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Zenith Bank, Stanbic IBTC, FBN Holding, UBA, SFS Capital, CDL, others win big in BusinessDay’s BAFI awards 2018 BUNMI BAILEY

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enith Bank, Stanbic IBTC, First Bank of Nigeria (FBN), United Bank for Nigeria (UBA), SFS Capital Holdings Nigeria Limited (SFS Capital), Credit Direct limited (CDL), among others, were the biggest winners at the 2018 BusinessDay’s Banking and Financial Institutions Awards (BAFI) held at the weekend.

The fun and glamour of event, which took place at Lagos Continental Hotel in Victoria Island, Lagos State, was graced by Shehu Muhammed, a representative of Lamido Sanusi, Emir of Kano, Tunde Coker, CEO, Rack Centre, Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Businesses Law (NBA-SBL), Lucy Newman, MD, Continues on page 42

Inside Insurers face stringent regulation as NAICOM cancels Tier-Based capitalisation P. 2 I will restructure Nigeria, build egalitarian society P. 31 – Fela Durotoye

L-R: Olaitan Aworonke, executive director, Omoluabi Mortgage Bank plc; Remi Oni, executive director, corporate banking, First Bank; Caroline Anyanwu, deputy managing director, Diamond Bank plc; Yinka Sanni, chief executive, Stanbic IBTC Holding plc; Sheu Mohammed, Sarkin Kano, representing Emir of Kano; UK Eke, GMD, FBN Holdings plc; Denis Olisa, executive director, Zenith Bank; Frank Aigbogun, publisher/CEO, BusinessDay Media Limited; Bayo Ajayi, chief finance officer, Rand Merchant Bank; Aliyu Abdulhameed, MD/CEO, NIRSAL, and Anant Rao, group executive, digital and consumer banking, UBA, at the BusinessDay Banking and Financial Institutions Award in Lagos, weekend. Pic by Pius Okeosisi

FG running out of cash as MDAs feel the pain T

LOLADE AKINMURELE

he Federal Government is finding it difficult to raise money to fund its operations and its various ministries, departments and

agencies (MDAs) are beginning to feel the pain.

Sources told Business Day that most federal government agencies are operating on shoe-string budgets, struggling to pay salaries and have not accessed more than 10 percent of

their budgeted capital expenditure for the year.

The precarious state of the government agencies piles pressure on an economy still recovering from a recession.

Nigeria’s economy is forecast to expand by only 2 per-

cent in 2018, below an average population growth rate of about 3 percent.

“The public sector is a catalyst for business activity in Nigeria, so when the agencies are

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Naira falls as Brent crude hits one-year low …to impact reserves …CBN to maintain tight monetary policy HOPE MOSES ASHIKE, ISAAC ANYAOGU & STEPHEN ONYEKWELU

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he Nigerian naira fell against the US dollar over the weekend as Brent Crude, the international benchmark was down 5.9 per cent to $58.9 a barrel, its lowest point since October 2017.

From its most recent peak in October, it has fallen more than 30 per cent.

A visit to the Murtala Mohammed International airport Lagos shows that dollar was scarce at all the Bureau Du Change (BDC) retail outlets.

“No dollar. Dollar is scarce. It is not our fault,” one of the retailers said.

Walking around, BusinessDay met a street trader who said, “Dollar is scarce.

How much do you want to buy? The price is high now. It is N367/$”.

This is coming after the BDC operators numbering 4,250 across the country on Wednesday received about $85 million from the Central Bank of Nigeria (CBN) as part of their weekly allocation.

The CBN sells $20,000 three times in a week to each BDC operator in the country. The CBN on Wednesday injected a total of $210 million into the foreign exchange market.

The global oil market is still reeling from a supply glut, with the possibility of sending jitters across the economy of oil producing nations including Nigeria.

The declines further piled pressure on OPEC ahead of a keenly anticipated meeting between the influential oil cartel and its allies in Vienna on Dec. 6, where they are expected to announce an output cut of between 1.4 and 1.6 million

barrels per day.

Analysts say it may be early for Nigeria to panic but signs of trouble are gathering in the horizon.

“It is still early to call though because the bearish oil market is due to fears of oversupply in the market.

However, with OPEC looking to cut supply by 1.4 million barrels per day, oil prices might rally. We do not expect to see $79 - $80 rally though,” Olumide Adeosun, director for energy at PricewaterhouseCoopers (PwC) advisory said on phone.

Any sustained decline in oil prices will be painful for Nigeria which just emerged from an oil induced recession, and whose Federal Government gets 70 percent of its budget, and 95 percent of dollar earnings from proceeds of oil sales.

The CBN has already seen its reserves slide from a high of $47.25 billion in July to $45.90 in August; down to $44.45 billion in September and $42.13 billion in October and $41.52 billion as at November 22.

Jubril Kareem, head of energy research at Ecobank said “The major impact will be on government revenue which will reduce but if you look at historically, the amount we always budgeted for crude oil prices, this current prices at $59 is above the level, higher crude oil prices is always a good thing as it helps improve government revenue.”

Nigeria’s Medium Term Expenditure Framework (MTEF) and fiscal strategy paper of November 2018 assumes oil prices will sell at $60 per barrel. Analysts say it is way off.

•Continues online at www.businessdayonline.com

FG running out of cash as MDAs feel...

Continued from page 1

hampered by lack of funds in

performing their critical functions, it affects business and the private sector, and rubs off negatively on the economy,” said Taiwo Oyedele, a partner and head of tax and regulatory services at Price Waterhouse Coopers (PWC).

One of the critical agencies struggling for funds is the National Bureau of Statistics (NBS), which has not been able to release unemployment numbers since the last quarter of 2017 because it has not received enough funding to collate the data.

As seen in its data release calendar, the agency, was scheduled to release the Q4, 2017 labour force report on January 19, 2018 but has not even commenced the survey due to lack of funds.

A paucity of the NBS reports will make it difficult for evidence based decisions that guide policy implementation and evaluation as well as business decisions by investors.

Reliable sources at the statistics office say only 25 percent of their funds have been released to the statistics office for this year’s capex, while overheads have not been paid for about five months now.

“It is not an NBS issue alone, it is across the agencies, but we hope that things will be sorted out soon

by government,” the source who did not want to be mentioned told BusinessDay. As at October, total releases for capital expenditure stood at just N486 billion, as against the budgeted N2.86 trillion.

This represents a mere 17 percent outturn as low revenue means the government lacks the cash to implement its budget.

The third quarter economic report of the Central Bank of Nigeria (CBN) shows the federal government is experiencing a significant shortfall in revenues, which has been compounded by the fact that it is spending more money paying its creditors than running the government.

Total federal government revenues for the first nine months of 2018 stood at N2.75 trillion, just about half of projected revenue.

The federal government’s expenditure for the same period stood at N3.7 trillion, which also represented a 27 percent shortfall (N1.34 trillion) compared to the N5.04 trillion that should have been spent within the period, as the government cut back on its expenditure because it is not able to raise enough revenues.

A further breakdown of the federal government’s expenditure for

Continues on page 42

L-R: Bambo Adebowale, chairman, Automobile and Allied Group of Lagos Chamber of Commerce and Industry; Jelani Aliyu, director-general, National Automotive Design and Development Council (NADDC); Ajibola Adedoyin, national president, Auto Dealers Association of Nigeria; Tinuola Ipadeola, senior manager, KPMG; Okechukwu Enelamah, minister, industry, trade, and investment; Frank Aigbogun, publisher/CEO, BusinessDay; Thomas Pelletier, country manager/MD, CFAO Group, and Andrew Nevin, partner/chief economist, PwC Nigeria, at the 2018 dialogue with the minister, industry, trade, and investment, with the theme “Developing the Nigeria Auto Industry Across the Entire Value Chain” in Lagos, weekend.

Pic by Olawale Amoo

Insurers face stringent regulation as NAICOM cancels Tier-Based capitalisation MODESTUS ANAESORONYE

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nsurance companies may face stricter regulations in terms of solvency standards going forward, a fall out from some operators being resistant to reclassification under the Tier-Based Minimum Solvency Capital (TBMC) earlier proposed by the National Insurance Commission (NAICOM).

In this sense, companies will be restricted to certain areas of the business based on their capital, without recourse to any new policy statement, Business Day latent from an insider source.

A source close to the regulator who preferred not to be mentioned said in the days ahead, NAICOM is going publish claims owed by companies and mandate them to pay within a specific time or face bigger sanctions.

Mohammed Kari had told BbusinessDay in an interview a month ago that “Law or no law, nothing

says I cannot forbid a company from doing a business which he doesn’t have the finances for. We have been doing it and will continue to do it.

Law or no law, policy or no policy, it is an inherent duty of a regulator to do that.”

NAICOM on Friday said “pursuant to the powers conferred by the enabling laws, the Commission hereby withdraws and cancels the Circular dated August 27, 2018 with reference number NAICOM/DAPCIR/14/2018 and titled Tier Based Solvency Capital Policy for Insurance Companies in Nigeria.”

According to the Commission in the circular sent to all insurance companies and signed by Pius Agbola, director, Policy and Regulation on behalf of the commissioner for Insurance, “This withdrawal and cancellation takes immediate effect.”

NAICOM had on October 18, 2018 suspended the policy, di-

recting that the status quo will be maintained and insurers are to continue to operate on the subsisting regulatory framework prior to the circular, pending the determination of the suit filed against the policy by a group of shareholders.

The commission also said in that statement that appropriate regulatory directive would be advised upon conclusion of the suit, before the latest circular on Friday.

A federal High Court had on September 13 ordered NAICOM to stop the implementation of its proposed minimum solvency capital policy scheduled to take effect on October 1, 2018 pending the expiration of a 30-day pre-action notice.

Under the cancelled Tier-Based Minimum Solvency Capital (TBMC) , Tier 3 companies were those that fell within existing paid up capitals of N2 billion for life business; N3 billion for non-life business and N5

Continues on page 42

Treasury bills, forex drive N13.35trn OTC Fixed Income, Currency market turnover IHEANYI NWACHUKWU

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reasury Bills (T. Bills) and Foreign Exchange (FX) transactions remained the major drivers of a record N13.35trillion turnover seen last month in the Over-The-Counter (OTC) fixed income and currency (FIC) market.

The turnover in the Fixed Income and Currency market for the month ended October 31 represents a decrease of 19.81percent or N3.30trillion month-on-month (MoM) as against the turnover of N16.65trillion recorded in September.

Year-on-year (YoY), the record N13.35trillion turnover in the FIC market represents 9.60percent increase or N1.17trillion when compared with same period last year, according to FMDQ OTC latest monthly report.

Treasury Bills (T. Bills) and Foreign Exchange (FX) turnover jointly accounted for 73.98percent

of the Fixed Income and Currency turnover in October, despite being lower by 5.02 percentage points from their level of contribution in September (79percent).

The total T. Bills and FGN Bonds outstanding recorded month-onmonth increases of N210billion and N100billion respectively to close at N12.87 trillion and N8.21 trillion as at October 31. Also, the domestic debt mix by tenor as at October was 39:61 (long versus short term) as against the planned ratio of 75:25 outlined in the Debt Management Strategy (2016 -2019), according to the report seen by BusinessDay. Monthly Trading Intensity in the T.bills and FGN Bonds markets decreased from 0.52 and 0.17 in September, to 0.40 and 0.09 in October respectively. YTD trading intensity in both markets stood at 4.39 and 1.29 respectively compared to 5.70 and 1.17 as at the same period in 2017. T. Bills within the 6-12 months maturity bracket

remained the most actively traded, accounting for 24.82percent of the total Fixed Income market turnover in October.

The total FX market turnover in October was N4.55trillion ($12.52billion), representing 34.08percent of FIC market turnover and a 31.62percent ($5.79billion) MoM decline from the turnover recorded in September ($18.31billion).

Turnover at the Investors & Exporters (I&E) FX Window recorded a 37.94percent ($2.9billion) month-on-month decrease to close at $3.91billion from the $6.30billion recorded in September. Year-todate (ytd) turnover at the I&E FX Window closed at $49.39billion as at October 31, 2018.

The decrease in FX turnover in October was largely attributed to the decline in Member-Clients and Member-CBN trades (32.82percent and 40.71percent respectively)

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“XKPMG” (the global brand)

Bashorun J.K Randle Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

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he retired partners of KPMG who are still awaiting their gratuity and pension delivered a masterstroke by hiring Grant Advertising Nigeria to launch it as the latest entrant into global advertising.

The timing was most propitious and auspicious – at the 48th Institute of Chartered Accountants of Zimboda’s conference in Abuja. “XKPMG” painted the town red – the likes of which had never been witnessed by the sleepy town where, according to the explorers Dr. David Livingstone and Henry Morton Stanley, the civil servants and politicians go to bed at 1 am and wake up at 1 am the following day!

Regardless, all over town were intimidating billboards with shimmering neon lights.

As we weaved our way into town from Nnamdi Azikiwe International Airport, we were confronted with a giant statute of the Nobel Laureate professor Wole Soyinka with a cryptic message. “The Man Died” What followed in quick succession were the following billboards: Edward Kallon (United Nations Resident Coordinator):

“The government must seriously look into circumstances leading into bloody communal clashes which have become too common (like a recurring decimal). The United Nations appeals to all stakeholders to (immediately) commence processes which would amicably address their underlying causes and bring the perpetrators to account.”

LekanShonde “I Didn’t Kill My Wife, I Only Slapped Her” Professor Olabode Lucas/ “Washington Post” newspaper “Democracy Dies In Darkness” Richtopia (Digital Magazine) “Alhaji Aliko Dangote, President of Dangote Group is the sixth most charitable person in the world, after: - Warren Buffet (Chairman& CEO, Berkshire Hathaway) - Bill Gates (Co-founder of Microsoft) - J.K. Rowling (not J.K. Randle!!)

Author of the Harry Potter books.

- Oprah Winfrey (Media Executive/ Talk show Host) - Elon Musk (Founder, Space X&CEO Tesla Inc.) Tony Elumelu (Chairman, United Bank for Africa) “Zimboda’s Economy Is Heading In The Right Direction” Cardinal Anthony Olubunmi Okogie “We are in danger today because politics is separated from morality.

Instead of working for the common good our politicians, with very few exceptions are working for their selfish interests. Their primary objective is how to get into power and how to remain in power. This kind of politics is a breach of security and an impedi-

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When politicians divorce politics from morality, it would be irresponsible on the part of religious and traditional leaders who ought to be custodians of values to leave politicians to set this country ablaze

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ment to development.

When politicians divorce politics from morality, it would be irresponsible on the part of religious and traditional leaders who ought to be custodians of values to leave politicians to set this country ablaze.”

His Royal Highness Oba Babatunde Ajayi, FCA (The Akarigbo of Remoland) “My Reign Will Be DevelopmentDriven” Godwin Emefiele (Governor of The Central Bank) “Forex Restriction On 41 Items Saved Zimboda’sEconomy” Olusegun Adeniyi (Chairman, Editorial Board of “ThisDay” newspaper

“The conflicts in Kaduna, like in several other theatres across the country, have become pervasive principally as a result of the politicisation of accumulated grievances. To put the brakes on the violence there is the need to checkmate all appeals to hate and guilt by association. At the end of the day, all contending parties must come to the sober realization that they have nothing to gain and so much to lose under a state of perpetual hostility and enmity. In many of the communities where you have the kind of violence being witnessed in Kaduna, the local economy has crashed while the poverty and deprivation that such state of affairs breeds are in themselves a serious threat to national security.

Indeed, if there is anything that the Kaduna tragedy teaches it is that the government, at all levels, must begin to invest heavily in education and other initiatives that will create economic and employment opportunities for our teeming youths. Kaduna is populated mostly by young people and it is from this group that the entrepreneurs of violence mobilise their army of killers.

Nnamdi Kanu: “I have returned full-time and I am coming home and I will bring hell with me. The Army of the zoo killed my dog Jack and a few other people in my compound.”

Alhaji Femi Okunnu, SAN (former Federal Commissioner for Works and Housing) “We need to return to 1963 Constitution to get it right. We don’t have leadership with patriotism; we don’t have patriots at the helm of affairs; we don’t have those who are patriots.

We lack that sort of leadership. There

are good ones among them but they are very few. We don’t have people who are patriotic enough, who have the love of the country and who have a mission to create an economically strong country to lead this nation. We need a country or leadership which will have the feel of the people of this country, a leader who will understand the people of this country, who will understand what people want. We don’t have them. We have people who are interested in how much they can steal from the public pockets or exchequer. They are more interested in how much money they can rake out legitimately or illegitimately. That is our biggest problem.”

“Daily Trust” newspaper “If a donkey kicks you and you kick back, you are both donkeys.”

President Muhammadu Buhari, GCFR “My administration will continue to fight corruption. For this administration, fighting corruption is nonnegotiable. It is a must. We must fight corruption frontally, because it is one of the reasons we got elected. We campaigned on three fundamental issues: • Security • Reviving the economy and • The fight against corruption We cannot afford to let our people down.”

The Olu of Owu, Oba AdegboyegaDosunmu “I call for peaceful co-existence amongst all Zimbodians, irrespective of tribe or creed, as peace and unity are key ingredients for progress in any community.”

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Import substitution, and then export diversification

Gregory Kronsten Head, Macroeconomic & Fixed Income Research FBNQuest

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ne arm of the diversification agenda is to broaden the export base. As ever, we open with a few statistics. The balanceof-payments series from the CBN shows that products other than crude oil and gas represented just 7.7 per cent of merchandise exports in 2017. We should, however, extend the net to include all current-account receipts. On this basis, oil and gas provided 61.1 per cent of the total, current transfers (principally remittances) 30.0 per cent and non-oil/gas products just 4.7 per cent.

The top five exports in this last group by value in descending order may come as surprise: petroleum products, cocoa beans, urea, sesame seeds and tobacco.

The same source has a table with the leading exporting companies by value: this is headed by British

American Tobacco, Olam, and Indorama ElemeFertiliser and Chemicals.

The authorities could do more to promote export diversification.

A starting point would be the settlement of arrears on promissory notes due under the export expansion grant (EEG). The claims have been subjected to an independent audit, and amount to N1.2trn according to the local media. The exporting sector, as the rest of the economy, would benefit from faster turnaround at Nigeria’s ports, improved roads, increased power supplies and much more. It is more likely to invest where the soft and hard infrastructure for its needs is in place, a good example being companies established in theLekki Free Trade Zone in Lagos State.

The poor infrastructure cannot be the only obstacle. If it was, why have other leading oil producers in the developing world struggled to diversify their economies? The government targets and plans are in place yet delivery has lagged. The cases of Russia and Saudi Arabia, and, closer to home, Algeria and Angola spring to mind. Historically, the tendency for such governments has been to collect the large tax revenues from the oil industry, make a few spending cuts when the crude price plummets and

import what the country does not produce.

This is no longer a viable option because of rapid population and unemployment growth, and rising popular expectations (fuelled in part by the internet and social media).

Export diversification should involve the processing of raw materials wherever possible. The Ghanaian president, Nana Akufo-Addo, likes to make this point with the following observation: Côte d’Ivoire and Ghana together account for 65 per cent of global cocoa output but together earn about US$6bn from sales of the product per year when the international chocolate industry turns over about US$100bn annually. The comparable figures for sesame seeds, which have developed into an important employer in northern Nigeria, are not available but the benefits from a boost to value added are clear.

The gains in employment, incomes,skills transfer and government revenues as a result of processing are obvious. Exporting unprocessed goods also runs the risk of falling foul of non-tariff barriers. Earlier this year the FGN was trumpeting the growth in exports of hibiscus flowers to the US but more recently we have read that trade in the crop with Mexico has been halted due to some shipments of poor quality goods. Palm oil producers in Nigeria are serving

the domestic market above all but will be aware of the EU’s stance on sustainable production and related import policy.

We support export diversification where Nigeria enjoys comparative advantage, particularly when products are processed.

However, it should not detract in the allocation of government time, incentives and resources from import substitution. Trade data on a customs basis from the National Bureau of Statistics support the argument. Imports of agricultural goods and other oil products amounted to N890bn and N2.67trn respectively in 2017 out of a total of N9.56trn. In passing, we note that officials have been known to cite much higher figures for agricultural imports.

(On the export side, goods other than oil, gas and related oil products totalled just N630bn out of N13.60trn.)

The Dangote refinery in Lagos State, when completed in 2020 according to the Group’s founder, will transform the trade in oil and related products. There are the additional benefits for employment and the infrastructure, as well as the possibility that other investors will build their own refineries.

Once it has met domestic demand, Dangote intends to become an exporter of petroleum products and fertilizer to the sub-region over time.

The challenge in making savings on imports of agricultural goods is far greater than on oil products. There has been substantial investment in rice growing and milling, supported by the CBN’s anchor borrowers’ programme.

New local brands have been developed and imports from Thailand have crashed. Yet estimates from the US Department of Agriculture suggest that Nigeria will again be the second largest rice importer globally in 2019. Smuggling from Benin and other neighbouring countries have soared, and the product is cheaper than the local brands. The domestic fish industry has a similar story to share. This underpins out argument about the allocation of government resources and incentives.

Nigeria is not alone in its struggle to diversify away from oil. Years of official indifference to the nonoil economy have created many hurdles. It is in a worse position to meet the challenges than the other oil producers we cited(other than Angola) because its budget is much smaller. This brings us back to another subject of our columns, the paucity of its non-oil revenue collection.

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Hello IMF – Nigeria calling soon

Anthony Osae-Brown For feedback, send Whatsapp message to 08152060502

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ne of the toughest decisions whoever wins the 2019 presidential elections will have to make is to decide when to put a call through to the International Monetary Fund (IMF). The IMF is not much liked on Nigerian streets but there is a high chance that we will have to call them in next year to help stabilize the country’s finances which really looks in a bad shape currently.

In the last three years, the federal government has more than doubled expenditure, first in a bid to avoid recession and later to spend its way out of the 2016 recession. The outcome has not been positive in anyway. Economic growth has remained marginal and instead debt has piled up in a way that is beginning to threaten the government’s financial stability.

The difficult situation of the finances of the federation as a whole is seen in the budget performance report of the 2018 budget as at August 2018 contained in the 2018 Medium Term Expenditure Framework (MTEF) for 2019 to 2021 presented to the National Assembly. The MTEF shows that total revenues available for distribution

from the federation account as at August 2018 was N3.94 trillion. This represented a shortfall of about N2.0 trillion when compared to the projection of N5.94 trillion that was expected for the federal government and states to share in the period. The shortfall in the inflows into the federation account meant that all tiers of government shared less money than they hoped to get for the period.

The federal government alone, for the period to August 2018, got N2.3 trillion less money than it hoped to get. Total revenues for the eight months to August 2018 for the federal government was just N2.48 trillion when compared to the projected N4.78 trillion that it had hoped to rake in to support its funding obligations.

Faced with the significant shortfall in revenues, the government had to cut back on its expenditure.

As at August, total spending by the federal government stood at N3.4 trillion. Even though this is N1.7 trillion more than the revenues of N2.48 trillion for the period, it is N2.44 trillion below the planned expenditure of N6.08 trillion for the period. This means that the government has had to cut back on a lot of planned expenditure for 2018 due to the continuing shortfall in its revenues.

But a deeper look at the figures shows that it is mainly capital expenditure that is being cut back on. As at August, total capital expenditure was just N4.38 billion, an insignificant amount, considering that the federal government planned total expenditure for 2018 is N2.8 trillion. But the MTEF docu-

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Chances that government revenues could improve going forward are slim. Nonoil revenues, which the government has been hoping to boost, has not shown as much growth as the government has hoped

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ment also explains that allocation to capital expenditure has increased to N486 billion as at October 2018, which is just about 17 percent of the government’s planned expenditure and or just 5.34 percent of the N9.1 trillion 2018 budget.

Two big ticket non-discretionary items consumed the federal government’s N3.64 trillion expense for the period. These were personnel cost, which was mainly the payment of salaries and the other was interest payments on the government increasing debt profile. Interest payments for the first eight months alone was N1.54 trillion, which was more than the N1.3 trillion that the federal government earned from oil for the period. Non-debt recurrent

expenditure, which includes N1.2 trillion personnel cost, stood at N1.6 trillion. Recurrent expenditure is now three times oil revenues, which in the period accounted for 54 percent of the federal government’s actual revenues.

Debt servicing cost consumed 63 percent of all federal government revenues in the first eight months of the year. After deducting debt service cost from revenues, the government was left with just about N1.0 trillion, which is N200 billion less than the N1.2 trillion personnel cost bill for the same period and N600 billion less than total non-debt recurrent expenditure for the period.

So after covering its debt service cost, the government had to borrow a minimum of N600 billion to finance non-debt recurrent expenditure even before thinking of capital expenditure. It is therefore not surprising that total capital expenditure as at August was only N4.3 billion.

There was just not enough money for such expenditure. After cutting down on planned expenditure by more than 40 percent, the federal government still could not fund its non-discretionary expense without significant borrowing. And this is happening despite the fact that oil prices have remained relatively at a healthy level, above US$60 for most of this year.

Chances that government revenues could improve going forward are slim. Non-oil revenues, which the government has been hoping to boost, has not shown as much growth as the government has hoped. As at August, non-oil revenue was 24 percent below its set targets for 2018. A slow growing

economy means that chances of non-oil revenue picking is slim.

The government has some options to boost revenues in 2019 if it chooses to dump is populist posture.

It could take away subsidy or ‘under recovery’ and add a trillion naira or more to its 2019 federation revenues.

It could also decide to increase VAT to say 10 percent and that could add another N600 to N1 trillion more to revenues. But these are not easy decisions for a government with a populist inclination.

But the government can also make the fiscal hole deeper in 2019 by increasing the minimum wage, which would lead to a sharp increase in non-discretionary expenditure.

The fiscal hole could also get deeper in 2019 if oil prices were to drop suddenly, which is not a farfetched considering predictions that the oil market could be oversupplied in 2019 fuelled by US pressure on Saudi Arabia not to cut production.

Based on the current expenditure run, the fiscal hole for 2018 could be in excess of N3 trillion, similar to the same position in 2017. Also, like in 2017, when the government was unable to fund about N1.3 trillion of its deficit, there is a high chance that the government will not be able to fully fund its 2018 deficit. That would plunge the country into an even worse debt situation, which could worsen the debt service to revenue ratio position further. Things could get bad enough for Nigeria’s next president to put a call to the IMF to come to the rescue.

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Incomplete land reform threatens Nigeria’s economic future

Oladiran Ola Bello Dr. Bello, holds MPhil and PhD degrees from Cambridge University and is the Executive Director of Good Governance Africa (GGA).

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eaningful land reform is arguably one of the two most important economic reform issues facing Nigeria at this time. It constitutes a key systemic constraint alongside the erratic electricity supply. The country badly needs meaningful changes to processes and laws governing land acquisition and registration, whilst also redoubling efforts to tackle the ever present and ubiquitous menace of land touts and fraudsters.

Whether to help individuals establish thriving small businesses or develop a more viable commercial agriculture sector, or simply to enhance the value of land as collateral to secure loans, or even the government aspiring to

collect taxes more equitably and restore mutual accountability in governance, this reform is crucial.

It is the crux of building a wellfunctioning, transparent, secure and inclusive market economy that serves all Nigerians.

In reality though, the land administration outlook remains dire - and may be getting worse in some respects - as a recent semistructured survey by Good Governance Africa (GGA) shows. Take for example land fraud, which seems to be growing in sophistication. There are recent cases where individuals reported discrepancies between the physical land being shown to prospective buyers in places like Ibeju-Lekki and the legally delineated acreages on record at the state Surveyor General’s office. The Ibeju Lekki area has become one of Lagos’s foremost property hotspots on the back of the Dangote refinery and fertilizer plant being constructed there.

The situation there is definitely not being helped by the activities of touts sometimes aided by “Omo oniles” (which include the legion representatives of families claiming traditional title to lands).

Unscrupulous elements are exploiting loopholes in land administration to “sell” non-existent acreages to the less discerning

buyers. And in truth, most ordinary citizens are hampered from conducting effective land checks because of the malfunctions in land administration and the role of criminals working so hard to further compromise the system.

In other instances, officials are alleged to have conspired to provide criminals with the state’s copy of Certificate of Occupancy (CofO), effectively letting dubious elements offer for sale other peoples’ lands whilst the rightful owners remain oblivious.

Representing GGA Nigeria at the roundtable on Ease of Doing Business organised last week at the Lagos Business School, I injected a suggestion into the debates. This is specifically for the federal government to engage all state governors to ensure that all CofOs to be issued in the future are clearly marked as owner or state’s copy to forestall criminals from accessing official records to dupe unsuspecting members of the public. That roundtable was addressed by Dr Jumoke Oduwole, Senior Special Adviser to the president on trade and investment.

