BusinessDay 27 Aug 2019 by BusinessDay

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Foreign Reserve - $44.06bn Biggest Gainer Biggest Loser Cross Rates - GBP-$:1.22 YUANY-N 50.62 NESTLE SEPLAT N1232.00 0.16pc N441.00 -10.00pc Commodities 27,691.85

Cocoa

US$2,238.00

Gold

$1,538.10

news you can trust I **TUESDAY 27 AUGUST 2019 I vol. 19, no 380

₦3,665,096.92 +1.96pc

$58.84

N300

Foreign Exchange

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$-N 357.00 360.00 £-N 437.00 447.00 €-N 390.00 400.00

Crude Oil

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

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Market I&E FX Window CBN Official Rate Currency Futures

($/N)

362.99 307.00

-0.41 12.86

NGUS NOV 27 2019 363.97

ISAAC ANYAOGU

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6M -0.57

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20 Y -0.16

14.92

14.28

14.18

14.30

NGUS FEB 26 2020 364.42

FG/Siemens power deal: Parties expect financial close by Nov. he Federal Government through the Bureau of Public Enterprise (BPE), German company Siemens, and the electricity distribution companies (DisCos) have held multiple meetings since President Muhammadu Buhari announced on July 22, 2019 that Nigeria would ink a power agreement with the German company and anticipate financial close by November this year. BusinessDay gathered from sources with knowledge of these meetings that the success of the deal depends on DisCos’ acceptance of the terms, their ability to distribute energy provided and improve collections to repay the loan. So far, meetings have been held with at least six of the DisCos including Ikeja and Eko DisCos to firm up terms. The first phase of the deal is to add 2,000 megawatts to Nig er ia’s p ow er g eneration and improve the ability of the Transmission Company of Nigeria (TCN) to wheel all the energy generated. To this end, the Federal Government will in-

fgn bonds

Treasury bills

Spot ($/N)

NGUS SEP 30 2020 365.47

CBN, Bankers’ Committee introduce measures to help banks meet 60% LDR …Customers’ deposits in other banks to be used for loan repayment …set up mortgage guarantee company HOPE MOSES-ASHIKE

head of the September 30 deadline given to deposit money banks to increase their Loan to Deposit Ratio (LDR) to 60 percent, the Central Bank of Nigeria (CBN) and the Bankers’ Committee on Monday came up with some initiatives targeted at stimulating lending in the economy. One of such measures is the introduction of some clause to bank lending where the customers’ deposits will be used to repay loans in case of default. Aisha Ahmad, CBN’s deputy governor, financial system stability, who addressed journalists

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Inside Pipeline vandalism adds to Nigeria’s economic woes P. 37 Emmanuel Macron (l), President of France, and Akinwumi Adesina, president, African Development Bank, at the G7 meeting in France.

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news Favourable harvest pushes food price to 30-month low in July SEGUN ADAMS

igerians last month enjoyed food items at the cheapest rate since January 2017, at least, as a favourable harvest in the period saw the average price of food in July dipped by the most in 2019. The National Bureau of Statistics (NBS) in its Food Prices Watch for July 2019 reports that on the average, food prices dipped by 2.07 month-on-month in July and 10.78 year-on-year in July. Analysis shows a drop in food price for a second straight month and the biggest yearly decline so far in 2019. The commencement of harvest season elevated the supply of farm produce and saw food price moderate in July to an average of N585.71 for 43 food commodities captured in the NBS survey. This is the cheapest in more than two and a half years. The Food Price Watch is a monthly survey by the NBS that gauges move-

ment in select food items across all the 774 local governments across all states and the FCT. The data are obtained from over 10,000 respondents and locations, and reflect actual prices households state they bought those items. The average price of one dozen of egg mediumsized reduced to N468.314 in July, 5.45 less than N495.32 obtained in the previous month. The average price was at its peak in Anambra (N554.84) and lowest in Bauchi (N427.5). The average price of 1kg beans (brown) fell by 4.56 percent to N327.18 in July. For white beans, the average price was N289.78, which indicates a monthly decline of 6.94 percent. Beans (white) was highest in Ebonyi (N483.47) and least in Niger (N181.41). The brown counterpart sold dearest in Ebonyi (N520.41) and least in Gombe (N242.88). The price of ofada rice per 1kg declined 1.62 percent to average N367.44 while agricultural sold loose rice and imported high-quality grain fell 1.16

percent and 3.96 percent, each to average N314.56 and N356.1, respectively. On the other hand, local sold loose rice jumped 2.32 percent to N277.38 per kg in July. While the average price of white garri increased by 4.42 percent to N151.73 per kg in the period, yellow garri fell 1.26 percent to N154.05. The average price of 1kg of yam tuber decreased month-on-month by 6.21 percent to N170.85 in July 2019 from N182.15 in June 2019. To m a t o ( 1 k g ) f e l l month-on-month to N203.55 in July, 9.96 percent decline from N226.07 in June 2019. A loaf of sliced bread (500g) rose by 0.26 percent in the month but fell 3.85 percent year-on-year at N293.49, unsliced bread sold at N241.02 declining by 1.26 percent in the month. Evaporated tin milk at N157.14 was 0.12 percent costlier on a monthly basis but 5.19 percent cheaper on year-on-year. In July, lower food prices pushed inflation near 4-year low of 11.08 percent.

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AfICTF foresees improved ICT local content patronage with new communication minister Jumoke Akiyode-Lawanson

frican ICT Foundation (AfICTF) is optimistic that going by the track record ofthenewlyappointedministerof communications, Ali Isa Ibrahim Pantami, on the pursuit of Nigeria’s local content policy as well as data protection at the Nigeria Information and Technology Development Agency (NITDA), there will be improved patronage made in Nigeria IT hardware and software. The Foundation made the observation in a congratulatory

message to Pantami, the former director-general of NITDA, following his appointment as ministerofcommunication,lastweek. Inthecongratulatorymessage signed by Tony Ojobo, president of the foundation, he commends President Buhari for appointing a core ICT professional to manage the Communications Ministry, noting that the industry should leapfrog into a new beginning when the new minister goes into work. According to Ojobo, the former NITDA director-general has a formidable track record at

the NITDA, which prompted his choicefortheministry,asNITDA’s unwaveringcommitmenttolocal contentunderPantamienhanced thepurchaseofindigenousbrand of ICT devices by over 60 percent within the last three years. He says local hosting of data doubled in value and local software consumption has increased significantly, noting also that there was a cumulative effect of these efforts. ICT contribution to GDP reached an unprecedented markof13.63percentinthefourth quarter of 2018, under Pantami administration in NITDA.

2 policemen killed, as gunmen abduct CMD, Irrua Specialist Hospital Idris Umar Momoh & Churchill Okoro, Benin City

wo policemen were feared killed as unknown gunmen on Monday morning abducted the Chief Medical Director (CMD) of Irrua Specialist Hospital, Sylvanus Okogbeni, in Benin City. Eyewitnesses said stray bullets from the gunmen also hit two passers-by on the legs. The incident occurred at Ramat Park, Ikpoba Hill axis of the Edo State capital. Last week, two assistant directors of the hospital were

kidnapped and were released after ransom was paid. The two mobile policemen who were in uniform were among the three orderly attached to the CMD of the hospital. The killed policemen were said to be armed while the one of them not armed escaped unhurt. When contacted, Chidi Nwabuzor, the Edo State Police Public Relations Officer, confirmed the incident, however, said the officers were shot but not killed, saying investigation into the incident had com-

Jhaki launches to help importers, manufacturers enjoy hassle-free movement of goods

he prospects of logistics in Africa are brighter with the recent launch of Jhaki – a digital platform that helps shippers including importers and manufacturers enjoy hassle-free movement of goods within Nigeria by connecting them with truck owners and other carriers. Similar to advanced technologies for taxi hailing, the Jhaki Platform features include advanced booking, real time tracking, proof of delivery, automated receipts and a fair pricing structure. It is safe to say that, “Jhaki.com is reinventing freight transportation in Nigeria and sub-Saharan Africa.” The platform, which launched in June 2019, has already served several customers connecting them to pre-qualified and verified carriers registered on the Jhaki.com platform. According to Brainerd Odiete, director of strategy and growth initiatives of CRS Intermodal Group and promoters of Jhaki. com, the platform seeks to empower carriers and intelligently moving freight will create unprecedented economic opportunities in the logistics space while allowing shippers to book reliable, affordable and highquality loads. Odiete goes further to explain that customers changing behaviour and expectations will have the greatest impact on logistics going forward and Jhaki seeks to evolve a customer-centric logistics business enabled by the latest and most reliable technologies. In his own words, he explains, “Customer expectations are increasing greatly. “Both individuals and businesses expect to get goods faster, more flexible, and – in the case of consumers – at low or no delivery cost. Manufacturing is becoming more and more customised, which is good for customers but hard work for the logistics industry.” Continuing, Yemi Kushimo, marketing and business development lead for Jhaki.com, explains that one thing that sets Jhaki apart from other logistics companies is that Jhaki offers its customers the option of moving goods through road, rail, and inland water.

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menced. Later in the day, Nwabuzor, the command’s spokesman, confirmed the incident to the News Agency of Nigeria, that the policemen were killed by suspected gunmen who also abducted the CMD. Speaking on the incident, Emmanuel Igiechi, chairman, Senior Staff Association of Universities Teaching Hospital, Research Institute and Associated Institutions of Nigeria, Irrua branch, said the union would protest against insecurity in the area.

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Nigeria, 54 others fail to make progress in fiscal transparency in 2019 Endurance Okafor

igeria alongside 54 other countries from around the world did not make progress in meeting the minimum requirements of fiscal transparency, according to the US Department of State 2019 Fiscal Transparency report. Fiscal transparency fosters greater government accountability by providing a window into government budgets for citizens, helping citizens hold their leadership accountable, and facilitating betterinformed public debate. A dive into the report reveals that one of the reasons Nigeria did not make progress in the survey conducted by the US Department was due to the fact that the Nigerian National Petroleum Corporation (NNPC) did not have fully audited financial reports that were available to the public. “The executive budget proposal and the enacted budget, however, were not published within a reasonable period of time. Information on debt obligations was publicly available. Budget documents provided detailed estimates for revenue

and expenditure but did not include allocations to and earnings from state-owned enterprises,” the report discloses. According to data compiled from Budgit, a Nigeria civic start-up, the budget implementation of the federal level of Africa’s most populous nation has commenced officially in January only four times in the past 19 years from 2000-2018. The budget implementation circles were completed only in 2001, 2007, 2009 and 2013. In conducting the 2019 review, the Department assessed the fiscal transparency of governments during the review period of January 1- December 31, 2018. The Department considered information from US embassies and consulates, other US government agencies, international organisations, and civil society organisations. The Department concluded that, of the 140 governments evaluated pursuant to the Act plus Equatorial Guinea, 67 did not meet the minimum requirements of fiscal transparency. Of these 67, however, 13 governments made significant progress toward meeting the minimum requirements of fiscal transparency. The 13 countries that were

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considered to have made significant progress in 2019 were: Uzbekistan, Somalia, Madagascar, Malawi, Haiti, Guinea, Egypt, Ecuador, Djibouti, Chad, Benin, Bahrain, and Angola. A determination of “significant progress” indicates that during the review period a government has satisfactorily addressed a key deficiency in meeting the minimum requirements of fiscal transparency. A key deficiency is some material condition or fact that causes a government not to meet the minimum requirements of fiscal transparency. Countries like Ethiopia, Liberia, Pakistan, Saudi Arabia, Zimbabwe, Zambia, etc., fell in the same category as Nigeria to be among the 54 countries that did not make progress in Fiscal transparency. Commenting on Nigeria’s set back, the US Department said, “Budget documents provided detailed estimates for revenue and expenditure but did not include allocations to and earnings from state-owned enterprises. The government maintained off-budget accounts not subject to adequate oversight or audit.”

CBN gives banks 24 months to wind down exposures to corporate, individuals without TIN, BVN Hope Moses-Ashike

entral Bank of Nigeria (CBN) has given deposit money banks 24 months from the effective date of the new prudential guideline (January 1, 2020) to wind down exposures to corporates without Tax Identification Number (TIN) and individuals without Bank Verification Number (BVN) or individuals with BVN that are not resident in Nigeria. The CBN on Friday issued a revised prudential guideline as part efforts towards enhancing the quality of deposit money banks’ assets. According the guideline, a bank that lends to any corporate entity without a TIN and individuals without BVN or non-resident individuals with a BVN from the effective date of the guidelines or a bank that fails to fully wind down its existing exposures to such entities by the stated date is in contravention of the regulation. The prudential guideline states that in addition to any other sanctions that the CBN may impose, the amount of such exposure shall be deducted from the bank’s capital in computing capital adequacy ratio. The total value of credit allocated to the private sector by the banks stood at N15.21 trillion as at first quarter (Q1) 2019. Oil and Gas and Manufacturing sectors

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got credit allocation of N3.49 trillion and N2.23 trillion to record the highest credit allocation as at the Q12019, according the National Bureau of Statistics (NBS). Under limit on exposure to a single obligor/connected lending, the CBN states the total outstanding exposure by a bank to any single person or a group

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of related borrowers shall not at any point in time exceeds 20 percent of the bank’s shareholders fund unimpaired by losses. “50 percent of a bank’s offbalance-sheet engagements shall be applied in determining the bank’s statutory limit to a single obligor as per 3.2(a) above,” it states.

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Human capital and the future of work in Africa (2) STRATEGY & POLICY

MA JOHNSON

he Fourth Industrial Revolution is here. Automation, artificial intelligence and other technological advances associated with it have started changing the nature of work globally. The technological train is moving on the fast lane and it would be better if Africans catch-up with it. The workplace will undergo significant change in the coming years. It is those African countries that prepare their citizens for it that will reap its benefits. Africa’s greatest challenge will be how to create enabling environment and right policies for its future generations to maximise gains from the industrial revolution. Whether we like it or not, the fourth industrial revolution will determine the type of jobs that will be available in Africa in the next decade; how and where people will work; and what African governments need to do to prepare its future workforce for higher performance and productivity. Nigeria is the main concern of this writer with respect to the future of work in Africa. If Nigeria could do well technologically and economically, it would spur most African countries towards development. Regrettably, an assessment of human capital in Nigeria is below par. Why? Quality of education is still below acceptable standards. One wonders why elected and appointed officials of governments at local, state and federal levels are not having sleepless nights

about the state of affairs in the education sector of the country. Education is a critical factor for improving the quality of human resources for developing new skills, cultural and behavioral values needed in the industry. With technology changing rapidly, it is the general level of educational attainment in Nigeria that gives an implicit indication of its technological capability. Technology will influence the workplace of the future and impact positively on the education system, if Nigeria is interested in developing technologically. Yet the number of out-of-school children keeps increasing. Most Nigerians are extremely poor and as a result their standard of living is grossly compromised. This category of Nigerians does not have access to good medical facilities. Overall, the country’s human capital is weak. An important requirement for the fourth industrial revolution is talent attraction and retention. Most of our talented citizens are moving to Europe, Canada and America in search of greener pastures. Instead of undertaking comparative analysis that will put Nigeria’s human resources in context, we isolate personalities who have achieved excellence in foreign organisations and research institutions including internationally acclaimed scientists, engineers, lawyers and writers to generalise that Nigerians are not doing badly. Yet, we have millions of illiterates and unemployed youths. There is a general belief that most Nigerians who excel in the international arena have done so because of their education and experience abroad. This writer differs slightly from this belief. Not all Nigerians who succeed abroad were raised there. In fact, some of them grew up in Nigeria and went abroad to further their education, came back home and they have been doing well. There are those who have not schooled

or lived abroad and have reached the peak of their professional career. Environment is a complex totality of many things. The role of environment is so great that it affects our society and people’s behavior. We have witnessed instances where environmental degradation affects human capital investments through negative health effects. The implication is that poor environmental quality slows economic growth due to negative impact on human capital. We have equally observed to a large extent that our environment does not open doors of opportunities for many people to achieve their dreams because of the “Nigerian factor”. As a result, many of us are caught in between patriotism and survival. But we have seen quite a large number of Nigerians who have displayed their skills in doing things well. While others become quite good at something even when they do not have much talent, but they are willing to work hard at the skill. The emphasis here is that Nigeria must not be allowed to die an intellectual death if truly we are going to take active part in the fourth industrial revolution. Nigeria cannot continue to have an unenviable reputation as a politically unstable society. A society where we have inferior elections and insecurity occasioned by banditry, kidnapping, religious riots and tribal conflicts, all converging at a critical point in our national life to create a state of perpetual political instability will not augur well for development. In fact, the question is not merely that of a conflict between the survival of democracy and authoritarian rule but one of competence in national economic management; rationality and predictability in policy; acceptability and trust at home and within the international investment community; respect for the rule of law; human rights and property

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An important requirement for the fourth industrial revolution is talent attraction and retention. Most of our talented citizens are moving to Europe, Canada and America in search of greener pastures

rights; freedom of expression; accountability and transparency in governance. Political stability is crucial for technological and economic developments as it makes it possible to take long term strategic decisions needed to transform the society. It would also, enable the country to undertake institutional reforms and to create the environment that will help to attract international investors. One may be wondering why political stability is related to technological and economic developments. The crux of the matter is that Nigeria is now negatively perceived by local and international investment communities as one of the risky countries to invest. In all these, Nigerians are frustrated and their frustration is better seen from the standpoint of the workplace. Most workers generally take to work their cognitive traits, cultural values, social norms, traditionalism, expectations, frustrations and indeed their entire background. Because of the need for survival, rather than the desire to be patriotic, you find some people in high and low places of the society carry a baggage of characteristics to the workplace which fundamentally are anti-industry. Add to all these is the capacity of a few Nigerians for deceit, corruption, insubordination and one begins to appreciate that the quality of most of our workforce is probably of the negative genre. We must manage our diversity, ensure gender equality and inclusion for future generations to be part of this industrial epoch. We must develop a culture that supports technology. This is because technology is culture-using, culture-dependent and culture-generating. Leadership has a significant role to play in all of these. (To be continued) Johnson is an author and a retired naval engineer who has passion for African development and good governance

