosak Group.

“For students to begin appreciating reading culture, they first need to understand the value of reading. Parents and teachers should be deliberate in ensuring that students engage in reading. Government should reintroduce public libraries, and a strong library culture in schools. The ministry of education should reintroduce the library system into the public space and in schools.

Vice chancellor advises students against possession of hard drugs ...As School matriculates 450 Students IDRIS UMAR MOMOH, Benin

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mmanuel Aluyor, vice chancellor, Edo University, Iyahmo has advised students against possession of hard drugs.

Aluyor speaking during the 4th matriculation ceremony of the institution in Iyahmo, in Estasko West local government area said

possession of hard drugs, indiscipline, gangsterism and smoking will result to expulsion of student.

According to him, “The university management will not tolerate any act of indiscipline, gangsterism, smoking or possession of hard drugs within the university premises; this could lead to expulsion of the student,” He said a total of 450 students who successfully gained

admission into the university out of the 750 candidates offered provisional admission

by Joint Admissionand Matriculation Board (JAMB) for the 2018/2019 academic session matriculated.

He however advised the matriculated students to make best use of the facilities available in the university so that they can become wellgrounded and employable after graduation.

The vice chancellor assured the new students that the institution has state-of-the arts modern technological and computer based equipment that makes learning easier.

He listed some of the learning facilities to modern Engineering workshop, skills laboratories for nursing and medicine students, mass communication studio and legal clinic for law students.

Aluyor further posited that the university had recorded milestone achievements in its short period of establishment in 2015.

“Some of the milestone achievements of the university within the short period of its establishment include 3rd best university in Nigeria and best amongst the state owned universities in the 2018 Open Educational Resources ranking of Nigeria universities

by the National Universities Commission (NUC).

“The first in Nigeria universities to own an Anatomage which is the most advanced digital device for the training of medical students in the field of Anatomy and also the first in Nigeria and West Africa universities to acquire the CANVAS Learning Management System (LMS) for teaching in the university,” he added.

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EDUCATION Enterprise challenge: Corona Secondary School students receive $1500 award KELECHI EWUZIE

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panel of international judges have selected students from Corona Secondary School, Agbara as winnersof the one thousand five hundred dollars Top Global Business Plan Prize at the 2018 edition of the school enterprise challenge.

The School Enterprise Challenge is an initiative of ‘Teach A Man To Fish’, a UK charity organisation. 1,137 schools across the globe participated in this programme.

The aim of which is to help students learn valuable 21st-century business skills they can use to support their schools and local community.

Corona Secondary school students participated in this enterprise challenge and came up with a business called Keke Goods, an online business that delivers groceries to people

who find it difficult to get to the market themselves in the Agbara community. The name Keke goods is derived from the mode of delivery i.e. through the use of a tricycle commonly known as ‘keke NAPEP’ Or ‘Keke Marwa’.

The Keke has been found to be able to navigate rough roads and move faster than regular vehicles in the case of traffic, which is a regular occurrence because of bad roads. Seeing that our school is sited in the countryside and surrounded by several farmers market such as Lusada, Ikoga and Agbara markets.

It became very profitable to buy directly from the farmer and sell to our parents on visiting days, since many of them reside in the up country areas. The company is owned and run by Corona Secondary School Students.

Students in the School Enterprise Challenge are involved at every stage of their school business. Over the

Students from Corona secondary school, Agbara, Ogun State who emerge winners at the School Enterprise challenge competition

course of the programme, students write a business plan, conduct market research and balance a budget - and all this is in on top of making and selling their products or services!

Expert gives insight on what can be done about poorly performing universities David Mba

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hy are Nigeria’s universities in such a sorry state? Some would say it has to do with just one word -money. Sadly this is part of the reason. But not entirely.

Nigeria’s universities have been under-funded for decades. Like a talented but under-achieving football team, they fail to achieve goals because the country hasn’t invested enough in their structure, their facilities and their people.

Higher education in Nigeria includes universities (federal, state and private) as well as polytechnics (skills-intensive and experiential learning programmes) and colleges of education. With over 160 universities, 128 polytechnics and 177 colleges of education, it constitutes the largest higher education system in Africa.

My colleague Professor Val Ekechukwu, the dean of engineering at the University of Nigeria, Nsukka, and I did a review of Nigeria’s top 12 universities to assess their academic output. This review was undertaken as part of a comparative assessment of Nigerian universities to other emerging global economies (Brazil, Turkey and Thailand).

We found that the country’s universities lag well behind equivalent emerging global economies like South Africa, Egypt, Thailand, Turkey and Brazil. They also lag behind traditional world leaders.

The problems

Decades of under-funding in universities has had dramatic consequences. These include: • Universities under-perform on research. According to our research, Nigeria’s universities produce only 44 percent of the ‘scholarly output’ of South Africa and 32 percent of Egypt. This is despite the fact that Nigeria has nearly four times more universities than Egypt and over six times more than South Africa.

• The higher education sector loses local talent and fails to replace it. According to UNESCO data, over 60,000 of Nigeria’s brightest students – equivalent to 375 students for each of our 160 universities – choose to study abroad.

There’s nothing intrinsically wrong with this. The trouble in Nigeria’s case is that it fails to attract the equivalent in foreign students. It becomes a ‘brain drain’ rather than the ‘brain exchange’ it could be.

And yet the education budget in Nigeria has seen little or no change over the last few years, and government funding of education remains low.

In 2018, it was just over 7 percent of the national budget.

This level of funding, as a percentage of the total budget, has remained stagnant since 2009 when it was 7.25 percent.

A widely-used international indicator to measure the level of investment in research is the Gross Domestic Expenditure on Research and Development. It’s measured as a percentage of the total economic activity in a country or gross domestic product.

The world average is a healthy 1.77 percent. But Af-

rican countries lag behind. In South Africa it is 0.76 percent and in Egypt it’s 0.4percent.

Nigeria trails behind even its African equivalents at 0.2 percent.

How to fix the problem Nigeria is Africa’s biggest economy and most populous country. Why then, when it comes to university education, does it behave more like a backwater than the mainstream it should be?

What can be done?

We would argue that improving the outcomes of Nigeria’s universities requires investment, powered by a national strategic vision and matched with good governance.

The National Universities Commission of Nigeria has indicated that it intends to increase university capacity by supporting the creation of new private universities. But indications show that the commission hasn’t focused on the level of scholarly output.

Quantity is of limited use unless accompanied by quality.

Of course, decades of neglect will not be remedied in a year. There are competing demands for government funds, such as in areas from transport infrastructure to health. But there must be a strong political will to improve universities year on year, and make education a long-term priority.

David Mba is pro vicechancellor and dean of computing, engineering and media, De Montfort University, United Kingdom.

Professor Val Ekechukwu, the dean of engineering at the University of Nigeria, Nsukka.

“We are on a mission to tackle youth unemployment and the ‘learning crisis’. The impact shown by these winners reminds us why it is so important to give young peo-

ple the skills and experience to become the job creators of tomorrow,” says Nik Kafka, chief executive officer, Teach A Man To Fish.

Sustainability and social re-

sponsibility is at the heart of the School Enterprise Challenge.

In 2018, student teams generated an impressive average profit of $390 and used these funds to support their schools or important local causes, as well as re-invest in growing their businesses.

Ayomide Akinyemi a member of the team says “The School Enterprise Challenge through the activities of Kekegoods has taught me the importance of market research in setting up and running a business”. “The enthusiasm I see in my students as the carry out their different roles within the business operation is quite enormous. In addition to learning entrepreneurial skills they are learning to work in teams” says Ibironke Sonuga, team leader of the Corona Secondary School is leading the way in sharing the positive impact of school businesses, not only for students, but for the Agbara community as well.

The private sector closing gaps in education

OYIN EGBEYEMI

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any international and humanitarian organisations have, in one way or the other, stated that education is a basic human right.

Such organisations include the United Nations (through the Universal Declaration of Human Rights), International Covenant on Economic Social and Cultural Rights, United Nations Educational, Scientific and Cultural Organization “UNESCO” (through the Convention Against Discrimination in Education), Organisation of African Unity “OAU” (through the African Charter on Human and People’s Rights).

While this list is not exhaustive, many other non-profit organisations and smaller humanitarian groups have been established for the sole purpose of addressing what has now become a critical global issue. Today, the popular notion is that a nation that is not educated should be concerned about its future.

Many recent studies and literature have linked education or the lack thereof to economic prosperity or economic crisis respectively.

Due the gravity of this matter today, we could forget that

before the eighteenth century in Europe and not very long ago in Africa (post-slave trade era), education was actually the responsibility of the church and families. It was a matter of choice or culture and was a private arrangement. It did not become a public service until after the French and American Revolutions in the late eighteenth century. Before this period, while fathers were away at war, women and children went to the factories to work in order to make ends meet. But after child labour laws were put in place, thereby reducing and eventually eliminating the number of hours children spent working; the focus began to shift towards educating children and keeping their minds busy with some form of productivity which would benefit their future outside a factory.

As much as education has been declared vital, up to 70million children in the world still do not enjoy this basic right that it is supposed to be; and most of these children are in Sub-Saharan Africa. There is some sense to this imbalance by virtue of the way the world has developed and some historical factors such as the Western world having always been ahead in such advancement, as well as colonisation and slave trade which on one hand could be viewed as a setback for Africa but on another could be viewed as the means of introducing such western phenomena as religion and education which may never have been a part of our culture in the first place.

While the world is where it is today, we have to take a critical look at what education as a basic human right actually means. According to the Right

to Education Project, the right to education should fulfil the 4 A’s Framework i.e. Availability, Accessibility, Acceptability and Adaptability.

Availability – The platform, infrastructure, materials and curriculum Accessibility – The removal of any discrimination that would prevent a person from enjoying their right to education i.e. gender, religion, disability, socio-economic status Acceptability – Ensuring that educational objectives are met, unbiased and to an acceptable standard Adaptability – Flexibility to the needs of the community as well as societal and global changes in the grand scheme of things Bearing all this in mind and bringing it to the Nigerian context, can we confidently say that we have the public platform available to exercise our basic right to education?

This is a difficult question that we need to ask our leaders and ourselves. While the government plays its role in providing this public service, there are observable gaps in these four areas; and this is evident in our educational outcomes (results from examinations and teachers’ literacy skills etc).

Almost inevitably, this is where the private sector comes in. Throughout my experience in the education sector, I have come to observe that a good number of private schools were established out of the passion and care for children, as well as great concern over our dwindling educational standards and as a result, our future as a nation.

Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

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How GE, Youth for Technology Foundation plan to boost Nigerian tech startups …Belgian government explores partnership, digital for development potentials in Nigeria Stories by Jumoke Akiyode Lawanson

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n the last five to six years, Nigeria has seen a huge growth in tech investments from deep pocket individuals and foreign investors who have strong belief in the untapped potentials of Information and Communication Technology (ICT) in Nigeria – a sector that has been acknowledged as the largest generator of Foreign Direct Investment (FDI) after the oil and gas industry, recording over $32 billion on foreign investments in 2018.

More so, research has proven that one of the ways for rapid economic growth is through digital and industrial development through invention and innovation, especially by the youths.

As a result, General Electric, the world’s premier digital industrial company, through its GE Lagos Garage in partnership with Youth for Technology Foundation’s 3D Africa program, hosted a pitch and networking session in Lags for local youth-led technology start-ups and entrepreneurs to assist them in reaching their maximum potentials.

Tagged ‘Building a Viable Hardware Ecosystem in Nigeria’, the pitch session which held at the GE Lagos Garage in Lagos on Friday, 22 March 2019, featured youth-led technology start-ups and scale-ups from Nigeria, and offered them the opportunity of presenting their pitches before

L-R: Joshua Egba; business development specialist, West Africa, United States Trade & Development Agency (USTDA), Thomas Hardy; Ag. director, USTDA, Umar Garba Danbatta; executive vice chairman/CEO, Nigerian Communications Commission (NCC), Olabiyi Durojaiye; chairman, NCC Board, Shannon Roe; country manager, Sub-Sahara Africa, USTDA and Clement Baiye( member, NCC Board during a courtesy visit by USTDA team to the NCC headquarters in Abuja at the weekend.

Philippe De Backer, the Belgian minister of Digital Agenda, and his Silicon Lagoon Mission, as well as local and international entrepreneurs, investors, representatives from private-sector companies, and non-profits.

De Backer, who was accompanied by a delegation of Belgian start-ups, entrepreneurs, non-profits and the press, said he was in Nigeria with the mission to connect with the country’s vibrant technology start-up community in Lagos; explore partnership potentials and raise awareness about digital for development opportunities in Africa’s most prominent tech hub.

Apart from the pitch presenta-

tions, participants also had the opportunity to network with players in youth-led start-ups and scale-ups in the technology space, entrepreneurs, investors, private sector companies and academics amongst others.

Patricia Obozuwa, director, communications and public affairs, GE Africa, said GE is happy to have partnered with Youth for Technology for the session.

“At the GE, we are passionate about empowering Nigerian entrepreneurs with relevant skills to compete on a global scale, and this is what we have been doing through our GE Lagos Garage, and we happy for this op-

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portunity to work with Youth for Technology’s 3D Africa. Their vision aligns with ours, and we are happy to say that as critical stakeholders, we have made our contributions to Lagos’ and Nigeria ’s vibrant technology start-up communities,” she said.

Also speaking, Njideka Harry, CEO, Youth for Technology Foundation/3D Africa, said the session was in continuation of the organisation’s objective of equipping the next generation with necessary skills to excel in the world of work.

“It is about empowering the next generation of leaders to enter the workforce with the skills they need to access employment or create their entrepreneurial opportunities in the fourth industrial revolution. Our programs utilise technology to inspire youth and women in developing nations to create innovative solutions to the challenges they encounter, and we are pleased to have been able to collaborate with GE Garage for this initiative,” she said.

Harry added that the YTF’s 3D Africa would not relent in its quest to change Africa’s narrative from dependence on foreign technology to being self-sustaining through “meeting the increased global demand for emerging and disruptive technologies, like 3D printing.”

Frederik Tibau, director of international relations, Startup.be, and Vanden Eynde, founder and CEO, Close the Gap, were also among the Belgian delegation at the pitching and networking session.

Konga rated in top league of globally viable start-ups

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onga, Nigeria’s leading e-commerce company has been highly rated in an exclusive list of globally viable start-ups and corporate organisations, compiled by Early Metrics, an independent rating agency.

The rating places Konga in a rarefied club of the top 14 percent of the 2,100 startups rated globally as at March 2019, further justifying the elevated standing of the company as one of the most promising ventures in the Nigerian and African business space.

A European-based global rating agency, Early Metrics assesses the growth potential of innovative and early-stage ventures. Their ratings support decision makers such as investors and corporates to identify innovative start-ups worthy of their time and money. Their ratings also help the organisations themselves, as it allows them to critically examine their strengths and weaknesses, gain credibility and give their investors added confidence by being audited by a third party.

Konga, acquired by the Zinox Group about 12 months ago, has been undergoing strategic restructuring and expansion to position it as the first and largest Omni – channel e-Commerce group on the African continent.

Sophos Intercept X tops other endpoint security solutions in AEP group test

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ophos Intercept X, the nextgen cyber security endpoint solution has been recognized to have the highest security effectiveness and the most efficient total cost of ownership (TCO), as it topped all 19 endpoint security products tested in the 2019 Advanced Endpoint Protection (AEP) Group test recently published

by NSS Labs.

The 2019 Advanced Endpoint Protection (AEP 3.0) Group Test

tested 21 products from marketleading vendors out of which 19 comparable products were presented in the Security Value Map (SVM). These products were examined for security effectiveness and total cost of ownership (TCO).

Measuring cybersecurity product effectiveness is unimaginably complex. With threats and attack techniques increasing and evolving at an ever-accelerating rate, testing houses need to make extraordinary

investments in their laboratories if they are to produce meaningful and rigorous measurements of cybersecurity product effectiveness.

“Just like all cybersecurity products are not equal, not all testing houses are equal and this remains somewhat opaque to the consumers of their reports, particularly when there is insufficient transparency around methodologies or execution details. Competent independent testing labs provide a great service

to vendors and buyers, and are critical to the cybersecurity ecosystem to drive higher standards of protection for all,” said Joe Levy, chief technology officer, Sophos.

According to Sophos, its Intercept X includes advanced deep learning technology, which delivers a massively scalable detection model that is able to learn the entire observable threat landscape.

With the ability to process hundreds of millions of samples, deep

learning can make more accurate predictions at a faster rate with far fewer false-positives when compared to traditional machine learning.

Sophos Intercept X also includes innovations in anti-ransomware and exploit prevention, and activehacker mitigations such as credential theft protection. By integrating deep learning technology, Intercept X is changing endpoint security from a reactive to a predictive approach to protect against unknown threats.

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Capitalising on mobile and internet penetration to create jobs in Nigeria Adeniyi Ogunfowoke, Guest writer

Jumoke AkiyodeLawanson

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nemployment is by far one of the most pronounced hurdles Nigeria is currently facing. The situation is exacerbated by the fact that youths account for 36.5 percent of the unemployed population. The Trading Economics reports.

This is a ticking bomb waiting to explode if not nipped in the bud.

Thankfully, Nigerians have embraced the use of smartphones and the internet. This is why mobile/ smartphone penetration is 84 percent, as more people now have access to the internet.

This has prompted Nigerians to capitalise on this increased penetration to combat unemployment headlong. In Nigeria and other parts of Africa, e-commerce companies play an impactful role in providing desperately needed jobs.

While taking advantage of the rise in mobile and internet access, Jumia launched its eCommerce platform in 2012, expanded to 14 African countries and has created thousands of jobs across the continent.

Vendors have been empowered, delivery associ-

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ates now have a means of earning a living and degree holders are working daily to deliver convenience to the homes of millions of Nigerians. Hence, creating employment opportunities for thousands of Nigerians.

Mobile and internet penetrations have jilted businesses to develop or build mobile apps. Today, one of the most sought-after jobs is

mobile/web development.

Having these at the back of their minds, young chaps have gone ahead to study and hone their mobile/ web development skills to become employable. This is because this is the job for now and the future.

What about social media entrepreneurs? Currently, you can be your own boss by simply having a product and

an internet-enabled smartphone. Social media tools like Facebook, Instagram and Twitter are readily available for you to use free of charge.

On your part, just take good pictures of your product and share them on your pages.

Anyone who is interested in what you sell will send you a direct message.

This reveals that increased mobile and inter-

net penetration will continue to provide jobs. These jobs are already available.

What is required is for Nigerians to acquire the training and skills needed to perform them. If for this reason alone, our university can be repositioned to teach these in-demand digital skills, it will go a long way in making Nigerians employable thus reducing unemployment.

Canon expands range of products in Nigerian market Jumoke AkiyodeLawanson

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anon, imaging solutions provider has expanded its range of products in the Nigerian market with the launch of three new products – the EOS R camera system, the PIXMA TS9540 printer and the ZOEMINI pocket printer.

The company which reiterated its devotion to this market, says that every new technology solution it develops is in line with its commitment to ensuring that customers optimally manage productivity.

Amine Djouahra, senior manager sales and marketing - B2C, Canon Central & North Africa, said, “We are very proud to have officially launched and announced

Comercio Cloud Computing wins award as Huawei cloud partner of the year

the availability of our EOS R System today here in Lagos- Nigeria. This market plays a significant role in our growth plans and we hope that today’s local launch event will further cement our position as innovators in imaging technology.”

Canon’s EOS R System is redefining the frontiers of photography and filmmaking. Over thirty years on from the original, eradefining EOS launch, the bold, new EOS R System once again expands photographic possibilities in countless ways. The new RF lens mount has been engineered with the perfect blend of optical, mechanical and electronic design to capture unique moments previously seen as very challenging.

During the launch of these products in Lagos on Wednesday March 20, 2019, Seasoned photographer, TY Bello said that the new Canon EOS R camera was far from the ordinary.

“While test shooting with this new camera, I realized that it could do so many other things that I never imagined I could do with such a compact, lightweight camera. It is very silent to shoot with and can gain focus on an object in extremely low light conditions. Even if you’re in a very dark room – six times darker than the human eyes can see, the camera will focus on your object and you can take perfectly clear pictures,” Bello said.

Since its inception in 1987, the EOS System – including Cinema EOS – has

grown into the most recognised imaging system in the world.