Arguably, some of the fiercest contestations over land in Ijebu Lekki are also fueled by the state’s own practices. In one instance, the state allegedly compensated families displaced by the Dangote refinery with land purportedly occupied by

the Oniganrigan chieftancy. Those buying from the compensated/ resettled families now face threat of violence from those claiming that their ancestral land has been taken by government to effect a procedurally incomplete land compensation deal.

Arguing that the so-called resettlement acreages must remain out of bounds for all outsiders, including recent buyers, they point to rumours that the state had signed cheques worth billions of naira for their compensation.

Though, as often with land in Nigeria, they also suspect a fraud in which the purported cheque has allegedly been diverted by some powerful individuals.

According to some legal experts consulted on this, a sympathetic judge might easily uphold the Oniriganrigan claim on their entitlement to official compensation.

The laws of Lagos were purportedly contravened in some respect as the state essentially used what some had claimed to be their “private” land to compensate families displaced from land procured for the Dangote refinery.

For bigger businesses, navigating the labyrinthine processes involved in land due-diligence can be time consuming but not impossible. For the many small/ medium sized entrepreneurs

and businesses that Nigeria really needs to underpin a production/ manufacturing revolution, acquiring land tenure can be laden with unimaginable chaos and risks to both capital and personal safety.

Sadly, this depressing situation looks set to continue until urgent actions are taken to address the well-known issues bedevilling land acquisition and security in Lagos and Nigeria.

Eliminating government’s own seeming ambivalence will help.

We have seen the introduction of tougher legal penalties for land grabbers and fraudsters, even as the state is still perceived to mishandle some of its more sensitive land requisition bids. The latter, whether real or imagined, can doubtless stoke conflict, especially where those affected genuinely feel that the state has been opaque or acted unfairly in procedurally flawed land actions.

As further corrective, government must rapidly automate all processes around registration, surveys, and legal searches. The recent removal of the need for sworn affidavit when prospective buyers search titles at the land registry is a baby step though decidedly in the right direction.

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Frank Aigbogun editor Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Monday 26 November 2018

A dumping ground for scraps

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igeria’s car sales have been shrinking in the last four years.

For instance, Total number of new vehicles sold in 2016 was only 36, 000, lower than the 48, 000 sold in the previous year of 2015.

For 2017, the figure was a little less than 10, 000. With an estimated population of 200 million, only about 10,000 new cars will be sold in Nigeria to both individuals and corporates. This ranks Nigeria as one of the worst places on earth to sell new cars, an irony considering that Nigeria is Africa’s largest economy.

Based on the 2016 data, South Africa, which boast of less than one third of Nigeria’s population and is the second largest economy on the continent, records the largest number of “light vehicle” sales in Africa, with about 561, 000 cars sold in the country in 2016, which is about 11.7 percent lower than the 590,000 cars sold in 2015. It ranked 23 in terms of

global auto market sales down from 21 in 2015.

Egypt, Africa’s third largest economy, which has about half the population of Nigeria is estimated to have recorded 217,000 new car sales in 2016, down by 20.8 percent from the about 274,000 sold in 2015.

The drop in car sales in Egypt pushed the country’s global ranking to 40 in 2016 down from 33 in 2015. There were about 164,000 “light vehicles” sold in Morocco in 2016 up from 132,000 in 2015. This improved Morocco’s ranking on the global auto market sales market to 45 in 2016 from 49 in 2015. Morocco has a population of just about 35 million people, which is about one fifth of Nigeria’s population.

Another North African country, Algeria, with a population of just about 40 million, recorded new vehicle sales of 129,000 in 2016 almost 50 percent down from 256,000 in 2015. Among the top 100 auto markets in the World, only Kenya ranked lower than Nigeria with its sales record of 13,000 cars in 2016. Now,

based on car dealers’ projection, Nigeria is going to likely fall behind Kenya and out of the top 100 auto markets in the world in 2017.

Dwindling car sales in Nigeria has been fuelled by rising inflation and weaker naira which has led to a fast rise in car prices across the country. A recent report by BusinessDay shows that a brand new 1.6 litre Engine Kia Cerato automatic transmission saloon car, which used to sell for N3.6 million in early 2015 is now selling for N9.54 million. A base model Toyota Corolla, one of the most preferred brands for many Nigerians, which used to sell for N4.45 million three years ago now sells for N18.9 million.

Even corporates that used to be the biggest buyers of cars in the country for staff and business activities have since cut down on their demand, monitising it for their staff and outsourcing car services.

More unfortunately, even Tokunbo or second hand vehicles are now going out of reach of most Nigerians. Due to the au-

tomotive policy that increased tariff on imported cars to 70 percent, most (about 70 percent) vehicles imported into the country (through the seaports) are now very old and accidented vehicles to avoid the punishing tariffs and levies. A visit by BusinessDay to one of the terminals at the TinCan Island Port, Nigeria’s foremost roll-in, roll-out terminals for the importation of vehicles, most vehicles brought in by vessels were mostly low quality and damaged vehicles.

Meanwhile, the reason for the imposition of the punitive tariff has not happened.

The lack of effective demand for new cars has stymied any plans of establishing vehicle assembly plants in Nigeria by car manufacturing companies.

The rational thing for the government to have done was to do away with the tariff but that is yet the happen. The implication is that the country is being turned into a dumping ground for used, old, accidented and vehicles and scraps. The economic, social, health and human costs of this foolery will be with us for a long while.

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Monday 26 November 2018

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In Association With

Brother against brother

Credit Extra credit

Boko Haram is becoming even more extreme

A slightly more moderate leader of Nigeria’s most brutal terrorist group is killed by his fanatical followers

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EW NIGERIANS will have mourned the death of Mamman Nur, a senior figure in Boko Haram, one of the world’s most brutal terrorist groups. A capable field commander, Nur is thought to have trained with al-Qaeda cells in the Sahara and with al-Shabab in Somalia. He favoured a pan-African jihad to replace sinful secular regimes with the rule of God. Three months ago he was killed by his own followers. Nigeria’s security chiefs were delighted. However, they should hesitate before celebrating. His death is a hint that the jihadist group— already known for kidnapping schoolgirls and turning children into human bombs—is becoming bloodier still.

For all his grand vision, Nur was slightly more moderate than the longtime leader of Boko Haram, Abubakar Shekau (pictured), who rejoices in enslaving girls and “killing anyone God commands me to kill”. Under Mr Shekau’s command the group has bombed markets and mosques alike.

Nur, by contrast, suggested that Boko Haram should only attack military targets and that using children as human bombs might not be an act of unblemished piety. His motives may have been tactical. By not engaging in acts of needless cruelty, the jihadists would be more likely to win support, or at least acquiescence, in the remote areas of north-eastern Nigeria where they operate. But Nur also had a theological disagreement with Mr Shekau over who was a Muslim and who could be declared an infidel and therefore killed.

Mr Shekau thinks that everyone not loyal to him or fighting for his group

Monday 26 November 2018

The Earned Income Tax Credit almost pays for itself The policy that reduces unemployment, boosts wages and costs a pittance

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is an infidel. Nur and Abu Musab al-Barnawi, the son of Boko Haram’s late founder, thought this too broad a definition. In mid-2016 they split away and swore allegiance to the jihadists of Islamic State in Syria and Iraq (who also thought Mr Shekau too extreme).

They formed a new group: Islamic State West Africa Province (ISWAP).

Since then the two factions of Boko Haram have fought largely separate insurgencies. ISWAP, which became the dominant faction, has operated largely to the north of Maiduguri, the main city in the region: Boko Haram has kept to the south and east (see map). Now ISWAP’s policy of sparing civilians has changed.

The circumstances of Nur’s death are unclear. Some people say he was killed in a falling-out over ransom payments for the release of 110 schoolgirls kidnapped early this year in Dapchi. A likelier explanation is that he was killed by younger, more extreme members of ISWAP who disagreed with his slightly more moderate stance.

There is certainly evidence of growing brutality. A video released

by ISWAP showed the murder of a kidnapped aid worker, Hauwa Mohammed Liman. She was bound, forced to kneel and shot. A colleague, Saifura Hussaini Ahmed Khorsa, was

murdered in September, three weeks after Nur’s death. ISWAP said the two Muslim women, a midwife and a nurse, deserved to die because they worked for the Red Cross, which it argued proved that they were apostates.

The growing influence of ultra-extremists, some of whom are thought to be French-speaking foreign fighters, has disrupted ISWAP’s chain of command. Mr Barnawi himself may also be in danger. Nur’s death has caused “fragmentation” in the ranks, says a negotiator who was involved in trying to secure the release of the two murdered aid workers (and a third captive, from UNICEF, who may still be alive). “In the history of Boko Haram there has not been a period where they have killed female hostages in this fashion,” he said. “But now the fighters are in charge rather than the clerics.”

Observers worry that the likelihood of freeing other hostages, including 112 girls still missing after a mass kidnapping from a school in the town of Chibok in 2014, has diminished. “I doubt many more are coming back,” says another hostage negotiator.

Meanwhile the government’s struggle against both jihadist factions has suffered serious setbacks. Army outposts and operating bases have

been overrun in recent months. Attacks have spread into neighbouring Nigerian states.

Some fret that Nigeria’s army may not be able to hold the ground it liberated in 2015, when Boko Haram controlled an area about the size of Belgium before being pushed out of most towns. Casualties among frontline troops have been high and morale is poor. More than 70 soldiers are facing court martial after a mutiny in Maiduguri in August, when they protested against being redeployed to an area that is a Boko Haram stronghold, near the border with Niger.

Such military setbacks cast a shadow over presidential elections scheduled for February. Muhammadu Buhari, Nigeria’s president and a former general, won power in 2015 partly by promising to be tougher on Boko Haram than his predecessor, Goodluck Jonathan, had been. Having claimed last year that the army had crushed Boko Haram in its “last enclave”, he may fail to convince voters that he can do better if given a second term.

Next year will see the conflict enter its second decade. More than 20,000 people have been killed; 2.1m have been displaced. If Mr Buhari cannot defeat the jihadists, Nigerians are wondering who can.

E M O C R AT S A N D Re publicans can sometimes agree that splashing water on things might make them wet, but not on much else. How remarkable, then, that the Earned Income Tax Credit (EITC), which tops up the earnings of low earners, is beloved by politicians of all stripes. EITC is one of the most effective government programmes.

Analysis from the Centre on Budget and Policy Priorities, a think-tank, finds that it boosts the income of around 28m Americans every year, lifting 9m of them above the poverty line. A new working paper finds the programme might be even better than was previously realised, because it costs so little to administer.* The study, written by Jacob Bastian, a post-doctoral researcher at the University of Chicago, and Maggie Jones of the Census Bureau, points to two reasons why the EITCcosts taxpayers less than is generally understood. First, the EITC, unlike many other welfare programmes, is designed to encourage more people to work, since only the employed can receive benefits. This results in a bigger pool of people paying income tax. Second, the EITC raises incomes of the poor, which means fewer are dependent on other forms of welfare. Mr Bastian and Ms Jones find that once you take these two factors into account, every dollar the government notionally spends on the EITCcosts taxpayers just 13 cents on net.

Although the EITCis generally well-regarded, it does have some kinks. A single person without children can only receive benefits Continues on page 15

Monday 26 November 2018

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In Association With

Britain and the EU

The truth about a no-deal Brexit

Time to bust the last great Brexit myth

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HE BRITISH body politic is again convulsing. Theresa May has appointed new ministers, including her third Brexit secretary and counting, following another round of cabinet resignations. The prime minister’s own backbenchers are feverishly (if ineptly) plotting to bring her down. The Labour opposition’s position is hopelessly unclear.

The cause of this chaos is that those with long-standing delusions about what Brexit would mean have been forced to swallow a dose of reality.

With negotiating time almost up, Britain has the imperfect deal that it was always going to get. Promises of having cake and eating it have given way to a less appetising offering.

Yet among Brexiteers, one hopeful fantasy lives on: the idea that, if all else fails, Britain can prosper outside the European Union without signing a deal at all. The idea’s proponents tout a no-deal Brexit as a way to avoid giving ground, or money, to Brussels.

They dismiss objections as another round of the alarmist “Project Fear” that Remainers deployed before the referendum.

They are gravely mistaken. It is time to debunk the last, and most dangerous, of the Brexit fantasies.

The notion that Britain should leave the EU without agreeing on exit terms or paying its tab has gained currency. Perhaps two dozen Tory MPs want such an outcome, now that a cake-and-eat-it deal is off

the menu. Given the government’s wafer-thin majority, this small band has undue clout (see article). Assurances by level-headed ministers that Parliament would block a no-deal exit are constitutionally questionable. The public, meanwhile, are worryingly relaxed about no deal. Polls find that many voters would rather do a runner from the EU than accept the compromise that Mrs May has struck.

The reality is that no deal amounts to a very bad deal, as our briefing this week spells out. It would rip up 45 years of arrangements with the continent that in living memory has gone from existential threat to vital ally. It would swap membership of the EU’s single market for the most bare-bones trading relationship possible. Reneging on £39bn ($50bn) in obligations to the EU would devas-

tate Britain’s international credibility.

Reaching no deal on the Irish border would test the Good Friday Agreement that ended a serious armed conflict. And the violent dislocation of nearly every legal arrangement between Britain and Europe would affect daily life like nothing outside wartime.

The myth has taken hold that no deal simply means no trade deal.

Proponents of a no-deal exit say it will involve Britain trading with the EU on the standard terms used by other members of the World Trade Organisation (WTO). No-dealers argue, correctly, that Britain could eventually adjust to this. It would be painful, but the economy could move beyond industries like carmaking, which would be ruined by the 10% tariffs that the EU would im-

pose on British exports. Consumers would gain if the government took the highly unlikely step of abolishing all tariffs, as no-dealer economists recommend. But protected sectors, particularly agriculture, would wither. And many Leave-voters might be surprised that the price of exit was the collapse of much of Britain’s high-end manufacturing and the demise of farming.

More important, no deal would mean not just no trade deal, but the rupture of a whole corpus of legal arrangements with the EU. Britain would be left without rules to govern the trade in radioactive materials, international electricity markets, financial-contract clearing, aviation, medicines regulation, immigration control and much else. What some Brexiteers describe as a “clean break” from Europe would in fact be horrifically messy.

No-deal proponents counter that Britain and the EU would quickly sign side-deals to mitigate the worst of the chaos—allowing flights to carry stranded citizens home, for instance. But it is unlikely that the EU would do more than the minimum if Britain defaults on its debts. What little goodwill remains would turn to dust. Brexiteers say that shortages could be avoided if Britain threw its borders open to EU products without checks. But eschewing any sort of regulation would be an odd way for Britain to “take back control”, as the Leave campaign promised.

The man who would be king

The person who is doing most to undermine the Reserve Bank of India Swaminathan Gurumurthy represents everything India’s liberal economists fear

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OMETIME IN THE 1990s Jagdish Bhagwati, one of India’s most distinguished economists, encountered Swaminathan Gurumurthy, a financial commentator associated with the Rashtriya Swayamsevak Sangh (RSS), a Hindu-nationalist organisation. Mr Gurumurthy was making the case that globalisation, brought in by well-connected financiers, was destroying India. Mr Bhagwati came to a caustic conclusion. If RSS ideologues like Mr Gurumurthy were economists, then Mr Bhagwati was a “Bharatnatyam dancer”, he said (referring to a traditional dance from Tamil Nadu performed by women).

Over 20 years later, Mr Gurumurthy’s beliefs have changed little.

But today he is one of the most influential members of the board of the Reserve Bank of India (RBI), the country’s central bank, to which he was appointed by the government in August. He has led demands that the RBI loosen restrictions on India’s rickety state-run banks and hand more of its reserves to the government. Other than Narendra Modi, the prime minister, he is perhaps the man India’s liberal economists most fear.

Mr Gurumurthy had never be-

fore held a government position. A chartered accountant by training, he says he took the RBI position “under some pressure”. But he admits that he has long offered “advice” to government. Plenty of people think that advice is taken extremely seriously, especially by Mr Modi, who shares his background in the RSS. “He’s really a fixer, he gets things done in Delhi,” says Mohan Guruswamy, a former government economist who has often clashed publicly with him.

The biggest thing Mr Gurumurthy is thought to have helped get done is demonetisation in 2016, when 86% of bank notes by value were abruptly

withdrawn from circulation in an attempt to crack down on undeclared “black money”. This, he argues, prevented an economic collapse (most Indian economists reckon it almost caused one). He is also thought to be behind a scheme to expand lending to small businesses, and a rejigging of the government’s economicplanning department.

Mr Gurumurthy believes, as he put it in a speech last year, that the “the subject of economics is collapsing” and should be replaced by an Indian economics based on Swadeshi (self-reliance). Foreign capital should be kept out; the government should

manage finance directly and small businesses should be prioritised over big ones. Western-educated economists who disagree need a “correction” of the mind.

Since joining the RBIboard Mr Gurumurthy has turned its monthly meetings into day-long slogs, as he puts forward these ideas, seemingly with the backing of the government.

“His being on the board is not merely some symbolic thing,” says Vivek Dehejia of IDFC Institute, a think-tank.

His appointment was followed in October by the squeezing out of Nachiket Mor, an American-educated economist who had been attacked by the RSS. Weeks later Viral Acharya, one of the bank’s four deputy governors, warned that the government was undermining the bank’s independence.

A paragraph-long statement after the latest board meeting, on November 19th, said that the bank would direct more money to small businesses but fudged the biggest question: whether it would hand more cash to the central government.

With an election approaching, few think that fight is over. If the government wins, more demands are likely to follow. And one man is sure to be at the front making them.

The Earned Income Tax Credit almost pays for...

Continued from page 14

if they earn less than $15,270 a year, or roughly the federal minimum wage. They also can only receive up to $519. By contrast a parent with one child can receive up to $3,461. A single parent with one child can claim benefits if they earn less than $40,320, while a couple with one child can claim benefits if they earn less than a combined $46,010.

This means the programme has a bigger impact on the behaviour of some than on others.

Research has found single mothers are the most likely to join the workforce because of the EITC. The tax credit has little effect on the employment rates of fathers since they are more likely to have jobs anyway. The EITC also has some downsides. Married women who are not their families’ chief breadwinners are actually discouraged from working if their households are near the eligibility threshold.

The fact that the EITC makes people richer, and hence less likely to be eligible for other kinds of welfare programmes, might mean some of its reported benefits have been overstated.

But past research has found that beyond its impact on household finances, the EITC has also been shown to lower crime rates for women, and to improve health and education. Mr Bastian reckons the EITC might have further positive effects: single mothers who are nudged into work, might serve as better role models for their kids, for instance.

The EITC does have one glaring shortcoming: it does little to help the childless. America’s labour-force participation rate is below that of many other rich countries, including Britain, Canada and Germany. Closing this gap would be a boon for the economy. But convincing a discouraged worker to start looking for jobs again will probably take more than $519 a person.

“Do EITC expansions pay for themselves? Effects on tax revenue and public-assistance spending,” by Jacob E. Bastian and Maggie R. Jones.

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Monday 26 November 2018 In Association With

Still on top

Binyamin Netanyahu has overcome one challenge. Bigger tests await With the slimmest of majorities, the prime minister is at the mercy of the right

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INYAMIN NETANYAHU is not only the prime minister of Israel. For the past four years he has been its foreign and health minister. And on November 18th, following the resignation of ministers from the ultra-nationalist Yisrael Beiteinu party, he added the defence and immigration ministries to his bulging portfolio.

Mr Netanyahu is confident that he can handle all these jobs (though he may eventually give up some).

He also thinks he can dictate the timing of next year’s election—and win it. But the tactics he used to see off the challenge by Avigdor Lieberman, the leader of Yisrael Beiteinu and former defence minister, betray vulnerabilities.

Citing intelligence that “simply cannot be revealed at this point”, Mr Netanyahu justified his defence policies and hinted at vague threats. He thus implored the remaining members of his government to stick with him. And so they did, even Naftali Bennett, the leader of the nationalistreligious Jewish Home Party, who had demanded the post of defence minister. Mr Bennett accused the prime minister of scaremongering and issued

a scathing assessment of his policies. But in the end he succumbed to pressure from rabbis and settlers not to bring down the coalition, which now has a one-seat majority.

Mr Netanyahu has led one of the most hawkish and religious governments in Israel’s history.

In July he signed a law affirming Israel’s Jewish nationalist identity, to the fury of Arab and Druze minorities. Even so, Israeli nationalists are sceptical of his commitment to their cause. He has not expanded settlements as much as they would like; nor has he hit Hamas, the militant group that rules Gaza, with enough force, in their opinion. Mr Lieberman cited a recent truce with Hamas as the reason for his challenge. Now, with the slimmest of majorities, Mr Netanyahu is at the mercy of his right-wing allies. If the conflict with Hamas escalates again, he will be under enormous pressure to go to war.

But Mr Netanyahu’s next big challenge may come at home.

The attorney-general is expected to bring charges of corruption against him early next year. There is no precedent for a prime minister serving while on trial; but there is no law requiring him to resign.

Mr Netanyahu denies the allegations. He has said in private that he would fight the charges in court, while running the country—a move that would undoubtedly be contested in the Supreme Court.

The legal process will take months. Israel must hold an election by November next year. Mr Netanyahu is in no rush, but he may eventually want to show that a majority of voters are behind

him, regardless of his legal problems. Though his popularity has declined because of the truce, polls still show him in good shape.

His party, Likud, would handily win a plurality were an election held today. Keeping his allies on board, now and after charges are filed, will be the tough part.

His legal troubles give them even more leverage.

The nationalists, though, also

depend on Mr Netanyahu. They appreciate his uncanny ability to win elections—and fear the prospect of a centre-left government that might cede territory to the Palestinians, which the prime minister has not done. Few of his potential rivals have dared to challenge him. Many on the right still think Israel would be worse off without Mr Netanyahu’s leadership.

The green House effect

Democrats and a climate-change dilemma Should Democrats pursue the best policy, or the one that does them least political damage?

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LIMATE POLICY in America has always been an up-anddown affair. But few reversals have been as dramatic as the replacement of Barack Obama with Donald Trump. Unlike his predecessor, the current president is sceptical about climate change and loves “beautiful, clean” coal. The environmental agencies are stocked with former lobbyists for coal, fracking and chemicals companies. And yet according to the Environmental Protection Agency (EPA) the amount of greenhouse gases emitted in America dropped by 2.7% in his first year of office. This was the biggest reduction anywhere in the rich world.

Andrew Wheeler, the former coal lobbyist who now heads the EPA, has been quick to praise “President Trump’s regulatory reform agenda” for this. In fact, the decline has little to do with the president’s policies.

America’s carbon dioxide emissions have been on a downward trajectory since 2007, mostly because power plants have been switching to cheaper, cleaner natural gas and away from Mr Trump’s beloved rock. According to the Energy Information Administration, a government agency, America guzzled nearly equal quantities of coal and natural gas in 2007.

Today natural gas provides twice as

much energy as coal. Energy from renewable sources, like wind and solar, now make up just over 10% of America’s energy consumption.

Since 2010 nearly 40% of the country’s coal-generating capacity has either been shut down or designated for closure. This is mostly because rival fuels were cheaper, rather than the Obama administration’s Clean Power Plan, which was much derided but never actually went into effect. Even under Mr Trump, coal plants are expected to shut down 11.4GW of capacity this year, the most since 2015. No American utility plans to build a new coal-fired plant; most

of the existing ones are at least 40 years old. The environmental regulations that the Trump administration is trying to undo will not restore the coal industry to its glory days, though they might slow its decline.

That is because America’s relative success at decarbonisation is mainly a result of market forces. Though these will continue to operate, the dent in emissions will be smaller than if the federal government joined in too. On current trends, carbon dioxide emissions will be 17% lower in 2025 than they were in 2005, some way short of the 26-28% reductions envisaged in the Paris Agreement, which Mr Trump withdrew from, or

the Clean Power Plan. This improvement is too gradual to avoid the disastrous consequences predicted by the Intergovernmental Panel on Climate Change of a world that is 2°C warmer.

For those reasons, if there is a struggling power sector the administration wishes to foster, nuclear would be a worthier candidate than coal. Done with enough determination, propping up coal could stall progress towards decarbonising the economy. Nuclear energy, on the other hand, produces little carbon dioxide (though uranium mining and milling does have a small effect).

Yet capacity has been stuck since 2000, and plants have floundered financially because gas is cheap and there is no reward for the absence of pollution which is nuclear’s main selling point.

The best policy to rectify this would be a carbon tax, yet carbon taxes are easily denounced as energy taxes, which voters do not much appreciate. That leaves Democrats, soon to take power in the House of Representatives, in a bind. With Republicans still controlling the Senate and the White House, a vote for a carbon tax looks like a self-defeating political strategy and a self-defeating climate strategy, because it could lose the Democratic majority, says Paul

Bledsoe, a former climate adviser to Bill Clinton. If House Democrats want to pass bills, they will find that Republicans representing districts with nuclear plants or wind turbines like tax credits for those technologies, says Matthew Nisbet of Northeastern University.

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CITYFile

3 attackers of Guardian E-in-C to be charged JOSHUA BASSEY

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hree persons suspected to be involved in last week’s robbery attack on Editorin-Chief of Guardian Newspapers, Debo Adeshina are to be prosecuted, Imohimin Edgal, the Commissioner of Police, Lagos State, has said.

Edgal who briefed the press at the weekend, said that the suspects were arrested by the command’s Rapid Response Squad, riders’ unit, posted to Oshodi-Oke Pin-Down Point.

According to him, the suspects allegedly attacked and robbed the Guardian Newspapers’ Editor-in-Chief on last Wednesday, at about 5.30 p.m He said the suspects were picked up following complaints received from some commuters that hoodlums who specialised in snatching phones and robbing innocent citizens during traffic at Oshodi-Oke were on operation.

“Armed with the information, I directed the officer in charge of RRS to deploy a team of police riders to Oshodi Bridge.

“On getting there, the men swung into action and arrested the suspects.

“They were subsequently searched and a Samsung X8 phone belonging to the Guardian Newspaper Editor-in- Chief was recovered from them.

“Other items belonging to the journalist, recovered from the thieves include Guardian I.D Card bearing the name of Debo Adesina and four ATM Cards,” he said.

FCTA trains youths on satellite installation JAMES KWEN, Abuja

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ederal Capital Territory Administration (FCTA) through the Social Development Secretariat (SDS) has trained at least 100 youths in satellite technology installation.

The youths drawn from various communities and faith based orgnisations were trained at the FCT Youths Support Centre, NyanyaAbuja.

Amanda Pam, SDS Secretary while declaring the skill acquisition training open, said the free training was organised in partnership with Dafio V-Sat Tech.

Pam, represented by the director of Youth Development Department in the secretariat, Ereodichukwu Anulunko, stressed the need for youth to learn a skill of their choice to avoid roaming the streets for non-existing jobs.

“The essence of the programme is to motivate young people to take to vocational skills, which can fetch them income, make them self-reliant and be gainfully employed, thereby helping to tackle the challenges of unemployment in the society.

Community raises alarm over cult activities

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ba-Ukwu Autonomous Community in Aba South local government area of Abia State has raised alarm over incessant harassment by a suspected cult group, Aroo Boys.

The traditional ruler of the community, Eze Monday Ugbo, who raised the alarm on Friday, called on Governor Okezie Ikpeazu to protect the community.

Ugbo said members of the group were going after women in his domain in order to rape them at the slightest opportunity.

“The menace has become unbearable to us and that is why we decided to cry out to the appropriate quarters to hear, and come to help us out.

“I am using this medium to appeal to Governor Ikpeazu to direct whosoever needs to be directed to do the needful. “For the security agencies, I know they have handicaps like inaccessible roads, yet we need to cry out for help,” he said. NAN

Suspected Smugglers of Pharmaceutical products intercepted by the Nigerian Customs Service in Lagos.

NAN

Police arrest kidnapper with 4 AK-47 rifles KEHINDE AKINTOLA he police say they have arrested a suspected kidnapper, Sani Rabiu, 30, with four AK 47 rifles in Zamfara.

The force public relations officer, Jimoh Moshood, disclosed this while addressing newsmen on the arrest on Friday in Abuja.

He said that other items recovered from the suspect were four empty Ak 47 rifle magazines, a Boxer motorcycle and some charms.

Moshood said that the suspect who shuttled between Sokoto and Zamfara, was arrested by the I-G X-Squad attached to the police special intervention teams deployed in Zamfara.

According to him, the suspect was

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arrested along Gusau-Keita-Tsafe road in Keita village, Tsafe local government area of Zamfara.

Moshood said that on interrogation, the suspect confessed to be working with other armed bandits terrorising villages in Sokoto and Zamfara.

He said that further investigation revealed that the suspect belonged to notor ious and vicious gang of armed bandits and kidnappers responsible for several attacks in both states.

Speaking to newsmen, the suspect who said that it was the first time he was doing such business, revealed that the rifles were sent to him by one Danjuma who was at large.

In a related development, Moshood said that the police command in Zamfara

had arrested 65 armed bandits in the state few weeks after attacks on villages in the state.