Donald Trump’s war on the Federal Reserve

ity Jay Powell. The man who appointed him as chair of the US Federal Reserve wonders whether he is a bigger enemy of the US than China’s president, Xi Jinping. Donald Trump entered new territory by implying his country’s central bank was run by a traitor. Previously, Mr Trump had described Mr Powell as “clueless” and a man with a “horrendous lack of vision” who is like a “golfer who cannot putt”. Also he “maybe” regrets having picked him. Anyone would think Mr Powell was trying to ruin Mr Trump’s re-election prospects. In fact, most of Mr Trump’s recent epithets came after the Fed had done what he wanted by cutting interest rates in late July. His tweet followed an otherwise anodyne speech in which Mr Powell sounded a mildly dovish tone about the Fed’s likely trajectory. His offence, it appears, was to sound agnostic about how far the Fed should go to counteract the fallout from a trade war that is harming domestic growth. Though the Fed chair was too diplomatic to single out America’s escalating trade war with China, Mr Trump correctly sensed that this was the unforced error to which the Fed chair was referring. Where does it go from here? At the best of times, US presidents have limited power to stop a recession, or even a growth slowdown. Mr Trump has already ruled out two out of the three most obvious things he can do to to keep the economy buoyant ahead of next year’s election. The first would be to call off his trade war with China. The likelihood that

it will get worse has spurred a flight to the dollar, which has more than wiped out any depreciatory effect of last month’s quarter point interest-rate cut. The US investment outlook is already fraught with uncertainty. On Friday the US president “ordered” US businesses to disinvest from China. Concerns about a US-China decoupling now seem almost quaint. Mr Trump is aiming for a full-blown divorce. This is not a climate that is conducive to higher investment. The second tool Mr Trump is abjuring is global co-ordination. This weekend he is meeting his G7 counterparts in France. It would be the ideal moment for leaders to issue a clear statement that they will act to stop competitive currency devaluations and trade wars. Such pledges have had a constructive impact on many occasions over the past 50 years. International co-ordination can steer currency markets, as happened in the 1980s, and can help to rescue the global economy, as happened in the financial crisis. But cross-border co-ordination is foreign to Mr Trump. It goes against his belief that sovereign powers should act alone. That is also out of the question. The third tool a US president can use is fiscal stimulus. Mr Trump has mused in recent days about passing a payroll tax holiday, which would put more money in American consumer pockets. However, Democrats would probably www.businessday.ng

demand a price that Mr Trump would find hard to swallow, such as a federal $15-anhour minimum wage, or a big infrastructure package. Each would boost the economy. But Mr Trump is allergic to striking deals with Democrats (and vice versa). Either way, Mr Trump now says a tax cut is off the table. That leaves him with just one tool — bullying Mr Powell. The problem is that the Fed has fewer tricks up its sleeve than Mr Trump supposes. The difference between a fed funds rate of up to 2.25 per cent, which is where it is now, and going to 2 per cent or below would be minimal at a time when we are facing fears of what former Treasury secretary Lawrence Summers calls “secular stagnation” — negligible long-term growth. It is like pushing on a piece of string, as the saying goes. A better metaphor would be that Mr Trump is administering futile beatings to the Fed chair with a golf club. The president can threaten all he likes — and even stretch the law to imply he can fire Mr Powell. That may be what eventually happens. But he cannot turn the Fed into a magic box of economic remedies. The larger danger is that the Fed is already enabling Mr Trump to indulge his most combative instincts. Every time Mr Trump threatens China, he looks to the Fed to bail him out. Mr Trump is now pushing for a 100 basis point rate cut. This puts Mr Powell in an unwinnable position. On the one hand, mon-

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EDWARD LUCE

etary easing gives Mr Trump further room to pursue his growth-dampening trade war. On the other, the Fed would be negligent if it failed to react to the incoming data. Mr Powell’s remit is to aim for the dual target of 2 per cent inflation and full employment. It is not his role to question a president who is making that task far harder. Over the long term, the Fed as an institution will probably survive Mr Trump’s assaults with its independence intact. The same looks decreasingly likely for the man who heads it. It is quite possible that Mr Powell will be replaced from among the galaxy of unprincipled job seekers who audition daily on Mr Trump’s TV screen. Technically, the president does not have the power to remove the Fed chair before his term ends in 2022. But this president is a unique kind of leader. Earlier this week, Mr Trump tweeted quotes from an admirer that likened him to “the King of Israel”. Mr Powell should beware. Biblical scholars will recall that the infamous King Herod was fond of having heads served to him on a platter.

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Prosper Africa - America’s renewed outreach RAFIQ RAJI

n June 2019, America’s deputy commerce secretary Karen Dunn Kelley launched the President Donald Trump-led American government’s “Prosper Africa” initiative at the biennial Corporate Council on Africa’s US-Africa Business Summit, which was held this year in Maputo, Mozambique. This was the first cabinet-level engagement by the Trump administration on the continent. Kelley echoed the views of Commerce Secretary Wilbur Ross two years earlier, at the same summit held in Washington DC, about Africa’s relatively high economic growth, increasing urbanisation and expanding consumer class. And even as Prosper Africa is by far the most significant African policy initiative of the Trump administration thus far, it could be objectively inferred the continent may still not be a major priority for it by the fact that it was a junior commerce secretary that presented the signature programme on the continent. Still, and as mentioned by Kelley, America remains the largest donor of aid to Africa. American trade with Africa has been declining, however. US exports to Africa are down 32 percent from a 2014 high, for instance. While not mentioning China directly, Kelley suggests the decline can be attributed to the “increasingly sophisticated but too often opaque business practices of foreign competitors.” Still, Kelley notes other reasons for the decline in American trade with Africa. Many US businesses seem ignorant of their government’s “export, investment and risk-mitigation tools”, for instance. Another reason, Kelley says, is that American officials working on the continent do not cooperate well enough with one another. In her words, they “too often

worked in silos”. US companies also face significant constraints when doing business in Africa. Poor infrastructure, scanty data, shallow capital markets, hard currency shortages, exchange rate volatility, complicated regulatory regimes, cumbersome customs practices and local content requirements are some examples. Trump’s Africa initiatives thus far are as follows. The Better Utilization of Investments Leading to Development (BUILD) Act signed into law in October 2018 enabled the establishment of a new frontier markets-focused International Development Finance Corporation. Months earlier, in April 2018, Trump also signed legislation to increase the number of African countries utilizing preferences under the African Growth and Opportunity Act (AGOA) and increase the flexibility of the Millenium Challenge Corporation. In the same year, the Trump administration also launched “Power Africa 2.0” to help facilitate solutions for the continent’s power shortages. The American government is also looking to negotiate bilateral free trade agreements (FTAs) with interested African countries. In this regard, it has already signed memoranda of understanding with Cote d’Ivoire, Ethiopia, Ghana, Kenya and Mozambique. But how would these potential bilateral FTAs fit with the recently operationalised African Continental Free Trade Agreement (AfCFTA)? Judd Devermont, director of the Africa program at the Centre for Strategic and International Studies (CSIS) in Washington DC and former US national intelligence officer for Africa is unequivocal about the answer when I asked him in mid-July. Devermont argues they would not. While acknowledging the significance of the AfCFTA, he asserts “the US government has been disappointingly absent as a voice in support of continental integration.” Simply put, Prosper Africa is largely a coordination framework. The American government will be providing a one-stop shop that synchronizes the resources of more than a dozen US government

agencies to provide technical assistance, capacity-building and so on for the facilitation of transactions. It also aims to ease the trade barriers that constrain American businesses and indeed African ones as well, on the continent. Is countering China the key motivation? There are doubts about whether Prosper Africa is really intended to help African countries. Some believe the motivation is largely China’s currently dominant position on the continent. Such suggestions are not unfounded. Trump’s national security advisor John Bolton did not mince words about his country’s geopolitical goals on the continent in his mid-December 2018 speech at the Heritage Foundation in Washington DC. “Under our new approach, every decision we make, every policy we pursue, and every dollar of aid we spend will further US priorities in the region,” Bolton said in what he described as “the Trump administration’s new Africa strategy”. Bolton also identified China and Russia as key competitors on the continent, arguing China and Russia use corruption and indebtedness to hold African countries “captive”. Devermont says “Prosper Africa is more than merely an effort to compete with China”, however. He argues it is about increasing American trade and investment in Africa. To buttress his point, he asserts Africa “has been a consistent priority for the United States, and successive US administrations have developed signature initiatives to advance this goal – even before China’s dramatic rise in Africa.” “Prosper Africa is really about addressing longstanding challenges within the US government that have impeded support for the US private sector”, Devermont adds. However, he acknowledges China’s expansion may have added a new urgency and focus, but considers it inaccurate to interpret the US effort solely in terms of “great power competition.” Ways to maximise benefits for both sides In a recent publication by the Brook-

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Prosper Africa is largely a coordination framework. The American government will be providing a one-stop shop that synchronizes the resources of more than a dozen US government agencies to provide technical assistance, capacitybuilding

ings Institution, a public policy think tank in Washington DC, Landry Signe, Rubenstein Fellow at the Africa Growth Initiative of the Brookings Institution and Shanghai-based Eric Olander, managing editor of the China Africa Project (CAP), a multimedia platform on China’s engagement with Africa, suggest US policymakers and business leaders should focus on manufacturing and intra-African trade instead of commodities. Signe and CAP’s Olander also suggest the US embrace the AfCFTA, which is expected to boost consumer and business spending on the continent to $6.7 trillion by 2030 and annual manufacturing output to $1 trillion by 2025 and create over 14 million jobs. “For Prosper Africa to benefit both the US and Africa, both sides need to…consider each other as friends”, add Signe and Olander. That is, “Prosper Africa should focus on winning the hearts of African leaders and citizens, as well as addressing Americans’ lack of trust in African countries as reliable business partners.” An important point raised by Signe and Olander is the need for post-AGOA certainty. Thus far, the Trump administration has not made known whether AGOA would subsist beyond 2025. That Prosper Africa does not clarify the American government’s position on this or announce an alternative is a major shortcoming. Devermont disagrees. “The U.S. initiative is neither about AGOA nor trade preferences for quota and duty-free entry of certain goods into the United States. I would not interpret that as a weakness or an indication of its sustainability. Prosper Africa is about improving US government coordination to support trade and investment whereas AGOA is focused on access to US markets for African products. AGOA’s future most likely will be addressed in a different venue and in conjunction with the US Congress.” “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Developing Nigeria’s maritime transport industry

aritime transportation plays a significant role in the social, economic and political development of different nations globally –whether developed, or a developing nation. Wherever they exist the success of an organisation is highly connected with the degree of development of its maritime transport system, and the Nigerian case is not an exception. Maritime transport promotes economies of scale, efficiency and adds value to the system in areas such as provision of mobility, creation of employment, promotion of trade and commerce, generates revenue for the government, accelerates urbanisation with inherent advantages for market expansion and helps in industrialisation. The maritime sector plays a very fundamental role in the employment of labour (skilled and unskilled) and also indirectly in areas such as insurance, customs, haulage, clearing and forwarding, logistics, storage, free trade zone activities and sorting of incoming and outgoing cargo. It is evident from the above that Nigeria has a great potential for an extremely buoyant and viable maritime industry and we must give it our all in order for us a nation to

maximise it. In the pursuit of the economic progress of our nation there is need for an effective and efficient maritime transport system because of its vital role of facilitating logistics and trade through connecting the local markets with the national and international markets and destinations. It also helps encourage the development of transportation institutions, expansion of transport infrastructure, simulates tourism and also helps facilitate international relations. It is characterized by high demand, very capital intensive, labour intensive, it needs high technical skills, determination of trade patterns, and it needs regular upgrade. Some of the activities it provides are ship-harbour which is pilotage, dredging, provision of berths, maintenance of navigable channels and stevedoring activities, it also helps in the provision of ship-port interface such as loading, unloading of cargoes, freight services. Lastly, it helps in the provision of port –land interface such as delivering cargo to and from the connected inter land. Some of the above functions require well-coordinated strategies, approaches and organisation.

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The relevance and relationship of the maritime sector to the growth of our nation must be taken seriously into account in the formulation of policies because of its strategic role in the economy; all imports and exports move through the maritime transport sector which is central for greater efficiency and competiveness to be achieved in trading. The urgent need for our government to support and strengthen the capacity of the industry for the development and growth of the maritime industry will definitely help develop the huge prospects and potentials of the Nigerian economy. Some of the areas where the government can come in are adequate funding of the sector, investment and access to available funds for ship acquisition, development of port infrastructure programmes, associated logistics infrastructure support, dredging of channels, ports terminal development, intermodal connections, workforce resource development and installation of modern information computer technology systems. The Nigerian economy is blessed with abundant human and natural resources which makes it unique and endowed. We are currently ranked 29th in terms of the

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2019 GDP ranking, currently one of Africa’s largest trading partners of the US and also the largest oil producing country in Africa. Maritime represents a vast and complex structure in the nation’s transport system in many ways because it provides a number of interrelated and inter-connected activities. It is important to note that for us to achieve greater success in this sector, as a nation we must urgently start harnessing the full potentials of our maritime transport by constantly upgrading our infrastructures, workforce and we must operate it in a global and competitive standard in order for it be more attractive to both local and foreign investors which will definitely help create greater efficiency and add more value to the economy of our nation. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Tuesday 27 August 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 GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri

A lazy habit: Delay in federal and state cabinets’ formation

n Nigeria, unusual, crazy and inexplicable things do happen and because, most times, the perpetrators of such acts do get away with them, they tend to become the norm. In 2015 President Muhammadu Buhari squandered three whole months to set up his cabinet with colossal loss and damage to the nation’s economy, nothing was done or even said significantly to let him understand that he was toying with the fate and future of 200 million people. That was why, in his second coming, he too five months (almost equalling his personal best record), to come up with a list of recycled and worn out spare tyres for a brand new vehicle set out for a long, tortuous journey which is meant to recover lost time and makeover self-inflicted pain on both national psyche and the economy.

Unlike Nigeria, Australia held elections on May 18, Scott Morrison won, and on May 26, three days before inauguration, he announced his cabinet that was sworn in on May 29. Narendra Modi of India was sworn in on May 30 and, on May 31, he formed his cabinet, just one day after. Similarly, South Africa had its election on May 8, 2019; inauguration took place on May 25 and on May 29, just four days after, Cyril Ramaphosa, the new president, formed his cabinet. Senegal held elections on February 24. Macky Sall who won the election was inaugurated on Tuesday, April 2, and the following Monday, April 8, he set up his cabinet. But President Buhari who was inaugurated on May 29 formed its cabinet just a couple of days ago, August 21. This inexplicable delay in setting up a cabinet, it seems, has become the norm. And if that was not enough salt on a festering sore, the state gover-

nors have copied this lazy habit. Almost six months after their election on March 9 and three months after their inauguration on May 29 most of them are yet to appoint commissioners. The presidential system of government which Nigeria runs and the enabling constitution provide for an executive council, at federal and state, to assist in the development of the economy and wellbeing of the people. It smacks of political and economic bankruptcy and administrative naivety and incompetence, therefore, for a governor to seek election, get elected into office and delay the appointment of his commissioners on the pretext or flimsy excuse that the state has no money. This embarrassing situation can only be likened to an entrepreneur who sets up a school, gets students into the school and turns round to tell their parents that he has no money

to pay teachers and, therefore, refuses or delays to hire any. That is an anomaly and it thrives in Nigeria. If a state governor, like the school proprietor, lacks money to run his state because the more reason he should appoint smart advisers to help him get the money. It seems to us that these governors don’t really understand the implications or risk of running a government. It’s like a chief executive shirking its responsibility to stakeholders because he lacks a board of directors. It is unfortunate. It underscores the allegation that many Nigerian politicians come into public office without any vision, mission, ideas or programmes to pursue and execute. There are no excuses for state governors still waiting for manna from heaven in order to set up an executive council and settle down to the real business. Be decisive and get to work. Now.

