BusinessDay 26 Nov 2019 by BusinessDay

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news you can trust I **TUESDAY 26 NOVEMBER 2019 I vol. 19, no 443

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FG to sign executive order declaring telecoms critical national infrastructure

...as MTN becomes first to test-launch 5G technology in West Africa Jumoke Akiyode-Lawanson

Capital importation data show Nigeria losing FDI battle igeria is losing a crucial battle for Foreign Direct Inv e s t m e nt ( F D I ) , compared to investor-friendly peers. Public data agency, the National Bureau of Statistics (NBS),

3M 0.00 7.57

NGUS JAN 29 2020 362.99

L-R: Vincent Okeke, nonexecutive director, Globus Bank; Elias Igbinakenzua, CEO; Ifueko Omoigui Okoruwa, former CEO, FIRS, and Nixon Iwedi, executive director, receiving Ifueko who was on a courtesy visit to Globus.

LOLADE AKINMURELE, DAVID IBIDAPO & GBEMI FAMINU

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Treasury bills

Citizens get $1 of FDI per head

reported, Monday, that capital importation through FDI into Nigeria declined 62.29 percent to $200.8 million (N61.4 billion) in the third quarter of 2019, the lowest in four quarters stretching back to 2018. On average, Africa’s most populous nation has attracted FDI in-

flows of $222 million each quarter in 2019, an alarmingly low amount for a country estimated by global consulting firm, McKinsey, to need $31 billion in investment each year for 10 years to bridge vast gaps in infrastructure. What this means is that despite

obvious opportunities, FDI is not rushing into Nigeria as the government continues to maintain a stranglehold on sectors that can attract foreign investment at the detriment of the economy and

Continues on page 38

he Federal Government has started the process to declare Information and Communications Technology (ICT) infrastructure as critical national infrastructure by preparing an executive order to stop the lingering issues of multiple taxation and base station site closures, amongst other issues

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Inside 36 years after metro line dream, Lagos traffic still P. 2 defies solution

Financial market operators await MPC P. 2 decision today

Tuesday 26 November 2019

BUSINESS DAY

news Upsurge in investment activities signposts opportunities in Nigeria’s upstream sector DIPO OLADEHINDE

L-R: Oluwarotimi Shodinmu, director of advancement office, University of Lagos; Uzoechina Molokwu, regional head, UBA plc; Dauda Risikat, guest speaker; Ben Oghojafor, deputy vice chancellor, University of Lagos/chairman board of trustees, UBA Professorial Chair; John Ezike, chair occupier, UBA Professorial Chair in Finance; Babatunde Ajayi, head, Micro, Small and Medium Enterprises (MSMEs), UBA, and Uche Agu, regional head, UBA plc, at the 1st annual lecture of UBA Professorial Chair in Finance themed ‘The Dynamic Structure of World Economy, From Globalisation To Slowbalisation: The African Dilemma’, in Lagos.

36 years after metro line dream, Lagos traffic still defies solution CHUKA UROKO & JOSHUA BASSEY

“

e are making history today. One hundred years from now, generations yet unborn would thank us for the wisdom in establishing this project. At that time, the metro line would have expanded from the north-south route of Lagos to other states. I dream of a comfortable future and I thank God for making me and this administration instruments for this future.” These words capture the dream of Lateef Jakande, first civilian governor of Lagos State (1979-1983), when he flagged off the Lagos Metro Line project on July 16, 1983, projected to cost N689 million at that time. It was a major attempt at introducing an intra-city

rail system in Nigeria’s commercial city. Jakande’s Lagos Metro Line project was conceived against the backdrop of the city’s seemingly intractable gridlock. On March 29, 1978, Daily Times had led with a screaming headline ‘LAGOS TRAFFIC DEFIES SOLUTION’, with a rider, ‘Chaos despite new measure’. It was to resolve this traffic situation that the metro line was launched. According to Jakande’s projection, the first phase of the project was to be completed in July 1986. It was to have 30 trains, each running 28.5 kilometres on raised concrete tracks from Marina to Agege. The 30 trains were projected to carry 88,000 passengers per hour, which is 2,288,000

passengers in 16 hours, about half of the population of Lagos going by the World Health Organisation (WHO) calculations at that time. The Jakande-led government was responding to a transportation study said to have been commissioned by the Federal Government in 1974, which indicated a crisis situation with regard to traffic in Lagos, compared to what was the case in the early 1970s, unless the challenge was urgently addressed. The administration had planned to execute the metro line project in two phases, with the first starting from the Marina to Yaba. This phase was slated for completion in July 1986, while the second, commencing from Agege to Yaba through Oregun and Ikorodu Expressway,

was slated for completion in March 1987. BusinessDay findings reveal that the two sections were to have 19 stations spaced 1.5 kilometres from each other, with two platforms of 140 metres in length, and six metres wide. The trains were to be made of aluminium to reduce power consumption and maintenance cost. They were to be powered from two major sources, and a traction supply, which would come through 10 rectifier substations linked to the defunct National Electricity Power Authority (NEPA) low voltage network. The other was the 415/250 volts required to operate fixed auxiliary equipment.

•Continues online at www.businessday.ng

Insurers extend ‘right of first refusal’ to shareholders in recapitalisation plans Modestus Anaesoronye

ajority of the insurance companies raising fresh funds to meet the ongoing new capital requirement set for players in the industry have embarked on rights issues among other recapitalisation options. A cursory look at recapitalisation plans of most companies shows that most have rights issue as first action plan, which they said was necessary to carry along existing shareholders, particularly the minority equity holders in the exercise. BusinessDay checks show that companies like Wapic Insurance plc, Sovereign Trust Insurance plc, Consolidated Insurance plc, Guinea Insurance, Niger Insurance plc, AIICO Insurance, Saham Unitrust Insurance Limited,

...give rights issue priority

among others, have all included rights issue in their recapitalisation plans. Rights issue is an issue of shares offered at a special price by a company to its existing shareholders in proportion to their holding of old shares. It is a subscription rights to buy additional securities in a company made to the company’s existing security holders. Stephen Dike, chairman, board of directors, Niger Insurance plc, told shareholders at the company’s Annual General Meeting in Lagos that the essence of the rights issue was to give existing shareholders the ‘right of first refusal’ before such stakes could be given to an outsider. Dike said it was proper that existing shareholders are given opportunity to take www.businessday.ng

their rights because the company belongs to them. Boniface Okezie, national president, Progressive Shareholders Association of Nigeria (PSAN), said the stability of the insurance industry was key to economic growth of the country, and that PSAN would give all its support to ensure that the sector stands strong. Okezie said insurance companies create jobs in the economy, and shareholders would help many of them to recapitalise despite regulatory challenges in the country. With an estimated N200 billion expected into the Nigerian insurance industry after the ongoing recapitalisation by underwriters, the sector is hopeful to emerge stronger, contribute reasonably to the economy and also

be able to offer good returns to investors. Industry experts believe that the sector post consolidation will have enough resources to attract quality manpower, acquire necessary skills to underwrite big ticket risks, increase retention in the local market, and take advantage of untapped potential to create shareholder value. The National Insurance Commission (NAICOM) had in a circular issued on Monday, May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; general business from N3 billion to N10 billion; composite business from N5 billion to N18 billion; and reinsurance companies from N10 billion to N20 billion.

•Continues online at www.businessday.ng

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igeria’s upstream sector has recorded a flood of activities in the last three weeks. Analysts say these investment activities are a reflection of the opportunities that exist in the upstream sector of the country’s oil industry. Savannah Petroleum plc last week completed the acquisition of Seven Energy, making it the latest entrant in Nigeria’s exploration field in dire need of investments. In the month that Seplat announced the acquisition of AIM-listed Eland Oil and Gas, largely for the complementarity of the latter’s Oil Mining Lease (OML) 40 with its base assets, Oslo-listed Panoro Energy ASA agreed to sell its entire stake in OML 113 (Aje field) to another Norwegian Junior, PetroNor E&P Limited. Canada-based Africa Oil Corp said on November 1, 2019 it would buy all Petrobras’ stakes in producing assets in Nigeria after trading house Vitol and Delonex Energy walked away from a $1.4 billion deal to jointly acquire the interests.

Only two months ago, LEKOIL announced it was acquiring 45 percent interest in Newcross-operated Oil Prospecting Lease (OPL) 276 in the eastern Niger Delta. ExxonMobil’s divestment of undeveloped discoveries is ongoing while international market watchers are also speculating that Chevron would be divesting more than it previously thought it would, information Chevron has not denied. “It’s more of market forcesdriven actions. Some smart investors are seeing a cash cow that they can leverage on which is why they are positioning themselves early in the sector,” Gbolahan Ologunro, research analyst at Lagos-based CSL Stockbrokers, said. Ologunro noted that there are market indicators that there might be more of these transactions and deals, especially since the amendment of Production Sharing Contract (PSC), which is a major move that will shape how IOC will reduce or increase their exposure to the Nigeria market. He advised that for government to unlock the potential

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Financial market operators await MPC decision today HOPE MOSES-ASHIKE & MICHAEL ANI

i na n c i a l ma rke t operators in Nigeria are awaiting the decision of the Monetary Policy Committee (MPC) meeting, which will be announced today by its chairman, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN). The MPC, which decides the direction of the benchmark interest rate, commenced its meeting yesterday, Monday, but there is little or no expectation on easing or hike by experts and analysts in the financial market. “We expect the Central Bank of Nigeria (CBN) to keep its Monetary Policy Rate on hold at 13.5 percent at its 26 November meeting,” Razia Khan, managing director, chief economist, Africa and Middle East Global Research, said. October headline inflation rose to 11.6 percent year/year, likely driven by the impact of border closures on food prices. Recent pressure on Nigeria’s foreign exchange reserves – which the CBN attributes to the repayment of external obligations by the banking sector – is also likely to keep the central bank cautious, @Businessdayng

she said. Nigeria’s external reserves declined by 11.52 percent to a five-month low of $39.95 billion as at November 21, 2019 from a peak of $45.15 billion as at July 5, 2019, data from CBN indicated. While the CBN still wants to see a rise in private-sector credit, it will continue to rely on unconventional measures to boost bank lending. The minimum LDR (loan-to-deposit ratio) for the banking sector has already been raised to a targeted 65 percent at the end of December 2019, from an initial target of 60 percent at end-September 2019. “We think the CBN could raise it further, setting a minimum LDR target of 70 percent for 2020. A punitive unremunerated 50 percent cash reserve ratio (CRR) will apply to banks that fail to comply with this target. While private-sector credit growth is expected to rise, the more punitive CRR, which will mop up liquidity more cheaply, will help to limit the cost of the CBN’s OMO issuance,” Khan said in a report made available to BusinessDay.

•Continues online at www.businessday.ng

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Asharami Energy targets 100,000bpd production, canvasses investment in new technology Dipo Oladeinde

ontinuing investment in technology and how smartly it is deployed will be crucial to optimising opportunities in oil and gas exploration in Africa, Olajumoke Ajayi, managing director, Asharami Energy, has told Energy Editors at the recently concluded 37th annual international conferenceoftheNigerianAssociationof PetroleumExplorationists(NAPE) in Lagos. Ajayi said Asharami Energy, a Sahara Group Upstream Company, had since reviewed its processes and operations to facilitate “seamlessintegrationofemerging technology to boost the organisation’s exploration activities across Nigeria, Ghana and Cote d’ Ivoire as Asharami is working towards hitting 100,000 bpd production milestone over the next five years.” This feat will make Asharami Energy one of the foremost oil production companies in Africa. She said Asharami Energy’s decision to support the NAPE conferenceasmajorsponsorswas in keeping with the company’s commitment to driving thought leadership, good governance and sustainability in the sector. “Asharami’saffiliationwithSahara Group, an energy conglomerate

with operations and investments in the upstream, midstream, downstream, power and infrastructure sectors continue to propel us to provide leadership in thesector.AtAsharamiEnergy,we are transforming our operations with cutting edge technology that supports remotely operated oil and gas facilities as well as new data acquisition and processing methodologies driven by supercomputers,” she stated. Ajayi urged stakeholders in the oil and gas sector to invest in new technology to enhance productivity and the ability of operators to exploit opportunities in a sustainable manner. “Asharami iscommittedtodeployingemerging technologies that will enable us protect the environment and improve the wellbeing of the people in the host communities where we operate, while ensuring that our productivity is secure to match our future projections.” While participating as a panellistatthepre-conferenceworkshop themed; “Emerging Technologies and the Nigerian Oil and Gas Sector,”AsharamiEnergy’sexploration manager, Olabode Matthew, said embracing new technology in upstream business had become inevitable given the volatile nature of investments in the sector. Matthew said a consider-

able number of exploration and production operating companies have had to cut down on investments or dropped new capital projects on account of unstable oil prices and other socio-political factors. “To mitigate the long-term impact of reduced to non-existent investmentsinmakingnewexploration finds, operators in the explorationandproductionindustry need to adopt new strategies that integrate new technological developments. These technologies cut across seismic to simulation, from redesigned seismic data acquisition parameters to new algorithms for time and depth migrated processed data,” he said. Accordingtohim,technologydriven solutions will improve efficiency, safety, and productivity as the sector continues to grapple with unfolding challenges and opportunities.“AsharamiEnergy’s continueddeploymentofcreative technologies paved the way for its mostrecentexplorationmilestone where a smart well design led to the drilling of a 3km-long reach exploration well. Operators and stakeholders need to collaborate especiallyintheareaofknowledge and data sharing to enhance de-risking opportunities leading to more successful exploration activities,” he said.

Afreximbank disburses $15bn in support of intra-African trade HOPE MOSES-ASHIKE

frican Export-Import Bank (Afreximbank) has disbursed $15 billion of the $25 billion it committed in support of intra-African trade under its current five-year strategic plan, the bank’s president, Benedict Oramah, says. Confirming that the bank was delivering on the commitments it made in support of the implementation of the African Continental Free Trade Agreement, Oramah told the attendees at the opening of the Africa 2019: Investment for Africa Forum in Cairo, Egypt, on Friday that the funding was helping to bridge the trade finance gap in Africa. He said Afreximbank would soon commence the piloting

of a pan-African payment and settlement system that would allow cross-border trade in Africa to be done in national currencies, thereby addressing the issue of high cost of payments. He also noted that the bank was building a trade information portal that would be launched by year end, to improve knowledge and access to critical trade information across Africa, and was developing industrial parks across the continent. It was also working with the African Union to organise the second Intra-African Trade Fair in Kigali, Rwanda, in September 2020, continued Oramah. The trade fair would underpin a market of 1.2 billion people, attract over 1,000 exhibitors and

5,000 buyers and generate over $32 billion in deals. The President said that Egypt had become the largest recipient of foreign direct investments in Africa, despite witnessing a retreat between 2011 and 2013. He attributed this development to the return of confidence to the Egyptian economy due to the visionary leadership of the country. The two-day Africa 2019: Investment for Africa Forum was organised by the Egyptian Ministry of Investment and International Cooperation, in collaboration with the Ministries of Foreign Affairs and of Trade and Industry. It was held under the auspices of Egyptian President and current chairman of the African Union, Abdel-Fattah Al-Sisi.

Yoruba youths, Miyetti Allah stand with Allen Onyema

IFEOMA OKEKE

eactions have continued to trail the purported indictment of Allen Onyema, chairman of Air Peace, by the United States government, over issues of money laundering. Latest to react is the National Committee of Yoruba Youth (NCYY) and the Miyetti Allah Kautal Hore Socio-cultural Association groups, which say it is disturbed by the allegations coming out of the United States regarding the purported indictment of Allen Onyeama. Speaking through a statement issued on Sunday and signed by Odeyemi Oladimeji and Saleh Alhassan, the national secretary, the groups said the sudden indictment of Allen Onyeama, who had done business for decades in the US, had never been found

wanting until now, raises fundamental questions about the bad timing and the growing suspicion of many Nigerians over the motive behind targeting our own distinguished Allen Onyeama. According to the groups, we see a pattern that portends international conspiracy to rubbish one of the few outstanding entrepreneurs in Africa. The groups further said Onyeama had over the years built a reputation of integrity, a promoter of peace and a hardworking man, and cannot be allowed to be dragged in the mud by what they called “a western conspiracy.” The groups also said the airline boss had been impacting the continent with footprint of integrity as a Nigerian dedicated to the service of Nigeria and Nigerians in difficult situations at various points in time, using his hard-earned income and God-

given wealth of wisdom. “As law abiding citizens, we will not object to any process aimed at promoting transparency and accountability. Yet, we will not fold our arms akimbo and watch helplessly and hopelessly as one of our finest is being coerced and pulled down in broad daylight, without an iota of any subsisting clear evidence from a joint investigation between the US law enforcement agencies and Nigeria counterparts to determine the veracity of the claims before unleashing this dreadful move, deliberately aimed at tainting the image of Onyeama.” The groups finally urged Nigerians to rise up to this new attempt to destroy one of Africa’s fastest growing airline, just as it appealed to the Federal Government of Nigeria to urgently intervene and approach this matter diplomatically.

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Aviation experts urge FG to ignore proposal to convert Aero, Arik into national carrier IFEOMA OKEKE

wo aviation experts have asked the Federal Government to ignore proposals to convert Arik Air and Aero Contractors into a national carrier, arguing that such a step will create more problems for any airline that emerges from that process. Chris Aligbe, an aviation consultant, said Hadi Sirika, minister of aviation, should rather take immediate steps to facilitate the formation of Nigeria Air. Aligbe, who spoke in an interview in Lagos on Monday, said there was no going back on achieving a national airline because of booby-traps associated with converting the two carriers - Aero and Arik Air - private carriers into a government airline. Recall that Ahmed Kuru, CEO of Asset Management Corporation of Nigeria (AMCON), proposed that the Federal Government should merge Arik and Aero Contractors into a national carrier. He argued that if the two carriers were owned by the government, they would have been taken over by the Ministry of Aviation and not AMCON, which major brief was to recover debts. Aligbe said the option of converting two carriers that

were not doing well into a national carrier was fraught with a lot of intractable challenges, which would serve as disincentive to would-be investors. Aligbe said the clamour for a national carrier had become imperative because of the grossly inadequate operational strength of domestic airlines. “And so today, virtually the entire industry and, indeed, the vast majority of stakeholders are either clamouring for or desirous of a befitting national carrier. “There are still a few who believe that Aero and Arik are airlines that belong to the government. It is not true. If they were, they would be under Aviation not AMCON that has no statutory responsibility on aviation but rather on debt collection. “Any attempt to move outside this statute will occasion international litigations that could be unresolved for many years. This is because both the original owners and creditors will head to court to challenge the Federal Government.” He posed a few questions to buttress his opinion: “Can any healthy and virile establishment be founded on the back of unhealthy and struggling entities? Will any sensible investor invest in such establishment?

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Nigeria’s volume of mobile transfers increased by 344.1% in 10 months

Lagos pledges support for STEM education for national development

… cheque volumes reduce by 13.2%

SEYI JOHN SALAU

BUNMI BAILEY

obile money transfers in Nigeria rose 344.1 percent over a 10-month period (JanuaryOctober 2019), a BusinessDay analysis shows. The volume of transactions (transfers) via mobile devices rose to 26.2 million in the first 10 months of 2019 from 5.9 million in the same period last year, according to data obtained from the Nigeria Interbank Settlement System (NIBSS). Also, the value of mobile transfers rose 137.4 percent from N238.2 billion in 2018 to N565.4 billion as at October 2019. According to Ayodele Akinwunmi, corporate banking department, FSDH Merchant Bank Limited, this shows that there is an increased adaptation of technology to drive payments and financial transactions in Nigeria, which is more to reach the unbanked people. “We now have technology making businesses better and easier. It is also in line with the Central Bank of Nigeria’s (CBN) plan to drive financial inclusion in the country. The use of mobile phones by people in the rural areas and urban cities to make transactions, improvement in

internet services across the country and data availability has actually increase investments in those areas to ensure that we have a reliable telecommunication system to support the banks payment systems. “And again CBN has also licensed other operators in the industry to aid this. So convenience for the consumers and the efficiency in driving down the cost price of the operators makes this possible,” Akinwunmi said. Correspondingly, from the NIBSS data, the volume of cheque transactions fell by 13.2 percent to 6.6 million from 7.6 million over the same period. Omotola Abimbola, a macro and fixed income analyst at Lagos-based Chapel Hill Denham, said, “This is positive for the economy in terms of efficiency of transactions and velocity of money which is supportive of growth.” Abimbola also noted that they had clearly been seeing an increase in electronic banking, thinking the spike in ebanking income of banks also corroborated this view and that increased smartphone penetration and technological innovation of banks had greatly supported e-banking services.

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agosStategovernmenthas pledged its unrelenting supporttoensureScience, Technology, Engineering and Mathematics (STEM) subjects take its rightful place in the state’seducationalenvironmentas ameansofpromotingnationaldevelopment and industrialisation. This was the outcome of the recently concluded 2019 Africa Industrialisation Day/Young AfricanIndustrialistsWeek,themed, ‘Positioning African Industry to Supply Africa Continental Free Trade Area (AfCFTA).’ The event showcased a model aircraft by students of the International College of Aeronautics in collaboration with Lagos State Polytechnic, built and designed to take off with little runway space. LolaAkande,thecommissioner for commerce and industry, LagosState,inherclosingremarks, said the reason for celebrating the week was to step up industrial activities in Lagos, noting that the contribution of the manufacturing sector to the overall economy was low. Represented by Hakeem Adeniji, a director in the ministry, Akande urged the participants not to relent, stating, “It takes doggedness and perseverance to run a successful business in a state like Lagos.”

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She equally encouraged the students to take advantage of several initiatives of the state government geared towards youth empowerment, as she assured residents of the state that the government was always ready to remove impediments within its purview. According the commissioner, the recently declared state of emergencybyGovernorBabajide Sanwo-Olu on road reconstruction and rehabilitation was to ensure free movement of goods and services with minimal traffic across the state. Akande lauded the creative science based researches exhibited at the 2019 Africa industrialisation day and young African industrialists’ week. Tomiwa Olatunji, a representative of one of the participating schools, urged the students to show more interest in STEM and add their quota to national development. Olatunjialsosaidthedesigned model aircraft was good for surveillance,andhadabilitytotakeoff on water and also land on water. Oludara Okelola, the permanent secretary education district five, in a statement urged the participants to pay keen attention to STEM, stating her confidence in the children’s ability to take the nation to the next level in technology.

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Rising intolerance among political elites STRATEGY & POLICY

MA JOHNSON

nytime there is going to be elections in Nigeria, there will be one form of violence or the other. Whether the violence is low-level or intense in nature, elections has always posed a threat to the security of our country. Violence during elections not only threaten the rights and values that are cherished at the level of the individual, but most times, it constitutes a threat to the corporate existence of the country. Bill Thrall et al in the book TrueFaced, state that eventually all our masks will be cracked and inevitably, our true selves will be exposed. I concur with this view particularly if one examines Nigeria’s economic crisis and the attitude of most politicians. Nigeria’s economic crisis, though legendary, has certainly caused the masks of many politicians to crack and crumble. The pain for many politicians who perceive they will lose elections and those who actually lost has been unbearable after spending huge sums of money to occupy juicy positions in government. But for election malpractices, the struggle many of our politicians’ face could not have happened to them. Who are those behind electoral malpractices and violence occasioned by massive election rigging? Who are the masterminds of snatching and burning election materials, maiming

and killing of political opponents? They are politicians with cracked masks! Politicians are to be blamed for all malpractices and rising intolerance during elections. If all politicians won elections, their masks would have protected them. And the electorate would not know the true identity of their politicians. True identity in terms of character. Bayelsa and Kogi States gubernatorial elections are over but as usual some of those defeated may end up in election tribunals. It is when election petitions are taken before appropriate tribunals that some of us will understand why “one man’s struggle is certainly another’s salvation.” In spite of the controversies that election process throws up, challenges and opportunities democracy offer, and elites’ interests that they project, the overwhelming body of opinion suggests that democracy is the best form of government. “Democracy depends on strong institutions. It is about minority rights and checks and balances including freedom of speech and freedom of expression and a free press and the right to protest, and petition the government and an independent judiciary and everybody having to follow the law,” according to Barrack Obama. We should stop pretending that we are a democratic country because we hold elections. There is more to democracy than elections. Elections must be free and fair. The rule of law must be restored. Elections in which the opposition is harassed and prevented from talking while the winner gets all the votes without counting is not democracy but banausocracy. One may argue that we need electoral reforms. Yes, but where are the reformers? (Refer my article in this column titled Reforms without Reformers.) Over time, political scientists have

emphasised that one way in which democracy can enhance security is through cultivation and development of a democratic political culture. The argument here is that if we want to reduce violence and conflict before, during and after elections to the barest minimum, we must develop a political culture. Political culture refers to the beliefs, values, and dispositions regarding politics that are held by the elites and masses in the country. Certain values which are assumed to be crucial to a democratic culture have been identified by many contemporary scholars in the field democracy studies include but not limited to: “Belief in the legitimacy of democracy; tolerance of opposing parties; a willingness to compromise with political opponents; trust in the political environment, and cooperation, particularly among political competitors; moderation in political positions; civility of political discourse; and participation based on principles of political equality.” It would be extremely difficult to find a polity that exhibits above stated values and beliefs among African countries whose citizens, for decades, have been politically socialised under assorted authoritarian regimes. Developing a strong political culture is going to be herculean in a society where more than 35 percent of the adult population are illiterates. If past and current democratic regimes in Nigeria were x-rayed, it can be seen that the level of intolerance among competing political elites is rising, while the inability to accommodate divergent views and opinions is gaining grounds. The citizens will express their displeasure if a state governor does not pay workers in the state for nine months. The masses will grumble when highways are in a state of disrepair. Nigerians will not accept poor roads as the standard from those in the government.

‘

We need a democratic environment that will facilitate a process of political socialisation in which values, beliefs and attitude that are accommodative and tolerant of opposition are cultivated

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

Rural areas can and must be connected in Africa

he potential of Information and Communication Technologies can enhance rural communities’ opportunities in Africa, by improving their access to market information. For digital transformation to truly be a meaningful success, and the benefits of the Fourth Industrial Revolution to genuinely take hold, both need to be all inclusive. That means better coverage is imperative in rural areas, especially those that have been underserved with critical infrastructure in the past. It is a challenge that Ericsson doesn’t take lightly. At Ericsson, sustainability and corporate responsibility are integrated into our business and our commitment to responsible environmental performance and social and economic development. Given the challenges we face as a planet, and the Sustainable Development Goals laid forth by the United Nations for a better world by 2030, doing business today is not just about a healthier bottom line. It’s about making a measurable positive impact on the industry and the regions that Ericsson operates in. Indeed, conducting business responsibly is fundamental to our company’s strategy and culture, with these priorities embedded across our company. Connectivity for all From a coverage point of view, extending the access to connectivity within rural areas addresses one of the sustainable development

goals in particular is that of reducing inequalities. That end is accomplished by more than just enabling more people living in outlying areas to have access to the internet. It further entails enabling those communities to be able to better fulfil a wide range of societal needs. From access to education and health services, to financial inclusion and enabling entrepreneurship, the societal benefits in rural people’s lives are far reaching and profound. The good news from an African perspective is that Ericsson has made tangible progress in other areas of the world that faced a similar challenge as that of rural Africa. For example, in Greenland, Ericsson modernized and managed Greenland’s main telecommunication provider, Tele-Post, so as to expand coverage into remote villages, using Ericsson Radio System. The obstacles were similar, if not even more challenging, than those facing many rural areas in Africa, including harsh terrain and extreme climate. Nonetheless, by using a combination of Ericsson Radio System and cost-efficient upgrade of sites to LTE, the project resulted in providing connectivity for residences and enterprises alike. This aided in broadband becoming the backbone of Greenland’s society. IoT in rural communities Beyond ensuring that more people in rural areas are empowered with broadband connectivity, we need to consider emerging technologies, like the Internet of Things. We www.businessday.ng

NORA WAHBY

must ensure those same communities are able to benefit from that development as well. Recently, Ericsson completed a long-range narrowband IoT (NB-IoT) deployment, which enabled IoT connections from as far away as 100 kilometres from the nearest base station. The network’s ability was demonstrated with a sensor from a solar powered weather station, which reported temperature, relative humidity, rainfall and leaf wetness. This approach enables local operators to increase penetration into rural and regional parts of the country. For farmers in other rural areas, particularly in Africa, the possibilities of IoT for farmers in rural areas are significant. The ability to leverage data means that they could plant crops more efficiently and maximise their yield. Rural communities need not be exempt from the benefits of broadband and IoT connections. The technology is available and where Ericsson has deployed it, the results have been an unmitigated success. Harnessing the sun However, reach is not the only challenge to connectivity in rural communities and remote areas. The power grid is another, and Ericsson has workable technologies to address this as well. Rural, off site grids typically employ a diesel generator and battery, but this is costly and the CO2 emissions are detrimental to the environment. To address this, in conjunction with Maroc

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Over time, I have observed that divergent views national issue is often perceived as incorrect by government officials. If words are not cleverly chosen, such a view may be regarded as “hate speech”. Democracy where freedom of expression and human rights should be the propelling forces is gradually being destroyed by some politicians who preferred that no one speaks on any matter pertaining to governance in the country. The elections in Kogi and Bayelsa have brought out the need for us to develop a strong political culture. We cannot continue to have Ad hoc staff of INEC missing during elections while political chieftains and supporters are murdered. If we do not have a strong political culture, voter apathy will continue as polling booths are now turning to war zones – where violence is perpetrated by hoodlums in line with their battle plans. The risk is too high when one goes out to exercise his or civic responsibilities to vote in most polling booths. Without a strong political culture, good people with democratic character will continue to distant themselves from politics. While the political landscape will be occupied by shenanigans who will not bother to do anything meaningful to improve the lives of people. We need a democratic environment that will facilitate a process of political socialisation in which values, beliefs and attitude that are accommodative and tolerant of opposition are cultivated. If democracy will endure, there is need for strong opposition political parties. Regrettably, I cannot find any strong political party in opposition to the party in power. This is rather sad. The pathology of intolerance among political elites must stop forthwith. Thank you!

Telecom, Ericsson rolled out a 3G modernization program using a solar hybrid solution in the Central African Republic. This translated into 7.2 fewer hours of generator run time that was needed per day, and a saving of 7,000 litres of diesel that was saved per site. Additionally, it also had a positive impact on the bottom line, reducing total operating expenses by 50 percent annually. As well, in Myanmar, our Pure Solar project showed the effectiveness of fully leveraging solar power. Together with Telenor, Ericsson deployed a 500-Watt solar powered site, which featured 2G, 3G and LTE connectivity across three bands. The result was a notable 75 percent reduction in power consumption while retaining full coverage, service quality and performance. It also mitigated the dependency of diesel and made solar more economical. Much like technology has made working from anywhere a viable opportunity for many industries, so connectivity need not be constrained to urban areas. Bringing more communities in outlying and rural areas into the digital era is not just an achievable potential, it’s now a moral responsibility. Wahby is vice president and head of customer unit for West Africa and Morocco, Ericsson.