He said that the command also foiled armed bandits attacks on Hayim-Alhaji village in Tsafe area and recovered two live grenades.

Moshood said that the command equally recovered 24 firearms comprising five AK-47 rifles, 17 locally made firearms and 120 AK 47 ammunitions.

He said that other items recovered included 269 cattle and 109 sheep in Tsafe, which had been handed to their owners.

Moshood said that the operation was ongoing and efforts were being intensified to arrest other members of the armed bandit.

He said that all suspects would be arraigned on completion of investigation.

Human factors constitute 85% of road traffic crashes – VIO

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he Vehicle Inspection Office (VIO) in the Federal Capital Territory (FCT) says human factors constituted 85 per cent of road traffic crashes in the country.

Sani Ibrahim, commander in charge of Provost and Regimentation in the FCT disclosed on Friday.

He said that human, vehicular and environmental factors were causes of road accidents, insisting that human factors were the highest causes of crashes across the country.

While calling for efforts to reduce the burden of crashes, Ibrahim urged motorists to visit the computerised vehicle inspection centres within their location to check and know the status of their vehicles to ensure safety on the highway.

He noted that the centres were located at Gwagwalada, Lugbe, Maitama, Kugbo which covered Nyanya-Maraba axis, Gudu and Mabushi areas of the FCT. On the number of vehicles impounded

by VIO since the “ember season’’, the commander said “if you talk about ember months, it is not the real time for impounding vehicles.

“The irony of saying vehicles are impounded during the ember months is because of the yuletide season and community meetings.

“People love to go home toward the end of the year. What we do is not to add to people’s problems but to solve them,” he said.

He explained that what the agency usually do at such season was to educate

and enlighten the public of latest development with regards to vehicles, and encourage owners to go for inspection.

“When one is arrested at this period, you are going to be asked to repair, replace and put your car in order and advise you the kind of load you should carry in your vehicle.”

He said operations were currently ongoing by officers of the agency to clamp down on offenders.

Ibrahim added that in August which ushered in ember months, there were no arrests of offenders instead, warning and corrective measures were carried out.

“In September, we had 200 vehicles subjected for re-inspection while in October, more than 5, 000 vehicles were subjected to re-inspection,” the commander said.

BUSINESS

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COMPANIES & MARKETS

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How long before the MPC blinks?

Pg. 20

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

BIG MOVER

Dangote stocks fall to 52-week low in opportunity for bargain hunters LOLADE AKINMURELE

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angote Cement’s stocks fell 2.5 percent to N195 per share Friday to its lowest in 52 weeks, in what analysts say provides a good entry point for investors in the hunt for value stocks.

The stock is down 30 percent from a year-high of N278 per share in February, as the general bearish sentiment in the market in the lead up to elections next February continue to ruboff on fundamentally sound stocks even as the recent slide in oil prices deals a blow to investor sentiment.

The cement maker declined 4 percent in the course of the week, compared to a 5.28 percent decline in the industrial goods index, which tracks the performance of stocks of industrial companies.

That worsened the year to date loss of the industrial index to 34.81 percent, double the year to date loss of the All-share index which was down 1.18 percent in the week to a year low of 31,678.70 points.

Dangote Cement, owned

by Africa’s richest man, Aliko

Dangote, has an Enterprise Value to EBITDA of 7 times, compared to emerging market peers of 10 times. That implies that the stock is undervalued.

The stock has a BUY rating from most investment banks with an upside potential ranging from 20 percent to 30 percent within one year.

The cement maker had a Return on Equity of 26.6 percent as at the third quarter of 2018 and return on assets of 12 percent.

In the first nine months of 2018, Dangote Cement Plc. grew revenue by 13.54 percent to N685.29 billion from N603.58 billion in 2017, driven by higher volumes.

The company pushed out 17.77 million metric tonnes in the period compared to 16.51Mmt in the same period of 2017.

In the period, the company introduced two new products, Falcon and Blockmaster, to capture additional market. Analysts expect this, coupled with the improved bonus schemes and better route to market scheme as well as the increased volumes from other African countries, to drive full-year revenue to N895.72 billion, a short crawl from the trillion

Source: Bloomberg naira mark.

In line with the growth in revenue and cost management strategies of the company, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA), Profit-Before-Tax and ProfitAfter-Tax all advanced by 14.60 percent, 12.35 percent and 2.70 percent respectively,

with analysts widely tipping the trend to continue through the year. The company’s approval of pioneer tax extension which is expected to take effect in October 2018, should moderate the effective tax rate to 15 percent from 28 percent.

As stock valuations remain depressed, some investors

are seeing value and buying stocks with confidence that the current downtrend will not last forever.

The smart buyers believe there can be no better time to beef up their portfolios in value stocks in anticipation of superior future Return on Investment (ROI) other than now that shares of many

large capitalized companies are selling below their intrinsic values.

“In the coming week, we expect investors to take advantage of the low and attractive prices in the sector,” analysts at Lagos-based investment bank, Meristem said in a Nov. 23 note to clients.

INSURANCE

FBN Insurance grows gross premium by 27% in 4 yrs

BALA AUGIE

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espite the lingering apathy for Insurance by the Nigerian populace, driven largely by cultural & religious beliefs, First Bank Insurance Limited remains resilient, recording a compounded annual growth rate (CAGR) of 27.10 percent in gross premium written (GPW) since 2015.

The growth rate, which validates management and board of directors’ focus and market strategies, affirms the business’ position as one of the fastest growing underwriting companies in Nigeria.

The insurer said the steady progress in performance was driven primarily by gross premiums from retail life insurance and annuity businesses amid a tough and unpredictable macroeconomic environment.

For first nine months through September 2018, First Bank Insurance’s return on average equity (RoAE) increased to 39.10 percent in September 2018 from 34.0 percent as at September 2017.

A higher return on eq-

uity means management and board of directors have utilized the resources of management in generating higher profit.

The Nigerian insurer’s net income was up 41.60 percent to N3.73 billion in September 2018 as against N2.64 billion the previous year. The percent growth in profit is the second largest expansion among 21 firms tracked by BusinessDay as insurers’ profit margins continues to get squeezed by slow growth in revenue, rising claims and underwriting expenses, slim underwriting profit, and shrinking investment income.

First Bank Insurance maintained low cost strategies in an inflationary environment as cost to income fell to 34.0 percent in the period under review as against 35.0 percent the previous year. A lower ratio means firms is able to curtail costs while increasing profit.

While Nigeria’s headline inflation figure has fallen to 11.26 in October from 11.28 percent in September, it is still lower than the Central Bank of Nigeria (CBN) target range of 6 and 9 percent.

The Nigerian insurer has

been paying spending less on claims expenses in generating unit of premium income each

from government and private companies.

To further exacerbate the

already anaemic position of insurers is the combination of sluggish economic growth

and receding foreign direct investment that is increasingly discouraging corporates and foreign investors from taking FBN Insurance: Nine months September Financial Highlights up a cover.

Further analysis of First

Bank Insurance’s financial statement shows operating 9M 18 9M 17 % Change

income was up 26.70 percent FBN Insurance: Nine months September Financial Highlights Gross Premium Written (N'm) 23,257.80 17,170.50 35% to N12.59 percent in September 2017 from N9.93 billion 9M 18 9M 17 % Change the previous year.

Operating income (N'm) 12,594.70 9,938.60 27% Gross Premium Written (N'm) 23,257.80 17,170.50 35% The Nigerian insurer’s Operating income (N'm) 12,594.70 9,938.60 27% 33.10 percent growth in shareProfit before tax (N'm) 4,465.50 3,539.90 26% Profit before tax (N'm) 4,465.50 3,539.90 26% billion holders fund to N14.55 After Tax (N'm) 2,640.70 42%review in the period under Profit After Tax (N'm)Profit 3,738.70 2,640.703,738.70 42% RoAE (%) 39.1 34.9 12%consisvalidates the insurer’s tent Cost to Income 34 35uptick in profit.

-3% RoAE (%) 39.1 34.9 12% 12.9This means the company Claims ratio 18.1 40% has the capital to take on more Source: Company Financials; BusinessDay. Cost to Income 34 35 -3% risk and grow its premium

income while contemporaneClaims ratio 18.1 12.9 40% ously magnifying sharehold ers’ earnings.

Source: Company Financials; BusinessDay. “Following the announcement of the Tier Based Minias claims ratio for the Life and mum Capital Requirement,

General businesses declined the Life and General busito 12.90 percent in September nesses were categorised as 2018 Tier 1 and Tier 2 respectively,” from 18.10 percent the previous year. said the company.

Nigerian listed insurers “We are well positioned to are ensure the smooth transition paying more claims due to exposure to risk from the of the General business to oil and gas as increased prea Tier 1 company when the mium rates by underwriters policy becomes effective,” the

have resulted in low patronage company sums.

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How long before the MPC blinks?

LOLADE AKINMURELE

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he Monetary Policy Committee (MPC) held all key rates stable in its final meeting of the year, in line analysts’ expectation.

The Monetary Policy Rate (MPR), which sets the tone for borrowing in Nigeria, was left at 14 percent, where it has been for over two years. The Cash Reserve Ratio (CRR) was left at 22.5 percent and liquidity ratio at 30 percent.

Every member voted to keep rates steady, compared to the last meeting when two members voted for a hike and others wanted rates unchanged.

The hawkish sentiment observed in the last two meetings disappeared, despite core inflation in October accelerating for the first time since December 2017, never mind that headline inflation slowed for the first time in three months.

Despite slowing 11.26 percent in October, the inflation

rate remains above the CBN’s preferred band of between 6-9 percent.

Until the November meeting, the MPC had become hawkish since the middle of the year, in anticipation that inflationary pressures would return on the back of election spending.

The CBN Governor, Godwin Emefiele, said he and the other members thought a hike in rates will undermine economic growth, which has remained fragile after an exit from recession in 2017.

While counterparts in Nigeria decided to maintain the benchmark interest rate, even as price growth persists above the upper end of its goal, the South African MPC voted to raise its benchmark rates as Africa’s two largest economies diverge on how best to fight inflation.

The CBN is not less concerned about inflation of the two countries, just that it has opted to rely on indirect toolsTreasury and OMO bills.

Even though the policy rate has been left unchanged

at 14 percent since July 2016, the CBN has frequently used short term instruments to support price and exchange rate stability.

Since August 2018, yields on treasury bills have been trending higher.

Average yields at the last NTB auction increased to 14.19 percent as against 13.34 percent at the September NTB auction.

Likewise, OMO yields climbed higher by 100 bps on 364-day bills (16.95 percent vs.

15.60 percent in September 2018) and advanced by 50bps to 14.94 percent on 182-day bills.

However, there are risks to price and exchange rate stability yet to fully materialise that could force the CBN to hike rates in 2019.

First is the potential implementation of a new minimum wage in the first quarter of 2019 that could trigger a wage-price spiral thus stoking demand-pull inflation.

Another risk to price stability is a possible devaluation of the Naira after the elections.

Oil prices are sliding and that

MARKETS

Reuters sells 55% of risk, financial business to Blackstone-led consortium …Unveils “Refinitiv” to reward financial market participants MICHEAL ANI

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homson Reuters Corporation, a leading data and financial technology platform, has sold 55 percent of its risk and financial businesses to a consortium of investors led by US private equity firm Blackstone Group LP, the firm disclosed to Businessday.

The deal which was sealed early last month was valued at a transaction cost of approximately $20 billion including debt.

The remaining 45 percent, is owned by Thompson Reuters, according to Sneha Shah, the Managing Director for Africa.

The firm said the successful completion of the deal enabled Thomson Reuters launch its new brand identity, and rename its financial and risk business unit, ‘Refinitiv’, as a way of offering reliable quality services to customers and deepening the Nigerian capital and money markets.

The businesses that will comprise the new F&R partnership had 2017 revenues of approximately $6bn.

Additionally, Thomson Reuters will receive approximately $17bn in gross proceeds at closing – subject to purchase price adjustments – funded by $14bn of debt and preferred equity to be incurred by the partnership and a $3bn cash equity contribution by Blackstone. Thomson Reuters will also maintain full ownership of its legal, tax and accounting and the Reuters news

businesses.

At its West Africa Excellence Awards, recently organized in Lagos, Nigeria, Reuters had six (6) categories through which the customers with remarkable imparts and outstanding performances were rewarded.

Described as the ultimate form of recognition of the organization’s customer excellence, the annual Excellence Awards highlighted the work being done by financial markets participants. Of the six awards, the Peoples’ Choice Award was given priority because attendees had to vote at the venue of event.

This award was carted by Ini Ebong of First Bank Nigeria. He also got an award of the longest serving customers.

Others who emerged winners are Bola Onadele Koko, the MD/CEO FMDQ Securities Exchange who also received two( 2) awards-The Best Partner Award and the Innovation awards for embracing disruption with new ideas; Ibukun Oyedeji of Ecobank who got the Most Impactful Business Award, and Jacob Brobbey of the Barclays Bank of Ghana who clinchéd the Embracing Technology award.

The awards honoured financial markets participants from across West Africa, including Francophone countries, which help to drive growth and efficiency, transparency and deepening financial markets in their respective countries and the region.

Speaking at the event, the Deputy Governor, Economic Policy, Central Bank of Nigeria, Okwu Joseph Nnanna, represented by Alvan Ikoku x-rayed Refinitiv supportiveness to CBN, and to the Nigerian Capital Market. “Thomson Reuters Refinitiv has been a dependable partner of the Central Bank of Nigeria (CBN) and other financial institutions within West Africa sub-region in developing support for financial products and information.

On his part, the MD/CEO FMDQ Securities Exchange, Bola Onadele Koko, who clinched two awards thanked Refinitiv for its immerse contributions to his company and economy.

The Refinitiv Excellence Award is an annual event that brings together industry professionals and businesses across the financial sector of the West Africa nations for the good of their regions.

Refinitiv is one of the world’s largest providers of financial markets data and infrastructure, serving over 40,000 institutions in over 190 countries. It provides leading data and insights, trading platforms, and open data and technology platforms that connect a thriving global financial markets community - driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime.

could affect dollar supply, put pressure on the naira and eat into the country’s external reserves which have already shed close to $6 billion since July. Thinning external reserves weakens the CBN’s ability to defend the naira and that is more pressure on the exchange rate.

In the global space, further US rate hikes in 2019 also poses risks to both price and exchange rate stability.

The interest rates on US

treasuries will continue to rise into 2019 and there could be more fund outflows from emerging markets.

Emerging market currencies are already feeling the pain of fund reversals by investors who are increasingly cutting their risk appetite and parking their cash in US treasuries. The naira has been relatively unscathed due to the CBN’s increased dollar intervention in the market which has kept the exchange

rate fairly stable. But that task will become increasingly difficult in 2019.

The possible implementation of higher and more cost reflective electricity and any upward shift in the artificial retail petrol price next year would also stoke inflation.

Although some analysts opine that interest rates would remain unchanged in 2019, there are potential risks that suggest otherwise should they materialise.

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Business Event

TELECOMS

Orange, MTN launch Mowali to enable interoperable payments across Africa BUNMI BAILEY

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range Group, one of the world’s leading telecommunications operators and MTN Group, Africa’s leading cellular telecommunications company, launched Mowali, a mobile money wallet, on Thursday, 22nd November 2018 in Africa in Paris, France.

According to the two groups, Mowaliisadigitalpaymentinfrastructure that connects financial service providers and customers in one inclusive network that makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.

Stéphane Richard, CEO, Orange, said by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa.

“Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularlyformoreisolatedcommunities.” He added that this solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent According to the World Bank Findexsurvey,financialinclusion inSub-SaharanAfrica“increased dramatically” to 43 percent in

2017 from 23 percent in 2011.

“One of MTN’s goals is to accelerate the penetration of mobilefinancialserviceinAfrica; Mowali is one vehicle that will help us achieve that objective,” Rob Shuter, CEO, MTN, said in a statement made available to BusinesDay. “Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key,” he added.

Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. Its goal is to increase the usage of mobile money by consumers and merchants. From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”.

Also, the Global System for Mobile Communication popularly known as (GSMA), an association that represents the interest of mobile network operators worldwide, supports the Mowali initiativeasinteroperabilityand a key accelerator for both financial inclusion and mobile money usability across Africa.

Mats Granryd, DG, GSMA said that the creation of Mowali willhelptofurthertransformmobilefinancialservicesthroughout the African region.

“It demonstrates the mobile industry’s continued leadership and commitment to driving

financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” Granryd further explained.

Kosta Peric, the deputy director of Financial Services for the Poor at the Bill and Melinda Gates Foundation, said that a new wave of innovation is coming to help alleviate poverty and drive economic opportunity Orange Group is present in 28 countries, and has a total customer base of 261 million worldwide as at 30th September 2018, including 201 million mobile customers and 20 million fixed broadband customers. It is also a leading provider of global IT andtelecommunicationservices to multinational companies, under the brand Orange Business Services.

MTN Group which was launched in 1994 is a leading emerging market operator, connecting subscribers in 21 countries in Africa and the Middle East. The MTN Group is listed on the Johannesburg Securities Exchange in South Africa under the share code “MTN”.

As of 30th , September 2018, MTN recorded 225,4 million subscribers across its operations inAfghanistan,Benin,Botswana, Cameroon, Ivory Coast, Ghana, GuineaBissau,GuineaRepublic, Iran, Liberia, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

L-R: Niyi Yusuf, country managing director, Accenture Nigeria; Toye Soladoye, assistant general manager, Access Bank Plc; Yinka David-West, academy director, Lagos Business School (LBS); Dele Adeyinka, chief digital officer, Wema Bank, and Toluleke Adenmosun, managing director - financial services, Accenture Nigeria, Pic by Olawale Amoo during the unveiling of Accenture Nigeria Innovation Index 2018 in Lagos.

L-R: Dotun Sulaiman, trustee and immediate past chairman, Corona Schools Trust; Oluwalaonoayo Ashiru and Ifeoma Osakwe, winners in both 2nd and 5th positions in Nigerian Stock Exchange (NSE) 2018 National Essay Competition, (beating over 200,000 entries), Chinedum Oluwadamilola, principal, Corona Secondary School, Agbara, and Olusola Falodun, Corona Secondary Schools PTA Chairman, at the 2018 Corona Secondary School Annual Speech and Prize-Giving Day for the 2017/2018 academic year held in Agbara, Lagos

TECHNOLOGY

Huawei launches Africa’s first data center for cloud services Jumoke Akiyode-Lawanson

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uawei Cloud, the cloudcomputing services of Huawei, has unveiled South Africa as its newest cloud region at AfricaCom 2018, making the company the world’s first cloud service provider that operates a local data center to provide cloud services in Africa.

The provision of cloud services in South Africa from its station in Johannesburg will enable organisations operating inside South Africa and its neighbouring countries to access lower-latency, reliable, and secure cloud services, such as Elastic Cloud Server (ECS), Elastic Volume Service (EVS), and Object Storage Service (OBS) by December 2018.

BusinessDay gathers that despite several business challenges in Africa, Huawei may be planning to unveil more local data centers for cloud services in other African countries. This will be a huge welcome in a country like Nigeria, where the government has always clamored for the hosting of data in-country.

Robert Nkuna, Director-General, National Department of Telecommunications and Postal Services, South Africa says: “Huawei has been a great technology partner to our country and they

have regularly brought cutting edge technologies to our shores.

The launch of the Huawei Cloud Service is taking place in an exciting period in our country. For an example we are investing in skills development with numerous partners. We’ll engage Huawei to transfer cloud technology skills to SA and the continent.

We are convinced that we can fast track our development if we work in partnership with other stakeholders.”

Li Peng, President of Huawei Southern Africa Region, says:” Huawei has been operating in Africa for 20 years, contributing to social and economic development and enriching African people’s lives with its ICT solutions and services. We have indepth understanding of African market and we are capable of better meeting customers’ current and potential needs. South Africa is one of the most diverse and promising emerging markets globally with tremendous potential. With cloud services, we are aiming to unleash the latent capacity by introducing cloud computing, one of key engines drive the growth in this era.”

At an event held to unveil its plans for the in-country cloud service, Huawei Cloud released the Africa Partnership Program

with local channel partners, such as Altron, ATOS, BCX, Datacentrix, EOH, Gijima, StorTech, TCM, Tech Mahindra, T-systems and XON. Edward Deng, Vice President of Huawei Cloud Business Unit, said; “With over 30 years of technical accumulation in ICT infrastructure and products, Huawei provides reliable, secure, and sustainable cloud services to customers worldwide. Looking forward, Huawei Cloud’s innovative technologies and services, such as cloud computing and artificial intelligence, will help African governments, carriers, and enterprises in a variety of industries such as finance, energy, agriculture, to leapfrog to a fully-connected, intelligent era.”

Huawei also launched InTouch Aggregator, a PaaS platform powered on Huawei Cloud, which helps connect carriers, open up telecom capabilities, enable OTT, and build up the cloud ecosystem.

A growing number of organisations, such as Groupe PSA, Santander Bank, European Organisation for Nuclear Research (CERN), Falabella, and Andreani, have chosen Huawei Cloud and partners, for their cutting-edge technologies and professional local technical support.

L-R: Kehinde Bamigbetan, commissioner for information and strategy, Lagos State presents best commercial director of Multinational Brand in Nigeria Award to Martin Mabutho, chief customer officer, MultiChoice Nigeria, Goddie Ofose, Chairman, Brand Journalist Association of Nigeria, during the 6th annual brands & marketing conference held at Lagos Chamber of Commerce and Industry in Lagos.

L-R: Akwuobi , business development manager, Shell Staff Cooperative, Globacom regional activation manager, Lagos and Ogun, Olufolahan Faseyitan and the operations manager, Shell Staff Cooperative Investment and Thrift Society Limited, Sunkanmi Faniran at the on-going Shell Staff Cooperative Investment and Thrift Society Trade Expo in Marina, Lagos.

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Currencies

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Rates + Bonds

Economics

Funds

Week Ahead

Monday 26 November 2018

Watchlist

economy

Falling oil price could damp Bank’s NPLs ...10 lenders’ NPLs hit N1.01 trillion in Q3 BALA AUGIE

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significant drop in crude oil prices from current levels could expose Banks to headwinds that could damp industry’s Non Performing Loans (NPLs) and send capital adequacy going up.

After touching a four-year high in October, oil prices have fallen by more than 20 percent, as U.S shale producers have gotten back their mojo and are pumping more oil hence reigniting a supply glut.

Of course the above uncertainties are of outmost concerns to policy makers and investors because the fortunes of banks in Nigeria is tied to oil price as half of loans were given by lenders to operators in the upstream, downstream, upstream and oil and gas operators.

Bank’s asset quality as improved on the back oil price rally in past year as the cumulative NPLs of 10 largest lenders that have released third quarter fell by 16.15 percent to N1.01 trillion from N1.21 trillion as at September 2017, according to data gathered by BusinessDay. A breakdown of the NPLs per sector shows First Bank Holdings Plc’s NPLs have fallen by 16.15 percent to N381.05 billion as at September 2018, while 54.70 percent of NPLs is to the upstream oil and gas.

Zenith Bank’s NPLs’ was flat at N103.30 billion in the

W

hile capital expenditure spending by non-financial companies has improved by 20.86 percent to N226.16 billion in the third quarter of this year from N187.12 billion the previous year, the growth is abysmally poor when compared to prerecession levels of 2015.

This means economic growth is not enough to motivate managers of companies to embark on aggressive expansion plans with a view to increasing share of the

SHORT TAKES $8.134 billion In August, the central bank ordered MTN and its banks to bring $8.134 billion back into Nigeria, sending the company’s shares plummeting. The regulator alleged the firm had sent the funds abroad in breach of foreign exchange regulations.

14 percent

period under review while 50.70 percent ($475.42) of its $937.10 billion foreign currency loans are to the oil and gas.

United Bank for Africa (UBA)’s NPLs reduced by 6.12 percent to N110.40 billion in the September 2018, while 35 percent of the lender’s total NPLs per sector are to oil and gas.

Fidelity’s Bank’s NPLs dipped by 5.13 percent to N50.66 billion in September 2018, as 40.90 percent of NPLs are to the downstream oil and gas sector.

“If oil prices fall to $50, it means that asset quality will begin to deteriorate as the upstream margins will shrink,” said Ayodeji Ebo, managing

director and CEO of Afrinvest Securities Limited.

But Kareem Jibril, Head of Energy Desk at Ecobank , is of the view that there are no qualms for lenders as they have reduced their exposure to the upstream oil and gas and they have also slowed down on loans to banks in recent times.

A lot of them accommodated their debt payment at the supposedly lower crude oil price compared to where they were some three years ago, said Jibril.

According to the report a recent report by the Central Bank of Nigeria (CBN), industry NPLs fell to 12.5 per cent in June from 15 per cent a year earlier, albeit it had risen to

14.7 per cent by August.

Banks that are exposed to the oil and gas should brace for more challenges as oil prices could drop below $30 as U.S production this year is the fastest in 98 years.

By the end of 2019, total U.S. oil production -- including so-called natural gas liquids used in the petrochemical industry -- is expected to rise to 17.4 million barrels a day, according to the U.S. Energy Information Administration. At that level, American net imports of petroleum will fall in December 2019 to 320,000 barrels a day, according to the same report.

More worrisome for Saudi Arabia and other OPEC members is that IEA noted that

global supply surplus could rise to as much as 2 mb/d in the first half of 2019 based on the trajectory of the current fundamentals. It will require OPEC+ action to head that off.

“The rise has come as a welcome respite for the country’s banks, whose fortunes are tied to fluctuations in the oil market,” said the Financial Times report.

“About a third of all domestic commercial bank credit is extended to the oil and gas industry. If its entire upstream, midstream, and downstream operations and supply chain were added together, analysts estimate oil and gas lending would make up as much as half of bank’s loan books,” it stated.

This Charts show Firm’s Capex Spend still below precession period BALA AUGIE

P.E

market and increasing profitability.

Investment in property plant and equipment by 41 largest firms that cuts across different sectors except banks hit an all-time of N522.68 billon in the third quarter of 2015, when the precipitous drop in crude oil price of mid 2014 has not started taking a toll on economic activities.

There was an improvement in 2017, a period that coincided with the country existing its first recession in 25 years, thanks to a rebound in crude oil production and

price and the introduction of a flexible exchange rate regime by the Central Bank of Nigeria (CBN).

Firms were motivated to import plant and equipment as they had access to foreign exchange while oil and gas giants returned to the rigs to drill more oil.

But the combination of lethargic economic growth since the start of the year, risk surrounding the forthcoming elections, emerging market sell offs due to geopolitical and macroeconomic risk in Turkey, Argentina, and South, Africa, trade wars

between China and United States could cast a pall over future economic growth hence undermining capital expenditure by spending by companies.

The economy has to bloom for firms to buy more

assets to meet rising demand for goods and services, but the country is grappling with low consumer spending as more people are getting poorer.

Menacing grid lock at the Apapa Ports is another tumbling block for manufacturers who struggle with huge production costs. And such costs are squeezing margins.

While GDP grew by 1.50 percent in the second quarter of 2018, it is lower than 1.90 percent growth recorded in the first quarter of the year and 2.10 percent in the fourth quarter of 2017.

Nigeria’s central bank kept its main interest rate at 14 percent on Thursday, its governor Godwin Emefiele said.

25 years Nigeria emerged from its first recession in 25 years in 2017 but continues to suffer from sluggish growth and high inflation.

1.50 percent Economic growth dipped to 1.50 percent in the second quarter, continuing a slowing trend that began in the first quarter.

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

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

Monday 26 November 2018

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Markets Intelligence

FBNQuest Capital says the CBN misses out in holding MPR at 14% MICHEAL ANI

T

he last meeting held by the monetary policy committee (MPC) would have been a better time for the Central bank of Nigeria (CBN) to have tightened its key interest rate to help lure investors and reverse capital outflows in an economy that has suffered persistent selloffs, Lagos-based FBNQuest Capital said.

The MPC in its 264th meeting and the last for the year, all voted unanimously to hold the bench mark rate at 14 percent for the 14th consecutive time since July 2016, on the back of tepid growth expectations and growing uncertainty in the global financial markets arising from the poor reception of the Brexit deal by British politicians, alongside continuing trade war between the US and her major trading partners, as well as the commencement of US sanctions on Iran.

A move analyst at FBNQuest capital has said the apex bank would find problematic to increase again all through 2019.

“This was the time to tighten for the signal to offshore investors, and stay ahead of the curve in our view”, FBNQuest capital said. “A move in January could be problematic, and we would not be surprised if the rate now remains on hold throughout 2019”.

While the Central Banks of Africa’s largest economies (Nigeria & South Africa) are both concerned about inflation, both have attacked the issue in different ways.

While SA increased its key interest rate by .25 basis points for the first time since 2016 from 6.5

percent to 6.75 percent and has announced another three more hikes before end of 2020, even though its inflation is single digit at 5 percent, Nigeria on the other hand has left its rate unchanged for more than two years.