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Visa extension and the aggregate rule – Matters arising ADENIKE YOMI-FSEUN & BUKUMI OLANIYONU

n September 2015, the Federal Ministry of Interior, the supervising Ministry for the Nigeria Immigration Service, announced, through a publication in some national dailies, new guidelines for the control and monitoring of non-resident expatriates in Nigeria. This category of expatriates is not covered by the Combined Expatriate Residence Permit and Alien Card (CERPAC) regime. These guidelines, among other things, stipulated some conditions for extension of stay of non-resident expatriates in Nigeria. However, a key aspect of these guidelines, the aggregate rule, appears to have generated some controversy and concerns among stakeholders, especially in relation to family visitors and those visiting for the purpose of tourism. This article seeks to examine the visa extension policy, the aggregate rule and the burning issues that need to be addressed by the regulators to ensure government’s aim of creating an enabling environment for business and tourism activities is achieved. Nigeria’s visa policy provides for various categories of entry visas to Nigeria. For short-term work related assignments, entry is permitted on Temporary Work Permit (TWP) visa (usually between 4-12 weeks) while Subject to Regularization (STR) visa is for long term assignments and residency. On the other hand, Business visitors, Tourists or family visitors are allowed entry on the applicable business or tourist visas to Nigeria. Upon arrival in Nigeria, all visitors are issued with the relevant arrival stamp which indicates the allowed period of stay in the country. This arrival

stamp is also referred to as the Visitor’s Pass (VP). VP of 60 days is typically granted to holders of TWP visas while 30 days is issued to those on business or tourist visas. Expatriates on STR visas are issued VP of 90 days. With the introduction of the visa extension guidelines in 2015, opportunity for visitors to stay in the country beyond the validity of their arrival stamps received a boost. Based on the policy, all visitors are entitled to a minimum of 56 days in Nigeria, irrespective of their visa category and at no cost. However, statutory payments would be required from 57 days upwards. Visitors that intend to stay for 57 - 90 days in Nigeria would be required to pay an extension fee of $200. The $200 is for 34 days extension after the initial 56 days, of free stay in the country. A subsequent extension for a period of 91-180 days attracts a statutory payment of $1,000. Any visitor that stays for more than 3 months at a stretch in Nigeria is liable to pay $1,000 and those who intend to stay beyond 180 days would be required to pay $2,000. It should be noted that, irrespective of the extension fee, once a visitor departs the country, the payment made to process the required extension of stay ceases to be of any effect. Based on the revised guidelines, the Nigeria Immigration Service (NIS) uses the aggregate rule to determine applicable extension fees. The aggregate rule states that ‘in determining the applicable extension fee, an aggregate is taken of all periods of presence in the country and periods of absence, starting from the date of first arrival into the country’. This rule takes into cognisance of all visits to Nigeria within a 12-month period. Thus, the duration of stay while in Nigeria and outside are considered in determining the applicable exten-

sion fees. For example, let’s say we have “Expatriate A” who first arrived Nigeria on a multiple entry tourist visa on 1 October 2018, stayed for 50 days in the country, and then exited the country. If this “Expatriate A” returns to Nigeria on 15 January, 2019, and requires an extension of stay beyond the allowed period of 30 days, he would be required to pay an extension fee of $1,000. This is because between 1 October 2018 and 15 January 2019 when he returned to Nigeria, there is an aggregate of 97 days, thereby placing the expatriate within the 91-180 days bracket. One of the objectives of using the aggregate rule to determine the applicable extension fees is to discourage visitors from overstaying in Nigeria on a nonwork related visa. Until December 2018 resident expatriates in Nigeria paid a thousand dollars ($1,000) for their work/ residence permit (CERPAC) annually, while this same amount was required from any visitor staying for more than 90 days. For family visitors, whose spouses are on non-resident status in the country, the aggregate rule poses a huge financial burden to them. This, in turn, may affect retention of specialized skilled personnel who may decide to exit the country due to the high cost of keeping their close family members with them on visits. Furthermore, the aggregate rule could also impede Foreign Direct Investment as intending investors, who may have to make several trips to Nigeria on Business visas and request for extension of stay within a 12-month period could fall into the $2,000 category. In addition, tourism all over the world has proven to be a huge source of foreign exchange critical for economic development. Several countries within the Africa region, including Kenya, South Africa, Zambia and even beyond Africa,

‘

A clear distinction in the extension fees that would be paid by tourist, and family visitors on one hand and those on business and temporary work permit visas

have been able to tap into the potentials that tourism provides to fuel economic development and growth. Unfortunately, many observers have noted that Nigeria has not been able to fully realize the potentials that abound in its tourism industry. Although this cannot be attributed fully to it, the high cost of securing extension of stay due to the aggregate rule may inhibit the development of tourism activities in the country. Given the challenges that the aggregate rule presents to family visitors and tourists, the Nigerian government, through the Federal Ministry of Interior and the Nigeria Immigration Service, is encouraged to review the aggregate rule aspect of the visa extension policy. There should be a clear distinction in the extension fees that would be paid by tourist, and family visitors on one hand and those on business and temporary work permit visas. Specifically, expatriates on tourist and business visas (who do not carry out any work and who also do not earn any income while in Nigeria) should not be subjected to same rate as those on a work visa (TWP). There is no doubt that Nigeria, as a developing nation, requires Foreign Direct Investment, which may come in the form of new investments and through the activities of tourists, to grow the economy. Therefore, it is hoped that the government would look into the issues that have been identified in the extension guidelines and address the concerns of stakeholders to ensure that the country reaps the benefits of global migration, which has become a recurring feature all over the world. Yomi-Faseun, (Associate Director, KPMG) & Olaniyonu, (Manager, KPMG), are both of the Tax, Regulatory and People Services Division of KPMG, Nigeria

The Philippines dengue outbreak and rising global dengue risks

n the future, dengue outbreaks will escalate worldwide. Due to tropical and socioeconomic conditions, climate change (and covert biological efforts), dengue can only be contained through multipolar cooperation. In mid-July, Philippines health authorities declared a “national dengue alert.” In early August, the Department of Health declared a National Dengue Epidemic. By now, the number of cases has soared to 170,000, with 720 deaths; that’s 100 percent higher relative to 2018, despite a delayed rainy season. The most affected age group among dengue deaths is 5-9 years. The dengue outbreak in the Philippines and several other South and Southeast Asian countries is now international headline news. But how did dengue become “endemic” to these countries? The conventional dengue narrative By the 2010s, dengue caused the greatest human disease burden of any arbovirus – that is, viruses that are transmitted by mosquitoes, ticks, or other arthropods, including yellow fever – with estimated 10,000 deaths and 100 million symptomatic infections per year in over 125 countries. Historically, the first epidemic instances of dengue occurred in Asia, Africa and North America in the late 18th century. The ecological disruption in Southeast Asia and the Pacific during and after World War II fostered conditions for increased transmission of mosquito-borne diseases. The first recorded dengue hemorrhagic fever (DHF) epidemic occurred in Manila, in the early 1950s, but within 20 years the disease in epidemic form spread throughout Southeast Asia. By the mid-1970s, dengue was the leading cause of hospitalization and death among chil-

dren in the region, while epidemics intensified in the Pacific and the Americas. Since the 1980s and 1990s, epidemic dengue transmission has intensified further, with a global resurgence of dengue fever. In this view, the Philippine dengue epidemic is the net effect of environmental conditions (last July was the warmest in recorded history), vaccination debacle (Dengvaxia mess, corruption), extreme weather (high precipitation), living conditions (high urban density), and socio-economic vulnerabilities (low living standards, high income polarization, weak public-health system). Yet, medical studies presume that dengue is “endemic” to certain climate areas, even though it has been purposefully exploited ever since the postwar era. The Philippines has a special role in this dark history of experimentation on unwitting human subjects. US bio-tests began in the Philippines in 1906, when Richard P. Strong, then head of the Philippine Biological Laboratory, inoculated 24 inmates of Manila’s Bilibid Prison with a cholera vaccine that had been contaminated with plague causing 13 fatalities. The covert dengue history After World War II, the United States quietly augmented domestic efforts by recruiting major Nazi and Japanese bio-warfare scientists. As weaponisation activities began with disease vectors in the early 1950s, the focus was on plague-fleas, mosquitoes, and yellow fever. During tests in Utah, Georgia and Florida, hundreds of thousands of fleas and (yellow fever) mosquitoes were dispersed, according to US Army studies. Until the early 1970s, US programme stockpiled dangerous bioagents and pursued research on many more. In 1972 the Biological

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Weapons Convention (BWC) banned the “offensive” use of biological and toxin weapons, yet the treaty, which suffers from verification and compliance issues, left the door open for “defensive” bio-warfare and “research” in major powers. Historically, dengue fever had been the focus on US Army and CIA biological warfare researchers for more than half a century. US Army’s Biological Warfare facility at Fort Dietrick, Maryland, has experimented with dengue fever, as verified by US historians and congressional committees since the 1970s. By 1981, Cuba struggled amid an epidemic of hemorrhagic dengue fever, although it did not have a history of severe dengue outbreaks. During the Cold War, when biological agents were produced in industrial scale by the Soviet Union and the US, the threat of the mutually assured destruction constrained risks. After the Cold War, the Nunn-Lugar Cooperative Threat Reduction Programme (CTRP) presumably aimed to keep the former Soviet Union’s nuclear and chemical infrastructure from rogue nations and terrorists. Yet, in 1996 Congress expanded the programme internationally. Branching from the Nunn-Lugar programme, bio-labs are funded by the Defense Threat Reduction Agency (DTRA) under a multibillion dollar military Cooperative Biological Engagement Programme (CBEP). The CBEP labs are located in 25 countries, including in Eastern Europe (e.g. Georgia and Ukraine), the Middle East, Africa and Southeast Asia – and the Philippines. Critics claim that some of these locations have seen outbreaks of tropical diseases, which are not endemic to the area. After 2015, sand flies, which can be found in Philippines (and were tested on humans in US in early 1970s),

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have infested areas in Tbilisi, Georgia. In turn, outbreaks of tropical diseases, such as dengue, have become more severe. Until recently, there had been no dengue outbreak in the US since the 1930s. Presumably, dengue had been eradicated, despite global increases in incidence and severity, and immigration. But in 2009, Key West, Florida, several residents showed infection. According to a study by the Centers for Disease Control (CDC), the infection rate in the area was 5 to 8 percent. Mosquitoes known to spread dengue fever were found in more than half of US states. According to CIA documents and the 1975 Congressional committee, three sites in Florida, Key West, Panama City and Avon Park, and in central Florida, had been used for experiments with mosquito-borne dengue fever and other biological agents.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/

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Tuesday 27 August 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

AVIATION

Aviation firms’ revenue, bottom-line hit 5-year low on economic headwinds DAVID IBIDAPO & SEGUN ADAMS

he year 2018 is a period the Nigerian aviation industry represented on the Nigerian Stock Exchange (NSE) cannot forget in a hurry, as they slipped into a loss zone following a decline in revenue which was the first of its kind in the last 5 years, BusinessDay analysis show. An industry-based analysis of 3 aviation companies listed on the NSE revealed net income slid by N13.07 billion to record a net loss of N10.82 billion during the period halting growth in income since 2016. Also, revenue plunged 49 percent to N25.52 billion in 2018 against N49.74 billion recorded in 2017 also halting a consistent growth in revenue since 2014. This saw the industry’s annual average growth rate slow to 3 percent from 9 percent as of 2017. Industry watchers say the travails of domestic airlines include funding, the impact of economic downturn, the naira to the dollar exchange rate, unfriendly regulations, cost of aviation fuel as well as low infrastructures, These problems have been there for long and are the causes of several domestic airlines closing shop. Some of these airlines include Tat Nigeria, Max Air, Discovery, Kabo Air, Harka Air, Donair Aviation, Association Aviation, Allied Air and recently, FirstNation and Aero contractors. Ali Magaji, Aviation fi-

nance consultant said there are significant challenges for the industry as a whole to find finance for the new deliveries. “Today, most of the airlines owe Asset Management Corporation of Nigeria (AMCON) substantial amount of money beyond the capacities of their balance sheets, which reveals that it is getting increasingly difficult for investors to source financing options,” Magaji said. Weighing on the Aviation industry performance according to analysis is the significant loss after tax of Medview Airline plc in 2018.

Medview recorded a loss of N10.35 billion in aftertax profit after recording its first billion profit in 2017 (N1.25bn), showing the airline’s dire straits. Recall that the airline pulled out of the London Gatwick and Dubai routes last year after a brief stint in the international market, citing harsh local operating environment, aircraft leasing programme that went awry and aggressive aero politics. Also, between November 2017 and June 2018, the airline laid off a huge chunk of its workforce especially the outstation offices.

BusinessDay checks show Medview suspended its operations as all its aircraft have gone out of maintenance. Sources close to the airline said the development may be connected to the airline’s only operating aircraft B737-500, suddenly going out of service. Skyway aviation handling company plc on the other hand during the period slid into a loss of N665 million in 2018 amid a 26 percent growth in revenue to N6.13 billion against N4.85 billion in 2017. Amongst peers NAHCO remains the most traded stock on the exchange however the last five years have

seen shareholders value eroded by 47 percent, hence losing N3.40 billion. The aviation sector in Nigeria, as elsewhere, is pivotal to the transportation system and as an important “gateway” to the outside world, the sector’s contribution to the economy cannot be downplayed. The National Bureau of Statistics reports an average annual output of $179 million in the last four years. The analysis shows the sector has grown by a Cumulative Average Growth Rate (CAGR) of 3.99 percent, which is faster than the broader economy

with an average of 0.28 percent in the same period. Nigeria’s aviation sector features (20) airports and many regulated airstrips and heliports; 23 active domestic airlines; 554 licensed pilots; 913 licensed engineers and 1700 cabin personnel, according to the Nigerian Civil Aviation Authority (NCAA). In comparison, Africa has 731 airports and 419 airlines with an aviation industry that supports around 6.9 million jobs and $80 billion in economic activity, data shared at the 2019 World Economic Forum suggest.

EQUITY

Nigerian stocks edge higher over African peers on Buhari’s cabinet inauguration OLUWASEGUN OLAKOYENIKAN

he allocation of portfolios to 43 appointed ministers by President Muhammadu Buhari six months after his second term reelection came as succor for stocks listed on the Nigerian Stock Exchange (NSE), delivering the most return for investors in the market last week compared with its African peers. Although before the inauguration, the Lagos bourse had lost 13.91 percent of its value since the start of the year. It snapped a three-day winning streak in the week to halt its extended bearish

run, making listed stocks advance 3.25 percent and adding N403 billion to investors’ wealth. “We believe that the bullish run would be short-lived due to sustained weak investor sentiment in the market, analysts at Lagos-based Afrinvest Securities Limited stated in a note to clients. As a result of bargain hunting in bellwether stocks such as MTN Nigeria and Zenith Bank, the NSE broad index All-Share Index booked its best weekly performance in almost three months thereby reducing its year-to-date loss to 11.6 percent and making it take a lead among its regional peers which largely

witnessed a bearish week The Bourse Regionale des Valeurs Mobilieres (BRVM), a regional stock exchange serving Benin, Burkina Faso, Guinea Bissau, Cote d’Ivoire, Niger, Mali, Senegal and Togo, slumped 0.83 percent. The Botswana Stock Exchange lost 1.09 percent of the market, while the Dar es Salaam Stock Exchange in Tanzania was down 0.23 percent. Similarly, the Ghana Stock Exchange composite weakened by 0.91 percent, while the All-Share Index of Zambia’s Lusaka Stock Exchange fell 1.01 percent. The Malawi All-Share Index dropped marginally by 0.07 percent,

while the key performance indicator of the Nairobi Securities Exchange closed at 1.01 percent lower. Other African markets where key performance indices declined over the week are the Namibian Stock Exchange which shed 1.13 percent, the Stock Exchange of Mauritius which fell by 0.27 percent, and the Uganda Securities Exchange which plunged 0.62 percent. However, the All-Share Index of the Johannesburg Stock Exchange, Africa’s largest stock exchange, rose 0.23 percent. Also, the stock market index for securities in Egypt, EGX 30, increased by 0.27 percent, while the Tuni-

sia Stock Exchange appreciated by 0.52 percent. Out of the 43 ministers, 14 returning ministers retained their past portfolios while some ministries were restructured by merging and splitting some ministries. Afrinvest’s analysts were optimistic about the development, stating the need for ensuring confidence in existing approaches and policies of the government. The Ministry of Budget and National Planning was merged with Finance Ministry and headed by Zainab Ahmed, while the Ministry of Power led by Saleh Mamman and Ministry of Aviation headed by Hadi Sirika were

unbundled from the former Ministry of Power, Works and Housing and Ministry of Transportation. Other new ministries created are Humanitarian Affairs, Disaster Management and Social Development; Police Affairs; and Special Duties and International Affairs under the watch of Sadiya Umar, Muhammadu Dingyadi and George Akume, respectively. “I am pleased to inform you that the federal ministries have been further expanded to ensure effective service delivery,” the president said while assigning portfolios to the newly sworn-in ministers in Abuja.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Tuesday 27 August 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CONSUMER GOODS

Dangote Flour Mills worth N159.24bn based on enterprise value BALA AUGIE

ang ote Flour Mills’ enterprise value, which is seen by investors as better measure of the value of company, is N159.24 billion, based on Olam’s consideration of N120 billion, BusinessDay calculation shows. The figure represents an 11 percent increase from N143.23 billion enterprise value (EV) calculated by BusinessDay a fortnight ago using the market capitalization of N104 billion as at August 16. This also shows that even though the price of Dangote Four has rallied by 93 percent over the last traded share price of N10.70 on 18 April 2019 (being the last business day prior to the date of date the initial binding offer), the Olam’s last offer of N24 per share still represents an additional premium if 11 percent to shareholders of Dangote Flour. The final offer of N24 represents 124 premium to Dangote Flour’s lasttradedpriceofN10.70 before the initial offer date and 24 percent premium to Dangote Flour’s lasttradedpriceofN19.40 before the final offer date.

The enterprise value (EV) including equity (money that belongs to shareholders) and debt (obligations to creditors and financial institution), is the theoretical takeover price of a firm if it were bought. EV is calculated as market capitalization (total number of ordinary shares multiplied by market price per share) plus total debt (both long and short term) minus cash and cash equivalent in the balance. Olam International Limited (‘’Olam”) and its full owed subsidiary, Crown Flour Mills Limited (“CFML) submitted an initial binding offer on 23 April 2019 to the board of Dangote Flour Mills to aquire Dangote Flour’s outstanding and issued for a final consideration of N120 billion. Tiger Brands, a South African firm had in 2012 bought a 63 per cent stake in Dangote Flour and pasta maker, but few years down the line the Dangote Group bought back the company after the new owner’s sustained losses repeatedly on its operations. Dangote Flour Mills and other consumer goods firms are feeling the pains of a harsh and unpredictable macroeconomic environment as a high

inflationary environment, decrepit infrastructure, double taxation and weak consumer spending continues to squeeze margins. Low growth and high unemployment has further dampened consumer purchasing power, which is showing up in lower sales volumes for consumer firms. The country’s GDP expanded by 2.01 percent in the three months through March 2019, from a year earlier; that compares with 2.4 percent expansion in the fourth quarter. While inflation figure for the month of July fell to a 12 months low of 11.08 percent, the figure, however, falls below the central bank’s target range of 6 percent and 9 percent. Over eighty percent of Chief Executive Officers surveyed by a polling agency say the gridlock at the Apapa Port is responsible for poor performance and their goods get trapped for an indeterminate period of time. Such delays causes disruption on the production floor and it also distorts the inventory cycle. Dangote Flour’s share price closed at N20.80 as at August 16, and a market capitalization of N104 billion.