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BUSINESS DAY

Tuesday 26 November 2019

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Changing culture in Africa (1) Rafiq Raji

f culture is a factor in Africa’s relative underdevelopment thus far, why not reform? It is a herculean task. Cultural practices endure precisely because they worked towards a desirable purpose of the majority of a population during a prior period. For instance, tight kinship and the moral systems around it were useful for agricultural production, which typically is the early stage of a country’s development. But is such a system suited to the current “modern economic regime that relies on increased interactions with strangers?” While loose kinship societies currently populate the global technology frontier, it is not suggested that tight kinship societies give up their norms to achieve similar feats. Instead, it is the institutions around the culture that need to be changed or reformed to become fit-for-purpose for the current modern era. Intercultural exchange can also be a mechanism through which sub-optimal norms are updated or discarded. Cultural entrepreneurs have also been found to be effective influencers; albeit with varied success. Policy and institutions “A modern economy is characterised by a rapid growth in non-parental transmission, and in fact such mechanisms

of intergenerational transmission are one of the hallmarks of modernity” (Mokyr, 2016). Policy reforms can be used to effect cultural change. It is a fact that “exposure to different institutions/ norms during crucial developmentalages significantly changes individuals’ behaviour.” Institutions can be used to change culture. And it is weak institutions that allow bad cultural practices to persist. Because even when a cultural practice is bad, in the face of strong countervailing formal institutions, it can be discouraged to extinction. In other words, “culture persists in certain institutional environments and not others.” Culture and institutions are complementary and the roles they play in wealth creation depends on the environment and context. Still, even as culture may be amenable to institutional changes, the lead time to the desired outcome could be considerable. In fact, it “can take several generations to reach a new steady state [even] after institutions have changed.” One study actually shows that it is in the absence of institutions that culture matters, but that once institutions are in place, culture is not so relevant. The study further argues that “economic freedom is relatively more important for growth than culture” albeit the effects of culture on growth are not totally dismissed. It could be inferred that institutions could be used to change culture. And when strong institutions are in place, sub-optimal cultural practices and the systems that sustain them would have little room for influence or power. “Culture changes in response to

a new environment”. Culture is hard to change, however. The reasons why this is the case are as follows. Firstly, parental transmission, through which a great deal of culture is passed from generation to generation, is hard to shake off; that is, even in the face of evidence of sub-optimality. Secondly, entrenched organisations like the state and religious institutions, which garner economic benefits, power or influence from certain values and beliefs, are typically reluctant to give up their power. Thirdly, some growth-hindering cultural practices engender population growth and thus the spread of these values and beliefs. With these entrenchments, how then can culture be successfully reformed? Culture consists of two major components: inherited values, a historical component, and social interactions, a contemporaneous component. As inherited values are transmitted from parents, they are hard to change. Social interactions, however, are malleable to change, and are thus channels through which culture could be changed, updated or reformed. Thus, interactions between accomplished Africans in the diaspora, who could be encouraged to return home via incentives, and their compatriots on the continent could be effective. Put in positions of authority in business and government, they could affect cultural change. Multinational companies already do this but with mixed results. For instance, a 2015 survey by Russell Reynolds Associates on senior African executives in the diaspora shows that while senior African talent no

‘

Economic freedom is relatively more important for growth than culture albeit the effects of culture on growth are not totally dismissed

References are available at https:// rafiqraji.com/2019/10/31/culture-development-the-case-of-africa/ “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Our weak institutions

ew weeks ago, at the Nigerian Economic Summit, Doyin Salami, who happens to be the head of President Buhari’s Economic Advisory Council said, in the presence of the President, that closing the border was a bad idea. That advice, very sound from my point of view, has been ignored, and the borders will remain shut at least until the end of January, covering the entire end-of-year shopping period. I think the shutdown will be extended, but that is another matter entirely. One thing this border closure shows is the inability of our government to deal effectively with a complex problem. What is causing the inefficiency of the customs and smuggling at our borders? Is it not more sustainable to address the inefficiencies than shutting our border posts? Did we attempt to calculate the collateral damage that the border closure would cause to be sure that we have taken the most valuable approach? Consider the customs stopping people for “smuggled” cars. You have a rather ridiculous 70 percent tariff on brand new cars in the name of “incentivising local manufacturing”. It has been on for five years, with no discernible impact on the local manufacturing of cars. When you consider a host of negative economic factors (including low wages, the utter absence of a developed production line for basic manufacturing raw materials, power, and the lack of a discernible middle class with the sort of disposable income that would make local manufacturing make sense), it is orders of magnitude not economically viable to manufacture cars in Nigeria. Almost every locally made vehicle is more expensive to purchase than a comparable vehicle made

CHETA NWANZE

abroad even without the import tariffs. Under the circumstances, the only thing the tariffs do is encourage smuggling, and not discourage it. During the 1920s, the United States government decided alcohol was an evil and placed a total ban on hooch. Mobsters got very wealthy smuggling alcohol to people who wanted to drink, and the government missed out on millions of dollars in tax revenue. Nigeria ought to learn from that harsh lesson. Instead of a pointless tariff to support a local manufacturing sector that is simply not viable at this point in time (how many Nigerians can afford N15 million for a locally made Honda Accord anyway?) the government ought to focus on expanding production base. India did not jump into pushing locally made vehicles until its steel sector was firmly entrenched, and now we buy tricycles by the boatload from them. Regarding rice, it is an unassailable fact that Nigeria’s rice production simply cannot meet our demand, and is not on track to do so. Multiple studies show that Nigeria’s soil isn’t even that productive for rice, whereas we are leaders in the production of several other crops. Our grain storage capacity is also laughably inadequate as we currently have the ability to store less than 5 percent of all the grain we produce (including rice) and postharvest losses can reach as high as 50 percent of any given crop yield. What have we done to incentivise production, storage, and getting the rice to the market on time? Why are we not focused on the crops in which we have a strategic and comparative advantage to other countries? For example, 70 percent of all yam eaten

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longer view returning home to work as a failure, the willingness to do so varies by country. Also, “education is an effective way of inculcating the right sort of beliefs among citizens” (Acemoglu & Robinson, 2019). Put another way, “education is the most powerful factor in making men modern”. Political leaders could be persuaded to the cause of modernity through education; which some top American and European universities already facilitate. For younger citizens, school curricula could be modified to promote critical thinking over rote learning. For those outside of the school system, public advocacy on specific negative cultural practices has been found to work; especially when backed by the international community. In tandem with advocacy, legal measures could also be put in place in strengthen deterrence. For instance, female genital mutilation has been criminalised in many African countries. And just recently in South Africa, spanking a child was declared unconstitutional. These are just few examples. More fundamentally, policy and institutions could be used to countervail cultural practices and entrenchments inimical to prosperity.

in the world is grown in Nigeria. What are we doing to improve production quality, storage capacity, and promote exports of Nigerian yams? Two years ago, and with a lot of fanfare, we exported 72 tonnes of yams to the United States. They were rejected and returned because of poor quality. Have we learned any lessons from that about storage and packaging? What is this obsession with rice, and how does the border closure improve local production of rice or any other crop? The border closure has not improved production or yields of rice, but has instead driven prices sky high, and contributed to a spike in inflation figures, news that should alarm any sensible government. Despite all this, the government seems determined to see this policy through to its inevitably bitter end. The saddest part of this entire episode is not Buhari or his destructive ideas, it is how Nigeria, as a society, shows no resistance to the dictates of authority figures. Whoever gets to the top can do anything and all our systems will just accommodate the person, even if doing that is to all our detriments. In South Africa, when Jacob Zuma began to derail, the country’s institutions and business community stood up to defend their interests. In Nigeria, what we are watching is everyone bending their interests to accommodate the whims of President Buhari. This has to do with the nature of the Nigerian system. Power is so heavily concentrated in the office of the commander-in-chief, that having independent institutions is nigh impossible. This is a relic of our decades of military dictatorship during which the Head of State could do whatever he wished, and there was no independence in public institutions. That

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attitude has carried over into a supposedly democratic system of government that ought to involve checks and balances, as the executive has steadily undermined and eroded the independence of the other branches of government. As such, it is near impossible to envision a scenario such as the one in the United States where the Federal Reserve essentially ignores the haranguing of President Trump and continues to carry out its policy objectives. Here, the Central Bank of Nigeria has proven to be more than willing to go along with whatever President Buhari directs, irrespective of the CBN’s own policy thrust and the interests of the economy at large. This is why the CBN is apparently undermining its own “Cashless Policy” with directives that have the unintended effect of discouraging the use of electronic payment options. Even in the US with its long and proud history of strong and independent institutions, it is being clearly shown that what probably matters most is not the strength of the institutions or even their independence, but the attitude of the President and the people he puts in place to operate and oversee these institutions. A President who disdains checks on his power will act to grow that power at exponential rates and gladly step on anyone and anything that gets in his way, and there are no sacred cows. Thus, even as the institutions have tried to contain President Trump’s worst impulses, he still manages to get his way a lot of the time, and he will happily terminate the appointment of anyone who does not follow his orders. Sad consolation is that perhaps the US will one day get to where Nigeria is. But it will have to hurry. We’ve had an almost 60-year head start. Cheta Nwanze is head of research at SBM Intelligence

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Tuesday 26 November 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

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

Bashir Ibrahim Hassan

Failure of institutions in Kogi and Bayelsa elections

he defence by the Inspector General of Police (IGP) that thugs and fake policemen overpowered his 66,241 men to perpetrate violence in elections in Kogi and Bayelsa states on November 16 is a significant selfindictment. It speaks loudly and brazenly to connivance and abdication of responsibility of various institutions of authority that failed in their duty to ensure proper conduct of those elections. It is damnable and we condemn both the statement and the inaction of various authorities, from INEC through the Nigerian Police, the Army, Navy and Airforce. IGP Mohammed Adamu told State House correspondents without a hint of irony or shame on Tuesday, November 19 that the Nigerian Police had intelligence about plans to undermine the polls. It did nothing. Rather, he offered a lame rationale for the failure of the police when the intelligence proved correct and it was required to act.

Hear Adamu: “During the elections, anybody you saw either in police uniform or military uniform that did not carry the tag that had been given for the election, that person was not a genuine police officer or military officer or he was not on official duty. We were aware of the fact that or we were told that some politicians were going to sew police and military uniforms, so we devised some other means of identifying those who were on elections duty. We gave them tags.” IGP Adamu added that Police helicopters were deployed to intervene in incidents of ballot box snatching or fights. They did not carry firearms. “That helicopter you saw was to patrol and scare those that would want to snatch ballot boxes. Of course, if you see a helicopter hovering over your head, if you wanted to snatch a ballot box or you had carried one, you would know you are being monitored and you would stop. So, prevention was our focus.” The Police “prevention” strategy did not work. Ballot box

snatching was the order of the day in both Kogi and Bayelsa. They ignored the police helicopter, as if they knew it was ineffectual, and committed brazen acts of violence against voters. They shot, they killed and maimed. The Police looked the other way as confirmed by the IGP. The worst features of Nigerian electoral management were on display in the two states. These include weaponization of poverty as voter inducement with cash was done openly; failure of the security apparatus as they showed indifference to the brigandage happening right before them; A race by the politicians to beat the system by any and every means possible; Open display of incompetence by INEC officials unable to agree on the vote tallies while reading results on national television; diminution of Nigerian institutions connected with electoral management, from INEC through the Nigerian Police, the Army and civil defence. Violence continued post-election in Kogi State as thugs went and locked up a female PDP stal-

wart in her house, set fire to it and prevented help reaching her until she and the house burnt down! A critical consideration is the consequence of all these for the nation. Declining trust and belief in our institutions is one. There is also increasing loss of faith and interest in democracy. What a sad development against the backdrop of the excitement the free and fair election of 2015 caused in Nigeria and Africa. The November 2019 election in Kogi and Bayelsa states continues the tendency to undo all the gains of Nigeria in election management in 2015. The way out is the application of technology. Time now to insist on enacting an electoral legislation that prioritises the latest technologies in our election management, from voter registration to actual voting. Many countries of the world with even larger populations and more difficult terrains such as India have done it. India recently managed a national election with 600m voters. Nigeria can do better by applying technology immediately.

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Tuesday 26 November 2019

BUSINESS DAY

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To whom much is given: Accountability in public life (2) ‘ The Reformer

JOE ABAH

he civil society has a very important role to play in ensuring accountability on behalf of the people. First of all, it has the responsibility to deepen its own knowledge and understanding of the way government works. Secondly, it has the responsibility to demand explanations and answers from government officials on behalf of the people. Civil society organisations do this best when they’ve developed a reputation for thorough professionalism. Tools like citizen scorecards have been very effective in focusing the minds of public servants that public service is about service to the public, not just service to the public servant, which tends to be uppermost in the minds of many public servants. The debate in the public service tends to be about “our pay”, “our training” and “our promotion”, not often enough about the wellbeing and convenience of the public. Many civil society organisations have used the FOI Act to very good effect as an accountability mechanism. As Nigerian civil society organisations continue to mature and deepen the collaboration with each other, leveraging the areas of strength of each organisa-

tion to the benefit of others, their ability to demand and receive answers is improving. The co-creation of the OGP National Action Plan by government and civil society is certainly a step in the right direction. Joint monitoring of progress towards the lofty ambitions of that plan is perhaps even more important. The media similarly has a role to play in demanding accountability on behalf of the people. The media has the responsibility to raise awareness about issues, demand answers, raise and praise and name and shame. It has the responsibility to wield its immense powers with knowledge and professionalism, putting national interest first at all times. Press freedom is a key element of Freedom of Speech, one of the two key freedoms I had pointed out that we must guard jealously. It is not immediately clear how well the media uses the FOI Act in its work. It seems to rely more on press releases issues by government officials, and investigative journalism does not appear to be common, except for some online media platforms. It is my view that the media should make more use of the FOI Act in its work and should also help to apply pressure on government to comply with the provisions of the Act. For instance, the performance of the National Assembly on FOI requests should be under constant scrutiny by the media, since it was the National Assembly that passed the law and it is a public institution under the Act. Government’s track record of response to FOI requests has been poor. Year-on-year, many public service organisations fail or even blatantly refuse to respond to FOI requests. There do not seem to be any administrative sanctions for an organisation that fails or refuses to provide information. Although the law requires all public institutions

to make annual returns to the Attorney General of the Federation, there are no sanctions for failing or refusing to do so. Similarly, when the Attorney General submits his report to the national assembly, the report seems to enter a black hole. The national assembly often doesn’t exercise its accountability powers by demanding an explanation from nonresponsive public organisations as to why they did not respond to an FOI request, or why they did not file their returns to the Attorney General, nor does it compel those nonresponsive organisations to appear before it to explain their recalcitrance. Therefore, the only remedy available to ordinary members of the public and civil society organisations seems to be to go to court. Unfortunately, the court system in Nigeria is slow, expensive and daunting for the average Nigerian. Many simply cannot afford the money or the time required to pursue FOI requests through the courts. Consequently, this constrains one of the two fundamental rights that I said we must fight to protect in our quest for accountability: the freedom to demand information and explanation from the people we elect or appoint. Some progress has been made since the fuller implementation of the FOI Act was made a commitment in Nigeria’s Open Government Partnership National Action Plan. In this regard, I must commend the efforts of the Federal Ministry of Justice in the mediation role that it has started to play between government organisations and citizens that demand information from government. Of course, the fact that a mediation role is necessary when there is a law that mandates disclosure is indicative of the size of the problem. A few organisations, such as the Bureau of Public Service Reforms (BPSR)

The only remedy available to ordinary members of the public and civil society organisations seems to be to go to court. Unfortunately, the court system in Nigeria is slow, expensive and daunting for the average Nigerian

and the Nigeria Extractive Industries Transparency Initiative (NEITI), have been practicing proactive disclosure. However, it is my opinion that the FOI Act should be amended to provide some administrative sanctions for non-compliance with its provisions. For instance, the Public Procurement Act, 2007 says that the Bureau of Public Procurement can recommend the removal of a Chief Executive that fails to comply with the Act or recommend investigation of any perceived infraction by the anticorruption bodies such as EFCC. Therefore, Chief Executives tend to jump when they get a letter from the BPP that reminds them of those provisions of the Public Procurement Act. The FOI Act should be amended to include similar provisions, if it is to be taken seriously by government officials. Increasingly, individual citizens are taking advantage of social media to demand accountability. Similarly, many government organisations now have a presence on social media, with some being more responsive than others. For the 2017 budget, the Bureau of Public Service Reforms, the NBS and the Nigeria Extractive Industries Transparency Initiative defended their budget proposals publicly online before defending them at the national assembly. This is an example of real transparency and accountability in action. I am aware that the presidential office of digital engagement is making efforts to ensure that many more government organisations are available to answer questions online to the public. This is important for building the confidence of citizens in the government.

Dr Abah is a development practitioner and the immediate past Director-General of the Bureau of Public Service Reforms.

China’s growth outlook beyond 2020

espite US tariff wars, Chinese economic prospects remain in line with 2019 expectations and are likely to prevail in 2020, due to deleveraging and structural reforms. A year ago, I projected that in 2019 Chinese GDP growth could achieve 6.2 percent in full-year growth, if policymakers can sustain higher-quality growth while suppressing debt accumulation. This scenario has proven pretty valid so far. Recent international headlines have projected “sub-6 percent growth” in 2020 China, assuming weakened consumption, cautious private investment and shrinking exports. Such projections have been reported as a negative turn. In reality, Chinese growth deceleration is in line with long-term expectations. Even half a decade ago, the International Monetary Fund expected China’s annual growth to be 6.1-6.2 by 2020. The minor deviation can be attributed to US tariff wars. In 2020, the final figure may likely to hover around 5.8-6 percent, though. Most economic projections focus on growth prospects in 2020. But let’s go beyond the shortterm to see how the 2020 economic prospects are likely to support China’s more vital mediumand long-term objectives– deleveraging and structural reforms in 2020-2024 and rebalancing until 2030. Decelerating growth, but rising incomes The Chinese government could achieve more rapid growth, but at the cost of people’s livelihood, living standards and environment. Policymakers cannot accept too much deceleration either. The effort to double living standards – as measured by GDP per capita,

with purchasing power parity – between 2010 and 2020 requires growth at about 6.1 percent in 2019-2020. Assuming peaceful international conditions and managed trade wars, Chinese growth may decelerate from the 2007 peak of 14.3 percent to 5.5 percent by 2024. In the 2000s, Chinese growth accelerated, while living standards almost doubled. In the 2010s, Chinese growth decelerated, but living standards doubled again. And if things go right, these standards could increase by another half in the mid-2020s. In contrast, US living standards increased by only 6 percent in the 2000s and 14 percent in the 2010s, while growth has halved from 3-4 percent to 1-2 percent. In the largest EU-4 economies – as proxied by the average of the UK, Germany, France and Italy – growth declined even more from 3 percent to barely 1 percent, whereas living standards increased by 4 percent in the 2000s and 8 percent in the 2010s. In Japan, living standards barely grew in the 2000s, but rose by 10 percent in the 2010s. Here’s the inconvenient truth: In China, the Communist Party continues to foster the expansion of middle group consumers. In contrast, US middle classes have stagnated since the 1970s, European middle classes are shrinking and their Japanese peers seek to avoid a fall into a poverty trap. Deleveraging and structural reforms In the Reagan era, US growth was sustained by soaring trade deficits and debt-taking. During the Trump rule, the White House has fostered growth with huge one-time tax cuts, tariff wars and drastic debt expansion. US public debt now exceeds $23 trillion (107 percent of the

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GDP). Except for Germany, the debt-to-GDP ratio is also high in the largest EU economies, such as the UK (99 percent), France (109 percent), and Italy (143 percent) – and far worse in Japan (264 percent). These major economies in the advanced West have all benefited from ultra-low interest rates, while engaging in rounds of quantitative easing. Second, none of them are engaging in substantial structural reforms. Third, due to their unsustainable growth, maturing economies, aging populations and declining growth potential, they all are on a path to secular stagnation. In China, the central government has used fiscal support and monetary easing to defuse the collateral damage associated with U.S. protectionism. So public debt has increased (64 percent of GDP). But unlike all major Western economies, China continues to deleverage. Indeed, financial deleveraging and reduced interconnectedness between banks and nonbanks have contained the rise of financial risks, although vulnerabilities remain. And China is also engaging in broad structural reforms, even amid the US tariff wars. And unlike Western economies, China still has significant long-term growth potential. Since the Chinese growth continues to shift away from investment and net exports toward consumption and innovation, the corrosive impact of protectionism will be reduced over time. In turn, rebalancing continues, as evidenced by record retail sales records during the October Golden Week, China International Import Expo (CIIE) and Alibaba’s Single’s Day. Investors have made note. China may prove the world’s best-performing major stock market

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Dan Steinbock in 2019, with the benchmark CSI 300 index up by a third this year. By November, bourses in Shanghai and Shenzhen had added $1.4 trillion in market capitalization, raising the total onshore equities to $6.8 trillion this year. Meanwhile, almost half of fixed income institutional investors outside China plan to increase their exposure to China-issued debt in the coming year, according to FinanceAsia. Three probable trade war scenarios Despite periods of optimism, trade talk between Washington and Beijing remain inconclusive. While negotiations on the “Phase 1 trade deal” focus on agriculture, additional core disputes remain unsolved, including disagreements on intellectual property and technology, and financial market accessibility.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr. Steinbock is an internationally recognised strategist of the multipolar world and the founder of Difference Group. He has served at India, China and America Institute (US), Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see https://www.differencegroup.net/ The original commentary was released by China Daily on November 20, 2019.

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Tuesday 26 November 2019

BUSINESS DAY

Media business Nigerian entrepreneurship gets boost as International Breweries gives N3m grant each to 70 start-ups Daniel Obi

nternational Breweries Foundation has said it has earmarked 70 young promising Nigerian entrepreneurs to be awarded grants of up to N3 million each as seed money to help kickstart their entrepreneurial dreams. The grant, which is coming under the yearly International Breweries’ KickStart entrepreneurial initiative, will be disbursed to the beneficiaries at a formal award ceremony, this week in Lagos. KickStart, according to International Breweries Plc, a part of the ABInBev family is a social investment initiative conceived to help reduce the unemployment burden on the economy. KickStart empowers young enterprising Nigerians by supporting their entrepreneurial aspirations with business management trainings, mentorship, and most importantly grants. The yearly initiative, which started three years ago, has produced close to 800 beneficiaries, including this year’s

70, and has helped to create hundreds of jobs, with a projected 1000 plus new jobs to be created by the beneficiaries by 2021, International Breweries said. The KickStart initiative has a number of phases over a period of five months designed to ensure that only serious and impactful young entrepreneurs and business ideas are supported. The Pitchfest is the penultimate phase of the Kickstart initiative wherein participants defend their business proposals to independent judges. The judges use five critical criteria to arrive at their decisions which include business maturity, experience of the applicant to run the business,

financial statement of the business and overall business concept. Chairman, International Breweries Foundation, Peter Bamkole, said the process has been a very transparent one from inception during the application phase through to the Pitchfest phase. Director, Legal and Corporate Affairs, Otunba Michael Daramola, said, “We are extremely happy that we have finally been able to conclude this process. We now have our beneficiaries whom we have trained and will continue to mentor into the foreseeable future in order to make sure they make the leap that we envisaged for their businesses,” he said.

FairMoney unveils ‘No Excuses’ campaign to encourage SMEs

Eat’n’go marks UN world’s Children’s Day with N50m commitment to Slum2school initiative Daniel Obi

o mark this year’s United Nations World Children’s Day, Eat’N’Go Limited, franchisee for Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Frozen Yoghurt, has committed the sum of N50 m to Slum2School Africa, a volunteerdriven developmental organization that provides quality education to disadvantaged children in Nigeria. The World Children’s Day is an annual celebration by United Nations, which promotes international togeth-

erness, awareness among children worldwide, and improvement of children’s welfare including education. So far over N38million has been raised by Eat’N’Go to provide education for 776 children across Nigeria, with outstanding N12million to be raised by end of December 2019 to send 1000 kids to school. The funds raised so far, is through the company’s “Hope for Every Child, One Bite/Scoop/Swirl at a Time” initiative, in partnership with Slum2School Africa. This initiative contributed a 100 naira proceed from Eat’N’Go for every purchase of Cinnastix from Domino’s pizza, every

bubble waffle from Pinkberry Gourmet Frozen Yoghurt and N100 for every waffle from Cold Stone Creamery from December 2018 till date. Speaking on the importance of quality education in Nigeria, Patrick McMichael, Chief Executive Officer, Eat’N’Go Limited said “Every Nigerian child deserves access to quality education, which is why we decided at Eat’N’Go, to lend our support to Slum2School to raise funds to send 1000 kids to school. We believe that everyone has a role to play in addressing the issue of illiteracy as well as to sustain a healthy literacy rate in Nigeria.

Interswitch Group bags Sub-Saharan Africa Rising Star Award

nterswitch Group has been recognized as the inaugural winner of the Linkedin Sub-Saharan Africa Rising Star award at the 2019 edition of the Linkedin Talent Awards hosted in Johannesburg, South Africa. This accolade was presented to the company at the South African LinkedIn Talent Awards ceremony, which took place at the LevelThree Premium venue in the heart of Sandton recently. For Interswitch, a leading technology-driven company focused on the digitisation of payments in Nigeria and other countries in Africa, this

award is a reflection of the deliberate investment the company makes in its people and in shaping its employer brand, including unique approaches to talent attraction, nurturing and engagement, which have resulted in the phenomenal growth attested to by Linkedin’s peer-ranking analytics. The LinkedIn Talent Awards, in their second edition in Africa, are designed to recognise organisations that invest in understanding, engaging and developing talent based on a company’s page and engagement on LinkedIn. Currently operating in 12

locations across the world and recognising organisations in four regions including the Middle East and Africa, the LinkedIn Talent Awards are powered by insights and driven by data. Using carefully crafted criteria, LinkedIn evaluates the performance results and impact of its corporate customers to identify finalists and winners. Expressing her delight at this recognition, Tolulope Agiri, Group Chief Human Resources Officer at Interswitch said “We are extremely proud and excited to be the inaugural recipient of the Linkedin Sub-Saharan Africa Rising Star Award.

…Offers small businesses instant loans via mobile app

airMoney, mobile bank for emerging markets, is running the ‘No Excuses’ campaign to encourage individuals and small businesses to take advantage of its loan offering of N1,500 to N150,000. According to a report, FairMoney gives more than 6,500 loans daily, and since the company commenced operations in 2017, it has disrupted the banking landscape, disbursing over one million loans to individuals and small businesses around Nigeria. A customer can download the app from the Google Play Store and, based on their credit score, calculated using Artificial Intelligence, receive an instant credit offer between N1,500 and N150,000. The first credit is always for a period between 15 and 30 days. Customers who show good repayment behaviour can increase the loan term to up to 3 months. Explaining the idea behind the ‘No Excuses’ campaign, Seun Oratokhai, Head of Direct Marketing, FairMoney in the statement said: “From our research we learnt that

most individuals and small business owners in need of a quick loan first approach their family and friends, or a commercial bank. Unfortunately, they may get a long list of excuses such as ‘I wish you asked yesterday,’ ‘I borrowed what I am spending,’ and so on. Many of these individuals also struggle to meet the requirements of commercial banks, such as collateral and documentation.” “Our guarantee to prospective borrowers is that, if they satisfy the eligibility criteria there are ‘No Excuses’ in securing a loan from FairMoney. We are also not asking for any documents or collateral. All

FairMoney requires are a few personal details, the customer’s BVN and bank details,’ Oratokhai, concluded. Securing a loan with FairMoney is easy and can be done in a few quick steps. Firstly, the applicant must download the FairMoney app from the Google Play store. The applicant can sign up using their telephone number and answer a few questions to get a loan in only five minutes. Funds are disbursed instantly and, depending on the loan offer, can be repaid in one, two or three instalments easily within the app. Repayment options include Automatic Bank Transfer, USSD and Debit (ATM) card. A fun and engaging part of the ‘No Excuses’ campaign is ‘The Friends Loan Test’ in which consumers ask their friends and family for loans and post their funniest excuses on social media using the hashtags #FriendsLoanTest and #QuickLoansNoExcuses. FairMoney will repost the funniest excuses on the company’s social media pages, and the post with the most likes each week will win prizes.

L - R: David Whelan, Africa head, LinkedIn Talent Solutions; Chinenye Tony-Chidolue, senior HR Business Partner, Interswitch; Tomi Ogunlesi, head, corporate communications, Interswitch; Luke Mckend, director for Africa, Eastern and Southern Europe at LinkedIn and Matthew Gray, regional manager, Sub-Saharan Africa at LinkedIn at the 2019 Linkedin Talent Awards in Sandton, Johannesburg, where Interswitch won the inaugural SSA Rising Star Award.

MTN Nigeria calls for entries in Academic Research Development & Innovation Challenge

n furtherance of its commitment to lead the delivery of a bold new digital world by promoting science and technology in Nigeria, MTN has announced call for entries for the Academic Research Develop-

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ment & Innovation Challenge (ARDIC). ARDIC is MTN Nigeria’s latest contribution to the enhancement of academic research in Nigeria. With ARDIC, MTN Nigeria seeks to leverage its existing assets to enable local innovation/ @Businessdayng

research. ARDIC is a platform to assist young motivated postgraduate researchers in Nigerian universities to build and develop their research ideas into sustainable products and initiatives within six months.