Also launched on the same day, the Canon PIXMA TS9540 is a compact All-In-One inkjet printer that is capable of A3 printing, with a comparable A4 printer footprint.

Omotayo Omodia, country manager, Canon Nigeria, explained the new printer to deliver professional results with the help of Canon’s class leading FINE print head technology and its five individual inks give photos a rich gradation and up to a 100-year album life.

“Unleash your creativity with all new feature of create fun nail stickers and customize your nails with Canon’s unique nail sticker media and app. It comes with 200 designs (with new

designs released each year).

You can also get creative and print your own personal photos to stick on your nails,” Omodia said.

The ZOE MINI is Canon’s smallest and lightest Mini Photo Printer, the perfect accessory for those who enjoy snapping and sharing treasured moments with family and friends. It features ZINK™ technology, meaning zero ink is required. With customisation at its foundation, this printer, through the Canon Mini Print app, offers the option to print not only individual smudge-free and water-resistant 2” x 3” prints or stickers, but also a tile print that is made up of four or nine prints, as well as over ten unique collage templates that print on one 2x3 photo.

ndigenous cloud computing company, Comercio Cloud Computing Limited has been named winner of Huawei EBG: Cloud Solutions Partner of the Year Award at Huawei Nigeria EcoConnect 2019.

Aderemi Adejumo, chief technology officer (CTO) of Comercio Cloud, said the prestigious and coveted award further endorses Comercio Cloud’s success in delivering top-rated cloud solutions within the Nigerian local cloud ecosystem.

The company has in two years proven to be a force to reckon with; providing Infrastructure as a service (IaaS), Storage as a Service (SaaS), Backup as a Service (BaaS) and Disaster Recovery (DR) as well as providing industry specific solutions to support its clients varied needs in its Tier III infrastructure built by Construction Data Center and certified by the Uptime Institute, IT industry’s most trusted and adopted global standard for the proper design, build and operation of data centers globally.

The CTO of Comercio Cloud said that Nigeria’s premier indigenous cloud computing company is steadily attaining its mission of providing the Nigerian IT community and sub-region with quality cloud services, business information solutions, reliable and professional technical support, and unparalleled customer service by embracing good ethical business practices.

According to Adejumo, there is a greater peace of mind when it comes to sitting on a local cloud platform such as the Comercio platform.

“Our platform has a lower latency than offshore platforms. We have a number of advantages over the notable foreign cloud platforms. It takes on average less than 25 percent of the time to retrieve data from an offshore cloud platform.”

Adejumo explained that with Comercio Cloud adhering to international standards like the ISO 27001, (Information Security Management System) and ISO 9001 (Quality Management System), it is no surprise that Nigeria’s premier indigenous cloud computing company can with ease “provide bespoke services, engage their customers and guide their request to the optimum solution on their platform while bagging meaningful awards.”

Tuesday 26 March 2019

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Why is NERC paying to find out if consumers want meters?

ISAAC ANYAOGU

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he Nigerian Electricity Regulatory Commission (NERC) is requesting for bids from competent and eligible firms for the conduct of a fast-track survey on consumers’ willingness to pay for meters in Nigerian Electricity Supply Industry (NESI). Problem is, consumers are already paying exorbitant cost for meters that aren’t even available.

According to an advertorial published on the Commission’s website, the request for Expression of Interest (EOI) was due to “concerns regarding the cost of meters and customers’ willingness to pay for them. Therefore, the Commission is desirous of engaging a firm with proven experience in data polling, and survey activities to conduct a survey to determine customers’ willingness to pay for different classes of meters.”

Paying for meters is not a new phenomenon in the NESI. while announcing the introduction of the Credited Advance Payment for Metering Implementation (CAPMI), a model that allows electricity consumers self-finance their meter acquisition and installation due to Discos’ inability to promptly meter their customers, in 2015, customers were already paying for meters.

“It is regrettable that customers paid for meters and not supplied with same months even years after. This is a double jeopardy considering that meters ought to have been supplied to them free

once they paid bills. We are working on measures to ensure that customers who paid before January 2011 are metered within the shortest possible time,” said Sam Amadi, NERC’s chairman in 2015.

Two years later, the Commission accused the DisCos of abusing the process and in a letter sent to DisCos in September 2017, it abolished the scheme. Between November 2013 and June 2016, only about 500,000 meters were deployed by the 11 Discos within their networks with less than 35 per cent of that directly done by the Discos

said NERC. Many consumers lost their money as they were placed on endless waiting list by the DisCos with many who paid failing to get meters. Even letters written

by NERC to DisCos to fulfill their obligation under CAPMI were largely ignored.

In August 2017, Babatunde Fashola, minister of Power, Works and Housing directed that electricity customers could negotiate with DisCos while also reiterating that the DisCos are obligated to meter their customers, stirring confusion.

“Some Discos have come back to say that their customers still want to pay for meters and they can reach agreements with them on how to pay for it. Government will not stand in the way of such an agreement. It is consistent with the intent of privatization envisioned by The Electric Power Sector Reform ACT (EPSRA) or at least it does not violate the Act,” said Fashola at the 18th Power Sector operators meeting with the minister held in Kano that month.

So if consumers have been paying for meters, whether single-faced or

three phased meters, for the past seven years, it seems silly to organize a survey to waste public funds to find out what everyone already knows. Nigerian electricity consumers have been inflicted with arbitrary estimated electricity billing by predatory DisCos and require no persuasion to pay for their own meters.

Yet NERC is wasting public funds to learn what is already obvious.

According to the Commission, the survey follows its approval by the regulation on meter asset providers with a view to scaling up the rate of metering by the electricity distribution companies, thereby reducing incidence of estimated billings as well as guarantee revenue in Nigerian Electricity Supply Industry (NESI).

The scope of the service according to NERC will include a web-based survey comprising interviews of households, small businesses, schools and hospitals to determine how much they pay for electricity as opposed to how much they think they ought to be paying.

“In addition, the scope shall also include the following: Willingness to pay for one-phase and three-phase meters based on an internal estimate arrived at by the Commission; Acceptability/attractiveness of payment in installments for pre-paid meters,” the notice reads.

NERC will conduct this pointless survey in selected cities spread across six geo-political zones with the breakdown of the number of interviewees required for the survey.

MARKET

Nigeria, South Africa still failing to light-up homes, power factories ...despite billions of dollars in gov’t bailout programmes STEPHEN ONYEKWELU

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frica’s two biggest economies, Nigeria and South Africa, are having a tough ride keeping the lights on in homes and the machines running in factories despite huge sums of money sunk into the electricity supply value chain in these countries.

Citing shortage of capacity, South Africa’s utility company, Eskom Holdings SOC Ltd. on March 23 shifted gears to Stage two load shedding from 09h00 until 23h00, implemented to protect the system and to prevent a total collapse or a national blackout.

South Africa is preparing to bail out Eskom, which might involve the banks and asset sale alongside, to the tune of R69 billion ($4.9 billion), over the next three years. But there are no easy options given the state of South Africa’s uncertain public

finances, stubborn unemployment and inequality.

The fact that Nigeria and South Africa’s residential and industrial sectors suffer electricity shortages means that both countries struggle to sustain gross domestic product growth. South Africa emerged from its first recession in almost a decade in the third quarter of 2018.

Lack of accountability, transparency and mismanagement has made returns on investment into these utility companies sub-optimal. In Nigeria, the electricity generation and distribution have been privatised (with 40 percent government equity holding) but transmission lines are still owned by the federal government. South Africa’s Eskom still awaits the legal separation of generation, transmission and distribution electricity through privatisation.

What these utility companies have in common is the fact that the homes are not lit up and factories gasp for power in both economies despite humongous interventions from government.

The Federal Government of Nigeria had as at June 2018 committed the sum of N1.023 trillion ($2.84 billion) in different kinds of bailout packages to Nigeria’s struggling power sector yet Nigerians remain in darkness with power generation at abysmal levels of less than 4,000MW daily. And electricity market still has shortfalls of about N1.3 trillion ($3.61 billion). This has been due to inefficient revenue collection and uncertain feedstock for power generating plants.

On 6 December 2018, at a briefing at Eskom’s Megawatt Park head office, interim results forecast a R11.20 billion ($800 million) loss

for 2018, up from R2.30 billion ($164 million) in 2017.

Eskom suffers equally from poor revenue collection. Municipal debt to Eskom stood at R17 billion ($1 billion) as of November 2018, yet the power utility is asked by government not to pursue cut-offs or legal cases for debt collection.

A plan to resolve the power snarl-up at local level has been in the making since early 2018, but Cabinet has at least twice delayed decision on the integrated electricity reticulation plan.

To move ahead on development of the power sector, national governments need take the initiative in a number of areas. They could focus on ensuring the financial viability of the power sector.

Electricity tariffs should reflect the true cost of electricity, costs should be transparent, the country

should make the most of what it already has in the sector, and officials should pursue least cost options in investments.

A second imperative involves creating an environment that will attract a broad range of funding mechanisms. Private-sector involvement is critical and central to effectively delivering new capacity. To attract the private sector, it is necessary to provide clear, consistent regulations; allocate risks to the parties best suited to carry them; ensure that a credible buyer (off-taker) exists; and seek support from external institutions to guarantee the risks.

Last, it is important for governments to demonstrate political will, keep an eye on the long term, and focus on the regulations and capabilities needed for the sector to thrive, not just on the plants and associated infrastructure.

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Tuesday 26 March 2019

ENERGY INTELLIGENCE Market

Big oil flirts with electricity, begins to take aggressive positions ISAAC ANYAOGU

I

n a bid to cover the entire supply chain including new growth areas, big oil companies are turning their focus on the electricity sector after gaining inroads into the electronic car and renewable energy markets.

In 2018, French Total invested more than US$1.7 billion in its local electricity retailer Direct Energie to fit an ambitious expansion plan.

According to CEO Patrick Pouyanne, electricity will be the energy of the 21st century and Total is using every opportunity to expand there.

Since 2014 when Pouyanne assumed the top post at Total, the company has become a utility as well as an oil and gas company after a string of acquisitions across power generation (Eren), battery manufacturing (Saft), and power distribution (Direct Energie, Lampiris). In Sub Saharan African market, the company is increasingly gaining a foothold in the renewable energy market.

Not to be outdone, Shell is seeking to become not just a player in electricity generation, but also the biggest one by 2030. The AngloDutch super-major revealed it was pouring US$2 billion annually into its new energies division that aimed to expand its presence in cleaner power generation. This segment could yield returns of between 8 and 12 percent, the head of the new

energies unit, Maarten Wetselaar, told Bloomberg.

Oil price reports that like Total, Shell is growing through acquisitions in the power generation and distribution sector as well as in electronic vehicles (EV) charging. This power plan fits in with the company’s strategy of reducing the portion of oil in its overall production to 25 percent from 50 percent and raising the portion of gas to 75 percent. What’s more, however, Shell specifically plans to materialize its power ambitions by

betting on renewables rather than on conventional power generation and distribution.

Nigeria’s electricity market is fraught with risks that preclude intense involvement of big oil companies but this does not mean they are not playing a role. Gas produced by international oil companies (IOCs) help to provide feedstock for Nigeria’s legacy power plants. Until market issues are resolved, a big involvement

by IOCs may be unrealistic at the moment.

However, analysts believe power generation and distribution is already turning into the new battleground for major oil companies in other countries. Andrew Critchlow, S&P Global Platts’ head of news for EMEA, warned in a recently published analysis that this Big Oil rush into power utilities might potentially “create a new breed of gigantic energy-controlling monopolies.”

Such monopolies, if they ever materialize, which is questionable, are quite a way off says Oil price and

compared Big Oil’s shift into electricity to what Big Tobacco did after the offense against smoking began. It regrouped and went into e-cigarettes.

Big oil companies will instantly have huge advantages should they consider aggressive entry. They are better positioned, have vast investment budgets to meet electricity demand growth from a bourgeoning population and rising energy needs.

It could also displace renewable energy companies on competition for cheaper power.

ANALYSIS

Gas flaring: Nigeria burnt N306 billion in 2018 DIPO OLADEHINDE

I

n 2018, Africa’s biggest oil producing country threw N306 billion into the flames through age long gas flare practice, in spite of its potential for development into cooking gas and other products to reduce environmental pollution.

Millions of people live within five kilometers of a gas flare site in the oil-rich Niger Delta region of southsouth Nigeria. Below the flames, they’re extracting oil. With the oil comes unwanted gas, which is burnt off in a process called gas flaring.

Analysis by BusinessDay showed from January 2018 till December 2018, Nigeria flared a total of 282.05 billion standard cubic feet (Scf) flared translating to a total cost of $846 million (N306 billion) using the average 2018 price of natural gas of $3 per 1,000scf.

Analysis of the NNPC report using 2018 average cost of $3 per 1,000 Scf showed in January Nigeria flared 31.68 billion Scf of gas worth $95 million, in February 27.25 billion Scf was flared worth $81.75 million while in march and April, Nigeria flared 26.88 billion Scf and 23.06 billion Scf worth

$80.64million and $69.18 million, respectively.

The oil and gas companies, which include international and indigenous operators, also wasted 21.20 billion Scf of gas in May worth $63.6million, 21.66 billion Scf in June worth $64.98 million, 21.21 billion Scf in July worth $63.63million, 22.42 billion Scf in August worth $67.26 million, and 20.54 billion Scf in September worth $61.62 million.

In October 2018, Nigeria flared 20.51 billion Scf of gas worth $ 61.53 million while in the month of November and December respectively the country flared 23.78 billion Scf and 21.89 billion scf worth $71.34 million and $65.67 million respectively.

“It’s a sad story and a combination of several factors which cut across the value chain; the gas flared away in Nigeria would have been able to address some of the challenges facing our gasto-power plants,” Luqmon Agboola, head of energy and infrastructure at Sofidam Capital, said.

Agboola explained that there are still major bottlenecks in infrastructural operational capacity which needs to be addressed in order to solve the menace of gas flaring.

The NNPC data revealed out of the 240.59BCF of gas supplied in December 2018, a total of 151.13BCF of gas was commercialized while 38.61BCF and 112.52BCF supplied to the domestic and export market respectively.

“This translated to a total supply of 1,245.48 million standard cubic feet (mmscfd) of gas to the domestic market and 3,748.47mmscfd of gas supplied to the export market for the month,” NNPC said in its report.

NNPC noted that 62.61percent of the average daily gas produced was commercialized while the balance of 37.39percent was re-injected, used as upstream fuel gas or flared in December 2018.

NNPC said Gas flare rate was 9.15percent in December 2018 i.e.

729.55mmscfd compared with average Gas flare rate of 9.92opercent i.e.

777.37mmscfd for the period December 2017 to December2018.

The NNPC further said that the

Total gas supply for the period December 2017 to December 2018 stood at 3,074.92BCF out of which 469.73BCF and 1,328.98BCF were commercialized for the domestic and export market respectively. Gas –Injected, Fuel gas and Gas flared stood at 1,276.22BCF. Since the 1950s when Nigeria started oil production, gas has been flared indiscriminately by the oil companies operating in the country, despite its many implications.

Yet legal efforts to reduce gas flaring and convert the resources into productive use such as generating electricity have never really come through.

According to the World Bank’s rankings Global Gas Flaring Reduction Partnership from July 2018, Nigeria is the sixth largest gas flaring country globally and the second largest in Africa after Algeria, moving up from the seventh global flarer the year before.

In a country where 27 per cent of Nigerians do not have access to electricity, many residents of communities living near gas flares are aware of the irony of the burning of a resource which could be converted into power.

Tuesday 26 March 2019

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Analysis

Puerto Rico’s march to 100% renewable electricity holds lessons for Nigeria’s urban cities DIPO OLADEHINDE

T

he island of Puerto Rico is taking proactive steps through a legislative bill, to move its electric system to 100 percent renewable energy and this serves as an example for many urban cities in Nigeria.

Hurricane Maria ravaged Puerto Rico’s power grid and plunged the island into the longest energy blackout in U.S. history, an incident stakeholders on the island wish will never happen again.

Unlike Nigeria that is yet to explore the full opportunities in its renewable energy space, Puerto Rico’s power grid is about experiencing a paradigm shift thanks to a current renewable energy bill mandating the island’s electric system to move towards 100 percent renewable energy by 2050.

Nigeria is failing to maximise its own renewable energy potential despite analysts projecting that Africa’s most populous nation could generate 600, 000 MW by deploying solar photo-voltaic (PV) panels from just 1 percent of Nigeria’s land mass.

Stakeholders also believe that given the high level of solar radiation in the northern part of Nigeria (about 5.0-7.0Kw.m2/day), utilising solar power generation in the northern part of the country has potential to steadily increase the

power generation capacity in the country.

Meanwhile, U.S.’ 3.20 million people strong island’s energy bill authorises a move to 100 percent renewable sources, like solar power, and energy independence by 2050, and its timeline has been sharply accelerated to require 40 percent renewable energy by 2025 and 60percent by 2040. The bill also exempts energy storage systems from sales tax.

The bill has already passed the Puerto Rico Senate and is being sent to the House for reconciliation; thereafter get the assent of

Governor Ricardo Rossello.

Puerto Rico’s largest nonutility electricity supplier Sunnova is excited that the island is joining other states like Hawaii, California, Washington D.C., and New Mexico in their commitment towards 100 percent renewable energy.

“Given the abundance of sun on the island, we believe that solar will be able to play a significant role in meeting the 100 percent goal,” Sunnova’s vice president of policy and communication Meghan Nutting told USA today.

Puerto Rico’s electrical system has been in a state of disrepair for

decades and controlled by Puerto Rico Electric Power Authority (PREPA), a public corporation that controls energy generation and distribution on the island.

Sunnova, which has 65,000 solar customers in the U.S. and its territories, began selling solar panels in Puerto Rico in 2013 as an attractive alternative to costly PREPA services. The company quickly became the island’s solar leader. Today, it has about 10,000 residential solar customers in Puerto Rico – or more than 90 percent of the total residential solar market on the island.

“Knowing Puerto Rico is an island prone to strong storms and the vulnerable state of its power grid, Sunnova officials should have more aggressively sold customers solar systems with a battery source that could be used off-grid,” Tom Sanzillo of the Cleveland-based Institute for Energy Economics and Financial Analysis told USA Today.

With three states such as Hawaii (100 percent renewable by 2045), California (100 percent zero-carbon by 2045), and Washington D.C. (100 percent renewable by 2032), already having a mandate to move towards 100 percent; the addition of Puerto Rico and a bill in New Mexico mandating 100 percent zero-carbon electricity will give a combine population in these five areas of 47 million persons, or roughly 14 percent of the total U.S. population.

And this may be only the beginning, as the governors of a number of other U.S. states have also expressed plans to move their states to 100 percent renewable energy. Also, more than 100 U.S. cities have made commitments to move to 100 percent renewable energy, including Chicago, which at 2.7 million persons is the largest city in the nation to make such a commitment to date.

FUNDING

New financing mechanisms will support off-grid connectivity in Africa - experts ISAAC ANYAOGU

E

nergy industry stakeholders are calling for a restructuring of the financing mechanisms enabling the development of off-grid and mini-grid connectivity in Africa.

This call was made at the 5th Energy Access Investment Forum that took place from 13th to 14th March in Abidjan, Cote d’Ivoire, for the first time on the continent, with the support of the African Development Bank, the Alliance for Rural Electrification (ARE), GET.invest (formerly the Africa-EU Renewable Energy Cooperation Programme), the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE) and UNIDO.

“Meeting the universal electricity access objective within the next decade will require the roll-out of off-grid and mini-grid solutions at scale,” said Daniel Schroth, acting director of renewable energy & energy efficiency at the African Development Bank, in his opening remarks.

The African Development Bank said it had developed financing instruments for engaging the off-grid and mini-grid sectors through its sponsorship and anchor investment in the Facility for Energy Inclusion (FEI), a $500 million debt financing facility targeting small scale renewable energy projects.

The 5th Energy Access Investment Forum The forum brings together public, private, and other stakeholders to encourage clean

energy access globally, and particularly in Africa.

Despite Africa’s significant energy resources endowments, close to 600 million people on the continent are still without access to electricity. Clearly, inadequate investment lies at the heart of Africa’s energy paradox.