OIL & GAS

Agusto expects downstream operators to grow revenue by 8% in 2020 AMAKA ANAGOR-EWUZIE

here are expectations that operators in Nigerian downstream oil and gas sector can grow revenue earnings from the sale of white fuels by 8 percent in 2020, from the N4.5 trillion recorded in 2018, latest Oil and Gas Downstream report released by Agusto & Co., has stated. According to the report, this segment’s revenue is expected to remain within same level in 2019 owning to tepid growth of the economy in the first half of 2019 as a result of electioneering activities. Presenting the report in Lagos recently to newsmen, Yomi Akinola, analyst with

Agusto & Co. said operators in this segment of the market has been experiencing weak cash flow owing to soaring trade receivables, alongside constrained access to credit. She however noted that issuance of promissory notes by the Federal Government to operators has been a positive development. “We expect that operating profit margins will average about 2 percent in the near term driven by how efficient an operator’s distribution network is, while profitability in the industry will be upheld by multiple cycle nature of the downstream business vis-a-vis a conservative equity base,” Akinola said. Akinola, who noted that

opportunities exist in the industry while leveraging on improving distribution networks and product diversification, said growth of about 8 percent are expected for 2020, while north of 15 percent may be recorded should the premium motor spirit (PMS) market be deregulated. She however said that pricing of products remains a top subject, not just in Nigeria, but globally, largely driven by demand pressures vis-à-vis the ability to refine crude oil, supply dynamics of refined products and regulatory peculiarities.

L-R: Olayeye Olugbenga, director, sales and marketing, Fidson Healthcare Plc ; Kunle Oyelana, new managing director, GlaxoSmithKline Nigeria Plc; Fidelis Ayebae, managing director, Fidson Healthcare Plc, and director, communications & government affairs, GlaxoSmithKline Nigeria Plc, Omongiade Ehighebolo during a courtesy visit by GSK to Fidson.

R-L : Segun Oni, area sales manager ,Friesland Campinawamco ; chairperson, St.Mary Catholic Church Nnodo Abakaliki, Nwagu Pauline, president Cecilia Nwankwegu, Sec. Onyibe Elizabeth and Ward leader Jovita Okemini during the Three Crowns August meeting at St.Mary Catholic Church Nnodo Abakaliki, Ebonyi State

L-R:: Tochukwu Ezeukwu , SMEs consultant; Yetunde Moito, manager, Murtala Mohammed Way Branch (Ilorin, Kwara State), First City Monument Bank (FCMB),; Head SME Liability of the Bank,. Paul Adebo; Head SME Assets, Oluremi Agboola and an official of Kofsol Group, Success Sanmi, during the Business Enterprises and Sustainability Training (BEST) organised by the Bank for SMEs on August 24, 2019 in Ibadan, Oyo State

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FASHION

Celio fashion brand launches retail store in Abuja DESMOND OKON

n a bid to promote men’s fashion, a French fashion brand for men, Celio, has recently launched a retail store in Abuja, Nigeria’s capital city. The hugely-anticipated launch was a gathering of fashion lovers from across the city of Nigeria who graced the event. There were also lots of breath-taking fabrics and fashion accessories on display as fashion enthusiast gathered amidst an atmosphere of entertainment, networking, not

only to feed their eyes, but also shop at the new store. Style influencers present at the event include Kuyet Bamai, Nigerian Fashion Blogger, and Temitope Okunuga, Content Writer, Rage Media, and other fashion lovers. The store is strategically located on the ground floor of the popular Jabbi Lake Mall in the city of Abuja. The growth in Nigeria’s fashion industry has continued to attract global attention, and drawn interest from the international community. Last year, the UK Government ex-

pressed interest in the industry, as Prince Charles, the Prince of Wales, hosted two of Nigeria’s prominent designers—Eki Orleans and Nkwo Onwuka. In 2010, data on GDP by the National Bureau of Statistics showed that “textile, apparel, and footwear” sector has averaged growth of 17 percent. But Nigeria accounts for 15 percent ($4.7 billion) of Sub-Saharan fashion market which is worth USD31 billion.

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L-R : Station Officer, MAN House Divisional Police, Nichodemus Maigari, Divisional Crime Officer Chudi Onyeanusa, winner of BLB Promo Cpl Salisu Isah, and Celestine Achi, Director General, BLB Promo during the symbolic cheque presentation of to the winner at the station in Lagos at the weekend.

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Tuesday 27 August 2019

BUSINESS DAY

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Tuesday 27 August 2019

BUSINESS DAY

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Tuesday 27 August 2019

BUSINESS DAY

Media business

NIM frowns against trend of rewarding perfidy in public office … Challenges members to reverse the development have faced as many challenges as it does at this time. “Apart from the insurgency that has refused to go away, there is increasing insecurity and fear among the people to exercise their freedom of movement, there are allegations of corruption in the most sacred temples of the land, of subjugation of national to sectional interest and a seeming loss of faith in Nigerian nationhood. “Perfidy in public office seems to be rewarded by higher public office once there is common political affiliation or sycophancy. These are practices that are antithesis to the doctrine of professional management”, he told the gathering of managers in Lagos He therefore told his members that they can reverse the trend through the propagation of good management where ever they find themselves. “We are therefore called upon

Daniel Obi

enior members of Nigerian Institute of Management, NIM have been challenged to speak against and make efforts to reverse the detrimental trend where perfidy in public office seems to be rewarded with higher public office once there is common political affiliation. Nigeria has been going through various socio-economic and political challenges in the recent time but speaking at NIM forum recently, the Institute’s President, Olukunle Iyanda identified among others, the practice of rewarding perfidy in public office and described the trend as unproductive and undesirable. According to Iyanda, the nation, in its chequered history may not

to demonstrate the highest level of selfishness, probity, objectivity and accountability in our own personal and professional responsibilities so that we can restore faith of all stakeholders in the Nigerian project” The NIM president used the occasion to confer some elder statesmen with life membership award and others with Fellows of the institute. Also speaking on the theme, Repositioning the Public service for Public Private Partnership to enhance good governance, Isiaka Bisiriyu, Head of Service, Ogun State Government said the need for continuous renewal and transformation of public service is in line with current global practice for the sustainability and continuous improvement of developmental programmes and projects embarked upon by successive administrations.

Eat’N’Go Limited marks 7 years Nigerian named as Lisbon International of doing business in Nigeria, Advertising Festival 2019 Grand Jury grows investment to N10 b Daniel Obi

at’N’Go Limited, leading franchisee for Pizza company in the world - Domino’s Pizza and its 2 other global brands, Cold Stone Creamery and Pinkberry Gourmet Frozen Yoghurt, is celebrating 7 years of continuous growth since it began operations in Nigeria in August 2012. This anniversary further throws a spotlight on the company’s success and immense progress in the dynamic quick service restaurant industry in Nigeria. As part of its growth trajectory, the QSR brand has remained consistent in the expansion of its services to more Nigerians, providing value and satisfaction for its customers. Since it entered into the Nigerian market, Eat’N’Go has recorded significant milestone across all aspects of its business with the delivery of high quality service. In the last 7 years, the brand has grown from 250 members of staff to over 2400 staff members. Increase in number of outlets to 102 and currently operates with a N10 billion investment in Nigeria.

In the course of its operations in Nigeria, the company has recorded a long list of achievements and awards, most recent of them is winning the QSR brand of the year 2019 and the CEO winning the most innovative CEO award at the Business Day Leadership Awards 2019. Speaking on the anniversary, CEO Eat’N’Go Limited, Patrick Mc. Michael in a statement revealed his excitement on the organisation’s growth in Nigeria over the years, owning its success to all its stakeholders. He said “Our experience in Nigeria has been tremendously great. Not only have we grown as a company, we have evolved enough to be a huge contributor to the Nigerian economy as well as giving back to the society. We will like to say thank you to all of our loyal stakeholders whose impact and contribution has proven priceless to us as a company’’. As part of its corporate social responsibility, it has partnered with Slum2School Africa, a volunteerdriven developmental organization that provides quality education to disadvantaged children, to send 1000 undeserved children to school in Nigeria.

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teve Babaeko, Chief Creativity Officer /CEO, X3M Ideas, has been announced by the Lisbon International Advertising Festival as a member of its revered Grand Jury for the 2019 edition of the Festival. This selection followed the successes recorded at the Cannes Lions 2019 Advertising Festivals in France where Steve Babaeko made an impactful global presentation on “The Authentic African story” and his recent listing on the Adweek’s Global Creative 100, The Lisbon International Advertising Festival which is in its fourth edition has scheduled the 2019 edi-

tion of the Festival to take place on September 20th at the Ciência Viva museum, at the Portuguese capital – Lisbon. Making the announcement in Lisbon recently, the organizers said in a statement: “The organization takes the opportunity to announce the first names of this year’s Grand Jury”, the list which numbers above 70 features distinguished practitioners cutting across critical arms of the marketing mix. “These prestigious names, coming from all around the world, increase the global character of the event, which is already one of the most important international advertising

festivals”, it added. The festival’s categories cut across the Film, Press, Radio and Outdoor. It also features the Campaign category, Promo & Activation Category, Direct Category, Event Category, Digital Category and Public Relations Category. Others include: Innovation Category, Branded Content Category, Design Category and Craft Category. Steve who is the Vice President of the Association of Advertising Agencies of Nigeria (AAAN) also doubles as the Chairman, Lagos Advertising & Ideas Festival board which organises the AAAN’s annual LAIF Awards.

Nigeria’s mobile payments firm, Paga, hits N1.5 tr in transaction value

aga, Nigeria’s foremost mobile payments company said it has it has crossed N1.5 trillion in transactions since its commercial launch in August 2012, showing a continuous pattern of steady growth. Since 2012 to date, the company has processed 87 million transactions, valued at N1.5 trillion or $5.4 billion using monthly nominal exchange rates, the company said in a statment. “Reaching one trillion in transac-

tion value is a major milestone for Paga. We are proud of our success in digitizing cash and making it easier for people to pay and get paid. We are working round the clock to continue to bring innovative solutions to the mobile payments industry as we expand our range of services” said Tayo Oviosu, Founder and CEO of Paga in the statment. With over 13 million users across all 36 states of Nigeria, Paga is an

omnichannel payments platform offering users a safe and convenient way to send and receive money and pay their bills. Users can access the platform on any mobile phone through its USSD code *242#, mobile apps or website (www.mypaga.com). In addition, Paga’s innovative wallet allows Nigerians to link multiple bank cards or their bank account - this way customers can use Paga with money from their bank account.

Guinness Nigeria displays commitment to provision of potable water for communities

s the world counts down to the 2030 United Nations’ clean water and sanitation goal, Guinness Nigeria, as part of its sustainable development strategy, has maintained its commitment towards the provision of potable water across communities in Nigeria. For Guinness, achieving this objective is sacrosanct for attaining the desired

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global wellbeing. The assurance was given during the donation of a mini water project to members of the Angwan Albarka Community in Nasarawa State. The project, which was commissioned under the Diageo Africa Water of Life Programme, is expected to bring succor to the over 50,000 thousand residents of the community, who @Businessdayng

have had to deal with sourcing for potable water for many years. At the commissioning of the project, the Head of Agribusiness, Guinness Nigeria, Jacquelyne Yawa explained that to live healthy, access to clean water cannot be substituted; hence, the desire of Guinness Nigeria to contribute its quota in support of government’s effort in this regard.

Tuesday 27 August 2019

BUSINESS DAY

ADVERTISING Mediacraft Associates clinches Stanbic IBTC new PR account Daniel Obi

tanbic IBTC Holdings Plc, a member of Standard Bank Group and Nigeria’s leading end-to-end financial services group, has appointed Mediacraft Associates as the Group’s new PR agency. The appointment took effect early this month. The appointment of Mediacraft Associates followed the conclusion of a very competitive pitch process that featured some of Nigeria’s leading PR agencies. By this appointment, Mediacraft Associates will be responsible for the PR and Reputation Management for all the 11 subsidiaries of the Stanbic IBTC Group. Bridget Oyefeso-Odusami, Head, Marketing and Communications at Stanbic IBTC, said in a statement: “The PR pitch process was very thorough, transparent and competitive and we are happy to finally announce Mediacraft Associates as our new PR agency. In arriving at this choice, we considered not just the agency’s level of competence and professionalism, but also its experience and track record, especially in the financial services sector where we play. We believe that we made the right choice.” John Ehiguese, Founder/

CEO of Mediacraft Associates, expressed excitement and pleasure on winning the Stanbic IBTC business. He said: “The Stanbic IBTC business means a great deal to us for two major reasons. First, the transparency and integrity of the entire pitch process. The second reason is that Stanbic IBTC is a brand that I have personally always admired from a distance. Both our organisations share a common set of core values, especially with regards to very high professional and ethical standards. “We are happy to finally have Stanbic IBTC Holdings PLC on our client list. There is of course the challenge of having to service all the subsidiaries in the Group, but then we did not get to where we are today by running away from

challenges. We have every intention of giving the Stanbic IBTC business our very best support and contributing our quota to making it the most admired and successful financial services group in Nigeria”, John concluded. Stanbic IBTC also confirmed the re-appointment of Playhouse Communication as its digital agency. Playhouse has handled digital services for the Group since 2014. Tolu Onile-Ere, Managing Director, Playhouse Communication, said in a statement : “On the back of being named Digital Agency of the Year 2019 by Marketing Edge, Playhouse is thrilled to be re-appointed to continue to work with Stanbic IBTC on its journey towards leveraging the digital space to service their customers, staff and the brand in general.”

Spectranet targets enhanced internet consumer experience with launch of new data plans Daniel Obi

s part of its efforts to continually innovate and offer its customers products based on cutting edge technologies , foremost broadband and internet service provider, Spectranet 4G LTE has launched Fibre on Air ((WTTx) and Home Fibre (

FTTx) based fixed line services in selected areas of Lagos city. Spectranet’s Fibre on Air service is targeted at customers living in Estates and Multi dwelling Units (apartments), using a point-to-multipoint MIMO wireless technology to offer data speeds upto 50 Mbps. Similarly, Air Fibre or FTTx based fixed line service, offers very high internet speeds of up to 100 Mbps through end-to-end Optic Fiber Cable ( OFC) based connectivity. C o m m e nt i n g o n t h e launch of these technologies, Chief Executive Officer, Ajay Awasthi says “we have been witnessing significant changes in customers’ usage behaviour trends. Apart from exponential growth in data consumption in terms of GBs , the customers are also expecting higher speeds ( Mbps) for applications like Ultra HD Videos and Gaming. Keeping all these evolving www.businessday.ng

consumer needs in mind , we at Spectranet have designed the tariffs accordingly – truly Unlimited data plans and the customer has the option of opting for a speed he/she would like to have. For example a Naira 20K per month Fibre-on-air tariff plan will offer truly Unlimited Data volume ( GBs) and a speed up to 10 Mbps. Similarly , a customer can subscriber to 50 or 100 Mbps truly unlimited data plans on Home Fibre ( FTTx). The CEO further added – “With the launch of these technologies, we really want to make a difference to the browsing experience of our customers. Backed up with our customer service , we hope to really wow our customers “ The Fiber on Air and Home Fiber services are getting launched in selected areas in Lagos city and would be expended to other areas and cities like Abuja very soon.

FRSC, Akin Fadeyi Foundation to launch Report Corruption App

he Federal Roads Safety Corps and the Akin Fadeyi Foundation, conveners of the ‘Corruption Not In My Country’ project, a micro level anti-corruption TV Drama, have announced a major strategic partnership. This was consummated at the FRSC Headquarters in Abuja recently, according to a statment. The partnership will be driven on the platform of technology as the AFF is set to launch its newly designed Report Corruption App called FLAG’IT, which was funded by MacAuthur Foundation. According to a joint statement by both parties, FLAG’IT shall serve as a tool to strengthen FRSC’s capacity to be integrity-driven, improve on public service delivery and be very responsive to public feedback. It shall also be a platform where citizens can provide positive feedback on credible and outstanding officers. Speaking at the event, the

FRSC Corp Marshall, Boboye Oyeyemi said the Presidential decree 001, which supports the ease of doing business, has created more room for the government to be accountable and transparent in service delivery. He said the FRSC has improved tremendously through innovative projects like, the Joint surveillance activity, through which the FRSC partners with other agencies to improve governance in the country; Service improvement through which Nigerians can now secure their Driver’s licenses after two months, and after been certified by a regulated driving school; and a verification portal which helps track fake licenses issued to unsuspecting public. Oyeyemi said as no system was perfect without evolving needs for improvement, the partnership with the Akin Fadeyi Foundation was timely especially as it is bringing about technological innovation as mechanism for

feedback, analytics and insight garnering for improved service delivery. Programme Officer, Akin Fadeyi Foundation, Nabila Okino commended the Corp Marshall for boldly confronting corrupt practices within the Corps. She highlighted the Akin Fadeyi’s foundation’s objectives, programs and interventions in Nigeria, which includes Anti-Corruption campaign, which is driven through the ‘Not in My Country’ Edutainment skits and the ‘Never Again’ Radio Drama skits, which has been airing on CNN Africa and other TV Channels under the funding of the John D and Catherine T. MacArthur Foundation; past training programs in schools and now the incorporation of technology in the fight against corruption. She thanked the Corps Marshall, Boboye Oyeyemi of the FRSC and his Team for their continuous efforts in ensuring safety on Nigerian roads.