The federal government last

Crude, oil and gas stocks eye one of their worst days this year

O

il and gas stocks led Wall Street lower as pressure from US President Donald Trump on Saudi Arabia to keep prices low sent crude more than 6 per cent lower on Friday and had them on track for one of their worst drops this year.

Saudi Arabia, whose decision thus far to hold off on supply cuts, drew the praise of Mr Trump this week, and came on the heels of the US leader voicing his support for the kingdom’s crown prince, Mohammed bin Salman, in a delicate time following the killing of journalist Jamal Khashoggi.

All told, the price of Brent crude, is now down by about 32 per cent from its four-year high in early October, putting it firmly in a bear market. West Texas Intermediate, the US marker, is down by ⅓ over this period.

On Friday, Brent was down 6 per cent at $58.84 a barrel, putting it on track for its fourth-worst one-day drop so far this year. It also means three of the international benchmark’s worst days this year have taken place in November.

All three of WTI’s worst days this year have occurred in the past

fortnight: a 7.1 per cent drop on November 13, a 5.9 per cent fall on November 20, and today’s 6.7 per cent fall that has taken the US marker, down 6.7% at $50.97.

Unsurprisingly, the S&P 500 energy sector is down 3.6 per cent, eyeing its worst session in a month and its fifth-worst day of 2018.

The flip side is that airline stocks are having a good day and are among the best performers in the S&P 500 on the view one of their key input costs had become cheaper.

Chevron, down 3.3 per cent, and ExxonMobil, down 2.8 per cent, were the worst performers in the Dow Jones Industrial Average.

In the S&P 500, losses were led by Concho Resources, down 6.1 per cent, EOG Resources, off 5.6 per cent and Devon Energy, which was 5.5 per cent weaker. Further down the leaderboard, oilfield services providers were feeling the pain, with Hess down 4.7 per cent and Halliburton off 4.3 per cent.

Among the carriers, American Airlines was the S&P 500’s secondbest performing stock, up 4.8 per cent, while Delta Air Lines gained 2.5 per cent and United Continental added 2.3 per cent.

month reached an agreement with the Nigerian Labour Congress (NLC) over a 66 percent increase in the minimum wage to N30, 000, which implementation will commence next year. The US has also tipped signals of three more hike in its interest rate, a

situation analysts say will accelerate further sell offs which in turn, put pressure on the Naira.

“The CBN does not have a formal inflation target, unlike for example its South African counterpart, and so, has what we might call a roving remit in terms of its

monetary policy. The MPC sees inflationary pressures ahead but of a moderate nature. Those pressures are largely supply-side. The committee is now playing down the impact of the expansionary budget and of the expected rise in the national minimum wage”, “The normalization of US monetary policy has become the main driver of the FGN bond market, leading to the exit of some offshore investors. We see mid-curve bond yields in a 15.50 percent to 16.50 percent range for the next MPC meeting”. The merchant bank and Asset management firm said in a Nov 23 note to clients.

Prices of goods and services in Nigeria slowed to 11.26 percent in October from 11.28 percent a month before, but still above the upper band of the CBN target. The Apex bank has predicted the rate of inflation to hit 11.5 percent and thereafter, continue to moderate further downward Also, growth in the second quarter slowed to 1.5 percent from the 1.95 percent that was recorded the previous quarter owing to a drop in daily crude oil production to 1.84 million barrels per day in Q2 2018, from the 2.00 million barrels produced in Q1 2018 and the 1.87 million barrels recorded in the same period last year when the country managed to limp out from recession. The CBN has projected 2018 full year growth at 1.75 percent FBNQuest said “the communiqué saw tepid growth ahead (1.75 percent this year), but did not identify much to change the narrative for next year. The positives mentioned will not restore growth to the level of the early 2010s.

Sino-US trade risks pile on worry for ‘peak earnings growth’ bears Myriad sources of uncertainty are weighing on share prices

W

orshipping at the altar of future earnings growth has become challenging for investors in US stocks this year.

While profit growth in 2018 has been nothing short of spectacular, even the most faithful of Wall Street bulls has had to believe that the rate of increases must slow.

“Stock investing today is like a monotheistic religion,” says David Kelly, chief global strategist at JPMorgan Asset Management. “Investors seem to worship only one God, and that is ‘future earnings growth.’

The problem in 2018 is that while we have spectacular earnings now, prospects look much less positive for future earnings growth.”

Indeed, “peak earnings growth” has become a common catchphrase to help explain the bouts of weakness in the US stock market this year.

It encapsulates the myriad sources of uncertainty weighing on share prices: trade tensions between the US and China, rising interest rates, wage pressure, an uncertain outlook for the global economy and questions about future growth for the technology behemoths, such as Apple, that have driven Wall Street’s bull run in recent years.

Concern that earnings growth

was topping out first took hold months ago during the reporting season for the first quarter when Bradley Halverson, chief financial officer of Caterpillar, told analysts on an earnings call that the company’s outlook “assumes that first-quarter adjusted profit per share will be the high watermark for the year”. Shares tumbled.

Boosted by corporate tax cuts, blue-chips have delivered on average back-to-back quarterly earnings growth of more than 20 per cent per share this year, according to FactSet. That was capped off by the 25.9 per cent increase for the third quarter, the largest gain since 2010, while the full-year 2018 estimates sits at 20.5 per cent.

It has been clear for a while that such increases were unsustainable especially given the difficult comparisons to the levels boosted by the corporate tax cut. But just how much growth would slow has been a question hanging over the market.

Consensus estimates for 2019 had been hovering around 10 per cent for much of the year, a figure some saw as a place holder until the picture for 2019 started to become more clear.

That includes the state of trade

talks, the pace of interest rate rises by the Federal Reserve and the robustness of the global economy, as well as the level of the US dollar and oil prices. The steep drop in oil prices has been one of the more recent headaches to emerge for investors.

Forecasts have started to fall — even if the drop is less than has been historically the case at this point in the year, FactSet said.

Since the end of September, the aggregate estimate has decreased from $178.01 a share to $176.63, which comes to a rise of 8.8 per cent over the previous year for companies in the benchmark S&P 500 index.

But some investors and strategists expect further markdowns in the growth rate, possibly to 5 per cent or even less, and argue that the market is already discounting that into stock prices. It would be in line with the expected growth rate for revenues, reflecting fears of significant pressure on margins ahead.

Strategists at Morgan Stanley wrote in a recent report that “2019 EPS forecasts are finally coming down, albeit slowly”, adding that it thinks “this will be a long arduous process as companies are slow to acknowledge margin pressure, topline weakness, or both”.

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This is M NEY A daily guide to your Personal Finance

Monday 26 November 2018

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

‘Rather than selling off, this is the best time to invest in stocks’ Sulaiman Adedokun, deputy group managing director of Meristem Securities Limited in this interview with some select journalists shares his thought on state of the capital market now, hope for investors and opportunities in the long run. Modestus Anaesoronye reports: Excerpts

T

capital market, as there is still a lot to be done by the government in this regard.

The role of the government is to provide an enabling environment for the capital market to shape the economy. The capital marketcan raise funds for the development and boosting of various infrastructural projects in the country from a state of deficiency to a state of sufficiency.

In the areas of product offerings, do you think we have enough products in the capital market that will give us the kind of growth that we expect after the elections, take for instance you know we are yet to kick off derivative trading in Nigeria capital market whereas other emerging markets have gone far ahead ofus There is no doubt that we do not have enough products to meet with the demands. A paradigm shift must occur as we still have a long way to go when compared with other emerging economies.

It is good that you mentioned derivative. Derivative is an important product that the market should have come up with however, first and foremost, an awareness of the product needs to be created. Thankfully, we have other products in the market like the (ETF).

ETF provides access to nearly all asset classes that an investor will need. We are currently at a base level with the ETF and this supports the fact that we have huge opportunities for growth in the aspect of product development. Accordingly, a derivative market needs to be strengthened as fast as possible to enable other products follow suit and we need to keep pushing harder as the pace could be slow due to the system.

Considering this level of achievement that you have recorded so far; can you share with us how you were able to navigate Nigerian micro economic challenges?

For us at Meristem, when there are micro economic changes, we try to identify what the issues are and what opportunities lies therein

Sulaiman Adedokun

and as you know, challenges bring about opportunities.

At Meristem, our focus is not about selling shares rather information. For us, shares are just products but what we do sell is information hence, the reason we pioneered active research information in the market.

What area should operators and regulators focus on in improving market outlook?

The capital market is an ecosystem where everyone is expected to perform his or her respective duties. There is a need for more collaboration between the regulators and operators in the capital market. Considering this, the market needs a high level of

‘ The government needs to create incentives and an enabling environment to encourage more companies to list

‘

What do you think about the current state of the nation’s capital market? he market is currently down, and we understand this is because of the political environment of the country.

There is a lot of apprehension about foreign portfolio investors right now because they are the largest in number.

Everybody wants stability hence the reason why people are selling off their investment while watching the market trends before they come back. Regardless of the level of good results achieved from the listed companies, some people keep selling off their investment. Nonetheless, this creates an opportunity for long-term investors; this is the best time to invest as opposed to fleeing from it.

How would you describe the potential of the market and its contribution to the economy?

The Nigerian capital market has huge potentials, and such is expected from a developing economy like ours.

We have huge untapped areas in the market that needs to be filled. We are still at a base level when compared to that of the developed economies.

The capital market needs to be deepened further than this to provide opportunities for growth in the economy; it is a barometer of growth and development in the economy. When the capital market is down, people believe the economy is down and this provides an opportunity for the government to grow the economy.

Capital market is the connection between the monetary sector and real sector.

The funding of the real sector can better come from a long-term fund that is from the capital market as the real sector cannot grow without funds, and no economy grows without the real sector.

Hence, the need for the Nigerian government to focus on the capital market as listing of government and private firms on the Nigerian Stock Exchange significantly enhances the market.

We are not yet exploring the full potentials of the

transparency, as no investor wants to put money in the market except there is transparency hence the existence of a strategic role where the regulators and operators need to do more in terms of partnerships. For instance, the stock market crash in 2008/2009 could have been avoided if things were put in place ahead of that time.

There have been a lot of awareness and activities on the part of the Securities and Exchange Commission (SEC) and other regulatory bodies. There is need for more proactive regulation to ensure that the economy is moved to the next level. Regulators should involve operators by making them participate actively in the formation of regulations in the industry and should be sustained to tap into the opportunities in the market.

Do you think we have enough products in the capital market to spur the kind of growth people are expecting after elections?

As I mentioned earlier, I have no doubt that we do not have enough products to meet the demands. We have come so far but we still have a lot more to do compared to other developed economies. We need a framework and enough awareness to develop the market. We have products such as the Exchange Traded Funds that provide access to nearly all asset classes, nevertheless,

we are not yet where we ought to be.

This greatly supports the fact stated earlier that there is huge room for growth in product development that will ride on derivatives.The derivatives market needs to be developed and groomed as fast as possible to enable other products to be developed to meet other needs.

I am aware that there are a lot of activities going on to achieve this; the pace may be slow due to the system, the politics and the likes, but we really need to push significantly to ensure that we get there quickly before it is too late.

Why is it that mutual funds are not growing the way is expected in Nigeria, but doing well in other countries?

Mutual funds are in different forms, we have equity mutual funds and money market mutual funds. I think the first thing is awareness, if people become aware and are financial literate enough to know about investment activities, it would provide a veritable platform for people to invest. With ten, twenty and thirty thousand naira, you can go in any time and go out any time capturing the best platform for pulling fund together from different arrays of investors, but when people are financially excluded, it limits participation in some of these investment instrument opportunities. If an individual neither knows anything about investment, or an idea of what it is, nor had a bank account, they cannot invest.

Mutual fund literacy education is one of the roles of the operators and that is one of our social responsibilities too. In other economies as you rightly mentioned, their level of both financial literacy and awareness of investment market are higher than that of Nigeria.

There lies our challenge. That said, note that with the current situation of this country, people lack purchasing power to also run investment.

Investments are discretionary hence when your discretionary income is so low,

and is not even sufficient for you to eat, you do not want to think about investment. That then is the link between economy development and capital market development.

Government needs to really focus on capital market to ensure that it is a catalyst for other aspect of the economy so that the real sector can grow properly. So, an ideal situation would be to address the activities that can make the capital market grow effectively so that we are all better for it.

The capital market needs to be deepened more than what we have learned, incentive should be provided for companies that are just coming up in the market.

When the market is growing, people want to participate just like in 2006/2007 when the market was booming, quite a lot of people came to the capital market, people became aware of the market during that time because it providedopportunity for growth.

What can be done to encourage more companies to list on the stock exchange?

The government needs to create incentives and an enabling environment to encourage more companies to list.

With fintech taking over the trends, how is Meristem prepared to stay ahead of trends in the market?

Technology has always been at the front burner for us because it is a lever. In today’s world, it is difficult for a financial institution to exist without technology. One of the factors that drive growth is technology. Imagine having to meet a client’s need at Abuja while you are in Lagos.

Branch network may not be the best option; only technology can fill that gap.

Meristem Stockbroker, a subsidiary of Meristem Securities started the first online trading platform in Nigeria and just recently won the NSE Bull Awards for the digital broker of the year, and that tells you that we have always been at the forefront of the technological advancement.

Monday 26 November 2018

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Monday 26 November 2018

Access Bank Rateswatch Market Analysis and Outlook: November 23 - November 30, 2018

KEY MACROECONOMIC INDICATORS GDP Growth (%)

1.50

Q2 2018 — lower by 0.45% compared to 1.95% in Q1 2018

Broad Money Supply (M2) (N’ trillion)

25.28

Increased by 1.73% in Oct’ 2018 from N25.28 trillion in Sept’ 2018

Credit to Private Sector (N’ trillion)

22.72

Increased by 0.72% in Oct’ 2018 from N22.56 trillion in Sept’ 2018

Currency in Circulation (N’ trillion)

1.97

Increased by 1.54% in Oct’ 2018 from N1.93 trillion in Sept’ 2018

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

11.26 14 14 (+2/-5) 41.53 71.40 1.75

Decreased to 11.26% in October’ 2018 from 11.28% in September’ 2018 Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9% November 21, 2018 figure — a decrease of 0.98% from November start November 23, 2018 figure— no change from the prior week October 2018 figure — a decrease of 0.96% from September 2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr)

Friday

Friday

23/11/18

16/11/18

31,678.70 11.57

Change(%)

32,058.28 11.70

(1.18) (1.18)

Volume (bn)

0.22

0.16

36.27

Value (N’bn)

2.63

2.79

(5.77)

MONEY MARKET NIBOR Tenor

Indicators

23/11/18

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.)

Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Silver ($/t oz.)

Copper ($/lb.)

1-week Change

YTD Change

(%)

(%)

71.40 4.30

0.00 6.97

10.77 40.71

2129.00 112.85 78.78 12.54 506.75

(3.88) (1.01) 0.70 (1.10) (1.51)

9.97 (13.33) 1.65 (18.20) 16.90

1222.30 14.30 278.05

0.50 0.00 1.33

(7.23) (16.81) (15.18)

Friday Rate

Friday Rate

Change

(%)

(%)

(Basis Point)

23/11/18

16/11/18

5.83

6.33

(50.0)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

6.58 5.55 11.97

7.17 7.13 11.94

(59) (157.5) 2

Tenor

90 Days

13.66

14.15

(49.7)

1 Mnth 3 Mnths

11.51 13.44

10.95 13.30

55 14

Friday

1 Month

6 Mnths 9 Mnths 12 Mnths

13.74 15.33 16.87

13.68 14.83 16.82

6 50 6

OBB

FOREIGN EXCHANGE MARKET Market

Friday (N/$)

(N/$)

Rate (N/$)

23/11/18

16/11/18

23/01/18

Official (N) Inter-Bank (N)

306.75 360.64

306.70 360.52

306.55 362.55

BDC (N) Parallel (N)

359.36 364.00

363.50 364.00

363.50 362.00

Friday

Change

(%)

(%)

(Basis Point)

23/11/18

16/11/18

3-Year 5-Year

0.00 15.16

0.00 15.23

0.0 (6.3)

7-Year 10-Year 20-Year

15.50 15.48 15.62

15.46 15.50 15.70

3.5 (1.9) (8.3)

Indicators

16/11/18

Friday

Friday

Change

(%)

(%)

(Basis Point)

23/11/18

16/11/18

2673.80

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

8.35 5.20

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

8.85 -46.86

2665.09

0.33

8.32 5.19

0.32 0.23

8.49 -47.70

0.36 0.84

TREASURY BILLS (MATURITIES)

Disclaimer

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

(Basis Point)

Index

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

Change

(%)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

AVERAGE YIELDS Friday

Friday

(%) 23/11/18

BOND MARKET Tenor

Friday

91 Day 182 Day 364 Day

Amount (N' million) 3,384.18 16,920.90

Rate (%)

10.9752 13.49

107,938.48 14.4

Date

14-Nov-2018 14-Nov-2018 14-Nov-2018

Global Economy In the US, consumer sentiments dropped to 97.5 in November 2018 from 98.6 in October. According to the University of Michigan, the body responsible for the survey, it is the lowest value in three months.

Consumer spending accounts for about 70% of the United States' gross domestic product. Therefore, consumer sentiment can potentially be a gauge of the health of the economy. Elsewhere, in China, inflation remained unchanged at 2.5% year-on-year in October 2018. A slowdown in prices of food was offset by a faster rise in cost of nonfood products as reported by the National Bureau of Statistics of China. The inflation rate remains below the Chinese government target inflation rate of 3% for the year 2018.

Annual core inflation, which excludes volatile items such as food and energy, edged up to 1.8% in October from 1.7% in the previous month. In a separate development, Eurozone trade surplus shrinked to EUR 13.1 billion in September 2018 from EUR 25.3 billion in the same month of the prior year.

The European Statistical Office revealed that export dipped by 1% to EUR 184.8 billion in September from last year's EUR 186.6 billion while imports edged up by 6.4% to EUR 171.7 billion from EUR 161.3 billion in September 2017. Imports were boosted by purchases of energy raw materials, machinery and vehicles, chemicals and other manufactured goods while exports of food and drink fell. Intra-euro area trade increased 2.2% year-on-year to EUR 161.1 billion in September.

Domestic Economy The Central Bank of Nigeria (CBN) concluded its 2-day Monetary Policy Committee (MPC) meeting on November 22. The apex bank decided to maintain the Monetary Policy Rate (MPR) at 14%, while the MPC also retained the cash reserve requirement (CRR) ratio at 22.5%, the liquidity ratio at 30% and the asymmetric corridor around the MPR at +200 bps/-500 bps. With respect to growth, the MPC acknowledged the recent tepid performance but expects the Economic Recovery and Growth Plan (ERGP), the 2018 budget, increased stability in security, as well as improved FX conditions to redirect the economy to sustainable growth. On inflation, the Committee welcomed October's moderation on the back of lower food prices. It however noted that growing pressures that will see inflation tick up again at the end of the year. Recently released data by the National Bureau of Statistics, showed Nigeria's Inflation rate declined in October, after two consecutive months of increases in August and September. The Consumer Price Index which measures inflation increased by 11.26% year-on-year (y-o-y) in October 2018, reflecting a 0.02% decrease from the 11.28% rate recorded in September 2018. Food inflation eased to 13.28% y-o-y compared to 13.31% y-o-y in July. The highest increases in food price were seen in prices of Potatoes, Yam and other tubers, Bread and cereals, Fish, Fruits, Meat and Vegetables. In contrast, core inflation notched up to 9.9% year-on-year in October 2018, from the rate recorded in September at 9.8%.

Stock Market The equities market remained in negative territory last week, with the All Share Index (ASI) posting a week-on-week decline of 1.18% to 31,678.70 points, amidst dampened investor sentiments. Market

capitalization contracted N14 billion to close at N11.57 trillion. This week we anticipate the equities market will sustain a negative outing as investors continue to tread cautiously.

Money Market Rates declined at the money market last weekdue to a net inflow of about N210 billion in Open Market Operations (OMO) maturing treasury bills. Retail refund estimated at N300 billion also hit the system thereby boosting liquidity. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates eased to 5.83% and 6.58% from 6.33% and 7.17% respectively the previous week. Longer dated placements also retreated. The Call and 90-day NIBOR closed lower at 5.55% and 13.66% from 7.13% and 14.15% the previous week. This week, rates may remain at the same level or likely decline due to expected Primary Market Auction (PMA) of N153 billion.

Foreign Exchange Market The local currency depreciated marginally at the interbank window by 12 kobo to close at N360.64/$ from N360.52/$ the previous week. At the official window, it lost 5 kobo to settle at N306.75/$ from N306.70/$ the prior week. At the parallel market, the local currency remained unchanged from the previous week at N364/$. The relative stability of the local currency continues to be supported by the intervention of the apex Bank. This week, we expect the naira to remain stable, boosted by the Central Bank's sustained supply of liquidity to the market.

Bond Market Bond yields dipped for the first time in six weeks consequent on investors' reaction to the monetary policy rate retention and a moderation in headline inflation. Yields on the five-, ten- and twenty- year debt papers settled at 15.16%, 15.48% and 15.62% from 15.23%, 15.50% and 15.70% respectively the previous week. The Access Bank Bond index rose marginally by 8.71 points or 0.33% to close at 2,673.80 points from 2,665.09 points the previous week. This week, we don't expect to see much activities in the market as investors remain wary of the yields levels.

Commodities Oil prices retreated last week on concerns of rising supplies and a cooling global economy.

The OPEC Reference Basket (ORB), an important benchmark for crude oil prices, fell by 5% to reach $62.08 per barrel. Meanwhile, precious metals prices climbed as investors moved to risk-averse assets amid geopolitical tensions like Brexit and the USChina trade war. Gold settled at $1,222.30 an ounce, up $6.08, or 0.5%. Silver prices remained unchanged at $14.30 an ounce.

This week, oil prices are likely to remain pressured by ongoing supply glut worries.

For precious metals, Brexit turmoil and trade war concerns will continue to support prices.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Nov’18

Dec’18

Jan’18

Exchange Rate (Official) (N/$)

363

364

365

Inflation Rate (%)

11.30

11.32

11.45

Crude Oil Price (US$/Barrel)

75

77.00

78.00

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

Monday 26 November 2018

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Interview

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I will restructure Nigeria, build egalitarian society – Durotoye Fela Durotoye, a management expert, is the presidential candidate of the Alliance for New Nigeria (ANN). He kicked off his presidential campaigns with an interactive session with some selected Journalist in Lagos, unfolding his plans to transform the country, if elected president in next year’s presidential election. Iniobong Iwok, who was there for Businessday, reports. Excerpt:

H

ow prepared are you for the task ahead if you emerge the winner of the 2019 Presidential election?

I am hundred percent prepared for the task ahead; we have plans and we have unveiled our primary blue print, about six months ago even earlier than other candidates.

We have a ten-point agenda and it is constantly being reviewed and updated. We believe it is possible for things to work in the country and we are passionate about fixing things. Nigerians and the general masses are tired of the state of affairs and will vote the right people in next year’s general elections. Nigerians will vote for a new Nigeria.

We have said it before that

by May 29 we will inaugurate our cabinet members. This will be the fastest cabinet formed in the world.

ered financially. There has to be a shift in the revenue sharing formula across boards. That would give more resources to the local government areas in the country and our economic base can shift and there would be more resources and job opportunities for the people.

What we have saying is that there has to be a restructuring of the economy which would create jobs. The economy will grow, the country will grow and things would be fine.

We have seen successive governments come and go without much impact on the lives of Nigerians why.

Should Nigerians vote for you?

Nigerian will get the opportunity to pursue their life happiness and see a nation that they will be proud after I have been elected the president of the country.

We believe three things will happen: we want a government that will serve Nigerians and not Nigerians serving them.

Secondly we will cut out corruption and eliminate it completely in the system Thirdly, we will see our economy grow, because we will diversify the economy and we believe there are resources that are untapped in all local government areas in the country and our priority will be turning the local governments into industrial hubs and resources would be tapped for their development.

We want to see job opportunities for Nigerians and a general reorientation; we want a new Nigeria where everybody across the globe would want to work with and in, seeing that the country can progress.

We will have opportunities for all where people are safe and prosper and we woill see a value reorientation, a nation where power is constant, where roads are without potholes. We will see investment, and the development of human capacity, education will be given priority.

We will see a nation that values its own people, a nation where you can aspire to any position without knowing

I want to disabuse the minds of Nigerians about the illusion that their votes will not count. This is the notion that the political class sells to the masses. If your vote does not count why are they buying it?

Nigerians should not believe let them. They should go out and vote. We will get a new generation of 50 million Nigerians who do not vote for APC or PDP that will vote in the right people and we will have a new leaders and a new nation.

The people of Nigeria want a change. The people want a new order. The working class people are giving us N100, N2, 0000, and we are seeing street urchins even giving us donations, which shows how much the youths are desirous of a change in the country.

We have not collected money that is more than N1million from anybody, which exceed INEC minimum rules.

Don’t forget that is what they often do. When they collect money from these business men who are perhaps the generator contractors, they would then say we cannot fix power. We are passionate about moving the country forward and Nigerians are more conscious and will vote out leaders who have held the country captive for years.

Nigerians want a change, a shift in the state of affairs and that is why for the first time we are seeing street urchins, all sorts of people contributing to this campaign to move forward and provide that purposeful leadership which this country urgently needs.

Are you not afraid that the result of the presidential election would be manipulated?

No I have no fear of the election being manipulated because I believe in next year’s presidential general elections. The two established political parties would try and stop each other from rigging the election and in doing so we will have free and fair elections.

anybody; a nation where human dignity is upheld and young people will be empowered.

It is easy for any politician to say they would do some of these things; but we need to ask what they have been doing over the years.

But I have a track record of service to people. We have the Fela Durotoye Mentoring Programmes which have about 30,000 young people benefiting from them.

We have been involved in social projects like education.

We have helped states like Oyo reform their education programme which made significant success and taken them from the 24th position to third in the country in terms of educational ranking from 2010 to 2017.

We have also been involved in social projects. We want to evolve a new value system, a new nation and I am sure Nigerians would be proud of their nation and their leaders after wards.

Are you saying your administration would bring a new order in the country?

The first thing I would say is: look at the life of a politician before he runs for political office. What have they done? Why do they want to become leaders? In the developed countries, it is the reverse scenario: leaders have track records.

Look into the life of a politician, if you can find a level of consistency in what they are saying and what they are doing, then you have a leader that can

be trusted.

Nigerians need a leader whose mind-set the electorate understand, a leader who understands the problem of the country and have a track record, a leader who is credible and consistence in their actions and records.

How do you react to insinuation that your party is for the elite and what structures have you put in place to win the presidential election?

Our party is a political party for all Nigerians. We want to build a party for all, a party that will meet the needs of Nigerians. Our leaders may be privilege to good education, but it does not mean they are not from the normal society.

We want education to be available to all Nigerians. The problems that have been created by the current crop of leaders are affecting Nigerians.

We are fighting for that mother who cannot send her child to school, the jobless youths. We want an equal society and you can see that what we are saying is what we have done.

When we wanted to kick-start our campaign we started in Ajegunle, on the street. Most of our works over the years have been on the street and we have been touching the lives of Nigerians, especially the youths.

Power is not working for anybody especially the elite.

We are fighting for that young man who wants to go to school,

but cannot. It is not a fight for the elite; it is for everyone. Our message is not elitist, it is for everyone and you see that our presidential campaign did not start in the big Sheraton hotel. It started in Ajegunle on the street, because we have been on the street touching people’s lives and we understand their needs.

It is the people who want change that have been supporting the course, giving us N1,000 N2,000, N5,000. Those are the people who have done this campaign. We have structures across Nigeria.

It is not an elitist movement but for all Nigerians and that is all we have been doing.

We want a system where the son of nobody can become somebody without knowing anybody. That is the Nigeria we are dreaming about.

What is your view on agitations for restructuring of the country?

Upon assumption of office as the president of Nigeria, I will restructure the country. We believe the country is faulty as it is presently constituted. There is too much power at the centre.

For instance the governors are called the Chief Security Officers in their states but they cannot control the Commissioner of Police.

We need to decentralise power to the regions; let the local government have more power.

The local governments are the custodians of the wealth of the nation but they are not empow-

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In association with

Damilare Ogunleye: Promoting brands through technology Josephine Okojie

E

very entrepreneur in Nigeria has a unique story to tell and usually an inspirational one of how his or her own personal entrepreneurial journey started.

For Damilare Ogunleye, CEO and co-founder of Lasiko Limited, his inspiration came when he identified a market potential in merchandising brands.

“In America and Europe, movies and musical artistes rake in millions of dollars by just putting their brand logos and elements on things like t-shirts and children bags, among others. But in Nigeria, many of our artistes do not take advantage of such opportunity,” Damilare says.