Tuesday 26 November 2019

BUSINESS DAY

ADVERTISING Old Mutual: Deepening insurance penetration through effective product marketing Insurance penetration in Nigeria is as low as 0.31% and what partly accounts for this is complex, ambiguous language in marketing the products and lack of friendship and partnership between insurance and consumers. This report looks at the introduction of ‘Buying Insurance is a click away’, a campaign launched to introduce Old Mutual Nigeria’s new website to revolutionalise the sector. Old Mutual Nigeria is a firm that provides financial solutions that are designed to help customers achieve their long term goals and create a positive future for them, their families and their businesses. Daniel Obi writes.

said marketers of products including insurance need to research on the language of their audience and speak to them in same language. In spite of the need for insurance products, including environmental changes, natural and man- made catastrophes; political changes, including geo-political risks, terrorism; and demographic changes and shifts, only about 1.5% of all Nigerian adults are covered by insurance today. Simplifying language and techniques for product sell, Umogun further said enables greater appeal to the generality of the buying and consuming public. “A good marketer must always speak the language of the consumers and not the other

‘

The insurance industry has maintained complex and ambiguous system of marketing insurance products and perhaps through the same channels and language

‘

Nigeria’s insurance industry ypically, medical doctors and auto engineers can make a client pay huge fees for simple problems by employment of technical languages. Contrastingly, some marketers can cause potential clients to develop dis-interest about products through use of technical and complex marketing methods. This is a case in the Nigerian insurance industry. Over the years, Nigerian Insurance industry has found itself growing sluggishly in spite of huge population of about 200 million. Insurance penetration is still extremely low at 0.31 %, “even when compared with countries with similar GDP per capita with Nigeria. For example, India has insurance penetration at 3.69%”, according to a 2019 Insurance industry report by Coronation Merchant Bank. As at 2015, Insurance Industry survey 2015 by PwC put insurance policy holders at 3 million. “Approximately only 1.5% of all Nigerian adults are covered by insurance today”. This, according to the report, means that uninsured Nigerians face risks and require better mechanisms to mitigate these risks as an alternative to the informal arrangements currently in use. In some other climes, insurance plays much intermediation roles in economic transactions and helps to mitigate risks. Need for privileged marketing strategy The PwC report further attributed the low insurance penetration to lack of trust and confidence in insurance companies and limited knowledge of insurance amongst the public. As noted by other stakeholders, while agreeing that there is scope to develop a revised market strategy centred on educating the public, the PwC report noted that there is a lot more potential to increase the number of policyholders. For a long time, the insurance industry has maintained complex and ambiguous system of marketing insurance products and perhaps through the same channels and language. Even when technology and mobile phone have evolved, the industry has not embraced the channels enough to grow the insurance penetration. Mike Umogun, Lead, marketing and new business at Kantar Nigeria underscored this when he

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way. We all know communication is when the other party gets the message not when you confuse them by your marketing language verbosity”. Using clear and simple language also enables attainment of marketing objectives which, according to experts are processes engaged by organisations in creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. While agreeing that Nigerian Insurance sector may not have been growing at a rate expected due to complex and intricate language and lengthy forms, Umogun advised that insurance in Nigeria should go through the life journey of the typical Nigerian that are so God-centric and change their marketing model. “Some Nigerians may be seeing insurance as a rip off because God prevented mishap and still insurance people collected and kept the money ...haba they seem to be saying by walking away from their policy. Our mumu don do. They want to eat and have their cake ....insurance company must find a way around this ... re-educate them the more about the concept of pooling risk which is the bedrock of insurance”. He advised for new language of marketing insurance, Consumer reorientation and re-education and repositioning insurance companies as partners in progress and not “that company that collects from me and pays me nothing when Baba Godey protects me for twelve months” Old Mutual new method to deepen Insurance penetration A new campaign by Old Mutual Limited, the Nigerian subsidiary of Pan-African insurance giant and

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foremost global financial services provider, with a vision to be their customers’ most trusted lifetime partner, passionate about helping them achieve their financial goals, is expected to be a boost in driving penetration of insurance in Nigeria. The multinational company which has been operating in Nigeria since March 2013, having acquired the majority stake in Oceanic Life Assurance Company, recently introduced ‘Buying Insurance Is Now A Click Away’, campaign aimed at introducing its new website. This is new thinking from the traditional model of marketing insurance products over the years. The campaign brings simplicity of language, partnership and technology in marketing insurance products, a move expected to be embraced by consumers as the campaign helps subscribers and potential customers of the firm’s insurance products to achieve their dreams and plan a positive future. The launch of the new e-commerce website is in line with the brand’s commitment to increase insurance penetration in Nigeria by making it more accessible to customers across the country. Sporting a fresh look and feel, the new site affords users the opportunity to easily navigate through Old Mutual’s uniquely tailored product offerings and make instant purchase of solutions that align with their personal goals, as well as existing customers to make claims Speaking on this development, Executive Head, Marketing, Old Mutual, Alero Ladipo, noted that launching the revamped website is not only connected with the brand’s drive to deepen insurance penetration in Nigeria, but it is also intended to increase the acces@Businessdayng

sibility of its insurance solutions to help Nigerians achieve a better and more fulfilling future. “This website speaks to every Nigerian; we want them to think about the great plans they have for themselves and their families, and to seek the right partner to help them achieve those goals. A great future doesn’t just happen, it results when people make the right plans and have the right protection for those plans”. She added that buying insurance should be an activity that fits into our everyday life and we should be able to purchase insurance ‘on the go’ or make a claim. The claims functionality demystifies that illusion the that ‘insurance companies don’t pay claims’. In Old Mutual we are about partnerships. On the new site you can initiate a claim and you will be updated on progress until payment. This website brings insurance to everyone either through their mobile or laptop. In addition we are just getting started, she said. The brand draws from its over 170 years of wealth creation and management experience, and its deep African roots, to champion financial inclusion, education and prosperity in Nigeria and across Africa, pushing the message of smart financial planning as the answer to a secure financial future. Time to pool more consumers into Insurance Nigeria, the most populous nation in Africa which has brighter future should ordinarily be driving insurance penetration in line with its size in the continent. As the nation diversifies to grow the GDP from the present $400 billion, it is important that Insurance keys in to this growth plans. As said by PwC report “Growing insurance industry aids in the development and growth of the economy. It encourages savings and investment, job creation and growth in capital markets and financial assets” It is in this direction that any effort to grow the industry and deepen penetration as being implemented by Old Mutual is welcome to grow the industry from 0.7% contribution to GDP to higher percentage. One way to achieve this is to bring more people to become policy holders through simplification of products, partnerships, re-education and using technology such as mobile to sell insurance products.

Tuesday 26 November 2019

BUSINESS DAY

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Tuesday 26 November 2019

BUSINESS DAY

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Tuesday 26 November 2019

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

ECONOMICS

Q3 GDP: Who’s hot and who’s not LOLADE AKINMURELE & SEGUN ADAMS

he Nigerian economy continued to expand at a sluggish rate in the third quarter of 2019 after state data agency, the National Bureau of Statistics (NBS), reported a 2.28 percent growth for the period. Nigeria’s low growth problem has lingered since the exit from recession in 2016. The last time the economy grew in real per capita GDP terms, which factors in population growth, was in 2014. The economic downturn is being reflected in the fortunes of listed companies, with stocks down some 14 percent on average since the start of 2019. Households are also being tortured by rising unemployment and weak purchasing power. It’s no wonder poverty rate has climbed. Despite obvious economic challenges with government policy and infrastructure, some sectors managed to outperform the broader economy in the third quarter. In fact, the top five fastest-growing sectors averaged a growth rate of 8.05 percent, which is about four times faster than growth in the broader economy. Transportation and Storage (18.24%) Moving people or things was the biggest deal in Nigeria in the third quarter according to data from the

National Bureau of Statistics (NBS) which showed 18.24 year-on-year growth in the transportation and storage sector. This growth was on the back of a more-than-double expansion of road transportation which hit 20.18 percent yearly combined with high growth air transport sub-sector which at 15.23 percent yearly growth was one of the fastest expanding in the quarter. Quarterly, the sector rebounded from a slow second quarter where growth dipped to about 8 percent from almost 20 percent in the first three months of the year. Information and Communication

(9.88%) Telecommunications and Information Services sub-sector grew by 12.16 percent to put the Information and Communication sector in second place with a growth of almost 10 percent. On a quarterly basis, this is the fastest the sector has grown so far in the year although publishing and broadcasting sub-sectors did not do well in the latest quarter published. Mining and Quarrying (6.19%) Although the mining and quarrying sector lost a little bit of steam quarterly, the sector struck gold year-onyear with a growth of 6.19 percent in the third quarter

L-R: Olusegun Osunkeye, chairman emeritus; Babatunde Savage, chairman, International Chamber of Commerce Nigeria, [ICCN]; Ehia Erhaboh, chief transformation officer , Interswitch Group Limited,/ guest speaker, Raymond Ihyembe, vice chairman, ICCN, Omolara Akanji, vice chairman, ICCN banking commission, and Odein Ajumogobia, former minister, foreign affairs, at the annual dinner and dance night, of ICCN, Themed ; ‘’Make Technology Work Pic by Pius Okeosisi for All’’, in Lagos .

of 2019 compared to -2.81 percent a year ago. What changed? A lot ; Crude Petroleum and Natural Gas went up from less than one percent annual growth in the third quarter of 2018 to almost seven percent in the latest published quarter. Also, coal mining sprung from negative to about 32 percent to turbocharge the sector. Metal Ores was the exact opposite plunging from around 17 percent to minus seven percent while Quarrying and other minerals followed suit. Administrative and Support services (3.05%) Maybe a growth rate not as exciting as the previous

sectors but definitely faster than the broader economy and population. Administrative and Support services grew the fastest in seven quarters at least given its rate of 3.05 percent in the third quarter of 2019. Arts, Entertainment and Recreation (2.89%) The “creative” sector ranked as one of the top five in terms of growth rate seen in the third quarter of 2019 with a rate of 2.89 percent. The performance is not the best so far in the year but is a rebound from a much slower second-quarter performance. Construction

(2.37%) The construction sector grew by 2.37 percent year-on-year to rank as the sixth overall fastest-growing sector in the third quarter of 2019. On a quarterly basis, the sector more than doubled its previous performance while it surged compared to 2018 third-quarter reading of 0.54 percent. On the other hand, the laggards in the third quarter were Electricity, Gas, Steam and Air Conditioning Supply (-11.81%), Professional, Scientific and Technical Services (-2.62%), Real Estate (-2.31%), Water Supply, Sewerage, Waste Management and Remediation (-1.9%) and Trade (-1.45%).

L-R: Kingson Elendu, researcher, LBS Sustainability Centre; Clem Ugorji, public affairs and communications director, Coca-Cola West Africa Business Unit; Ola Oresanya, chairman, E-Waste Producer Responsibility Organisation of Nigeria (EPRON); Oladele Osinbajo, president, Waste Management Association of Nigeria (WAMASON); Oreva Atanya, sustainability associate, Lagos Business School and Eugene Itua, CEO, Natural Eco Capital Ltd, during the Leadership Programme for Sustainable Waste Management in Lagos

Tuesday 26 November 2019

COMPANIES&MARKETS

BUSINESS DAY Business Event

Financial Services

CFAN to launch shares exchange for co-operatives in Nigeria IFEOMA OKEKE

he National Cooperative Financing Agency of Nigeria (CFAN), in what is being described by stakeholders as a novel idea, is set to launch a Co-operative Shares Exchange initiative centred around Co-operatives in the country. CFAN is the national financial body for all registered Co-operative Societies that offer financial services to their members in Nigeria. In a sensitisation workshop held in Lagos recently, Adebola Orolugbabe, the President/Chairman, Board of Directors of CFAN, said the idea of the Shares Exchange is to have a financial instrument for the transfer,

buying and selling of Cooperative Shares. “CFAN intends to list the shares of viable Co-operatives that comply with laid down procedures on an OTC or BlockChain platform and to trade these shares amongst its members. We will also use the OTC/BlockChain platform to promote and to trade approved Cooperative securities so as to raise capital in the market.” Also speaking at the workshop, Eric Olo, the Managing Director of E-Percent, said the Shares Exchange will have a digital registry to maintain all the records of the Co-operatives for ease of access uniformity, and as a way of maintaining compliance for the Exchange, and will be an asset management platform that ensures liquid-

ity, risk mitigation and diversification for Co-operatives on the Exchange. While delivering his paper, Abubakar Lawal, another keynote speaker and the Chief Executive Officer of GTI Capital, stated that the Shares Exchange will create financial freedom and redistribution of wealth among Co-operative Societies. The workshop was a crystallization of over six years of work developed by CFAN, GTI Capital and E-Percent, with the aim of adding value to co-operative shares and opening up the capital market space. When it finally comes on stream, stakeholders expect that the Shares Exchange would help create about 150,000 direct jobs and over 300,000 indirect jobs across Nigeria.

L-R: Ernest Orji , director, Southern Sun Ikoyi; Funke Majekodunmi , overall female winner, and Cliff Shiridzinodya , deputy general manager, Southern Sun Ikoyi, at the prize-giving ceremony of Southern Sun Ikoyi 8th Annual Golf Tournament in Lagos.

Technology

Global digital transformation presents abounding opportunities for Nigerian businesses

L-R: Ogochukwu Odum , acting group company secretary / Legal adviser, Emerging Africa Capital Limited ; Funke Okoya , director, client origination and coverage; Nike Akande, group chairman; Toyin Sanni, group chief executive officer, and Joe Mekiliuwa , non-executive director, at the third quarterly board meeting of the company in Lagos.

…KPMG to hold digital summit to improve customer experiences DAVID IBIDAPO

hile technology disruption is no longer a newsflash and businesses are left with no option than to join the train in delivering value to customers or ceasing to remain a going concern, Nigeria’s ability to position herself in this new wave could unlock economic stimulating investments and viable businesses across all sectors of its economy. While Nigeria continues to grow at a snail-paced rate indicating sluggish business activities in the economy, the survival of firms to a large extent may depend how well they embrace technology and values they create are through digital driven solutions. KPMG, one of the big four professional services firms in Nigeria, at a press conference announced its upcoming 2019 Digital summit themed “Leveraging insights and experience to scale” which is set to hold Tuesday, 26th November 2019 at Eko Hotel and Suites Convention Centre, VI, Lagos state. According to Boye Ademola, partner and lead, digital transformation of KPMG, this is the third in the series of digital summits held overtime. “It is focused on how businesses and organisations can leverage on the power of technology to create and capture value that is transformational. The summit is said to focuses mainly on customers experience and artificial intelligence (AI). “We are looking to improve customers experience and use artificial intelligence

to make better decisions that are timelier and fact based,” Ademola said. In the words of Ngozi Chidozie, partner, strategy and customer experience, KPMG Nigeria, “the summit provides a medium to facilitate the convergence of great minds through an engaging discourse and empowerment.” This she believes will stretch the boundaries of innovation across various demographics in Nigeria. The summit which will bring to table topics around AI and robotics, customer experience transformation and design thinking aimed at improving business competitive advantage is regarded timely amid the transformational wave of technology across the world and increased competition among businesses. “We are going to have international and well renowned technology leaders feature in this event,” Segun Sowande, partner and lead, digital transformation, KPMG Africa stated. Also, the summit is said to provide masterclasses with indepth insight around the theme of the event and serve as a medium to launch KPMG’s digital publication which was designed on the foundational theme of leading through digital. “Business leaders, Tech entrepreneurs and C-Suite executives are encouraged to attend this iconic event by registering on the KPMG site using the address” Tunji Odumuboni, associate director, digital transformation KPMG Nigeria. KPMG will also be providing a platform for FinTechs to showcase viable and scalable

solutions to investors who are committed in this space. While the embracement of AI and robotics may mean the untimely death of some skills and positions hence a threat to employment given Nigeria’s current high unemployment rate, the positive side remains technology advancement creates new jobs which of course are opened to individuals who equip themselves with the right skills. The effect of a technology driven sector or economy cannot be undermined as growth potentials can best be imagined. Taking a look at the constant GDP report of the Central bank of Nigeria as published in its statistical bulletin. In the last 37 years (1981–2018), the telecommunication subsector of the information and communication sector is the fastest growing sector amongst other sector at a CAGR of 18 percent, outperforming the ICT industry growth of 10 percent in which it is a subsector. As at 2018, the telecommunication industry recorded a real GDP value of N6.6 trillion, 9 percent of Nigeria’s real GDP of N69.81 trillion in 2018. This makes the telecommunication sector the second biggest subsector after crop production subsector with a real GDP of 15.78 trillion, 23 percent of total GDP. The ICT sector of the economy in which telecommunication is a major contributor is the third biggest contributor to the GDP after the Agriculture and Trade sector of the economy. Contribution to GDP stood at 12.22 percent in 2018.

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L-R: Obumneke Okoli , marketing manager and Tolulope Adedeji,marketing director, both of International Breweries; Illbliss, Hero brand ambassador and Mc Frank D’ Don, at the Hero Fiesta5, Echefula Edition and the unveiling of Hero Beer 330ml and 500ml Limited Edition cans in Onitsha, Anambra State .

L-R: Yinka Sanni, chief executive, Stanbic IBTC Holdings PLC; Pascal Dozie, president, Society for Corporate Governance Nigeria; Moyosore Onigbanjo, attorney general/commissioner for Justice, Lagos State and Olusegun Osunkeye, guest speaker and immediate past president, Society for Corporate Governance Nigeria; at the 2019 edition of the annual Corporate Governance conference, in Lagos.

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Tuesday 26 November 2019

BUSINESS DAY

Tuesday 26 November 2019

BUSINESS DAY

David Wright

CEOINterview

Managing director of Chemical and Allied Products (CAP) plc

Interview with Private Sector Leaders

‘Our aim is to be a significant player in African paint market’ David Wright is the managing director of Chemical and Allied Products (CAP) plc, which fully operates in the coatings business providing a wide range of quality products and services. In this interview with Oluwasegun Olakoyenikan, Wright highlights plans of the newly constituted board to broaden the company’s footprint, not only geographically but also in terms of products, to become a dominant player in the Nigerian paint market and also play significantly in the African paint market.

t’s been about four months since your appointment as managing director of CAP plc took effect; what should stakeholders expect from the new management? The stakeholders should expect that we’re going to have a much higher profile going forward. CAP has been a bit of a slow burning company over the last few years and is producing good results as well as paying good dividends, but not really growing significantly in the marketplace. So, our aim is to raise the profile and also boost the business. We got a new board in place which is taking quite a long time for the business to put together because they wanted to be very specific about bringing in people who were both passionate about growing the business, but also brought in the skills that would help the business grow. We had our first board meeting of the new board last month, and I’m sure that you saw that we rung the bell in the stock exchange to notify that we had a new chairman. For me, the key in that first board meeting was that the board members are active, they participate and when we talk about specific issues, they actually bring in experience that’s going to help us in the future. They are also very strong on corporate governance. They want to see this business not only thrive but also do it in the right way. They are also very keen on sustainability. There are lots of questions about what we’re doing with the community, what we’re doing to sustain our business, both from an environmental impact point of view, but also from creating a business that will grow in the future. So, I think there’s a change and that’s why we now have a very active board and that will be reflected in the amount that you see us in the media, the amount of interaction we will have with the stock market in the future. Obviously, you have put together a strong board. How do you intend to harness the individual strengths of the members for corporate good? I think there are a number of aspects. First thing is that they are all very keen to be involved in the business. They are not only just attending board meetings, but they are actually getting involved in what we are doing. They come from a diverse background, but all their experiences are linked to our business. So whether it’s strong finance or acquisition or investment background or whether it’s real estate, they all bring something different to the table which can enhance different parts of our business going forward. But I think the key for me is two things really. One is their enthusiasm and the second is determination. We are going to create a company here that’s going to grow significantly in the future.

I understand that you have invested so much to form this new board. How soon should stakeholders expect yields from this investment in top level human capital? We are going through an investment phase at the moment; the business has kept itself quite tight over the last few years because the market has not been good. So, they focused on making sure that the business creates a good solid base. We will be investing quite heavily in the coming year. We are upgrading our IT systems to SAP HANA in the cloud which gives us access to our business systems and from any location, which means we can then implement Point of Sale data capture. We’re moving to Microsoft 360 to give us better communications and we’ve just launched our new website. So there’s significant investment and moving forward over the next year, we will start to see benefits from that during the year. Realistically, it’s going to take some time to get things in place. I would expect us to start seeing some significant gains probably towards the end of 2020. We also invested in distribution. It’s key that we get our products out to the customers. At the moment, we have 25 Dulux colour sensors. We will have 27 by the end of this year, and our aim is to add another 12 in 2020. The focus is that we have a good product, we have a good top-of-mind recall for the Dulux brand, but at the end of the day, you’ve got to get the product in front of the customers. So we will be investing in distribution quite significantly and we will probably be investing significantly in Caplux, which is our second brand. Following what you’ve invested in structures and IT, what should your customers look forward to? Our customers will see a very significant difference. With our existing colour sensors, we are probably 75 percent of the way through our refurbishment programme, which is bringing them more up-to-date. Going forward, we’re looking for new colour ranges that will be in the Dulux range, introducing some new functional products – things like anti-mosquito paint, damp shield and anti-mold paints, both in the Dulux range and the Caplux range. We’re also looking to introduce new interior design tools into our pillar sensors so that it helps people make the right choices for their homes. If you take it all together, over the coming few years we will see new products and new services which will help people create colourful exciting spaces. We have our aim to grow this business to be a significant player in the African paint market. In order to do that, we will need to broaden our footprint not only geographically, but also in terms of products. At the moment, we only play in the decorative www.businessday.ng

range, so we will always be looking for the opportunities. Are you also looking at exploring opportunities at least in the ECOWAS region? Recently, we had a workshop with our people to talk about what our vision for the future is and we came up with the slogan, “Creating a New Africa Inspired by Colour”. At the moment we only play in Nigeria, and we first need to look at dominating the Nigerian market. We have a strong market position with the Dulux brand, but we intend to grow that so we become by far the major paint company in Nigeria. We have responsibility for a number of export territories with Dulux, so we will plan to start exploring those regions this year. And then, our aim is to start exporting of Dulux and Caplux into those territories. Our next target is really to go sub-Sahara, and then, hopefully, further expand into Africa over the coming years. I would hope that we will be exporting into our export territories before the end of 2020. Given your vast experience, why did you opt to work in the Nigerian market, particularly CAP plc, at this time?

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There are a few things that really draw me to Africa. One is, for some reasons, it has always been on my list of continents that I would love to work in. The opportunity here is amazing. Africa is the last frontier for coatings industry. The coatings industry on a global basis is dominated by a handful of companies. However, they’re not really in Africa. There may be in South Africa, but coatings industry doesn’t really exist here. So this is still a market where local companies can create a position that in the future can have a dominant effect when these global companies come. For me, my experience is generally about growing businesses across many industries, but the match of an untapped market and the potential to grow motivate me quite strongly. But also, CAP is in a great position. It’s got a solid foundation. It’s got 60 years of history. It’s got a great backing with UAC. So everything is in the right place to really launch this company and move it to the next level, which is pretty exciting stuff. The Nigeria market is peculiar. How does it compare with other markets where you had worked? Paint makers across the world are different but they’re the same. They’re different because you always have local peculiarities. The climate in

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Nigeria is different from the climate in the Middle East, so you have to modify products to match the local requirements. For instance, because of the humidity as a result of the way temperatures are here, you tend to get high mould growth, bacterial growth and fungal growth, whereas in the Middle East it is hot and dry, you don’t have that problem, so you modify the products. But essentially, paint is there to protect and there are buildings everywhere in the world, so the application is pretty much the same. The other part is the development of the market. At the moment in Nigeria, the market is not very heavily developed. For instance, in the construction industry there are lots of small players rather than one or two big players. That’s what keeps the major multinationals away because it’s a difficult market to play in, but I believe that CAP has a great market position in that it’s a very well known company, its brands are very well known and there’s a lot of loyalty to the brand. So, it’s a good place to start to grow from. The market is slow. It’s coming out of what I would see as a pretty bad time. But everything is moving in the right direction. It will very quickly gain momentum. So, I think it will be good to be at the front now than when we get that momentum going.

Given your diverse experience, what good strategy could work for CAP plc at this time? We have pretty simple high-level strategy. We want to grow our volumes. We want to grow our sales channels. We want to grow our portfolio, and we want to do that through investing in our people and improving our efficiencies to drive the business and to create the domination we want; we just have to make sure we sell more paints. In order to do that, we believe that there are two main drivers: one is to grow the channels – that’s increasing the number of colour sensors entering into the projects market, finding new routes to market. It’s key that you have the product, but it’s also key that you can get it to the customer. We want to grow our portfolio to make sure we have products that meet all needs – whether it’s increasing the functionality of the product or whether it’s creating products at different price points so that we can have products for everybody’s spending capacity. In order to do that, we need to make sure we have the right people, we need to invest in our own people or we need to bring in people where we need extra skills, but we believe that the people are what’s going to create the experience for the customers. And then we want to be, if you like, the cheapest cost producer. We want to improve our efficiencies dramatically. What are the greatest challenges facing the chemical and allied industries in Nigeria? There are a lot of challenges. The biggest challenge I see personally is the speed of change. Things are a little bit slow here. If we want to stay ahead of the competition, we need to drive change as fast as we can. Restrictions, legislation, currency controls all have a way of slowing things down. Now there’s still some uncertainty in the market. It’s a slow market and it’s not started to grow significantly, but I believe that will change. What is your strategy for surmounting these challenges for CAP plc or converting them to opportunities? I think it’s simple. My role here is to coach and empower the people we’ve got to achieve the goals. There’s no shortage of desire. This committee has a great image and people enjoy being part of this company. What we’re going to do is empower the people so that they can actually achieve their full potential. CAP plc reported an improved financial performance in 2018. What plans are on ground to sustain the trend? The financial performance of the business has been steady; I would say nothing exciting but no failures either. We’re going to take some risks going forward. We don’t want it to be steady in the future; we actually want it to be exciting and exceptional. Our aim is to grow our volumes substantially in the future. We need to do some www.businessday.ng

investment to get there. But I would say that if our plans come off, the growth in our business will finance the investment we need so we will maintain the growth in our financial performance. The company paid dividend to its shareholders in 2018 with its entire net profit. What informed this decision and what should the

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company’s owners be expecting this year? The business is here to support our investors. We will pay the maximum dividends we can. The idea is to grow a business in a way that we can self-finance our investment in the growth. Our aim is to make sure that we have a business here that is sustainable for the next 60 years, and sometimes you have to invest to do that.

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Tuesday 26 November 2019

BUSINESS DAY

property&lifestyle Changing the narrative: Developer proves it’s possible to own a home without breaking banks Stories by CHUKA UROKO

narguably, Nigeria is one of the most expensive housing markets in the world. As a matter of fact, Lagos, the country’s commercial capital, is the most expensive city in Africa and the third in the world. The popular narrative in Nigeria’s property market is that houses are unaffordable and it is truly so, especially in the big cities of Abuja, Lagos and Port Harcourt where over 80 percent of the residents are renters. House suppliers cite high cost of land, expensive building inputs which are largely imported; lack of critical infrastructure and cost of funds, for the affordability issues in their market. But there is a new narrative in town. Millard Fuller Foundation (MFF) has just proved that it is possible for a low income earner to own a home without the high risk of breaking banks. The developer has also proved that delivering houses that are affordable is not rocket science. MFF describes itself as a faith-driven organization out to promote collaborative partnerships with individuals and organizations in a bid to provide affordable le housing for those in need. So far, it has partnered Reall and Family Homes

…offers houses for sale at N2.8m ($8.040) per unit Funds (FHF) and the results have been phenomenal. The company’s partnership with FHF is understandable. The family fund is a social housing initiative promoted by the federal government as part of its social intervention programmes. The fund has an initial shareholding by the Federal Ministry of Finance and the Nigeria Sovereign Investment Authority, focused on affordable homes for Nigerians on low-income. According to a recent report by Estate Intel, an independent provider of African real estate research and data, MFF is selling 200 one-bedroom studio apartments for 2.8 million each in the outskirts of Abuja. The report recalls that in 2016, Reall UK, as part of its contribution to bridging Nigeria’s housing gap, partnered with MFF to fund the first phase of the GrandLuvu Estate situated in Luvu-Madaki, Masaka, Nasarawa on the outskirts of Abuja. GrandLuvu Estate features 600 units of one and 2-bedroom semi-detached bungalows targeted primarily at a specific group of Nigerians earning between 50,000 to 150,000 a month. The 32-square metre onebedroom homes have a sales price of 2.8 million, an equiva-

lent of $8,040. Questions have been asked as to what MFF has done differently to account for the affordability of their houses. The answer is simple. The company, apparently, dimensioned its target market and decide to keep its cost low by delivering just functional homes for low income buyers. According to the estate intel report, “the construction of the 2.8 million ($8,040) house results in an estimated cost of 2.3 million ($6,394.98) even without receiving any form of government support on land purchases.” The components of each building include 150mm hollow sandcrete block walls, Aluminum casement windows, sharp sand from a

river and cement from Dangote Cement plc, Obajana plant. Others are screeded floor finish, wet rooms and kitchen tiles (floor and walls; backsplash in the kitchen). There are no kitchen cabinets installed, internal painting (one coat only). The houses are externally finished with tyrolean with window and door panels painted. It has electrical conduit & wiring; no fittings. All plumbing fittings are installed with water connected with PVC ceiling finish. The roofing is done with 0.55 long span Aluminum roofing sheets on well-seasoned wood trusses. The houses boast such facilities as overhead and underground water tanks from industrial boreholes; laterite graded road network;

dedicated estate transformers with power connected to homes, good drainage layout, good sewage and refuse disposal system, and adequate water reticulation for home consumption. The report recalls that, in 2018, FHF bulk-bought 400 completed units for resale, meaning that MFF was able to completely re-pay the original loan to Reall. The houses were then sold to first-time homebuyers on an owner-occupier basis through a bridging facility provided by the Fund pending the release of applied mortgages by the Federal Mortgage Bank of Nigeria (FMBN). Some units were also sold through an internal mortgage arrangement provided by MFF.

Home buyers, investors in focus as RevolutionPlus plans more affordable homes

of funding and taste of the people, the company says it has provided over 5,000 affordable housing units to Nigerians across its five locations in Ikeja, Lekki, Abuja, Ibadan and Dallas in Texas, USA. “We believe that everybody is a potential homeowner and what we are doing is our own little way of supporting the federal government in reducing the country’s housing deficit,”

said Bamidele Onalaja, the company’s managing director/ chief executive officer. Nigeria, officially, has housing deficit estimated at 17 million units. But analysts fault this figure, saying it is no longer tenable given the country’s growing millennial population and fast-paced urbanization. Onalaja spoke at a press briefing which he addressed to announce their promotional

L-R: Bamidele Onalaja, MD/CEO, RevolutionPlus Property; Omoni Oboli, brand ambassador, and Tolu Onalaja, ED, RevolutionPlus Property, at the launching of RevolutionPlus Chrismas promo and the unveiling of Oboli as the company’s brand ambassador www.businessday.ng

sales for the current festive period and also to unveil Omoni Oboli, a Nollywood actress, as their new Brand Ambassador. The company, according to the CEO, has evolved several ways through which it makes housing affordable to their customers. One of such ways is the promo sales which, he said, has become a tradition for them every festive period. Another way of making their products affordable is through the interest-free and flexible payment plan they offer buyers. “We have ‘Isusu’ Thrift where people can own a piece of land starting from N25,000 and can begin to build in a gated, secure estate,” the CEO said. According to him, the promo for the forthcoming Christmas tagged ‘Xmas Xtravaganza’ encourages potential home buyers to begin their journey to home ownership with an initial deposit starting from N25,000. This also gives them the chance to win various food and household items. Some of the items to be won are generator, smart TV,

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goat, 50kg bag of rice, Hamper, pressing iron, a set of cooking pots, and VIP ticket to Revplus mega party. Explaining the choice of Oboli as their brand ambassador, Onalaja said the celebrated actress has enviable track record, especially her scandalfree acting career, adding that her movies are lovable. He hoped that the new brand ambassador would bring her wealth of experience to bear on the marketing and promotion of the RevolutionPlus brand. Omoni, on her part, noted that she found one thing common between her and the company. “We pursue excellence and RevolutionPlus also pursues excellence. Together we will strive for excellence and I believe we can really do more to move the real estate industry forward,” she assured. The actress noted that there would be challenges in the task ahead, given that Nigeria is a society where there is no mortgage facility for potential home buyers coupled with high interest rate on credit facility. @Businessdayng

Home buyers, investors in focus as RevolutionPlus plans more affordable homes

ome buyers, especially first timers, local and Diaspora investors are the focus of the current efforts by RevolutionPlus Property to deliver 10,000 more affordable houses in the next five years, authorities of the young ambitious company have said. In the last five years of coming into the real estate industry, despite the challenges of funding and taste of the people, the company says it has provided over 5,000 affordable housing units to Nigerians across its five locations in Ikeja, Lekki, Abuja, Ibadan and Dallas in Texas, USA. “We believe that everybody is a potential homeowner and what we are doing is our own little way of supporting the federal government in reducing the country’s housing deficit,” said Bamidele Onalaja, the company’s managing director/chief executive officer. Nigeria, officially, has housing deficit estimated at 17 million units. But analysts fault this figure, saying it is no longer tenable given the country’s growing millennial population and fastpaced urbanization. Onalaja spoke at a press briefing which he addressed to announce their promotional sales for the current festive period and also to unveil Omoni Oboli, a Nollywood actress, as their new Brand Ambassador. The company, according to the CEO, has evolved several ways through which it makes housing affordable to their customers. One of such ways is the promo sales which, he said, has become a tradition for them every festive period. Another way of making their products affordable is through the interest-free and flexible payment plan they offer buyers. “We have ‘Isusu’ Thrift where people can own a piece of land starting from N25,000 and can begin to build in a gated, secure estate,” the CEO said. According to him, the promo for the forthcoming Christmas tagged ‘Xmas Xtravaganza’ encourages potential home buyers to begin their journey to home ownership with an initial deposit starting from N25,000. This also gives them the chance to win various food and household items. Some of the items to be won are generator, smart TV, goat, 50kg bag of rice, Hamper, pressing iron, a set of cooking pots, and VIP ticket to Revplus mega party.