“This forum is certainly an opportunity for investors, project developers and other stakeholders to learn more about upcoming support schemes, innovative products and new business models to accelerate rural electrification and advance the market for decentralised renewable energies,” said Marcus Wiemann, Executive Director of ARE and the 2019 Conference Chair.

Mahama Kappiah, executive director of ECREEE, said that lack

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

of adequate project management in Africa’s energy sector was a major drawback to private investments.

“The money is not the problem.

The way projects in the energy sector are prepared for financing is the problem…we need to address the institutional and regulatory issues in the energy sector so that Africa can attract more private investments,” Kappiah said, during a session entitled “International Funding Initiatives to support the Off-grid Renewable Energy Sector.”

In his contribution, Joao Cunha, manager of the renewable energy initiatives division at the African Development Bank, said: “The African Development Bank has been a strong supporter of Africa’s energy sector. It’s a top priority…we can see that the sector is evolving as de-

centralized energy systems are fast expanding with the proliferation of off-grid technologies…so, de-risking investment upfront is key to attracting more investment.”

Long Cheng, general manager for Africa at Trina Solar, highlighted the importance of solar technologies in providing solutions that meet the needs of rural communities in Africa. “Solar energy is also an important contributor to the continent’s climate agenda,” Cheng said.

These investments need to focus on “not just off-grid but also minigrids,” argued Dominiek Deconinck, Fund Manager at Electrification Financing Initiative (ElectriFI). Business plans and discussions in this regard ought “to focus on converting interest into investments in the offgrid sector,” he said.

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

30

BUSINESS DAY

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LegalPerspectives

With

Our rights and its limitations under the freedom of information act

T

T

he reason for treating this is because of the misconceptions that people (including legal practitioners) have about the purpose of the Act and how it functions. People do think that the Act has taken away the privacy of people and therefore eroded the duty of confidentiality totally.

charged, and shall perform such military duties within or outside Nigeria as may be required of them by, or under the authority of this or any other Act.” Once there is no criminal ele-

ment in the process of obtaining the money then it is absolute illegality for police to be used as instrument of harassment and intimidation in the process of recovering the debt owed.

Implications of writing a Letter of Comfort in Business Transaction

A

letter of comfort can simply be said to be an assurance from one party to another that the obligations of a party under a contract will be met. An example of a situation where such letter is often issued is when a parent company writes such a letter in favour of a subsidiary assuring a third party that the subsidiary will not default or will meet its obligations under a contract. Sometimes, it is issued

in a loan transaction. It must be noted that the party issuing it is usually not a party to the agreement that is between the person to whom the letter is addressed and the person in whose favour the letter is issued.

The letter is often worded in a way that the party issuing it will not be accused of guaranteeing anything. It therefore places no legal burden on the party issuing the letter. At best, it only creates a

moral obligation for the person.

In essence, it carries no legal weight.

It must be noted that a letter of comfort is not same as a guarantee in case you request that a party should bring a letter of guarantee from a credible person or organisation and such a person brings a letter of comfort. You will have no legal claim whatsoever against the person that issued the letter of comfort.

proper format. Other essentials of a valid lease areCertainty of term- the period for which the lease will last must be certain. The commencement date and expiration date must not be in doubt., Certainty of Property- The property concerned under the lease must be identifiable and properly described. The address should be clearly written., Certainty of parties- the parties to a lease agreement must be easily

identifiable. Their names must be clearly written. They must both have the capacity to contract i.e. the leasee and the lessor.,exclusive possession- the leasee must enjoy exclusive possession of the property even to the exclusion of the lessor. The lessor/landlord may only gain entrance for the purpose of repairs.

The foregoing are elements that must be present for a lease to be valid.

LEASE

L

eases not exceeding three years are usually just in writing- they are often referred to as tenancy. However, for leases that exceeds three years it is mandatory that such must be by deed i.e. it must be signed, sealed and delivered. Under Section 77 of PCL a lease that is aimed that conveying or creating a legal estate is void if not made by deed. This falls under the essentials of a valid lease i.e. it must be created in the

Tuesday 26 March 2019

Odunayo Oyasiji

Do you know? his segment tries to enlighten the public on some of the illegalities that happen frequently in our society. An example of such is using the police as an instrument of debt collection. The police have no business in issues relating to debt recovery (no matter the amount). It is not part one of their duties under the Police Act. Section 4 of the Police Act states their general duties as “the police shall be employed for the prevention and detection of crime, the apprehension of offenders, the preservation of law and order, the protection of life and property and the due enforcement of all laws and regulations with which they are directly

@Businessdayng

The purpose of the Act are listed below – a. To make public record and information more freely available. b. Provide for public access to public records and information. c. Protect public records and information to the extent consistent with the public interest and the protection of personal privacy. d. Protect serving public officers from adverse consequences of disclosing certain kinds of official information without authorization and establish procedures for the achievement of those purposes Section 1 (1) of the Act guarantees the right of any person to “access or request information, whether or not contained in any written form, which is in the custody or possession of any public official, agency or institution howsoever described, is established.” Where such right is denied, section 2(6) states that a person can approach a court to enforce the

disclosure.

Section 2(7) defines what a public institution is i.e.

“Public institutions are all authorities whether executive, legislative or judicial agencies, ministries, and extraministerial departments of the government, together with all corporations established by law and all companies in which government has a controlling interest, and private companies utilizing public funds, providing public services or performing public functions.” The last part of the definition extends it to private companies.

It must be noted that the Act stipulates the limitations to the right it guaranteed. A look at sections 12,14,15,16,17 and 19 provides for situations where request for information can or must be denied. It will be observed that information that deals with personal records of people is exempted and can only be disclosed if the person consents. Also, matters pertaining to a lawyer’s client and clients of health workers are exempted.

Furthermore, journalism is also protected with regards to privileged information.

Therefore, please take a look at the sections listed above before you write to organisations demanding for information under the right guaranteed by the Freedom of Information Act.

Copyright in Nigeria

T

his is a legal right conferred on the owner of an original work to have exclusive right to its use and circulation. The owner of a work is usually referred

to as author of the work.

The body responsible for the registration and regulating issues relating to copyright in Nigeria is Nigerian Copyright Commission.

Tuesday 26 March 2019

BUSINESS DAY

31

32

BUSINESS DAY

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

GTBank Nigeria Plc: Growth in profit aided by efficient cost management BALA AUGIE

G

uaranty Trust Bank Nigeria (GTBank) Plc recently released its results for the year ended December 2018 which shows significant growth in key metrics.

The largest lender by market capitalization in Africa’s largest economy has the strongest profit margin among peer rivals while its cost efficiency and moderate operating expense growth has been adding impetus to bottom line.

Growth in non interest income adds strength to gross earnings Gross earnings for the month of December 2018 increased by 3.70 percent to N434.70 billion as against N419.22 billion the previous year; the growth in revenue was a result of growth in non-interest income which compensated for the slight dip in interest income.

Interest income was up 39.01 percent to N127.4 billion in December 2018 as against N91.89 billion as at December 2017. A breakdown of non interest income showed fees and commission moved by 23.94 percent to N50.47 billion in the period under review as against N40.73 billion as at December 2017 while other income that comprise gains from foreign exchange trading increased by 34.12 percent to N37.63 billion in December 2018 from N37.63 billion the previous year.

However, interest income and similar charges were down 5.95 percent to N306.96 billion in the period under review from N327.33 billion as at December 2017.

The reduction in interest income was due to a low yield environment as yield on short term government securities has been growing at a slow pace since the start of 2018, but there has been an improvement in the money market in 2019, thanks to successful elections or benign political risk and Central Bank of Nigeria (CBN)’s Open Market Operations (OMO) and gradual economic recovery Modest operating expenses bolster profit Total expenses during the financial period 2018 increased by a mere 1.04 percent (lower than the 11.37 percent inflation) to N127.12 billion in December 2018 from N125.81 billion as at December 2017.

The moderation in total operating expenses was due to consistent application of cost optimization strategies by the Bank, as the out-

Segun Agbaje, MD/CEO, GTBank

come of the various cost initiatives adopted across the Group led to 180bps improvement in Cost to Income Ratio (CIR) from 37.09 percent in December 2018 from 38.89 percent as at December 2017.

The aforementioned moderation in operating costs greatly added to the company’s probability markers as profit before tax increased by 9.05 percent to N215.58 billion in December 2018 from N197.68 billion the previous year.

Profit after tax followed the same growth trajectory as it was up 10 percent to N184.64 billion in the period under review as against N167.91 billion as at December 2017 Sustained Competitive Margins amid headwinds Guaranty Trust Bank (GTBank) Plc has turned a unit of Naira invested revenue into higher profit than any Nigerian lender while it has also utilized asset in generating higher returns than peer rivals.

For instance, GTBank recorded net profit margin of 42.50 percent as at December 2018, this compares with Access Bank’s 18.30 percent; Zenith Bank, 30.70 percent, and United Bank for Africa (UBA), 15.90 percent.

Also, GTBank recorded a return on average equity (ROAE) of 30.90 percent in the period under review, this compares with Access Bank’s 19.0 percent; Zenith, 23.70 percent, and UBA, 14.60 percent.

GTbank’s net interest margin dipped by 119 basis point to 9.23 percent in the period under review from 10.42 percent as at December 2017. The decline in NIM was due to declining asset yields.

GTBank’s total assets were down 2.10 percent to N3.28 trillion in December 2018 from N3.35 trillion the previous year. The decrease was caused by pay-downs by some

foreign exchange loan customers on account of improved foreign liquidity in the market as well as impact of IFRS 9 implementation that saw a 12.92 percent decline in loans and advances to N1.26 trillion in December 2018 from N1.45 trillion the previous.

Improving Asset quality with very strong coverage for NPLs GTBanks’s risk management and portfolio allocation strategy has paid off as evidenced in improved asset quality.

Non Performing Loans (NPLs) ratio improved to 7.30 percent in December 2018 from 7.7 percent December 2017. The 7.3 percent NPLs was as a result of the decision taken to classify 2 key names within the General Commerce, Construction and Real Estate Sectors under Stage3 (Life-time Credit Impaired).

In aggregate terms, the lender has adequate coverage of 105.1 percent for NPLs; this is consistent with the Bank’s maintenance of 100 percent coverage for its NPLs. The Bank continued to have robust capital buffers as Capital Adequacy Ratio (CAR) of 23.4 percent is l well above the regulatory requirement of 16% percent, despite the global shocks resulting from transition to IFRS 9 Expected Credit Losses (ECL) from I AS39 Incurred Credit Losses (ICL).

Digital Banking and USSD Banking Performance The ease and simplicity and the continuous introduction of new service offerings and upgrade of existing ones have been the major attraction for new and existing customers to the GTBank’s USSD (Unstructured Supplementary Service Data).

Continuous drive to grow the level of adoption of USSD has seen GTBank’s total USSD users grow to 4.6 million with 3.7 million of them reported as active users as at December 31, 2018.

Total number of USSD active users increased by 8.8 percent year on year (yoy) to 3.70 million in December 2018 from 3.4 million as at December 2017.

Total value of GTBank mobile banking increased by 55.05 percent to N5.83 billion in December 2018 from N3.76 billion in December 2017.Total volume of transaction was up 65.38 percent to 90.50 million in the period under review from 54.70 million the previous year.

On the other hand, total value of internet banking dipped by 33.36 percent to N2.17 billion in December 2018 from N3.27 billion as at December 2017.

BD MARKETS + FINANCE Analysts: BALA AUGIE

Tuesday 26 March 2019

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Live @ The Exchanges Market Statistics as at Monday 25 March

Top Gainers/Losers as at Monday 25 March 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N45.5

N48.5

3

MOBIL

STANBIC

Closing

Change

N170

N167

-3

DEALS (Numbers) VOLUME (Numbers)

N5

N5.5

0.5

NESTLE

N1500

N1498

-2

UBN

N6.85

N7.05

0.2

DANGCEM

N189.7

N188.5

-1.2

UPL

N1.85

N2

0.15

NASCON

N20

N19

-1

N14

N14.1

0.1

CCNN

N20.9

N20

-0.9

REDSTAREX

DANGSUGAR

Stock market returns to negative path, investors lose N36bn Stories by Iheanyi Nwachukwu

N

i g e r i a’s stock market rerouted back to the negative territory at the sound of closing gong on Monday March 25 as more investors chose to sell their stocks than they bought. Only twelve (12) stocks gained against 19 losers.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.31percent, while the Year-to-Date (ytd) return stood at -1.24percent.

The All Share Index closed at 31,042.32 points as against the preceding day close of 31,139.35 points while Market Capitalisation closed at N11.576 trillion as against preceding trading day close of

ASI (Points)

Opening

N11.612trillion, implying a decline of N36billion.

The volume of stocks traded decreased by 27.03percent, from 231.23million to 168.72million, while the total value of stocks traded increased by 43.37percent, from N2.61billion to N3.75billion in 3,048 deals.

The Financial Services sector led the activity chart with 150.2million shares exchanged for N2.96billion; followed by Consumer Goods with 6.20million shares traded for N351million.

Mobil Nigeria Plc stock price recorded the highest decline, from N170 to N167, down by N3 or 1.76percent. It was followed by Nestle Nigeria Plc which dipped by N2 or 0.13percent, from N1500 to N1498.

Dangote Cement Plc also declined from N189.7 to N188.5, los-

ing N1.2 or 0.63percent.

NASCON was down from N20 to N19, losing N1 or 5percent.

Cement Company of Northern Nigeria Plc dipped from N20.9 to N20, down by 90kobo or 4.31percent.

On the gainers table, Stanbic IBTC Holdings Plc occupied topmost position after its share price advanced from N45.5 to N48.5, up N3 or 6.59percent.

It was followed by Red Star Plc which moved up from N5 to N5.5, adding 50kobo or 10percent.

Union Bank of Nigeria Plc stock price increased from N6.85 to N7.05, adding 20kobo or 2.92percent.

University Press Plc advanced from N1.85 to N2, adding 15kobo or 8.11percent; while Dangote Sugar Refinery Plc increased from N14 to N14.1, up 10kobo or 0.71percent.

L – R: Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE) presenting a replica of the closing gong to Oba Otudeko, group chairman, First Bank Holdings Plc during a Closing Gong Ceremony in commemoration of 125 years anniversary of First Bank at the Exchange today in Lagos.

VALUE (N billion) MARKET CAP (N Trn

31,042.32 3,048.00 168,721,911.00 3.751 11.576

Global market indicators FTSE 100 Index 7,171.99GBP -35.60-0.49%

Nikkei 225 20,977.11JPY -650.23-3.01%

Generic 1st ‘DM’ Future 25,555.00USD -15.00-0.06%

Deutsche Boerse AG German Stock Index DAX 11,337.00EUR -27.17-0.24%

S&P 500 Index 2,800.41USD -0.30-0.01%

Shanghai Stock Exchange Composite Index 3,043.03CNY -61.12-1.97%

Fintech takes center stage as stockbrokers globalise operations

I

n pursuit of global c o m p e t i t i v e n e s s, stockbrokers and other stakeholders in the financial markets have concluded arrangements to participate in a professional course on the fundamentals of financial technology and its applications to their businesses.

The course, slated for Wednesday, April 27 at GTI House, Lagos is part of the Continuing Professional Development

(CPD) Programme of the Chartered Institute of Stockbrokers (CIS).

The objectives of the course include, enhancement of the participants’ understanding of Fintech, an expository overview of the global Fintech market and practical examples and ways of using Fintech in asset management.

Others include numerous benefits of Fintech and its prospects in the African market. This is part

of the Institute’s determination to help companies, business owners, asset managers, traders and investors better understand and properly manage their financial operations.

The course will place premium on the utilization of a specialised software which can leverage technology to improve activities in the financial market as a radical departure from the traditional services delivery in the financial industry.

34 BUSINESS DAY NEWS

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Buhari sets May 29 target to pass law ...

Continued from page 1

production sharing contract

before this legislative year expires in May 2019”.

But this could be an uphill task as National Assembly workers who spoke to BusinessDay said preparation for the 2019 budget is the priority of the 8th Assembly before it winds down.

For a cash-strapped Federal Government, amending the provision requiring raising revenue when oil prices exceed $20 a barrel is critical.

Nigeria has already lost $21 billion over this non-amendment, according to the Federal Government.

President Buhari’s directive is contained in a one-page letter titled “RE-SUIT NO SC 964/2016 REQUEST FOR ENFORCEMENT OF THE JUDGMENT OF THE Supreme Court”, which was signed by Abba Kyari, chief of staff to the president, and sent to the both the attorneygeneral, Abubakar Malami, and the secretary to the government of the federation (SGF).

The urgency of the matter appears to have resulted from the fallouts from a strange consent judgment entered into by the attorneygeneral in the suit brought against the Federal Government by Rivers, Bayelsa and Akwa Ibom States seeking to block perceived losses from the failure to adjust to production sharing contract terms as provided

for by sections 16(1) & (2) of the Deep Offshore and Inland Basin Production Sharing Contracts Act, Cap D3.

The law says, “The provisions of this Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $20 per barrel, real terms, the share of the government of the federation in the additional revenue shall be adjusted under the production sharing contracts to such extent that the production sharing contracts shall be economically beneficial to the government of the federation.”

Instead of fighting the case brought by the three states, the attorney-general says he was “compelled to concede to the claims of the states in the suit”, having carefully considered the merits of the case and the reliefs sought by the states and “bearing in mind that the adjustment of the share where the price of crude oil exceeds the twenty dollars benchmark is beneficial to the Federal Republic of Nigeria, particularly the benefits of the recovery of the outstanding and unpaid difference inclusive of interest over the years”.

According to the attorney general, “From the calculations of a team of experts, the additional revenue recoverable as at December 2017 plus accrued interest on the outstanding amount calculated up to the end of December 2018 stands at $43,747,120,957.”

Claiming that the “most effective

mode of ensuring enforcement and execution of the judgment in the utmost interest of the Federal Republic of Nigeria is a quasi-judicial/ administrative approach”, Malami then sought the blessing of Buhari as both president and petroleum minister to “implement the recovery by whatever means possible including but not limited to directing a lien on all available profit oil or the accounts due and or receivable by both contracting parties (international oil companies and Nigerian National Petroleum Corporation jointly or severally) immediately or instalmentally until full payment”.

Malami berated the NNPC, saying as “contracting party on behalf of the Federal Government of Nigeria”, the state-owned oil company “has over the years been derelict in its responsibility and obligation to the Federal Republic of Nigeria in this regard”.

In his response, President Buhari rejected the two key prayers by the attorney-general on the grounds that the consent judgment entered into by the attorney-general violated the Constitution of Nigeria.

Before now, previous attempts to amend the royalty and revenue aspect of the Deep Offshore Act had been unsuccessful. Victor Nwokolo and Samuel Ikon, both members of the House of Representatives, introduced bills extending Nigeria’s royalty regime to areas in excess of 1,000 metres water depth and proposed a 3 percent royalty on explorations

beyond 1,000 metres. In the Senate, Ben Murray-Bruce (PDP, Bayelsa) and Theodore Orji (PDP, Abia) have sponsored bills pushing for a 5 percent royalty in areas excess of 1,000 metres water depth.

Enacted in 1993, the fiscal policy stipulates a zero percent royalty

Access, Diamond Bank to wear new brand...

Continued from page 1

soon berth.

Six days from now, a new brand identity that reflects the merged institutions will be unveiled across the banks’ branches.

Ahead of this “tomorrow that is coming” so fast, Access Bank notified the Nigerian Stock Exchange (NSE) of the appointment of Chizoma Okoli as executive director, Business Banking Division.

Okoli, who until her appointment was an executive director in Diamond Bank, replaces Titi Osuntoki who had resigned her position effective March 18.

This implies that Diamond Bank has got its slot into Board of the enlarged entity, according to a source close to this development, noting that “interestingly, Okoli’s appointment was not an additional appointment but a replacement”.

In December 2018, the two banks announced their merger plans following the signing of the

Memorandum of Agreement and announcement of headline terms which valued Diamond Bank at approximately $200 million.

“We are very delighted to welcome Okoli to the Board of Access Bank,” said Herbert Wigwe, group managing director, Access Bank plc.

“She brings on board very deep banking industry and boardroom experience relevant to our bank.

Her appointment will no doubt improve the skill set and diversity of our Board and support our quest to become the world’s most respected African bank and Africa’s gateway to the world,” Wigwe said.