“To change this, I, alongside my other co-founders, established Lasiko Limited in 2015, launching a unique technology platform called suvenia.com, to allow individuals create, design, buy and sell ideas on products such as apparel, drink ware, and other accessories,” he explains.

To achieve this, he and his cofounders undertook training in communication marketing. “To make my transition to a marketing career, I took up courses in marketing to broaden my skills in the sector.”

The engineer-turned-entrepreneur tells Start-Up-Digest that he started his business with N3 million

Damilare Ogunleye

with each of the co-founders contributing N750, 000. He says the money was raised from their individual

personal savings while working.

He says that the money was spent on registration of the company, sta-

tionaries and as working capital for the first set of projects undertaken.

He notes that the business has grown since starting as it has been able to attract grants from the Tony Elumelu Entrepreneurship Program, World Bank GEM Business Plan Grant, Systemspecs NITDA seed funding, and from the Lagos State Employment Trust Fund to expand its operation.

“Since we commenced operations, the journey has been filled with lots of sleeplessness, doubts, mistakes, frustrations around the operating environment we find ourselves and, most definitely, a couple of wins that compensate for all,” the young entrepreneur says.

Currently, the business is made up of 11 team members that see to the daily operations of Lasiko Limited.

The accessories used in branding are sourced both locally and internationally. “We source locally and internationally. We source 60 percent locally while we import the rest of our ram materials we use in branding.”

Speaking on why people should patronise Lasiko Limited for brand promotions, he says the business prides itself providing 100 percent quality and service delivery.

Also, he discloses that the business provides the opportunity for creative individuals to make money through the sales of their designs.

He highlights that the country’s

huge infrastructural challenge remains the biggest constraint challenging the business.

Similarly, he notes that the Federal Government policy flip-flop remains another major business hiccup.

“While we do have an amazing team, a challenge I have experienced is also in the quality of human capital available. This is the biggest one that worries and scares me,” he says.

He calls on the government to bridge the huge infrastructural gaps in the country, adding that it will help speed up industrialisation in the country. On the business expansion plans, he states that Lasiko plans to launch in other markets outside the shores of the country. Also, it is seeking to execute some major brand partnerships on a scale.

Answering question on his biggest piece of advice to other startups, he says, “Do not get fooled by the hype of how some entrepreneurs are succeeding and doing well and it looks like they have it easier. Nothing could be further from the truth.”

“Overnight success is sometimes the outcome of over 10 years of consistent handwork. So, keep putting your bit daily into your ‘hustle’. It may not look like what you are seeing, but in the end it will make sense.

“However, as you do this, be very attentive to the market you are serving. The market is always talking, but are you listening and adapting to it?” he asks.

ACUF to train youths on entrepreneurship, problem-solving skills ANTHONIA OBOKOH

T

he Amaka Chiwuike-Uba Foundation (ACUF), a non-governmental organisation, in furtherance of its monthly Youth Development and Leadership Workshop Series (YouDAL) and as part of its giant strides of contributing to national development, is holding a one-day workshop to train

youth on entrepreneurship development and problem solving.

ACUF is organising the training in recognition of the challenges facing the youth in Nigeria, which includes lack of knowledge to envision and execute strategic leadership processes and effective management, inadequate skills for entrepreneurship, lack of ability to participate in governance and effect social change and weaknesses in setting personal and vocational

goals among others.

Chiwuike Uba, founder of the NGO, said in a statement made available to BusinessDay that the workshop is free for registered participants; as the NGO is basically interested in enlightening and building the capacity of Nigerians; hence, making life easier for everyone.

“The YouDAL aims to promote youth leadership development, education and employment, to

L – R Mazi Sam Ohuabunwa, national coordinator, Strategic Outreaches, Full Gospel Businessmen’s Fellowship International ( FGBMFI) );Okeoma Agu, national vice-president; Ifeanyi Odedo, national president, FGBMFI – Nigeria; Isaac Okpanachi, national vice president, Outreaches, and Fola Aguda, district coordinator – South West 3 District at the opening ceremony of the 2018 FGBMFI convention in Lagos recently .

support healthy lifestyle and foster the participation of all the youth into all aspects of society at national, state and local government levels. The mission is to transform lives and build nations,” Uba said.

“Critical, creative and entrepreneurial thinking are useful in every sphere of life and not just innate skills. Individuals with strong critical thinking skills are very valuable resources to nations, teams and to businesses and that is why we are going to be broadening the skills of our youths.”

He stated that no stone would be left unturned in bringing experts and resource persons to train participants at the workshop.

He even as he revealed that the foundation will not relent in its efforts to build the capacity of youths.

Chiwuike said that ACUF has carried out similar workshops in the past, especially in spreading the awareness about asthma ailment, just as he called on government and well-meaning Nigerians for sponsorship in combating the scourge of asthma: which he said is not a death sentence for patients.

He noted that the skills recognize that solutions to problems are not always found by picking apart

and analysing ideas, but in the investigation of the external world.

“The training workshop methodology shall include individual exercises and reflections, stories and scenarios, small and large group discussions, activities and games, role-playing exercises and team projects and exercises,” added Uba. The workshop, which is expected to hold in Enugu on Saturday, December 1, will afford youths the opportunity to acquire and apply some necessary skills required in thinking critically, creatively and making decisions that will solve problems and resolve conflicts.

Start-Up Digest Team Odinaka Anudu Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Bummi Bailey Fifen Eyemisanre Famous Graphics

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Start-Up Digest Funmipe Olofinlade: Astute security entrepreneur ODINAKA ANUDU

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unmipe Olofinlade is a young security entrepreneur who knows what he wants and how to get it.

Funmipe heads SOC Esentry Systems Limited and is a PhD level researcher on cybersecurity at the Federal University of Technology Akure (FUTA).

His security journey started when he saw a movie named ’24’.

“I wanted to be like Chloe O’Brien and that was how I started. My first search was Chloe’s role and how to attain it. Basically, I literarily typed, ‘How do I become like Chloe?’ I discovered that I needed an understanding of programming. So, I started from writing codes (Visual basic and c). Then, I also needed a bit of networking knowledge. So, in my 200 level, I had the CCNA. In my internship 400 level, I found out that I needed to know how operating systems, server and infrastructure worked,” he recalls.

Funmipe delved into server management and administration and, in his final year at FUTA, he majored in Nose Biometrics.

In 2011, he majored in Information Security as there was no academic course available for him.

“Biometrics was the closest,” he says.

“Then by the grace of

God, in my quest to learn more, I got a rare opportunity to study Communications and Computer Security in France, which was co-organised by Telecom Paris Tech/Instutut Eurecom. There and then was I exposed to the world of security. I had an in-depth knowledge of cybersecurity and exploitations.”

There was no job for him when he returned to Nigeria as a security professional.

This was because the only job out there then was applications development.

“My first interview was as a java developer. I could write codes very well, but I was not enthusiastic about it. I wanted to put my skills and passion to work . I wanted an information security role. I did not take the job.

Instead, I opted to become a visiting researcher at my alma-mater. I was working on cloud computing security and cryptographic protocols. I was not paid though, but I loved it. I would travel Mondays to help out in research. I did that for a while and at some point, I felt that Nigeria was not mature for my skills. So, I decided to make my final journey out of the country and never to return. I said to myself, ‘If I would take a development role, I would rather do it out of Nigeria’. It was at the embassy that I met my first information security employer, who currently is the MD/CEO of Flutterwave, Olugbenga Agboola. It just happened by chance. I was

Funmipe Olofinlade

planning to travel out and he was also traveling to France.

I started a conversation with him. I was actually trying to help a good-looking man looking for French application stand and there we got talking about IT security, my passion and why I was leaving,” he recounts.

He says Olugbenga saw his passion and believed, giving him an opportunity to express himself.

He started working for him on projects and pentesting applications. The young entrepreneur decided

to conduct an independent research on financial fraud in transactions with two eminent persons, which would eventually lead to a PhD degree.

Two years after, his research was noticed by Esentry Systems Limited, a new MSSP in Nigeria offering security services.

He discussed this with his boss, who surprisingly gave his blessings.

“I assumed the role of a lead researcher and the head of security operations center at Esentry Systems

Ltd, where I have been able to proffer consulting services from industrial and research perspective. This has been my journey so far,” he narrates.

How has he been coping combining academic activities and job?

He says it has not been easy. However, he is coping because he has a goal.

“I have a goal to be a world-class researcher with a wealth of industrial experience. So, it means that while I am aiming at attaining the peak of an academic degree in information security, I also want to be a world-class professional with a lot of industrial experience and certifications. I want to be relevant in both worlds. It has been very difficult and I could have done it anywhere else in the world but Nigeria gives me the opportunity to be able to move and shuttle in-between the academia and the industry which I really do not think it would be easy for me to combine if I am outside the country.

It has not been easy but I’ve been able to put it together thus far.”

He says there are many opportunities in cybersecurity.

For him, it is a green area, where a lot of knowledge gap exists.

“So, there are a lot of opportunities here. Lately on the globe, there are lots of cyber-attacks on different sectors, so we need more professionals now than be-

fore.”

He says that Esentry Systems Limited has the vision to pioneer the maturity of cybersecurity research and development in Nigeria and in Africa.

The firm aims to be the first and the leading MSSP in Africa, with an eye on grooming talents and giving students early exposure to cybersecurity, which people like him never had.

“So in the nearest future, we want to be a point of reference for the government in terms of research, forensic investigations, cyber -defence and development of solutions that solve indigenous cybersecurity problems,” he says.

What is the significance of the cybersecurity lab to the growth of Nigeria’s cybersecurity Industry?

He says it will generate more professionals grounded in IT security from Nigerian Institutions.

“Students would have the option to stay in the country to earn a qualitative degree in cyber security thanks to the lab,” he says.

“The awareness level at the institutions is still low and these are the future.

FUTA is among the very few federal universities that will be offering cybersecurity as a degree. So, it is still as its infancy. However, it is on the rise. We hope that with this lab, we will be at the forefront, flying the cybersecurity flag for Nigeria,” he added.

Orasopee partners La’ Crystal to empower youths on 3D design JOSEPHINE OKOJIE

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rasopee Communication Ventures is partnering La’ Crystal Clear Solutions to train over 100 youths in Alimosho area of Lagos state in 3D epoxy flooring design skills.

The six-day Xpopreneur workshop would focus on exploring the 3D flooring technology by exposing participants to the digital interior designs.

“As a 3D epoxy business person, you can create your own multimillion income stream for yourself.

We advise prospective participants to pay detailed attention to the full practical training programme, because the end benefits are unimaginable,” Olanrewaju Owolabi, managing director, La’ Crystal Clear Solutions said in a statement made available to BusinessDay. “Epoxy-Coat is approved by the USDA as safe for commercial, institutional and residential applications. All the materials are safe

so please do not worry about using epoxy-coat products because it is perfectly safe for any other application.” Olanrewaju explained.

Also, Peter Ehigiator, founder, Orasopee Communication Ventures, identified lack of skills as the major factor responsible for the country’s high unemployment rate among youths.

“It is unfortunate that the education system of Nigeria lacks be ability to impart skills on the students. The major cause of the unemployment among vibrant youths is lack of skills to back up what they learnt from their institutions of learning,” Ehigiator said.

“We are committed to bridge the gap in skills acquisition by offering practical training programmes in IT, ICT, engineering, publishing and entrepreneurship to graduates, non-graduates, professionals and corporate bodies.

“Our pure practical training will equip participants with required marketable skills to boost their employability and also start their

own enterprises.

“We also offer special organised training to corporate bodies on human capacity development for enhanced business performance.

Partnering La’ Crystal Solutions, one of the foremost player in the industry is sure way to go in empowering young men and women in our society,” he said.

At the workshop, participants are entitled to training materials, videos on 3D designs, catalogue and price list of chemicals and materials with suppliers’ contacts.

The areas of training include 3D, metallic and plain epoxy flooring designs. Others are 3D wall panel and HD wall paper design. The first 20 participants to register for the empowerment programme will be given free training CDs. Training fee is N15,000 per participant and all payments should be made at the training centre; Orasopee Communication Ventures, Ikotun, Lagos. The training is schedule to hold November 26th to December 1st, 2018.

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Start-Up Digest Sterling Bank to fund winners of iCreate Skills Fest by encouraging young Nigerians to participate in a programme like iCreate Skills Fest, more jobs would be created.

“The future of the country is jobs. The entire banking sector cannot hire more than 100,000 people. We want to enable sectors at Sterling Bank to create jobs.

What I can assure is that what we do next year will be far greater than this year,” he said, adding that skills acquisition remained the easiest way to create a future for a country like Nigeria with large population of young people.

He assured the winners that whatever they needed to do or were doing would be funded and supported by the bank.

Bright Jaja, CEO of iCreate Africa, said this was one of the most difficult things he had undertaken in life. Jaja said the vision of iCreate was to change the skills narrative and encourage skills development among young Nigerians to create jobs.

ODINAKA ANUDU

S

terling Bank Plc has pledged to fund the businesses of winners of iCreate Skills Fest held in October.

Last month, young and dynamic Nigerians with various skills assembled in Abuja to showcase their talents in various sectors such as fashion and design, carpentry, cooking, arts, and tiling, among many others. The event was organised by iCreate Africa.

Announcing the bank’s plan to fund the winners last week in Lagos, Abubakar Suleiman, managing director and chief executive officer of Sterling Bank Plc, said he was impressed with the work each of the winners did in various sectors.

Abubakar said he was elated that each of the winners brought honour to various industries, pointing the way for others who would want to be part of such fields in the future.

He pointed out that the future of the country was jobs, stating that

Abubakar Suleiman

How Nigerian-American Chamber trained entrepreneurs in agribusiness ODINAKA ANUDU

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he Nigerian-American Chamber of Commerce (NACC) in collaboration with Multimix Export House organised a two-aay Agro-Commodity Export Masterclass, where it empowered entrepreneurs with knowledge of farming.

The workshop, which held on 16th and 17th November, took place at the Multimix Global Learning Centre in Lagos.

“The recent ban of some food items from Europe has been very embarrassing and impacting negatively on the contribution of agro commodities to the national economy. This is a setback for a nation that desperately needs to expand its export basket to boost domestic agricultural activities

and create jobs,” NACC says, in a statement.

The workshop focused on export of sesame seeds, ginger, cashew nuts and products, shea nuts/butter and processed vegetable & food products was designed to equip stakeholders, produce merchants, infant exporters, existing exporters, commodity brokers, foreign buyers, investors, financiers and government export facilitating and inspection agencies with the information and knowledge to take good decisions to enhance their profitability.

“From available statistics, only few countries in the world can match Nigeria’s endowment in the area of Natural resources as Nigerian agricultural commodities rank among the best in the world,” NACC adds.

The workshop featured Obiora Madu, known as Mr. Export and seasoned industry practitioners who held participants spellbound for two

days, Itemising all the challenges and landmines in the value chain and providing practicable mitigating factors .

According to Madu, the biggest problem with export is that of shipping poor quality produce and this can be taken care of if exporters can spend time to study the commodities they wish to export.

He said agro-commodity export can be very profitable if things are done right in terms of quality and in other areas of risk management and finance.

Though the third session in a row, the workshop was successful just like the two before it.skill-sets for success, he said.

Joyce Akpata, director-general, NACC, said the chamber remains committed to capacity building.

“This workshop was informed by our experiences in commodity trade, fairs, trade missions and export management expos.

Foundation empowers 100 Kwarans with N10m SIKIRAT SHEHU, Ilorin

S

aliu Mustapha, a philanthropist and founder of Saliu Mustapha Foundation, has disbursed overN10 million to one hundred people in Kwara State to further empower them in their various businesses.

Babatunde Idris Alata, chairman of the empowerment programme committee, at the weekend, said the programme was aimed to alleviate poverty among the downtrodden in the society.

According to him, the beneficiaries were carefully selected across the 16 local government areas of the state.

Alata, while presenting the cash

“We have jobs, but we do not have the skills to fit in. We have about 30 million jobs with no skills to fit in,” he said, adding that he thought that it would provide more opportunity for young people and remove social stereotypes about skills if he organised a programme like that.

An emotional Onyinye Nneli, who studied Maritime Management, was one of the winners.

Nneli said she only wanted to become a female barber, which did not fit well with her father. She said her father had often sent her links to job opportunities, stressing that her dream was to own a barber’s shop.

She said the spotlight was on her during the competition, pointing out that she wanted to demonstrate that there was no gender tag to any job. Joshua Mosebolatan, who owns Mosh Josh Furniture, won in the carpentry category. Sterling Bank was able to connect Joshua to new clients, assuring to provide the needed market for them.

of N100 thousand each to the beneficiaries, noted that the programme would be in batches in a bid to ensure their needs are met, pointing out that another batch of the empowerment programme would soon hold very soon so as to capture more people.

“What informed this programme is the good intention Saliu Mustapha has for Kwarans because he was one of the aspirants for the 2019 governorship election in the state, but unfortunately, he did not emerge.”

He said he was not deterred in his aim to eradicate poverty level in the society. Alata also explained that the committee had been directed to monitor the beneficiaries to ensure the money is judiciously utilised, adding that committee would also moni-

tor the beneficiaries to ascertain if the money was enough for the businesses or not so as to recommend a top up.

In her reaction, Ajibola Baraje, one of the beneficiaries, expressed delight over the programme, saying, she would venture the money into cosmetic business and expressed gratitude to the philanthropist with an appeal to other well-to-do individuals to emulate the gesture of Saliu.

Other beneficiaries such as Mariam Yusuf from Baruteen Local Government, Kolo fatimah from Edu Local Government and Halimatu Alasun from Patigi Local Government appreciated Saliu Mustapha for touching their lives positively, describing such empowerment as first of its kind.

Helen Couture unveils luxury clothing store in Lagos Josephine Okojie

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elen Couture, a luxury fashion brand, has launched its exclusive collection of luxury bridal, bespoke and ready to wear pieces in its new flagship clothing store in Ikoyi, Lagos.

The unique tailored pieces launched were complemented by the beautiful aesthetics of the atelier which perfectly eluded sophisticated, exquisite and timeless fashion in line with the theme of the event, the statement made available to BusinessDay states.

“I am super excited that everyone can finally get to see and appreciate these pieces. A lot of hard-work, time and resources have been accumulated to bring this collection to fruition,” Helen Chukwu founder and creative director of Helen Couture says.

“Helen Couture is not just any fashion brand, we are dedicated to making every woman feel special and stand out in our pieces. We provide a diverse range of styles for the modern woman with style,” Chukwu says.

She says that her inspiration for designs is drawn from all her travels and experiences.

At the launch, each design was displayed on mannequins and placed strategically in versatile positions where guests could admire and appreciate every detail of the flawless outfits.

The illumination and radiance reflected coupled with the vibrant colours of the dresses, created a picturesque backdrop for guests to take beautiful pictures, the statement notes.

Stealing the show during the event was the glory dress; an ivory

coloured bridal-inspired workof-art perfectly hand-crafted and beaded with authentic pearls and feathers, the report notes.

The event attracted big-wigs in the Nigerian fashion and lifestyle industry, celebrities and personalities from different works of life.

Among them are Oke Makinwa, Idia Aisien, Dj Obi, L.A.X, Denola Grey and Swanky Jerry among others.

A reception followed the main event where guests were treated to an unlimited supply of refreshments. G.H Mumm had guests relishing their glasses of champagne with other guests having the option of infusing Martell cognac into their cocktails as they connected with friends, networked and enjoyed great music.

Chukwu has worked with big fashion house in Dubai and with renowned Nigerian fashion designers like Lanre Da Silva-Ajayi.

The luxur y clothing store launched is located at 100a, Illupeju Street, Dolphin Estate, Ikoyi, Lagos.

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BUSINESS DAY Harvard Business Review

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In association with

If your innovation effort isn’t working, look at who’s on the team Nathan Furr

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n all-star team is making headway with a new initiative. Then the results begin taking longer than anticipated to prove, and after too much time spent outside their individual comfort zones, the team of high-achieving employees can’t seem to execute within the uncertain environment.

How could such a capable team fail?

Transformation-capable teams are made up of people who not only are high performers, but hold a unique balance of skills and mindsets that allow them to sustain focus, agility and optimism in the face of uncertainty.

Ultimately, not all topperforming employees

are equipped for this.

There are three unique characteristics that will play critical roles as a team takes on a breakthrough initiative.

observation and experimentation.

DIVERGENT THINKING, CONVERGENT ACTION AND INFLUENTIAL COMMUNICATION

BEING COMFORTABLE WITH UNCERTAINTY The term “negative capability” was coined by the poet John Keats while describing writers like Shakespeare who were able to work within uncertainty and doubt. In a modern context, negative capability can be thought of as the ability to be comfortable with uncertainty, even to entertain it, rather than to become so anxious by its presence that you have to prematurely race to a more certain, yet suboptimal, conclusion.

Finally, there are three neuropsychological traits to seek while building a transformative team. The first of the three, divergent thinking, is the ability to uniquely connect new information, ideas and concepts that are usually held far apart.

LEADING AND EXECUTING IN UNFAMILIAR TERRITORY Chaos pilots are people who can creatively lead a project through uncertainty. Leaders who are chaos pilots are able to drive a team forward on a project even as the en-

vironment around them fluctuates.

Chaos pilots often care more about creating meaningful change than about climbing a corporate ladder or getting another star on their charts.

Finding them can be challenging and requires

Convergent action, the second trait, is the ability to execute on these new ideas in order to create something tangible. And last, having the ability to communicate ideas in a coherent, compelling, and influential way is paramount. This trait will

inspire other leaders and decision-makers to believe, support and act on a novel idea or opportunity.

Each organizational project represents a moment of potential transformation, and each success helps a firm self-correct and become what it needs to be to survive: a malleable organization capable of capturing new opportunities.

(Nathan Furr is an assistant professor of strategy at INSEAD. Kyle Nel is the CEO and co-founder of Uncommon Partners.

Thomas Zoëga Ramsøy is the founder and CEO of Neurons Inc. The three are co-authors of “Leading Transformation: How to Take Charge of Your Company’s Future.”)

What stan lee knew about managing creative people Sydney Finkelstein

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tan Lee hated to see an idle artist. The renowned comic book writer and publisher, who died recently at 95, thought idle talent was bored talent, and bored talent was easy to lose to the competition. It also personally bothered him that the people in his employ might be scrambling to earn enough money. So Stan made sure to provide continuous employment, sometimes to the detriment of the company.

I studied Lee for my book, “Superbosses.” A superboss isn’t just a really good boss. They

don’t just build an organization or surpass a revenue target; they identify, train and build a new pipeline of talent.

“Keep talent busy” was just one of the lessons I

took from Lee. A second but equally important one was “Don’t censor talent.” Lee preferred to let his talent sort out the creative details. Lee

elaborated: “It seems to me that if a person is doing something creatively, and he feels that’s the way it ought to be done, you’ve gotta let him do

it.”

A third lesson I took from Lee’s example: “Give credit where it’s due.” It sounds so straightforward, but in reality, it’s very rare.

One way Lee gave credit was by creating a credits page, written in a chatty tone. The credits page was unique in comics; up until then the artists drawing and inking the panels had remained anonymous. This kind of publicity was not only good for the artists, but made it possible for a young reader to become particularly devoted to their favorite artist.

Finally, Stan Lee’s example is a reminder to dream big. Lee felt that

(C) (2017) Harvard Business Review. Distributed by New York Times Syndicate

comic books had the power to make important social commentary, to be incisive and satirical and smart. He argued there was no reason comics shouldn’t be seen as viable art. That attitude drew the best artists to want to work with him.

Ultimately, Lee repositioned comics, professionalized the industry and launched the careers of dozens. It’s a legacy any boss would call super.

(Sydney Finkelstein is a professor of strategy and leadership at the Tuck School of Business at Dartmouth.)

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Dangote Group shows why Nigeria’s manufacturing sector is worth the risk

ODINAKA ANUDU

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a n g o t e Group, Nigeria’s biggest conglomerate, is pointing the way for investors, showing them that the manufacturing sector of Africa’s most populous country is worth the risk.

Dangote Group has defied difficult operating environment to invest billions in cement production, sugar refining and plantations, salt refining and seasonings, flour and pasta processing, packaging materials, food & beverages as well as transportation and property management.

Nigeria’s attainment of cement sufficiency today is down to the efforts of Dangote Cement which, after commencing operations in 2007, ramped up production to become the country’s largest producer with over 29 million metric tonnes (mmt) annually. It is estimated that Dangote Cement’s capacity will hit 41 mmt when all of Edo plants are completed. The company built three production plants in Ibese, Obajana and Gboko, where supplies to various parts of the country come from.

The Obajana Cement Plant (OCP), located in Kogi State, is seen as one of the single largest cement plants in the world with a combined capacity of about 13.25 mmt annually.

Dangote produces various grades of cement today to suit various construction purposes.

Dangote Cement has helped reduce the cost of construction emanating from the cement segment, crashing the prices of cement many times. Such price crashes eventually forced competitors to follow suit, to the advantage of consumers.

Dangote Cement has expanded to many African countries, including Cameroon, Congo, Ethiopia, Ghana, Senegal, Sierra Leone, South Africa, Tanzania and Zambia.

Dangote Cement is not a non-governmental or-

ganisation, implying that though the firm has helped cut cement prices in areas where it operates, it also smiles to the banks every now and again.

It recently released its results for the nine months ended 30th September 2018.

Revenue for the company increased from N603 billion in 2017 to N685.3 billion, representing a 13.54 percent increase year on year.

Profit before tax (PBT) rose from N220 billion in 2017 to N247 billion in the corresponding period of 2018, indicating a 12.35 percent increase year on year.

Profit after tax (PAT) also increased from 154 billion in 2017 to 158 billion, a 2.70 percent rise over the year.

“Nigerian sales were affected by serious flooding in September. Although Pan-African sales were flat.

We will see soon increase sales from Tanzania now that its gas turbines are installed, and from Ethiopia as local community issues are resolved. We have launched new products in Nigeria that we believe will help us improve our leadership position in Africa’s most exciting market for cement,” Joe Makoju,

group chief executive officer, said while announcing the results.

Like many things foreign, Brazil’s sugar appears to be sweeter to Nigerians than honey. Nigeria imported 1.56 million tons of sugar worth $516.156 million in 2016 and 1.30 million tons valued at $459.36 million in 2017, mainly from Brazil.

Dangote has pumped hundreds of millions into sugar plantations and refining infrastructure to plug the demand-supply gap and cut down importation from Brazil.

Its sugar refining facility at Apapa, Lagos, is the largest in sub-Saharan Africa, with 1.44mmt per annum installed capacity. Its ultimate focus is to cultivate and mill sugarcane to finished sugar from its subsidiary, Savannah Sugar Company Limited.

Aliko Dangote, president of Dangote Group, disclosed in June this year that the group had so far invested N121 billion in sugar Backward Integration Project Plan, which is targeted at developing domestic sugar production capacity through homegrown sugarcane.

He said Dangote Sugar

Refinery (DSR) paid N3.25 billion for the acquisition of 60,000 hectares for Tunga Sugar Project in Nasarawa State and mobilisation of necessary developmental work.

“Negotiations with the government and local communities in Kwara and Niger on land acquisition processes are on-going, in line with the backward integration sites plan. Project activities will resume in Taraba State when the rain assuages—after issues with the government and local communities over the Lau/Tau project which has recently been resolved,” Dangote said.

On his part, Abdullahi Sule, acting managing director, Dangote Sugar Refinery (DSR) Plc, said the company would continue to pursue its target to achieve 1.08 metric tonnes of refined sugar annually in six years and eventually 1.5 million metric tonnes in 10 years.

He said the focus of the company was to leverage its strengths to maximise every opportunity to generate sales, increase market share and create sustainable value for all stakeholders.

“Though the business

terrain remains very challenging, we remain resilient in the face of the situation and are focused on increasing our market share and customer base as well as the creation of sustainable value for our stakeholders.

Our priority in the current year is the achievement of our Sugar for Nigeria Project goals and sustenance of our leadership position by improving efficiency and growing our markets,” Sule said.

Perhaps, the segment that is not meeting real expectations is the flour. But this should be expected in a difficult and competitive environment like Nigeria, especially given the foreign exchange crisis that has hurt many firms in the last two years. For the records, most flour is made from wheat, which is heavily imported into Nigeria. It is estimated that Nigeria imports wheat worth $6 billion annually.

Dangote Flour Mills reported revenue of ₦56.39 billion for the period ended June 2018, compared with ₦64.86 billion reported in the corresponding period of 2017, representing a 13 percent decline.

The PBT was ₦4.40 billion for the period, indicat-

ing a 50 percent drop as against ₦8.80 billion reported for the period ended June 2017.

The PAT was ₦3.25 billion, which was a 43 percent decline from a profit of ₦5.75 billion recorded in H1 2017.

It recently sold two production lines to rival pasta maker De United Foods Industries for N3.75 billion.

In July 2017, Dangote pledged to invest $3.8 billion in sugar and rice and $800 million in dairy production in three years.