APCON empowers corporate communications managers on identity design, management

he Advertising Practitioners Council of Nigeria (APCON) will host a two day training seminar for marketing communications practitioners to keep them abreast of corporate and brand communications challenges in contemporary business environment. The focus of the training is ‘Corporate Identity and Management’. The training is organized in line with APCON’s professional development initiative to offer learning and mentoring experience to industry players. Participants are drawn from across the public and private sectors of the marketing com-

munications industry. The two day programme which will hold on September 18 and 19, 2019, at Sandralia Hotel, Jabi, Abuja, will feature several sessions with experienced and expert resource persons who will focus on topics such as ‘Steps in Designing

Effective Corporate Identity’; Identity Design and Management: Laws & Regulations’, ‘Corporate Communications: Tactics & Strategies for Corporate Image Management’, and ‘The Role of Traditional and New Media in Corporate Identity Management’.

West African Ceramics celebrates trade partners

n recognition of the importance of trade partners to its continuous growth over the years, West African Ceramics Limited (WACL), manufacturer of ceramic, vitrified & roofing tiles in Nigeria and first marble & tiles manufacturing company in Africa, recently honoured its trade partners in Lagos. The event which was tagged Optimizing Opportunities, according to the company was used to celebrate its distributors nationwide for being the pillars upon which the business has stood on in the last 24 years. WACL rewarded outstanding distributors, announced new trade incentives, as well as received feedback

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from the trade partners. General Manager of the company, Bhaskar Rao stated that “This gathering gives us the opportunity to appreciate our wonderful distributors who have been the mainstay of our business and also to sharpen one another towards better productivity, so that together we can build a better business and create enhanced opportunities for all.” “As a pioneer of this industry in Africa, we continue to aim to deliver the highest quality marble products and tiles for every home with an adherence to international best practices”, he added. Rao also charged the distributors to support WACL @Businessdayng

in breaking new grounds in the year ahead, particularly towards delivering excellence across the brand’s entire value chain. In his address, the Director, Chief Nick Nzeakor, emphasized on the strategic role the company plays in the real estate sector in Nigeria and Africa. WACL in addition to manufacturing quality products also meets the needs for aesthetics and artistry in contemporary building and architecture. He therefore said the company will continue to remain globally competitive by constantly reinventing itself, to compete favourably with imported products so that their customers always get the best.

Tuesday 27 August 2019

BUSINESS DAY

Tuesday 27 August 2019

BUSINESS DAY

INTERVIEW

Now available in Nigeria, ‘genetics is the future of medicine’ First introduced into modern medicine several decades ago, genetic testing is now making a huge impact on healthcare. Pamela Jackson-Ajayi, founder and managing director, Synlab Nigeria, speaks with Anthonia Obokoh about genetic testing in Nigeria, developments in the health sector, preventive healthcare and how the health sector has changed in the past few years. Excerpt:

hat is your assessment of Niger ia’s health sector? Are we making any progress? To say we are not making progress will be incorrect. We are indeed making progress, especially in the private health sector. In the private sector, there has been a return of Nigerians from the Diaspora who have made significant investments and have set up institutions that deliver a high standard of care. These services are comparable to those done abroad, especially in areas such as cardiology, IVF, orthopaedics and of course diagnostics. In the public sector, there are also a number of institutions that have made considerable strides e.g. in cancer care, particularly with the advent of PPPs (Public Private Partnerships) and investments from the Nigeria Sovereign Investment Authority (NSIA) and others. The advent of important associations like the Healthcare Federation of Nigeria, which have helped in the advancement of the sector have all played a part. But considering our population, these are just a drop in the ocean. A lot more still needs to be done. Indeed, there are tremendous challenges in the development of healthcare in Nigeria. These include the lack of infrastructure, educational levels, and reduced budget from the government, the brain drain issue, to mention a few. In what areas are we lagging and what can we do to address the challenges? Nigeria is a vast country. There needs to be a multiplication of quality service delivery facilities around the country to effect significant change. Access is essential — access not only in terms of location but also in terms of affordability. The increase of non-communicable diseases such as cardiovascular disease, diabetes and cancer in the country is compounding our high rate of infectious disease – it is effectively a double whammy. A person having a heart attack needs to receive

effective intervention/care at a hospital within 2 hours. That individual needs to know where to go, get there on time, and be able to afford the care required. The government has a significant role to play in this process. If it is not possible to provide this level of care in government institutions, then the government needs to enable the private sector to assist in delivering these services. The establishment of PPPs is a good start. But a lot more needs to be done to reverse the brain drain and provide an enabling environment where healthcare institutions can flourish. Even more important is the establishment of accessible healthcare specific intervention funds to develop the private sector and to pay for services to enable patients receive the treatment they need. There also needs to be a huge increase in the take up of health insurance. Some states are leading in this regard but the country needs a more vibrant National Health Insurance scheme. What is your assessment of the diagnostics segment of the health sector? Are there specific challenges that should bother Nigerians? Over the past 15 years, the diagnostics segment has become more sophisticated. Nigerians are no longer compelled to travel abroad for pathology testing as companies like Synlab offer access to international standard comprehensive and specialised tests locally. There has been a proliferation of medical laboratories in the country. However, not all that glitters is gold. Nigerians need to be discerning and ensure that the centres they frequent can deliver the services they claim to provide. As with other areas, there are quacks as well as people who talk more than they can deliver. Without proper medical regulation and enforcement in place, more responsibility rests on the public to check whether the provider has the right equipment, well-trained personnel and most importantly, the provider must have an active quality management system in place to assure continuous accuwww.businessday.ng

racy and reliability of test results. Does the diagnostics segment of the health sector face policy-related challenges? Certainly, the right policies have the ability to transform healthcare in Nigeria. The Healthcare Federation of Nigeria (HFN) is a strong advocate to the government on new healthcare policies that are needed by all the areas of the healthcare sector. These policies, once fully implemented, will benefit both the public and the health sector at large. Globally, there is an upsurge in the adoption of preventive healthcare. Are Nigerians paying attention? Yes, most certainly. Nigerians are becoming more health conscious, and we are adopting better lifestyles. Just go to Lekki

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Bridge on a Saturday, and you will see it. People are paying more attention to all aspects of improved wellbeing. More people are conscious about their physical wellbeing; they exercise, do yoga or do classes where they are active. People are becoming more considerate with what they eat and how diet and nutrition impact their health. And more people are doing preventive screening tests to check their body before it shows symptoms of problems. W h a t d o e s p re ve n t i ve healthcare mean to you, and what are you doing to popularise it in Nigeria? It is a vital aspect of healthcare. There are three types of preventive healthcare – all of which are carried out at Synlab. Primary prevention aims to avoid the development of a dis@Businessdayng

ease or disability in healthy individuals. Secondary prevention focuses on early disease detection, which prevents the worsening of the condition and development of symptoms and limiting disability. Tertiary prevention focuses on reducing complications and restoring function in individuals with already established disease. The most familiar form of preventive healthcare is secondary prevention. This includes screening for conditions such as cervical cancer (Pap smears and LBC), prostate cancer (PSA) and diabetes (glucose and HbA1c assessments). However, genetic testing, which Synlab is bringing to Nigerians, moves preventive healthcare to the next level, which is primary prevention. Synlab is a partner and sponsor of the Doctors On Air radio show. This weekly programme was the first focused preventive healthcare initia-

tive in Nigeria popularising ‘Know Your Numbers’ and encouraging screening. Through its programme Doctors On Air Medical Missions, it provides these services free for the underprivileged. The second kind of intervention, which we offer is our medical missions outreach. The last edition took place August 17, 2019, at the LCDA in Ilupeju. We worked with many churches, mosques, NGOs, in markets, etc. over the years, promoting preventive healthcare and providing free care. We have also developed Synlab ‘Wellness Centres’ such as the one recently launched on Adetokunbo Ademola in Victoria Island, which aims to help individuals optimise their health. Your recently opened wellness centre handles genetic testing and other diagnostics tests; what exactly is the correlation between

genetic testing and preventive healthcare? Our health is generally a result of the interplay of three significant factors – our genes, our environment and our lifestyle (food, exercise, etc.). Understanding our genetic makeup enables us to make the right choices in our lifestyle to protect us from becoming unwell. The traditional way was a one size fits all approach. However, with the advancement of medicine, we are now able to offer tests like NutriHealth, which explicitly tells you which foods are right for you and which ones are not. SportsGen is another test that can advise you based on your genes. It provides information that helps you choose which sports you can do or should avoid minimising the risk of injury. The test shows whether your body can tolerate high-intensity training or whether www.businessday.ng

you should focus on resistance training and whether you are prone to torn ligaments and bone fractures. It is no longer enough to do cursory tests, especially for people who are seriously into sports. By popularising these tests, we hope to minimise the number of people who drop dead on the treadmill or develop injuries following other forms of exercise. Tests such as MyPGx (Pharmacogenetics) are critical, as recent studies have shown that in the USA, up to 25% of deaths are attributable to adverse drug reactions (ADRs). MyPGx lets you know what medications work for your body (genes) and which ones may cause harmful side effects. That way, your physician can avoid prescribing ineffective or frankly toxic drugs for you, e.g. a newly diagnosed person with hypertension can be immediately put on the right drug which works for him/her, eliminating trial and error, and reducing complications due to both the disease and the drug. It also makes having operations safer if the anaesthetist knows in advance what medications they need to avoid to keep you safe. In short, if you know your genes, you can modify your lifestyle and even your environment to prevent these conditions from manifesting. Our Synlab facilities around the country offer the genetic tests, not just the one in Victoria Island.

genetics, it is the future of medicine. Genetic testing will enable you to know your body in much greater detail and is the key to how to use that information to live a better, longer and healthier life. What genetic tests are available in Nigeria, and their relevance? There are a few genetic tests available in Nigeria. At Synlab, we offer more than 800 genetic tests, covering a wide range of issues from preventive to curative, from diagnosing chromosomal disorders including sickle cell disease in the unborn child, to diagnosing metabolic disorders etc. in the newborn or in adults. It includes paternity and maternity testing. We have panel tests that let you know if you are predisposed to developing specific types of diabetes, or the BRCA16+ test that lets you know if you are at higher risk of developing cancer. There are so many, it is impossible to describe them all here. Given the vast array of genetic tests available, it is best to contact our Consultant Pathologist who can assist with your specific requirements. Are there other tests available in other countries that Nigerians do not have access to at the moment? Only a few tests are still not available locally due to the specialist nature of the specimen for analysis or the time to report

Some Nigerians have expressed fear over the whole concept of genetic testing. Should they be concerned? Not at all! Genetic testing is an analysis (understanding) of a person’s genetic makeup and not a modification of a person’s genes. The beauty of gene testing is that it is specific to you as an individual. I have been asked all sorts of questions about genetic testing. Questions such as “if genetic tests will create transgender people in Nigeria,” and the answer is no. It has nothing to do with that at all. Or “if it is paternity testing,” as they believe anything to do with DNA is related to paternity testing. Genetic testing is much bigger and broader than that. With epi-

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that makes it difficult to perform. As new, highly specialised tests are being launched, they are immediately being made available in Nigeria. The fact that all these services are available here in Nigeria today serves to improve healthcare in the country, as you have to make a diagnosis before there can be effective treatment. How can ultra-modern medical diagnostics labs in Nigeria make more impact on the sector? Firstly, we need more doctors to challenge us by using us and requesting for more of our specialised services to help manage their patients. Many still don’t know that all these tests are available here and that they can access their patients’ results anywhere they are in the country or even the world, via the Pathprovider secure portal. We also want to encourage more Nigerians, as individuals, to focus on preventive care. The old adage “Prevention is better than cure” is so true. There is no better time than now to take advantage of the new technologies and make the necessary adjustments to ensure you stay healthy. For those unsure of how to start, they can get a free consultation from the VI wellness centre or listen into Doctors on Air every Wednesday: Lagos 8am on 97.3 Classic FM: Abuja 7.45am on 95.1 Nigeria info or Port Harcourt 7.45am on 95.9 Cool FM.

Tuesday 27 August 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Shortfall in quality teaching manpower drives private sector investment KELECHI EWUZIE

hortfall in the number of qualified teaching manpower in basic level of education in Nigeria and the aftermath effect of poorly trained future generation may have forced private sector organisations to commit investment in human capacity to stem this tide. BusinessDay finding have revealed. With the nation’s out-of -school children rate still on the high with an estimated 13.5 million and a shortage of qualified teachers especially on the basic levels, educationists see this involvement as a welcome development. Private sector organisations like Teach For Nigeria, a non-profit organisation under its Teach For Nigeria Fellowship programme have in the last two years enlisted Nigeria’s most promising future leaders to expand educational and life opportunities for all children in Nigeria. The Fellowship programme is a 2 year fulltime paid commitment that is designed to build a movement of leaders who will work towards eliminating educational inequity in Nigeria by teaching in underserved schools in low-income communities across Nigeria. Folawe Omikunle, chief executive officer, Teach For Nigeria says the efforts and successes recorded by 44 exceptional change agents in the last two years have improved learning outcomes and ignited the love of learning in their pupils and have in turn expanded the life opportunities for their pupils. Omikunle while speaking at the graduation ceremony of the 44 Fellows in Lagos says they were inducted in 2017 and deployed to 25 public primary schools in Lagos and Ogun states impacting approximately, 2700

L-R: Samuel Olusegun Sogeke, Ogun State Ministry of Education, Science and Technology; Folawe Omikunle, CEO, Teach For Nigeria; Bamidele Abiodun, Wife of the Ogun State Governor; Vongai Nyahunzvi, Head of Africa, Teach for All; Gbenga Oyebode, board chairman, Teach For Nigeria at the graduation ceremony of the pioneer Teach For Nigeria fellows in Lagos.

students. She observed that their successes over these years has made it evident that indeed a movement of transformational leaders can change the narrative, adding that the pioneer cohort of teachers have worked in some of the most challenging circumstances to build a different social fabric with hope, conviction, but above all, with actions to change our country one classroom at a time. “For Nigeria alumni have the requisite qualification to continue an impactful career in education, post-Fellowship. Teach For Nigeria’s long-term goal is to be present in all 6 geo-political regions of Nigeria within a decade (by 2027), impacting over 500,000

children”, Omikunle said. Bamidele Abiodun, wife of the Ogun State Governor, said “The Ogun State government is committed to supporting the vision of Teach for Nigeria as education is one of the core missions of our administration. I have experienced first-hand the excellent work the Teach for Nigeria fellows are doing in Ogun state and I am very impressed by the impact and the confidence they are instilling in these children”. Gbenga Oyebode, board chairman, Teach For Nigeria in his address at the event opines that educational injustice is one of Nigeria’s most critical and deeply rooted crises. According to Oyebode, “Nigeria with a

Lebanese community endows $1.5m MBA scholarship for Nigerians in AUB KELECHI EWUZIE

etermined to strengthen ties with Nigeria and build human capital, Lebanese Nigeria Initiative (LNI), a not-for-profit association has awarded full MBA scholarship to two young Nigerians every year at the prestigious American University Beruit (AUB). The MBA scholarship endowment worth $1.5m will enable two Nigerians attend AUB every year for life, except if the university which is about 300 years old ceases to exist. Elias Nicolas, Consul General of Lebanon in Nigeria while speaking at the media presentation of Ajibola Olubando as the first beneficiary of the LNI MBA scholarship in Lagos, said the scholarship scheme is aimed at further strengthening the existing friendly relations between the two countries. Nicolas says the Lebanese community has always seen itself as part of the social fabric of Nigeria, noting that the current programme is

a sign of its commitment towards the educational upliftment of young Nigerians. Nicolas further said Lebanon at the crossroads of three continents and many civilizations along history accommodates several internationally recognized higher institutions with AUB at the top having produced several high calibre scientists, heads of states and prime ministers around the Middle East and beyond. He thanked the Chairman of LNI, Faysal El Khalil and other members of the Board of Trustees for their huge efforts in birthing this noble project. In his remarks at the event, Ali Safieddine, vice-chairman, Lebanese Nigeria Initiative said the endowment was conceived to identify young Nigerians who can acquire requisite knowledge from global institutions who would be willing to come back and invest same in Nigeria for the benefit of the country. Sefieddine who traced the history of first Lebanese to settle in Nigeria to 1880, thanked Nigeria for giving them opportunity to live peacefully within the communities to do business, saying that this spirit of unity was part of what informed

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Nexford University launches $200,000 startup funding for graduates

the life MBA endowment fund at American university of Beirut. He said the beneficiaries while at the American University of Beirut would be ambassadors of Nigeria in Lebanon and when they are back, would be ambassadors of Lebanon in Nigeria as they would be sufficiency immersed in the two cultures. Speaking on the criteria for selection, Safieddine said the candidate emerged out of numerous applicants who must satisfy the stringent admission requirement of AUB and also be ready and willing to return to Nigeria to use his education to impact the society. He said lots rigour went into the process of selection of the candidates who were interviewed by a panel of the LNI and AUB before it was narrowed to four from which a candidate emerged. The LNI MBA scholarship awardee, Ajibola Olubando, a Petroleum and Gas Engineering graduate of University of University of Lagos, while thanking LNI for the opportunity to study at AUB, said he will use his global education to impact Nigerian society on graduation.

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growing rate of out-of-school children needs to adopt a multipronged approach and commitment from individuals and organisations to solve the problem. As a nation, we should see education as one of the ways to change the country”. “These 44 exceptional Fellows have been transformed into leaders and champions for education in Nigeria; dedicating their time, energy and resources into impacting the lives of their pupils. We are very proud of the pioneer Cohort; they have made the Teach For Nigeria vision – that one day, every Nigerian child will have the opportunity to attain an excellent education – a reality,” Oyebode added.