Last week Tuesday, Access Bank obtained a court sanction of the deal which was sequel to the final approval by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) on the agreement.

The Access-Diamond merger will birth Nigeria’s biggest lender with a total asset of about N6.11 trillion, accounting for 24 percent

of total aggregate value of N18.9 trillion assets owned by all tierone banks.

The merger will form a leading tier-one Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million customers. It will bring together treasury, risk management and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments.

The merger’s cost synergies, conservatively estimated at N30 billion per annum pre-tax, are to be fully realised within three years post-completion.

The Access-Diamond merger means “stronger player, more power, more scope, more reach and more coverage, combining their assets together”, according to Uju Ogubunka, president, Bank Customers’ Association of Nigeria (BCAN).

“I hope they will be able to fund large transactions with long tenure

from oil companies exploring deep offshore fields above 1,000 metres water depth. Since SNEPCO successfully drilled the Bonga field in 2005, deep offshore fields now constitute 35 percent of Nigeria’s oil exploration, according to latest figures from the NNPC.

As global bond markets signal slow down...

Continued from page 2

Historical data also shows that wherever economic growth goes, oil prices follow, immediately or shortly after.

In acknowledgement of a likely slowdown, the Bank of England cut its 2019 growth forecast to 1.2 percent from 1.7 percent, citing a 25 percent chance of a recession, while the European Central Bank announced surprise plans to stimulate the Eurozone.

The negative sentiment surrounding the global downturn was further affected by manufacturing output data from Germany. Germany’s manufacturing output fell to the lowest level in six years in March, according to a report from IHS/Markit research. The manufacturing activity shrunk for the third straight month.

A “wider trade deficit symptomatic of an overvalued dollar” and a decline in the “value of Nigeria’s exports as dollar weakens” are some of the implications of a global economic slowdown for Nigeria, said Bismarck Rewane, an economist and CEO of advisory firm, Financial Derivatives.

In addition to lower oil prices, emerging market assets typically take a beating in the time of an economic recession, which would mean more pain for Nigerian equities, which have somehow managed to escape a habitual post-election bounce for the first time since 1999.

Nigerian stocks are down 1.2 percent year to date, according to official data, as equities hit a fresh low of 7 times earnings, effectively making them some of the cheapest stocks globally.

Minimum Wage: Buhari promises quick...

Continued from page 2

L-R: Funmi Roberts, chairman, board of trustees; Bolanle Austen-Peters, keynote speaker, and Olubunmi Aboderin Talabi, chairperson, executive council, at the 2019 WIMBIZ annual lecture in Lagos.

Pic by Pius Okeosisi

Tuesday 26 March 2019

and modalities for the implementation of the salary increases” and “any other suggestions that will assist in the implementation of this, and future wage increases”.

President Buhari, while commending the committee members for their patriotism and hard work, noted the sacrifices they made in ensuring that the report was delivered before receipt of the minimum wage bill from the National Assembly.

The committee led by renowned economist and CEO of Financial Derivatives Company, Bismarck Rewane, has as members Ifueko Omoigui-Okauru, former chairman of the Federal Inland Revenue Service (FIRS); Ayo Teriba, CEO, Economic Associates, among others.

“We will review this report expeditiously. In the process we may need to engage with some mem-

bers of your committee. I therefore implore you to make your services available whenever we may call on you,” Buhari said.

Vice President Yemi Osinbajo, Secretary to the Government of the Federation Boss Mustapha, Minister of Finance Zainab Ahmed, Central Bank of Nigeria Governor Godwin Emefiele, and Minister of Budget and National Planning Udo Udoma were among top government officials present at the presentation of the report.

The organised labour had in December 2018 rejected any attempt by the Federal Government to set up another committee on the national minimum wage, describing any such planasdiversionaryanddelaytactics.

BusinessDay’s effort to get a peep into the content of the report hit a brick wall as our correspondent was told that “it is embargoed”.

without problem and as well serve their customers without problem,” he said.

Ayodele Akinwunmi, head of research at FSDH Merchant Bank Limited, said the merger is good for the banking industry as it demonstrates the capabilities of all the stakeholders in the merger arrangement that they can execute a merger in a timely manner. It also demonstrates that there is an opportunity for players in the industry to grow inorganically in addition to their organic growth strategy.

The merger is also good news for customers of Access and Diamond as they will have access to more products and services from the combined entity given that the strengths of the two banks are now combined in one bank. The merger will ensure that customers of both banks continue to experience the best banking experience, with zero disruptions to normal banking services.

The new entity will have 29 million customers with 13 million mobile customers, with a wide spread of over 3,000 ATMs and over 13,000

digital/financial inclusion customers. Customers of both Diamond Bank and Access Bank will have access to over 600 branches, where they can enjoy same-day clearing of cheques in either bank, just as they will get rewarded for using either Diamond Bank or Access Bank POS terminals. In the meantime, more lounges for the Diamond Bank XclusivePlus subscribers will be created.

“Access Bank is very proactive and expect that by now it will communicate on how to go about these things. Next week or first week of April, things will unfold in terms of what people expect. For us as bank customers, what is critical is safety of our money, ability to access it,” said Ogubunka.

Contrary to fears that customers may pull their funds from Diamond Bank, Akinwunmi said no such thing will happen.

“This is because I believe the customers of Diamond Bank will enjoy more services from the combined entity than the individual banks, which will make them happy,” he said.

Tuesday 26 March 2019

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35 NEWS

BUSINESS DAY

BusinessDay launches skill assessment platform to bridge unemployment gap SEGUN ADAMS

B L-R: Adeoye Adefulu, secretary, Nigerian Bar Association-Section on Business Law (NBA-SBL); Cynthia Lareine, executive director, International Lawyers for Africa (ILFA); Theodora Kio-Lawson, chairman, NBA-SBL committee on media; Seni Adio SAN, chairman, NBA-SBL, and Tominiyi Owolabi, chairman, NBA-SBL committee on banking and finance, at the opening ceremony of NBA-SBL/ILFA banking and finance academy for lawyers in Lagos, yesterday.

Pic by Olawale Amoo

Boeing invites pilots, regulators on return of 737 MAX to service …Ethiopian Airline insists its pilots trained on aircraft type IFEOMA OKEKE

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oeing aircraft manufacturer said it invited more than 200 global airline pilots, technical leaders and regulators for an information session on Wednesday, as it hopes to return the 737 MAX to commercial service.

The meeting is a sign that Boeing’s planned software patch is nearing completion, though it will still need regulatory approval.

Over the weekend, Ethiopian Airlines executives had questioned whether Boeing had told pilots enough about “aggressive’’ software that pushes the plane’s nose down, a focus of investigation into a deadly crash in Ethiopia this month.

The crash had led to the global grounding of 737 MAX jets.

The informational session in Renton, Washington on Wednesday is part of a plan to reach all current and many future 737 MAX operators and their home regulators to discuss software and training updates to the jet, Boeing said in a statement.

Garuda Indonesia, which on Friday said it planned to cancel its order for 49 737 MAX jets citing a loss of passenger trust after the crashes, was invited to the briefing, Ari Askhara, CEO, PT Pelabuhan Indonesia 111, disclosed.

“We were informed on Friday, but because it is short notice we can’t send a pilot there,” Askhara said, adding that the airline had requested a webinar with Boeing but that

idea had been rejected.

A Boeing spokeswoman said the Wednesday event was one of a series of in-person information sessions.

“We have been scheduling and will continue to arrange additional meetings to communicate with all current and many future MAX customers and operators,” she said.

Garuda has only one 737 MAX and had been reconsidering its order before the Ethiopian crash, as has fellow Indonesian carrier Lion Air, which experienced a deadly crash in October.

Daniel Putut, Lion Air managing director, said Boeing had informed the airline of the Wednesday meeting but it might not attend, and declined to provide further comment.

Singapore Airlines Limited said on Monday its

offshoot SilkAir, which operates the 737 MAX, had received the invitation to the Wednesday event and would send representatives.

Civil Aviation Authority of Singapore representatives will also attend, a spokeswoman for the regulator said. Korean Air Lines Co Ltd, which before the grounding had been due to receive its first 737 MAX in April, said it planned to send pilots to Renton.

A spokesman said South Korean low-cost carrier Eastar Jet would send two pilots, but Ethiopian Airlines did not respond immediately to a request for comment about the meeting.

The 737 MAX is Boeing’s best-selling plane, with orders worth more than $500 billion at list prices.

Human trafficking, smuggling still major threats to Nigeria - IGP INNOCENT ODOH, Abuja

... calls for collaborative efforts against menace

cting Inspector General of Police (IGP), Mohammed Adamu, says human trafficking and migrant smuggling constitute some of the major security challenges threatening Nigeria and other countries in the sub-region.

The IGP said this in his remarks while declaring open the INTERPOLE workshop on “Countering Trafficking in Human Beings and Migrant Smuggling in Nigeria,” in collaboration with the Nigeria Police, Nigeria Immigration Service, Nigeria Customs Service, National Agency for the Prohibition of Trafficking in Persons (NAPTIP) and the Ministry of Justice, held in Abuja on Monday.

The IGP in a statement issued on Monday by the

Force Public Relations Officer, Frank Mba, said, “It was a clear statement that the government recognises that the consequences of human trafficking and migrants smuggling have critical national security and developmental implications, and requires sustained intervention action build on capacity development for security agencies.”

The workshop symbolises the firm commitment of the Nigerian government to galvanise all relevant security agencies and strengthen strategic local and global partnerships towards dissecting, developing strategies, and emplacing sustainable action plans towards addressing the threat, he said.

The IGP recalled that

A

during the sixth INTERPOL Global Conference on Trafficking in Persons and Smuggling of Migrants held here in Abuja in September 2018, stakeholders from Nigeria met with top officials from the INTERPOL General Secretariat to discuss modalities for technical assistance in capacity building to combat the scourge of human trafficking and migrant smuggling and the result of that engagement had culminated into Monday’s workshop.

“This event could not have come at a better time. This is because in recent times, Nigeria and indeed the continent of Africa have been experiencing a surge in the menace of trans-border trafficking in persons and smuggling of migrants. These illegal activities

do not only pose a threat to the victims as individuals but also to the countries involved at both ends.

“The Nigeria Police, working in collaboration with the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) and the Nigeria Immigration Service (NIS) have been at the forefront in the fight against the menace. I must in this regard, recognize and commend the great works that the Director General of NAPTIP and the Comptroller General of NIS have been doing in this regard.

“The Nigeria Police under my leadership shall continue to support the two agencies while strengthening its institutional capacity towards addressing the threat of human trafficking,” he said.

usinessDay is narrowing the chasm in Nigeria’s labour market with the launch of ratemeng.com, an online platform that allows employers gauge the skill level and competencies of prospective employees as well as provide an avenue for job seekers to stand out among peers in the labour market.

The platform is a cloudbased self-assessment, which is used by Fortune 500 companies to select the best talents and has been developed to assist job seekers evaluate themselves based on industry-relevant criteria in a very easy yet effective way to improve significantly, the chances of landing their dream jobs.

Speaking about the platform and partnership with BusinessDay, Kelechi Dozie, CEO of IONEC Limited, commented, “There is a need to give people the opportunity to assess themselves and also enhance their opportunity to get the right jobs.”

The idea behind the project is to ensure that the recruitment process becomes easy for job seekers and firms, while at the same time guarantee that skill requirement and competency of applicants matches.

Since the job market has become very competitive given the country’s rising unemployment, the increasing rate at which graduates are

churned out of higher institutions and several other factors that increase cost both for all parties in the factor market, digital media and artificial intelligence has begun to play a crucial role in recruitment.

What expensive employment processes mean for employers is that having a CV is never enough. Firms want to certify the level of competency of people before inviting them to an interview and this is a challenge in most industries.

This difficulty for both job seeker and employer can now be solved with the launch of the cloud-based self-assessment platform ratemeng. com. The platform provides assessments in categories such as skill-based assessments, Programming assessments, Aptitude assessments and Psychometric assessments at cost-effective valuedriven prices.

All an individual will need is access to a computer and data. The tests can either be webcam-enabled to ensure the right person is taking the test or turned off if it is for personal use.

“Ratemeng is groundbreaking and set to disrupt the recruitment space in Nigeria,” Ike Okosa, CEO of eWorkerHR said concerning the platform.

The platform which is a collaboration between IONEC LIMITED, E-WORKERHR, METTLE of India and BUSINESSDAY would be a game changer in the recruitment industry and unlock opportunities for many.

Nigeria, Egypt, Sudan lead with cheapest data rate in Africa BUNMI BAILEY

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igeria, Africa’s most populous country, Egypt, Sudan, Rwanda and Burundi are the countries with the cheapest access to internet in Africa as of December 2018, according to a recently released survey by Alliance for Affordable Internet (A4AI).

The survey by A4AI, a global coalition of private sector, public sector, and not-for-profit organisations that analysed 100 Low and Middle income countries (LMIC) in the world, showed that Egypt, Sudan, Nigeria, Rwanda and Burundi spent $1.12, $1.20, $2.74, $2.80 and $3.30, respectively, on one gigabyte (1GB) mobile broadband data plan.

Ayodeji Ebo, managing director, Afrinvest Securities Limited, attributes this to the stiff competition in the telecoms industry, saying, “The industry operates an oligopoly market structure where only a few firms dominate the industry. The

operators have been forced to reduce the price of data to the barest minimum as a result of competition.”

Ebo adds that despite the naira devaluation experienced in the last 2 years, the telecoms have not raised the price of data but rather come up with different packages at cheaper prices inclusive of bonanzas to consumers.

Meanwhile, the top five African countries with the most expensive access to internet were Equatorial Guinea, DR Congo, Angola, Guinea-Bissau and Zimbabwe, with $34.80, $20.00, $16.30, $15.66 and $15, respectively.

“Often, in countries where data is most expensive, it is due to a combination of having poor infrastructure and low consumer demand. People often buy data packages of just tens of megabytes at a time, making a gigabyte a relatively large and therefore expensive amount of data to buy,” Dan Howdle, a consumer telecoms analyst, Cable.co.uk, said to Fin24, a South Africa Business newspaper.

36 BUSINESS DAY INTERVIEW

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Tuesday 26 March 2019

BUA Group signs 48mw power project deal with Finnish firm STEPHEN ONYEKWELU

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UA Group has sealed a deal with Wartsila Oy of Finland to construct a 48-megawatt power plant for Sokoto Cement line three.

AbdulSamad Rabiu, executive chairman/CEO,

BUA Group, signed on behalf of BUA, and Magnus Miemois, head of Africa, Wartsila Oy, signed for the multinational company known to provide services for power suppliers, marine, cement and mining industries.

Rabiu said the Group was attracted by the track record of Wärtsilä, who has

provided 1000mw of electricity in Africa and has 70 gigawatts (GW) of installed power plant capacity in 177 countries around the world.

BUA’s executive chairman expressed confidence in the construction of the ultramodern power plant, saying Sokoto Cement lines, when combined, have a total of about 100mw of captive

power.

It was estimated that in 2015, manufacturers spent as much as N3.5 trillion to generate alternative power due to the challenges in the supply of public electricity in Nigeria.

“We can’t compromise on our quality. We are known to provide quality products and services to

our customers and we are assured that Wartsila aligns with this vision of ours. They have an impeccable and intimidating track record and we are confident that they will deliver on their mandate,” Rabiu said.

Successive governments in Nigeria have failed to provide stable electricity to light up homes and power

industries. In a report titled ‘From darkness to darkness: How Nigerians are paying the price for corruption in electricity, the Socio-Economic Rights and Accountability Project (SERAP) called for a probe into alleged squandering of N11 trillion mapped out for the power sector between 1999 – 2015.

Tuesday 26 March 2019

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BUSINESS DAY

FIRS set to ‘freeze’ tax defaulters’ bank accounts as suspension date expires ENDURANCE OKAFOR

… expects VAT increase after 8% compliance rise

t is exactly 11 days today since the grace period to suspend the lien on alleged tax defaulters’ bank accounts expired, and to that effect, the Federal Inland Revenue Service (FIRS) says banks are to resume placing restrictions on such defaulters’ accounts.

Babtunde Folwer, executive chairman of FIRS, disclosed this to BusinessDay on Friday as he said freezing of taxpayers’ bank accounts would commence with immediate effect.

“In line with our word, we gave that concession of 30 days additional grace and we have one back to the banks, and we told them that for the 50,000 plus who have still refused to come forward, that their account should be frozen with immediate effect,” Fowler told BusinessDay on the sidelines of the Nigeria Tax Outlook (NTO) event in Lagos recently, with the theme: Tax Planning As An Effective Strategy To Cost Management.

FIRS had through its let-

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ter dated 15 February 2019 directed banks to suspend its lien on bank accounts of alleged tax defaulters for a period of 30 days. The directive became necessary to allow the affected large number of taxpayers with frozen bank accounts to regularise their tax positions and alleviate the inconveniences they faced.

In September 2018, Fowler had said the service was going after 6,772 tax defaulters, stating that they would have their account frozen till they paid

the due taxes.

“So, all these ones of TIN and no pay and no TIN and no pay, to the total of 6772 will have their accounts frozen or put under substitution pending when they come forward,” Fowler had said.

Stakeholders in the Nigeria’s tax industry have however raised issues with the way and authority of the FIRS in placing restriction on the bank accounts of the alleged tax defaulters.

PricewaterhouseCoopers (PWC), one of

the country’s big four tax advisory firms, said the wording of the provision and the manner in which the FIRS were applying it raised a number of issues.

PWC noted, “The impact of the provision on business may be very harsh. For example, an appointment of a bank as an agent effectively freezes the account of a taxpayer up to the amount of the tax payable as alleged by the FIRS. The process of releasing the account may significantly disrupt business activities.”

The issues raised by PWC regarding the regula-

tor’s decision was supported by KPMG, another of the big four auditing firms, as it said that the FIRS had gone draconian by giving fiats to banks to freeze accounts of suspected tax defaulters.

KPMG said in a statement, “Nothing in the CITA or FIRSEA authorises the FIRS to impose a freeze order on a taxpayer’s bank account beyond the amount of tax proven to be due and payable by that taxpayer.”

It added that the move contravened CITA, and breached the confidentiality between the banks and their clients.

38 BUSINESS DAY NEWS

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Solving Africa’s smallholder poverty, food insecurity through block farming MICHEAL ANI

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he problems of smallholders’ poverty and food insecurity associated with community farming in Africa can be effectively managed through the strategy of “block farming”.

Community block farming is a kind of rural farming strategy where farmers in large contiguous blocks of land are provided with all that they require to farm successfully, ranging from land preparation to inputs, harvest and access to the market.

“African smallholder poverty and food insecurity are problems that are solvable with the efficient distribution of our wasted agricultural land put to use through block farming,” said Dimieari Von Kemedi, managing director, Alluvial Trade & Development Limited.

Kemedi describes this system as an inverted contract farming, where the farmers are provided with

inputs and services on credit while they are under contract to make repayments by yielding a portion of their produce to the input providers as compensation for those inputs and services provided.

“With the strategy of block farming, one can expect profitability and efficient land use that will transform the continent’s ability to feed itself and export to the rest of the world,” Kemedi said at a conference in Washington, DC, on “Agricultural Investment, Landholders, and Food Security in Africa”, sharing experiences from working in different parts of Nigeria, Africa’s most populous country.

Alluvial is an innovative business that provides comprehensive support to smallholder farmers in Nigeria’s Niger Delta, in collaboration with Tata Group, the UK government-funded Stakeholder Democracy Network and the International Centre for Tropical Agriculture (CIAT), an NGO constituted by the

World Bank and United Nations Development Programme.

Narrating his experience from Ogoja, northern Cross River in Nigeria, Kemedi noted that land there belongs either to families or communities, while permission for use of the land could be granted over a period.

To test out the full model, he said the company worked successfully with farmers in Aviara, Delta State.

The conference was aimed at bringing together for exchange of ideas three types of people who rarely have opportunity to meet each other – agricultural investors, advocates for Africa’s smallholder/landholding family farmers, and food security policymakers.

Kemedi noted that the talk about effective communal land management is an issue that has been prevalent in Africa simply due to the continent’s perception that communal land is an ancestral heritage, no matter who

has been permitted to use them in the time being.