Nigeria is waiting on Dangote Refinery and Petrochemical, which will be ready in two to five years.

With a petrochemical plant in Nigeria, the challenges of raw materials for chemical, pharmaceuticals and other allied industries will be solved.

Okey Akpa, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria, has lamented how much over 120 pharmaceutical firms in the country struggle on the back of exchange rate volatility.

Experts say Nigeria’s plastic and allied industry could have grown much bigger had there been a big petrochemical plant such as the one planned by Dangote Group.

“Nigeria is a growing economy. Our developmental challenges are quite enormous and will require the combined efforts of government and private sector to overcome them.

It is in this light that we are here to contribute our own quota to transforming the economy of Edo State as we have done elsewhere,” Dangote said while performing ground breaking of $1 billion Dangote cement plants at Okpella, Edo State in 2016 when the economic was in a great slump.

“Also last year, in Lagos, we signed a deal valued at $4.34 billion, with Sinoma International Engineering Company Limited, for the construction of 10 additional new cement plants across Africa, with one in Nepal in Asia. The combined capacity of these new projects will be 25 million metric tons per annum,” he added.

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real sector watch Olam, Tulip, De-United Foods, Rubber Estates shining amid export challenges Stories by ODINAKA ANUDU

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lam Nigeria, Tulip Cocoa Processing Limited, DeUnited Foods Industries Limited and Rubber Estates Nigeria Limited are among export-shining industries that have defied Nigeria’s tough environment to expand offshore operations.

These firms are bringing the much needed foreign exchange into Nigeria despite near absence of government support.

At the moment, the Export Expansion Grant (EEG), which could have been a source of support, is in limbo as exporters’ promissory notes worth over $1 billion lie on the table of the National Assembly without being discussed.

The EEG was introduced in 1986 to help exporters navigate through high production costs in order to make them competitive in the global market. But the grant has been suspended a number of times, with the latest being in 2013. The currency for the EEG today is the promissory note, which replaced the Negotiable Duty Credit Certificate (NDCC) used by the last administrations.

These firms are also facing

peculiar challenges such as high production cost necessitated by unfriendly energy cost, consumer shrinking wallets across various markets, poor infrastructure and barriers to trade.

However, they have remained resilient, shipping out tons of products to various markets.

Olam Nigeria has invested in cocoa, coffee, edible nuts, spices, grains and feed, among others.

The company exported sesame seeds (Dhs) and fermented cocoa beans worth

$110.892 million to India, Netherlands, Poland, Syria, United Kingdom, Singapore, Turkey, Jordan, Poland, and Japan in 2017, according to the Central Bank of Nigeria data.

Tulip Cocoa Processing Limited exported cocoa cake, pure prime pressed and cocoa butter worth $32.60 million to Netherlands, Mexico and Spain.

Similarly, De-United Foods Industries Limited gave a good account of itself, exporting $30.568 million worth of Indomie and Min-

imie noodles to Ghana, Cameroon and the United States of America.

As of 2013, De-United had been exporting Indomie noodles worth close to $30 million to the US, BusinessDay gathered.

Rubber Estates Nigeria Limited exported technically specified natural rubber (tsnr) and processed renl 20 estimated at $20.392 million to Spain, France, Italy, Poland Spain and Singapore.

But this is not all as many other firms gave a good account of themselves.

British American Tobacco exported various forms of cigarette valued at $145.48 million to Liberia, Guinea, Ghana, Cameroun, Cote D’ivoire and Niger.

Indorama Eleme Fertilizer & Chemicals Ltd shipped out granular urea in bulk valued at $69.815 million to Uruguay, Brazil and Argentina.

Indorama Eleme Fertiliser & Chemicals Limited got $1 billion from the International Finance Corporation (IFC) in June for the construction of a new fertiliser plant in Nigeria.

Atlantic Shrimpers Limited shipped out $38.397 million worth of sea frozen shrimps and crabs to the Netherlands, China (Taiwan), United States Of America and Vietnam.

Dangote Cement Plc exported Dangote Portland Limestone Cement (42.5R) to Niamey, Niger Republic, Togo and Ghana estimated at $21.496 million worth of grey ordinary “Beside our continuous expansion, we also export to counties like Ghana, Benin and Togo. These are sources foreign exchange for our dear nation. Where ever we operate we operate as economic partners because we add value to the economy by creating employments,” Joseph Makoju, group managing director of Dangote Cement

Plc, said on July 4 during a plant facility tour by officials of the Standards Organisation of Nigeria (SON).

Also, Guinness Nigeria exported Malta Guinness and Guinness FES valued at $15.06 million to the United Kingdom, Ghana and Cameroon.

Beta Glass shipped out bottles estimated at $14.134 million to Sierra Leone, Ghana, Liberia and Cape Verde.

Flour Mills Of Nigeria exported recycled polypropylene black, wheat bran pellets, dried raw cashew nuts and plastic pvc valve bags to the United States Of America, Morocco and Vietnam.

Friesland Campina Wamco Nigeria exported $3.87 million worth of Full Cream Milk Powder Peak (12x400g), Full Cream Unsweetened and Evaporated Peak Milk (96x30g) to Ghana and Sierra Leone.

“As a company, we will continue lead in steering economic solutions in the dairy sector and will continue to play a key role in the ongoing efforts to improve and maximise the potentials of dairy farming in Nigeria,” Ben Langat, managing director of FrieslandCampina WAMCO Nigeria PLC, said at Dairy Farmers’ Day held at Iseyin , Oyo State, in December 2017.

Juhel: Source of hope for struggling pharma industry

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nambra Statebased Juhel Nigeria is a source of hope for the struggling pharmaceutical industry.

The company is consistently investing in new infrastructure to provide quality drugs for Nigerian consumers and get the World Health Organisation (WHO) prequalification necessary for international competition.

The drug maker recently introduced Oxytocin injection for pregnant women, the first of its kind in Africa.

Juhel’s injection, unveiled in Lagos, was manufactured in collaboration with the United States Pharmacopeia (USP). It has the capacity to reduce after-birth bleeding and maternal deaths, estimated at 58, 000 each year. The drug was hitherto imported outside Africa but

is now locally manufactured in Awka, Anambra State, Ifeanyi Okoye, CEO of Juhel Nigeria Limited, said.

“We have the capacity to produce enough Oxytocin that will serve the rest of subSaharan Africa,” Okoye said.

“USP for two years collaborated with Juhel Nigeria Limited towards the production of maternal commodities –Magnesium sulphate and Oxytocin injection,” Okoye said.

He emphasised that his firm is one of the three drug makers in the country to have ‘Blow Fill Seal’ (BFS) machines, which can do the multiple task of blowing the bottle, filling it with polyethylene and then moving it to the conveyor belt to seal.

“We are conserving our foreign exchange because we are no longer going to import Oxytocin. Secondly, the cost of these drug is much

cheaper than its imported counterpart,” Frank Jacobs, president of the Manufacturers Association of Nigeria (MAN), said.

Nigeria’s drug makers have invested N300 to N500 billion locally in new plants, vehicles, buildings and per-

sonnel.

They share 35 percent of the African drug market and over 70 percent of the West African market, according to PMG-MAN. Swiss Pharma, Evans Medicals, Chi Pharmaceuticals as well as May &Baker

have obtained the WHO prequalification, which enables them to participate in international drug supplies.

However, the industry is struggling with major players unable to sustain production pre-2015 years. Already Swiss Pharma has been bought by an investor after experiencing early struggles, while Evans Medicals has gone under. Incidentally, these two drug makers got the WHO prequalification, which ordinarily should raise the level of their competitiveness. The pharma industry depends on import for over 50 percent of their raw materials while patronage remains a major hurdle to cross. Capacity utilisation is less than 40 percent, say players in the industry.

A chief executive of a pharmaceutical industry told BusinessDay that the

industry is struggling and some firms may go under except there are policies to protect existing investors that have pumped billions into the industry.

Some pharma firms complain that government’s executive order which deals with government patronage has not been implemented at all since its inception by the ministries, departments and agencies.

“Their challenge reflects the problems facing the industry. Patronage is key and remains something the industry wants the government side. Also, you must look at a business case in terms of incentive or protection of an industry before asking players to upgrade,” Okey Akpa, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), said.

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Fixing broken PPPs to achieve economic prosperity JOSHUA BASSEY

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igeria’s failure to successfully leverage Public Private Partnership (PPP) models for infrastructural development has left it struggling unsuccessfully to bridge huge infrastructural gaps.

This has been majorly linked to policy inconsistency, unpredictable political climate, winding legal process, unstable exchange rates and cost of capital, which experts say, remains a setback to the mobilisation of private capital for purposes of PPP. In many cases, PPP entails an agreement between a government agency and private sector company, or a consortium investors, to finance or build public projects. In many climes, the models have emerged an effective tool in the delivery of quality infrastructure that not only lift the standards of living of their citizens but also add to strengthen the confidence of investors, in addition to opening up such economies for more investments.

The success recorded of a project like the 2nd Vivekananda Bridge in Kolkota shows the inherent advantage in PPP. This bridge, whose concession agreement was signed in 2002, was commissioned in 2007 at a total cost of $128 million under a concession period of 30 years.

The concession was signed with a consortium of investors from the USA, UK, Mauritius and India with the bridge commissioned for use on July 4, 2007, and subsequently won an award for excellence same year, under the Foreign Bridge Project Category from the American Segmental Bridge Institute.

The metro rail projects in India, also being implemented using the PPP model, is another success story. In this case, the Delhi Metro Rail Corporation (DMRC) prepared the master plan for Mumbai Metro. The private party involved—Reliance Energy Ltd— executed the project at the cost Rs. 2356 Crores Muda Yusuf, director-general of the Lagos Chamber Commerce and Industry (LCCI), agrees that the PPP model has the singular advantage of quick mobilisation of private capital to fund infrastructure development, but laments much success has not been recorded of it in Nigeria.

The Lekki-Epe expressway concession presents a failed case of PPP in the country. The agreement signed between Lagos State government and Lekki Concession Company (LCC) was terminated in 2013 by the state less than two years into the 30-year Build, Operate and Transfer (BOT) concession.

It was basically to stop the LCC from commencing tolling at the 2nd tollgate following ceaseless complaints that trailed the tolling at Admiralty tollgate.

The concession agreement allowed LCC to expand, upgrade and maintain, for the initial phase, the 50 kilometre

road and to build another 20 kilometre coastal road along the Lekki axis and recoup its investment on the road through toll collection from road users for 30 years before transferring it to the state government.

The initial concession was signed on April 24, 2006. In 2008, then Governor Babatunde Fashola signed supplemental agreements with LCC enabling the firm to access long-term funding for the construction. Later that year, LCC got N50bn long-term financing lifeline from local and international financial institutions.

Some of LCC’s investors include Stanbic IBTC, First Bank of Nigeria, and African Infrastructure Investment Managers (AIIM).

Also, an attempt in the recent past by the Lagos State government to leverage the PPP to build its long promised Fourth Mainland Bridge at the cost of N844b billion, ran into the brick wall, as the Akinwunmi Ambode-led administration, in May 2017, had reason to terminate the concession signed with a consortium of investors in May 2016 to build the bridge, citing ‘delay’ in commencement of construction work. The investors included Visible Asset Limited, Julius Berger Nigeria Plc, Hi-tech Construction Limited, J.P. Morgan, Eldorado Nigeria Limited, Nigerian Westminster Dredging and Marine, Africa Finance Corporation (AFC) and Access Bank.

The 36km bridge had been conceived as part of measures to reduce traffic between mainland and island parts of the

state and complement the three existing bridges- Eko, Carter and Third Mainland Bridges which are daily overstretched.

The cancellation of concession agreement resulting in the failure to build the long proposed bridge, amid the increasing Lagos population estimated at over 21 million residents, means that the existing infrastructure which the new bridge would have complemented, remains under pressure with consequential traffic crisis.

According to experts, while PPPs have quite succeeded in other climes, their failure in many of the African countries, including Nigeria, has to do with uncertainty in polity, lack of respect for sanctity of agreement, cost of capital and greed.

According to Adetokunbo Mumuni, a lawyer and executive director, Socio Economic Rights & Accountability Project (SERAP), African governments have not shown that they can be trusted to keep to agreement freely entered into.

“In other climes, there are rules and those rules are followed to the letter by parties involved. When broken, there are consequences. In Nigeria, I am not sure those rules are often followed through.”

Mumumi says, in many cases where agreements are broken, the consequences that should follow are delayed or not applied at all. “So the investors are cautious with staking borrowed capital in projects they are not certain terms of agreement signed would be respected and executed.”

He cites a case in Nigeria where officials in government charged with the privatisation of public assets sold such assets to their cronies at compromised

terms as against investors with genuine interest to turn such assets around.

Segun Olulade, a member of the Lagos State House of Assembly, speaking from a perspective of lawmaking, says: “We have laws to enable the PPP model to thrive in Nigeria, but greed and corruption have led to compromising the implementation of the laws.

“In other places, PPP drives the economy, but in Nigeria, because of corruption, people who are not competent to drive the process are appointed. Implementation of PPP requires expertise,” says Olulade.

A finance expert, who craves anonymity, links the poor showing of PPP in the country to wrong motive on the part of both government and the private partners.

The expert notes that PPP is a longterm project and because most governors in Nigeria are selfish, deploying PPP to drive their projects become a challenge because the projects would not be completed within their tenure.

“They don’t want to see the credit of the project they started go the next government.”

The expert also points to unwillingness on the part of the citizens to pay for the services offered. “In the developed worlds, the citizens would readily pay but not so in Nigeria. This is a major constraint when the project concessionaires are not assured they can recoup their investment. Don’t forget that PPP majorly involves debt financing. Cost of borrowing locally is very high, and when you move outside Nigeria to raise funds, the issue that you would be wor-

ried about is the stability of the exchange rates. All of these are constraints to PPP,” says the finance expert.

Way forward On how to overcome the challenge and use PPP to drive infrastructure development, the expert says there is the need for stable exchange rates, reduced interest on local loans as well as engagement of experts.

According to him, in the emerging political dispensation, the president and governors of the various states must be willing to respect the rule of law and business agreements voluntarily entered into. “For emphasis, delay in the legal system and justice dispensation should be addressed.”

“The government would equally need to ensure that persons appointed to drive PPPs are knowledgeable about the process and how it works. National interest in the delivery of projects must supersede selfish interest. A situation where governors won’t start a project that can lift the quality of lives of the citizens because it wouldn’t be completed for them to commission must be discouraged,” says the expert.

Also, Timothy Olawale, directorgeneral designate of Nigeria Employers’ Consultative Association (NECA), says Nigerians would love to see an immediate cessation of policy somersault and the building of trust in investors.

“New governments must show themselves capable of sustaining policies enunciated by the previous administrations that encourage investments,” says Olawale.

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the period shows that 82.4 percent of the total expenditure was recurrent, while 12.5 percent went into statutory transfers. Only 5.1 percent of government expenditure for the period went into capital expenditure, the data from CBN shows.

Also, of the 82.4 percent of recurrent expenditure incurred by the federal government in the third quarter, more than half, 59.1 percent went into debt service payments, leaving only 40.9 percent for non-debt recurrent expenditure, a situation which explains why many government agencies, including the military, are now complaining of lack of funds to run their operations effectively.

The third quarter trend is not a one off, considering that in the first half of 2018, debt servicing accounted for 58 percent of recurrent expenditure which was higher than budgeted and was the single largest item that the government was spending on.

At N1.24 trillion, debt service or interest payments was 12 percent higher than the proportionate budget estimate of N1.1 trillion and gulped 68.9 percent of the Federal government’s retained revenue.

Of this amount, N1.18 trillion (95.2 percent) was expended on

domestic debt service, while the balance of N58.93 billion (4.8 percent) was for external debt service.

Non-debt recurrent expenditure, which comprises allocations to government MDAs, paid part of the price for lower than planned revenues and higher cost of borrowing, as it was below the proportionate budget estimate by 63.6 percent, a pointer that the MDAs are operating on shoe-string budgets.

Mojisola Adeyeye, the DirectorGeneral of the National Agency for Food and Drug Administration and Control (NAFDAC) recently disclosed that the agency is facing significant funding challenges.

Adeyeye was quoted to have said on November 19 that 80 per cent of the NAFDAC equipment can no longer function due to lack of funds to fix them and even to recruit more staff.

Even the military are feeling the pain of poor funding, a report by International news agency Reuters on September 19 disclosed. The Reuters report claimed that soldiers have been left with “too little equipment, and many vehicles are broken and gathering rust” as soldiers complain of poor funding for their operations.

In recent weeks, there have been reports of hundreds of Nigerian

soldiers being killed in their fight with Boko Haram insurgents in the Northeast.

This has been largely blamed on the fact that the army have been poorly equipped to fight the insurgents who look to be better armed and more motivated.

Ken Goodluck, an Abuja based political economist, who spoke to BusinessDay, confirmed the challenging environment within which agencies operate presently, further disclosing that even contractors are not being paid for jobs already completed, while new contracts cannot be funded.

President Muhammadu Buhari, who seeks a second term at next year’s polls, signed off on a N9.120 trillion 2018 budget in June, after six months of appropriation delays by the National Assembly.

The budget has a deficit slightly in excess of N2 trillion and the federal government plans to borrow N1.643 trillion to fund the deficit and equally hopes to raise N306 billion from privatisation and another N5 billion from the sale of government property in order to finance the deficit. So far, none of those assets have been sold, BusinessDay can confirm.

Apart from borrowings, questions are being raised on how the government is deploying billions of naira it

claims to have recovered from looters, collections from revenue generating agencies, as well as oil earnings especially as crude prices have well exceeded the $51 budget benchmark for much of the year.

The Nigeria Custom service for instance said it has already made N784. 88 billion between January and August 2018 and hopes to exceed its N1.3 trillion target for the year.

The Federal Inland Revenue Service (FIRS), announced it recorded N4.3 trillion between January and October, which translates to 64.2

Monday 26 November 2018

percent of its N6.7 trillion targeted for the 2018 fiscal year and is the largest amount raised by the Nigerian equivalent of the US IRS in four years, according to data compiled

by BusinessDay. The 2018 appropriation bill, the largest in the nation’s history, was premised on key revenue assumptions of oil price benchmark of $51 and 2.3 million barrels per day.

Although average oil output for the year has not reached the target, average oil price at over $70 per barrel so far in the year has well exceeded the $51 benchmark.

Insurers face stringent regulation as...

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billion for composite business.

Companies in this category were to be limited to underwrite only risks in life business in the following areas - Individual Life, Health Insurance, Miscellaneous Insurances; while for non-life they will be limited to underwrite risks in these areas - Fire, Motor, General Accident, Engineering (only classes covered by compulsory insurance), Agriculture and Miscellaneous Insurances.

Tier 2 companies were to be those whose paid up capital has increased by 50 percent above the existing minimum capital.

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

capital base will be N4.5 billion and they will underwrite all Tier 3 risks, Engineering (All inclusive), Marine, Bonds Credit Guarantee and Suretyship Insurances.

Tier 1 companies were those whose paid up capital had increased by 200 percent, above the existing minimum requirement.

Life companies in this category will have capital of N6 billion, and will underwrite all Tier 2 risks and Annuity. While for non-life business, the paid up capital will be N9 billion, and they will underwrite all Tier 2 risks and Oil & Gas (oil related projects, exploration & production), and Aviation Insurances.

Composite companies in Tier3 were to maintain N5 billion; Trier 2 N7.5 billion and Tier 1 were to have N15 billion.

Treasury bills, forex drive N13.35trn OTC...

Continued from page 2

L-R: Nike Akande, member, board of governors, Pearl Awards Nigeria; Oscar Onyema, CEO, Nigerian Stock Exchange; Tayo Orekoya, president/CEO, Pearl Awards Nigeria; Umar Farouk, chairman, Pearl Awards Nigeria, and Eniola Fadayomi, member, board of governors, Pearl Awards Nigeria, after ringing of the closing gong at the Nigerian Stock Exchange by Pearl Awards Board of Governors, weekend.

Zenith Bank, Stanbic IBTC, FBN Holding...

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Financial Institution Training

Centre (FITC), and other prominent and important personalities in Nigeria.

Frank Aigbogun, CEO, BusinessDay Media Limited, warmly welcomed the guests to the 2018 BAFI awards.

“BusinessDay, the premier financial and business newspaper in the West African sub region, has been organising recognition awards for eminent CEOs in the banking sector since 2013.

“This year awards are very unique in the sense that for the first time, other distinguished players in the financial industry such as registers, insurance, trustee, pension funds administrators, pension fund custodians, Development Finance Institutions (DFIs), are now part of the awards,” AIgbogun said in a welcome address.

Aigbogun further said that their

inclusion was in response to the suggestion by prominent players and other dignitaries in the financial industry of the need to recognise the contribution of insurance firms, registrars and trustee to economic growth and development.

FBNQuest Asset Management Limited under FBN Holdings won the equity fund of the year and bond fund of the year awards. United Money Market Fund by United Capital plc obtained the money market fund of the year award. SFS Financial Services Capital Limited won the awards for fixed income fund of the year, asset fund of the year and real estate investment stock of the year.

Also, AIICO Balanced Fund by AIICO Capital Limited won the mixed fund of the year, Stanbic IBTC Pension Managers Pension Limited won the pension fund administrator of the year, pension fund custodian of the year was won by Zenith Pension

Custodian Limited, Leadway Assurance Company Limited won the Insurance Company of the year, and Meristem Stockbrokers Limited won the Stockbroker of the year award.

This year’s BusinessDay’s BAFI awards had 37 categories with over 100 nominees that were carefully selected by the award committee based on universal acceptable parameters.

The parameters, both qualitative and quantitative, include the availability of financial results and investor’s presentation on bank’s website; the type of operating licence; 5-PAT growth; growth in deposits; capital adequacy ratio (CAR); non-performing loans (NPL); liquidity ratio; return on average assets (ROAA); return on average equity (ROAE); cost to income ratio; perchance of women in the workforce (management); fines paid for contraventions, and the percent complaints resolved relative to the total complaints received in 2017, among others.

Furthermore, STL Trustees Limited was the Trustee of the year; First Reg-

against the marginal increase in Inter-Member trades (0.22percent).

Analysis of FX turnover by product type showed that FX Spot was the main driver of the MoM decline with a drop of 34.67percent ($4.62billion). However, FX Derivatives also recorded a MoM decline of 23.45percent ($1.17billion), driven mainly by a 49.14percent decline in FX Futures turnover.

In October, the 28th Nairasettled OTC FX Futures contract (NGUS OCT 31, 2018) with total open contract of $371.49million, matured and was settled on FMDQ, whilst a new 12-month Futures contract (NGUS OCT 30, 2019) with a notional principal of $1billion and price of $/N365.74 was listed on the OTC Exchange.

In October, the Dollar/Naira rate at the I&E FX Window appreciistrars and Investment Service Limited emerged the Registrars of the year; best bank in mobile money services. Credit Direct Limited, the consumer Finance CEO and most innovative Consumer Finance Lender of the year; Renmoney MicroFinance Bank Limited, Consumer Finance Lender of the year; Eagle Global Markets, Digital Finance Platform of the year; Bank of Industry Limited (BoI), Best Public Institution in Small and Medium Scale Enterprises (SME) and Financial Inclusion, and Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) won the best Development Financing Institution.

Financing Holding Company of the year went to FBN Holdings plc; mortgage bank of the year was won

by Omoluabi Mortgage Bank plc; the merchant Bank of the year went to Rand Merchant Bank (RMB) Nigeria Limited, while the investment Bank of the year was won by Coronation Merchant Bank Limited. United Bank for Africa (UBA) won the Con-

ated by 38 kobo to close the month at $/N363.54 (from $/N363.92 recorded in September), while the CBN Official Spot rate depreciated by $/N0.25 to close at $/N306.60 (from $/N306.35 recorded in September).

The $/N rate at the Parallel market rate also depreciated between September and October

by N1 to close at $/N362, closing lower than the rate at the I&E FX Window for the fourth consecutive month.

Turnover recorded in the Repos/Buy-Backs segment of the Money Market was N2.64trillion in October, representing a 24.70percent (N0.52trillion) MoM increase from N2.12trillion recorded in September, and a 22.85percent (N490billionn) year-on-year increase from the turnover recorded in October 2017. tinental Bank of the year.

Additionally, Stanbic IBTC Bank plc won the bank CEO of the year; Zenith Bank plc, the bank of the year; Diamond Bank, best bank in Retail Banking; Access Bank, best bank in Corporate banking; Fidelity Bank, the best bank in Infrastructure Financing; First City Monument Bank (FCMB), for best banking in SME Financing; First Bank of Nigeria Limited, best bank in Agriculture Lending and Support; Guaranty Trust Bank (GTB), most Customer Friendly Bank.

The deal advisor of the year was Zenith Capital Limited; LAPO Microfinance Bank Plc., Microfinance Bank of the year; Bank of Agriculture, best bank in financial inclusion of farmers; Fidelity Bank Plc., best bank in Corporate Social Responsibility (CSR) and the most innovative online customer service award went to Leo, the intelligent Chabot by United Bank of Africa (UBA).

•Continues online at www.businessdayonline.com

Monday 26 November 2018

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Nigeria ranks 150th in world SDGs index IDRIS UMAR MOMOH, Benin

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im Clarke, a former ambassador/Head of European Union (EU) delegation to the African Union, said Nigeria ranked 150th out of 156th countries that made commitment in achieving the Sustainable Development Goals (SDGs) in the world Clarke gave the figure while delivering the 16th convocation lecture of Igbinedion University Okada, with the theme, “Creating an African Academic Network to Promote Regional and Political Integration in Africa,” last week in Okada.

He however said Scandinavian countries like Sweden, Denmark and Finland lead the SDG Index table with about 85 percent of all 17 goals.

He noted that a supreme superhuman being would be required to bring about the achievement of the SDGs in Nige-

ria by the set date of 2030.

The University of Lancaster lecturer also disclosed that the SDGs 1, which was ending global poverty, Nigeria as country was responsible for 19 percent of the total world gap in meeting the goals.

“The SDG Index and Dashboard 2018 Report of Global responsibilities implementing the Goals’ ranked Nigeria 150th out of 156 countries in achieving the SDGs,” he said.

He noted that with 2016 UNESCO report, Africa had zero chance of meeting the SDGs by 2030, even as he added that it was likely they would even met the target by 2080, 50 years after the UN agreed date of 2030.

He opined that the challenges in meeting the SDG with 2030 as the agreed timeline was much more higher in African countries than other continents.

Clarke, who lamented that Nigeria’s performance by the indicator for each goal was empty rhetoric, urged government and

the people to collectively work toward strengthening the spirit of national ownership to deepen the process of continuous sensitisation and awareness on the SDGs, through a robust engagement with the grassroots-based Civil Society Organisations to succeed.

According to Clarke, effort towards promoting research and implementation of the SDGs, particularly in the area of education in the17 goals of the SDGs, is significant in the quest to ensure all learners acquire knowledge and skills needed to promote sustainable development.

He however challenged the academic community to embark on research aimed at achieving and ensuring the implementation of the SDGs goals.

Earlier, the institution’s Vice Chancellor, Lawrence Ezemonye, said the lecture would proffer solutions on how the nation could achieve the SDGs targets at agreed date.

$8bn annual spending on vehicle importation shows untapped auto market - FG HARRISON EDEH, Abuja

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he Federal Government on Friday said the $8 billion annual spending on vehicle importation had shown that Nigerian automotive industry had not been fully explored.

Okechukwu Enelemah, minister of industry, trade and investments, gave the information at Volkswagen organised workshop in Lagos.

The workshop, according to a statement from the minister’s special adviser on media, Bisi Daniels, was organised for Nigeria and Volkswagen to agree on the next steps to operationalise a September 2018 agreement for Volkswagen to lead development of Nigeria into an automotive hub.

The minister while declaring the workshop open said the $8 billion Nigerians spend in importing vehicles annually

JUMOKE AKIYODE-LAWANSON

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Pic by Pius Okeosisi

Nigerian Army confirms attack, killing of soldiers

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fter days of disturbing silence, the Nigerian Army has confirmed reports of attacks on its troops’ location in Metele village, Guzamala Local Government Area of Borno State.

Meanwhile, the Coalition of United Political Parties (CUPP) has called on President Muhammadu Buhari to immediately sack the nation’s Service Chiefs over the recent killing of over 100 soldiers by suspected Boko Haram insurgents in Borno State.

The fierce attacks, which occurred last Sunday, were said to have resulted in the death of at least 70 soldiers, including their commander.

However, after days of keeping mum on the incident, the Army has admitted

was proof that there was a large market for a viable automotive industry in the country that would create jobs and contribute to the growth of the Nigerian economy.

Further in his remarks, he said the development of the country’s automotive industry was a key plank of the Federal Government’s Economic Recovery and Growth Plan (ERGP), which aims to grow the economy, invest in Nigerians and build a globally competitive economy.