Seyi John Salau

exford University has announced its ‘Entrepreneurship Scholarship’ and $200,000 start-up funding, with a mission to empower next-generation leaders across the world. “The world needs more entrepreneurs. But millions of people struggle to get the education and skills they need. Nexford University plans to change that,” the university said in a statement on Thursday. “The world needs more doers,” said Fadl Al Tarzi, Nexford’s chief executive officer. “We thought about what we can do to help them. If you’re a doer, you won’t let anything stop you, be it your physical location, lack of experience or even lack of funding.” Tarzi said, “Having said that, we want everyone to succeed – we want to empower people with the tools they need to increase their chances of success. “Through this initiative, we are providing entrepreneurs with the skills they need to move forward in life, and we’re not stopping there. While we believe skills are the most valuable currency, you can’t buy ads or hire people with skills alone. So we’re taking it one step further and funding the most promising start-up ideas we’ll receive.”

@Businessdayng

Tuesday 27 August 2019

BUSINESS DAY

EDUCATION Shortfall in quality teaching manpower drives private sector investment OYIN EGBEYEMI

shortage of qualified teachers especially on the basic levels, educationists see this involvement as a welcome development. Private sector organisations like Teach For Nigeria, a non-profit organisation under its Teach For Nigeria Fellowship programme have in the last two years enlisted Nigeria’s most promising future leaders to expand educational and life opportunities for all children in Nigeria. The Fellowship programme is a 2 year full-time paid commitment that is designed to build a movement of leaders who will work towards eliminating educational inequity in Nigeria by teaching in underserved schools in low-income com-

munities across Nigeria. Folawe Omikunle, chief executive officer, Teach For Nigeria says the efforts and successes recorded by 44 exceptional change agents in the last two years have improved learning outcomes and ignited the love of learning in their pupils and have in turn expanded the life opportunities for their pupils. Omikunle while speaking at the graduation ceremony of the 44 Fellows in Lagos says they were inducted in 2017 and deployed to 25 public primary schools in Lagos and Ogun states impacting approximately, 2700 students. She observed that their successes over these years has made it evident that indeed a movement of trans-

formational leaders can change the narrative, adding that the pioneer cohort of teachers have worked in some of the most challenging circumstances to build a different social fabric with hope, conviction, but above all, with actions to change our country one classroom at a time. “For Nigeria alumni have the requisite qualification to continue an impactful career in education, postFellowship. Teach For Nigeria’s long-term goal is to be present in all 6 geo-political regions of Nigeria within a decade (by 2027), impacting over 500,000 children”, Omikunle said. Bamidele Abiodun, wife of the Ogun State Governor, said “The Ogun State govern-

Youths urged to provide solutions to inclusive, access to quality education challenge KELECHI EWUZIE

igerian youths have been urged to play significant roles in providing the needed solutions to solving the problem of inclusiveness and access to quality education across the country regardless of their backgrounds. Adetola Juyitan, National President, Junior Chamber International (JCI) Nigeria stated this at a youth conference held in Lagos in commemoration of the 2019 International Youth Day. Juyitan while speaking on the theme; ‘Transforming Education; Rethinking the Present’ noted that youths

must begin to embrace a digital mindset if they are really interested in causing any change in our society. According to Juyitan, “All youth must rise above their present holdbacks and challenge themselves to take on new actionable ideas that are in tune with the reality of the present age”. Ketil Karlsen, European Union Ambassador to Nigeria, on his part made an urgent call-to-action for every youth in the country to contribute their part in ensuring that inclusive and equitable access to education was made possible to everyone especially now that we now live in a digital age. Ronald Kayanda, director,

United Nations Information Centre (UNIC), Lagos Nigeria, revealed that the commemoration of the historic day, which has been ongoing for 20 years, forms part of United Nations agenda to support the youth. According to Kayanda, “The choice of the theme was timely given that United Nations as an organization was already making effort to ensure that Nigeria’s education system is fit for the digital age. In her remarks, Bamidele Abiodun, Wife of the Ogun State Governor, expressed delight for being part of the historic celebration and applauded JCI Nigeria for its contribution towards youth development in Nigeria de-

Team from Covenant University, Otta, Ogun celebrate with their trophy as winners of the 2019 Enactus national competition in Lagos www.businessday.ng

spite the overwhelming challenges. She equally commended the ‘Ten Outstanding Young Persons’ for their continued belief and optimism in the country and encouraged all to remain committed to Nigeria’s development, continually striving for self-development and finding innovative ways to positively impact on the country. Abiodun explained she is committed to achieving the Sustainable Development Goal (SDG) 4 of the United Nation (UN) stating that providing equal opportunities for the education of the country’s young ones is the core of her personal project as well as the administration of her husband, Dapo Abiodun ledgovernment. Whilst at the event, the list of the 2019 JCI Nigeria Ten Outstanding Young Persons (TOYP) was unveiled. The honourees are Adeola Adefemi, Glory Osei, Naomi Ekpoki, Folarin Falana, Oluwaseun Osowobi, Temi-Giwa Tunbosun, Bilikis Adebiyi-Abiola, Lauretta Onye, Samson Itodo and Onyeka Akumah. Juyitan, who commended them for their dedication and perseverance to success despite all odds, appreciated and presented awards of commendation to all ten honourees in different categories (Personal Development Award, Scientific and Technological Development Award, Medical Innovation and a host of others).

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ment is committed to supporting the vision of Teach for Nigeria as education is one of the core missions of our administration. I have experienced first-hand the excellent work the Teach for Nigeria fellows are doing in Ogun state and I am very impressed by the impact and the confidence they are instilling in these children”. Gbenga Oyebode, board chairman, Teach For Nigeria in his address at the event opines that educational injustice is one of Nigeria’s most critical and deeply rooted crises. According to Oyebode, “Nigeria with a growing rate of out-of-school children needs to adopt a multipronged approach and commitment from individuals and organ-

isations to solve the problem. As a nation, we should see education as one of the ways to change the country”. “These 44 exceptional Fellows have been transformed into leaders and champions for education in Nigeria; dedicating their time, energy and resources into impacting the lives of their pupils. We are very proud of the pioneer Cohort; they have made the Teach For Nigeria vision – that one day, every Nigerian child will have the opportunity to attain an excellent education – a reality,” Oyebode added. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

LPSS students excel at IGCSE, Year 6 SAT examinations KELECHI EWUZIE

agos Preparatory and Secondary School (LPSS) students have achieve outstanding results in her maiden Cambridge International General Certificate of Secondary Education Examination and Year 6 SAT Examinations LPSS in a statement made available to BusinessDay says all students that participated in the IGCSE attained A*, A and B grades, while also scoring over 90 percent pass rate in Year 6 SAT Examinations. Osebhi Okosodo, deputy head Teacher LPSS while commenting on the results opines that the school has always had a track record of outstanding Year 6 SAT results and this trend has extended to the IGCSE results. According to Okosodo, “This year is no different, with over 90 percent of the Year 6 students attaining the required pass in the SAT examination, way above the UK National average. Okosodo who took the lead in establishing the IGCSE curriculum at LPSS was very appreciative of the efforts and willingness of @Businessdayng

the teachers to go above and beyond to bring out the best in these students. “O u r t e a c h e r s h av e truly shown their level of expertise and ability to implement both the primary and secondary curriculum. Our use of specialist teaching from Year 1 truly sets LPSS apart from other schools and the result is evident. The school facilities and resources are just right, providing the students with all they need to attain well rounded learning,” Okosodo said. Okosodo further lauded Year 6 and Year 10 students for their exceptional performances in both international examinations, adding that the school looks forward to celebrating more outstanding results in the coming years. LPSS, formerly known as Lagos Preparatory School (LPS) changed her name last year to reflect the expansion of the school into a full secondary school. Hitherto, she had admitted children from 18months to 14 years (Year 9-the equivalent of Junior Secondary School) but extended last year to include Years 10 and 11 and now prepares her students for the IGCSE Examinations.

Tuesday 27 August 2019

BUSINESS DAY

Women run into a wall in the fight for front-office jobs

Love in the workplace is an endangered affair

here are many benefits to living near to a worldclass teaching hospital — the time the paediatric team at St Mary’s in west London saved my 17-month-old daughter’s life certainly springs to mind. Since then, my affection for National Health Service staff has been increased by eavesdropping. My journey to work goes through Paddington station, allowing me to overhear the St Mary’s trainee and junior doctors discussing their love life. I’m not planning to make my fortune writing a medical Mills & Boon any time soon, so here is what I have been able to glean from behind my FT: the training placements seem to dictate dating opportunities, and there is a fair bit of vetting by the peer group as these young people weigh up the suitability of potential partners they work and study alongside. Because it’s a seven-year course, cursed with long hours and blessed with intense, life-and-death situations to face together, this medical mating ritual seems as sensible — and inevitable — as it always did. But the billing and cooing on the Bakerloo line bucks the trend. Researchers have mapped the extraordinary rise of internet dating and its effects on other ways of meeting romantic partners — all have declined, including via family, school or work, as the lonely flock online in search of perfect strangers. Michael Rosenfeld of Stanford University found, in a study a few years ago, that the internet provided a

significant boost to the love lives of those who had “thin” opportunities — his term not for sizeist preferences but for a paucity of available partners offline — including gay people and older singletons. Meanwhile, the percentage of those who met “through or as co-workers” was being “crowded out” by the efficient sorting algorithms on dating sites. So much for the office romance, then? I have my doubts, and for two reasons. Which, if I’m wrong, can also serve as arguments in a campaign to revive the tradition. (We are talking here about looking for a partner, by the way, not the dismal behaviour of #MeToo gropers.) First, there is surely no better way to meet than at work, not least because the candidates are actually physically present for most of your waking hours. Research shows that we value proximity in our choice of mate. According to Viren Swami, a social psychology professor at Anglia Ruskin University, as many as half of us end up with someone who lives within a four-mile radius. Aside from this slightlyuninspiring thirst for convenience, there are other pluses to falling for someone at work. You are likely to be exposed to their best and worst traits and they to yours. Maybe you had to negotiate and establish reciprocity — this comes in handy later. You have shared experience and presumably similar things make you tick. Eyes locking above surgical masks is a feature of hospital love stories (think Grey’s Anatomy’s Meredith and Derek) but we all have www.businessday.ng

equivalents — Dawn and Tim in The Office bonded while colluding against an appalling boss. And these relationships have a good chance of surviving. Taking our young doctors’ training years as a promising field of opportunities to find love at work, the assumption has recently been debunked that medical marriages are doomed because of long hours and high pressure — that should cheer anyone in a demanding environment. The other reason for believing the end of office amours may not be nigh is guile, and of two sorts. Almost every couple I know who got together either as colleagues or as contacts, kept it secret for a long time. Not only does subterfuge give a relationship time to simmer, free of deadly interference from friends and family, it is also (some even admit this) quite fun — until it isn’t, by which time you have probably worked out if he or she is a keeper. At this moment, there are hearts thumping under the radar in offices and factories across the world. But because it is seen as respectable these days to look online — normal even, to use a plodding concept about something as magical as love — there may be more of us keeping schtum, even lying to researchers about where we conduct our courtships. It is an unfashionable idea that remains true: someone you spend every day toiling alongside might just be The One, even if you have to travel to the cloud and back to find them.

fter a decade on Wall Street, Kristen Fanarakis left an exhausting job in foreign exchange sales because she had enough of being paid “a third and sometimes even a quarter of my male counterparts — despite producing three times as much as they did”. Ms Fanarakis, who set up a fashion business after leaving the industry in 2011, said unfair pay practices were “absolutely, 100 per cent” the reason for her departure. It was the same for many of her female peers. “For an industry that’s driven by how much money you make, at the end of the day, it defies logic that the few women who used to work in trading or sales got systematically underpaid,” she said. Devoting her life to the job and believing she was paid less as a result of her gender, she added, was “incredibly demoralising”. Although policymakers and some financial services companies have made strides to address the issue, change has been slow and many women still feel undervalued or shut out from the financial services sector. Many women working in front-office roles still leave before reaching the most senior ranks, either because of pay or due to a lack of flexibility around working hours. In the UK, new rules on pay disclosure last year revealed gaps between men and women of “40 per cent to over 60 per cent” in top insurance, accountancy, banking and asset management firms, according to a report presented to parliament last November. Moreover, the report found, for every £100,000 of bonuses paid to men in finance, women received £33,000. Banks, for their part, say they are ploughing resources into addressing imbalances. For Goldman Sachs, increasing the number of women in front-office roles is “a massive area of focus”, according to a spokesperson, who added the bank runs a trading academy for women and provides childcare facilities for staff, among other initiatives.

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JPMorgan Chase has set a target to have 30 per cent female representation in its uppermost ranks by 2023. Despite efforts such as these, data from the UK’s Financial Conduct Authority show the number of women in financial sector roles grew by just 2 percentage points over the past five years to 14 per cent. This is despite more than 300 companies signing up to the government’s Women in Finance Charter aimed at improving representation in executive roles. Banks argue that recruitment for senior roles is nearly impossible, as there is a dearth of women with sufficient levels of experience. “That’s simply not true,” said Dominie Moss, the founder of specialist London-based financial services recruitment company The Return Hub, which aims to help women with more than five years’ finance experience return to work

The result is that companies keep hiring the same type of candidate, over and over again. Hiding pregnancies or returning soon after childbirth is a regular occurrence on trading floors, some female traders have reported. One recalled how she was back to “quoting prices for orders worth hundreds of millions of dollars six weeks after giving birth, my body raging with hormones, because I was worried that my seat was empty”. Ms Fanarakis said one of her female colleagues went into labour during the release of US non-farm payroll numbers — a key data point for currency markets — after the desk was too busy to allow her time off as she approached full term. Claire Douglas worked in foreign exchange sales in London for 17 years until 2013. She left soon after having a baby, because her request to work from home

after taking a career break. “Corporate UK is built so that one part of society can navigate it without friction, while the other part of the population faces many hurdles in doing the same,” said Ms Moss. Among the 2,500 candidates on her books, 49 per cent have between 10 and 20 years of experience in finance, and a similar proportion has postgraduate qualifications. But these candidates remain “invisible”, she said, as CVs that show gaps in employment histories are often discarded before they reach the hiring manager.

one day a week was proving fruitless. Ms Douglas said she still missed the buzz and would have stayed if she had not felt it was “a choice of whether I wanted to see my children or work in the city”. “It makes no sense to discard all the experience I have accumulated over the years I worked in FX sales just because working from home one day a week is not an option,” she added. “A lot of attitudes have changed since I left . . . and flexible working is not as unheard of as it used to be, but front-office roles remain the last bastion.”

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Tuesday 27 August 2019

BUSINESS DAY

Why we all want to be entrepreneurs now

ack in the very early 1990s, that heyday of first-born Generation Xers — yes, we had all read Douglas Coupland’s book — there was a singular coffee shop just off Leicester Square. Java Java was unusual both for being open in the evening and for being the only one of its kind in central London. Before Friends normalised latte life, it had comfy chairs where you could sit and talk. That coffee shop opened at a time when the going-out choices were either a pub — smokey, blokey — or a disastrously expensive meal. ( Ver y cheap meals were also on offer, often disastrous for other reasons.) The midmarket dining sector had yet to be invented. No Byron burgers for us. We often talked about how there ought to be more places like this. Why didn’t someone open them? We knew they existed in America. And we had heaps of other ideas. But we didn’t do anything about it. The idea of working for ourselves, rather than for a distant corporate boss, never occurred to us. Nearly three decades later, my job involves reporting on people’s careers and the wider societal changes around the

time-sucking, frustrating and sometimes extraordinarily fulfilling worlds we inhabit at work. My inbox fizzes with story pitches from disruptive 28-yearold entrepreneurs who already have an MBA, a pile of start-up money — and a mentor. Everyone has a mentor. Government statistics show that the number of businesses in the UK jumped from 3.5 million in 2000 to 5.5 million in 2016, most of which have fewer than 10 employees. Obviously, these dynamic people make me feel old and envious. And they have made me wonder why none of my peers thought of becoming an entrepreneur when we were young. Everyone I knew worked in jobs that our parents either approved of (teachers, solicitors, accountants, doctors, academics, Something in the City) or that they at least+ understood, even if they considered them a disappointment (journalism, lower-tier civil service). Why did we shelter in these secure careers rather than cutting loose while we still could? Looking back, I think worry was coded into our upbringing. People born in Britain in the 1960s had parents who grew up in the wake of the second world war; some came here as www.businessday.ng

refugees. They all knew its austere aftermath. It was also about social status. We knew the word “entrepreneur” but used it interchangeably with “self-made man” — a concept visualised as Bentleys and gold signet rings. It was vulgar and showy, those twin sins of traditional mid-20th-century Britain. I test my anecdotal theories of financial security and social unacceptability on John Mullins, an associate professor at London Business School, and an expert on entrepreneurship. (Which certainly was not a thing in his early years: “When I did my MBA in the late 1960s, I never heard the word entrepre-

‘

We knew the word “entrepreneur” but used it interchangeably with “self-made man” — a concept visualised as Bentleys and gold signet rings

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neur in two years at Stanford.”) He reminds me of the biggest thing I was forgetting: technology. It’s never been easier to set up a company. Now you don’t need to buy a factory (or a hotel, if you are Airbnb). But the cultural climate is also a key factor — he cites the importance of role models such as Charles Dunstone (co-founder of Carphone Warehouse) and Richard Branson. “In 2000 when I moved to the UK [from America], it was not cool for kids to say, ‘Mum, Dad, I want to be an entrepreneur.’ That has changed.” A second piece of the societal change needed to push entrepreneurship into the mainstream was the popularity of the BBC show Dragons’ Den and its equivalents around the world, notably Shark Tank in the US. Mullins says: “Families sit and watch the television at night — that makes them think it is something normal and OK.” I now worry, though, that so many people may become entrepreneurs that it will leave the corporate world hollowed out of talent and ideas. Mullins reassures me that is currently not the case: only one in 10 people is actively involved in starting a business (probably more like one in five in California). That leaves nine in 10 who are not. Still, since the early @Businessdayng

1990s the lustre has come off corporate life. The idea of a job for life — the ambition to receive the “30-year gold watch”, as Mullins puts it — has gone, as too many people learnt that loyalty and hard work meant nothing in big rounds of lay-offs. Add in the frauds, scandals and countless careers sacrificed because of discrimination or harassment, and it’s no surprise that working for yourself seems more appealing. Companies now have to work harder and behave better in order to keep their talented employees. Of course, some of our peers did spot the opportunities and took the riskier path. Alan Yau founded Wagamama in 1992, and we knew at once it was a great place for our generation to eat. And in the half-empty Canary Wharf of the later 1990s, our only caffeine option was a branch of Coffee Republic, a US-style chain set up by Sahar and Bobby Hashemi. I hope that the We-Working, SoulCycling entrepreneurs of today — and their employees — land safely and softly when this cultural moment of well-funded hype comes to a halt. At least they’ll have a wide choice of coffee shops in which to sit at laptops and think of the next start-up.