In Nigeria, for example, he noted the clash between farmers and herders in the middle belt region has left many dead, with properties destroyed and thousands of residents displaced, plummeting growth in the agricultural sector, which in turn hindered food sufficiency in the country.

A report by Amnesty International showed that the clash between farmers and herders has killed more than 3,600 people since 2016, most of them in 2018, Kemedi said. He explained that the community block-farming model works because, unlike most out-grower programmes, the level of involvement in farm activities is very high.

“We control almost all of the factors of production. The land belongs to the community but it is under lease to us for reallocation to farmers who manage adjoining plots,” he said.

Wole Soyinka, Nobel laureate (3rd l), flanked by Kingsley Aigbokhaevbo, executive director, ProvidusBank; Walter Akpani, MD/ CEO, ProvidusBank; Emeka Anyaoku; Folake Soyinka; Newton Jibunoh, and Russel Brookes, public affairs officer, United States Consulate, during the World Poetry Day event by ProvidusBank in Lagos.

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Tuesday 26 March 2019

Tax reform, digitisation key to financing development in Africa - report DANIEL OBI

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frica must digitise its economies, broaden its tax base, prevent further deterioration of fiscal and debt positions, and aim for doubledigit growth to achieve the UN 2030 global goals (SDGs), and the AU Agenda 2063, according to the 2019 Economic Report on Africa released last weekend at the Conference of Ministers.

The 52nd session of the Conference of African Ministers of Finance, Planning and Economic Development taking place in Marrakech, Morocco, will end today.

This year’s Economic Report on Africa, a flagship publication of the United Nations Economic Commission for Africa (ECA) according to a statement, focuses on fiscal policy. Government revenues account for 21.4 percent, insufficient to meet countries’ development financing needs.

“The Report identifies several quick wins in Africa’s pursuit of additional fiscal space to finance its accelerated development,” Vera Songwe, the ECA’s executive secretary, stated at the launch. “It also focuses on the instrumental role of fiscal policy in crowding-in investment and creating adequate fiscal space for social policy, including supporting women and youth-led small and medium enterprises.”

But, a decade away from the SDG, she said, “African countries continue to search for policy mixes to help accelerate the achievement of the SDGs. However, for many countries, financing remains the biggest bottleneck with implementing capacity a close second.”

While analysing and highlighting both challenges and opportunities, the Report also recommends comprehen-

sive macroeconomic reforms aimed at building financial resilience, placing emphasis on the need for Africa to accelerate growth to double digits by 2030 and to boost investment from its current 25 percent of GDP. While economic growth in Africa remains moderate at 3.2 percent in 2018 – due to “solid global growth, a moderate increase in commodity prices and favourable domestic conditions,” the Report emphasises that Africa needs to do more, and work towards achieving a fine balance between raising revenue and incentivising investments, in order to boost growth.

In some of Africa’s largest economies - South Africa, Angola and Nigeria – the Report reveals growth trended upwards but remains vulnerable to shifts in commodity prices.

East Africa remains the fastest growing, at 6.1 percent in 2017 and 6.2 percent in 2018, while in West Africa, the economy expanded by 3.2 per ent in 2018, up from 2.4 percent in 2017. Central, North and Southern Africa’s economies grew at a slower pace in 2018 compared to 2017.

On the issue of Africa’s debt burden, the Report reveals that debt levels remained high as African countries increased their borrowing, to ease fiscal pressures most of which have been precipitated by the narrowing of revenue streams that has gone on since the commodity price shocks of 2014.

It argues that African countries can increase government revenue by 12–20 percent of GDP by adopting a policy framework that strengthens revenue mobilisation, including through digitalising African economies, stating that digitisation could enhance revenue mobilisation by up to 6 percent.

FG directs MDAs to patronise SON management systems certification, save FX SHIN achieves health/safety milestone of 1,200 days with no lost time injuries AMAKA ANAGOR-EWUZIE

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ederal Government has directed all its Ministries, Departments and Agencies (MDAs) to henceforth patronise internationally accredited services of the Standards Organisation of Nigeria (SON) for the certification of their management systems and processes in accordance with international best practices.

A circular from Boss Mustapha, secretary to the Government of the Federation (SGF), to all MDAs, said the SON Management Systems Certification (MSC) services have attained international accreditation.

The scope of the accreditation includes four International Organisation for Standardisation (ISO) stand-

ards - Quality Management Systems (QMS) Standards; Environmental Management Systems (EMS) Standards; Food Safety Management Systems (FSMS) Standards and Occupational Health and Safety Management Systems (OHSMS) Standards.

Mustapha directed all the MDAs to take advantage of the SON certification services in line with the Presidential Executive Order 4 on support of local content.

He said patronage of SON’s MSC would lead to huge savings in foreign exchange previously expended by some MDAs in procuring such services from foreign organisations.

Commenting, Osita Aboloma, director-general of SON, said the accreditation had brought his agency at par with its contemporaries

in Europe, America, Asia and some parts of Africa.

He said SON international accreditation of its MSC services came on the heels of a similar attainment for its training services, which focused on development of national capacity in international management systems standards.

He recalled that the SON Training Services (STS) Centre received certification by the Chartered Quality Institute (CQI) and the International Register of Certified Auditors (IRCA) as an Approved Training Partner (ATP) in 2018.

He said the Centre became the first CQI and IRCA approved training centre in Nigeria and the West African region to offer certified courses by the two international institutions.

KELECHI EWUZIE

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amsung Heavy Industries Nigeria (SHIN) says it has achieved a significant health and safety milestone of 1,200 days with no lost time injuries at SHI-MCI, Africa’s largest ship fabrication and integration yard located in Lagos.

This achievement is reflective of SHIN’s focus on ensuring the health and safety of its entire workforce through significant investment in training and oversight.

Bala Adjuya, senior health, Safety and Environment (HSE) manager, SHIN, observes that the shipbuilding industry is potentially a very dan-

gerous one with heavy machinery in operation, explosive gases used for welding and high temperatures in enclosed spaces. This means that there are many challenges to ensuring the health and safety of a large and diverse workforce.

According to Adjuya, “The main challenge for Samsung is that we have many employees who have never worked in the industry before. So, it is hard to instil an awareness of health and safety. But once you train them, it becomes a skill for life.”

He states that in addition to continuous staff training, every worksite is investigated for hazards, mitigation measures implemented and active HSE personnel are con-

stantly present onsite to ensure safety protocols are followed.

SHIN set itself a target of 0.9 percent lost time injury (LTIs) on the Egina FPSO Project in Nigeria, adding that LTIs is an injury sustained by an employee that will lead to loss of productive work time.

Even one minor incident will result in a complete reset of the LTIs counter to 0. As of March 25, 2019, SHI-MCI has achieved 1,207 days of no LTIs. In order to achieve this challenging target, SHI-MCI follows a rigorous process.

“It begins from the day that new people come into the yard. We first take people to HSE training even if they only come onto the site for a job interview,” Adjuya says.

Tuesday 26 March 2019

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Residents in doubtful state in Lagos Oil prices skid as concerns over Island as another building caves in sharp economic slowdown loom … government issues vacate order JOSHUA BASSEY

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ncertain fate now hangs around the residents of Lagos Island, a large slum and densely populated residential cum commercial area of Lagos State, where building collapse has become a recurring decimal, with two recorded within two weeks.

After the March 13 threestorey building collapse on Massey Street, Ita-Faji, Lagos Island, in which 20 died and about 45 injured, another building at No.50 Kakawa Street, came down on Monday, by 1:10pm, however, without any casualty.

Residents say it is hard to tell with precision whether they would live to see the next day, as they are no longer sure the building that comes down next. As their fears deepen, the state government has issued a direc-

Tech reform: Edo Innovation Hub hosts Wikipedia, mulls partnership

T

he growing profile of the Governor Godwin Obasekibacked Edo Innovation Hub has attracted the interest of more technology companies, as Wikipedia has expressed readiness to work with the Hub in building local capacity to deploy technology in solving societal problems.

The hub also known as Edo Innovates, hosted Wikimedia Foundation, a global educational resource organisation and parent company of Wikipedia, popular online encyclopaedia.

Speaking at the visit of representatives of the Wikimedia Foundation, head of EdoJobs and senior special assistant to Governor Obaseki on Skills Development and Job Creation, Ukinebo Dare, said the state was delighted at the steady progress of the Edo Innovation Hub, noting that the governor is working to ensure that there is a conducive environment for the growth of a topnotch tech ecosystem in the state to be driven by the hub.

She noted that a lot had been put in place to attract young people in the state to the facility so they could learn in-demand skills for jobs and entrepreneurship in the tech space.

tive to occupants of marked buildings to relocate to relief and resettlement centres in Alimosho area of the state.

The government last week confirmed the discovery of 149 buildings in distressed and defective state across the state, out of which 48 are on Lagos Island alone.

While some of the distressed buildings were said to have been built four to five decades ago, and have over the years become weak from their foundation, others identified to be structurally defective, are generally linked to the engagement of non professionals in their construction.

Adebowale Adeyanju, a resident in one of the clustered houses on Lagos Island, with poor ventilation, told BusinessDay on Monday, after another building caved in on Kakawa Street, that he was in confused state, and not certain what to expect at any given moment.

STEPHEN ONYEKWELU

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oncerns over a potential sharp economic slowdown are overshadowing support from supply disruptions due to OPEC’s production cutbacks and from US sanctions on Iran and Venezuela.

The outages in Venezuela and Iran, along with the strong production cuts from OPEC+, are undoubtedly tightening up the oil market. The one thing holding back oil prices seems to be concerns about the global economy and how the USChina trade war might impact that outlook.

Oil prices bounced around on recent murmurings about the trade negotiations, up on positive news, quickly down when it seemed that the talks were souring.

Brent crude oil futures were at $66.73 per barrel at 0752 GMT, down 30 cents, or 0.5 percent, from their last close. It rebounded to $66.76 at 1700GMT. US West Texas Intermediate (WTI) futures were

at $58.69 per barrel, down 35 cents, or 0.6 percent, from their previous settlement. But it rallied to $59.00.

Both crude oil price benchmarks have slumped by almost three per cent since last week, hitting their highest since November 2018.

“Oil remains in a tug-ofwar between fundamentals and a fickle sentiment in the global financial markets,” said Vandana Hari of consultancy Vanda Insights in an interview with CNBC. Concerns about a potential US recession emerged Friday after cautious remarks by the US Federal Reserve caused 10-year treasury yields to slip below the three-month rate for the first time since 2007.

Historically, an inverted yield curve – where long-term rates fall below short-term – has signalled an upcoming recession. Adding to concerns of a widespread global downturn, manufacturing output data from Germany, Europe’s biggest economy, shrunk for the third straight month.

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39 NEWS

BUSINESS DAY

TomTom signs Phyno, Teni as Brand Ambassadors SEYI JOHN SALAU

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omTom, a household candy brand of Cadbury Nigeria plc, has signed Nigerian rap act, Phyno, and singing sensation Teni, as its Brand Ambassadors. At an unveil ceremony held in Lagos, Monday, the company revealed that the desire to connect further with their consumers through music informed the engagement of the talented duo.

The contract involves featuring in the TomTom’s brand and marketing campaigns, including advertisements and special appearances at the brand’s events.

Amir Shamsi, managing director, Cadbury Nigeria plc, expressed his delight at the influence of the ambassadors on the objectives of the company for the TomTom brand. “The future is now.

Despite being a candy of heritage, TomTom remains youthful and cool. The Nigerian entertainment industry has remained a major sector for the Nigerian youths to

thrive, and TomTom is very delighted to go all the way to showcase passion points of millions and hopefully contribute to the success of many more.”

In his remark, Aruleba Olumide, marketing manager, Cadbury Nigeria, believes the choice of Phyno and Teni is strategic to the new marketing objectives of the brand.

“The choice of Phyno and Teni as brand ambassadors for the TomTom aligns with our mission to project the brand as youthful and cool.

Phyno has taken rap in indigenous language to the next level since he broke into the Nigerian music industry.

Today, he is easily one of the best rap acts in the country.

“For Teni, breaking into the Nigerian music scene was as easy like a hot knife through the butter. Ever since her emergence, she has continued to wax strong. Both artists definitely enjoys the power of cool, which only TomTom can bring. We are simply delighted at these partnerships,” Olumide said.

40 BUSINESS DAY A thanksgiving service in commemoration of First Bank 125th anniversary in Lagos www.businessday.ng

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Tuesday 26 March 2019

L-R: Oba Otudeko, chairman, FBN Holdings ; his wife, Adebisi; Florence Ajimobi, wife of Oyo State governor; Ibukun Awosika, chairman, FirstBank of Nigeria Limited, her husband, Abiodun; UK Eke, group managing director, FBN Holdings, and his wife Uganze Eke. L-R : Akin Osinbajo, officiating minister, Bayo Olugbemi , MD/CEO, First Registrars and Investors Services Limited, Idowu Iluyomade, pastor in-charge of region /SATGO CSR,RCCG City of David and a representative of the general overseer .

L-R Olu Akinkugbe and a guest

L-R: Okechukwu Enelamah, minister of Industry, Trade and Investment, Ibukun Awosika, and Wilson Badejo, former general overseer, Foursquare Gospel Church.

L-R: Tunde Oyefolu and Biodun Awosika

L-R Gbenga Shobo, deputy managing director, FirstBank of Nigeria Limited ; Biodun Awosika; UK Eke, group managing director, FBN Holdings ; Frank Aigbogun, Publisher /CEO, BusinessDay; Ibukun Awosika, chairman, FirstBank of Nigeria Limited; Oba Otudeko, chairman, FBN Holdings ; Adesola Adeduntan, managing director, FBNL, wife, Vivian, and Bayo Olugbemi , MD/CEO, First Registrars and Investors Services Limited.

Bisi Onasanya, ( middle) former managing director of Firstbank and guests.

Kayode Akinkugbe (middle) his wife left, and a guest

L-R: Gbenga Shobo, deputy managing director, FirstBank of Nigeria, his wife, Vivian; Adesola Adeduntan, managing director, FBNL, his wife, Adenike; and Abimbola Fashola, wife of minister of power, works and housing.

Pictures by Pius Okeosisi

Tuesday 26 March 2019

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41

World Business Newspaper

EU warns no-deal Brexit is ‘increasingly likely’

Brussels finalises preparations but warns UK of delays for people and goods JIM BRUNSDEN

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t is “increasingly likely” the UK will leave the EU without a deal in less than three weeks time, Brussels said on Monday, as it announced the bloc was ready for a hard Brexit involving delays, customs checks and quizzing British travellers at the border.

With a no-deal Brexit possible as soon as April 12, the European Commission said that country visits by senior officials showed “a high degree of preparation by member states for all scenarios”.

It added that Brussels had itself completed its no-deal planning “as it is increasingly likely that the United Kingdom will leave the EU without a deal on 12 April”. But it noted there would inevitably be disruptions to trade and free movement.

There will be “frictions”, one official said. “It is pretty clear.”

The commission also said it would be looking to the UK to keep making budget contributions to Brussels, even in the case of a no-deal Brexit.

“We are of the opinion that financial commitments we put together as 28 [EU member states] should be honoured as 28,” the official said. The official added that the two sides would need to reach agreement on the budget

“before one could move to other issues in a no-deal scenario”.

According to commission contingency plans, Britain would have to confirm whether to make about €7bn of net contributions to the EU’s 2019 budget by April 18 — less than a week after the new departure date.

At a summit last week the EU agreed to delay Britain’s exit from the bloc from the previously scheduled date of March 29 until April 12 — or May 22 if Theresa May succeeds in finally winning House of Commons for her Brexit deal this week.

Donald Tusk, European Council president, said that all options were still on the table — including no deal — but that “almost everything” was now in the hand of the British parliament and Mrs May’s government.

The Commission acknowledged that if there was a no-deal Brexit the new checks could still cause delays at ports and airports for both people and goods coming from the UK despite the “considerable preparations” by member states.

A no-deal Brexit would involve the immediate imposition of customs duties on UK goods entering the EU, as well as product checks.

In documents published on Monday, the EU also warned

Deutsche Bank revealed as behind € 150m loan to Wirecard founder German lender took almost half Markus Braun’s stake in payments group as collateral OLAF STORBECK AND ARASH MASSOUDI AND ROBERT SMITH

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eutsche Bank is the source of a €150m loan to Wirecard’s founder Markus Braun, with Germany’s largest lender accepting as collateral almost half his shares in the controversial payments group.

The so-called margin loan was disclosed in December 2017 in filings from Wirecard without identifying the lender. People familiar with the matter said Deutsche Bank made the loan. One said it reflected Deutsche Bank’s ambition to do more business with wealthy individuals and family offices.

Deutsche Bank and Wirecard both declined to comment.

Banks provide margin loans for wealthy, stock-rich executives to give them access to cash without selling their shares. To protect the lender against losses, these borrowers usually have to agree to either pay money, hand over shares or relinquish other assets if the price of a stock falls sharply.

These loan products can be a source of lucrative fees for lenders but have also come under scrutiny following unexpected and severe share reversals. For instance, a group of banks suffered heavy losses on margin loans to the chairman of South Africa-based retail conglomerate Steinhoff, dramatically changing lenders’ risk appetite.

The arrangement with Mr Braun

— whose 8.6m shares in Wirecard give him a 7 per cent stake, making him the largest shareholder — exposes Germany’s largest bank to the risk of a further large slide in the highly volatile stock.

The company’s share price quadrupled from €45 to more than €191 from the start of 2016 until the end of August last year. The gains, which saw the company’s market value reach €24bn, turned Mr Braun into a billionaire.

Since late January, when the Financial Times reported that a senior Wirecard executive was suspected of using forged and backdated contracts in a string of suspicious transactions, Wirecard has lost more than a third of its stock market value.

In late 2017, Wirecard disclosed in a regulatory filing that Mr Braun had pledged 4.2m shares of Wirecard to an unidentified third party. Three people familiar with the transaction told the FT that the shares were used as collateral in a margin loan to Mr Braun; two of them added that it was provided by Deutsche Bank.

The loan volume stands at about €150m, according to people familiar with the transaction. This implies a loan-to-value ratio of 40 per cent compared with the then-market value of €390m of the Wirecard shares that were pledged as collateral.

Despite the slump in Wirecard’s shares this year, the share collateral is worth close to €410m, avoiding problems for both parties.

Theresa May and Brexit secretary Stephen Barclay leaving Downing Street on Monday © AP

Britons that travellers to the continent would face questions at the border about the purpose of their visit and means of subsistence.

Animals from the UK would no longer be covered by the bloc’s “pet passport”. As a result, pets would be checked at the border to verify whether they have the necessary vaccinations and ID chips.

EU officials added that European companies had told Brus-

sels they would prefer a no-deal outcome soon to prolonged uncertainty.

“They were telling us ‘we want certainty, and if it has to happen so be it’,” one official said.

Asked about the implications of customs checks for the Northern Ireland land border, an EU official said that Brussels was working intensively with the Irish government to minimise “disruptions to cross-border trade and

supply chains” in the event of a no-deal Brexit.

“We are working very closely with the Irish authorities to try to carry out controls away from the border if at all possible,” the official said.

“But this is still a situation that is absolutely fundamentally different to a withdrawal agreement situation — there will be disruptions, we are working to find good solutions.”

Brussels faces US clash over plan to monitor Huawei 5G security European Commission favours risk management rather than ban on Chinese company MICHAEL PEEL

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he European Commission will this week call for the bloc’s 28 countries to provide data to help map and then close possible vulnerabilities if they choose Huawei or other Chinese suppliers to build critical communications systems, diplomats say.

The move is in line with the national strategies of many EU member states but at odds with pressure from Washington to shut out Chinese companies from sensitive areas of electronic infrastructure. US officials have warned that a European embrace of Huawei could undermine transatlantic military and intelligence co-operation.

“Huawei technology is good and it’s cheap — the only problem is it’s Chinese,” said one EU diplomat of the European view.

“The approach will be, let’s see how we can somehow manage the security risks. This is clearly the direction we are going in.”

The commission will call for member states to quickly carry out assessments on which parts of its 5G networks are most at risk and how the problems might be mitigated, diplomats said. The results would then

be pooled and used to develop recommendations for EU-wide minimum standards, to be made available as auctions for 5G spectrum are rolled out.