“We believe that this is an idea whose time has come,” Enelamah said at the workshop.

“The presence of this strong Volkswagen delegation led by Schaefer, the Head of Sub-Saharan Region and Managing Director Volkswagen South Africa is an important show of commitment to make our partnership successful and mutually

beneficial,” according to the release.

Shaefer agreed that Nigeria’s time to be an automotive hub was now, saying, “Africa’s time is now and Nigeria’s time is now.

There’s no doubt about that. The National Automotive Industrial Development Plan (NAIDP) is a great base and it would help this country to industrialise.”

He said Volkswagen was “more than happy to play the pioneer role and be the role model” that will spur the interest of other global players in the Nigerian automotive sector.

“Nigeria could outperform the rest of the world.

We should not hold back mentally. The fact that Nigeria currently does not have a thriving auto industry presents an opportunity because there are no legacy issues. So the country can invest and prepare now in order to become ripe for the future.”

NCC initiates appropriate blueprint for ICT research

L-R: Mazen Mroue, chief operating officer, MTN Nigeria; Emeka Anyaoku, former secretarygeneral of the Commonwealth; Julius AdelusiAdeluyi, chairman, MTN Foundation, and Tobechukwu Okigbo, corporate relations executive, MTN Nigeria, during a private reception in honour of the governorgeneral of Canada, Julie Payette, in Lagos.

STELLA ENENCHE, Abuja

43 NEWS

BUSINESS DAY

… as CUPP asks Buhari to sack service chiefs

there was, indeed, an attack on 157 Task Force Battalion in Melete.

The Army, in an unsigned statement on its Facebook page, was, however, silent on the casualty figure. Rather, it said it had procedures for reporting incidents, which involved its personnel on the frontline.

“The attention of the NA has been drawn to several social media, print, electronic and online publications about the recent attack on 157 Task Force Battalion at Metele.

“Whilst it is true that there was an attack on the location on 18 November 2018, it has however, become necessary to correct several misinformation being circulated with regards

to this unfortunate event.

“It is important for the public to note that the NA has laid down procedures for reporting incidents that involve its personnel who fall casualty in action”, the Army said.

On the video shooting gory footage of killings of troops suspected to have been released by Boko Haram Terrorists yesterday, the Service noted that same was not only outdated, but a deliberate propaganda ploy.

“Out respect for the families of our gallant troops, the NOKs ( Next Of Kins) are first notified before any form of public information so as to avoid exacerbating the grief family members would bear, were they to discover such from unofficial sources.

“Furthermore, it suffices

to observe that several social media, print and online publications have been brandishing false casualty figures as well as circulating various footages of old and inaccurate BHT propaganda videos and alluding same to be the attack on 157 Task Force Battalion.

“While it is understandable how such misinformation can spread in this era of social media frenzy, the spurious circulation of some of these videos only contribute to further propagate the propaganda intent of the terrorists; to misinform the populace and portray themselves as what they are not. So far, the situation is that the location is under control as reinforcing units have been able to repel the terrorists and stabilise the situation,” the statement said.

n order to enhance Nigeria’s participation in the ongoing global digital revolution, the Nigerian Communications Commission (NCC) has appointed a seven-man panel of experts to create an appropriate blueprint to serve as guiding principles for Information and Communication Technology (ICT) research programmes in the country.

The research panel of experts chaired by Ernest Ndukwe, former executive vice chairman of NCC was created to look critically at issues relating to ICT research, and had submitted its final report to the NCC Board and Management at the weekend.

Olabiyi Durojaiye, chairman, NCC Board, who received the report in the presence of Umar Garba Danbatta, executive vice chairman of NCC, Sunday Dare, executive commissioner (stakeholder management), and other members of the executive management, said the initiative was to invite eminent Nigerians with “deep knowledge, expertise and experience in ICT to serve on the panel of experts and in their capacity to advise the NCC on ICT discovery, innovations, technology through the instrumentality of research and capacity building.”

Premised on the commitment of NCC to the establishment of ICT learning and education in Nigeria, Durojaiye said “the Board deeply considered setting up a merit-

based process for objective selection of young Nigerians resident in the country and in diaspora for special training and capacity building to enhance Nigeria’s participation in the ongoing global digital revolution.”

Apart from Ernest Ndukwe, other members of the panel of experts include Titi Omo-Ettu, chairman, Digital Bridge Institute (DBI), Mohammed Ajiya, Abdullahi Maikano, Ike Adinde (administrator DBI), Johnson Asinugo, and Shehu Olaniya.

Durojaiye said, “It is pertinent to note that, the Digital Bridge Institute (DBI), an innovation of the Commission already has ample basic facilities to house ICT research centres in Lagos and Abuja to start with. The Commission is desirous of refocusing the DBI to actualise its mandate in accordance with the ideals of its founding fathers.

“This includes the need to identify the numerous “Bill Gates” and “Mark Zukerberg” of Nigeria who are currently roaming the streets of Lagos, Kano, Enugu, Port-Harcourt and indeed across every other city and State in Nigeria in search of salaried Jobs.

“The challenge is for our youths to be major actors in the World Fourth Industrial Revolution by discovery, innovating and inventing solutions that will address current and future needs of mankind. Nigeria will thereby earn more foreign exchange and respect in the comity of Nations.”

Monday 26 November 2018

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BUSINESS DAY

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A2 BUSINESS DAY NEWS

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How Nigerians’ penchant for everything foreign is stifling economy DANIEL OBI

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t is sad that Nigeria’s foreign exchange earnings pall into insignificance when compared with the real needs facing the country. Even sadder is the penchant for anything foreign that is being exhibited by our leaders. This puts undue pressure on the foreign exchange market in the country.

Take for instance, the much talked about medical tourism, which has become a drain on Nigeria’s foreign exchange. Earlier this year, the minister of state for health, Osagie Ehanire, revealed that Nigeria lost about $1 billion every year as a result of medical tourism

by Nigerians to India, USA, UK, among other countries.

The preference by Nigerians to seek medical care abroad is unfortunate.

This is taking place in spite of Nigeria’s potential to attract medical tourism in different fields of medicine. Some major and complicated medical operations such as kidney transplant and other surgeries have

been undertaken in Nigeria.

Nigeria’s presidents including Ibrahim Babangida and the current one, Muhammadu Buhari, are known to have spent weeks in foreign countries attending to some ailment that cost the nation millions of dollars.

Despite several calls for the government to disclose how much Buhari’s treatment in the UK cost Nigeria, the authorities refused to do so. But, even taking just the $1 billion yearly loss as indicated by the minister of state, it is certain that the loss is significant in a country that is deeply getting weighed down by debt.

This amount, converted to naira at the official central bank rate, is N306 billion. The real cost of medical tourism to Nigeria is whatever that money could be used to do in the country each year! Is there any hospital of world standard that could be built at this amount? That is the cost.

Perhaps the latest manifestation of this penchant for foreign products and services is the one emerging in the Nigerian advertising industry, which is the trend

in the advertising industry.

The local advertising industry involved in one form of foreign engagement or the other through advert shooting though Advertising Practitioners Council of Nigeria (APCON) has been able to tame this through its reform.

It is either pre-production, shooting and post-production of adverts are done outside the country where the models are foreign and the production crew are also foreigners and the Nigerian client and its agency representatives travel abroad to supervise the production or the creative, technical and administrative talents are flown in into the country to work on the production. In both types of productions, foreign exchange is involved to pay for the services, Jide Alade, a communication expert writes.

In addition to all these foreign exchange expenses, Peoples Democratic Party (PDP) is said to have contracted the services of Brian Balland, a top US lobbyist for $90,000 (N31.5m) per month, as communications consultants, ahead of the upcoming 2019 election.

Monday 26 November 2018

Monday 26 November 2018

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CBN, BDCs’ collaboration stabilises naira amid campaign spending HOPE MOSES-ASHIKE

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ollaboration between the Central Bank of Nigeria (CBN) and the Bureau De Change (BDC) operators has kept the naira stable at both the official and parallel markets, despite huge campaign spending by political parties.

Aminu Gwadabe, president of Association of Bureau De Change Operators of Nigeria (ABCON) who spoke with financial journalists in Lagos at the weekend, said measures initiated by the CBN including the sustenance of dollar supply to over 4,000 BDC operators across the country through the International Money Transfer Operations (IMTOs) forex window had helped the status of the local currency.

Accordingly, the CBN’s official rate closed last week somewhat flat at N306.75/$ from N306.70/$ in the prior week. Similarly, the exchange rate at the Investors and Exporters Forex window closed at N364.70/$. At the parallel market and BDCs, the naira traded at N363/$1 throughout the week.

He said: “The naira remains stable despite po-

litical parties campaign spendings across the nation. The strategic partnership, actions and preactions of the CBN and the ABCON of Nigeria have stopped distortions to the exchange rate due to ongoing politicking and campaign spendings in the country.”

Continuing, Gwadabe said the determination of the apex bank to maintain the IMTOs forex window for the over 4,000 BDCs on weekly basis had brought steady liquidity in the market and discouraged unethical market behaviours like hoarding, speculation and frivolous demand.

He said on its part, ABCON had ensured that its members continue to make dollar accessible to critical end-users like travellers demanding personal and business travel allowances, school fees and medical bills payment abroad, among others.

He said the ongoing ABCON automation and configuration of soft token for forex return rendition by over 4,000 BDCs nationwide would enhance transparency and financial integrity of the operators.

Lagos orders contractors to speed up work on ongoing projects JOSHUA BASSEY

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agos State government on Sunday directed contractors to speed up work on major ongoing projects in order to bring relief to motorists and residents.

There has been an unusual slow down on major infrastructure projects in the state since Governor Akinwunmi Ambode failed to secure the All Progressives Congress’ (APC) governorship ticket to seek re-election in 2019. Ambode lost the party’s to Babajide Sanwo-Olu. The expansion of the Lagos-Badagry Expressway is now stylishly abandoned, as the contractor - CCEC had since left site, leaving some sections of the road in a terrible state of disrepair, with motorists and commuters groaning daily.

Construction work on other projects, such as the Airport Road expansion, Oshodi Transport Interchange, Agege Pen Cinema flyover, has been slowed down significantly.

But speaking during his visits to some project sites yesterday, Adebowale Akinsanya, the commissioner for works and infrastructure, said the government was not was

DisCos lack of investment, problem of power sector – TCN boss FELIX OMOHOMHION, ABUJA

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he Managing Director and Chief Executive Officer (MD/CEO) of Transmission Company of Nigeria (TCN), Usman Gur Mohamme d, has identified non-investment by the Distribution Companies (DISCOs) as one of the major challenges faced by the power sector in country.

He said lack of long term investment in the sector has made power supply in the country a nightmare, adding that the country has one of the worse distribution networks in Africa.

The MD, who spoke during the signing ceremony of the Mou between Power Analytics & Solutions, an indigenous investor, and CEC Africa Investment, a major investor in the Abuja Electricity Distribution Company (AEDC), in Abuja, said until big companies take advantage of the privitazation window by the Federal Government and invest in the sector, power supply in the country will be far from being sustainable.

According to Mohammed: “The sector is about investment. The reason DISCOs and Power Generating Companies (GENCOs) were pr ivatis ed is because government does not have the funds to sustain and expand the network. Therefore anything we are going to do to bring investment into the sector, we are happy to do it. And the kind of investment we are looking at is the kind of investment these people are bringing in, with this MoU.” He stated further: “The MOU of today will add more megawatts to the grid. Currently with the addition of Azura, we have over 2000 megawatts stranded capacity we can’t feed to the grid.

And this is because of lack of capacity by the DISCOs. If you look at the investment that TCN is doing it cannot be sustained by DISCOs. Currently about 40 percent interface between TCN and Discos are actually supplied directly from TCN network to the customers.”

Mohammed disclosed

that the TCN was expanding, “Even the expansion we are doing is not going to be covered, you know we stimulated the grid IG 33 kV and we have come out with injection of N4.2bn, the DISCOs need to raise N2.2bn to be able to absorb the load we are bringing. But how will they be able to do that when there is no long term investment in DISCOs?” he queried.

The Director of Power Analytics & Solutions, Tony Ezeani said the company was bringing in over $2bn into the AEDC. A c c o rd i n g t o h i m , “The MOU is both for financial and technical support. What we want to do is to invest with CEC, take over and expand the distribution network,” he said.

Managing Director, CEC Africa, Emmanuel Katepa, said the sector needs collaborative efforts to make it function optimally Katepa said AEDC has of recent recorded lots of success stories despite the challenges. “It is one of the best DISCOs in the country,” he enthused.

in the know of the difficulties being experienced by motorists, and that efforts were on to bring it under control.

He said with the rains subsiding, residents should expect increased pace of work by contractors handling various projects, the government remains committed to delivering the projects.

He said: “I have just inspected the progress of work on Airport Road, Pen Cinema Flyover, Oshodi Transport Interchange, Onikan Stadium, OshodiAbule-Egba Bus Rapid Transit (BRT) project and JK Randle Centre For Yoruba Culture and History.

“The inspection tour is at the instance of the governor, Akinwunmi Ambode who equally given contractors handling various projects across the state matching orders to expedite work.”

He said the projects were embarked upon to align the state with the league of cities with world-class infrastructures thus making Lagos to be globally competitive, adding that the gains of the investment of the present administration in provision of critical infrastructure would soon be positively felt on a large scale in all sectors.

A3 NEWS

BUSINESS DAY

NCDC confirms yellow fever outbreak in Edo ANTHONIA OBOKOH

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he Nigeria Centre for Disease Control (NCDC) has confirmed an outbreak of yellow fever in Edo State.

In a statement signed

by Chikwe Ihekweazu, CEO, NCDC, as of November 21, nine persons had tested positive to yellow fever in four local government areas (LGAs) in Edo State following its recent outbreak.

The Centre, also, disclosed that samples from the nine cases had been sent to the World Health Organisation Regional Reference Laboratory for reconfirmation.

“The state public health team has commenced investigation following the report of an outbreak of fever of unknown origin and the Edo State Epidemiology Team is working with NCDC, National Primary Health Care Development Agency (NPHCDA) and WHO to carry out a detailed investigation and response to the already confirmed cases,” Ihekweazu said.

Yellow fever is an acute

viral hemorrhagic disease transmitted by infected mosquitoes. Symptoms of yellow fever include fever, headache, jaundice, muscle pain, nausea, vomiting and fatigue, according to the World Health Organisation (WHO).

Ihekweazu said the NCDC had deployed a rapid response team to support the state with contact tracing, risk communications and management of cases. “There are also ongoing plans to begin a vaccination campaign in the state in response to the cluster of cases,” he said.

He said a multi-agency yellow fever Emergency Operations Centre had been established at NCDC to coordinate the response, saying, “If you have these symptoms or notice someone in your community displaying them, please contact your nearest health centre.

“This week, our sister agency, NPHCDA flagged off a large yellow fever vaccination campaign, targeting 26 million children and adults (aged 9 months to 44 years) in six states: Niger, Plateau, Borno, Sokoto, Kebbi and the FCT.

A4 BUSINESS DAY NEWS

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CBN calls for collaboration to tackle identity theft, social engineering HOPE MOSES-ASHIKE & GBEMI FAMINU

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entral Bank of Nigeria (CBN) last week called for collaboration among banks and other stakeholders in tackling identity theft and social engineering in the sector.

Dipo Fatokun, director, banking services department, CBN, made this call during the anti-fraud week stakeholders’ workshop themed ‘identity theft and social engineering,’ organised by Access Bank in Lagos.

“Identity theft and social engineering is something no single individual can deal with, it requires collaborated efforts of which CBN partners with other banks and regulators such as the Nigeria Communications Commission (NCC) for issues like SIM swap through a memorandum of understanding and joint technical committee to address such issues,” Fatokun said.

Represented by Olubukola Akinwunmi of the CBN,

he said banks were expected to watch-list customers whose accounts were linked to fraudulent or suspicious activities.

Responding to questions from journalists, he said banks had the responsibility to enrol their customers and also to verify each customer.

Banks need to improve on their controls to ensure that appropriate steps are taken and customers are properly validated before transactions, he said.

On the issue of Bank Verification Number (BVN) not matching account holders, he said banks should review their accounts and customers regularly and that it should be a regular cleansing activity.

In his welcome address, Herbert Wigwe, group managing director/CEO, Access Bank, said, “There are diverse forms of cybercrime but social engineering and identity theft are quite rampant, and is giving the financial sector problems regardless of the advanced digital and technological innova-

tions.”

Represented by Pattison Boleigha, chief conduct and compliance officer, Access Bank, he made reference to a report released in 2014 where it showed that 0.8 percent of Nigeria’s gross domestic product (GDP) was lost through cybercrime.

He explained that fraudsters rely on any information they could get and had resorted to softer targets to carry out their criminal activities because financial data could be compromised with human factor.

He also faulted the customers for not being able to recognise threat and also not being able to report the loss of vital items like debit and credit cards, phones, SIM cards and also their carelessness in divulging vital information to strangers who pose as account officers.

He therefore advised that stakeholder of the financial sector must cooperate and form a partnership that would combat all forms of cybercrime.

Speaking with journalists

at the event, Ade Bajomo, executive director, information technology and operations, Access Bank, said the objective of the workshop was about sharing information and deepening knowledge about issues related to fraud and social engineering, as fraud was one of the fastest growing in the crime industry.

“These days, everything is becoming more digitalised till the extent that transactions can be done on the streets using accounts and bank transfers. The more advanced our digital resources are the more need to create awareness because we are only as strong as our collective awareness.

“This programme is also to bring together industry knowledge, industry experts and participants in the financial sector services, to share information and knowledge in order to protect customers and establish trust in the industry and facilitate commerce and better experience for customers,” Bajomo said.

L-R: Okechukwu Enelamah , minister of industry, trade and Investment; Amina Oyagbola, founder, Women in Successful Careers (WISCAR), Ellen Johnson Sirleaf, former president of Liberia, and Opral Benson, consul general of Liberia in Nigeria, at the 2018 WISCAR annual leadership and mentoring conference in Lagos on Saturday.

Hazardous weather: NCAA warns pilots, airline operators IFEOMA OKEKE

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igerian Civil Aviation Authority (NCAA) has warned pilots and airline operators to observe safety precautions in line with Nigeria Civil Aviation Regulations (Nig. CARs) during flight operations in adverse weather conditions.

This warning was contained in an Advisory Circular with reference no. AC: NCAA-AEROMET- 26: to all pilots and airline operators signed by Muhtar Usman, director-general of the authority.

This circular became imperative as rainfall cessation will likely herald a

long and severe dust haze (Harmattan) in the months ahead.

Sam Adurogboye, general manager, public relations, NCAA, said with this information, pilots were expected to be cautious and uphold Standard and Recommended Practices (SARPs) while conducting flights during hazardous weather associated with dust haze at this period.

According to Adurogboye, “This haze comes with – a dry and dusty wind that blows southwards from the Sahara across Nigeria in the months of November to March.

“Consequently, pilots should note that air-toground visibility may be

considerably reduced due to the dust haze. In addition, aerodrome visibility may fall below the prescribed minima and in severe conditions; dust haze can blot out runways, the markers and airfield lightings over wide areas. This makes visual navigation extremely difficult or impossible.”

Where visibility falls below the prescribed weather minima, flight operations are expected to be delayed, diverted or out rightly cancelled, he said.

“Therefore to reiterate, all pilots are obliged to exercise maximum restraint, especially when severe weather condition is observed or forecasted by NIMET.

Monday 26 November 2018

The church must stand in the gap for the nation - Gowon SEYI JOHN SALAU

... as Nigeria prays

ormer head of state and convener of Nigeria Prays, Yakubu Gowon, has called on the church in Nigeria to continually stand in the gap for the nation.

“The church must provide a moral compass for the nation and cause darkness to recede and warn people to heed to truth, imbibe the fear of God and to follow righteousness,” Gowon said.

Gowon stated this at the special National Prayer service held Sunday at the Deeper Life Bible Church headquarters, Gbagada, Lagos.

According to Gowon, the church is God’s house of prayer, hence “we must steer clear of any semblance of encouraging religious warfare in the guise of self-defence.”

Similarly, he called on the government to be accountable to the electorates. “... we must continually demand that government be seriously alive to its primary responsibility of the protection of life and property of all citizens.

“While government is encouraged to do the needful, people of faith also must be encouraged to win over unnecessarily angry and violent

people with the force of love,” Gowon said.

The General Superintendent of the Deeper Life Church and host of the event, William Kumuyi, in his sermon tagged, ‘Divine Assurance when Nigeria Prays’ said, “Perplexing national problems demand the nation’s prevailing prayer.”

According to Kumuyi, the church can claim God’s unfailing promise for our nation, Nigeria. “The healing of our land will restore health and wholeness to every section of our society. God has promised to heal our land if we humble ourselves, turn from our wicked ways and pray with expectant faith,” he said.

President Muhammadu Buhari, in a special message to the congregation, said, “Nigeria is not a mistake,” and called on Nigerians to encourage and promote passion for one Nigeria.

Buhari, who was represented by his special adviser on media, Femi Adesina, said the prayer for the nation was the right thing to do. “Non of Nigeria’s challenges is greater than God. In God we trust and He will take us through the challenges,” he said.

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Caritas deepens PR practice with new book

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ublic relations, reputation management and digital engagements consultancy firm, Caritas Communications, has presented a new book, ‘Public Relations Thoughts and Deeds,’ to the public.

The 128-page book, written by Adedayo Ojo, founder/ CEO, Caritas Communications, chronicles the evolution of Public Relations (PR) practice in Nigeria, gives a global perspective of the practice, while presenting an array of case studies to readers.

This book “provides valuable insights for professionals,

managers, and business persons who seek an understanding of what PR really is, and how it can be deployed in a strategic manner to help achieve corporate and business objectives, said Opeyemi Agbaje, who reviewed the book at the Caritas Reputation Leadership Roundtable event where the book was officially presented to the public in Lagos.

The Caritas Leadership Reputation Roundtable brought together key players in the public relations community in Nigeria, top executives from various institutions, as well as academia.

European Investment Bank, Afreximbank sign €200m loan agreement HOPE MOSES-ASHIKE

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he European Investment Bank (EIB) has signed a new 15-year €200 million loan agreement with the African Export-Import Bank (Afreximbank) aimed at supporting trade-related productive investments, including in renewable energy projects, in Africa.

The facility will support promoters in more than 40 countries across Africa with long-term funding.

By improving access to finance for private enterprises, and specifically SMEs and Mid-caps, this loan will enhance intra-African trade as well as trade with the European Union.

It will enable smaller companies to sustain and create new jobs and will ultimately stimulate the expansion, diversification and development of African trade. At least, 25 percent of this financing will be dedicated to projects that will help to diversify the power mix in the region, reducing reliance on fossil fuels and supporting climate goals.

Speaking from the Africa Day event, jointly hosted by the EIB and the United Nations Industrial Development Organisation (UNIDO), Werner Hoyer, president of the EIB, said: “The EIB, as the EU bank, is committed to supporting investment in Africa that unlocks economic opportunities, creates jobs and tackles a changing climate.

“As one of the largest mul-

tilateral financial institutions, the EIB has a crucial role to play to help channel private capital towards the energy transition. This is urgent if we want to achieve the Paris Agreement and the Sustainable Development Goals. With this operation Afreximbank and the EIB are joining forces to improve access to clean energy across Africa”.

“We are confident that effective implementation of this facility, which heralds Afreximbank’s financing of climate action projects in Africa, will lead to strong development outcomes, including employment creation, increased economic activities, and increase in tax revenues for fiscally strained governments,” Benedict Okey Oramah, president of Afreximbank, said.

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World Business Newspaper

May’s focus shifts to hard sell after sealing Brexit deal UK prime minister faces uphill battle at home to ratify agreement GEORGE PARKER, ALEX BARKER, JIM BRUNSDEN & MEHREEN KHAN

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heresa May will embark on a two-week campaign to sell the historic Brexit deal agreed by European leaders, telling MPs they risk plunging the country into “more division and uncertainty” if they reject it.

The terms of Britain’s exit from the EU were signed off at a tightly choreographed European Council meeting on Sunday, but Britain’s prime minister now faces a struggle to win over a hostile House of Commons.

After months of tensions over Brexit, Mrs May and the EU27 leaders are now engaged in a joint political fight to persuade MPs to ratify the exit deal; the British premier insisted it was “a deal that works for the UK and the EU”.

The deal aims to deliver a smooth divorce to end Britain’s 45-year involvement in the European project, although many details of the future relationship between the two sides have yet to be agreed.

Mrs May agreed with JeanClaude Juncker, European Commission president, and Donald Tusk, European Council president, that both sides should insist the deal was the only option on the table, with no plan B. She told a Brussels press conference: “If people think there’s another negotiation to be done, that’s not the case.” If the Commons rejected the deal it would “open the door to yet more divi-

© AP

sion and uncertainty”.

Mr Juncker, speaking after the short summit in Brussels, delivered a near identical message: “This is the best deal possible for Britain, this is the best deal possible for Europe, this is the only deal possible.”

Some pro-EU cabinet ministers have speculated that Mrs May will need to fall back to a “softer” Brexit, including a “Norway-style” single market deal; Eurosceptics say she should consider a “managed” no deal exit.

The terms of Britain’s departure — scheduled for March 29 next year — were finalised before lunch, as EU27 leaders signed off on a 585-page withdrawal treaty and a shorter political declaration

Shock Taiwan local elections result casts doubt over China policy

Stunning defeat for ruling party in cities throws president’s leadership into jeopardy EDWARD WHITE

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n a bright, sunny late autumn morning on Saturday Taiwan’s President Tsai Ingwen joked with local media and the public as she queued at a school in Taipei to cast her vote in the country’s local elections.

By the evening, however, the outlook for Miss Tsai, her government and Taiwan’s relations with China were far from clear after the ruling Democratic Progressive party suffered a series of stunning losses to the opposition Kuomintang.

Miss Tsai, who has pursued a firmer line with Beijing than the China-friendly KMT since taking office in 2016, immediately resigned as head of the party, despite the result coming amid widespread allegations of Chinese interference in the polls.

“Today, democracy taught us

a lesson,” the president said in Taipei on Saturday night.

Analysts said the local contests were fought mostly on domestic issues, including the economy and air pollution, and the result was not necessarily a rejection of Miss Tsai’s China policy — the president has sought to strengthen Taiwan’s military and build ties with western democracies in the face of Beijing’s claim that the island is part of its territory.

But the result has raised uncertainty over Taiwan’s direction ahead of legislative and presidential elections 14 months away.

“There are big questions now about Tsai’s ability to lead the party into 2020. Her progressive agenda has stumbled, the economy is weak and China has snubbed her,” said Jonathan Sullivan, a Taiwan politics expert at the University of Nottingham.

The potential for a change of Continues on page A9

on a future relationship.

The mood was solemn as EU leaders contemplated the legal texts that will see the biggest reversal of the project of European integration since it began in the 1950s. “It is a sad moment, a tragedy,” Mr Juncker said.

Mrs May was asked if she was sad, but replied: “No. But I recognise that some European leaders are sad and some others at home in the UK are sad at this moment.”

But Mrs May now has to sell the deal at home ahead of a parliamentary vote next month, with opposition parties ranged against the proposal and more than 90 Conservative MPs publicly recording their criticism.

On Monday Mrs May convenes her cabinet to discuss how to avoid a defeat; so far many of the prime minister’s Eurosceptic ministers have failed to endorse the deal publicly.

She will follow up with another Commons statement to MPs on Brexit — the third in the past 10 days — before heading off around the country later in the week to appeal for public support.

Meanwhile the government will publish its economic analysis of the deal — which offers a smooth exit and a transition deal lasting up to December 2022 — compared with the costs of a disorderly “no deal” exit.

The analysis, which has already been branded “Project

Fear II” by Eurosceptics, will also look at the economic benefits of achieving the “frictionless trade” promised in the Chequers white paper.

For the EU27, the summit was a moment for quiet satisfaction, given that the 2016 Brexit referendum did not trigger an unravelling of the club — instead the remaining member states held together throughout the negotiations.

The one-day European Council went ahead after Spain and Britain reached an agreement over the future status of Gibraltar in any subsequent EU-UK trade deal, with Madrid claiming it had secured a vital say in the future of the British territory.

French protesters hit out at ‘distant’ Emmanuel Macron ‘Yellow vests’ accuse president of being out of touch with ordinary people HARRIET AGNEW

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he protesters came from all across the French political spectrum but were united by a common complaint: that President Emmanuel Macron was out of touch with the lives of ordinary people and had impoverished them since coming to power 18 months ago.

On Saturday, 8,000 people took to the streets in Paris as part of the so-called Gilets Jaunes (yellowvest) movement, a grassroots initiative that has no official leaders, no political affiliation and relies on social media to mobilise its cohorts.

Across France, 106,000 protesters wearing gilets jaunes were recorded by the interior ministry, the culmination of a week of countrywide action that claimed two lives and left hundreds injured.