Tuesday 26 November 2019

BUSINESS DAY

property&lifestyle The real estate value that silently affects monetary returns

here are 24 reasons we invest in real estate and they are not peculiar to any tribe or race. As long as you are a human being making real estate decisions, your reason will be found on this list. It is a widely favoured belief that monetary reward is the only pay-off of real estate investment. But there is another kind of return, rarely talked about, which accounts for more than half of the reasons you would consider investing in real estate. This other kind of return often makes up for the down-times that characterize periods of negative or no financial returns even though it could sometimes be considered a hindrance to the effective delivery of monetary returns on your investment. I refer to this other kind

of return as Sentimental Value. Sentimental value is defined as the value of an object deriving from personal or emotional associations rather than material worth. Hence, in real estate investment, you are either getting sentimental or monetary value; or both. Sentimental value is also your inflated opinion of your piece of real estate’s value. The value of your real estate, in your opinion, can be related to a number of things peculiar to you as an individual. These could range from the sacrifice and discipline it costs you to acquire a piece of the earth or to set up a real estate business which is often known and considered by you alone. This type of value tends to be subjective and therefore, it finds its way around assets through the lifetime of the asset even as the as-

set moves from one buyer to the next buyer. The creation story both from the religious or scientific perspective shows that there has to be a planet to sustain human life. It must have required some great effort to have the first house or bridge or wall. The earliestreal estate objects have become artefacts in Museums or monuments around the world. These edifices have nostalgic stories behind them. The labour invested in the acquisition of real estate often invokes an incredibly nostalgic feeling in the owner. It becomes a priceless asset, largely because of the underlying purpose of purchase, efforts and energy invested as well as the investment journey. Most real estate investments come at higher financial costs than they should. The extra cost is usually overlooked because

of the sentimental value attached to real estate. Conducting an objective evaluation of how much a real estate investment is truly worth at the prevailing rate may be impossible when the investment is induced by deep-rooted emotional motivations that are often denied or, in many cases, unknown. This is considering the variations in the market value of properties within a location. Sentimental value tends to be subjective. Therefore, it finds its way around assets through the lifetime of the asset as the asset moves from one buyer to the next buyer. A skewed perception of real estate value makes it difficult to focus on a bigger picture or make accurate judgments about its monetary value given a current economic reality and real estate cycle which are always subject to external factors.

Stakeholders offer insights on ways to integrate engineers into national devt Stories by CHUKA UROKO

ue to the crucial role engineering and technology can play, especially in creating critical infrastructure such as transport, power, water supply, and others, stakeholders in this field of science are canvassing its integration into national development. Engineers, they say, can be part of national development through three potential pathways classified as policy formulation, programme development, and project implementation. “Engineers are at the core of national development as no nation can develop in the absence of a flourishing engineering and technology

practice. Integrating the Nigeria engineer into the development process is, therefore, a starting point to the development of our nation,” explained Nurudeen Rafindadi, MD/ CEO, Federal Roads Maintenance Agency (FERMA). Rafindadi was keynote speaker at the 41st Association for Consulting Engineering in Nigeria (ACEN) annual conference/AGM in Lagos. He spoke on ‘Integrating Nigerian Engineers into National Development’, highlighting the various impacts of engineers on the nation’s economy. Rafindadi was very optimistic about Nigeria in spite of present challenges, saying that the country would witness stability in the exchange rate and the entire macro-

economic environment, major improvement in economic performance which should result, among others, in a reduction of the importation of food items and refined petroleum products, and improved power supply. “The country also expects improved transport infrastructure, expanded industrial production, improved competitiveness, greater availability of foreign exchange, improved job creation, reduction in poverty and greater inclusiveness in the spread of the benefits of economic growth,” he hoped. Rafindadi advised that, as a matter of policy, the Nigerian government should address one factor that has continued to limit Nigerian engineering firms from com-

L-R: Nurudeen Rafindadi, MD/CEO, FERMA); Charles ‘Yele Akindayomi, President, ACEN; Olujimi Hotonou, Perm Sec, Lagos State Ministry of Works and Infrastructure; Adekunle Mokuolu , President, Nigerian Society of Engineers, and Ali Rabiu, President, COREN), at the 41st ACEN Annual Conference in Lagos recently. www.businessday.ng

peting effectively with offshore counterparts. These are the high cost of fund/capital in establishing engineering practice and companies, and the conception and pioneering of projects generally. “Our offshore counterparts and competitors have access to much lower cost of capital and sometimes actually get financial/moral support from their home countries in the form of assistance in negotiating contract terms and conditions,” he said. The Nigerian government must consider encouraging Engineering-based MDAs to create commercial subsidiaries and enterprises that can bid and execute jobs using the local workforce. It is also necessary for government to consider the idea of establishing an infrastructure bank or credit agency that will lend at a concessionary rate to empower local engineering firms. Rafindadi hopes that this will raise their level of participation and enable acquisition of requisite experience that would engender technology transfer. Another thing government should do is to stimulate growth in the local manufacturing industry through developing local production of industrial raw materials such as steel, chemicals, production plants and spare parts. “In general, I will say our problem is indeed not policy formulation but full implementation which has been lacking over the years,” he said.

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Talking Real Estate

With Oluwakemi Adeyemo Of the 24 reasons for real estate investments, it is important that you identify which have influenced or can influence your real estate investment decisions as well as which of them may no longer be sentimentally or financially profitable. Your reason may no longer guarantee any higher monetary compensation you may desire at a current or future sale. An attachment to the subtle sentimental value of a piece of real estate is partly responsible for many abandoned properties. The initial listing of an asset for liquidation at a rate way higher than the perceived market value only to change it later may suggest the existence of a defect to potential investors who are often smart enough to delay

their investment decision in anticipation of a further drop in price. You definitely don’t want to deal at a loss. It is best for every investor to put in perspective the kind of values an investment is expected to deliver and for how long that value will be profitable. To access the 24 reasons, and tips on how to manage them in the investment process, send “24 reasons” to 07061351530. Oluwakemi Adeyemo is a Real Estate Wealth Creation Enthusiast, Advisor, Ambassador and Author with extensive experience in real estate wealth creation and optimization. She is known for her diligent, meticulous, analytical and deep insight into the transformative power of real estate as a wealth creation tool.

Buyers, sellers meet to set prices as Northcourt hosts Property Auction

ouse buyers and sellers will be meeting one another physically to set prices as Northcourt Real Estate, an award-winning real estate brokerage, management, advisory and valuation firm, hosts the first Property Auction of international scale in Lagos. The Auction already slated for 6pm on November 29, 2019 at Four Points by Sheraton Hotel Oniru, Lagos, is the first of its kind and is being organised to bring the buyers and sellers together in an environment of trust. It aims to revisit and, possibly, reset accepted property prices. Properties up for auction have gone through rigorous checks by a team of lawyers. Pictures on display are the most recent and accurate depictions of the property’s true state. Tayo Odunsi, CEO of Northcourt Real Estate, says there is need for price corrections in Nigeria’s real estate market as the economy recovers. He explained in a statement in Lagos at the weekend that an auction allows the market to set the price to each auctioned property. Ayo Ibaru, the company’s COO/Director, Advisory, noted that leading property market indicators, including vacancy rates, development pipelines and real estate stock, have not changed @Businessdayng

over the last 18 months. “This could reflect a period of stagnation or slow recovery,” he said. Ibaru said there was need for external stimulation to the market which was what the Lagos Property Auction aimed to do. The event is free to attend to the general public, especially those looking to buy or invest in the auctioned properties. Developers or property owners who would like to list their properties in the auction can do so by sending an email to auctions@ northcourtrealestate.com. Due diligence will be done on all listed properties to give buyers comfort as well as. “Detailed investment profile will be made available to show the returns and other important information investors may require.” Ibaru assured. The Lagos property market remains the most vibrant in West Africa and one of the top investment destinations in Africa. It is yet another laudable indicator of the rising maturity, transparency and activity-levels of the market. Expected at the Friday evening event are pension funds, investment managers, developers, real estate consultants, property owners and other market participants who will be coming as property listers and prospects for some of the listed

Tuesday 26 November 2019

BUSINESS DAY

Older workers need understanding from employers about their physical limitations ...Support and flexible terms can fulfil the desire of older people to work longer Robert Wright

hen Malcolm Emery’s wife died in 2015, his initial instinct was to quit work entirely. After 30 years as a principal chef in catering businesses, he planned to take up new activities, buy a dog and relax. “I was prepared to call it a day,” says Emery, now 62. But Sodexo, the French services contractor for which he was working, felt Emery still had more to offer. Instead of quitting entirely, it suggested, he should shift to a flexible contract, working 80 days a year. They would be focused on some of the key corporate hospitality events of the British summer — the Royal Ascot race meeting, Henley Royal Regatta and the Open golf championship. The suggestion, which Emer y accepted, is typical of those big businesses increasingly make to older staff as they seek to retain skills amid tight labour markets and declining labour forces in most industrialised countries. In the UK in particular, record high employment levels and declining levels of immigration from the EU mean the battle to secure valuable talent is more intense than at any time on record. The pull of tight labour markets and the push of worsening pension provision have combined to drive participation in the UK labour market up to a record 72.5 per cent of people aged 50 to 64, only a little under the 75.9 per cent average for 16 to 64-year-olds, according to the Office for National Statistics. Megan Horsburgh, head of diversit y for S o dexo in the UK and Ireland, insists, however, that the change is rooted in employees’ health. Improved lifestyles and better treatments have pushed up life expectancy and meant workers reaching traditional retirement ages still feel fit to work and eager to participate in the labour force, she says. It enhances their wellbeing to continue to have the social contact of work, she adds.

Fresh approach: Chef Malcolm Emery has moved to a flexible contract, working 80 days a year

“ They’re not wanting to move to doing nothing,” Horsburgh says. “We’ve recognised that if we can help people to phase down, that is really good for us as a business because we are able to keep their experience for longer. But it is also good for them.” Th e s e nt i m e nt i s w i d e sp rea d a m o ng e mp l oye rs. Lindsey Rix, managing director of savings and retirement for Aviva, the UK financial services company, says her company has a responsibility to support both employees and investors through their different life stages. “We increasingly think of ages from 45 to 60 becoming more of a transition period than a winddown phase into retirement,” Rix says. Yet there remains a great deal to be done to ensure older workers are well supported in coping with the challenges that disproportionately affect their age group. These include chronic conditions such as arthritis and responsibility for older relatives. Christopher Brooks, senior policy manager for consumer and community at Age UK, the charity for older people, says www.businessday.ng

older workers are more likely to be made redundant and find it harder to return to work if that happens. “The labour market is perhaps more flexible,” he says, comparing it with a few decades ago. “I think the flexibility should be a two-way street. Quite often we find the employer holds all the cards, but the flexibility should be reciprocated for the workforce.” The experience of Andrea Woodhouse, a senior legal counsel at Aviva, illustrates the opportunities and the challenges. Aged 57, she insists she is as eager for stimulating, demanding legal work as when she joined the company in 1996, and that she has a significant contribution to make. “There are assumptions made that when you hit 50 you are not ambitious any more, you are looking to retirement, you are looking to slow down, which is not necessarily the case,” Woodhouse says, speaking at Aviva’s headquarters in the City of London. “I’m still the same person in my head.” According to Brooks, the key to dealing with all such matters around age in the workplace is to encourage a “good, open culture”. That can

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ensure employees do not, for example, feel the need to hide a chronic health condition such as diabetes until a crisis occurs and potentially makes their job untenable. There are assumptions that when you hit 50 you are not ambitious any more, you are looking to slow down, which is not necessarily the case He accepts, however, that employers often struggle to create such collaborative atmospheres. “The vast majority of employers are small with no human resources functions,” he says. “Most employers don’t know how to approach any kind of difficult conversation.” Nevertheless, for employers able to help older workers through the occasional crises of working later in life, there can be substantial rewards. Since January 2015, Bob Pemberton, 68, has been working in a specialist fraudprevention team at Aviva’s Sheffield office in northern England. He has brought the company nearly 50 years’ experience of working in a range of relevant jobs, including administering benefits on behalf of the government. He is even undertaking training to @Businessdayng

develop new skills. The company has been able to help him continue working 35 hours a week, even though he has to care for his 96-year-old mother-in-law. He normally works four long days a week to leave one day free for his caring responsibilities. “Having an attitude to wanting to learn and to move on and to develop — as long as that’s still there, I really do feel age need not be a particular barrier,” he says. Emer y, meanwhile, says “obviously” he has less energy than when he was younger. But Sodexo encouraged him to recruit the replacement for his former full-time role and the two now collaborate on big events. “His energy has made my life easier,” he says. “I’m using my experience to work alongside.” It is part of an arrangement that Emery accepts, despite his initial instinct, has worked “brilliantly”. “I’m pleased, if I’m really honest, that they persuaded me to stay on,” he says. “To have gone to no hours straight from 70 or 80 hours a week would have been terrible for me. I think I have work balanced with life.”

Tuesday 26 November 2019

BUSINESS DAY

DJ Kim says the support of her female boss was key to completing the EMBA © Jun Michael Park

‘It was a really good change for me’ — a senior banker on her EMBA ...DJ Kim says the course helped her to see the real value of people on her team

had always worked with bankers — studying the executive MBA at Korea University Business School was the first time I had made friends with colleagues who did not work in finance. There were about 50 of us on the course. While most of us were from South Korea, we came from all types of industries and companies. My classmates had a way of thinking that was quite different from mine, so the experience was very interesting. Even though I graduated from the programme four years ago, I still often contact them for their advice when I have difficulties managing my team or face big decisions. I started my banking career in New Zealand. I had moved to Auckland in the 1990s to do a music diploma, having studied classical music in Korea, but I ended up being offered a job at HSBC. At the time, New Zealand was receiving a wave of immigrants from Korea and the bank needed someone who spoke English and Korean to

explain financial products such as mortgages and credit cards. I got married, had a child and then, after 10 years in New Zealand, was asked to join my boss, who had been appointed head of the South Korea office, to help him launch HSBC’s personal banking division there. Initially, my husband, who is also Korean, said I was crazy and would soon be back. We imagined my colleagues in Korean banking would be very conservative and domineering, but I had a great time: I settled down without any major problems, and my husband soon joined me. A change was around the corner, however. I switched to corporate banking and was involved in one of the largest merger and acquisitions deals in South Korea, when Doosan, one of the country’s conglomerates, bought US construction equipment maker Bobcat in 2007. My career was going well, but then the financial crisis struck. Amid the cutbacks, I moved to Standard Chartered and then started thinking about doing an EMBA. At the time, my work involved helping Korean companies benefit from the China’s www.businessday.ng

decision to internationalise its currency. This meant I was liaising with regulatory bodies and private clients, as well as being a team leader. Previously I had mostly managed myself, but from here on I had to work with a team. The main reason for applying for the

”

DJ Kim

I started my banking career in New Zealand. I had moved to Auckland in the 1990s to do a music diploma, having studied classical music in Korea, but I ended up being offered a job at HSBC

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EMBA was to learn how to do this effectively. I decided to apply to KUBS in Seoul as it has a good name and my previous boss was a graduate. Initially, I thought about doing a normal MBA, but he recommended I do an executive course to prepare myself for senior management roles in the organisation. My company paid about 60 per cent of the tuition fees and I funded the rest myself. The course was part-time and lasted for two years. We would meet on Friday afternoons — my company would allow me to leave early — and on Saturday. We had a lot of homework, quite a lot of reports to read and then exams. I would normally get to school early on Saturday to study in the library and spend the whole of Sunday reading. Without the understanding and support of my family and my boss, it would have been difficult to work and study at the same time. I was lucky to have a female boss who fully supported and understood my desire for career development. I also had to give up on the idea of achieving a perfect balance between work and family. @Businessdayng

During my studies, my son was preparing for his university entrance exams and I couldn’t spend as much time with him as I wanted. But looking back, I think it made him more independent. My favourite class was on corporate innovation, as we were taught how to assess and prepare for risk. My work is providing financial services for midsized companies in Korea. It used to be a predominantly manufacturing-focused economy, but these days we work with a lot of ecommerce and tech companies, which have completely different balance sheets. The EMBA taught me how to value companies based not only on their financial results, but on other intangible aspects such as intellectual property. My work style has changed a lot since KUBS. I now rely more on colleagues whereas previously I would spend a lot of time trying to achieve the best result myself. It has allowed me to see the real value of people on my team — it was a really good change for me. Now I think about the young talent in my team and try to share with them what I learnt on my EMBA. I want to be a great coach.

Tuesday 26 November 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Nigeria’s top 10 most expensive private universities offer parents local alternatives STEPHEN ONYEKWELU

igeria’s growing middle-class parents have increased the demand for quality university education but the rising cost of educating children abroad and the deteriorating state of publicfunded educational institutions are opening up a new market for the country’s most expensive private universities. Parents perceive these expensive private universities in Africa’s most populous country as being able to provide an international standard educational environment, facilities, teachers and exchange programmes. Average tuition fees in the United States of America for the 2018/2019 academic year is US$25,620 (₦9.2 million) per year according to a report by US-based student support organisation College Board. On 2nd July 2018, the United Kingdom government announced that there would be no change to the tuition fee cap for UK/ European Union Undergradu-

ate students for the academic year 2019-20. New entrants in 2019/20 will pay £9,250 (₦4.3 million) for full-time study and £4,625 (₦2.2 million) for parttime study. This is besides the feeding, accommodation and transportation costs. Nigeria’s top 10 most expensive universities compete with these universities abroad and have priced their tuition fees accordingly, in addition to attracting expatriates who help drive home the perception that the universities can fairly compete and produce graduates that can thrive in the world’s increasingly borderless labour market. The American University of Nigeria (AUN), in Yola, founded in 2003 leads the pack of Nigeria’s most expensive private universities. Engineering students pay ₦2.70 million each academic year and other students pay ₦1.90 million per session. AUN is followed, Baze University, Abuja, founded 2011, Law students ₦2.50 million per session while those in the faculty of management & social sciences pay ₦2.25 million. At the Nile University of

Nigeria in Abuja, founded in 2009, Social and Management Sciences students pay ₦2.40 million per year but English Studies students pay the least, ₦1.7 million per session. Little known Skyline University of Nigeria, in Kano, founded in 2018 charges students of the School of Science and Information Technology ₦2 million per session and those in the Schools of Art, Management and Social Sciences, ₦2 million. Law students at Afe Babalola University in Ado Ekiti,

UI unveils two projects to promote research for economic development MICHAEL ANI

igeria’s foremost tertiary institution, the University of Ibadan, has recorded yet another milestone after it unveiled two projects that would foster economic research and improve the countries academic ranking in the globe. The projects known as the Uduimo Itsueli foundation building and the Isaac Folorunso Adewole Library of Tomorrow (LoT), is part of the vision of the school aimed at making research count for national developments. Both projects were named after two of the institutions’ alumni, Uduimo Justice Itsueli, chairman of the UI-research foundation and Adewale Isaac, a one-time minister of health under President Muhammadu Buhari’s administration and former vice-chancellor of the school. Speaking at the commissioning, Abel Olayinka, Vice-Chancellor, University of Ibadan said the foundation shows the institutions drive towards producing leaders who can use research and

research results to address the challenges, capture the aspirations of the Nigerian people and chart the path for national developments. “The University of Ibadan has taken the bold steps to invest in creating this platform that is necessary for continual renewal of the competencies of our students, faculty and staffs as efforts are being devoted to support the research leaders as well as strengthen the pipeline with emphasis on early career research scholars as members of staff,” Olayinka said. According to him, the research foundation building is one of the recent development of the institution represents the emphatic declaration of the commitment and assurance that the products of the University of Ibadan are not only fit to lead but are also prepared to make knowledge a cornerstone and driving force for national development. The Uduimo Itsueli foundation building is situated at the Ajobode campus of the university and is one of the five structures designed to make the UI-research foundation complex a formidable platform to stimulate the contributions of research leaders at the www.businessday.ng

university. Similarly, the Library of Tomorrow (LoT) named after the former minister is designed with the singular vision of serving as a sustainable platform for access to research information that can serve as a driver of evidenced-based decision making, foster knowledge economy and socio-economic development of Nigeria. Olayinka explained that the LoT, which is the first in Nigeria, is envisioned to provide up-to-date and facilitated access to research information necessary to enhance competencies and competitiveness of early career researchers and postgraduate research scholars in research, grants funding and effective utilization of research outputs for national development. It would also facilitate effective vehicles for information sharing to promote comprehensive contributions of all stakeholders towards pragmatic evidence-based policy options and effective utilization of assets for national development; and lastly, create a gown to town platform as a forum for communal participation and contributions to priority setting and enhancing policy impacts.

Ekiti State, founded in 2009 pay ₦2 million, Nursing and Lab Sciences pay ₦1 million, Social and Management Sciences, pay N500,000, pre-medicine pays ₦2.15 million all per session. Pan-Atlantic University, Lagos, founded in 2002 bills students of Information Science and Media Studies ₦2.05 million, Mass Communication ₦1.95 million, Accounting, Business Administration and Economics, ₦1.85million, per session. At Covenant University in

Ota, Ogun State, the most expensive course of study is Accounting at N857,500. The school was founded in 2002. Igbinedion University at Okada, in Delta State, makes the list of one the most expensive private universities in Nigeria. This is because from 200 level and above, qualified medical students pay ₦2.4 million but other courses average N600, 000. It was founded in 1999, one of Nigeria’s oldest private universities. Adeleke University, in Ede, Osun State charges students

an average of ₦700, 000 per session. The school was founded in 2011. Babcock University, at Ilishan Remo in Ogun State bills on average of ₦568, 807 for per session. It was founded in 1999, another old private university in Nigeria. Experts say with these private universities attracting more Nigerian parents to their campuses, it will help keep some of the money that would have been exported to other countries. “Most of the dollars that would have been conserved or used to import other things that we don’t have a comparative advantage in are spent on studying abroad. This puts pressure on our foreign exchange and reserves,” said Ayodele Akinwunmi, corporate banking department, FSDH Merchant Bank Limited. These top 10 most expensive private universities were chosen to highlight private sector participation in the education sector and their impact on the economy. They benchmark their performance against international best practices, education analysts say.

‘How neglect as a form of child abuse affects academic performance’ KELECHI EWUZIE

ead of Counselling, Greensprings school, Theresa Nkennor has identified neglect which is a case of the absence of a caring adult in a child’s life as a major form of child abuse that is common but not often acknowledged in Nigeria today. Nkennor observes that neglect in the lives of children causes them to have attachment issues, adding that Greensprings school number one core value is child centeredness as every employee is expected to understand

how to relate with, protect and safeguard children. Speaking on the topic ‘Neglect as a form of child abuse’ during a child protection training for new employees organised by Greensprings School held at the Anthony Campus, Nkennor opines that children deserve to be protected, so as adults we need to think safety and take responsibility for the safeguarding of children. The essence of the child protection training was to provide employees with the knowledge and ability to recognise different types of abuse and learn how to safeguard children both within and out-

Head of counseling at Greensprings School, Theresa Nkennor taking new employees on child protection training

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side the school premises. The training also served as an avenue for new employees to interact, share experiences and talk about proactive ways to protect children. The cousellor explained some of the factors that can increase the risk of child abuse such as; unhealthy family relationships, exposure to alcohol or hard drugs, unemployment and neighbours unwillingness to intervene, and ensured that each employee understood the meaning of child abuse, the different types of abuse and how to recognise when a child is being abused. She further said that spending time with parents help children build bonds. “When kids are not able to connect with other people, it’s because they are being neglected, especially at home. This often causes them to act out and it can also negatively affect their academic performance,” she said. “At the end of the training we should be able to tell the possible signs that a child is being abused whether emotionally, physically, verbally, or sexually, or if the child is a victim of neglect.” Nkennor said.

Tuesday 26 November 2019

BUSINESS DAY

EDUCATION Adopt new strategies to achieve set goals, expert tells Corona students KELECHI EWUZIE

ounder/Chief Executive Officer, Girafit. com, Rotimi Ashley-Dejo has urged Corona Secondary School students to be willing to adopt new strategies if they plan to achieve their set goals in their academics. Deji-Ashley in his address titled “Not too early to start” delivered at the annual 2018/2019 Speech and Prize Giving Day of Corona Secondary School, Agbara, encouraged students on the need to start aspiring to be successes at a tender age. According to Deji-Ashley “Nobody sees you when you decide to be successful until you attain success. This tells you that success goes beyond that decision. The decision is just the beginning”. “And the first key to success is to discover what you are good at, and try your best at it. Our lives are a series of successes and failures. But if you don’t try something, you can never know if you can attain success in it or otherwise.” He also debunks the notion that poor academic performances is caused by student’s participation in extracurricular activities. According to him, on the contrary, “from research students who engage in extracurricular activities are also the high flyers academically. “However, parents job is to help them manage their time effectively and not to stop them from extracurricular activities. And parents should stop deciding choice of career for their children. Your job is to

L-R: Niyi Yusuf, chairman, Corona Secondary School Board; Chinedum Oluwadamilola, principal, Corona Secondary School; Ifeoma Osakwe, year 11 Third Overall best Student; Olumosope Kayode, overall best student; Gbenuola Olaiya, second overall best student and Noimot. SalakoOyedele, deputy governor, Ogun State at the school speech and prize giving day in Agbara, Ogun State.

guide them in choosing what they are best at, that way; they can glow and amount to success,” Deji-Ashley said. He concluded that for those not being awarded today, “It doesn’t mean that they are less successful, as everyone is a success at something,” as he stressed on the need for them to believe in themselves and devise a new strategy to achieving their set goals. In her opening remarks, Chinedum Oluwadamilola, Principal, Corona Secondary School-Agbara noted that though, true success comes from hard-work and dedication, the school was also very keen at other aspects of successes. According to her, “This is a time where we as staff and students come together to applaud our achievements and efforts, and for recognizing those individuals, teachers

and students, and staff who have given a touch of excellence into what they do, who have distinguished themselves by going the extra miles and breaking standing records. “This recognition hinges on behavioral and academic excellence, as well as sports, clubs, and so many other areas. It is based on sound psychological principle of reward and reinforcement. “Success is such a misconstrued phenomenal, hence the need to situate what it is in the right perspective. True success is what comes from hard-work. There is no such thing as overnight success. “There is a common misconception which equates success with a mere improvement on a previous record. While we concede to the fact that, improvement will be part of success, we contend that it

does not define it. “Our understanding is that, success involves setting a goal, and taking the right steps towards accomplishing it, with later life focus and undeterred success and determination. It is combination of those steps. “And like we say to our students regularly, you are never going to be able to score a goal until you take a shot. You cannot sit on the sideline and suddenly begin to score goals, you have to take that shot, and that is what success is about.” Noimot Salako-Oyedele deputy governor of Ogun State in a chat with Journalists says lauded the academic achievements of the school and also other achievements in sports, drama, art, and most importantly the ‘Principal Award’ which is for the most improved student, because this sort of create the total child.

Entrepreneurship education takes front seat at FATE Foundation’s policy dialogue series …experts advise on what Start-Ups need to grow into bigger businesses STEPHEN ONYEKWELU

oung entrepreneurs in Nigeria often set out without a clear understanding of the entrepreneurship ecosystem; this retards the growth of their enterprises from start-ups into scale-ups. A company qualifies as a scale-up after it moves past early-stage barriers demonstrates a track record of high growth, and shows potential for long-term success. A recent research report by the FATE Foundation, “From Start-Ups to Scale-Ups: A Review of Business Scaleup Activities in Nigeria” showed what entrepreneurs need to

know to move from start-up status to scale-up. The Foundation nurtures entrepreneurs through mentoring, coaching, consulting and support services required for developing an enterprise to operate optimally and deliver maximum impact. The number of enterprises the Foundation has facilitated their birth are 5, 400 and 65 percent of them are still in business and employing people. “Facebook started small but it is today a mega business. Entrepreneurship education outlines the ingredients that are needed to move from being small to becoming big,” Fola Adeola, founder of FATE Foundation said at the Fifth Policy Dialogue Series on Enwww.businessday.ng

trepreneurship. According to Daniel Isenberg, executive director of the Babson Entrepreneurship Ecosystem Project, entrepreneurs need to learn how to return growth back to the centre of their businesses. Scaling up means growth an enterprise is growing. When businesses are growing, economies become more prosperous, innovation speeds up and wealth is created. This is real growth. “More local companies achieving greater growth targets are preferable to many more new companies. However, entrepreneurs need to learn to avoid venture capitalists. Growth in customer value, new customers, new expansion,

and new exports are the driving engine of businesses that are scaling up,” Isenberg said. The Foundation’s research in Nigeria surveyed 250 businesses in Lagos and its environs, including Ogun State. The businesses have a combined value of N13.60 billion and employ over 3000 people. They were mostly in high growth sectors such as farming, education, and technology. Some of the enablers of these businesses leverage on include business location, quality of employees, government policies and access to markets. Growth inhibitors include the poor state of infrastructure, lack of access to finance and lack of appropriate human talents.

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Stanbic IBTC rewards outstanding students to promote financial literacy

n furtherance of its commitment to increasing the level of financial literacy amongst Nigeria students, Stanbic IBTC Holdings PLC has awarded prizes to the winners of the maiden edition of the MoneyBee Financial Literacy Competition, organised by the Junior Achievement Nigeria (JAN). The prize, which is a Stanbic IBTC Educational Trustee Account, worth over one hundred thousand naira, was awarded to each of the four outstanding students with two each from two winning secondary schools. The schools emerged joint winners out of the 25 public and private schools that took part in the competition. The Stanbic IBTCTrustee account is an educational trust product to help parents attain their objective of providing sound education for their

children through a plan that is convenient and flexible, with long term benefits. The winners are Yusura Aminu Ibrahim and Fathia Usman of Heritage Global Academy, Ikorodu and Adedeji Fuhad and Akerele Semilore of Canterbury International School, Ajah, Lagos State, respectively. Simi Nwogugu, JAN coordinator, explained that the goal of the competition is to grow beyond the Spelling Bee to a point where students would be conversant with the financial sector. She said: “We are delighted with this partnership as it will enhance our financial literacy programmes. We will provide an electronic platform for all our students to test their understanding of finance and create a signature Money Bee that we believe will be the financial equivalent of the Spelling Bee.”