Tuesday 27 August 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

INVESTMENT

Lekoil’s purchase of 45% stake in OPL276 waits on regulatory approval ISAAC ANYAOGU

ekoil, an oil and gas exploration and development company has acquired, a 45 per cent participating interest in Oil Prospecting Licence 276, located onshore Akwa Ibom state using a subsidiary, Lekoil 276 Ltd but regulatory consent could delay the process. The agreed acquisition from Newcross Petroleum Limited who owns 90 percent of the field is for a consideration of $5million and Lekoil will serve as technical partner. However, the field whose license expired in 2016 will require an extension by the regulator Department of Petroleum Resources, obtaining the consent of the Nigerian National Petroleum Corporation (NNPC) and the approval of the Minister of Petroleum Resources of the Federal Republic of Nigeria who doubles as the president. Lekan Akinyanmi, Lekoil’s CEO, said the acquisition of an interest in the OPL276 PSC represents an excellent opportunity to

Lekan Akinyanmi, CEO, Lekoil

further build its growing production base in line with our stated strategy to create a balanced portfolio of assets. “With the completion of this, Lekoil will have acquired a potential near-term producing asset with significant resource potential.

“We are optimistic about the prospects here, which have shallow reservoirs and are cost efficient to develop. Our focus will now shift to moving plans quickly forward for oil and gas production.” But the company’s unpleasant experience in obtaining regulatory

approvals may douse investors optimism. Worse still, the government has not particularly placed a premium over speedy regulatory approvals. The slow pace of regulatory approval is at the heart of the company’s recent legal case against the government. Lekoil applied for Ministerial Consent to acquire 23% participating interest in OPL 310 block, in Ogo fields, from Afren Nigeria Holdings in 2016, but the consent was neither given nor denied. So in May 2017, Acting president Yemi Osinbajo, issued an executive order which among other things provided that any application not approved or rejected by a government agency or official within the agency’s specified timeline shall be assumed to have been approved. Relying on this provision, the company proceeded to complete the acquisition. However, a Federal High Court ruled that the acquisition still requires consent from the Minister of Petroleum Resources. Based on the judgement, OPL 310 interest is

still held by the seller, Afren Investments Oil and Gas Nigeria Limited. Lekoil still holds a 17.14 per cent participating interest in the block. Lekoil will return to the government seeking approvals to complete acquisition of OPL 237 which was formerly operated by Shell Petroleum Development Corporation (SPDC) as OML 14 until 2004. Newcross has previously identified ten prospects and seven leads in the area covered by the Licence. Four wells have been drilled in the License area, resulting in four discoveries (two oil and two gas) including ,Uda drilled in 1972 (oil & gas discovery), Okposo-East; drilled in 1980 (oil & gas discovery), Mbo; drilled in 1990 (gas discovery) and Davy Bank; drilled in 1986 (gas discovery). According to Lekoil, preliminary resource estimates by Newcross, based on data from these four wells, reported gross recoverable volumes of 29 million barrels of oil and 333 Bcf of gas, upside of 33 million barrels of oil and 476 Bcf of gas (recoverable).

MARKET

DEALS

…as race to be Africa’s most attractive investment destination intensifies

Seven Energy gets Govt consent to transfer asset to Savannah Petroleum

Nigeria, Egypt, Mozambique jostle for a share of $103bn gas investment STEPHEN ONYEKWELU

he rapid growth of cities and industries in Africa will need reliable and sustainable power generation with subSaharan African countries jostling to attract the most investment for natural gas development projects to meet domestic consumption and export. Africa is a big frontier in the global natural gas sector. The continent holds 7.1 percent of proven global gas reserves and is expected to contribute nearly 10 percent of global production growth through to 2024. This year alone, greenfield investments in Nigeria, Egypt, Mozambique, South Africa, Senegal, and Mauritania are worth nearly $103 billion. Liquefaction has been viewed as the most profitable strategy of realising Africa’s enormous gas potential. Nigeria accounts for over 50 percent of current liquefied natural gas (LNG) production capacity on the continent. Africa’s largest gas reserve holder will in October 2019 take final investment decision (FID) on the $12 billion expansion of the country’s liquefaction plant at Bonny Island in Rivers State. The Train 7 expansion project would increase Nigerian LNG production capacity by 35 percent, from

22 million tons per annum to 30 million. Current indications point to a positive verdict. In North Africa, Egypt has successfully re-established itself as an important investment destination following the downturn in the gas sector in 2014. In the first half of 2019, the titanic Zohr offshore gas field produced 11.3 billion cubic metres 3.6 times more than it did in the first six months (1H) of 2018. The success is set to continue with reports earlier this year of Eni oil discovery in the Nour North Sinai Concession. Evaluation is ongoing but there are hopes that the new field could rival the Zohr, which would open significant opportunities for investment in new liquefaction plants. In February, the Egyptian Natural Gas Holding Corporation awarded five new gas exploration concessions to Shell, ExxonMobil, Petronas, DEA and Eni in which it expects to see 20 wells drilled. In June, Anadarko gave its final approval for a $20 billion gas liquefaction and export terminal in Mozambique. The Area 1 project is the single largest LNG project ever approved in Africa. And, it could be closely followed by Exxon’s $14.7 billion Area 4 development – FID is expected before the end of the year. Eni and partners are considering a $7 billion FLNG for the Coral South www.businessday.ng

field in Mozambique Political stability and access to East Asian markets could see Mozambique become a major global gas market over the next decade. Investors are also paying attention to smaller projects in countries like Mauritania, Senegal and Cameroon. Operators have been successfully able to deploy floating liquefied natural gas (FLNG) technology to realise the value of smaller assets in these markets and this could be a continuing trend in 2020 and beyond. In terms of African demand for LNG, South Africa – the most industrialised economy on the continent – could be an influential market. Heavy coal consumption and unreliable power generation make natural gas an attractive solution to diversify its power generation base. In 2020, Transnet – a state-owned freight logistics firm – will launch a tender for the development of an LNG import terminal at Richards Bay Port. The World Bank’s International Finance Corporation has committed $2 million to fund the project planning These and other recent developments reflect a growing and diverse African LNG sector. From top-tier greenfield developments to faster-tomarket, agile FLNG operations; massive new discoveries to expanding existing liquefaction infrastructure.

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DIPO OLADEHINDE

resident Muhammadu Buhari who also doubled as Nigeria’s petroleum minister has approved the transfer of troubled Seven Assets to the British independent oil & gas company Savannah Petroleum or any of its subsidiary companies. The ministerial consent is subject to the payment of all taxes due in relation to the transaction within 90 days of the receipt of the approval letter conveying the Consent. The deal will see the developer, which also has projects in Niger, take parts of Seven’s assets in a complicated deal that had to be agreed by the producer’s bondholders. It will have a 75 per cent stake in one producing gas field, Uquo, 51 per cent of another, as well as 75 per cent of the Accugas gas processing plant and marketing business. Savannah forecasts net take-or-pay production to be 18,900 barrels of oil equivalent per day. Savannah Petroleum noted that the completion process will follow pre-agreed steps as set out in the legally binding implementation agreement which was signed in February 2019 while Further updates in relation to the outstanding condi@Businessdayng

tions precedent and transaction completion will be followed in due course by the publication of a Supplemental Admission Document. Panmure Gordon analyst Colin Smith told investors chronicles that Savannah would receive between $74million and $94million in new funds from the debt restructuring process and the further sale of 25 per cent of Accugas and part of its share in the Uquo gas field for $70million. Savannah raised $125million from shareholders and borrowed $50million last year. Seven was up for sale because of its struggles with debt, with its net borrowings hitting $900million in 2016 and annual interest costs at $100million. Savannah will add debt through the takeover. There are $470m in borrowings linked to the Accugas midstream assets, with $371million of that with a hefty 10.43 per cent plus Libor interest rate, although this is ring-fenced from the rest of the company. Seven Energy, a Nigerian company founded in 2004, ran into troubled waters after several defaults on its debt servicing obligations. The company decided to enter into a transaction for a comprehensive capital restructuring, which includes selling most of its assets.

Tuesday 27 August 2019

BUSINESS DAY

ENERGY INTELLIGENCE ANALYSIS

Five things we learnt from NEITI’s new report ISAAC ANYAOGU

he Nigerian Extractive Industries Transparency Initiative (NEITI)... has published a pilot report on Nigeria’s oil and gas commodity trading for 2017. These are major highlights of the report. Nigeria made $13.17billion from crude oil sales Citing data obtained from the NNPC, NEITI said the total receipts from the crude oil sales amounted to $13.17 billion for the fiscal year 2017. The crude oil sales are made up of 44% of Federal domestic deliveries while the FIRS, federation exports, third party financing and DPR deliveries represent 24%, 21%, 7 % and 4% respectively. The report said 692 million barrels of crude oil was produced. “We noted that oil sales dropped significantly during 2016, which is mainly due to the pipeline vandalism in the Niger-Delta during this period, leading to a significant reduction in the production of fields owned by NPDC from 36,106,726 bbl. in 2015 to 17,017,458 bbl. in 2016.

“This production increased in 2017 to 34,302,513 bbl. as a result of successes recorded in repairs of vandalised pipeline in the NigerDelta and resumption of crude oil lifting activities at the Forcados Terminal,” the report said. Nigeria sold $1.3 billion worth of gas in 2017 NEITI reports that the Gas sales are made up of 77% of NLNG feed gas sales while LPG/NGL, EGTL/ EGP and NGCL represent 18%, 3% and 2% respectively. NNPC sells the feed gas associated to the crude oil production to NLNG, which uses it for the liquefied natural gas (LNG) and natural gas liquids (NGL) production. The report clarifies destination for Nigeria’s gas. Nigeria’s natural gas is exported mostly through

NLNG plant and West African Gas Pipeline which was built to supply gas to some ECOWAS countries which includes Ghana, Benin and Togo. Exports are carried out through a pipeline with an initial utilisation capacity of 200 mmcf/d which is expected to increase to about 460 mmcf/d by 2026. Refineries may be failing but keep getting crude According to the report, 25 percent of domestic crude oil worth over $1.4 billion was allocated to local refineries which can barely function at 10 percent utilisation capacity. The crude oil sent to the refineries is pumped from the terminals to the refineries located at Warri, Kaduna and two in Port Harcourt. A breakdown of the crude delivered to the refineries within the period showed that Port Harcourt refineries received the largest allocation amounting to 18.04 billion barrels worth about $989.02 million or 68% of the total allocations. Nearly 70% of domestic crude goes to subsidy Since Nigeria’s refineries are

unable to meet local consumption, Nigeria exports a large portion of its allocated crude for domestic use in exchange for petrol and kerosene and in 2017 as much as 70 percent of the crude went to the Direct Sales Direct Purchase arrangement used to sell crude. “We understand that the DSDP arrangements are mainly trading transactions by which NNPC receives oil products and delivers crude oil,” says the NEITI report. The crude exchanged amounted to 72 million bbl and the details of these transactions. The remaining quantity was exchanged following the SWAP agreements with DUKE Oil (total quantity exchanged is 3,795,543bbl) and TOTALSA (total quantity exchanged is 948,928bbl) and the unutilised crude oil was ultimately exported by NNPC. NNPC, oil companies fail to meet NEITI’s reporting standards NEITI admitted in its report that with regards to the sales of crude oil, sixty-six companies out of a total of seventy-three companies included in the reconciliation scope did not submit their reporting templates. “Therefore, we were unable to reconcile 81.46% of NNPC’s crude

oil sales. Furthermore, only one company submitted the template on its gas purchases from NNPC which implies that 99.89% of NNPC’s gas sales were not reconciled.” NEITI also said that many companies did not comply with reporting formats. The companies included in the reconciliation scope were requested to submit a reporting template signed by the Chief Financial Officer or Chief Executive Officer. The templates were to be stamped using the company stamp, audited financial statements were to be attached to the reporting templates and the company’s external auditors were to certify (sign and stamp) that the accruals-based audited report ties in with the amount reported by the company and that the company’s audit report was prepared in accordance with international auditing standards. “We noted that not all the companies selected in the reconciliation scope complied with those reporting instructions. Government agencies also flouted this rule. “We noted that NNPC did not comply with those reporting instructions.” NEITI said.

Insight

Egypt’s world largest 1.6 gigawatt solar park holds much lesson for Nigeria DIPO OLADEHINDE

he Egyptian government has said it expects the 1.6 gigawatt solar project which is also set to be the world’s largest solar installation worth $2 billion to operate at full capacity in 2019, a development Nigeria can learn from. According to sources, by the time it goes live in 2019, the Benban Solar Park will house 32 power stations across a 37km2 site, and will be capable of generating 1,650 megawatts of electricity which will go a long way toward Egypt hitting its goal of having 20 per cent of its energy needs met by renewables. Located at the Western Desert, some 650 km south of Cairo, the Egypt’s most ambitious solar energy projects, the Benban Solar Park is expected to produce enough electricity to power one million homes and is also expected to meet 20 per cent of its energy needs from renewable sources by 2022 and up to 40 per cent by 2035. The Egyptian investment ministry said in a pulic statement that the

$2 billion project partly funded by the World Bank who invested $653 million through the International Finance Corporation(IFC) while Multilateral Investment and Guarantee Agency (MIGA), another part of the World Bank Group, is providing $210 million worth of “political risk insurance” to private lenders and investors. “Egypt’s energy sector reforms have opened a wider door for private sector investments,” World Bank President David Malpass said during his recent visit to the site alongside Egypt’s Investment Minister Sahar Nasr. Egypt’s investment ministry said some parts of the park are already operating on a small scale, while othwww.businessday.ng

er areas are still undergoing testing. Egypt is on a drive to lure back investors who fled following the 2011 uprising with a slew of economic reforms and incentives the government hopes will draw fresh capital and kickstart growth with most foreign direct investment directed towards its energy sector, a senerio Africa biggest economy can learn from in order to solve its old perenial energy challenges. Unlike Eqypt, the sound of noisy, petrol-powered generators have become the background theme of Nigerian life. Nigerians are used to either living without or providing their own sources of power as an estimated

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of $14 billion is spent on powering small scale generators each year, at a significant cost to wealth, health, and the environment. While successive governments have trumpeted their plans for the power sector and how important it is as a development imperative, Nigerians continue to feel the pains of a lack of electricity, with its resulting impact on productivity, education and crime. According to the Nigerian Power Sector Recovery Programme, Nigeria’s erratic power supply results in more than $25 billion in annual losses to the economy and more than 6percent of GDP while over 60percent of Nigerians lack reliable access @Businessdayng

to energy. It is this gap that firms such as All On Partnerships for Energy Access, a Shell funded impact Investor, the EU Electrifification initiative, Persistent Energy Capital and others are looking to fill. In the face of the sector’s obvious institutional shortcomings, developers can choose from options including the REA/World Bank $350m Nigeria electrification project, the N1 billion All-On BOI Niger Delta Energy Access Fund, USADF – All On Off-Grid Energy Challenge, the AECF Household Solar Challenge amongst other interventions that are available for entrepreneurs. Renewable sources of energy such as wind, solar, hydro and biomass are now firmly in play, and an ecosystem of developers such as Rubitec or Arnergy are focusing on driving energy access to underserved rural populations and small businesses while on a larger scale; Lumos’ Solar Home Systems in partnership with MTN, a telecommunications provider, provide instant power to more than 80,000 low-income households across Nigeria.