The commission work is part of a push for a more coherent EU response to the growing strategic challenges presented by China, while acknowledging that national security remains the domain of member states. A document on China published earlier this month by the commission and the EU’s diplomatic service urged a “common EU approach” to 5G security risks, including a framework to exchange information and improve awareness.

Andrus Ansip, a commission vice-president responsible for the digital single market, said in December that the bloc should be “worried” about the risk that Huawei and other Chinese companies “had opened their systems for some kind of secret services” to use them as back doors.

Julian King, security union commissioner, said in January that it was “vital” countries used a diversity of 5G equipment manufacturers and addressed questions about “supply-chain integrity and the need for greater transparency regarding the provenance of technological

components”.

Brussels’ decision to favour a non-binding approach and avoid outright prohibition of Chinese products contrasts with the hardening line in the US where Congress has banned government agencies from buying Huawei equipment.

The security fears around 5G stem from its potential to become deeply embedded in daily life through its use in road and rail management to controlling household devices.

Gordon Sondland, Washington’s ambassador to the EU, warned this month that using Chinese 5G mobile technology risked making European countries vulnerable to Beijing “for the next 10 to 20 years”. He said use of the technology for sensitive functions could damage the ability of US military and intelligence “to be able to comfortably interlink with our allies and our friends in a way that doesn’t jeopardise our systems”.

Both Huawei and the Chinese government have denounced suggestions that the company poses security risks. Wang Yi, China’s foreign minister, last week branded western suspicions as “groundless accusations for political purposes” and called them abnormal and immoral.

42

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NATIONAL NEWS

FT Nissan chief approved $40m retirement payment for Carlos Ghosn

Ethiopian Airlines chief stands by Boeing despite crash Tewolde Gebremariam insists carrier’s pilots had been ‘fully trained’ on 737 Max

Signed document raises questions about extent of Saikawa’s knowledge of pay

SYLVIA PFEIFER

LEO LEWIS AND KANA INAGAKI

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issan’s chief executive approved a $40m lump sum payment to Carlos Ghosn as part of a proposed retirement package that raises new questions about senior executives’ knowledge of their deposed chairman’s remuneration.

Hiroto Saikawa approved a 10year employment contract for Mr Ghosn as “chairman emeritus”, according to the 2012 document seen by the Financial Times, which also permitted him continued use of company properties in Rio de Janeiro, Paris and Lebanon.

Under the agreement, Nissan was expected to make a lump-sum payment of $40m for the advisory role after Mr Ghosn stepped down as chairman, and provide an annual salary of $4.4m which would be increased to $6m if the company met certain targets.

Mr Ghosn would also be entitled to use residential properties as well as offices in Japan and other locations.

Those same properties were a focus of Nissan’s internal investigation last year into Mr Ghosn, with the carmaker finding he had acted improperly in the way the properties were acquired and the amount of money spent on their renovation, according to people familiar with the investigation.

The Ghosn family has always believed that the residences were corporate housing and there was no misuse of funds, according to people familiar with their thinking.

The employment agreement was signed by Mr Saikawa and Greg Kelly, another Nissan board member who was charged with conspiring with Mr Ghosn to falsify Nissan’s financial statements. Mr Kelly has denied the charges. It is not clear if the document was the final version of the agreement.

Mr Ghosn was arrested on November 19 and later charged with falsifying his pay in financial documents by not including more than $80m in deferred compensation that he was set to receive over an eight-year period. On his deferred compensation, the former chairman has said there was no undisclosed binding contract with Nissan for a fixed amount of pay. He has also denied all other charges.

Japanese newspaper Asahi reported in December that Mr Saikawa had signed a document listing the pretext for the deferred payment under question, but this is the first time the details of the document have come to light.

With the trial of Mr Ghosn set to unfold in Tokyo later this year, the employment document has increased concerns among some senior Nissan executives that Mr Saikawa’s continued leadership of the carmaker will be seen as a failure to make a break from the past.

Later this week, a panel of external experts commissioned by Nissan is expected to recommend an overhaul of the carmaker’s board with a majority of directors to be made up of external appointments.

But people with knowledge of the deliberations say Mr Saikawa is expected to remain as chief executive.

Tuesday 26 March 2019

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President Donald Trump: ‘It’s a shame that our country had to go through this . . . This was an illegal takedown that failed’ © AP

Mueller finds no collusion between Trump and Russia President claims to be completely exonerated but Democrats vow further probes DEMETRI SEVASTOPULO, KADHIM SHUBBER AND COURTNEY WEAVER

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obert Mueller, the US justice department special counsel, has concluded that Donald Trump and his presidential campaign did not collude with Russia in an attempt to influence the 2016 election result.

In a letter to Congress following the end of a 22-month probe that consumed Washington, US attorney-general William Barr said Mr Mueller “did not find that the Trump campaign or anyone associated with it conspired or co-ordinated with Russia in its efforts to influence the 2016 US presidential election”.

While Mr Barr said that Mr Mueller had found no evidence of collusion with Russia, however, his letter to Congress on Sunday was more ambiguous about whether Mr Trump had attempted to obstruct justice.

“The special counsel states that ‘while this report does not conclude that the president committed a crime, it does not exonerate him’,” Mr Barr wrote in his four-page letter delivered on Sunday afternoon.

The long-awaited outcome of the Mueller investigation — which involved 19 lawyers, 40 investiga-

tors and issued 2,800 subpoenas — marked a big victory for Mr Trump, who has repeatedly castigated the almost two-year investigation as a“witch hunt” that he claimed was orchestrated by Democrats.

“No Collusion, No Obstruction, Complete and Total EXONERATION. KEEP AMERICA GREAT!” Mr Trump said in a tweet on Sunday just before boarding Air Force One for his return flight from Florida to Washington DC. “It was just announced there was no collusion with Russia . . . There was no obstruction,” Mr Trump told the media on the tarmac. “It was a complete and total exoneration. It’s a shame that our country had to go through this . . . This was an illegal takedown that failed.”

While the report provided relief for Mr Trump, many legal experts had not expected Mr Mueller to bring charges because justice department internal guidelines prohibit the indictment of a sitting president. But the outcome shifts the focus to Congress where Democrats have made clear that they will continue to investigate Mr Trump over everything from his connections to Russia to his previous business dealings.

Mr Trump also faces multiple investigations in other jurisdictions, including by the vaunted office of the US attorney for the southern district of New York, which is known for its handling of high-profile cases.

Republicans welcomed the conclusions of the Mueller report as vindication of the president. “Great day for President Trump . . . the cloud hanging over President Trump has been removed,” said Lindsey Graham, the Republican head of the Senate judiciary committee who golfed with him on Sunday.

Democrats seized on the fact that Mr Mueller had not entirely exonerated Mr Trump, suggesting that while the justice department probe had ended, the intense focus on the president would now shift squarely to Capitol Hill.

“Mueller clearly and explicitly is not exonerating the president,” said Jerry Nadler, the Democratic head of the House judiciary committee.

“We must hear from Barr about his decision-making and see all the underlying evidence for the American people to know all the facts.”

Some Democrats raised questions about what Mr Mueller had found in terms of possible obstruction of justice by the president.

Global stocks hold nerve as slowdown fears wane Wall Street ticks higher in opening trade, bonds steadier after sharp rally last week HUDSON LOCKETT AND

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uropean stock markets recovered their poise on Monday, and investors moved back out of government bonds as fears of an imminent recession eased, indicating Friday’s fearful run had taken markets too far, too fast.

Reassurance came from better than expected business confidence data in Germany, which helped limit losses on Frankfurt’s Xetra Dax 30 to 0.2 per cent.

The Europe-wide Stoxx 600 was 0.4 per cent weaker after declining more than 1 per cent on Friday. The US stock market rose modestly, with the S&P 500 up 0.1 per cent overall.

“I don’t see a US recession as particularly likely,” said Janet Yellen, former chairman of the Federal Reserve, at the Credit Suisse Asian Investment Conference in Hong Kong.

Ms Yellen described the “concern” in markets as “really overdone”, adding that with the Federal Reserve’s rate-setting committee expecting US economic growth of

around 2 per cent, “that’s not a dangerous situation”.

Friday’s stocks sell-off came in reaction to disappointing data from Germany’s manufacturing sector, which sparked wider fears for global economic growth rates. Demand for the relative safety of government bonds pulled the yield on 10-year Bunds into negative territory, and led to investors demanding a premium to hold short-dated US debt over benchmark 10-year Treasuries. This inverted yield curve has often served as a harbinger of recession.

The benchmark 10-year Treasury yield inched lower on Monday, by 1 basis point to 2.4496 per cent on Monday as modest demand for the debt remained. The yield on US government debt maturing over three months crept lower, by just over 1 basis point to up to 2.4449 per cent.

Goldman Sachs said Friday’s German data had contributed to a “growth scare” on financial markets, but argued it amounted to a “major overreaction”. The US bank stuck by its opinion that weakness among German industry would be “manageable”.

Charles Evans, head of the Federal Reserve Bank of Chicago, said in comments on the sidelines of the Credit Suisse event in Hong Kong that while the flatter yield curve was “something to be mindful of”, the risk of a shock hitting the US economy was “not unusually high or low at the moment”.

“I think the reports of economic activity in China slowing add to nervousness about the foreign growth outlook. I think against that is the fact that US growth has been pretty good and the fundamentals still are good, so we have to balance that,” said Mr Evans, who has tipped the US economy to grow 1.75 to 2 per cent this year.

“Until things move more in one direction or another I’m pretty comfortable with where we are,” he added.

Investors also moved back out of European government bonds on Monday, pulling their yields higher, after Friday’s ferocious rally pushed the yield on the benchmark 10-year German Bund under zero for the first time since October 2016. It rose 1.5bp in Monday to minus 0.009 per cent.

he chief executive of Ethiopian Airlines stood by Boeing on Monday despite the crash of the carrier’s 737 Max 8 aircraft earlier this month and insisted its pilots had been “fully trained” to deal with plane’s updated software system.

Tewolde Gebremariam said in a statement that the crew of doomed flight 302 had received training on the details in the service bulletins issued by Boeing and US safety regulators in the wake of a Lion Air crash of the same aircraft model in October.

The pilots of flight 302 had been trained “on all appropriate simulators”, he added.

“Let me be clear: Ethiopian Airlines believes in Boeing. They have been a partner of ours for many years,” said Mr Gebremariam.

The stall-prevention software in the 737 Max aircraft has become a focus of investigators after a preliminary report showed the crew of the Lion Air aircraft appeared to fight with the system before the plane crashed, killing 189 people on board. The preliminary report found that a faulty sensor had triggered the automated anti-stall feature, known as MCAS. Boeing has been working with the US Federal Aviation Administration to return the Max 737 to commercial service after safety regulators grounded the aircraft, fearing similarities with the Lion Air crash.

Norwegian Air Shuttle, the low-cost airline whose shares have been heavily hit by the grounding of the 737 Max, shelved plans to sell six other Boeing aircraft as part of plans revealed on Monday to try to minimise customer disruption. Norwegian said it would use some of the larger Boeing Dreamliner planes on high-volume routes and also “wet lease” aircraft to cope.

Europe’s third-largest low-cost airline has asked Boeing for compensation and said it was confident of “a constructive agreement”.

The US aircraft manufacturer on Saturday hosted pilots from several American airlines to review proposed modifications to the anti-stall software as well as cockpit displays at its plant at Renton, Washington. The session included representatives from American, Southwest and United airlines, the three US carriers that fly the Max. On Wednesday Boeing will host a second group of 200 pilots and officials from almost all the carriers that fly the Max. “This is part of our ongoing effort to share more details about our plan for supporting the safe return of the 737 Max to commercial service,” the company said in a statement issued late on Sunday.

Mr Gebremariam said Ethiopian would work with investigators in Ethiopia, the US and elsewhere “to figure out what went wrong with flight 302”, which crashed minutes after take-off from Addis Ababa on March 10.

Tuesday 26 March 2019

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43

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

European stocks slip after flight from risk reaches Asia MICHAEL HUNTER AND EDWARD WHITE

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he global sell-off in equities moderated in Europe, having reached Asia on Monday, and the rally in sovereign debt eased as concerns about faltering global growth leaving investors unsettled.

Germany’s 10-year Bund yield rose 2.7 basis points back to zero as demand for the debt eased. The move came after a closely watched business climate index compiled by Ifo was stronger than forecast. The benchmark yield went into negative territory for the first time since October 2016 during the previous session amid demand for its relative safety.

The yield on US 10-year Treasuries was steady at 2.441 per cent. The yield on the equivalent Japanese note was off 1 basis point, at minus 0.092 per cent, after earlier touching its lowest since September 2016.

European stocks were steadier. Frankfurt’s Xetra Dax 30 was down just 0.3 per cent after closely watched Ifo business climate data were reasurring.

London’s FTSE 100 slipped a

further 0.4 per cent, adding to its 2 per cent decline at the end of last week.

Sectors most directly exposed to the outlook for global growth put in the worst performance in Europe on Monday. The Stoxx index tracking miners fell 1 per cent, with the equivalent benchmark for industrial metals stocks down 1.3 per cent.

Meanwhile, S&P 500 futures suggested the benchmark Wall Street index would decline 0.3 per cent.

The flight from risk — which also drew investors into government bonds, pushing yields lower — took hold on Friday after a run of surprisingly weak eurozone economic data deepened fears about faltering global growth.

It reached Asia in force on Monday. The Topix in Tokyo fell 2.5 per cent, its worst day in three months. Sydney’s S&P/ASX 200 dropped 1.1 per cent in its biggest one-day fall since early January. Mainland China’s CSI 300 was down 2.4 per cent, with Hong Kong’s Hang Seng weaker by 2.2 per cent.

Gold rose 0.3 per cent, while Japan’s yen was weaker by 0.1 per cent to ¥110.06.

Banks ramp up plans for ‘hard Brexit’ JPMorgan issues new EU contracts as preparations among lenders intensify ahead of March 29 LAURA NOONAN AND DAVID CROW

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PMorgan Chase has sent new EU employment contracts to more than 200 London-based staff in recent days while Royal Bank of Scotland is gearing up to begin serving clients at its new Dutch entity, as banks intensify preparations for a “hard Brexit”.

Senior executives at several large international banks said that while a postponement of the UK’s March 29 departure from the EU would be helpful at the margins, they were powering ahead with final preparations to be ready to cope with any eventuality.

In JPMorgan’s case, those preparations involved sending new employment contracts to between 200 and 300 staff in the past few days informing them that their employment will switch to new EU entities if a “hard Brexit” occurs, two people familiar with the situation said.

Affected employees already knew they were on the list to move from London to EU hubs including Frankfurt and Paris, the people said, adding that the bank has undertaken to support them with housing and travel on a temporary basis. A spokesman for JPMorgan declined to comment on its planning.

NatWest, the investment banking subsidiary of Britain’s RBS, has already hired around 150 people

for its new Amsterdam hub and is transferring around 100 people from London, a person familiar with its plans said. The new entity will begin transacting with clients on Monday, the person added.

RBS declined to comment.

Other banks including Bank of America, Morgan Stanley, Goldman Sachs and Citigroup have already moved between 50 and 250 “day zero” staff to eurozone locations in preparation for the original March 29 Brexit date, after which UK-based banks may not legally be able to serve EU clients.

“Clients are being rebooked [to our EU entity] as we speak,” said an executive at one of the big US banks. “The people who are moving have moved . . . We’re looking at it in a very cold-eye kind of way.”

A senior executive at another bank said they had no choice but to be “very proactive” and get everything in place for March 29.

A report by consultancy EY last week said that financial services have committed to move some £1tn of assets and about 7,000 jobs out of the UK in their first wave of Brexit moves.

Senior finance executives have warned that the initial moves could be the tip of the iceberg if the UK cannot forge mutual recognition regulatory agreements with peers in the EU that allow relatively free access between their financial markets.

Global stocks hold nerve as slowdown fears wane Wall Street ticks higher in opening trade, bonds steadier after sharp rally last week HUDSON LOCKETT AND MICHAEL HUNTER

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uropean stock markets recovered their poise on Monday, and investors moved back out of government bonds as fears of an imminent recession eased, indicating Friday’s fearful run had taken markets too far, too fast.

Reassurance came from better than expected business confidence data in Germany, which helped limit losses on Frankfurt’s Xetra Dax 30 to 0.2 per cent. The Europewide Stoxx 600 was 0.4 per cent weaker after declining more than 1 per cent on Friday. The US stock market rose modestly, with the S&P 500 up 0.1 per cent overall.

“I don’t see a US recession as particularly likely,” said Janet Yellen, former chairman of the Federal Reserve, at the Credit Suisse Asian Investment Conference in Hong Kong.

Ms Yellen described the “concern” in markets as “really overdone”, adding that with the Federal Reserve’s rate-setting committee expecting US economic growth of around 2 per cent, “that’s not a dangerous situation”.

Friday’s stocks sell-off came in reaction to disappointing data from Germany’s manufacturing sector, which sparked wider fears for global economic growth rates.

Demand for the relative safety of government bonds pulled the yield on 10-year Bunds into negative territory, and led to investors demanding a premium to hold shortdated US debt over benchmark 10-year Treasuries. This inverted yield curve has often served as a

harbinger of recession.

The benchmark 10-year Treasury yield inched lower on Monday, by 1 basis point to 2.4496 per cent on Monday as modest demand for the debt remained.

The yield on US government debt maturing over three months crept lower, by just over 1 basis point to up to 2.4449 per cent.

Goldman Sachs said Friday’s German data had contributed to a “growth scare” on financial markets, but argued it amounted to a “major overreaction”. The US bank stuck by its opinion that weakness among German industry would be “manageable”.

Charles Evans, head of the Federal Reserve Bank of Chicago, said in comments on the sidelines of the Credit Suisse event in Hong Kong that while the flatter yield curve was “something to be mindful of”, the risk of a shock hitting the US economy was “not unusually high or low at the moment”.

“I think the reports of economic activity in China slowing add to nervousness about the foreign growth outlook. I think against that is the fact that US growth has been pretty good and the fundamentals still are good, so we have to balance that,” said Mr Evans, who has tipped the US economy to grow 1.75 to 2 per cent this year.

“Until things move more in one direction or another I’m pretty comfortable with where we are,” he added.

Investors also moved back out of European government bonds on Monday, pulling their yields higher, after Friday’s ferocious rally pushed the yield on the benchmark 10year German Bund under zero for

the first time since October 2016.

It rose 1.5bp in Monday to minus 0.009 per cent.

The calmer showing came only after Friday’s trading pattern reverberated across Asia.

China and Japan’s main national equities indices declined more than 2 per cent each. The yield on the benchmark 10-year Japanese government bond dropped 1.4 bps to minus 0.09 per cent. Meanwhile, the Japanese yen, often a haven during periods of market stress, held near a six-week high at ¥109.77 per dollar.

According to Bank of America Merrill Lynch, investors pulled $20.7bn out of equities last week and put $12.1bn into bonds, the biggest inflow since early 2018.

Paul Brain, head of fixed income at Newton Investment Management in London, cautioned that for bond markets to “maintain these levels we will need confirmation that the economies are going to be weaker to the point where central banks have to change tack [from tighter monetary policy].”

The more cautious tone struck

by Fed policymakers at their meeting last week, when projections for further interest rate rises were abandoned, has added to the unease in equity markets.

Strategists at Citigroup said of the Fed that “to the degree that the US’s pause reflects a pure change in the Fed’s reaction function, this should help keep global financial conditions loose and support European reflation”, but “to the extent that it reflects ongoing concerns about US growth, this could be a warning sign”.

Goldman Sachs narrows gender pay gap slightly in UK business Median bonus for women still 70 per cent lower than for men at Goldman Sachs International LAURA NOONAN

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he difference between how men and women are paid at Goldman Sachs’s UK business narrowed only slightly last year, the firm’s latest gender pay gap report shows, with women still earning a median bonus that is 69.9 per cent less than men’s and a median hourly wage 35.5 per cent below their male colleagues at Goldman Sachs International.

Goldman Sachs on Monday became the first big international

bank to publish its 2018 pay gap, a metric which has become a flash point since its introduction last year for laying bare the longsuspected difference in how men and women were paid.

The figures for Goldman Sachs International, Goldman’s main UK entity, were marginally better than the 36.4 per cent median wage gap there last year. The 68.9 per cent median bonus gap was unchanged.