ICAN announces plan to conduct three professional examination annually

he Institute of Chartered Accountants of Nigeria (ICAN) has announced that it will conduct its professional examinations three times annually beginning from 2020. This is the outcome of the technological reforms introduced into the Institute’s examination processes. ICAN in a statement made available to BusinessDay says the new examination diet will hold in March, July and November yearly instead of the usual May and November for the Skills and Professional levels. The Foundation level will continue to be examined twice yearly, in July and November. Olubunmi Owolabi, prin-

cipal manager, Corporate Communications, ICAN says a huge investment in technology by the Institute paved the way for the additional diet and gave rise to a drastic reduction in examination processing time. According to Owolabi, “The introduction of an extra diet will give candidates more opportunities to participate in the Institute’s examination especially those who need to resit any paper in the Skills and Professional levels”. The Institute is poised to continue to provide the nation with the needed manpower especially finance professionals to move the economy to laudable heights

LASUMBA Heritage covens to discuss national issues for business growth

ASUMBA Heritage, an Association of Alumni and Managers of Lagos State University, Master of Business Administration (MBA) Programme is set to hold her convention in a grand style in Lagos on Saturday November 30th 2019 at the prestigious Lagos Country Club, Ikeja. The Association was formed with the aim of encouraging continuous professional interaction among members and relevant stakeholders. LASUMBA Heritage is one of the world’s largest business schools’ Alumni and a professional community with over 30,000 Managers who are strategically placed in both public and private organizations in Nigeria and in the Diaspora. One of the flagship programs of the Association is the Convention Programme where Alumni and Managers come together to share in@Businessdayng

sights on National issues that bothers on Business and the Economy with the aim of proffering solutions to National challenges. The Theme of this year’s convention is Rebuilding National Economy: Professionalism and Integrity as Pathway. The Honorable Commissioner of The Environment and Water Resources, Lagos State Tunji Bello is the chairman of the occasion, while the Keynote Speaker is Gbolahan Lawal, the honorable commissioner for Agriculture in Lagos State. Tony Agenmomen, president and chairman of Council of the National Institute of Marketing of Nigeria will be the special guest of honour. The event will also be attended by Olanrewaju Fagbohun, vice chancellor of Lagos State University, who will also be the chief host among other dignitaries in both private and public sector.

Tuesday 26 November 2019

BUSINESS DAY

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Tuesday 26 November 2019

BUSINESS DAY

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Ransomware, malicious android apps, cloud misconfiguration top list of cyber attacks …As Sophos 2020 report shows attackers raising stakes in evolving cyber threat landscape Stories by Jumoke Akiyode Lawanson

yber security is a big global problem that exists everywhere including right here in Nigeria. The fraudsters perpetuate these criminal acts from the confines of their homes or wherever they are as long as they have a device with access to the internet and the losses are huge. Over the years, organisations have lost billions of dollars to data breaches through the most common types of attacks including Denial-of-service (DoS) and distributed denial-ofservice (DDoS) attacks, Man-in-themiddle (MitM) attack, phishing and spear phishing attacks, etc. However, cybercriminals are evolving their attack methods and often use multiple payloads to maximize profits. In a recently released 2020 Threat Report by Sophos, a global leader in cloud-enabled next-generation cybersecurity, it is revealed that cyber attackers have continued to raise the stakes in ransomware, increasing stealth in malicious Android apps, exploiting misconfiguration in the

cloud, and abusing machine learning. The report, produced by SophosLabs researchers, explores changes in the threat landscape over the past 12 months, uncovering trends likely to impact cybersecurity in 2020. “The threat landscape continues to evolve – and the speed and extent of that evolution is both accelerating and unpredictable. The only certainty we have is what is happening right now, so in our 2020 Threat Report we look at how current trends might impact the

world over the coming year. We highlight how adversaries are becoming ever stealthier, better at exploiting mistakes, hiding their activities and evading detection technologies, and more, in the cloud, through mobile apps and inside networks. The 2020 Threat Report is not so much a map as a series of signposts to help defenders better understand what they could face in the months ahead, and how to prepare,” said John Shier, senior security advisor, Sophos. The SophosLabs 2020 Threat Re-

port, which is also summarized in a SophosLabs Uncut article, focuses on six areas where researchers noted particular developments during this past year. Among those expected to have significant impact on the cyber threat landscape into 2020 and beyond are the following: Ransomware attackers continue to raise the stakes with automated active attacks that turn organizations’ trusted management tools against them, evade security controls

and disable back ups in order to cause maximum impact in the shortest possible time. Unwanted apps are edging closer to malware. In a year that brought the subscription-abusing Android Fleeceware apps, and ever more stealthy and aggressive adware, the Threat Report highlights how these and other potentially unwanted apps (PUA), like browser plug-ins, are becoming brokers for delivering and executing malware and fileless attacks. The greatest vulnerability for cloud computing is misconfiguration by operators. As cloud systems become more complex and more flexible, operator error is a growing risk. Combined with a general lack of visibility, this makes cloud computing environments a ready made target for cyber attackers. Machine learning designed to defeat malware finds itself under attack. 2019 was the year when the potential of attacks against machine learning security systems were highlighted. Research showed how machine learning detection models could possibly be tricked, and how machine learning could be applied to offensive activity to generate highly convincing fake content for social engineering.

Stakeholders discuss need for organisations to prepare for the future of work …as digitalisation begets talent upskilling, disruptions

s technology continues to disrupt industries and new skills develop to adapt to a constantly changing world, forward looking organisations are bent on recruiting youths with digital skills and equipping their employees with new skills that are a necessity for the work of the future. Considering that digitalization would lead to disruption of major work roles and the emergence of new business structures that would lead to entrance of new players, Tek Experts Nigeria, a global provider of business and IT support services from across the world, recently gathered together key Information Technology (IT) and

Human Resource (HR) professionals at a forum, to discuss the future of work, examine the challenges that lie ahead in the world of work and identify credible, effective solutions. The forum, themed ‘Preparing for the Future of Work’, also analyzed Nigeria’s preparedness for the Future of Work and touched on several areas including what changes are in store for the workplace, the workforce, and the nature of work itself, and discussed if Nigerian workers have the necessary skills prepared to take Nigerian organisations to the next level of work. Guest speakers at the forum include Nkemdilim Begho, CEO, Future Software Resources; Aruosa Osem-

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wegie, Senior Manager, People and Organisation, PwC; Tosin FaniroDada, Head of Start-Ups, Lagos State Employment Trust Fund and Tayo Olosunde, Executive Director, mindthegap.ng / Author of Youthnomics. Speaking on the topic, Lars Johannisson, country manager, Tek Experts Nigeria, explained that with a workforce of 85 million people, Nigeria is home to an enormous labour market and this talent must be upskilled and honed in order to compete successfully in the 4th Industrial Revolution. “The Future of Work is upon us and we must now take urgent action at all levels; government, industry and individual, to ensure the Nigerian work-

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force always has the right skills and the ability to adapt in real time and succeed in the direction that work is going. Work as we know it is currently being disrupted and the advent of AI, and many technological innovations has changed the way we work and at Tek Experts we recognize that this is the direction the world is taking thus the need for adequate preparations to be made.” Also speaking at the forum, Aruosa Osemwegie, senior manager, people and organisation, PwC, said “Discussions such as this are necessary to have in this time and I commend Tek Experts for deeming it fit to facilitate this conversation and positioning it-

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self at the fore front of this discussion to proffer solutions and make recommendations to the business world,” he said. Nkemdili Begho, CEO, Future Software Resources said employees must make it their duty to understand that new skills are developing, some old ones are not needed anymore, but in all, the culture of the environment has to be considered. “Communication styles are changing. As employees, we must understand the way young people communicate, but adopting too much of foreign culture is also a problem, so it is about striking a balance and finding what works,” she said.

Tuesday 26 November 2019

BUSINESS DAY

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GIG Mobility pushes revolutionary transformation with tech in transport sector …Commences operations in Ghana Jumoke Akiyode-Lawanson

IG Mobility, formerly known as God is Good Motors, is investing in the use of technology innovation to enhance customer experience through digitization and is totally transforming Africa’s interstate and regional transportation network systems. The technology-powered transport company officially launched operations in Ghana last week where it would operate inter-city services in two of its major cities. “The expansion into Ghana is in line with the company’s agenda to provide great customer experience for commuters across Africa. We are committed to moving people across cities easily and safely. We are launching our Ghana operations with two terminals in the cities of Accra and Kumasi where we will run the Accra /Kumasi route as well as the Accra / Nigeria route. We plan to cut across major regions in Ghana in the shortest possible time,” Vuakpor Muoghereh, chief operating officer, GIG Mobility told BusinessDay. As a forward thinking company, the GIGM has launched several technology-driven tools to redefine transport, including its booking app available on Google play store and iOS for Apple users and its locally devel-

oped enterprise mobility platform which allows interested investors to operate in the transport industry through the GIGM enterprise partner model. Although the market competition is tightening for operators in the transport technology market, especially for players who use mobile applications (apps) to run taxi businesses, GIGM has become the continent’s first interstate transport business with operations even outside Nigeria. The com-

pany has in many ways proven to understand mobility in Africa. BusinessDay gathers GIGM is the first company in Ghana to power intercity/state/region transportation with the use of end-to-end technology solutions and the first transport platform in Ghana to engage in intercity operations. Chidi Ajaere, executive chairman of the GIG Group, announced that the company is undergoing complete restructuring and stra-

L-R: Mitchell Elegbe; GMD / founder, Interswitch Group, Nneka Onwuegbuche; product manager, card services, Zenith Bank Plc, Shamsudeen Fashola; Group head retail banking, FCMB, Lanre Oladimeji; Group head retail banking, Zenith Bank Plc, Margaret Okhoya; product manager, card services, FCMB and Mike Ogbalu III; CEO, Verve International during the Verve Global Card launch and first transaction at Emperor Retail Outlet in Dubai, UAE recently.

Experts point way to driving borderless trade in Africa through fintech Jumoke Akiyode-Lawanson

xperts and stakeholders in the digital payment ecosystem will converge at the 7th edition of the PoS Innovation Summit in Lagos on December 11, 2019, to discuss the African continental free trade agreement and highlight how AfCFTA can change the future of digital payments across Africa to drive borderless trade across the continent. The summit which is being organized by Global Accelerex, a leading e-payment company, is aimed at providing stakeholders in the Nigerian payment system with information on how to maximize the boundless opportunities it presents. Emphasizing the reason for the theme: The African Continental Free Trade Agreement: Driving Borderless Trade Through Fintech, Tunde Ogungbade, managing director, Global Accelerex said that this summit couldn’t have come at a more opportune time as AfCFTA is expected to boost intra-African trade significantly, making Africa a single

tegically repositioning for global opportunities but is at the same time, very mindful of the need to learn from its local experiences in Nigeria and elsewhere. “GIG mobility is committed to moving people freely and easily. We believe in the digitalization of transportation and are very deliberate in our approach. We want to change the way transport is done in Africa with key focus on the interstate/city space, one country at a time. Ghana has a rich mar-

market of 1.2 billion people and a cumulative GDP of over $3 trillion. According to Ogungbade, “AfCFTA provides a framework for trade liberalization in goods and services. With this liberalization comes an overarching need for trade settlements across different African countries, making payment an integral part of the process.” “It therefore behooves digital payment companies to design innovative payment platforms and solutions that will facilitate these trade activities. Global Accelerex is already taking the lead in this regard and some of our innovative products will be hitting the market soon,” he said. Industry watchers consider the move to accentuate this topic, which is on the front burner of continental discourse, a bold step in the right direction. Niyi Adebayo, Nigeria’s minister of industry, trade and investment has been confirmed as the special guest of honour for the summit. According to the organizers, other acclaimed speakers and guest panwww.businessday.ng

elists including Segun Awolowo; CEO of Nigerian Export Promotion Council, Kunle Elebute; senior partner, KPMG Nigeria and chairman, KPMG Africa, Sam Egube; Lagos State commissioner for budget and economic planning, Chijioke Ugochukwu; executive director, shared services and products, Fidelity Bank and Saratu Iya Aliyu; national president of NACCIMA, will be at the event. The forum is expected to attract notable delegates from the Central Bank of Nigeria, Nigerian Interbank Settlement System (NIBSS), Payment Service Providers (PSPs), representatives of Banks and Microfinance Banks, members of the Manufacturers Association of Nigeria (MAN), members of the Lagos Chamber of Commerce and Industry (LCCI), members of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), representatives of Fintech companies, importers, exporters and traders, payment processors, and other stakeholders in the economic value chain.

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ket that is yet to be fully explored. Road transportation accounts for over 90 percent of the passenger traffic in the country. With our customer first approach and reliance on technology, we will positively impact the sector,” Ajaere said. As transformation in all sectors is the key to economic growth, digital transformation in transport, a critical industry that adds about 10 percent to the country’s Gross Domestic Product (GDP), is no doubt seen as a revolutionary move which will greatly impact any economy. Some of the advantages of its mobility platform are that; expansion across the continent become even more seamless by making it possible for investors to own GIGM branded and run vehicles, thereby eliminating the need for the company to invest in owning her fleet in the long run and focus on developing advanced technology for Africa’s transport system. In addition, mobile apps for travel booking guarantee no waiting in bus lines. By just downloading the GIGM app on a smart device or through the web and creating an account, users are able to book a bus trip, hire a bus, check ride history, check and confirm booking status, see the amount being charged before the trip, track a bus, view driver profile and enjoy other features.

Data Science Nigeria prepares youths for fourth industrial revolution Jumoke Akiyode-Lawanson

ata Science Nigeria (DSN), a non-profit organisation managed by the Data Scientists Network Foundation is scaling up skills of Nigerian youths in Artificial Intelligence and technology that will help in solving economic challenges and prepare them to compete globally in the fourth industrial revolution. Speaking to journalists at the grand finale of the Data Science Nigeria 2019 Artificial Intelligence Bootcamp in Lagos at the weekend, Olubayo Adekanmbi, founder of DSN said that the bootcamp was an effort to scale up Nigerian youths to have skills enough for the future, especially with the ongoing consensus that Artificial Intelligence will take away lots of jobs in the next few years. “We need to scale up our young ones to have the skill that will make them employable in the next 10 to 20 years. A lot of jobs we have today will become archaic in the next five years, which is why we have taken the bull by the horns to start build@Businessdayng

ing capacity in AI,” he said. Analysts say that Nigeria, which has the youngest population in Africa, with over 50 percent of its population within the age bracket of 15 to 60 years old, needs to be fully prepared for the fourth industrial revolution. At the DSN bootcamp, intelligent students from all over the country are trained by international AI experts and equipped with problem solving skills through the use of data analytics and technology. “We have 26 international AI experts from the United Kingdom, Canada, Spain, and other parts of the world who have come to teach these students. The knowledge gained will be taken back to the different schools and communities. That is how we intend to spread knowledge which they can use to capitalize technology development in Nigeria and help the youths to be prepared for industry jobs,” Adekanbi said.

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Tuesday 26 November 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Insight

Creative financing options for Nigerian oil companies

Forward Sale According Elias, this is becoming widely accepted in the industry. In order to develop a project, you get the lenders to lend money to an SPV which will buy all or most of the production for a certain number of years. Reference sources like Platts are used to arrive at price benchmarks. The SPV undertakes to buy all the commodity for a determined period and the field developer uses the finance to develop the asset. There will be regular periodic delivery of products and payments over the agreed period. The implication is that the production company will not have any debts/loan on its books, all it has is an obligation to pay the price in installments over time, it will also have an obligation to deliver a certain number of barrels of oil over time. This has been convenient for the NNPC mandated to sell oil and to the extent that it uses forward stage structure, it does not borrow and does not contend with all the government rules regarding borrowing. It has been popular over the 10 years ExxonMobil have used it in the transactions involving ExxonMobil NGL.

Financing Indian firms position for a bite out of $3billion World Bank loan to Nigeria

Stories by ISAAC ANYAOGU s investment dollars thin out argely due to Nigeria’s uncompetitive fiscal and regulatory environment, local oil companies can find creative means to finance new projects without recourse to commercial banks with very low risk appetite. Gbolahan Elias, a Senior Advocate of Nigeria (SAN) and partner at G. Elias & Co in a presentation at the Centre for Petroleum Information (CPI) Oil and Gas Law Forum, highlighted principal ways indigenous oil companies can source finance through creative structures. Elias advised that the conditions precedents must be straightened out before embarking on these financing strategies. These include agreeing terms with Engineering, Procurement, Construction (EPC) contractors and carrying out Environmental Impact Assessments (EIA) for two seasons, (wet and dry season) among others.

Some participants at the CPI Law Forum event in Lagos.

Service fee Closely related to forward sale, this applies to services and it is a much newer concept. Under this scheme, a marginal field developer can enter into an agreement with a production company who wants to use his infrastructure, pipelines and flow stations, and get them to pay him the service fees in advance so that he can use the funds to build the infrastructure. “The market is getting familiar with it and should catalyse the development of infrastructure for those who have credible customers,” Elias said. Insolvency This is not new to the industry, in recent times two large producers have had this challenge, and this has seen debts been rescheduled. If the owner can show that funding was used to develop the project, and this can be verified, lenders will not panic and could even lead to new players coming in to buy the debt. Listings Local oil companies have also listed in the stock market especially in foreign capital market to improve access to financing. Seplat successfully listed on the London stock exchange and many other local producers are thinking seriously about the option. Bond tax relief If you are investing in bonds whether issued by oil production company or any other company, you will enjoy an exemption on tax between 10 and 30 percent

and this could also become a way to finance oil projects though now many are financed through debt. In 2010 many capital market participants approached the government and persuaded her to give tax relief on bonds. The idea was that in order to kick start the bond market in a big way, the income on bond, which is the interest element, should be tax free for ten years. The government issued a gazette instrument. It worked to catalyse the bond market in a big way and today, the bond market is far bigger than the stock market. This is exemption is will expire soon. Traders Oil traders like Trafigura have become major supplier of money to the market. It used to be production companies investing in smaller production companies or banks lending money to production companies, now it is the traders. For example most of the oil blocks sold by Shell has seen its trading company Shell Western Trading signs off take agreement with production companies who buy the oil blocks. Contractors EPC contractors like Schlumberger have also provided much needed capital. It is involved with a $750million transaction with the NNPC. Schlumberger is a major contractor, have contracts to give all sorts of services from start to finish for a field development and rather than get paid in cash, it takes part of the oil production and sells to make money. Companies pay a premium for it

because the risk profile is high. “Part of the difficulty with this kind of arrangement is that it is not really in the DNA of a contactor. Production risk is not their forte, they are contractors and just want to be paid,” says Elias. EPC companies do not have the same stomach and appetite for risks as production companies who can wait for 10 years to get production online. Some EPC companies including Schlumberger and GE have finance companies with huge assets to finance big projects. Marginal operators Elias said that operators have in recent times been intensifying efforts at collaboration which has lead to sharing resources and this has provided valuable financing for the sector. Some have contributed resources to develop projects together. Participants at the CPI forum agreed that these funding strategies will continue to become relevant in the coming years. Some argued over the need for concessions like the bond relief to drive investments. Gbenga Biobaku, partner at GBC Law who chaired the event said concessions should lapse when they serve the purpose of jumpstarting an industry. Victor Eromosele, one of the founders of CPI, countered that it may not work in all instances. He gave the example of the NLNG that could not come on stream for over 30 years until generous concessions were given and has become a significant contributor to the economy despite these concessions.

ndian power equipment manufacturers are intensifying efforts to partner with local distribution, transmission and energy companies to position themselves to benefit from the $3billion World Bank Power funding recently made available to Nigeria India is offering cooperation in the areas of financing, equipment supply and technical assistance to improve Nigeria’s energy access while helping their country meet government target of building a $5trillion economy by 2025 from the current $2.6trillion. The Future Energy Nigeria Conference which held in Lagos between November 12 and 13 saw over 50 Indian companies take exhibition stands to showcase a dizzying array of electricity transmission and distribution equipments and were keen to develop partnerships with Nigerian power companies. One of the companies leading the pack is SkipperSeil Group who wrote the biggest sponsorship cheque for the event. The group operates in various sectors including Power Transmission & Distribution, Mining, Education, Healthcare Services, Agriculture and Water Infrastructure through its two divisions, Skipper Infra and Skipper T&D. Skipper t&d manufactures substation equipments, EPC in Generation, Transmission, Distribution & Automation Sectors and Service and Repair of Transformers. The company opened its Lagos office on November 12 and invited the Minister of Power to cut the ribbon. The interactive session that followed was a masterclass on lobbying for government support. The company took the Minister round its facilities and thoroughly explained how all its power equipments can help dent Nigeria’s energy need. An impressed minister promised government support as long as they kept to standards and buy Nigerian cables. What was intriguing in the exchange is that the Indian high commissioner to Nigeria was at the forefront of the buy India campaign. In a speech at the event, he told the audience of mostly businessmen that the government has millions of dollars worth of credit literally waiting to be tapped. It comes with just a little condition precedent that you buy India and work with Indian companies. The World Bank in October approved $3billion for the expansion of the transmission and distribution networks in the power sector. Zainab Ahmed, Nigeria’s finance minister said the loan would be disbursed in four tranches of $750m each beginning from next year. She said the facility will cover the gap between the current tariff and the actual cost of generating electricity, improve transmission capacity and also enhance Nigeria’s ability to pay previous obligations in the sector that has crystallised so that investors in the sector can go on with expanding investments in the sector. To achieve Neranda Modi’s ambition of a $5trillion economy, India has cropped its income tax rate to keep it at par with Asian rivals including Indonesia and Vietnam, it softening rules to attract foreign direct investments from US companies and signing trade deals.

Tuesday 26 November 2019

BUSINESS DAY

ENERGY INTELLIGENCE Market

IMO 2020 deadline is close - why Nigeria, OPEC should worry DIPO OLADEHINDE

arely 35 days to the biggest shake-up to the shipping industry in decades, Nigeria and some Organization of Petroleum Exporting Countries (OPEC) members seem uncertain about what to do. On January 1, 2020, the International Maritime Organization (IMO) will impose new emissions standards designed to significantly curb pollution produced by the world’s ships. The new regulation provides a 0.5percent global sulphur cap on fuel content, lowering from the present 3.5percent limit. This new regulation in response to environmental concerns is the most impactful environmental regulation to date in the oil and gas sector and have far-reaching technical, commercial and operational consequences At a breakfast event in Lagos, PricewaterhouseCoopers (PwC), a multinational professional services network with headquarters in London, said the regulation has serious implications for refiners, shippers and other stakeholders in the industry.

Implication for Nigeria Tracking data published by Reuters said Nigeria’s biggest crude stream, Qua Iboe, is valued at a premium of $3.30 a barrel, the highest since 2013 while Refinitiv Eikon data showed Azeri Light, or BTC, has a premium of $5.10 to the benchmark, its highest since 2013. Energy analysts said both crudes are valued especially highly by simple refineries as they are ideal for producing IMOcompliant bunker fuel oil as the focus now is on not producing

high-sulphur fuel oil at all costs. Steve Jones founding director at Energex partners said the new law will make Nigeria’s grade of crude oil (sweet crude) attractive in the export market due to its low sulphur content. Jones also said that Asian countries could increase their demand for Nigeria’s sweet crude and Africa refiners will be the biggest gainers due to their close proximity to Nigeria. Pedro Omontuemhen, energy utilities and resources leader at PwC Nigeria said, “The new law can be positive news if Nigeria

can take advantage of the huge demand for its sweet crude in the export market however, it can be negative news if the impact of Nigeria’s fuel importation is maybe bigger than the impact of the increase in refined products.” When asked if pump price of petrol will be affected, Omontuemhen said, “Clearly the new law will increase the price of shipping cost which will also lead to an increase in landing cost. So the government can decide whether to increase the price of retail petrol or bear the burden through the increase of under-recovery.” Hameed Alaba, from USbased Downstream Advisors, said the new law is an economic incentive for Nigeria’s modular refineries to produce more sweet crude, because they would make better profit margins. Nigeria as a net importer of petroleum products spent N766.1 billion to import petrol in half-year 2019, The Federal Government has said it will spend about N450 billion next year on fuel subsidy. Implication for OPEC Oil cartels like OPEC are likely to lose out given their over-reliance

on heavy crude grades. In its World Oil Outlook, OPEC forecasted that compliance to the new law will be about 85percent in 2020 which will rise to almost 90percent by 2024 and to eventual near-full compliance. Implication for shipping companies The world’s two largest container shipping lines, Denmark based A.P. Moller-Maersk and Switzerland based Mediterranean Shipping Company (MSC) have both reportedly said they will incur extra costs of roughly $2 billion each by complying with the IMO rule. “This is the opportunity of a lifetime for the shipping lines to jack up prices because the entire industry expects increased costs,” said Patrick Berglund, CEO of Xeneta, a Norwegianbased company that crowdsources freight data. “My biggest concern is cost increases won’t be passed on. In a worst-case scenario, it could lead to another Hanjin situation,” he added, referring to the collapse of Hanjin Shipping in 2017, which had been the world’s seventh-largest container shipper prior to its financial demise.

Petrobras on track to become world’s largest listed oil producer Aramco IPO raises $20bn in orders DIPO OLADEHINDE

report by a Norway based independent energy research and business Intelligence Company Rystad Energy has said Brazil state-owned is on a pathway to becoming the world’s largest oil producer among publicly listed companies by 2030. According to Rystad Energy, during the course of 2019, Petrobras has evolved from fifth place to become the third-largest oil producer, reaching an output of around 2.2 million bpd in the third quarter. As it stands, Rosneft and PetroChina top the list over the world’s largest public E&P companies. “Petrobras can, in a matter of years, become the world’s largest oil producer among publically listed companies. The significance is huge and symbolic,” says Aditya Ravi, vice president of Rystad Energy’s upstream team said in a report. “We predict that Petrobras alone can boost its production numbers by more than 1.3 million barrels per day over the next decade.” Based on Rystad Energy’s

latest forecasts, Petrobras could be poised to overtake PetroChina over the next few months and Rosneft over the next decade, thanks largely to its latest acquisitions. To develop these and other resources, Brazil is expected to invest $70 billion between 2020 and 2025, solely on-field development. This program will have a monumental effect on Petrobras, says Rystad. Brazil’s production could be pushed from 2.8 million bpd in 2019 average to over 5.5 million bpd thanks to Petrobras’ potential peak output of almost 3.8 million bpd by 2030. Brazilian officials recently indicated the country wishes to join Organisation of Petroleum Exporting Countries (OPEC), and Brazil’s current output would make it OPEC’s third-largest producer, behind Saudi Arabia and Iraq. However, some stakeholders have cautioned Brazil joining OPEC saying the move could cause a major disruption for Brazil, bringing the country into the spotlight with the potential risk of having its wings clipped by the cartel just as

production takes off. Brazil’s biggest-ever oil auctions in November were generally deemed to be disappointing, receiving muted interest from international exploration and production companies. However, national oil company Petrobras gained nearly full control of more than eight billion barrels of oil in the Buzios field, where a sixth floater is being planned. Reuters reported that Petrobras expects deep offshore areas to account for 88 percent of its exploration and production activities next year, up from 55 percent currently. The company says is maintaining its selective strategy in bid rounds, focusing on world-class deep and ultradeepwater exploration and production assets. This casts an uncomfortable on the plan by Nigeria National Petroleum Corporation (NNPC) to list on the Nigeria Stock Exchange (NSE) which is yet to materialise. Other state-owned oil companies like Petrobras which was created in 1953 sold its first shares to the public in December 1957 and is listed on the Brazilian

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stock market. If the NNPC lists on the stock exchange it will drive huge capital accumulation allowing market forces to determine oil production, retail price for products and proper deregulation of the downstream oil sector. Auditing and preparing NNPC’s books for an Initial Public Offering (IPO) also implies revealing the total and current disclosure of reserves capacity, total revenue, profitability, taxes, and other key metrics which are needed in modeling the profitability of NNPC Plc and potential dividend it could pay to investors. A listed NNPC will lift Nigeria’s oil sector largely in recession and catalyse investments in the oil and gas sector A listed NNPC means huge gas reserves estimated at 202 trillion cubic feet (TCF) could help feed power generation for energystarved Nigeria, which remains largely undeveloped 20 plus years after being discovered due to NNPCs inability to either fund the CapEx needed to develop the fields or let go of the fields for private oil firms to develop.

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he Saudi Aramco IPO has garnered $19.47 billion (73 billion riyals) in institutional and retail orders so far, Saudi Arabia’s Samba Financial Group reported on Thursday afternoon, according to Reuters. The orders came from 1.8 million retail subscribers who contributed $3.7 billion into the IPO. Reuters had reported earlier that the institutional tranche of the IPO had been oversubscribed, but that preliminary estimates, according to Reuters, show that that it is not. “Retail and Institutional subscription levels for the first five days of the offering have reached an unprecedented scale, demonstrating the confidence of investors in Saudi Aramco,” Rania Nashar, vice chairman of Samba Capital, told Reuters, adding that the bank expected “further increases in subscription levels during the remainder of the offering period.” Samba Financial Group, a Saudi Arabia local lender, is managing investor orders for the IPO @Businessdayng

along with National Commercial Bank and HSBC Holdings PLC, Bloomberg reported yesterday, after other foreign banks found themselves with smaller roles after Saudi Arabia chose to focus on the local bourse only. Aramco is planning to meet investors in Dubai’s Ritz Carlton on November 24 in hopes of raising $25.6 billion through its share sales. The following day, Aramco will meet investors in Abu Dhabi as well. But its tour will no longer include New York and London, since Aramco decided not to sell its Aramco shares to developedmarket investors. Aramco’s top valuation figure is $1.7 trillion—a disappointment for Saudi Arabia who had held out hope for years for a $2 trillion valuation. Aramco plans to sell 1.5% of the company, which would work out to be roughly 3 billion shares. The total value of the IPO is expected to come in somewhere near $25 billion in what will be the world’s largest IPO to date.

Tuesday 26 November 2019

BUSINESS DAY

offgrid Business

Egypt’s big renewable energy projects point way for Nigeria STEPHEN ONYEKWELU

n the last twelve months, Egypt has executed two big projects that will ramp the proportion of renewables in the countries energy mix, indicating a path for Nigeria to grow the contribution of renewables to Africa’s most populous nation’s energy mix. One of the projects, the Benban solar park is a power complex of 41 solar power plants being developed in Benban, located in the Aswan governorate, Egypt. Benban has potential to become the biggest solar photovoltaic park in the world, upon completion. State-owned New and Renewable Energy Authority (NREA) is overseeing the 1.80 gigawatts (GW) project, which includes a number of small solar power plants being developed by different companies at a total cost of $4 billion. The project is a part of Egypt’s Nubian Suns

Renewable Energy Feedin Tariff (FiT) programme announced in September 2014, which is in line with the Egyptian government’s Sustainable Energy Strategy 2035 that aims to produce 20 percent of electricity from renewable sources by 2022. The first phase of the solar park included Infinity Solar’s 50 megawatts (MW) solar power plant, which commenced operations in March 2018. The entire

solar park is expected to be completed in 2019. The other big project in Arab’s most populous country is its first private and largest wind farm, which started operations six weeks ahead of schedule thanks to the support of its off-takers the Egyptian Electricity Transmission Company (EETC) and a consortium of partners. This is a feat Nigeria is failing to achieve despite the country’s abundant wind

supply. People familiar with Nigeria’s renewable space say the sector’s growth has been hindered by stifling regulation. “Nigeria has a fairly developed regulation for the off-grid market but the challenge is that due to many regulatory hurdles, many people are operating under the threshold of 1MW that does not require regulations,” Dolapo Kukoyi, partner at Details

Commercial Solicitors said at BusinessDay’s recent conference on power. In the off-grid sector, there is over $1 billion financing available from private investors, development finance institutions and multilateral organisations in the form of concessionary debt financing and low-interest loans. New investments are being recorded in the on-grid space including Transcorp’s acquisition of Afam Power. Despite the availability of funds, Nigeria’s renewable energy is yet to get robust regulatory shot in the arm to propel towards exponential growth. “These less than 1 megawatt projects are not large enough to scale, so it is best to pull these smaller projects together,” Daniel Mueller, head, origination and structuring at InfraCredit Guarantee Company, said. Mueller said the market is now ripe for relatively larger capacities of between 20MW and 100MW in different cities as there is now willingness and ability

of the Nigerian customer to pay for power but a lack of currency stability could discourage investors from taking long-term financing decisions. This is all the more urgent because Nigerians spend an estimated $14 billion annually on small scale diesel generators to offset poor or non-existent grid supply. Over 80 percent of Nigerian businesses cite electrification challenges as the most significant obstacle to doing business with erratic power supply resulting in more than $25 billion in annual losses to the economy, more than 6 percent of gross domestic product (GDP), according to Nigeria’s Power Sector Recovery Programme. According to Rural Electrification Agency (REA), developing off-grid alternatives to complement the grid creates a $9.2 billion a year market opportunity for mini-grids and solar home systems that will save $4.4 billion for Nigerian homes and businesses.