While that figure was fewer than half the 283,000 who turned out on the previous Saturday, the tone of defiance remained. This Saturday 130 people were arrested and placed in police custody, including 42 in Paris, the ministry added.

The official protest site in Paris was the Champ de Mars by the Ei-

ffel Tower, but hundreds of people lined the Champs Elysées and one of the most celebrated avenues in the world quickly descended into chaos. Store windows were smashed and bonfires set alight amid chants of “Macron, démission” (“Macron, resignation”).

Protesters threw stones at the police and materials on building sites were used to build barricades.

Police deployed a water cannon, pepper spray and tear gas to prevent people from marching to the presidential palace.

Mr Macron condemned the violent nature of some of the protests.

In a tweet on Saturday, he said: “Thank you to our law enforcement for their courage and professionalism. Shame on those who attacked them. Shame on those who have abused other citizens and journalists. Shame on those who have tried to intimidate elected officials.

No room for this violence in the Republic.”

What started as an online petition against the government’s decision to increase fuel taxes to spur drivers to greener vehicles has morphed into a wide-ranging display of discontentment. It cuts

across age, employment status and political affiliation, and centres on deepening inequality in a country where unemployment hovers at more than 9 per cent.

Aurelien Mercuri travelled from Decazeville in southern France to join the protests in Paris, where he walked up the Champs Elysées brandishing a placard, saying: “France is the most taxed country in the world”.

He said: “There are too many increases: the CSG [social security charges] for the retirees, the gasoline increase. The president does not listen to the people. He takes money from small workers and retirees and distributes it to the rich.”

Most of the protests on the Champs Elysées were peaceful. “We cannot live any more, money is badly distributed,” said an unemployed woman waving a French flag. “They do not tax the international companies that move to France, or the rich with their big boats and private planes.

Macron is too distant. He lives in a bubble with only rich people around him and doesn’t know how the ordinary French people live.”

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FT Shock Taiwan local elections result...

Black Friday online sales hit record high

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government in Taipei in 2020 will create fresh difficulties in ties between Taipei and Washington after a period of warming relations against a backdrop of Beijing’s rising aggression toward Taiwan through military, diplomatic and economic measures, experts said.

“The election results have introduced a high degree of uncertainty in cross-strait relations and the US-Taiwan security calculus,” said Elizabeth Freund Larus, a defence expert at the University of Mary Washington in Virginia.

And the return of the KMT to key mayoral seats would be viewed by Beijing that its “one China” policy “still has salience within a portion of the populace”, said Lauren Dickey, an analyst at the Center for Naval Analyses in Arlington, Virginia.

Among 22 mayoral and county magistrate seats, Taiwanese voted to unseat the DPP in seven of the 13 cities and counties it held going into the election, including shock losses to the KMT in its heartland of the southern port city of Kaohsiung for the first time in 20 years and in Taichung, central Taiwan.

With New Taipei City remaining in the KMT’s grip and the capital Taipei staying with the incumbent independent and potential presidential challenger Ko Wen-je, the DPP now holds none of the top positions in Taiwan’s four largest cities.

The result marked a striking turnround from 2014 when the DPP more than doubled its tally of city leaders from six to 13, a victory that helped springboard the party to win the presidency and a majority in the legislature for the first time in its history in 2016 amid widespread angst over the KMT’s efforts to tighten ties with China.

Saturday’s polls also delivered a blow to liberal reforms. Voting on a series of referendums, Taiwanese supported restrictions on same-sex marriage and rejected a proposal for Taiwanese athletes to compete at the 2020 Tokyo Olympic Games under the name Taiwan, rather than Chinese Taipei.

“We are deeply saddened and disappointed by the referendum results,” said Jennifer Lu, chief co-ordinator of Marriage Equality Coalition Taiwan, also noting that in 2017 Taiwan’s top court deemed as unconstitutional laws that banned same-sex marriage.

The government would now likely “drag its feet” on the introduction of laws to legalise same-sex marriage, said Timothy Rich, an Asian elections expert at Western Kentucky University.

Shen Ching-kai, a campaign leader for the Olympics name change, had hoped the referendum would be a step towards Taiwanese independence but said the government had to “fight back” against China’s “bullying”.

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US shoppers splashed out on deals but fewer visited stores in person

ALISTAIR GRAY

A Goldman’s role in the 1MDB scandal has come under increasing scrutiny since US prosecutors charged two former managing directors © Reuters

Goldman revamped risk oversight shortly after 1MDB deal Bank reformed internal committees following pressure from NY Federal Reserve in 2013 JOHN GAPPER & LAURA NOONAN

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S bank supervisors told Goldman Sachs to tighten its oversight of risk and report more of its internal debates about deals just after the Wall Street bank completed $6.5bn of controversial bond financing for 1MDB, the Malaysian fund.

Goldman implemented sweeping changes to how the powerful internal committees that oversee how its operations work, under pressure from the New York Federal Reserve. The reforms were agreed in 2013 after the Fed pressed Goldman to be more transparent, but were not publicly disclosed.

The bank is now being investigated by the US Department of Justice over the 1MDB scandal, and has been sued by an Abu Dhabi fund. Tim Leissner, a former Goldman partner, has pleaded guilty to conspiracy relating to money laundering and bribery. Roger Ng, another Goldman banker, has also been charged, although his plea is unknown. Mr Ng could not be reached for comment.

The news will add to questions over Goldman’s handling of the 1MDB deals and how it failed to

block the involvement of Jho Low, a Malaysian financier who is accused by prosecutors of diverting $2.7bn of the 1MDB proceeds into payments including bribery of officials. Mr Low denies the accusations.

The changes, which included rewriting of the charters of Goldman committees that approved three 1MDB bonds, were not directly linked to those deals. They resulted from a wider questioning of controls, including concerns that committee minutes did not record debate in sufficient detail.

All of Goldman’s company-wide and regional committees were affected by the reforms, which were introduced shortly after the bank financed the last of the 1MDB bonds in March 2013, receiving a total of $600m in fees. They included its capital and client suitability committees, which oversaw the 1MDB financing, and approve all such deals.

One person close to its Asia Pacific capital committee, which initially reviewed the first 1MDB deal in 2012, said that the Fed questioned why committees seemed to reject very few deals as being too risky or inappropriate. The bank then instructed its committees to record proposals that

it had turned down at earlier stages.

Mr Leissner was 1MDB’s closest contact within Goldman. But the person said that Andrea Vella, a partner who has not been charged but has been placed on leave by Goldman, was the most influential figure within the Asia Pacific committee in securing approval for 1MDB as a member of the deal team.

The Asia-Pacific committee reviewed the first bond before advancing it for approval to the bank’s capital committee in New York.

Although Mr Vella was recorded in the Asia Pacific committee’s minutes as recusing himself over the financing, he remained in the room and continued to take part in discussions, the person said. The committee met in Hong Kong with Eugene Leouzon, Goldman’s global chief underwriting officer, co-chairing.

“Tim Leissner and Roger Ng would do the pitch and Leouzon would say, ‘That is interesting,’ then Vella would walk in like a rock star,” the person said. “The deal would not have got through without him.”

Mr Vella was co-head of financing for Asia at the time, and was later promoted to co-head of investment banking in Asia. Through his lawyer, Mr Vella declined to comment.

UK parliament piles pressure on Facebook over data policies MPs consider publishing confidential internal documents obtained from app developer NIC FILDES, ALIYA RAM & HENRY MANCE

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onfidential Facebook documents seized by the UK parliament could be published this week as members of parliament continue to ramp up pressure on the technology company’s executives following the Cambridge Analytica scandal.

Damian Collins, chair of the digital, culture, media and sport select committee, told the Financial Times that “very important and very relevant” documents had been obtained from the founder of Six4Three, a US app developer, who was on a business trip in London last week.

Mr Collins issued an order to compel the businessman, Ted Kramer, to hand over the documents and the serjeant at arms — an officer responsible for security at Westminster — was sent to his hotel to ensure he complied. The app developer was in possession of internal Facebook documents, some from senior executives, re-

garding its data policies.

The method by which the documents, which date to between 2013 and 2014, were seized was first reported by The Observer. Mr Collins said it was “unusual” but not unprecedented to dispatch a serjeant at arms alongside the order.

The showdown is an unusual deployment for the serjeant at arms, whose job includes a daily parliamentary procession carrying a silver-gilt mace. The House of Commons did not immediately respond to a query about the last time the official had been involved in enforcing the law outside the parliamentary estate.

It reflects how high the stakes have become as governments around the world battle to obtain answers from Facebook’s executives about fake news and disinformation on its platform. “The process of getting information out of Facebook has been painful,” said Mr Collins.

The MP said he had already

reviewed the documents but would not comment on their contents.

The stand-off between parliament and Facebook comes one month after the social network appointed Nick Clegg, the former UK deputy prime minister, as head of global affairs and communications.

It also comes as Six4Three compiles evidence against Facebook in preparation for litigation. The documents have been sealed by a judge in California so cannot be released and any attempt to do so would be deemed to be in contempt of court.

Mr Collins said, however, that his committee, which will meet on Tuesday, has the power to publish the documents under parliamentary privilege if it chooses to do so.

The Six4Three case has little to do with the subject of fake news but could shed light on Facebook’s policies at the time that the data of tens of millions of Facebook users was accessed and then used by Cambridge Analytica.

mericans splashed out record sums on Black Friday online deals last week but fewer of them went shopping in person, according to initial figures.

Sales in stores during Thanksgiving and Black Friday dropped between 4 and 7 per cent compared with last year, according to a preliminary analysis by the data provider RetailNext.

Footfall was estimated to have declined even more — between 5 and 9 per cent — although those consumers who did show up spent more, driving average transaction values up about 3 per cent.

It was at least the fourth consecutive year of declines in both traffic and sales recorded by RetailNext. A group that uses a different methodology, ShopperTrak, found shopper visits for the twoday period fell just 1 per cent, less steep than the 1.7 per cent decline it recorded a year ago.

But as in-store business continued to weaken, online sales have soared to new highs.

Online spending on Black Friday leapt 24 per cent from a year ago to $6.22bn, according to Adobe Analytics. Average discounts included 27 per cent off toys and 18 per cent off televisions and computers.

Cyber Monday, traditionally the main event for online bargains, was shaping up to be the largest online shopping day in US history with a forecast $7.8bn sales haul.

Yet fewer stores felt the need to wait for Cyber Monday, or even Black Friday, to offer big discounts, further reducing incentives to hit the mall.

For the first time this year, online prices on Thanksgiving were as low as they were on Black Friday. Thanksgiving has become the fastest growing internet shopping day, said Adobe, with sales up 28 per cent from a year ago.

Although Amazon remains dominant online, nearly all big retailers have been boosted by the online spending surge, according to separate research by Edison Trends.

Online sales over Thanksgiving and Black Friday were up 48 per cent at Target, 34 per cent at Macy’s and 23 per cent at Walmart.

Amazon’s rivals have been investing heavily in ecommerce and logistics to better compete.

One exception to the digital sales bonanza was Sears, which filed for bankruptcy protection last month. The department store chain’s online sales collapsed almost half from a year ago.

In another threat to bricks and mortar retail, US consumers are getting more comfortable buying more expensive items online.

The average order tracked by Adobe was worth $146, 8.5 per cent higher than last year. About a third of purchases were made on mobile phones, compared with less than 30 per cent last year.

“Consumers are clearly feeling more confident in buying higher-ticket items on their smartphones,” said Taylor Schreiner, director of Adobe Digital Insights.

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BusinessDay Banking and Financial Institutions Award 2018

Mohammad Kagu, group head, corporate banking group (Agric Finance), First Bank, receiving the best equity fund of the year award, best bond fund of the year award on behalf of FBNQuest Asset Management Limited, from Frank Aigbogun, publisher/CEO, BusinessDay

Nike Bajomo, executive director, business development, Stanbic IBTC Pension Managers Limited, receiving pension fund administrator of the year award from Frank Aigbogun.

Patrick Ilodianya, MD/CEO, SFS Capital Limited, receiving the best fixed income fund of the year, best asset manager of the year, and real estate investment trust of the year awards from Frank Aigbogun.

: Tayo Lawal, receiving pension fund custodian of the year award from Frank Aigbogun.

L-R: Femi Adebayo of Leadyway Assurance , receiving best insurance company of the year award on behalf of the company from Tunde Coker, MD/CEO, Rack Centre L-R: Saheed Bashir of Meristem, receiving best stockbroker of the year award on behalf of the company from Tunde Coker.

L-R: Funmi Ekundayo, MD/CEO, STL Trustees Limited, receiving best trustees of the year award from Tunde Coker, and Frank Aigbogun

L-R: Bayo Olugbemi, MD/CEO, First Registrars and Investor Services Limited, receiving best registrar of the year award from Tunde Coker, and Frank Aigbogun

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BusinessDay Banking and Financial Institutions Award 2018

L-R: Sheu Mohammed, Sarkin Kano, representing Emir of Kano, presenting best money market fund of the year award to Sunny Anene, MD, United Capital Asset Management Limited, and Frank Aigbogun.

L-R: Sheu Mohammed, presenting best public institution in SME financing and financial inclusion award to Akeem Adesina, general manager, Bank of Industry (BoI), and Frank Aigbogun

L-R: Sheu Mohammed; Oyewale Ariyibi, CFO, FBN Holding, receiving best financial holding company of the year award on behalf of the company from Ronke Atkinson, MD, VeriPark Nigeria Olaitan Aworonke, executive director, Omoluabi Mortgage Bank Plc (r), receiving best Mortgage Bank of the year award on behalf of the company from Sheu Mohammed (l).

L-R: Sheu Mohammed, presenting best continental bank of the year award to Anant Rao, group executive ditital and consumer banking, UBA; Nasir Ramon, head, external relations, UBA.

L-R: Sheu Mohammed, presenting best Investment bank of the year award to Banjo Adegbohungbe, executive director/COO, Coronation Merchant Bank Group, and Frank Aigbogun.

Yinka Sanni, chief executive, Stanbic IBTC Holding Plc (m), receiving best bank CEO of the year award on behalf of Demola Sogunle, chief executive, Stanbic IBTC Bank from Sheu Mohammed, and Frank Aigbogun.

Temitope Fasorunti, executive director, Zenith Bank Plc (2nd l), receiving best bank of the year award on behalf of the bank from Sheu Mohammed (l); Denis Olisa, executive director, Zenith Bank (2nd r), and Frank Aigbogun.

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BusinessDay Banking and Financial Institutions Award 2018

L-R: Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Business Law (NBA-SBL), presenting best bank in retail banking award to Caroline Anyanwu, deputy managing director, Diamond Bank Plc; Lucy Newman, MD/CEO, FITC, and Ronke Atkinson, MD, VeriPark Nigeria

R-L: Abdul Imoyo, head, media relations, Access Bank Plc, receiving best bank in the corporate banking award on behalf of the bank from Lucy Newman and Priscilla Ogwemoh,

R-L: Paul Adebo; George Ogbonnaya, both of FCMB, receiving best banking in SME financing award on behalf of the bank from Lucy Newman and Priscilla Ogwemoh

L-R: Jubril Enakele, managing director, Zenith Capital Limited, receiving best deal advisor of the year award from Priscilla Ogwemoh, and Lucy Newman

R-L: Titilayo Folorunso, zonal manager, Bank of Agriculture (BOA), receiving best bank in financial inclusion of farmers of the year award on behalf of the bank from Lucy Newman and Priscilla Ogwemoh Dimeji Adegboye of AIICO Capital, receiving the Mixed Fund of the year award on behalf of the company from Frank Aigbogun, publisher/CEO, BusinessDay

Yinka Sanni, chief executive, Stanbic IBTC Holding Plc (m), receiving best bank CEO of the year award on behalf of Demola Sogunle, chief executive, Stanbic IBTC Bank from Sheu Mohammed, and Frank Aigbogun.

Funmi Ekundayo of STL Trustees Limited, receiving the Trustees of the year award on behalf of the company from Tunde Coker, MD, Rack Centre and Frank Aigbogun, publisher/CEO, BusinessDay.

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BusinessDay Banking and Financial Institutions Award 2018

Gbite Oduneye (m), MD/CEO, EGM, receiving the Digital Platform of the year Award on behalf of the company from Sheu Mohammed (l) representative of the emir of Kano, and Frank Aigbogun.

Sheu Mohammed representative of the emir of Kano presenting the Best Developing Financing Institution of the year Award to Aliyu Abdulameed, MD/CEO, NIRSAL supported Frank Aigbogun.

L-R Frank Aigbogun; Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Business Law (NBA-SBL), presenting best Bank in Infrastructure Financing of the year award to Richard Madiebo of Fidelity Bank, Lucy Newman, MD/CEO, FITC, and Ejike Ndiulo of Fidelity Bank L-R: Sam Cookey, CEO, CG&QMS Consulting; Tajudeen Ahmed, general manager/group head, business development, BUA Group; Kunle Shittu, and Paula Nwankwo, zonal manager, Lagos, LAPO Micro Finance Bank

L-R: Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Business Law (NBA-SBL), presenting best Bank in CRS of the year award to Ejike Ndiulo of Fidelity Bankm supported by Lucy Newman, MD/CEO, FITC and Richard Madiebo of Fidelity Bank.

L-R: Babalola Obilana; Nike Bajomo; Yinka Sanni, chief executive, Stanbic IBTC Holdings, and Olu Delano

Pictures by Pius Okeosisi and Olawale Amoo

L-R: Justin Osogbo; Nnamdi Edekobi, and Adamu Lawani, all of Zenith Bank

L-R: Oyewole Ariyibi, chief finance officer, FBN Holdings Plc; UK Eke, GMD, and Remi Oni, executive director, corporate banking, First Bank

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fivethings

Insight 2019: Buhari proposes, can Obasanjo dispose?

GLOBAL perspectives

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

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ext year’s presidential election is a two-horse race between President Muhammadu Buhari and former vice president Atiku Abubakar. But, in truth, it is also a contest between Buhari and former President Olusegun Obasanjo. Of course, Obasanjo’s name won’t be on the ballot, but, make no mistake, he will be lurking in the shadows as Buhari’s nemesis. The proxy contest between the two retired generals and former military rulers would be interesting. The stakes are truly high; one of them will have his ego boosted or busted!

For Obasanjo, it is his reputation as Nigeria’s quintessential Svengali or political godfather that is at stake. As he himself once boasted, he’s been instrumental in determining Nigeria’s presidents since 1979 when he influenced the election of Shehu Shagari. Both Umaru Yar’ Adua and Goodluck Jonathan owed their emergence as presidents to him. And, of course, Buhari won in 2015 in large part because Obasanjo precipitated a deep split in his party, People’s Democratic Party (PDP), making it unelectable, and then publiclybacked Buhari.

Jonathan once called Obasanjo“the boss of bosses” and warned any presidential candidate: “ignore him at your peril”. Surely, if Buhari wins next year, despite Obasanjo’s opposition to his reelection, that would shatter Baba’s aura of indispensability. Furthermore, Obasanjo is, so far, the only Nigerian leader who was a military head of state and served two terms in office as a civilian president.

His pre-eminence comes largely from that achievement. But if Buhari, also a former military head of state, wins re-election and does two presidential terms too, well, he would deny Obasanjo that preeminence. If you think these things don’t matter to Obasanjo, you don’t know him! You don’t know how egomaniacal and narcissistic he is; how he wants to be the biggest fish in the pond, any pond!

So, next year’s elections are not ordinary for Obasanjo; the stakes are really high for him!

But the stakes are high for Buhari too. As a military head of state in the early 1980s, Buhari was overthrown by his colleagues.

He has never forgotten or forgiven the“betrayal”. Indeed, his refusal to release Sambo Dasuki from detention, despite several court orders, probably owes much to Dasuki’s role in the 1985 coup.

Buhari’s persistence in running for president (he ran four times) was also partly to redeem his honour and prove that those

who removed him from power in 1985 were misguided. Victory was a sweet revenge for him!

Indeed, in 2016, President Buhari gloated about his election:“I can claim superior knowledge over the opposition because, in the end, I have succeeded”.

That “opposition”included those, including General Ibrahim Babangida, who thought he was no good and overthrew him in 1985.

Now, imagine the same Buhari removed from power the second time; this time not by his treacherous military colleagues but by the people of Nigeria in a general election. That would scar him with an indelible political stigma. To rephrase Oscar Wilde’s famous quote, “To lose power once may be regarded as a misfortune, to lose it twice looks like carelessness.” So, you can see why the stakes are high for Buhari! For him, it’s the need to bury the ghost of past failure and avoid history repeating itself. But can Obasanjo stand in his way?

Proverb 19: 21 says “Man proposes but God disposes”. Thomas a Kempis popularised the phrase in his celebrated work, “The Imitation of Christ”. Of course, the quotation refers to God being the decider of a man’s fate, the one who can alter a man’s plan. But I use the phase here in a political context without intending to be blasphemous. Surely, if, as former President Jonathan said, presidential aspirants ignore Obasanjo “at their peril”, or if, as another politician, Perry Opara, once said, “Obasanjo will be instrumental in who becomes president in 2019”, then that makes Obasanjo the god of Nigerian politics. Whatever anyone proposes, he can dispose.

Right? So, it’s not amiss to ask whether he can stop Buhari from being re-elected next year.

But, let’s be clear, the battle will be fierce. Buhari is not a

political midget like Jonathan, who has just written a pathetic book, blaming everybody but himself for his defeat. Buhari is a battle-hardened general like Obasanjo. He is also not from a minority tribe, one of the reasons Jonathan gave for his defeat. He is from the core North, with fanatical supporters. But Obasanjo is also hugely connected, with dyedin-the-wool loyalists all over the country. Nearly 90% of the PDP governors and legislators, who defected to Buhari’s party, All Progressives Congress (APC), before the 2015 general elections and contributed to his victory, are loyal to Obasanjo. The same governors and legislators have now returned to the PDP. Don’t be surprised if they are talking to Baba and Baba is talking to them on how to plot Buhari’s defeat next

year. Indeed, Obasanjo is talking to everyone, including his arch political enemies, the leaders of Afenifere, about thwarting Buhari’s re-election ambition.

The truth is that Buhari’s defeat next year means a lot to Obasanjo, and he will do anything to

‘

Obasanjo’s politics is opportunistic, defined by a simple philosophy: the end justifies the means! He supported Buhari in 2015, even though he knew he would be hopeless as president, because, according to him, it was “any option but Jonathan”. Now, it’s “any option but Buhari”

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achieve it. He fired the first salvo with a stinging open letter earlier this year in which he warned Buhari not to seek re-election. He said the president’s government was infested with “the lice of poor performance”, which manifested in “poverty, insecurity, poor economic management, nepotism, gross dereliction of duty, condonation of misdeeds”. He referred to Buhari’s health and age and pointed out, matter-of-factly, that “Without impaired health and

strain of age, running the affairs of Nigeria is a 25/7 affair, not 24/7”.

He then concluded: “President Buhari needs a dignified and honourable dismount from the horse”! In other words, Buhari must abandon his second term ambition.

Obasanjo, who publicly tore up his PDP membership card in 2015, also made clear that the PDP was not the way forward. Instead, he advocated the formation of a Coalition for Nigeria, CN, which would “take Nigeria to the height God has created it to be”. The new coalition, he said, “will be new, green, transparent, clean and selfless”, and averred that “I, therefore, will gladly join such a movement when one is established as Coalition for Nigeria, CN”. There was subsequently a flurry of political activities in the country, with sev-

eral politicians making political pilgrimages to Obasanjo’s home in Ota. In the end, a coalition was formed, which transmuted into the African Democratic Congress, ADC, one of the registered political parties. So, what then happened? I mean, what happened to the Coalition for Nigeria? What happened to Obasanjo’s support for the ADC? Why is he now supporting the PDP’s presidential candidate, Atiku Abubakar?

Well, the answer is simple: it’s all about his desperation for Buhari’s defeat, and who’s best able to deliver it. Obasanjo knows that his so-called Coalition for Nigeria, whatever party it morphed into, cannot defeat Buhari in next year’s election. But because he is determined to dislodge the president from Aso Rock next year, he will support anyone, yes anyone, that stands the best chance of pulling that off. Obasanjo’s politics is opportunistic, defined by a simple philosophy: the end justifies the means! He supported Buhari in 2015, even though he knew he would be hopeless as president, because, according to him, it was “any option but Jonathan”. Now, it’s “any option but Buhari”. For Obasanjo, his enemy’s enemy is his friend, even if he thinks the new “friend” is evil!

For over 15 years, Obasanjo was telling Nigerians and the world that Atiku was unsuited for public office. When Atiku was his vice president, he investigated him on allegations of corruption and gazetted an indictment against him.

In his book My Watch, Obasanjo called Atiku all sorts of terrible names, referring, for instance, to “his propensity to corruption” and “his readiness to sacrifice morality, integrity, propriety, truth and national interest for self and selfish interest”. As early as August this year, Obasanjo said, “God will not forgive me if I support Atiku for president”. He regularly taunted Atiku about daring to go to the US, saying in an interview with the EFCC TV programme, Zero Tolerance, “Let him (Atiku) go to America and see if he can return to Nigeria”.

But, dear readers, the same Obasanjo, who accused Atiku of such terrible things in his book and in various interviews, is now, without withdrawing those accusations, sayingthat Atiku is the best person to be Nigeria’s best president. Atiku now represents the “new, green, transparent, clean and selfless” politics he advocated.

Surely, Obasanjo is insulting the intelligence of Nigeriansby being frivolous with his actions and by abusing his position!

Of course, Obasanjo can forgive Atiku and vice versa, but not at the expense of Nigeria.

Even Bishop Kukah, who initiated their reconciliation, said he only expected spiritual and personal reconciliations, not the “high wire politics” that ensued. As he put it, “my reconciliation bid was not political, not about endorsement”.

But for Obasanjo, Bishop Kukah’s intervention was a fig leaf to do a volte face on Atiku, who stands the best chance of defeating Buhari. But dislodging Buhari may not be that easy. Two big egos will certainly collide next year. I can’t wait to see whose will be boosted or busted: Buhari’s or Obasanjo’s!

for your new week

Fascinating business facts

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$129m

unit of Glencore in the Democratic Republic of Congo has had a ban on imports and exports from its giant copper and cobalt mine lifted by authorities there. it had been blocked on Nov.9 from exporting copper and cobalt from Congo over a dispute around payments on copper that was never actually mined years ago. Congo is asking for $129.8 million to settle the dispute. Katanga Mining and its Kamoto copper and cobalt mine is one of Glencore’s most important growth projects. It restarted production in December after a two-year hiatus. It had expected to produce as much as 300,000 metric tons of copper and 34,000 tons of cobalt in 2019, which would make it Congo’s largest copper project and the world’s biggest source of cobalt.

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$300m

anzania will still receive $300 million in World Bank funding for secondary school education the presidency said after a visit by the lender’s vice president, Hafez Ghanem.

The Bank blocked the funding after President John Magufuli said his government would not allow girls who fall pregnant and deliver a baby back to school. The Washington-based lender has development projects in Tanzania worth $5.2 billion.

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$50bn

year after throwing down the gauntlet with an unprecedented outlay on next-generation mobility, Volkswagen AG has boosted its five-year spending plan by more than a quarter to $50 billion. With the new record through 2023, the German carmaker is highlighting the huge stakes in moving from the combustion era into an electric future. Volkswagen said it now plans more than 50 fully-electric models on the road by 2025, more than any other manufacturer. The push, including next year’s Porsche Taycan, is part of keeping old rivals and new competitors like Tesla Inc. and Uber Technologies Inc. at bay.

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$1.09bn

here is a new wave of young Nigerians taking the risks involved in experiencing life in some of the country’s tourist locations including the gushing waterfalls of Ikogosi in western Nigeria but the country’s unenviable reputation for violent crime and corruption largely deters international travellers. Nigeria is thus losing out on tourism revenues to other countries perceived to be safer such as Kenya, Ghana and the Gambia. Nigeria brought in $1.09 billion from international tourism in 2016, the latest year available, according to the World Bank. By comparison, Kenya received $1.62 billion that year, Tanzania got $2.16 billion and South Africa $8.81 billion.

Despite government assurances, problems persist for Nigeria’s tourism industry. Infrastructure is a major challenge: as well as decrepit roads, trains are a rarity and flights are notorious for delays and cancellations. Travel can also be dangerous. Many roads are plagued by kidnappings and accidents, police are more likely to ask for money than offer a service and deadly communal clashes have erupted across parts of Nigeria’s hinterland states, particularly this year.

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1.74%

terling has just had its worst weekly performance against the dollar since the beginning of August, as the UK government grapples with political turmoil over the proposed Brexit treaty. The pound fell sharply on Thursday morning after draft proposals for Britain’s exit from the EU sparked several ministerial resignations. A small recovery on Friday morning put sterling down 1.74 per cent over the week, approaching the 1.87 per cent it fell in the week ending August 10.

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