At a smaller service entity, GSUL, the median hourly pay gap improved from 20.2 per cent to 19.5

per cent while the median bonus gap widened from 30.5 per cent to 35.8 per cent.

“At Goldman Sachs, we set compensation by merit, not by gender or any other factor,” said Richard Gnodde, who heads Goldman’s UK operations.

“We spend significant time on this during the compensation process to ensure that our commitment to equal pay is upheld. This is, and has been for many years, a critical priority for me and a crucial element of our compensation process.”

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Tuesday 26 March 2019

ANALYSIS

Donald Trump’s Fed nominee faces broad backlash Economists say choice of Stephen Moore is attack on independence of central bank JAMES POLITI

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Rio de Janeiro’s militias: a parallel power in Bolsonaro’s Brazil

Death of leftwing politician Marielle Franco focused attention on the growth of militias — to the president’s discomfort

JONATHAN WHEATLEY

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he was the Alexandria OcasioCortez of Brazilian politics.

An articulate and charismatic public speaker, Marielle Franco was a city councillor from the leftwing PSOL party whose campaigning against corruption and police violence had made her a rising star of Rio de Janeiro politics — an unlikely achievement for a black, gay woman from one of the city’s sprawling favelas.

On the evening of March 14 last year, Franco — who was known universally as Marielle — was shot in her car in the centre of Rio, along with her driver Anderson Gomes.

Almost a year later, investigators finally arrested two men suspected of her murder — both of whom were themselves former police officers.

Hours later, as police were searching an apartment in a northern suburb of Rio owned by an associate of one of the suspects, they made a surprising discovery. In a storeroom, in sealed boxes apparently straight from the factory, were the unassembled parts of 117 M16 automatic rifles. It was the biggest haul of illicit weapons ever seized in Brazil.

Rio has long been famous for the drug gangs who have made parts of the city no-go areas for outsiders including the police. Franco’s killing has focused attention on a different and parallel menace — Rio’s milícias, the murderous paramilitary gangs led by serving and former police officers that have emerged over the past two decades as a threat to public security and to the integrity of the state. Investigators believe the two men arrested and who have not been charged were members of the Escritório do Crime — the “Office of Crime” — a militia gang of contract killers.

Although the detective leading her murder investigation suggested the alleged killers may have acted out of personal hatred for leftwing politicians, many others disagree and believe Franco was murdered because she had challenged some of the business interests of Rio’s militias.

“Marielle’s murder was a political contract killing, a sophisticated crime ordered by powerful people,” says Marcelo Freixo, a PSOL federal congressman from Rio who led a team of activists of which Franco was part. “We don’t want some nobody to be given the blame. We want to know who ordered it and why.”

The murder of Franco is also raising uncomfortable questions for Jair Bolsonaro, Brazil’s new

far-right president. Longstanding figures in Rio politics, Mr Bolsonaro and his sons have a history of associating with people close to known and suspected militia members.

Moreover, the spotlight on the militias clashes with the security plan that Mr Bolsonaro is proposing and the philosophy that helped him get elected. The president believes the police should be given more freedom to shoot back against suspected criminals. “We need to urgently get rid of the ideology that defends criminals and criminalises the police,” he said at his January inauguration. However, the death of Franco suggests that the root of at least some of the violence that scars so many Brazilian cities is the blind eye that the authorities cast over militias that act as an almost parallel state.

“The militias operate in places with a vacuum of power, an omission of the state,” says Simone Sibilio, head of a unit in the Rio state public prosecutor’s office investigating the militias and their involvement in Franco’s murder.

She likens their activities to those of the Italian mafia, particularly in the way they substitute and co-opt elements of the state. “They have public agents and politicians [working on their behalf ],” Ms Sibilio says. “So far, we have arrested the coalface workers,” she adds. “We need to arrest the leaders.”

Firepower, murder, organised crime and politics: the characteristics that define the militias have become more destabilising since they first emerged towards the end of the last century.

Their origins help explain how rampant lawlessness can flourish in the surroundings of a sophisticated, modern city that only three years ago hosted the Olympics. Rio’s first militia can be traced to groups of migrant construction workers who settled with their families on no man’s land to the west of the city while they were building the apartment blocks and luxury condominiums that formed the upmarket seafront neighbourhood of Barra da Tijuca.

As their community grew, the favela of Rio das Pedras took shape with little intervention or interest from the state. With no formal police presence, security was provided by justiceiros, or vigilante gunmen. The favela expanded in the 1980s and 1990s and, as parts of it acquired the look of a regular city neighbourhood, police officers living there banded together to take over from the vigilantes, expelling, beating and killing drug dealers and other people they considered unde-

sirables. They presented themselves to the local population as a peaceful alternative to the drug gangs.

“That’s where the behaviour of the militiamen began, behind Tijuca in Rio das Pedras,” says Ubiratan Angelo, a former Rio state chief of police. “They used to say, no criminals live here — where the police live there’s no place for bandits.

Then they began to dominate local businesses, the market for alternative transport and all the rest.”

At first, militias offered protection to local businesses at a modest price many were willing to pay.

From there to extortion was a short step, and soon militias were selling protection against themselves. They expanded into other services: informal public transport, distribution of cooking gas, pirate cable TV, the sale and rental of commercial and residential property, and more.

The most lucrative line of business for the militias has been real estate. Investigators recently found documents at the residents’ association in Rio das Pedras showing that between 5 per cent and 10 per cent of the value of every property deal goes to the local militia. They were also involved in the hugely profitable business of land expropriation or grilagem — the fraudulent assignment of property and land deeds.

This was the issue that Franco had been highlighting at the time of her death. Her work to support local residents and their rights to land and property made her a threat to this type of real estate scam.

Almost from the outset, militias dominated local politics in the areas they controlled. “If you have the power, you can tell people, ‘Look, it’s best that you vote for my candidate’,” says Mr Angelo. “That’s how these guys got big. In the city council, in the state legislature, they pass laws that interfere with the public machinery to benefit their activities.”

During the past 20 years, many new militias have been formed beyond Rio das Pedras. A study last year found they were present in 165 favelas and in 37 other city neighbourhoods in greater Rio, areas of the city that are home to a combined population of more than 2m people. They hand out often gruesome and lethal justice designed to set an example, sometimes for criminal behaviour, sometimes for acts of disobedience such as buying cooking gas from the wrong distributor. Their presence haunts the city: an opinion poll last month found that Rio’s residents were more afraid of the militias than of the city’s often brutally violent drugs gangs.

reg Mankiw, a respected Republican economist, did not mince words when he posted his reaction to Donald Trump’s latest anti-establishment gambit — his nomination of Stephen Moore, a conservative economic analyst, for a seat on the Federal Reserve board.

“Steve is an amiable guy, but he does not have the intellectual gravitas for this important job,” wrote Mr Mankiw, the Harvard University professor and former chair of George W Bush’s council of economic advisers, on his blog. “Mr Moore should not be confirmed.”

Just three months ago, Mr Mankiw had written a scathing review of Trumponomics, a book coauthored by Mr Moore, classifying it as a work of “rah-rah” partisanship that ignored economic evidence. “In their view, the world is simple, and the opposition is just wrong, wrong, wrong,” he said.

It is not unusual for mainstream Republican economists to criticise Mr Trump’s choices, but Mr Mankiw’s comments suggested that even by the standards of this White House the US president had crossed

Katz of Capital Alpha Partners in Washington.

Mr Trump’s move to nominate Mr Moore was, according to Bloomberg News, inspired by a Wall Street Journal editorial he wrote this month attacking the Fed for raising interest rates, and stymying economic growth. The column was shown to the US president by Larry Kudlow, the director of the National Economic Council. This echoed Mr Trump’s own criticism of the US central bank, despite the fact that the Fed has since shifted towards a much more dovish stance and its officials are not expecting more monetary tightening this year.

Economists noted that during Barack Obama’s presidency at the height of the financial crisis, Mr Moore was arguing for higher interest rates to fend off hyperinflation — a scourge that never materialised.

Mr Moore’s nomination, which must be approved by the Senate, is likely to reignite concerns about Fed independence which have already ratcheted up a notch in the Trump era. The US president has had no qualms about publicly attacking and undermining other

Stephen Moore, Donald Trump’s pick for a seat on the Fed board, is accused of having limited qualifications, patchy judgment and an unbending loyalty to conservative political imperatives © Bloomberg

a line. Whereas Mr Trump’s previous Fed selections, from Mr Powell to Randal Quarles and Richard Clarida, had been authoritative, Mr Moore is accused of having limited qualifications, patchy judgment and an unbending loyalty to conservative political imperatives.

“It seems a big strategy change in Trump’s choices for Fed positions: from very mainstream central bankers and academics to someone whose only aim seems to be to please Trump,” said Fabio Ghironi, an economics professor at the University of Washington.

Mr Moore, a 59-year old Chicago native who founded the Club for Growth, a conservative lobby group, and then served on the Wall Street Journal editorial board, was an economic adviser to Mr Trump’s 2016 presidential campaign and now is a fellow at the Heritage Foundation, a right-leaning think-tank.

“This is the first genuinely bad Trump pick for the Fed,” wrote Justin Wolfers, an economics professor at the University of Michigan, on Twitter.

The main concern about the choice of Mr Moore is that it marks a blatant attempt by Mr Trump to place a political ally within the Fed — after months of attacks on the institution from the outside.

“Moore appears to be a shot

by Trump against Powell — a counterweight to any thoughts the chairman might ever have again about tightening policy,” said Ian

independent agencies ranging from the FBI to the CIA to further his own political goals.

“He most certainly will pursue a partisan agenda, and continue to be a vocal critic of current monetary policy. In doing so, he would begin to erode the credibility of the Federal Reserve, a non-partisan institution, which relies on accurate and direct communication of policy to influence a global audience,” said Jason Reed, a professor of finance at the University of Notre-Dame’s business school.

The White House declined to comment on the backlash to Mr Moore’s nomination. In a tweet on Friday, Mr Trump said he had known Mr Moore for a “long time” and had no doubt he would be an “outstanding” choice for the Fed. Mr Moore responded by thanking the president for his “zealous commitment to freeing the American economic engine from government over-reach and oppressive taxation”.

As Washington was consumed by the conclusion of Robert Mueller’s investigation, political reaction to Mr Moore’s nomination has been muted. But Katie Porter, a first-term Democratic congresswoman from California, tweeted that “unqualified pundits” should not have top positions at the Fed. “The Fed is supposed to make sure our economy works for the middle-class, & Moore has been wrong time & again,” she wrote.

Tuesday 26 March 2019

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Politics & Policy

BUSINESS DAY

45

Why Appeal Court nullified Zamfara APC, governorship, assembly primary elections … Present certificate of return to our candidate, PDP urges INEC Yakubu said judges have the legal power to produce judgment and reach decisions with reason, noting that in the instance case, it was not done.

“I am convinced that the lower court has failed to evaluate the evidence before reaching the decision.

“The Appeal Court has power in law to access pieces of evidence on appeal, which we have done.

“Based on available facts, the respondents did not contradict the INEC evidence on conducting the said primary election,” Yakubu said.

Meanwhile, the People’s Democratic Party (PDP) has urged the Independent National Electoral Commission (INEC) to present certificate of return to its candidate in Zanfara State, Bello Matawalle.

Southwest vice-chairman of the PDP, Eddy Olafeso, stated this in an interview with BusinessDay, Monday, after the Court of Appeal’s

Iniobong Iwok

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he Court of Appeal Sokoto Division on Monday set aside the judgment delivered by the Zamfara High Court allowing the All Progressives Congress to field candidates in the 2019 elections, saying that the lower court failed in its duty to properly evaluate the evidence before it.

The appeal was filed by Senator Kabiru Marafa, chairman of the Senate Committee on Petroleum (Downstream); and 129 others through his counsel, Mike Ozheokome, SAN. Delivering the lead judgment, which was adopted by two other justices, Tijjani Abubakar and Jamilu Tukur, Justice Tom Yakubu held that the lower court failed in its duty to properly evaluate the evidence before it.

Kabiru Marafa

YDP governorship candidate identifies vote buying as setback to democracy in Nigeria ANIEFIOK UDONQUAK, Uyo

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zekiel Nya-Etok, governorship candidate of the Young Democratic Party (YDP) in Akwa Ibom State, has identified vote buying as a major setback in Nigeria’s quest to deepen democracy.

Giving a critical evaluation of the just concluded elections, NyaEtok described vote buying as the fundamental aberration of the elections alleging that “unscrupulous politicians and their cronies compromised the sanctity of the ballot through the practice of money politics.’’

He called for the declaration of a state of emergency on political electioneering in Nigeria and the overhaul of democratic institutions and processes to improve the legal framework of the electoral laws to be in conformity with international best standards and practices.

Nya-Etok, who criticised the apparent lack of ideological direction in political and governmental affairs of the country suggested the idea of social governance to address the anomalies in the workings of gov-

ernment and in the political system.

“I believe very strongly that a well-conceived ideological construct as social governance will not only recalibrate our political system positively, but also will change the narrative of government so much so that the welfare and security of the people will be the primary purpose of government.

“I hereby propose the Social Governance ideology for adoption by governments at local, state, national and international levels,’’ he said.

According to him, the adoption and implementation of Social Governance will mark a watershed in the political evolution as a country as well as change the dynamics of governance as government and public office holders will be made to function effectively while the citizens enjoy the dividend of democracy.

Nya-Etok who also called on for the restructuring of the political system for effective service delivery added that it would in addition correct the ills of the country’s electoral system.

“INEC should play a supervisory role in inter-party primaries as it will strengthen internal democracy and improve the leadership recruitment

judgment.

Olafeso said the judgment was a victory for democracy, while lauding the judiciary for staying on the side of justice.

“We celebrate the judiciary for staying with the side of the people for staying with justice; but we are asking INEC to present certificate of returns to our candidate, APC is an imposter.

The PDP chieftain further condemned the manner Saturday’s supplementary gubernatorial election was conducted in Kano State, stressing that the election was marred by violence, while members of the party was prevented from voting.

“The Kano election was a disaster and you all saw what happened that was not an election. They unleashed violence on our members; they could not vote, but we would seek redress at the tribunal”, Olafeso added.

Ninth Assembly: Ndume joins Senate Presidency race, writes APC leadership process to the betterment of the political system while it should beam its searchlight on political parties by establishing the parameters and modalities of their formation and operation.

He said it should start with the adoption of biometric registration for membership of political parties while the ownership of Permanent Voters Card should be a major criterion for belonging to any political party.

“In addition, the process for selection of delegates of political parties should be democratic and transparent,’’ he said.

Similarly, he suggested that the Independent National Electoral Commission (INEC) should place “institutional embargo on multiple rallies prior to elections because the conduct of numerous political rallies is usually a distraction to the incumbent government much as it also trivialises the electoral process.

He also called on INEC to reduce the number of political rallies to a maximum of two being opening and closing rallies pointing out that campaigns should rather include compliment the limited number of rallies prescribed.

mmediate past Senate Majority Leader, Ali Ndume has announced his intention to run for the office of the President of the Senate of the Ninth National Assembly, even as he is seeking the blessing of the All Progressives Congress (APC) to contest for the position.

Ndume said he is throwing his hat into the ring, believing that the position would be zoned to the North East geo-political zone where he hails from.

In a letter of intent dated March 25, 2019 and addressed to the APC National Chairman, Adams Oshiomhole, the former Senate Leader, said the decision to seek election into the exalted office was born out of his desire to help accelerate socio-economic development of the nation.

“Following the successful conduct of the 2019 general election and the overwhelming victory of our great party the APC at all levels, I hereby forward my letter of intent to contest for the office of the President of the Senate in the 9th National Assembly.

“I wish to emphasise that my decision to contest for the Senate

Presidency is informed by my conviction to contribute my quota to nation building,” the letter stated.

The ranking lawmaker, who served as Minority Leader in the Sixth House of Representatives and Majority Leader in the Eighth Senate, assured of his capacity to deliver on party policies and programmes, saying, “my vast legislative experience and my deep desire to take Nigeria to the next level of development” are reasons for contesting.

He expressed the optimism that the party leadership would zone the Senate Presidency seat to the North-East geopolitical zone where he hails from.

According to him, “This is the time to reward the zone with the position, having given President Muhammadu Buhari the second highest vote cast in the last presidential election.”

He said the position would enable him to also fulfil the aspirations of the insurgency-ravaged people of the North East whose respite came with the coming of APC government in 2015.

Other frontrunners for the top job are Ahmed Lawan (APC, Yobe), Danjuma Goje (APC, Gombe) and Abdullahi Adamu (APC, Nasarawa).

INEC had in a press statement that was signed by its National Commissioner and Chairman Information and Voter Education Committee, Festus Okoye, on March 15, insisted on continuing the result collation process.

The APC and its candidate held that unless stopped by the court, INEC would collate the pending results from Tafawa Balewa Local Government Area of the state and announce a final winner of the gubernatorial contest.

Also, counsel to INEC Taminu Inuwa (SAN), urged the court to dismiss the suit marked FHC/ABJ/ CS/299/2019, as lacking in merit.

The electoral body equally queried the jurisdiction of the court to handle the matter it said ought to have been brought before the election petition tribunal. INEC prayed the court to uphold averments contained in the counter-affidavit it filed in opposition to the suit.

OWEDE AGBAJILEKE, Abuja

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Court gives go ahead to INEC to collate, conclude Bauchi guber election Felix Omohomhion, Abuja

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Federal High Court in Abuja on Monday gave the Independent National Electoral Commission (INEC) the go ahead to collate, conclude and announce the Tafawa Belawa Local Government governorship of Bauchi State.

This is as Justice Inyang Ekwo declined jurisdiction over the matter.

The court dismissed the suit

brought by the All Progressives Congress candidate, Bauchi Governor, Mohammed Abubakar, and the party, seeking the order of the court to stop the electoral umpire from going ahead to collate and announce the results from Tafawa Belawa Local Government of the state.

INEC had earlier resolved to go ahead with the collation and announcement of the result after it had scheduled a supplementary election

for March 23.

But the Governor and APC rejected the resumption of collation and announcement of the results, praying the court to ask INEC to go ahead with the supplementary. Through their counsel, Ahmed Raji (SAN), they prayed the court to hold that INEC was wrong in its decision to resume collation of results of the governorship election which it had declared inconclusive.

The plaintiffs told the court that

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Promise not to forget that customers are human too

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o you believe that it is possible to predict the future behaviours of your customers based solely on detailed knowledge of their previous transactional behaviours with one single organisation - namely your own? Apparently, an increasingly number of organisations think it is.

Promise not to forget that customers are human too All they need do is capture all the customer behaviour data along each touchpoint with their own organisations, then ‘torture it’ using sophisticated instruments (cleverly designed computer algorithms) and voila, the future is clear! (I know that I am oversimplifying ‘big data’ to a ridiculous level, but I am doing that to expose an area of potential weakness I detect amongst some proponents of big data analytics.)

Human history is littered with ‘who would have thought...’ moments. In 1980 who would have thought that only 40 or so years later most economically active humans would be very dependent on being digitally connected through the tiny portable multi-functional digital devices they carry in their pockets. Based on expert knowledge of their intellectual disciplines, a few wise humans, perhaps some psychologists working with historians, finance wizards, philosophers, techno-visionaries, big data ana-

lysts and whoever else, might have accurately foreseen this consequence, but I do not believe a single computer would have.

This is probably because you can ‘build’ technology into humans, but you cannot build ‘what being human is’, into technology. You cannot expect technology to be intuitive and have consciousness. To make good predictions about human behaviour you need data with soul – human soul.

Yes, you must be looking carefully for successes and clues in customer behaviour data. However, in addition you must also look carefully at customer needs and perceptions. It is impossible to get such insights from behaviour data alone.

Just like you, customers are humans too. Their senses feed their minds with stimuli and based on

these stimuli, their minds form perceptions. It is their perceptions that drive their behaviours. Is it possible to write a reliable algorithm for this process using only behaviour data? Algorithms based on behaviour data cannot simulate human ingenuity, creativity, imagination and inspiration because computers cannot feel emotion and they cannot think.

Whatever you do, please do not forget that ultimately, customers are human beings and that in order to understand them you need more data than simple behaviour data. It is only by using needs and perceptions data in conjunction with behaviour data that you can begin to understand your customers and be able to predict their likely future behaviours.