Global solar PV market set for spectacular growth over next 5 years

he installation of solar PV systems on homes, commercial buildings and industrial facilities is set to take off over the next five years, transforming the way electricity is generated and consumed, according to the International Energy Agency’s latest renewable energy market forecast. These applications – known collectively as distributed PV – are the focus of the IEA’s Renewables 2019 market report, which was released today. The report forecasts that the world’s total renewable-based power capacity will grow by 50% between 2019 and 2024. This increase of 1,200 gigawatts – equivalent to the current total power capacity of the United States – is driven by cost reductions and concerted government policy efforts. Solar PV accounts for 60% of the rise. The share of renewables in global power generation is set to rise from 26% today

to 30% in 2024. The expected growth comes after renewable capacity additions stalled last year for the first time in almost two decades. The renewed expansion remains well below what is needed to meet global sustainable energy targets, however. “Renewables are already the world’s second largest source of electricity, but their deployment still needs to accelerate if we are to achieve long-term climate, air quality and energy access goals,” said Dr Fatih Birol, the IEA’s Executive Director. The report highlights the three main challenges that need to be overcome to speed up the deployment of renewables: policy and regulatory uncertainty, high investment risks and system integration of wind and solar PV. Distributed PV accounts for almost half of the growth in the overall solar PV market through 2024. Contrar y to conventional wisdom, com-

mercial and industrial applications rather than residential uses dominate distributed PV growth, accounting for three-quarters of new installations over the next five years. This is because economies of scale combined with better alignment of PV supply and electricity demand enable more selfconsumption and bigger savings on electricity bills in the commercial and industrial sectors. Still, the number of solar rooftop systems on homes is set to more than double to some 100 million by 2024, with the top markets on a per capita basis that year forecast to be Australia, Belgium, California, the Netherlands and Austria. “As costs continue to fall, we have a growing incentive to ramp up the deployment of solar PV,” said Dr Birol. The cost of generating electricity from distributed solar PV systems is already below retail electricity prices in most

countries. The IEA forecasts that these costs will decline by a further 15% to 35% by 2024, making the technology more attractive and spurring adoption worldwide. The report warns, however, that important policy and tariff reforms are needed to ensure distributed PV’s growth is sustainable. Unmanaged growth could disrupt electricity markets by raising system costs, challenging the grid integration of renewables and reducing the revenues of network operators. By reforming retail tariffs and adapting policies, utilities and governments can attract investment in distributed PV while also securing enough revenues to pay for fixed network assets and ensuring that the cost burden is allocated fairly among all consumers. “Distributed PV’s potential is breathtaking, but its development needs to be well managed to balance the different interests of PV system owners, other consumers and energy and distribution companies,” Dr

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

Birol said. “The IEA is ready to advise governments on what is needed to take full advantage of this rapidly emerging technology without jeopardising electricity security.” According to the report’s Accelerated Case, improving e conomics, policy support and more effective regulation could push distributed PV’s global installed capacity above 600 GW by 2024, almost double Japan’s total power capacity today. Yet this accelerated growth is still only 6% of distributed PV’s technical potential based on total available rooftop area. As in previous years, Renewables 2019 also offers forecasts for all sources of renewable energy. Renewable heat is set to expand by one-fifth between 2019 and 2024, driven by China, the European Union, India and the United States. The heat and power sectors become increasingly interconnected as renewable electricity used for heat rises by more than 40%. But overall, renewable

heat potential remains vastly underexploited. The share of renewables in total heat demand is forecast to remain below 12% in 2024, calling for more ambitious targets and stronger policy support. Biofuels currently represent some 90% of renewable energy in transport and their use is set to increase by 25% over the next five years. Growth is dominated by Asia, particularly China, and is driven by energy security and air pollution concerns. Despite the rapid expansion of electric vehicles, renewable electricity only accounts for one-tenth of renewable energy consumption in transport in 2024. And the share of renewables in total transport fuel demand still remains below 5%. The Accelerated Case sees renewables in transport growing by an additional 20% through 2024 on the assumption of higher quota levels and enhanced policy support that opens new markets in aviation and marine transport.

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Tuesday 26 November 2019

BUSINESS DAY

Markets + Finance

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

Lafarge Africa Plc: Reduced debt, cost cuts underpin profit margins BALA AUGIE

hairman of Lafarge Africa Plc, Bolaji Balogun, had seen the future through the flames when he told Bloomberg in an interview that the company debt would reduce drastically. The prognosticator knew he had strategies awaiting execution. And the plan has been meticulously executed. The second largest producer of the building material has recorded a marked improvement in leverage ratio. The combination of a reduction in financial leverage and costs reduction helped the company revert to the path of profitability, which means shareholders will be rewarded in form of share appreciation and bumper dividend. For instance, debt to equity ratio, a leverage ratio that measures the proportion of debt in the capital structure of a firm reduced to 18.67 percent in September 2019, which is far lower than the 60 percent and 70 percent company expectation. This means investors own N0.813 of every Naira of company assets while creditor own N0.186 on the dollar. The debt to equity ratio is a financial, liquidity ratio that compares a company’s

total debt to total equity. It shows the percentage of company financing that comes from creditors and investors. A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders). The chart shows the ratio was as high as 142.29 percent in 2016, when the cement maker suffered a foreign exchange loss due to dollar based debt of its subsidiary, United Cement Company of Nigeria (Unicem). That year, a lot of companies suffered huge foreign exchange losses as

the Central Bank of Nigeria (CBN) abruptly changed the exchange regime, while a precipitous drop in crude oil price of mid 2014 stoked a severe dollar scarcity that tipped the county in its first recession in 25 year. Lafarge Africa Plc’s operating profit can cover interest expense as its times coverage ratio stood at 2.14 times, which means earnings before interest and tax is 2.14 times. Analysts attribute the impressive performance of the company to the divestment in a subsidiary, a strategic decision they say added impetus to shareholders’ value. In June, Lafarge Africa had sold its South African operations to Caricement B.V, an indirect subsidiary of Lafarge Holcim Limited, for $317 million to pay-off a related-party loan, amounting to $293 million. The company said the sale will enable it focus more on its Nigeria operations, as competition with peer rivals such as Dangote Cement and Cement Company of Northern Nigeria (CCNN) heightens. Lafarge Africa decision to diversify its energy sources has bear fruit as its total cost of production has fallen, which further added strength to margins. Hitherto, the company used gas to power plant at its factories, but it now uses coal, a cheaper source of

energy. It has substituted locally sourced coal for imported which was relatively expensive and susceptible to foreign exchange risk. Total cost of sales otherwise known as input costs dipped by 37.27 percent to N111.78 billion in September 2019 from N178.20 billion as at September 2018. Cost of sales ratio fell to 68.56 percent in the period under review from 76.06 the previous year; this means the cement maker is spending less on input cost to produce each unit of product. A glimpse at the chat shows cost of sales was 88.75 percent in 2016, when attacks on oil and gas infrastructure by the Niger Delta militants and currency devaluation increased the cost of gas. Lafarge Africa uses its materials and labour to produce and sell products profitably, as gross profit margin increased to 31.44 percent in September 2019 from 23.94 percent as at September 2018. It is able to turn each Naira invested in sales into higher profit as net profit margin increased to 12.62 percent in the period under review against a negative figure of (4.42percent). Operating profit margin, another measure of efficiency improved to 21.97 percent in the period under review from 8.17 percent as at September 2018. BusinessDay calculation shows Lafarge Africa recorded the fastest margin expansion among peer rivals, which validates management and board of directors’ focus and market penetration strategies. The cement maker has embarked on an aggressive expansion plans with a view to taking advantage of the Nigerian market that is beset by huge infrastructure deficit. Lafarge Africa bought a plant in Calabar, in south eastern Nigeria, that can produce 5 million tons of cement a year and is also investing in its South African operation as it seeks to increase capacity to 17.5million tons from 14 million tons across the continent. Federal Government pro-

posed capital expenditure spending is expected to accelerate construction activities and add impetus the demand for cement, a boon for Lafarge Africa and its peers in the industrial building industry will benefit from The Minister of Finance, Budget and National Planning, Zainab Ahmed, said her ministry plans to release up to N900 billion for capital expenditure by December. Further analysis of the financial statement of cement maker shows it posted a profit after tax of N20.57 billion as at September 2019 from a loss of N10.37 billion

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the previous year. Its net cash from operating activities was up 64.34 percent to N47.58 billion in the period under review from N28.95 billion the previous year. This means it has the financial strength to pay dividend, settle its debt and fund future expansion plans. Amid a stock market rout that forced investors to dump shares of bellwether firms, Lafarge Africa’s shares have been growing since last year as it has a year to date of 14.86 percent. That outperforms the Nigerian Stock Exchange and All Share Index -14.12 percent.

Tuesday 26 November 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 25 November 2019

Top Gainers/Losers as at Monday 25 November 2019 LOSERS

GAINERS Company NESTLE PRESCO DANGSUGAR

Opening

Closing

Change

N1225

N1300

Opening

Closing

Change

N55

N49.65

-5.35

OKOMUOIL

N34.6

N37.85

3.25

FBNH

N7.5

N6.95

-0.55

N12.75

N13.8

1.05

WAPCO

N14.3

N14

-0.3

N9.8

0.8

ACCESS

N10.05

N9.8

-0.25

N29.4

N29.6

0.2

UBA

N7.5

N7.35

-0.15

CADBURY GUARANTY

Company

ASI (Points)

27,035.78

DEALS (Numbers) VOLUME (Numbers)

4,254.00 230,653,556.00

VALUE (N billion) MARKET CAP (N Trn)

3.207

…as market opens week on a positive note ...Niger Insurance to raise N15bn additional capital

Olumide Orojimi (middle), head, corporate communications, The Nigerian Stock Exchange (NSE) and winner of the “CSR Practitioner of The Year Award” at the 13th SERAS Awards. With him are Ken Egbas (left), founder of TruContact CSR organizers of SERAS Awards and Oyetola Oduyemi (right), regional adviser on Public Affairs, ENDFUND.

30kobo or 2.10percent. In a related market development, Niger Insurance Plc that its shareholders approved for the directors of the company to take all necessary steps to raise additional capital of up to N15billion. They gave the approval at the company’s 49th Annual General Meeting (AGM) held in Lagos. The shareholders approved

Nikkei 225 23,292.81JPY +179.93+0.78%

S&P 500 Index 3,129.54USD +19.25+0.62%

Deutsche Boerse AG German Stock Index DAX 13,247.02EUR +83.14+0.63%

Generic 1st ‘DM’ Future 27,971.00USD +109.00+0.39%

Shanghai Stock Exchange Composite Index 2,906.17CNY +20.88+0.72%

BusinessDay wins 2019 PEARL Media Award for Quality Capital Market Reporting

Stories by Iheanyi Nwachukwu

followed by Presco Plc which rose from N34.6 to N37.85, adding N3.25 or 9.39percent. Okomu Oil Palm Plc declined most after its share price dipped from N55 to N49.65, losing N5.35 or 9.73percent, followed by FBN Holdings which dropped from N7.5 to N6.95, after losing 55kobo or 7.33percent; and Lafarge Africa Plc that dipped from N14.3 to N14, losing

FTSE 100 Index 7,398.13GBP +71.32+0.97%

13.048

Stock investors gain N21bn igeria stock investors gained about N21billion on Monday November 25 as increased buy decisions at the Bourse helped raise prices of some shares. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.16 percent which helped push the monthto-date (MtD) positive returns to 2.57percent while moderating the year-to-date (ytd) negative return to -13.98percent. The All Share Index and market capitalisation rose from day open level of 26,991.42 points and N13.027trillion respectively to 27,035.78 points and N13.048trillion. In 4,254 deals, equity dealers exchanged 230,653,556 units valued at N3.207billion. Zenith Bank, GTBank, FBN Holdings, Transcorp and Fidelity Bank Plc were actively traded stocks on the Nigerian Bourse. Nestle Nigeria recorded the highest gain after its share price rose from N1225 to N1300, adding N75 or 6.12percent,

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for the capital raise be by way of rights issue, private placement or to negotiate merger and acquisition or any other form of business combination or other arrangement or a combination of methods with Insurance companies and that the rights issue be executed at such price, time and on such other terms and conditions as the directors may deem fit.

usinessDay Media Limited has further c o n s o l i d at e d i t s position in Capital Ma rke t Re p o r t i ng a s i t emerges winner of the 2019 PEARL Media Award. Tayo Orekoya, president o f Pe a r l Awa rd s, w h i l e speaking on the theme of the 2019 edition “Celebrating Sustainable Leadership and Resilience” said the event was recognising leaders who represent beacons of hope for the capital market. Published by BusinessDay Media Limited, BusinessDay Newspaper is the leading medium for up-to-date news and insightful analysis of business, policy and the economy in Nigeria. The newspaper, which has produced many awardwinning journalists is read chiefly by the business community in oil and gas, banks, blue-chip companies, educational institutions, among others, as well as policymakers and managers of government business. BusinessDay is a critical tool for managers, investors and governments who rely on it to make informed decisions.

SEC says committed to developing commodities ecosystem

he Securities and Exchange Commission (SEC) has restated its commitment to ensure that the Commodities Ecosystem in the country becomes vibrant in order to contribute to economic development. Acting Director General of the SEC, Mar y Uduk who stated this on Monday in Abuja at the opening of a two-day capacity building programme on commodities trading ecosystem for staff of some federal ministries also underscored the need for a vibrant commodities ecosystem to aid diversification from oil to non-oil sectors and boost the nation’s revenues and foreign exchange (Forex) earnings. Uduk, who was represented by He a d , R e g i s t ra t i o n , Exchanges, Market Infrastructure and Innovation at the SEC, Emomotimi

Agama said the commission is collaborating with relevant stakeholders to implement the 10-year capital market master plan and make Nigeria one of the world’s most liquid and Africa’s largest economy by 2025. She said “one of the crucial initiatives of the plan was to develop a thriving commodities trading ecosystem and fully utilise the nation’s potentials. We believe that if we can develop a v i b ra n t c o m m o d i t i e s trading ecosystem in Nigeria, we can substantially address lack of storage, poor pricing, non-standardisation and low contribution of foreign e xc ha n g e a f f e c t i n g ou r commodities sub-sector”. The acting DG stated that the role of commodity exchanges were critical to economic growth, especially in the areas of price transparency and value addition to farmers, www.businessday.ng

ensuring quality products for buyers and providing investment opportunities across the value chain. Uduk said Nigeria was still challenged in the area of transiting from an informal commodity trading system to one consummated on the platforms of commodity exchanges. She said if the country pays adequate attention to agriculture, it would boost food security, enhance job creation and facilitate production of raw materials for agro-processing pointing out that the capital market must operate at optimum level, even as the implementation of its 10-year master plan remains a priority. The training is being organised in two tranches, the first tranche consists of staff of the Federal Ministry of Agriculture and Rural Development

Toyin Sanni, group CEO, Emerging Africa Capital Group with Mal Hamed Ali, CEO NasdaqDubai, after a meeting on benefits of collaboration between African institutions and the United Arab Emirates. Both parties agreed to work together to broaden capital access and visibility for African governments and Corporate Issuers of Debt and Equity Securities.

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“ T h e P E A R L Aw a rd s remains the only Awards in Nigeria that rewards outstanding performance of quoted companies in the Nigerian capital market based on verifiable facts and figures. We remain humbled that our impartiality, transparency, fairness and unbias have continued to endear us to major stakeholders in the capital market. We commit to uphold and be sustainably guided by these principles”, Orekoya added. He noted that the PEARL Awards will expand its scope to cover the fixed income securities, derivatives and registrars space. He also said the board is also working out modalities for establishing the “African” version by 2021. At the event, the Acting Director-General of the Securities and Exchange Commission Mary Uduk commended the PE ARL Awards team for its legacy of driving excellence and competitiveness in the capital market. She assured stakeholders of the continued support of the Apex regulator for efforts towards rewarding hardwork, dedication, ingenuity and excellence in the capital market. Chairman of the Board of SEC Nigeria Olufemi Lijadu commended the PE ARL Awards for evolving for over two decades and remaining consistent in its drive to support the growth of the capital market. Abiodun Adedipe, an economist and board member of PEARL Awards in the presentation of the “Nigerian Stock Market Annual” 2020 edition noted that a key takeaway from the report was that Nigeria and West Africa remained key destinations for attracting private equity and even venture capital investments. He noted from the report that the government should explore catalyzing the growth of the commodities exchange market to help diversify the economy and give it revenue earnings.

Tuesday 26 November 2019

BUSINESS DAY

POLITICS & POLICY Buhari’s decision against third term is final, irreversible - BMO

re si d e nt Muhammadu Buhari’s decision not to run for a third term in office is sacrosanct, final and irreversible. Those pushing the agenda should respect the President and back off. The Buhari Media Organisation (BMO), giving this warning in Abuja yesterday, said it had believed that the President’s declaration would put the matter to rest finally. “We want to restate that President Muhammadu Buhari, as an acclaimed democrat and a man of integrity, will keep his words

especially in a situation where he made reference that he swore by the Holy Book to abide by the constitution which stipulates only two terms of four years for any incumbent President. “We want to challenge the Peoples Democratic Party (PDP) to show Nigerians evidence of any of their past Presidents who kept faith with Nigerians and abided fully with the constitution as it relates to the constitutional terms of office. “It is important to acknowledge that President Buhari’s major concern is to rebuild the dilapidated

Muhammadu Buhari

Monarch wants local governments to expand IGR base ANIEFIOK UDONQUAK, Uyo

he newly crowned clan head of Oniong in Onna Local Government Area of Akwa Ibom State, Etebom Samuel Efik has advised Local Government Councils to expand their Internally Generated Revenue (IGR) base rather than depend solely on the monthly allocations from the Federal Government. Efik said the councils should make more efforts to generate revenue internally, saying it would “greatly alleviate the economic and unemployment challenges prevalent in every Local Government in the country.” He advised them to establish mechanised farming schemes in their areas to provide employment to the teeming unemployed youths. “The idea of local governments having to depend solely on Federal Government monthly allocation is lamentable,” he said. Speaking during his coronation ceremony, the Royal

Father also kicked against superstitious beliefs and some harmful traditional practices including “the unsavoury practice of coercing widows to choose another member of the late husband’s family as her new spouse bespeaks the repugnancy of our traditional biases.” According to him, “We need to educate our people that it is not witchcraft that causes every misfortune that befalls us, such as sickness, joblessness or death, we need to open our minds to the fact that self employment is often not only more beneficial but also very achievable for most of us.” Efik, a lawyer, urged the people “to move away from the relics of the ignorant and self limiting past” and thanked the governor for finding him worthy to be recognised as the Clan Head of Oniong and promised to offer himself for the service of his people. In his remarks, Governor Udom Emmanuel gave assurance that the state gov-

infrastructure in the country, eradicate corruption and fight insecurity, thereby bequeathing a country that works for all citizens,” the group said. The group says it believes that with the bold declaration of the President not to seek for a third term Nigerians should ignore calls for the elongation “as it will never materialise. As a man of integrity, he will not renege on his promise, and neither will he bastardise the Nigerian constitution for personal gains, no matter the pressure. “We are confident that with the measures already

ernment is committed to partnering with the royal fathers to ensure sustainable peace and development of the state. The governor, who was represented by the Commissioner of Works, Ephraim Inyangeyen said the state government, in according recognition and respect to traditional rulers, has moved to strengthen the partnership with the royal fathers as part of efforts to ensure peace in all communities of the state. “We hold the traditional rulers in the highest esteem, with their support contributions, peace and development will continue to reign in the local government areas of the state,” he said. The governor, who commended the people of the clan for the spirit of brotherhood, described the new Clan Head as an accomplished professional and called on the people to rally around him to ensure that the clan will continue to be one the leading clans in the local government.

put in place by the Buhari administration, Nigeria is already well-positioned for development which will lead to job creation, economic growth and rapid socio-political development of the country.” “Definitely third term is not on the agenda of the President as it runs contrary to the oath of office he has sworn to. “We want to reassure Nigerians that President Muhammadu Buhari remains focused in improving the lives of ordinary Nigerians by embarking on programmes and projects that will positively impact on Nigerians,” BMO said.

Razak wants quick passage of Lagos 2020 Budget

n elder statesman, Lanre Razak has called on the members of the Lagos State House of Assembly to treat as a matter of urgency, the N1.1trillion 2020 proposed Appropriation Bill recently submitted to the state’s legislative chambers by Governor Babajide Sanwo-Olu. Razak, who is a chieftain of the ruling All Progressives Congress (APC) in Lagos, reasoned that giving priority to the quick passage of the budget would prompt the governor to put his acts together with his team in preparation for thorough execution and implementation of all the earmarked projects for the state contained in the proposed document. The Lagos State-born former Public Transportation Commissioner reasoned that quick passage of the budget would prevent unnecessary time wasting in the implementation, believing that with the performance of Sanwo-Olu in office so far, it is expected that Lagos State would witness huge infrastructure development from 2020 going by the proposed fiscal plan of N115 billion for public infrastructure.

Lanre Razak

“Accelerated passage of the budget would bring to fruition Sanwo-Olu’s plan to accelerate the growth of state’s economy through aggressive investments in critical areas of priorities like physical infrastructure, environment, human capital and security. “Also, it would give nobody unnecessary excuse for delayed implementation. The proposed budget would help the state in achieving the desired sustainable social investment and scale up private sector-led economic growth for the good of the citizenry. And with the governor’s assurance of transparency and accountability in the implementation of the budget, I have the belief that the state

is in for better days ahead,” Razak enthused. While quoting Sanwo-Olu that has said that, “the 2020 Budget will be supported by a Performance Management System that will ensure that, by December 2020, the budget shall achieve an optimal implementation when compared with previous years,” the High Chief therefore, enjoined the House of Assembly, under the leadership of Speaker, Rt. Hon. Mudashiru Obasa to do the needful because “Lagos people are eagerly awaiting good news from their end”. The budget, according to a reliable source, has been forwarded to a committee to start prompt work on it to aid quick passage.

2023: We would resist North attempt to retain power - Afenifere Iniobong Iwok

an-Yoruba sociocultural organisation, Afenifere, has said that Southern Nigeria would resist any attempt by the North to retain the presidency after the expiration of the tenure of incumbent President, Muhammadu Buhari in 2023. Nigeria’s two leading po-

litical parties, the People’s Democratic Party (PDP) and the ruling All Progressives Congress (APC) are expected to zone the presidency to the South in 2023 after the expiration of the second tenure of Buhari, a Northerner, who was initially elected in 2015. The arrangement, though not constitutional, has been practised since the advent of www.businessday.ng

the Fourth Republic in 1999; political leaders say, the zoning arrangement is to avoid dispute that may arise between the South and the North over the presidency position. However, speaking in an interview with journalists in Lafia, Nasarawa State capital, last weekend, Musa Liman Kwande, acting chairman of Arewa Consultative

Forum (ACF), had said the region would only vote for candidates from the North in 2023, while charging qualified Northern Nigerians to vie for the presidency. According to him, “Northern Nigerians who are tested and trusted should contest for any political office with anybody from any part of Nigeria and the people should exercise their democratic

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franchise to vote for their candidate of choice. But reacting in an interview with BusinessDay, Monday, Publicity Secretary of Afenifere, Yinka Odumakin, accused the North of being over-ambitious, stressing that the country does not belong to them. Odumakin noted that the North was becoming arrogant on the issue of the @Businessdayng

presidency in 2023, adding that any plan to retain power in the North would be resisted. “They are talking like Nigeria belongs to them only; they are putting their foot too much, and Nigeria does not belong to a section. They are becoming too arrogant on the issue; this is impunity, we await them,” Odumakin said.

Tuesday 26 November 2019

BUSINESS DAY

news

Access Bank commences 2019 Sustainability Awareness week

s part of its efforts to raise awareness about the importance of sustainability within and outside the corporate environment, Access Bank plc has commenced its week-long Sustainability Awareness Week. Through the Awareness Week, themed ‘Together for a Sustainable Future,’ the bank seeks to reinforce its identity as a sustainability leader in Nigeria, while also ensuring that everyone is informed of their individual roles in contributing towards positive development. With sustainability enshrined in all the bank’s operations, the group managing director, Access Bank, Herbert Wigwe, says the week will be a celebration of all its successes and also serve as a building block to achieve better results in the coming years. “At Access Bank, sustainability principles form the bedrock of all our banking and non-banking activities.Thusfar,ouryearlyresults have validated this approach, as we are now among the top three

most profitable banks in Nigeria. This week, we will be celebrating these successes, charging and reeducatingouremployeesonglobal best practices, while also creating awareness about what needs to be done to achieve the SDGs by 2030,” he said. Wigwe’s statement was reiterated by the Bank’s Head, Sustainability, Omobolanle Victor-Laniyan who said, “While we continue to achieve our objectives as an institution, it is important that the sustainability culture is imbibed and practiced by all employees. “Building on last year’s successes, we are going a step further in spreading the sustainability message to external audiences. To this end, we have scheduled workshops for various third party partners currently engaged by the Bank. We earnestly believe that through this and the various activities planned through the week, we would be able to achieve a telling impact.”

STL Trustees supports BagSwap project of ‘Street 2 School’ initiative

n line with its commitment to impacting lives and giving back to the society, STL Trustees Limited, a leading brand in the Corporate Trust industry in Nigeria, has donated some educational items and set up a trust to the “Street 2 School” Initiative, a non-governmental organisation that supports the educational advancement of out of school children in Nigeria. The items donated, including 1500 notebooks and 500 school bags, are in support of Street 2 School Initiative’s BagSwap project, an educational outreach that distributes basic educational items to children from low-income families who lack basic learning materials. The Street 2 School Initiative supports the education programmes of out-of-school children and primary school drop-outs in Nigeria through her annual education sponsorship scheme and establishment of tuition-free schools where

children are provided with basic learning materials, and enjoy free meal. Thanking the management of STL Trustees for the visit and the gifts, the Visioner of the Street to School Initiative said, “We are so thankful for the donated items received from STL which are 1,500 notebooks, 500 school back packs, and a pledge to establish a trust fund for the Street 2 School Initiative. What a pleasant surprise and act of kindness towards children in under-served areas.” STL Trustees is a company that is passionate about the wellbeing and education of children. It would be recalled that the firm provides the Children Education Trust product and service that enable parents and guardians to set up trusts for the education of their children. The Trust can go a long way in helping parents secure and fund their children’s education in the short, medium and long terms.

Edo proposes amendment to Violence Against Persons law

do State government says it intends to amend the Violence Against Persons law as part of the campaign to curb violence against young girls, women and other vulnerable persons in the state. Commissioner of Social Development and Gender Issues, Maria Omozele Edeko, said this at a press conference in commemoration of 16 Days of Activism Against Gender-based the Violence, in Benin City, Edo State. She commended the wife of the Edo State governor, Betsy Obaseki and the International Federation of Women Lawyers (FIDA), Edo State branch, for their support in the implementation of Violence Against Persons (VAP) law in the state. She said the implementation of the VAP law in the state had suffered some setback due to some errors and called for collective action to make it enforceable, “We urge all the stakeholders concerned to take quick and

necessary action to amend the law so that the people can enjoy the full benefits of the law.” The VAP law, according to Edeko, expanded the scope of violence against women to include physical, sexual, emotional, psychological and economic violence. The commissioner said the 16 Days Activism Against Gender Violence is an annual international campaign which kicked-off on the 25th of November, 2019. It is marked as the International Day for the Elimination of Violence Against Women and girls, with the theme, “Orange the World: Generation Equality Stands Against Rape.” She stressed that women and girls universally experience rape, sexual violence and abuse, adding that the exact number of rape and sexual assault are notoriously difficult to confirm due to frequent latitude and impunity of perpetrators, stigma towards survivors and the culture of silence over such wrongdoings. www.businessday.ng

Jim Ovia charts path for catalysing disruptive innovation at Zenith tech fair KELECHI EWUZIE

hairman, Zenith Bank plc, Jim Ovia, will lead other captains of industries and top industry experts to chart path for catalysing disruptive innovation through Youth Empowerment at the forthcoming Zenith Tech Fair in Lagos. The fair with the theme ‘Future Forward’ organised by Zenith Bank will cover conversations and exhibitions in emerging technologies as well as a Hackathon to identify and finance innovative start-ups. The tech fair scheduled for Wednesday, November 27, 2019, at the Landmark Events Centre, Lagos, is conceived in the mould of global technological events such as the CES and EmTech Asia. The fair will showcase leading technology innovations that cut across different aspects of life such as Artificial Intelligence, Quantum Computing, Machine Learning, Blockchain, Robotics, Big Data, FinTech, Augmented Reality, Data Analytics, 5G and Communication Technologies, among others. Ebenezer Onyeagwu, group

managing director/chief executive, Zenith Bank, says the event is part of the bank’s efforts to align and key into new technologies that provide innovative solutions to customers’ numerous financial challenges. According to Onyeagwu, “In today’s fast-changing world, we know that our customers need to perform easy, fast and secure financial transactions, wherever, whenever and however. So we need to go ‘future forward’ to provide banking services using cutting-edge technologies and seamless processes in the best interest of our customers.” Discussions at the Zenith Tech Fair will be handled by industry experts such as country director, Google Nigeria, Juliet Ehimuan-Chiazor; country manager, Microsoft Nigeria, Akin Binuso; managing director, Huawei Technologies Nigeria, Eric Zhang, and country managing director, Oracle Nigeria, Adebayo Sanni, among others. The discussions and seminars will be supported by four supersessions/master classes to drill down and offer participants a hands-on experience with the technologies.

Heritage Bank empowers 2000 female entrepreneurs via financial inclusivity initiatives

aking into consideration the importance of Micro, Small and Medium Enterprises (MSMEs) to the economy, Heritage Bank plc has continued to structure financial inclusivity initiatives in empowering over 2000 female entrepreneurs towards economic enablement and self-realisation. This move is in line with the people-oriented policies of the Central Bank of Nigeria (CBN), Heritage Bank is partnering a non-governmental organisation, Prime Women Builders Foundation of Nigeria (PWOBFON) in providing skills training to the female entrepreneurs. At the graduation ceremony/ certificate award ceremony held at Ikeja Local Government headquarters over the weekend, the MD/CEO of Heritage Bank, Ifie Sekibo, said the bank was keen in cultivating real partnerships with Micro, Small and Medium Enterprises (MSMEs). Sekibo, who was represented by the head, brand management and sustainability, Ozena Uturu, explained that the lender was interested in initiatives that encourage people to start their own businesses and gradually grow them into conglomerates. According to him, the partnership with PWOBFON is vital

in many ways particularly in the area of job creation, economic empowerment and financial inclusion. His words: “Apart from skills training, the women have been told the importance of record keeping in business, savings culture and the benefits of having bank accounts as a gateway to accessing other financial services.” He said Heritage Bank had been a leading Nigerian bank with an excellent service culture hinged on working with each customer to create a name, wealth and heritage. Also speaking, President/ Convener Prime women Builders Foundation of Nigeria, Kemi Olofinkua applauded the bank for its support, and urged other corporate organizations to take a cue from the lender in supporting grassroots women empowerment. She explained that through the support from the Heritage Bank and the Ikeja Local government, the women, based on their choices, have been equipped with 15 vocational skills covering event decoration, small chops making, baking, pastries, bead making, computer training , soap making, makeup, tailoring, digital marketing, Photography, hairdressing among others.