–Culled from Bizcommunity

Pepsodent, NDA underscore good oral care habits among consumers

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n furtherance of commitment to promot oral hygiene, Pepsodent and the Nigerian Dental Association (NDA) have emphasized the need for children and parents to adopt good oral care habits.

This formed part of the messages conveyed to the audience at the 2019 World Oral Health Day celebration organized by Pepsodent in partnership with NDA. Commenting on Pepsodent’s contributions to global awareness on oral care, Corporate Affairs and Sustainable Business Director, Unilever Nigeria and Ghana,

Soromidayo George said: “As the official global partner of the World Oral Health Day, Pepsodent has been consistent in raising awareness about the benefits of good oral hygiene and the prevalence of tooth decay (a disease that is preventable), not only in Nigeria, but globally.

“We are committed to helping children and adults manage their oral hygiene to forestall absence from school, work and socialising.

We have communicated this effectively in the days leading to the World Oral Health Day. We will forge

ahead in this direction throughout the year.”

Speaking at the event, President, Nigerian Dental Association (NDA), Evelyn Eshikena stated, “The theme for this year 2019 celebrations: ‘Say Ahh!….Act On Mouth Health’, motivates all children, adults and the government to take tangible action towards oral health.Poor oral health can negatively affect a child’s confidence, social skills as well as potential for success later in life. Oral health is therefore, essential to a child’s general health and well-being.

Emphasizing the roles children play in promoting oral care messages, Category Manager (Oral Care), Unilever Nigeria, Toluwaleke Salu noted, “Children are change agents. They are naturally blessed with the potential to drive behavioural change among those close to them – their parents and peers.

They are influential to the Pepsodent ‘Brush Day and Night’ Schools Program, a 21- day behavioural change campaign that encourages regular brushing, day and night and transfer of this message to their parents and friends.”

@Businessdayng

Tuesday 26 March 2019

World Quality Alliance makes innovation key Issue at 2019 standards summit

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orld Quality Alliance, a global quality organization has made product and service innovation a theme for this year International Standards leadership Summit, Exhibition and Award.

The 2019 international standards leadership summit holds April 2 2019 in Lagos.

International Standard Leadership Summit is a multidisciplinary event that brings stakeholders together to discuss the contribution of International Standards of trade and commerce. International standards ensures that products and services are safe, reliable and of good quality.

According to Desmond Esorougwe, Country Director, World Quality Alliance the 2019 summit will focus on product innovation because with innovation no organisation can progress.

“As part of the event, an International Standard Leadership Exhibition will also hold on the same day. The exhibition is a professional trade show that focuses on standard products and services in all organization,” he said.

Esorougwe said that the 2019 International Standard Exhibition will give top visibility to sweeping trending innovations and excellent networking opportunity for decision makers, innovation managers, and standard solution providers.

OMD earns recognition as Global Media Agency of the Year 2019

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MD Worldwide, an Omnicom Media Group Agency, has been named Global Media Agency of the Year by Adweek, a leading media and advertising industry publication.

In selecting OMD, Adweek cited the company’s impressive turnaround performance following a very challenging 2017.

According to a statement, Adweek’s story details the comeback that took place during 2018 – a journey that saw OMD win or retain over $2.6b of business.

On the award, the Global Chief Executive Officer, OMD Worldwide, said “It is a great honour to be named Adweek’s Global Media Agency of the Year. Not only did we win more than 300 pitches across all geographies last year, but at the same time we more than doubled

our retention rate and improved our client ratings four consecutive times throughout 2018. We also remained the most medalled agency at the Cannes Lions Festival of Creativity. When you put all this together it is simply astonishing.”

Star Lager releases new TVC starring Burna Boy

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fter the landmark unveil of Burna Boy as its brand ambassador, National premium beer brand, Star Lager has unveiled its new commercial which features the afro-pop artist.

The commercial follows Burna through a photo shoot as he poses with the Star bottle and cans, and also features a very catchy hook which plays as a jingle all through the commercial.

The Star brand has been known for iconic commercials all through its illustrious years in the Nigerian beer industry. These include the now infamous Shine Shine Bobo radio ad which was brilliantly delivered by the late Theodore Austin Mukoro. Burna Boy seems to have drawn inspiration from this by infusing bits of the classic melody in his own rendition of the new Star jingle.

Over the years, Star has been unrelenting in its efforts at encouraging the Nigerians who are aspirational in their ambitions. The new theme “Celebrate the brighter side” is referenced in the new Ad as Star continues with this brand messaging across various forms of media and touchpoints.

Speaking on the release of the commercial, Portfolio Manager, National Premium brands, Sarah Agha in a statement, expressed delight on the commercial saying, “Burna Boy is an amazing talent with a very likable personality, It’s no surprise he’s been so successful in the entertainment scene. It was interesting to have him star in our TVC as we prepare our consumers for what is to come in 2019. As you can see, his performance was full of joy and energy, and we look forward to unveiling bigger and brighter content with Burna Boy.”

Tuesday 26 March 2019

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How government lethargy, inertia put N120bn Nigeria’s advertising industry on hold …APCON council should be constituted without delay …Government should recognise industry Daniel Obi

N

ational chairman of the All Progressives Congress (APC), Adams Oshiomhole, in mid-July, 2018 directed the Minister of Labour and Employment, Chris Ngige, to inaugurate the board members of federal agencies and parastatals under his ministry in one week or be suspended from the party.

Oshiomhole was quoted to have said that APC under his leadership would not continue to tolerate ministers who abuse their offices and disrespect President Muhammadu Buhari by refusing to carry out Buhari’s orders.

The parastatals and agencies in question were the Nigeria Social Insurance Trust Fund (NSITF), National Directorate of Employment (NDE), National Productivity Centre (NPC), and Michael Imoudu Institute for Labour Studies (MINILS).

As at the time Oshiomhole issued this directive, Advertising Practitioners Council of Nigeria, APCON, had been without a board for about three years running. Nine months after that directive, APCON is still without a board. The question is, why was the same directive not issued to other ministries, such as Ministry of Information to inaugurate APCON board?

Or are the implications of not inaugurating agencies’ boards not applicable to APCON? Operating without a board for over four years is severely affecting the agency. For instance, APCON is waiting for a re-constitution of its board to push for the review of APCON law, specially the Code to accommodate digital Ad monitoring and regulation.

It is against this background that digital Ad is gradually gaining ground, with some misleading information. Digital Ad is presently accounting for about 6 percent of Nigeria’s about N120 billion annual above the line Ad spend.

“When we had a council, there was a committee working on digital Ad moni-

toring and regulation to develop administrative and legal framework to assist the enforcement on digital Ads. The dissolution of APCON council stopped the committee’s work,” APCON acting CEO, Ijedi Iyoha told BusinessDay recently.

“It is a difficult challenge for us now but the only thing we do is look at the social media and those we know we write to them on any infringement. When we have a council, we will push for the review of APCON law” she added.

On other functions that APCON cannot perform well without a board, Iyoha said the issue of installing new fellows had not been done, stressing that there are so many people on the queue. Also, APCON has not held Advertising Day, which is a big forum for all stakeholders in the advertising industry. The day involves the delivery of lectures by renowned practitioners and the giving of awards.

Thirdly, there are no disciplinary committees to sit on the cases of practitioners.

“What we do in this instance is to write to the defaulting members.”

The Buhari administration in July 2015 dissolved the board of APCON alongside the boards of other agencies and parastatals.

However, up until now, APCON, which regulates Nigeria’s Advertising industry, has no council.

The implication of this, according to experts, is that the industry is not moving the way it is supposed to move. There are some re-

“

forms that probably would have come on board by now and there are some that would have been enforced, but all these are not happening.

Nigeria’s advertising industry is segmented and it is not sure what the industry is doing collectively or within their groups to ensure their apex body council is constituted. “They may be enjoying the situation,” an observer said.

When Ikechi Odigbo, President of the Association of Advertising Agencies of Nigeria (AAAN), took oath of office late last year, he outlined the new direction for the body under his leadership to include pro-

The industry needs to educate government on its relevance to the wellbeing of the economy. This will ensure the re-constitution of APCON council and pave way for agencies’ engagement in public service

fessionalism and prestige of the AAAN. He also pledged to push for the proper constitution of the Advertising Practitioners’ Council of Nigeria (APCON) Council and push strongly for reforms through intense lobbying and leveraging influencers with the regulatory ministry and other relevant government institutions. Since then, it is not clear how far his administration has gone to these promises.

2019 political campaign The ruling political party and the others continued with such levity and disregard of the advertising industry during the 2019 political campaigns. Much of the campaign jobs did not go the professionals operating in the advertising industry.

Unlike in the events leading to 2015 elections when multi-billion Naira campaign messages passed through the traditional media, it was different for the above- the-line media in the political campaign for the forthcoming 2019 elections.

With the belief that the 2019 elections will be similar to 2015 when PDP and APC, two leading parties spent about N4 billion in adverts on traditional media alone, various media organisations positioned for such business, but they got disappointment.

A report by Compliance

and Content Monitoring Limited, CCM, a technology player in media monitoring in Nigeria had put 2015 presidential elections media advertising spend

by PDP and APC on Abovethe-Line communication platforms at N3.23 billion.

But this time, the traditional media lost out as below-the-line operators reaped the campaign funds.

Above-The- Line (ATL) advertising is where mass media such as television, radio, print and internet are used to promote messages. The messages are targeted at wider audience.

On the other hand, Below- the-line (BTL) advertising involves one to one, distribution of pamphlets and banners usually on the roads.

Assessing the trend, Kayode Oluwasona, former president of Association of Advertising Agencies of Nigeria (AAAN), agreed that campaign funds in 2019 did not go to ATL media and to agencies who are professionals.

He said that the politicians were rationalising expenditure as they were employing least-cost producers and printers for their jobs but what they got was disappointing quality of campaign materials.

He regretted that most politicians did not derive value for the little they spent

because they did not use professionals in their communication.

Tola Bademosi, the CEO of BD Consult, a top PR firm based in Lagos, said that the politicians changed game pattern with more involvement of grassroots mobilisation.

He said for instance, APC strategy this year was door to door approach, with funds moving to those agencies that handled this area. According to him, people realised that 2019 election was different from the past. Pointing out that it was more of one on one, he argued that it would be difficult to calculate the amount spent on political campaign in 2019.

Synergy needed by operators It is clear now that operators in the industry need to first come together and strategise on how to reposition the industry. Without this, and if the private sector behaves like the public sector, then the industry is headed for danger.

The industry needs to educate government on its relevance to the wellbeing of the economy. This will ensure the re-constitution of APCON council and pave way for agencies’ engagement in public service.

Alternatively, practitioners can create an institute for the industry while APCON can run as a regulatory. APCON was established by an Act 55 of 1988 and Act 93 of 1992. The provisions of Act 55 of 1988 are not significantly different from the Act establishing many professional institutes but APCON Act, however created a Council rather than Institute.

The difference, according to experts, is that whereas Institute is strictly a professional body, a council has the dual role of a practice regulation as well as professional body.

As it is, APCON has to remain as a government agency if it has to be effective and successfully carry out its functions of regulating the advertising industry. Practitioners in the industry should not allow government lethargy, inaction and disinterest to derail the course of the profession.

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What replaces Emefiele at the Central Bank?

I

OGHO OKITI

n the coming weeks, President Muhammadu Buhari will announce to leave Godwin Emefiele in his position as the Central Bank of Nigeria (CBN) governor for another term of five years or appoint a successor.

Since the CBN Act of 2007, no governor has been reappointed; so many analysts believe the President will announce a replacement for Emefiele. Indeed, while Chukwuma Soludo completed his term, President Goodluck Jonathan removed his successor Sanusi Lamido Sanusi before the end of his term.

Despite plenty rumours as to who occupies this seat in the coming five years, it is not the focus of this piece.

The focus of this piece is “what”, and not who replaces Emefiele. Coincidentally, BusinessDay published the governor’s speech yesterday (see page 51), which helps in providing context to this piece.

I will provide four further contexts, but bear in mind that this is not a comparison of the performance of CBN governors, which is difficult to do given that that performance relies on two variables outside their control – their bosses and oil price.

First, the management of the foreign exchange reserves and the value of the naira. In the BusinessDay’s article cited

above, the governor said, “As the pressure increased in the foreign exchange markets, the CBN in April 2017, announced a strategy to further liberalise the market with the introduction of the investors and exporters window”.

However, while this policy is a defining moment in his stewardship, it was because he was under pressure from the President that he maintained an unsustainable foreign exchange in 2016.

As Charles Robertson, Chief Economist at Rencap said in his piece published earlier this month “thoughts from a Renaissance man” and I quote “after two years of acute FX shortages, in Q2 2017, the CBN introduced a market friendly exchange rate for investors.

Portfolio investors had greatly reduced their net inflows to just US$ 1.3 billion in 2016. The new FX rate led to a big jump back with a full year US$ 5.3 billion inflow in 2017”. The recession of 2016 cannot therefore be explained as an irretrievably outcome of the fall in oil prices, but an outcome of the disastrous policy at the time, especially given that the same governor wisely adjusted the FX rates twice in the preceding 6 months of President Buhari’s presidency – November 2014 and February 2015.

Second is the continuation of the special intervention funds started mostly by his predecessor Lamido Sanusi. As the governor argued in his piece “we increased our lending to the agricultural and manufacturing sectors through targeted intervention schemes such as micro, small, and median enterprise development fund (MSMEDF), Anchor Borrowers programme, commercial agricultural credit scheme and the real sector support facility”.

As a matter of principle, these are

laudable initiatives. However, there is no doubt that these policies have become virtually permanent government subsidies outside of the government balance sheet, with semblance of unlimited scope, no plan towards an end, and most importantly, the public is at a loss if the programmes are achieving their set aims. This is important especially since it is common knowledge that the repayment ratio is abysmally low. So, what replaces Emefiele is important (and that could be him doing things differently), but these policies need review and more transparency.

Third is the handling of the banking institutions. While this is one aspect many will not remember, it is to his credit that there has been no major drama here. Nigerian banks suffer anytime following decline in oil prices. First, they suffer from exposures to the oil sector.

Second, they suffer from devaluation of the Naira because of their exposures to foreign currency denominated loans.

Third, they suffer as a result of increase in non-performing loans that arise following declining economic performance.

In 2010, Lamido Sanusi treated it differently and sacked a number of CEOs. Undoubtedly, it was popular at the time, but it destroyed the value of the banks, and they were eventually sold or merged with stronger banks. But it was drama.

Emefiele did the same with Diamond Bank and a stronger Access bank is acquiring the bank after the same kind of crisis. Good monetary policies are usually boring.

Fourth, there will also be the need to assess how the bank acts as the last lender of resort to the government. This has assumed a greater level of significance given the increasingly reliance of

‘

… there is no doubt in my mind that successive Central bank governors have failed to convince their principals in government that there is what we can call the right economic policies

the federal government on the Central bank for funding, and the shrinking ability of the government to borrow if oil prices remain at the current trend.

Godwin Emefiele, perhaps conscious of the economy has obliged the government considerably in the last four years, but it has severe implications for the economy. And in order to keep supporting the inflow of foreign exchange, stabilize reserves in the face of government’s excessive borrowing, and control inflation, the bank has kept the monetary policy rate high at 14%.

As I conclude, there is no doubt in my mind that successive Central bank governors have failed to convince their principals in government that there is what we can call the right economic policies. Some have also used this gap in fiscal policy to broaden their scope and powers. The broadening of the intervention funds are good examples of that. But most of them are motivated by the failing gaps in fiscal policies. And if those at the apex bank will be willing to admit the truth, the reason most of the intervention funds have achieved so little is because the fiscal dimensions of these problems cannot be solved by mere credit subsidization. So, as a country, and as the next CBN governor, their needs to be a sincere evaluation of the role of the bank in these measures.

In conclusion, it is therefore not about who replaces the governor or whether the governor remains, it is about what policies will replace those pursued in the last four years.

I thank you.

Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

New governments: And what next?

PROPHYLAXIS

AYULI JEMIDE

E

lections are basically over and now it is time for governance. Whether the federal or a state government is helmed by PDP or APC the issues plaguing our country – many of which have been plagues for decades – still need to be fixed.

At the risk of sounding like a scratched record we must highlight these problems.

These problems did not vote for any party even if some of them formed the basis for campaigns. Some of these problems like the power situation are glaring and encountered daily. There is a power cut in 80% of homes in Nigeria at least once a day. Power still needs to be fixed and the politicians must keep their promises. The unemployment rate has a lot of statistics flying around. We don’t need statistics to know that people are unemployed. Just look around your family and friends or check how many people vie for one position each time there is a job interview advertised. The thousands of people that trooped out to apply to be one of the housemates at Big Brother Nigeria 2019 auditions tells a story.

University lecturers were on strike for months heralding the fact that our University system is in shambles and has been so for decades. Just to put this in context there are 75,000 Nigerians in school in Ghana. Nigerians spend 300 Billion Naira per annum sending children to school in Ghana. At 75,000 students it would be 4million Naira per annum per student.

To put this in context, note that the total budget of Taraba State is 146 Billion Naira and the proposed budgetary allocation for education in the 2019 budget before the National Assembly is 462 Billion Naira. So, we can see that this is a lot of capital which should stay in Nigeria. If we included what Nigerians spend for children in school in the UK and other countries the sums would be mind boggling.

Let us think for a minute what these moneys can do for our economy if students schooled in Nigeria instead. Universities and all tertiary institutions need urgent attention by the government irrespective of party. On a related note UNICEF has ‘’blessed’’ Nigeria with the emblem of having the highest number of out-of-school children in the world - a total of 13.2 million children accounting for one in every five out of school children in the world.

Talking about emblems we seem to have several; the Brooking Institute has recently named us the Poverty Capital of the world.

We took the trophy from India. These are surely not nice badges to wear for a country that has so many hardworking people and abundant natural resources. Public health care is virtually non-existent and health insurance for the poor in our midst is still a pipe dream. It is important to note that in 2014, a total of 28, 139 doctors and

‘

It seems that what Nigeria has been blessed with in natural resources and talent we have lost in visionary governance

1375 dental surgeons were issued with practicing licences, which constitutes the approximate current total stock of 29,514 medical practitioners in Nigeria. Reports have it that there are currently about 5,000 Nigerian medical doctors currently practising in the United States, and we have not included doctors in Saudi Arabia, UK and other places. So, Nigeria does not lack the most important aspect in the medical profession – the human capital. We just need to get the infrastructure right. Would we be talking about progress made by any government by 2023? Or healthcare would still be in the doldrums? On the monetary policy side, we have a double-digit inflation rate of 11.37% and FX rate at USD 360 being the new normal. Any responsible government needs to be concerned about these even though it is within the purview of an independent Central Bank. We expect a new Central Bank governor to be announced before June this year and any responsible government should be shopping for an economist (not a banker) to helm the affairs of the Central Bank if these issues are to be addressed.

GDP growth currently at 1.95% per annum (GDP growth was 6% years ago) shows that the domestic business climate is contracting and needs to be addressed urgently. The current unofficial news that Value Added Tax may be increased is perhaps not a good way to go because increasing taxes in a contracting economy cannot be the solution. We should look to expand the pie instead by ensuring more businesses are thriving and more people come into the tax net.

For those of us who have lived in Nigeria long enough, majority of these issues

raised are not new. Some have gotten better, many are worse. But all of them are still not at par with citizens expectations and worldwide standards. Government in and government out these issues perennially make the headlines – promises are made but business is as usual. It seems that what Nigeria has been blessed with in natural resources and talent we have lost in visionary governance. Every examination has a pass mark – below the pass mark is a failure. No excuses! Every responsible company has targets and goals – not achieving the set target is failure. No excuses! I therefore posit that every good government should publicly declare their targets in every sector and should be held accountable. Where they fail, we should make no excuses for them. We should take a cue from Finland, were the Prime Minister Juha Sipila stepped down after a reform of the health care system failed.

I know it is not our culture in Nigeria to admit failure and resign, but as citizens we can demand the resignation of any government who fails to keep their promises. Even if they don’t resign, we should demand it continuously to keep them on their toes. We cannot bequeath to the next generation these same conversations about power, poverty, health care and the rest of it. The thought that our children and grandchildren may continue to have these same conversations about basic issues in the years to come is dreadful.

Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer.

Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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