L-R: Casimir Omuemu, chairman, medical advisory committee, University of Benin Teaching Hospital (UBTH), Benin City; Emmanuel Emefienim, executive director, institutional banking, Sterling Bank plc; Darlington Obaseki, chief medical director of UBTH; Tunde Adeola, executive director, commercial banking, and Remi Oyinloye, sector lead, health sector, both of Sterling Bank plc, at a courtesy visit to Sterling Bank headquarters by the management of UBTH.

Lagos to improve budgetary allocation to maternal, child health services JOSHUA BASSEY

ife of the governor of Lagos State, Ibijoke Sanwo Olu, says the state government would improve budgetary allocation to maternal, new-born and child health services as part of efforts to provide quality care and accessible maternal, new-born and child health interventions across public and private health facilities in the state. Sanwo-Olu stated this during the flag-off of the 2019 Maternal, Newborn and Child Health (MNCH) week held at the Lagos Island Local Government secretariat last weekend. According to Sanwo-Olu, the government will also be stepping up efforts at the provision of user-friendly atmosphere across all health

facilities in the state through continuous capacity building of health workers on personal effectiveness and etiquette. “Our plans among others include massive and aggressive capacity building of knowledge and skills of our healthcare workers to be able to offer evidencedbased healthcare services to our citizens, renovation and revamping of all Primary Healthcare System in the State to be able to gain public confidence through the provision of high standard healthcare services and improving access to basic screening and prevention of premature deaths through the state health scheme. “We will continue to provide life-saving commodities and consumables in public health facilities to be able to address emergencies and life-

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threatening situations and address the existing human resource challenges and motivation of dedicated health workers,” she said. The governor’s wife, who is a medical doctor, added that promoting women empowerment and education for the girl-child as well as promoting adequate nutrition interventions for all citizens of the state, especially nursing and expectant mothers would be given top priority. She urged all mothers and care givers to take advantage of the MNCH week which commenced on Monday, November 25, 2019 to access all free maternal, new-born and child health services offered in all primary health centres across the state. “Services to be rendered free of charge include; routine immunization as well as @Businessdayng

immunisation for defaulters or zero dose cases, vitamin A supplementation to at least 90 percent of children between 6-59 months de-worming of children between the ages of 12 to 59 months, malnutrition screening, counseling of care givers on Infant & Young child feeding and food demonstration”. “The pregnant women, nursing mothers and women of child bearing age, will also be provided with blood building drugs and family planning services. There will also be counselling sessions for men and women on adequate nutrition, birth preparedness, healthy-lifestyle, personal hygiene, exclusive breast feeding, complimentary feeding, hand washing, malaria prevention, Tetanus Toxoid and family planning services”, the wife the governor said.

Tuesday 26 November 2019

BUSINESS DAY

news FG to sign executive order declaring... Continued from page 1

which are slowly crippling the sector. Speaking during the demo launch of MTN Nigeria’s 5G technology in Abuja on Monday, Isa Ali Pantami, minister of communications and digital economy, said that a draft letter has been prepared, signed by him and sent to the Attorney-General of the Federation to review. “The Federal Government of Nigeria under the administration of President Muhammadu Buhari is passionate about ICT. Considering the increasing contribution of ICT to our Gross Domestic Product (GDP), it is only normal that every country values its most important and critical sectors,” Pantami said. “Today, ICT is one of the most critical sectors we have in Nigeria and the government recognises the situation and challenges that the players are facing. So the president has directed us to take action, and we are making progress in alleviating and removing the challenges,” he said. The minister recounted the steps being taken by the ministry to ensure an enabling environment for players, increased investment in the sector and a level playing field for all operators. “We are working on an executive order to declare telecoms infrastructure as critical national infrastructure. I have sent a signed letter to the Attorney-General of the Federation to review the draft and this is what I call a shortterm solution,” Pantami said. “For the long term, the president has also directed us to facilitate the process of having legislation in place and this is also in the pipeline. We are working to ensure that the environment is very conducive for telcos to do business,” he said. With heavy local and foreign investments in developing technologies and the ICT sector, industry watchers say it is high time ICT infrastructure was regarded as critical national infrastructure. Nigeria on Monday became the first West African country to demonstrate 5G technology as a result of collaboration between the Ministry of Communications Technology and Digital Economy, the Nigerian Communications Commission (NCC), MTN and Huawei (Abuja), ZTE (Calabar) and Ericsson (Lagos.) This immersive demo and experience will travel across three Nigerian cities to showcase the capabilities of 5G and its potential to enable economic growth, and social inclusion. MTN and its partner, Huawei, were able to provide a glimpse into a range of 5G use

cases and applications at a test lab designed to show proof-ofconcept in Abuja. For the business community, 5G, which supports fast data transfer rates of up to 20Gbit per second, will spur and support innovative ambitions and create new markets, transforming supply chain management and creating smarter, more efficient manufacturing. It is also a fundamental platform for the Internet of Things (IoT), the rapidly expanding number of devices that collect, transmit and share data via the internet. Reports show that by 2020, more than half of all new businesses will rely on IoT to cut costs, build efficiencies and grow their bottom lines. For the IoT to realise its limitless potential, 5G is critical. “The opportunities 5G creates are many. With this demo, we have seen areas where 5G can be used to provide services that require very high speed, large volumes of transactions for the banking sector, and services that would transform our society into what we call an instant society where things are seen as they are happening,” Umar Garba Danbatta, executive vice chairman, Nigerian Communications Commission (NCC), told journalists after the demo session at MTN’s headquarters in Abuja. “All these opportunities have been demonstrated in practical terms and I want to congratulate Nigerians for witnessing this transformational qualities of 5G technology, which we hope in the not-too-distant future will in turn transform the lives of our citizens,” Danbatta said. Ernest Ndukwe, chairman, MTN Nigeria, said the country was privileged to see the telecoms industry move from analog mobile to 5G. “In 2001, Nigeria was lagging behind countries like Tunisia, Ghana, Cameroon, who already had 2G GSM services installed in their countries. But today, Nigeria is leading the pack in demonstrating 5G technology,” Ndukwe told BusinessDay. “Once the enabling environment is provided, telcos will go ahead to make sure that Nigeria remains at the forefront of technology development,” he said. Following the successful demonstration in Abuja, MTN says the 5G-demo train will move to Calabar and Lagos. In addition, 5G trials will be run in four other cities across the country. According to the company, the 5G trial will run for three months utilising the 800MHz trial spectrum allocated to MTN by the NCC.

Capital importation data show Nigeria... Continued from page 1

the people. The $222 million average FDI, which is less than 1 percent of GDP, is so small that if shared equally among Nigerians, 190 million of them, each person will get only $1.2 per quarter. That’s like making do with $1.2 for a period of 90 days, which is far worse than the World Bank’s international poverty line of $1.90 per day. For a frontier market with the population of Nigeria, attracting such low investment should be a big worry for government as it has dire implications for social welfare and economic growth. In comparison, South Africa has averaged $1.3 billion in FDI every quarter this year, according to World Bank data. That translates to $23.6 per South African, while Egypt has averaged $3.5 billion, leaving $36 per Egyptian. “Nigeria is clearly underperforming; we shouldn’t even be measuring ourselves against any other country but South Africa and should hold our own against countries like Vietnam and Indonesia

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as an FDI destination,” an economist at a multinational firm in Nigeria said anonymously as he isn’t authorised to comment on government policy. “But we are not attracting sufficient capital largely because of bad government policies and our reluctance to implement market-friendly reforms,” the person said. Comparing Nigeria to countries like Indonesia, Vietnam or even Argentina shows how far the government still needs to go to achieve its commitment of the country becoming a top FDI destination. Since the beginning of 2019 alone, Indonesia has attracted double the capital ($14 billion) Nigeria has attracted every year since 2014 at $7.6 billion. Year to date, Nigeria has only got $666 million. “Weak FDI inflows suggest the economy’s low growth cycle will continue because there is no other assured path to robust growth without attracting investment,” said Wale Okunrinboye, head of investment research at pension funds

Upsurge in investment activities signposts... Continued from page 2

in the sector, there was need for more complementary reforms. Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), said it was more of individual brilliance from companies in the sector than a market reflection of the upstream sector whose credit system will definitely get worse. “Before the end this year we should see two or three more kinds of these deals because of the new fiscal Deep Offshore Act; some planned investment won’t go ahead until there is more divestment,” Henry told Busi-

nessDay. The mother of these entire asset sales will be Total’s divestment of its 12.5 percent stake in Shell-operated OML 118. Total is seeking to sell its 12.5 percent stake in a major deepwater oilfield off the coast of Nigeria. The plan is reported to be an effort to adjust the energy company’s Africa portfolio amid a broad expansion. OML 118 hosts the Bonga main field, the Bonga North West, the Bonga North and the Bonga South West structures. The Bonga South West is under consideration for a Final Investment Decision (FID) on a project expected to deliver over 175,000 bpd at peak. Two of the sources report

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manager, Sigma Pensions Ltd. “We are at a critical stage where the government’s lack of urgency in implementing the reforms that will open the economy to investment is under the spotlight,” Okunrinboye added. Slow reforms in the power sector, absence of full deregulation in the petroleum sector value-chain, multiplicity of exchange rates, among other factors are key downside risks that constrain investments and long-term growth, according to global consulting firm, PricewaterhouseCoopers (PwC). Nigeria’s treatment of some of its largest foreign direct investors, from the oil companies who are being accused of owing billions of dollars in back taxes to phone giant MTN which has been at the receiving end of a number of hefty fines, is surely not the best way to sell the country to potential investors. The government’s many failings with attracting foreign direct investment has meant Nigerians have grown poorer as economic growth is lower than population growth. In the third quarter of 2019, the NBS reported GDP

growth of 2.28 percent, which is lower than the country’s annual population growth rate of 2.7 percent. Even if Nigeria grew at 3.5 percent per year, it would take about 100 years to double GDP per capita or the wealth of Nigerians, which is why growth in the range of 6-10 percent is what is required for reducing poverty and unemployment. However, growing GDP at that rate would require investment of about 26-28 percent of GDP, according to Andrew S. Nevin, chief economist at PwC. Nevin suggests that Nigeria needs total investment in the range of about N35 trillion to N40 trillion a year. “We currently do not have enough domestic savings for this, as we only have about half the investment required, which means we need foreign investment as PwC has discussed extensively over the past few years,” Nevin said. Meanwhile, the FDI trend witnessed so far in 2019 hints at a possibility of Nigeria seeing FDI decline to $848 million by the end of the year, the lowest level in five years, based on BusinessDay estimation from NBS data.

that the stake in OML 118, which is located some 120 kilometres (75 miles) off the Niger Delta, is valued at up to $750 million. The move by IOCs to downscale their stakes in Nigeria’s oil and gas industry bodes well for indigenous businesses who have gradually expanded their footprints in the most strategic sector of the economy, according to a research report by Lagosbased CSL Stockbrokers. “From a macroeconomic standpoint, we believe the implementation of indigenisation policy in the oil industry will ease capital repatriation pressure and its attendant impact on the local currency,” CSL Stockbrokers said in the report.

Nigeria’s upstream sector lies at the heart of the oil and gas industry and is the origin of its ever-shifting dynamics. The sector covers activities relating to exploration and production of crude oil or natural gas either in underground or underwater fields. “Due to lack of clarity in Nigeria’s fiscal terrain, investors are worried about their margins, most especially getting back their cost of production which is a huge concern for oil exploration,” Mele Kyari, group managing director, Nigeria National Petroleum Corporation (NNPC), said at the 37th Annual International Conference of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos.

@Businessdayng

•Continues online at www.businessday.ng

Tuesday 26 November 2019

BUSINESS DAY

Border closure: FG seizes goods nearly worth N4bn, arrests 296 illegal immigrants ... says import revenue increases by 15% Godsgift Onyedinefu

he Federal Government disclosed on Monday that N3,235,126,420.00 billion worth of goods had been seized, while 296 illegal immigrants arrested since the partial closure of Nigerian’s land borders. Lai Mohammed, minister of information and culture, who made this known after a tour of the Seme border with heads of key security and paramilitary agencies, expressed concern that the magnitude of the seizure and arrests indicated that nothing was being done by Benin Republic and Niger Republic. According to Mohammed, the items seized include: 38,743 - 50kg bags of parboiled foreign rice, 514 vehicles, 1,012 drums filled with PMS, 5,400 Jerricans of vegetable oil, 346 motorcycles, 10,553 Jerricans of PMS and 136 bags of NPK fertilizer used for making explosives. The minister said there were still plans by both countries to smuggle in over 90,000 metric tons of rice into Nigeria, as the festive period draws near. “Since the commencement of the exercise, sig-

nificant seizures have been recorded with estimated monetary value of about N4 billion. Please note that the magnitude of seizures and the number of illegal immigrants recorded in the last two weeks alone indicates that nothing is being done yet by both countries,” he said. He added, “As we speak, we have ships loaded with rice waiting to be discharged in Benin and the target market is Nigeria for the Christmas period. We have MV africana jacana loaded with 40,000 metric tons of rice another with 3,000, MV San jaguar with 45,000 metric tons and others. “In addition, Benin Republic has concluded arrangements to get rice to the tune of $30 million from Japan, this is a country with just 12 million people, it is clear that this rice will end up in Nigeria.” The minister however said the partial closure of the border had impacted positively on revenue generation of the Federal Government, which in turn would be used to build more infrastructure and develop critical sectors of the nation’s economy.

Buhari seeks UN support for rehabilitation of IDPs Tony Ailemen, Abuja

resident Muhammadu Buhari on Monday appealed to the United Nations to support the rehabilitation of internally displaced persons (IDPs) in Nigeria, describing the rehabilitation as “urgent and imperative to prevent it from constituting a big problem to the country in future” The President stated this at the State House, Abuja, while receiving in audience the President of the 74th United Nations General Assembly, Nigeria’s Tijjani MuhammadBande. “Most of the displaced children do not know their parents, or where they come from. We have to look at the issue now, properly rehabilitate them, otherwise, we will have a problem on our hands in the future,” President Buhari said. He urged the UN General Assembly President to make Nigeria’s challenges glaring to the world, while commending him for what he called “your hard work and competence” so far. President Buhari said Nigeria was committed to education, and providing

health care to the young and old, among other welfarist policies. Muhammad-Bande said he was at the State House to express appreciation to President Buhari for the support given, leading to his emergence as UNGA President, and the continued cooperation from Nigeria. “Everything I have requested for, in terms of personnel and funds, has been delivered. I thank President Buhari very much. I also thank other member states for the support I am getting,” he said. Muhammad-Bande also appreciated Nigeria for rebuilding the UN Building in Abuja destroyed by Boko Haram. The UNGA President, while speaking with State House correspondents after the visit, however, hinged developmental prospects he could attract to Nigeria on the kind of cooperation he was able to obtain from other member states. “A lot depends on what cooperation we are able to obtain from other member states, and I will like to say that the support so far has been very encouraging,” he said.

news

FG unwillingness to honour agreements causes decline in graduates’ quality, others - Sanusi IDRIS UMAR MOMOH & CHURCHILL OKORO

uhammad Sanusi ll, Emir of Kano, weekend blamed decline in the nation’s quality of graduates and erosion of confidence in education system on unwillingness of governments to honour agreements entered into with Academic Staff Union of Universities (ASUU) and other educational bodies. Sanusi, who is the Chancellor of University of Benin, made the remarks in his address at the university’s 45th convocation ceremony for 2018/2019 graduating students in Benin City. “My advice to the government is that it must develop political will to honour all the agreements it entered into with university unions. Frequent distraction of academic calendar of Nigerian universities and the resulting effect of lack of uniformity in the calendar decline the quality of graduates and erosion of the confidence in our system, will become a thing of the past. “Government should be more open to dialogue and should at all times try to involve every stakeholder in the decision-making process. “In recent times, our public

universities have managed to maintain a stable academic calendar apart from occasional hiccups arising from a breach of agreement between the government and the university, unions; incessant disruptions of academic calendar arising in the late 70s and 90s have almost become a thing of the past,” he said. While noting that the disagreement between member of ASUU and the Federal Government over the planned implementation of the Integrated Payroll and Personnel Information System (IPPIS) has died down, he however commended the President Muhammadu Buhari-led government for the relative peace and uninterrupted academic calendar in the nation’s universities. In his address, President Buhari, who is the visitor to the institution, noted that universities need to be relevant and recognised internationally. Buhari, represented by Suleiman Yusuf, deputy executive secretary, National Universities Commission (NUC), charged the nation’s universities to do more to achieve the internationalisation, especially in this era of globalisation.

Shippers Council educates shippers on PSSP, other complaint management mechanisms GODFREY OFURUM, Aba

igerian Shippers Council (NSC), the country’s ports economic regulator, has advised shippers in Nigeria to utilise the newly introduced Port Services Support Portal (PSSP) to lodge their complaints, for effective resolution of issues. Hassan Bello, executive secretary/CEO of NSC, gave this advice in Aba, the commercial hub of Abia State, at a day clinic on complaint handling mechanism/operations of port services support portal, organised by the NSC at the secretariat of Aba Chamber of Commerce, Industry, Mines and Agriculture (ACCIMA). Bello, who was represented by Winner Anayo, zonal director, South-East zone of NSC, observed that the PSSP would eliminate corruption and other bottlenecks that militate against quick dispensation of complaints. He explained that the intervention role of the NSC, which is purely economic, is designed to protect critical strategic aspects of international trade of the country, from exploitative tendencies of monopolistic or oligopolistic shipping service providers, while supporting the fundamental principles of growth within a liberalised economy. He stressed that the PSSP project of the NSC was a veritable instrument for the achievement of the above mentioned goal, if properly harnessed by all stakeholders.

“Our gathering here is based on the importance the Nigerian Shippers Council (NSC) attaches to taking proactive measures capable of improving the nation’s international traders in the global market. “Moreover, it was in the light of this that the Federal Government appointed the NSC as the Port Economic regulator in 2014. “The responsibilities of the NSC in the nation’s international trade and shipping include efficiency and timely delivery of shipping services to importers and exporters, by the shipping services providers, minimisation of and stabilisation of cost, such as freight rates, port charges, local shipping charges, haulage charges, among others.” He stated that the NSC would ensure adequate understanding and know-how among the various practitioners in international trade, both at the micro and macro levels, regular and reliable advice to the Federal Government on matters affecting the shipment of goods into and out of the country. Moses Fadipe, deputy director, complaint, NSC, who presented a paper on effective complaints management mechanism and port service support portal (PSSP), said the clinic was designed to give stakeholders in-depth knowledge of effective complaints management system, using various options and more importantly, the PSSP, to enable them to successfully lodge and submit complaints. www.businessday.ng

L-R: Kolawole Mustaphak, Ondo/Ekiti retail cluster head, Wema Bank; Damilola Edewusi, Ekiti zonal manager, Wema Bank; David Olusoga, commissioner for investment, trade and industry/representing the Ekiti State governor; Oluwaseun Oke, business development manager, Wema Bank, and Kayode Fasae, director-general, Microfinance and Enterprise Development Ekiti, at the Agribusiness Small, Medium Enterprise Investment Scheme (AGSMEIS).

N2.2bn fraud: Maina fit to stand trial, Correctional Service says Felix Omohomhion, Abuja ational Correctional Service (NCS), on Monday told a Federal High Court in Abuja that Abdulrasheed Maina, the former chairman of the defunct Pension Reforms Task Force (PRTF), was fit to stand trial. Following the report, Justice Okon Abang ordered the prosecution lawyer, M.S. Abubakar, to serve the defence team with the medical papers. Maina, who is in the custody of Correctional Centre, Kuje, Abuja, is facing a 12-count charge for allegedly laundering over N2.2 billion, the use

...admitted to N1bn bail of fictitious names to open bank accounts and all sundry offences. He had since his arraignment last month looked to be seriously ill and helped to the court by retinue of aides and personnel of the Correctional Centre who always support him on both sides as he walked to the court room and the dock. Justice Abang had on November 5, ordered the National Correctional Centre to furnish the court with Maina’s health status in view of the arguments of the defence lawyer that he

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was not fit to stand trial. Prosecution lawyer, M.S. Abubakar, at the trial on Monday informed the court that the Economic and Financial Crimes Commission (EFCC) on November 20, 2019 received a comprehensive report on Maina’s medical status from the National Correctional Centre. Reading from the medical report signed by an assistant comptroller general (medical), Remi Ojo, the lawyer stated that Maina, 45 years old, had slight malaria and high blood pressure. The report stated that Maina was suffering from high blood @Businessdayng

pressure but it has been brought under control. “Maina’s vital organs are working normal. He is fit to stand trial,” the report said. The defendant, who was arraigned on October 25 before Justice Abang, has been in the Correctional Centre. Meanwhile, Maina was admitted to a bail in the sum of N1 billion. Justice Okon Abang, who gave the ruling, also ordered that Maina must produce two sureties who must be serving senators. The two lawmakers, according to the judge, must not be standing any criminal trial in any court in the country.

Tuesday 26 November 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Andrew Edgecliffe-Johnson and Alex Barker

aurice Lévy, the Publicis chairman named WeWork’s interim chief marketing officer, said the shared office company faced a daunting challenge but that he expected to spend only a few months in the role. “To be extremely honest with you I rejected the idea at first,” Mr Lévy told the Financial Times of the invitation from Marcelo Claure, the former Sprint chief executive brought in to chair WeWork by its largest shareholder, SoftBank. “It would have been much better that he goes for a young CMO and communications director but there is an emergency situation where there is a need to help for a few weeks or months,” the 77-year-old said. Describing the turnround effort as an “interesting and fun” challenge, he said his starting point would be to contain the damage done to the WeWork brand, stem “the flow of bad news” and refocus efforts on the core business. “We have the right strategy, the right people and should reap the fruits quite quickly,” he said. Publicis is Sprint’s longtime advertising agency and Mr Claure and Mr Lévy have worked closely together but the appointment of one of the ad industry’s most senior executives baffled some WeWork staff, who believe its problems stem more from a

Maurice Lévy prepares for daunting task in new role at WeWork

Publicis chairman to be shared office group’s marketing chief for ‘a few weeks or months’

Maurice Lévy said his starting point would be to stem ‘the flow of bad news’ and refocus efforts on the core business © Bloomberg

business model that has yet to show a path to profit than from branding shortcomings. Bringing in Publicis and subsidiaries such as Kekst CNC, the communications agency, also risks further demoralising WeWork employees who survived cuts that will cost the jobs of 2,400 people in its core business, outsource the positions of 1,000 cleaners and put up for sale non-core ventures employing another 1,000. WeWork announced on Friday that it was repricing share options to try to retain staff

Largest ever luxury deal gives French group a bigger presence in jewellery

Combination will create US online broking powerhouse that may draw regulatory scrutiny

harles Schwab has agreed to buy rival online brokerage TD Ameritrade for $26bn, as a savage price war forces the industry to consolidate. The all-stock deal is likely to transform the brokerage industry, heaping new pressure on large wealth managers including Bank of America, Morgan Stanley and UBS, who have watched as their online rivals have gained market share. The ambitious move comes at a critical moment for Schwab and Ameritrade, which have been caught up in a blistering price war that has seen the companies give up trading fees in the battle for customers who can then be sold other services. In recent weeks, the cuts have wiped billions of dollars from the pair’s market valuations. Under the terms of the agreement announced on Monday, shareholders in Ameritrade, whose origins date back to 1975 when US regulators outlawed fixed brokerage commissions, will receive 1.0837 of Schwab shares for each Ameritrade share they own. “One of Chuck Schwab’s ambi-

tions has always been to build a strong and independent Schwab that would be around to serve clients for many years in the future,” Walt Bettinger, Schwab president and chief executive, said. “The combination of our two great companies positions us to be competing and winning in the investment services business for the long run, the very long run.” The combined group will have about 24m accounts, catapulting the amount of client assets they have to more than $5tn. The two groups reported revenues of $16.8bn and profits of $6bn in the 12 months to the end of September. TD Bank, which holds a 43 per cent stake in Ameritrade, will own 13 per cent of Schwab after the deal is completed. The Canadian bank agreed to have its voting interest in Schwab capped at 9.9 per cent, with the remainder of its stake held in new, non-voting shares. Schwab said it would cut staff as part of the deal and re-evaluate its real estate portfolio, moves that it expected would save the combined group as much as $2bn. The takeover is expected to be finalised next year, after a stockholder vote. www.businessday.ng

In a statement on Friday night confirming Mr Lévy’s appointment, WeWork also said it was introducing a new measure of adjusted profitability that excludes the cost of stock-based payments to consultants. The announcement came as Mr Claure said WeWork would take on fewer long-term leases, ditching a business model that many industry analysts have questioned in all but a dozen or so top cities in favour of lowerrisk property management deals with landlords. Mr Lévy said he would stay

LVMH clinches takeover of Tiffany after raising offer to $16.6bn

Schwab bulks up for fee war with $26bn TD Ameritrade deal Eric Platt and Myles McCormick

whose incentives were issued before the company’s valuation plunged from $47bn in January to below $10bn. It pulled a planned initial public offering in September that could have handed more than $200m in fees to Wall Street banks. The company has continued to pay fees to a host of advisers since then, even after needing a rescue financing package from SoftBank to save it from burning through the remainder of the cash it raised in the private market.

at WeWork for “a maximum of a few months”, and would look to recruit a new marketing team to take over when he leaves. Mr Claure is understood to be keen to reposition a brand that had claimed to be “elevating the world’s consciousness” as an aspirational provider of upmarket workspaces. Publicis is expected to look to rebuild WeWork’s credibility with landlords and prospective members by touting its value proposition rather than the lofty mission promoted by cofounders Adam and Rebekah Neumann before their fall from power. “This is a story of space as a service and . . . transforming the way people are working,” Mr Lévy told the FT. Joining WeWork was “not without risk”, he conceded, “but, at the core, the business is not damaged. The mistakes have been at the fringes.” Mr Lévy made his name at Publicis almost half a century ago by running into a burning office building to rescue the company’s records. Citing his subsequent experience with corporate crises from Renault to Fiat, he said the task at WeWork was “huge but it is achievable”.

Arash Massoudi, Eric Platt and Michael Pooler

VMH has clinched a deal to buy Tiffany & Co for $16.6bn, handing control of the upmarket American jeweller to the luxury group controlled by Europe’s richest man Bernard Arnault. The two companies confirmed on Monday morning that they had entered into an agreement for LVMH to buy Tiffany for $135 per share in cash, following a Financial Times report that the bidder had been convinced to raise its takeover offer by about $600m. The deal, the largest ever in the luxury sector, comes a month after it emerged that LVMH had approached the jeweller, known for its diamond engagement rings, about a possible acquisition for $120 per share. Last week, the French group increased its offer to $130 a share and was granted access to Tiffany’s books to conduct due diligence. The company’s share price closed last Friday in New York at $125.51. As recently as August, the stock was trading close to $80

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a share. The purchase price translates to an equity value of around $16.2bn, or €14.7bn, representing a premium of about 37 per cent over the $98.55 at which Tiffany’s shares closed on the last day of trading before its move became public. It will include some $350m in net debt. Mr Arnault, who is chairman and chief executive of LVMH, said he was “delighted” to welcome a company with “an unparalleled heritage” into the group. “We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come,” he added. Chairman of Tiffany’s board of directors, Roger Farah, said the transaction delivered a “compelling price with value certainty” to its shareholders. The fame of Tiffany, founded @Businessdayng

in 1837 and known for its trademark duck egg blue boxes, was cemented by the 1961 film Breakfast at Tiffany’s, starring Audrey Hepburn. But that allure has faded in recent years. Several advisers working with luxury companies questioned the logic behind a deal, asking why would Mr Arnault buy a business that had fallen off the list of top-tier brands. Beyond appearances, Tiffany’s business has also had to cope with the impact of lower spending by tourists and a strong US dollar. For LVMH, however, the acquisition would deepen its presence in jewellery, allowing it to compete in the category more closely with the likes of Switzerland’s Richemont in one of the fastestgrowing categories in the personal luxury goods sector. Tiffany, which has a considerable footprint in the US and remains popular with Asian consumers, would sit in a portfolio that includes Bulgari, the Italian jeweller, which Mr Arnault acquired in 2011 for $5.2bn. LVMH’s stable of brands includes Louis Vuitton, Dior and Sephora.

BUSINESS DAY

Tuesday 26 November 2019

NATIONAL NEWS

Uber loses licence to operate in London

Ride-hailing service can continue to operate during any appeals process Tim Bradshaw

ber has been stripped of its London licence for a second time by the UK capital’s transport regulator, after it again found that the ride-hailing service was not a “fit and proper” company to operate there. Transport for London on Monday accused Uber of a “pattern of failures” and several regulatory breaches that had put “passenger safety and security at risk”. In one example cited by TfL, a driver had continued to be able to use the Uber app after his private hire license had been revoked after he had been cautioned for distributing indecent images of children. In late 2018 and early 2019, TfL said that more than 14,000 Uber rides were carried out by at least 43 drivers who exploited a loophole in Uber’s systems that allowed them to upload their photos to another driver’s account. TfL only became aware of the most recent example of the identity fraud earlier this month. After an independent review by Cognizant, a tech consultancy, TfL said it lacked confidence in Uber’s ability to prevent a repeat of the problem. TfL also found that a number of drivers who had been dismissed or suspended by Uber were able to work using new accounts. The agency said it was a “concern that Uber’s systems seem to have been comparatively easily manipulated”, adding that similar issues had not been identified at other private hire services operating in London. “While we recognise Uber has made improvements, it is unacceptable that Uber has allowed passengers

to get into minicabs with drivers who are potentially unlicensed and uninsured,” said Helen Chapman, director of licensing, regulation and charging at TfL. Sadiq Khan, Mayor of London, said: “Keeping Londoners safe is my absolute number-one priority, and TfL have identified a pattern of failure by Uber that has directly put passengers’ safety at risk.” Uber, which has 3.5m riders and 45,000 licensed drivers in London, did not deny TfL’s accusations but called its decision “extraordinary and wrong”. It said it planned to appeal and would “continue to operate as normal” in the meantime. Under London’s private-hire licensing laws, Uber has 21 days to lodge an appeal with a magistrate and can continue to operate throughout the process. The San Francisco-based company insisted that it has “robust systems and checks in place to confirm the identity of drivers”, including conducting an audit of every London driver in the last two months, and planned to introduce a new “facial matching process” soon. Jamie Heywood, Uber’s regional general manager for Northern & eastern Europe, said: “We have fundamentally changed our business over the past two years and are setting the standard on safety. TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond.” TfL’s damning verdict on Uber’s safety record in one of its top cities will come as a blow to chief executive Dara Khosrowshahi, who has promised to “do the right thing — period”. Uber’s shares were down by more than 5 per cent in pre-market trading in New York.

HSBC’s top duo put futures on line with radical overhaul Interim CEO Noel Quinn and CFO Ewen Stevenson know plan to streamline brings risks David Crow

hen Noel Quinn accepted the job of interim chief executive of HSBC in August, he had one condition. He told chairman Mark Tucker he did not want to be a caretaker manager who would keep the bank chugging along until a permanent successor was appointed, according to people briefed on the negotiations. Instead, Mr Quinn, a 32-year veteran of HSBC, has embarked on a major restructuring of Europe’s largest bank. Although the plan will not be unveiled until the bank’s full-year results in February, his intentions are already clear: he wants to rid the lender of its infamous bureaucracy while reducing the amount of capital tied up in the US and Europe, where it makes subpar returns. To do so, he will have to slash thousands of jobs. Investors are understandably sceptical. This is the third time the bank has attempted a big overhaul in a decade, following similar efforts in 2011 and 2015. But returns still lag behind global peers such as JPMorgan despite HSBC’s unparalleled exposure to high-growth markets in Asia, which accounts for about four-fifths of profits. At a meeting with analysts last month, the bank’s chief financial officer Ewen Stevenson acknowledged shareholder frustration, according to a transcript of his remarks seen by the Financial Times. “The main discussion point . . . with investors, the media and others is why is this time any different

to any other time,” he said. A graphic with no description But Mr Stevenson, who was poached from Royal Bank of Scotland last year and has become Mr Quinn’s main lieutenant in designing the overhaul, insisted failure would put their careers and reputations on the line. “[It] carries a high degree of management risk if we don’t deliver,” he said at the meeting. One analyst who attended the briefing said they had been left with the impression that Mr Quinn and Mr Stevenson knew they “have to produce something very marketfriendly and ambitious” in February. “Ewen was basically saying they’re putting their careers in jeopardy, that they can’t offer something halfhearted,” the analyst said. “They have to try something which carries quite a big risk of failure.” The overhaul comes at a difficult juncture for HSBC, with Hong Kong, its most profitable market, hobbled by months of violent protests that threaten to wreak economic and social havoc. Mr Quinn’s plan to reshape HSBC has two distinct parts, according to several people briefed on it. The first is to strip back a top-heavy management structure, which has mushroomed since his predecessor but one, Stuart Gulliver, tried to impose central oversight of the bank’s operations in 60 countries. Mr Gulliver made the changes following a damaging scandal in Mexico, where the bank helped drug cartels launder their ill-gotten gains. www.businessday.ng

Nigerian border closures cut smuggling but drive up prices Benin crossing has been shut for three months, halting trade on vital frontier Neil Munshi

undreds of trucks baked in the sun at the frontier between Nigeria and Benin last week as the controversial closure of west Africa’s busiest commercial crossing stretched into its third month. According to the Nigerian government President Muhammadu Buhari’s drastic action, which expanded last month into a suspension of imports and exports across all of Nigeria’s land borders, has achieved its primary goals: rampant smuggling from Benin has dropped and customs revenues through Nigeria’s ports have risen. But the negative consequences have been stark. Prices of food staples have risen steeply and legitimate businesses have been caught in the crossfire, from traders whose trucks are stuck at border crossings to telecoms operators struggling to refuel their petrol-powered masts. “It’s affecting everyone,” said Mikewonder Micah, who runs a shop at the now sleepy Seme border post, previously the scene of endless traffic jams and bustling street-side commerce on the road between Nigeria’s commercial hub, Lagos, and Benin’s capital, Porto-Novo. His sales have fallen by 70 per cent since the closure. “When they closed the border it wasn’t so bad, but it gets harder and harder every day.” The borders’ closure, planned to last until at least January 31, is the most aggressive in a series of policies Mr Buhari has introduced to curb smuggling, boost local production and achieve food security. Nigeria’s foreign minister Geoffrey Onyeama has said the borders will only reopen if the country’s neighbours properly enforce existing rules of origin

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within the regional trading bloc, the Economic Community of West African States (Ecowas), which are designed to prevent the dumping of cheap western and Chinese goods. For many observers this is an admission that Nigeria’s corrupt, underfunded customs service is unable to successfully control the country’s notoriously porous frontiers. That is a worrying signal for the prospects of a muchheralded continental free trade deal that is meant to provide a desperately needed boost to intra-African trade, said W Gyude Moore, senior policy fellow at the Washington-based Center for Global Development. “[Closing borders] is such a blunt instrument and as long as it remains in the repertoire of states trying to form a continental agreement you can see the challenge it poses,” said Mr Moore, a former public works minister of Liberia. Still, Mr Moore said he sympathised with Nigeria given how much of Benin’s economy is generated from its function as an informal trading route for its neighbour. Imports per capita into Benin of everything from cars to textiles, rice and poultry “are far too large” for Benin’s 11m people, according to research by the Washington-based Brookings Institution. Most goods end up being smuggled into Nigeria. The pattern hurts Nigerian producers and reduces government revenue — an untenable situation that Abuja should have addressed years ago, Mr Moore said. “I struggle myself to see how else Nigeria could have imposed significant costs on Benin for this behaviour,” Mr Moore said. “But by doing this it makes it an acceptable thing, [for example] for Ghana to do to Togo tomorrow.” Andrew Nevin, chief economist for PwC in Nigeria, agreed. @Businessdayng

“It’s obvious that 90 per cent of the traffic that goes through [Benin’s main port] Cotonou is destined for Nigeria . . . so on a basic level we’re supportive of the government dealing with this,” Mr Nevin said. “The problem with the current tactics is that it captures both legitimate and illegitimate trade.” The shutdown has had wideranging repercussions in Nigeria and across west Africa, where Nigeria accounts for about 70 per cent of the region’s gross domestic product. “When Nigeria sneezes, west Africa catches a cold,” said one Nigerian official at the Seme border post. The greatest impact has been on Nigeria’s vast informal sector, which at 65 per cent of GDP is the largest in sub-Saharan Africa, and on ordinary Nigerians, more than half of whom live in poverty. Inflation rose in October to 11.6 per cent year on year, driven by food prices, which jumped 14.1 per cent in the same period to an 18-month high. Food costs account for roughly 60 per cent of the average Nigerian’s spending and the price of the most important staple, rice, has roughly doubled since the border closed. The government says the border closures will help boost local food production. But rice takes time to grow, harvest, process and sell, and the country’s struggling farming industry cannot keep up with the huge increase in demand. “We are not yet ripe to close the border because . . . we need years [of] investing in farmers so they can harvest enough for Nigeria,” said Ekpo Ain, a rice trader at the Sura market in Lagos. He used to sell dozens of bags of rice a day when the market was bursting with low-cost Thai imports. He said he was now lucky if he shifted a few. “We are in a mess now — we are in trouble.”

BUSINESS DAY

Tuesday 26 November 2019

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

The people, not governments, should exercise digital Europe’s leaders are right to worry about Big Tech but the answer is not to over-regulate

John Thornhill

uropean politicians who have been complaining recently about the loss of “digital sovereignty” to US technology companies are like children grumbling in the back of a car about where they are heading. They itch to climb into the front seat and seize the steering wheel even if they don’t know how to drive. Instead, they ought to stop yapping, take some driving lessons and help design a new car. It is only when Europe becomes a global leader in tech again that it can hope to control the destination of travel in the 21st century. As almost every aspect of our lives turns digital, Europe’s leaders are right to worry that too much power is being grabbed by consumer internet giants, such as Facebook, Google and Amazon, and Chinese hardware manufacturers, such as Huawei, which runs 5G networks. Sovereign governments used to wield exclusive power over validating identity, running critical infrastructure, regulating information flows and creating money. Several of those functions are being usurped by the latest tech. Emmanuel Macron, France’s president, recently told The Economist that Europe had inadvertently abandoned the “grammar” of sovereignty by allowing private companies, rather than public interest, to decide on digital infrastructure. In 10 years’ time, he feared, Europe would no longer be able to guarantee the soundness of its cyber infrastructure or control its citizens’ and companies’ data. The instinctive response of many European politicians is to invest in grand, state-led projects and to regulate the life out of Big Tech. A recent proposal to launch a European cloud computing company, called Gaia-X, reflects the same impulse that lay behind the creation of Quaero, the FrancoGerman search engine set up in 2008 to challenge Google. That you have to Google “Quaero” rather than Quaero “Quaero” tells you how that fared. The risk of illdesigned regulation is that it can

stifle innovation and strengthen the grip of dominant companies. Rather than just trying to shore up the diminishing sovereignty of European governments and prop up obsolete national industrial champions, leaders may do better to reshape the rules of the data economy to empower users and stimulate a new wave of innovation. True sovereignty, after all, lies in the hands of the people. To this end, Europe should encourage greater efforts to “redecentralise the web”, as computer scientists say, to accelerate the development of the next generation internet. The principle of privacy by design should be enshrined in the next batch of regulations, following the EU’s landmark General Data Protection Regulation, and written into all public procurement contracts. The most persuasive champion of this redesigned future is Tim Berners-Lee, inventor of the world wide web, who has since launched Solid technology to give users greater data rights. “We have to imagine a world in which any data you create is under your control,” Sir Tim told me at the Open Data Institute conference this month. “By default you will control your data. By default it will not be shared with anybody.” What that means in practice has been spelt out by Francesca Bria, the former chief technology officer for Barcelona, now a senior adviser at the UN. Europe, she says, now has a chance to set the privacy and security standards for the digital economy that will define future platform innovation. “Europe should invest in technologies that are decentralised, privacy-enhancing and rightspreserving, that give data control back to citizens, so citizens are able to decide what data they want to keep private, what data they want to share, with whom, on what terms,” she says. The shift from surveillance capitalism to a more user-centric data economy is already opening up new business opportunities. Europe has the chance to jump ahead of this coming revolution, rather than just playing catch-up with the US and China.

What is China’s digital currency plan?

The central bank has been quietly working on the project for five years Yuan Yang and Hudson Lockett

hina is aiming to be the first country in the world to launch a digital currency, after five years of research by a team in its central bank. The project is still shrouded in secrecy. There have been few details about what form a new sovereign digital currency might take, how it will affect banks and businesses and when it might be launched. Confusion and speculation about the currency have grown since President Xi Jinping called for China to focus more on blockchain last month, and Facebook’s founder Mark Zuckerberg warned that Beijing’s digitisation efforts could leave American finance in the dust. Here is what the People’s Bank of China is really up to. What do we know? Since 2014, China’s central bank has been working on a project called “DC/EP”: Digital Currency/ Electronic Payments. Yi Gang, the governor of the People’s Bank of China, said the plan was not to create a new currency, such as bitcoin or Facebook’s Libra project, but to partially digitise China’s existing monetary base, or cash in circulation. Mr Yi has said the new digital currency will not replace other parts of the money supply — such as deposits held in bank accounts, and balances held by payment apps such as WeChat and Alipay. Retail banks and fintech companies will continue to manage customer deposits in the same way, but the new digital currency could provide a neater way for banks to settle payments with each other, rather than through the existing clearing system. The central bank added that there was no timetable for the launch, but China appears to be ahead of other countries undertaking similar research. “Most central banks are studying this, with Singapore, Canada and Switzerland having done advanced trials, but it’s likely that China will be the first to launch,” said Thomas Olsen, partner at Bain & Company in Singapore. China is already well on the

way to being a cashless society. Residents of its big cities often only carry their smartphones and pay for everything with apps such as Alipay or WeChat that are linked to their bank accounts. Chinese users have got used to scanning QR codes to pay or to transfer money to each other, and are likely to be comfortable with using the same process to transfer digital money between digital wallets. Is it a cryptocurrency and will it have a blockchain? The People’s Bank has not determined what the technology behind its digital currency will be. But because of the president’s recent speech on the importance of blockchain, some have conflated the two. The term “blockchain” itself has been highly contested, but in its original formulation it is a decentralised database stored across a network of computers, where all transactions are public and no single user has permission to alter other people’s accounts. But the central bank would probably prefer to be in control of a database, so that only it can view all transactions and edit records. Some have called this a “private, permissioned” form of blockchain. “Cryptocurrency” usually refers to digital currencies such as bitcoin that are implemented with blockchain technology, not controlled by a central entity. In that sense, the People’s Bank’s currency will probably not be a cryptocurrency either. What happens to retail banks? If people can hold their deposits of electronic cash directly at the central bank, they could cut out the middle men: the retail banks.

Former central bank governor Zhou Xiaochuan is well aware of the problems that could pose, saying: “Although in theory the central bank’s digital currency can also be used as a retail service, [we should be] very cautious, because of the major blow that could deal to the existing financial system.” In other words, Mr Zhou doesn’t want the central bank’s digital currency to become a threat to the retail banking system. Instead, the head of digital currency research for the People’s Bank, Mu Changchun, has said the digital currency will be issued to existing financial institutions. That means the banks would then distribute it for use by customers, much as physical currency is issued now. Why does the PBoC want a digital currency? Under a digital payments system, it would be possible for the government to track cash transactions, which officials have said would help battle money laundering, illegal gambling and terrorist financing. But beyond replacing cash, in the longer term the People’s Bank’s digital currency could also be used to improve the efficiency of transactions across the financial system. If many countries adopt digital currencies, this could even reduce China’s exposure to US financial institutions, thus making the country less vulnerable to sanctions. “In the long term, central bank digital currencies could create a different settlement mechanism for cross-border transactions between countries, which could reduce dependency on US-dollar clearing,” added Bain & Company’s Mr Olsen.

sovereign bond issued in 2004. After a 15-year hiatus, China returned to the dollar bond market in 2017 with an offer of $2bn, Dealogic data show. The country followed that up in October 2018 with an offering of $3bn, again selling bonds with maturities of five, 10 and 30 years. Joint lead managers and joint bookrunners for the upcoming deal are Bank of China, Bank of Communications, China Construction Bank, China International Capital Corporation, Bank of America, Crédit Agricole, CTBC Bank, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Mizuho

Securities and Standard Chartered, according to a term sheet viewed by the Financial Times. Investor appetite for China’s central government debt contrasts with new difficulties faced by a local government-run company in repaying its own dollar debt. On Friday the Tianjin-based company, Tewoo Group, told investors in an exchange filing that they could either take delayed repayment and reduced interest payments on $1.25bn in dollar bonds, or accept repayment between 33 and 64 per cent lower than the bonds’ principal amounts.

China lines up record-breaking dollar bond

Debt deal potentially worth $6bn would double last year’s dollar issuance total Hudson Lockett and George Hammond

hina is preparing to launch its largest ever dollar bond issue, in a move that could double last year’s issuance and help slake global investor demand for higher-yielding dollar debt. The government bond offering could raise as much as $6bn, people familiar with the deal said. They said the issuance, which would mark the biggest dollar offering on record by China’s Ministry of Finance, according

to Dealogic data, could hit the market as early as Tuesday. Yields on China’s 10-year US dollar sovereign bonds were just shy of 3.2 per cent on Friday, compared with yields of less than 1.8 per cent for US Treasuries of the same maturity. One banker working on the deal said the size of the offering reflected high demand for increased liquidity among large institutional investors and Beijing’s view that dollar issuance in recent years had helped to establish a benchmark for other borrowers and investors. “The size is twice of what it www.businessday.ng

was last year, that just speaks to the fact that the past two years have been perceived as successful by the Ministry of Finance,” the banker said. He added that previous offers were “not enough to match demand”. The dollar debt deal comes after the Ministry of Finance sold a trio of euro-denominated government bonds earlier this month for the first time in 15 years, raising a total of €4bn. That offering attracted close to €20bn of orders from investors. The issuance helped to set a new price benchmark after the maturity of the last euro-denominated

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Tuesday 26 November 2019

BUSINESS DAY

ANALYSIS

Hong Kong voters propel pro-democracy candidates to landslide win Rout of establishment opponents in local elections sends message of discontent to Beijing

Sue-Lin Wong and Nicolle Liu

ong Kong’s pro-democracy camp has stormed to a landslide victory in local elections as a record number of voters voiced their discontent at the Chinese government. The results are an indicator of the broad support for the antigovernment protest’s overarching goals, even as the movement has turned increasingly violent. Pro-democracy parties won a majority in 17 of the 18 district councils, a significant turnround after failing to win control of a single council at the last local election four years ago. Almost 3m people voted, nearly double the number who cast a ballot in 2015, representing more than 70 per cent

The past two weeks have seen some of the most violent scenes, with universities under police siege. About 80 pro-democracy councillors-elect gathered near Hong Kong’s Polytechnic University, the site of the fiercest battle where roughly 20 people remain holed up. “Hong Kong people will not succumb to police brutality, nor tyranny. Hong Kong people’s urge is clear: five demands, not one less,” the district councillors-elect said in a joint statement on Monday. District council elections are historically muted affairs. Councillors wield little political power and the campaign is typically focused on local issues such as noise pollution. But this year’s elections were a chance to gauge public opinion at a time of unprecedented political upheaval. Several star candidates from the pro-Beijing camp lost their seats,

of registered voters. The pro-democracy camp had secured 385 of 452 elected seats, according to local media citing the electoral office. Pro-Beijing candidates won 59 seats while independent candidates affiliated with neither camp took eight seats. Carrie Lam, Hong Kong’s chief executive, said the government would respect the result. “Many pointed out that the results reflect the public’s dissatisfaction with the social status quo and deep-seated problems. The SAR Government will listen to the views of the public with an open mind and seriously reflect on it,” she said in a statement. Reaction from Beijing was muted. China’s state-run Xinhua news agency announced the completion of the elections but did not provide details about which side had won. “For more than five months, rioters and ‘foreign forces’ have worked together to continuously create and escalate violence . . . these several months of continuous social unrest have seriously disrupted the electoral process,” it said. Sunday’s poll was the first electoral test of public opinion since the city was plunged into its worst political crisis more than five months ago, after Ms Lam tried to pass a contentious extradition bill. The proposed legislation could have seen criminal suspects sent to mainland China for the first time. Millions took to the streets in June to march against the now-withdrawn bill and the government has since effectively banned such large public gatherings.

including Junius Ho, an outspoken critic of the pro-democracy movement who many protesters said had supported mob attacks against them. “An exceptional year, an exceptional election, an abnormal result,” Mr Ho wrote on Facebook following his defeat. Joshua Wong, the prominent pro-democracy advocate was barred from running in this year’s district council elections but the candidate who stood in his stead, Kelvin Lam, won in his constituency. Several leading pro-democracy advocates also swept to victory. However, analysts cautioned the results did not indicate a dramatic shift in support for political leanings within the territory. The district council elections are determined by a simple majority, unlike the vote for the Legislative Council, the city’s de facto parliament, which is determined by proportional representation. The pro-Beijing camp has historically captured about 40 per cent of votes in Hong Kong’s elections. “This is obviously a landslide victory for the pro-democracy camp but it is important to note that the proBeijing camp still captured around 40 per cent of the vote, despite what has happened over the past several months,” said Samson Yuen, an associate professor at Lingnan University. “If you look at the vote share for the pro-democracy movement, there isn’t that much to be happy about because in terms of the overall vote share, the landscape is still very much the same.” www.businessday.ng

Climate change: how China moved from leader to laggard Beijing’s U-turn on renewables is triggering alarm ahead of UN meeting Leslie Hook

he smoggy city of Baoding is known for two things: donkey burgers, and solar panels. An industrial centre just south of Beijing — 45 minutes via highspeed rail — the city’s high-tech zone styles itself as “Power Valley” because it is home to so many solar manufacturers. But for Vincent Yu, deputy general manager at Yingli Solar, one of the first renewables companies to set up in the city, business has been difficult lately. “These last two years, there has been a lot of pressure. The subsidies for solar projects have fallen,” Mr Yu says. New solar installations in China — running at 53 gigawatts in 2017 when demand peaked — will be about 40 per cent lower this year, he estimates. The photographs in his office show Yingli in its glory days a decade ago. Sales were surging and the company spent millions sponsoring the 2010 and 2014 football World Cup tournaments. Yingli was the world’s largest solar-panel maker in 2012 and 2013, exporting all over the globe and celebrated in China as a national champion. Its huge factory campus in Baoding still nods to that status, with a spacious museum dedicated to the company’s history as a solar pioneer. Today Yingli is insolvent. It has been defaulting on debt payments since 2016, and in 2018 it was kicked off the New York Stock Exchange because its market capitalisation had sunk below the minimum $50m threshold. Although Yingli still makes solar panels, its factories operate at a loss and the most valuable asset it has left is the land underneath them. Some question how Yingli is still operating. But analysts believe the political connections of its founder may have helped stave off creditors. The company is the highest profile casualty of a change in policy that is being felt across the renewable energy sector in a country once celebrated as the world’s clean energy champion. Chinese investment in clean energy is plummeting — down from $76bn during the first half of 2017, to $29bn during the first half of this year. For the annual UN climate talks, starting next Monday, that is alarming. Concerns over the impact of climate change have never been higher. But the gap between what countries should be doing, and what they are actually doing — pumping rising levels of carbon dioxide into the air — has never been greater. With the US withdraw-

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ing from the Paris climate accord, an increasing amount of attention is on China. The country is both the greenest in the world, but also the most polluting. It has more wind and solar power than anybody else, yet it is also the world’s biggest builder of new coal plants. Last year, its emissions hit a record high, accounting for more than half of the global increase in energy-related CO2 emissions in 2018, according to the International Energy Agency. This year, Chinese emissions are expected to grow about 3 per cent from 2018. “Everything is at stake for the planet, because the Chinese economy is so much bigger than any other,” says Adair Turner, chair of the Energy Transitions Commission. “Even the whole of Europe is considerably less than Chinese emissions.” He points to China’s current pledge, that its CO2 emissions will peak by 2030, and says it is nowhere near ambitious enough. “Let’s be clear, if that was all China ever did, then we are on the path to climate disaster,” says Lord Turner, who is lobbying for China to consider a target of net zero emissions by 2050. “That is true of all the [countries that have made pledges under the Paris accord] . . . everyone has always known there would have to be very significant improvements, to get us anywhere close to 2C.” Newly commissioned energy capacity The Paris climate accord, of which China is a signatory, pledges to limit global warming to well below 2C. But that goal looks increasingly out of reach. The world is on track for 3C of global warming by the end of this century, if current trends continue. That would mean higher sea levels of as much as 1m, threatening more than 600m people in low-lying and coastal areas, according to a recent report from the UN’s Intergovernmental Panel on Climate Change. The climate pact is under attack from many sides, and the US is withdrawing from the agreement entirely, on President Donald Trump’s orders. Fraying multilateralism has further eviscerated the climate accord, which lacks any enforcement mechanism. China — distracted by a slowing economy, the US trade war and protests in Hong Kong — is not the only reason why the planet is on course for devastating climate change, but it is near the top of the list. “The general momentum on climate and environment issues has been declining [in China],” says Li Shuo, senior global policy adviser at Greenpeace. Climate change has @Businessdayng

become a lower priority for Beijing. “There is less space for the green agenda,” he says. China’s investment in renewable energy fell 39 per cent in the first half of this year, compared with the same period in 2018, according to data from Bloomberg New Energy Finance. Beijing yanked subsidies for solar panel projects in the middle of last year, and is shrinking those for wind, causing an abrupt shift. “This is probably a low point,” says Li Junfeng, a senior renewable energy policymaker and head of the National Centre for Climate Change Strategy Research, part of the government planning ministry. “The new policy is not in place yet, and the old policy [of subsidies] has been stopped.” Five years ago, when the economy was growing robustly, Beijing saw stronger environmental policies as core to its economic transformation away from energy-intensive heavy industry. Today, with the economy growing at its slowest pace since the early 1990s, that has changed. “The highest political priority in China is trying to stabilise the economy,” says Kevin Tu, an energy economist who previously led the China desk at the IEA. “Anything else, including environmental protection, especially climate change, will have to make some room for these political priorities.” Chart showing that the decline in clean energy investment, led by China, looks set to continue On paper, China’s climate targets have not changed: Beijing has pledged that its carbon dioxide emissions will peak by 2030, and that it will draw 20 per cent of its primary energy from non-fossil sources by that same date. Yet that promise would allow China to keep increasing its emissions for the next decade, with devastating implications for the planet. Its investments in the Belt and Road Initiative, under which state banks have earmarked more than $30bn to build coal-fired power plants in other countries, is also adding to global emissions. China’s participation in the Paris climate pact in 2015 was heralded as a great victory by activists. Convincing Beijing to set climate targets was a top priority for the Obama administration. But baked into the negotiations was an expectation that China would achieve its emissions target much earlier than 2030. Next year will be crucial, as countries that signed the Paris accord are supposed to submit enhanced targets — but the mood in Beijing makes a tougher climate goal less likely for China.

leaderSHIP

BUSINESS DAY Tuesday 26 November 2019 www.businessday.ng

CEO in Focus

Siju Iluyomade: Empowering women for nation-building

ith over 30 years of being active in legal practice, Siju Iluyomade, the founder and CEO of Arise Women, a faithbased Non-Governmental Organisation, is passionate, purposedriven, and a vessel of transformation who speaks up for the rights of women and provides a platform to empower them. Siju, as she is fondly called, is a partner in the law firm of Iluyomade& Iluyomade & Co., legal practitioners focusing on Corporate Law, International Trade and Finance and Construction Law, Energy Law, Insolvency Government Relations and International - Joint Ventures. She has practised Law in several Courts in Nigeria including the Supreme Court of Nigeria and she is a member of the Nigerian Bar Association (NBA) as well as the International Bar Association (IBA). Her commitment coupled with the fulfillment she derives from empowering her fellow women in accelerating nation building is one of the reasons that birthed Arise Women. She speaks up for the rights of women and believes that gone are the days of voiceless women. Siju pioneered the Handmaidens Fellowship in 1995 which has now become a popular, purposedriven and multi-generational fellowship that meets ever y Wednesday from 12:30 PM to 2:00 PM to teach and mentor women from all walks of life. Testimonies abound of how the Handmaidens gathering has helped many to find their purpose in life. The Handmaidens outreach has donated Eight (8) incubators to the Lagos Island Maternity as well as oxygen gauges, blood pressure machines, diapers, baby clothes, toys, etc. In addition, the Handmaidens, in conjunction with the City of David, Charity Ball donated a dialysis machine to the Gbagada General Hospital. Long known to have nurtured charitable hopes, and determination to help women efficiently thrive in life, Siju institutionalized the Handmaidens Women in Leadership Series (HWILS) to build intentional leaders. The HWILS is a platform to equip professional and career women with critical skills, and invaluable networking resources for growth through shared stories which propel them to become accomplished successful leaders at all levels of decision making - political, economic, and public life. In addition, Siju instituted the born to inspire awards to honour and inspire succeeding generations of women. She is also

the founder of the Arise women mobile clinics taking free medical care to the grassroots and advancing women’s health through health promotion, education, and advocacy. She is the convener of the Annual Arise Women’s Conference, a true national landmark programme, which holds every last Saturday of October, for women from every walk of life. The focus and essence of the Conference are encapsulated in its motto “arise for a woman today” so that the women of influence can take the message of upliftment to the grassroots. Arise women believe that “The hand that rocks the cradle rules the world” and that women have great power and influence because they have the greatest influence over the development of the children and the home. To create role models and spread the gospel of women empowerment, Siju launched the Arise Ambassadors Award to deserving women. The Arise Ambassadors are all over the nation, using their sphere of influence to accelerate nation-building. The vision of Arise Women is abridged in four key areas of influence: Healthcare, skills acquisition and empowerment, education, and leadership. The medical outreach healthcare has a primal place in the Arise Women’s agenda and on December 16, 2013, they launched the Arise Mobile Clinic and took healthcare to the communities in Ikeja, Surulere, Yaba,

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ENDURANCE OKAFOR

To create role models and spread the gospel of women empowerment, Siju launched the Arise Ambassadors Award to deserving women

Siju Iluyomade

Ebute-Metta, Ilaje, Bariga, Makoko, amongst others. In recognition of her contributions to legal education and development, the International Federation of Women Lawyers (FIDA) Lagos Branch, Nigeria presented Siju a merit award on June 14, 2017. She has also been a discussant and panellist at several legal forums on issues relating to Sexual Offences, Child Abuse, Child and Maternal Health and she is also a major advocate for the girl child education in Nigeria. Siju is on the cutting edge of women’s overall well-being and empowerment. One of her initiatives- Arise Women’s Mobile Clinics: The Clinic on wheels takes free healthcare to the doorsteps of communities across the nation. Accompanied by highly committed volunteers and professionals that include, Doctors, Nurses, and laboratory technicians. Arise Women carry out free consultations for diabetes, hypertension, HIV, Sickle – cell anemia, and cervical cancer screening. The Arise Women sponsored surgical repair for ten (10) women who developed Vesico-Vagina Fistula (VVF) on a Medical Facility called Mercy Ships, an International Charity. The Arise Women de-wormed 8,000 pupils under this programme and brought home to little children, the simple meaning of love and care. The NGO

started its Out-patient Clinic at the high-end Hospital, Healing Stripes-Dialysis and Diagnostics Centre located in upscale Victoria Island, Lagos. Arise provides them with quality primary healthcare and assures an environment that enables them to comfortably discuss their health challenges and get solutions. The Arise Out-patient Clinic holds on Wednesdays and twice a month. The Arise women also catered to the dire needs of the internally displaced persons (IDP) at the Federal Government approved IDP Camps; gave out food and relief materials, and also attended to their medical needs including taking delivery of babies. Under the Arise Prison Medical Outreach, the Arise Women visited Kirikiri and Ikoyi Prisons in Lagos where they provided drugs, sanitary items, and other household items. Consequently, under the Arise skills acquisition programme, Arise has recognised the hard truth that lending a helping hand to the needy is not only about handing over cash but more importantly, teaching and acquiring skills for economic gains. Arise has in its ten (10) years provided skills acquisition and empowerment for women by sending them to academies to learn leather works millinery, baking soap, pomade and She plays host to thousands of participants at the arise walk for

life, a health awareness walk that is held annually. In partnership with other women bodies, Arise Women collaborates with wives of top State functionaries and Military Service Chiefs, who are women of great influence and other women bodies including the Federation of International Women Lawyers (FIDA), Police Officers Wives Association (POWA), International Women Society (IWS) and Market Women Associations. According to industry sources, the Arise Adopt–a–Village Scheme is undoubtedly revolutionary. The Arise women have adopted villages under this programme to develop them over a seven-year period. The Arise Women ventured to Dafara, a rustic village on the precincts of the Federal Capital Territory, Abuja where they constructed boreholes, renovated and re-equipped primary schools, built a computerized library, provided school furniture, educational tools and software, school bags. In addition, Arise Women built and commissioned a ten (10) bedroom ultra-modern hospital in November 2018 for the community. In Kpaduma, another village on the precincts of the Federal Capital Territory, the Arise Women built a school and provide facilities to keep the school running. Arise Women use education and the arise module as a tool to teach compassion, good neighborliness, tolerance, and kindness. Also, the Arise goes to school initiative which has visited schools like Queens College, Methodist Girls High School, etc. offers medical care to students, teaching and non-teaching staff. The Arise Women provided a generator to Rebecca’s room, a resource centre for the visually impaired students of Queens College, Lagos. In Makoko, a riverine area in Lagos, Arise sponsored the building of a school. Under the leadership of Siju, the Arise for a Woman empowerment campaign was launched on March 9, 2018, with the aim of empowering business owners with N100,000 to move their business forward. She sits as the Chairman and Director of many Companies including Visible Oil Limited, Visible Energy Services Limited, the Healing Stripes Hospital and the Riverbank School to mention a few. She is a woman of faith and co-Pastors with her husband, Idowu Iluyomade, and they are blessed with children. Siju has also written several books most of which are Christian literature to edify and inspire the children of God. The founder has been given an award of Recognition presented by the Nigeria Association of Women Journalists and has a Conferment of Honorary Doctor of Laws.

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