Tuesday 27 August 2019

BUSINESS DAY

OFFGRID BUSINESS

FEATURE

FG lights up Upake community with clean, sustainable off-grid energy More than half of over 90 million Nigerians living in rural areas have no access electricity. The Federal Government of Nigeria has classified these set of Nigerians as the un-served and underserved communities across the country. Upake community in Kogi State was one of such until recently when an 80 kilo Watt solar hybrid mini grid power plant was commissioned by the FG. STEPHEN ONYEKWELU writes that this will reverse over two decades of arrested development in the locality.

he Federal Government of Nigeria, through its implementing agency, the Rural Electrification Agency (REA) has commissioned an 80 kilo Watt (kW) solar hybrid mini grid power plant at Upake community of Ajaokuta Local Government Area in Kogi State, amidst hearty cheers from residents. Executed by New Moon Nigeria Limited, this project guarantees access to clean, sustainable and reliable electricity for 496 residential and commercial buildings and close to 3, 000 people. Upake community is one of the 12 communities to benefit from the first set of grants under the Rural Electrification Fund (REF), which is a Rural Electrification Agency (REA) initiative. On August 19, drums were rolled out in the community to welcome light into Upake. It was a light festival. The movement of the crowd undulated with the rhythms of the drum as the locals witnessed the historic commissioning event. The community heads and elders, the youth, women, children and the neighbouring Obangede community rejoiced. It was a life changing experience for a community which has existed for close to three centuries without one of the basic social amenities, electricity. This is an oasis of serenity provided by President Buhari-led administration to the un-served and underserved community in Nigeria. The indigenes of Upake community (the ancestral home of Ebira people) that has suffered electricity neglect for centuries can begin to enjoy clean, safe and reliable electricity. “Government has just brought a new moon into this community. We are enjoying it and we are grateful to President Buhari. This is the first time we would be experiencing electricity. It feels good to drink cold water. We are very happy that we are feeling the dividends of democracy through this rural electrification initiative” Isa Danlami Abdullahi, an indigene of Upake community said. The REA, is tasked with electrification of un-served and underserved communities and providing equitable access to electricity across Nigeria to maximise the economic, social and environmental benefits of rural electrification grants, promote off-grid electrification, and stimulate innovative approaches to rural electrification. The rural electrification fund (REF) projects are administered using a Public Pri-

L-R: Aliyu Magaji, chairman, House of Representatives Committee on Power; Folashade Ayoade, Secretary to the State Government, Kogi State; Yakubu Oseni, senator representing Kogi Central; Damilola Ogunbiyi, managing director and chief executive officer of Rural Electrification Agency and Prince Akaba, administrator, Ajaokuta Local Government Area and Sanusi Ohiare, executive director, Rural Electrification Fund at the commissioning ceremony.

vate Partnership (PPP) model. The first call of the Rural Electrification Fund (REF) will energise 12 communities and deploy 19,000 Solar Home Systems (SHS). Damilola Ogunbiyi, managing director and chief executive officer of the Rural Electrification Agency, highlighted that commissioning the solar hybrid power plant project would enhance productivity and provide jobs at Upake. “Not only that, it would also benefit the 2,976 members of Upake community as families and businesses in Upake, will have access to clean, sustainable and reliable electricity from the sun. From this project alone, 32 jobs were created,” Ogunbiyi said. “From project managers to electricians, welders and bricklayers there was significant impact across the entire project value chain. We are hopeful that the jobs created will impact not just the immediate community, but Kogi State in general.” Women in Upake community who have mastered the art of cassava processing and school going age children will have the quality of their lives improved as a result of the project, Ogunbiyi quipped. Monday Muslimat an ‘O’ level student of the Upake community said “I am from this village and I am very happy about this development. Since I was born this is the first time I would be experiencing

this kind of initiative. This is my first time to see and feel electricity. It is amazing. Everybody is happy. We thank the Federal Government of Nigeria for brightening our community with this solar system. It is life changing.” Haruna Bashiru, another indigene of Upake said “I was a toddler when they (the community) started pushing for this electricity over 25 years ago and now; the government Buhari led administration gave us our right. We now use light. This is a fishing community and with this light our women can preserve their fish. We are using fridge, freezer, cold drink, cold water; our women use ovens to smoke their fish but can also use freezers to preserve them now. This will have a great impact on our economy.” In the governor’s address read by Folashade Arike Ayoade, the secretary to the State government, Governor Yahaya Bello of Kogi State expressed his delight at Federal Government’s initiative of electrifying unserved communities across the country and for particularly remembering a community in his state. “It is with great pride that Kogi State has collaborated with the Federal Government through the Rural Electrification Agency and the private sector to implement this impressive project that will ensure clean, safe and reliable electricity

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

for the entire Upake community and its neighbouring community – Obangede community. “The use of clean energy technologies in the quest to provide electricity is an added advantage to rural communities, who have been accustomed to using generators, candles, kerosene lamps and other unsafe energy sources over time. With clean energy sources, such as this solar mini grid, the health and environmental wellbeing of our people will be safeguarded.” Bello also stressed that the benefits of clean and safe electricity go beyond improvement in health and the environment. Upake community members can now grow their businesses and create more jobs. “Afterall, an electrified community and state means investment opportunities for the private sector. Therefore, Kogi State is open for investment and business opportunities. We welcome industrialisation in agriculture, fishing, steel manufacturing and other industries in our state. And it all starts here in Upake as reliable electricity will certainly begin a chain reaction from rural community to the state level and onwards to the national stage.” Yakubu Oseni, the Senator representing Kogi Central, expressed his gratitude on behalf of the members of his constituency reiterating the benefits that they all stood to enjoy

as a result of the project. He said “Our women will be able to process their Cassava in a less stressful manner and our fishermen can preserve their products now that there is reliable electricity. I believe that the quality of lives in Upake community will be improved because of this project and I look forward to seeing similar projects being installed in other communities under my leadership.” Similarly, Ohinoyi of Ebira Land, Ado Ibrahim said electricity is a vehicle of necessity that drives the economy. “For any community to progress, basic amenities need to be accessible. Electricity is a necessity that has a ripple effect on other human needs. With this solar plant facility, there will be a significant improvement in the quality of life for Upake indigenes and even the environment. It is evident that the Federal Government, under the Buhari administration, is ensuring the basic needs of Nigerians are met.” Ibrahim said small communities like Upake are not left out of the Government’s developmental plans because since the Rural Electrification Agency is working hard to provide electricity to the often-forgotten rural communities. “It is an honour that one of the communities in Ebiraland was considered viable for this laudable Federal Government initiative.” The community head (The Ananyiwa of Upake), His Royal Highness, Ibrahim Okenyi Eneye said “I stand here representing the people of our dear community. Just as you assured us of the plans to complete this project from the first day you visited us, I want to assure you that we will work with the developer to make sure that no harm will come to this project. It is our mini grid and we will protect it as our property.” Commending Federal Government and REA initiative of lighting unserved communities, chairman, House of Represenatves on Power, Aliyu Magaji said, “Oftentimes, the focus is on densely populated areas and on-grid electricity. We are all here to categorically state that every corner of rural Nigeria must be energised. That is why this commissioning is of great importance. The people of Upake community are indeed blessed to be recipients of this life-changing power plant. The power sector is critical to every aspect of Nigeria’s economy. With electricity in our big cities or small rural communities, Nigeria can attain its full developmental capacity. Therefore, reliable electricity is a necessity for all Nigerians.”

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Tuesday 27 August 2019

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Managing the autonomous evolution The autonomous database is set to revolutionise data management, helping boost the speed of insight and driving significant increases in productivity. With a self-driving system that uses built-in machine learning algorithms to manage itself, businesses can lower costs and increase productivity whereby manpower can be optimised and resources can be deployed to higher value tasks. This can be through tasks such as redefining data strategy, deriving actionable insights from data, and designing robust systems with business impact.

ADEBAYO SANNI

umans are now generating an estimated 2.5 quintillion bytes of data every single day, with more data being created in the past two years than in all of human history. Managing this growing flood is complex and the task comes with a high level of responsibility. But throwing more bodies at the problem isn’t efficient or even a guarantee of success. The 24/7 requirements on business and huge security challenges mean that ‘manual” management is no longer an option. The key lies in the use of Artificial Intelligence (AI), Machine Learning (ML) and automation. Particularly when combined together they will let businesses manage and get value from their information more easily, effectively, and with less effort. One technology in particular that is unlocking new levels of value is the autonomous database. Nigeria accounts for nearly 50 percent of West Africa’s population and the country has one of the largest populations of youth in the world. This sees Nigeria in the enviable position where it can start building skills for the data-driven environment. With

data becoming the currency of business today, establishing skills must be a priority. This leads to an understanding of how data can deliver on what is required and help guide autonomous technology to extract the best value out of it. Managing the data challenge The value of data is not in its abundance, but comes from analysing and understanding data and using it to make better decisions. So just as mechanical automation helped traditional manufacturing industries to benefit from economies of scale, software automation can free up valuable human resources from

mundane administrative tasks. Forward-looking organisations are already embedding AI and ML technologies into their critical business systems and processes, with key areas of the business predicted to benefit the most from this type of automation being operations, customer service, decision support, IT and finance. With AI and next generation cloud services becoming established, the autonomous database has arrived. Embracing core traits of being self-driving, self-securing and self-repairing, it offers unprecedented availability, performance, and security – helping eliminate human error.

Change required According to a recent Harvard Business Review Analytic Services survey, so far few organisations have made the move to intelligent automation to any significant extent – for a number of reasons. As with anything new, it takes time for adoption - companies need time to get their heads around how these emerging technologies can fit into their current enterprise systems and just how to do that within their existing budgets, skills and culture. While this change certainly won’t happen overnight, respondents are expecting to significantly increase their use of intelligent automation over the

next three years. With that the case, business and IT leaders need to start considering how to move along their automation journey from basic adoption to full intelligent automation. Skills development To get there, a substantial amount of change will need to happen, not least in the digital transformation of data, skills, processes, and culture. Intelligent automation requires a corresponding upgrade in skillset. Database administrators must be encouraged to seek new certifications and experience, building on their existing core skill set. Just imagine, all those incredible minds, currently dedicated to tuning, patching, securing and managing databases, applied to more valuable activities, such as improving data architecture, securing external data sources, and otherwise ensuring the business is making the best possible use of data. As more data continues to be generated each day, there will be even more pressure on businesses to make the most of the data available. Database management will be more crucial than ever before, and emerging technologies like autonomous will soon become the norm as they help businesses boost innovation and financial gains.

Last year, Oracle Academy announced a collaboration with the Federal Ministry of Education of Nigeria (FMoE) to create new computing education pathways for local students. Through the agreement, FMoE plans to integrate Oracle Academy computer science curriculum and resources across 10,000 academic institutions across the country, reaching over 1.5 million students within the region. Over the next three years, Oracle Academy will also facilitate the training of 4,000 educators at the secondary and higher education levels to teach computer science. Earlier this year, Oracle Academy hosted Knowledge Builder sessions with STEM university students. They were provided with guidance on technology career paths and industry relevant skills as well as practical sessions on artificial intelligence, data analytics, machine learning and data visualisation cloud services. From a country standpoint, Nigeria is ready to start the drive towards autonomous technology. Now the focus is on getting the skills in place to capitalise on the willingness to change. Sanni, managing director Oracle Nigeria

Tech experts lament second term machines importation ...say it discourages DESMOND OKON

echnology experts in the printing industry have lamented continuous importation of second term machines or old technology, stating that it is crippling the industry as well as discouraging local manufacturing. Speaking in an exclusive interview with Business Day at the launch of bizhub i-series printers recently in Lagos, Ugur Bozat, Business Support Manager, Konica Minolta, described the practice as still legal in Nigeria— and this is a “problem in the industry.” “When you talk about sec-

ond term products import, you are still getting old technology products from the developed countries. Life here is not easy, and the use of old technology and out-dated machines makes it worse,” he said. According to Bozat, the consequence is that you are then faced with lack of service and lack of spare parts. “Money here is very important, and once an entrepreneur pays money for a second term machine and it breaks down after a year and he cannot find a spare part, this is a loss for him,” he said. “I believe Nigerian markets and all African markets deserve the same quality products with the rest of the world; that is why

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we are launching almost at the same all products all over Africa, Europe, and US together,” he added. Bozat said that second term import of machines was a problem in other countries like India, and Turkey, but government took actions and stopped second term import of any kind, saying it is a problem they face in order countries. The manufacturers are creating new bills to push government to change the rules about parallel import and even second term imports. There are countries in Africa that you cannot import one piece if you are not an authorised distributor, he said. “You don’t need to consume

the waste of the rest of the world. I would advise the government to place a ban on second term products. I know it makes the market more smooth when the prices are down. But in the end, you look at total cost of ownership,” he said further. Also speaking to BusinessDay, the managing director of SkySat Technologies, Izzat Debs, said it was also damaging the industry a lot, and “it is not delivering good quality, and on top, they are using ink and toners that are not genuine, so it also destroys the machines.” “First of all, they are bringing all those machines that are scrapped in Europe and other parts of the world. It is affecting

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the quality of what is printed. Some just buy the machines for very low amount of money, they use it for a month and then buy another one. “If they invest in a new machine and we give them the support, on the long term they will see that it is much more beneficial for them, and they will make much more money on the long term than this short term hit and run approach,” he said. Debs, said the Nigerian printing industry could grow a lot more given that there is a lot of hunger for growth, but there must be a lot of support from the government, adding also that when government is allowing people to import books, to im-

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port so many printing material, it does not help the industry here. “Another thing is the government policy as regards importation of published and printed books. They should increase customs duty on that, if not banning it, so that it would protect the industry,” he said. Asked the major change he would like to see in the industry, he said: “The power supply is something that is a game changer. Not only for us the in printing industry, but also for the whole of Nigeria. So if the power supply could be addressed, you cannot imagine how many how many small scale industries will just flourish because they have enough power supply.

Tuesday 27 August 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Softcom promotes technology as a critical tool to end poverty in Nigeria

…launches digital payment solutions to promote financial inclusion

Stories by JUMOKE AKIYODE-LAWANSON

igeria is attempting to meet the social development goal (SDG) of eradicating extreme poverty by the year 2030. Hence, the country is looking to use advance technological solutions as an essential tool to achieve this goal. Softcom, an indigenous technology company and technical partners to the Nigeria Federal Government on the N-Power project, kick-started the conversation on the importance of technology in the fight against poverty, as it recently hosted a conference with the theme: Combating Poverty: Role of Technology in driving social change in Africa. Speaking at the conference, Yomi Adedeji CEO, Softcom CEO, said the 12 year old company is focused on addressing fundamental development issues tied to Identity, payment, data and learning. He said these four pillars formed the bedrock upon which any development initiative would rest. “For any development initiative to be successful, we have to first solve the issue of identity. This is because a oneto-all approach at solving development issues will make little impact and limit sustainability. Individuals function within economic clusters or communities. It is important to take cognisance of these peculiarities in designing any intervention programme.” With a population of over 1.216 billion people, Africa has more than 500 million people living below the global poverty line (US $1.25 a day). This accounts for about 40 percent of the global population living below the poverty line. Africa is the world’s last frontier in the fight against extreme poverty and also the next frontier in the world of global economic opportunities. According to projections from the World Data Lab, Africa has now reached a milestone in the fight against poverty as more Africans are now escaping extreme poverty than falling (or being born) below the poverty line. Ni-

Xpress Payment Solutions repositions in Nigeria’s fintech space

L-R: Usman Malah; chief of staff to the executive vice chairman, Nigerian Communications commission (NCC), Malla Abdulrahman Ado; chairman Bautek Nigeria Limited, Umar Garba Danbatta; executive vice chairman, Nigerian Communications commission (NCC), Modibbo Kawu; director general, National Broadcasting Commission (NBC), Clement Baiye; board commissioner, NCC, Henry Nkemadu; director public affairs, NCC, at the closing ceremony of Conference of African Telecommunications Regulators on Consumer Affairs CATCO 2019 held in Abuja on the 22nd August 2019.

geria has also set a target to lift 100 million of her citizens out of poverty over the next 10 years. Speaking at the conference, Afolabi Imoukhuede, senior special assistant to the to the President of Nigeria on job creation, noted six pillars comprising identity, digital literacy, education, agriculture, financial services and health that would facilitate social inclusion and national development. He added that strong government participation in policymaking, resource allocation and ecosystem development is required to fast track development in these areas. Imoukhuede lauded Softcom and other partners on their technical expertise in implementing the N-Power project, describing Softcom’s intervention as the ‘eureka’ that brought government’s objectives to light. “A traditional method of implementing the program would have limited enrolment and training delivery to under 40,000 participants; however, with the aid of technology,

the programme was able to enrol over 500,000 beneficiaries for the graduate and non-graduate programme across the 774 local governments in Nigeria”. Expressing his delight at the successful implementation of the N-Power project, Imoukhuede stated, “Nigeria now has a transparent, replicable and scalable model that can be adopted across all tiers of government and for all types of development initiatives. N-Power will expand into other connected economic clusters that will ensure sustainability and inclusive growth.” The conference sought to advance technological solutions to Nigeria and Africa’s socio-economic development challenges in light of upcoming conversations at the world economic forum (WEF) on shaping inclusive growth, and creating high quality employment opportunities. The SDG Agenda 2030 of ending poverty, ensuring equitable quality education, and promoting lifelong learning opportunities for

all was also referenced. Also in attendance were; Kayode Pitan, managing director, Bank of Industry; Toyin Adeniji, executive director micro enterprises, Bank of Industry; Ernest Umakhihe, permanent secretary, ministry of budget and national planning; Premier Oiwoh, managing director and chief executive officer of Nigeria Inter-Bank Settlement System Plc (NIBSS); Olatunde Adekola, senior education specialist, World Bank Group; Tobias Wolfgarten of German GIZ operations; and Hilda Kragha, CEO, Jobberman. The event also featured a panel and open discussion session with outcomes that sought to drive an agenda for inclusion and social change for Africa’s accelerated development with technology as the driving force. The critical role technology played in the implementation of the N-Power project from the application stage to selection, training and remuneration processes was emphasised.

press Payment Solutions Limited, a wholly owned Nigerian financial technology company that specializes in the design, implementation and provision of electronic payment solutions, is repositioning itself to lead in the Fintech space with the planned launch of its unique digital offerings which promote financial inclusion. The company which has processed transactions of over N1.3 trillion on its switch and payment gateway, over N75.3 billion point of sales (POS) transactions and a value of N411.4 billion collections and funds disbursed on its platform since it commenced operation in June 2016, is planning to seriously up its game and officially launch the company and its wide array of financial technology solutions to the general public on September 4, 2019. Speaking at a press briefing held at the company’s headquarters in Lagos, Oluwadare Owolabi, managing director and chief executive officer, Xpress Payment Solutions Limited said that the company operates a business philosophy of Business to Business(B2B), Business to Government(B2G) and Business to consumer (B2C). He went further to establish that the company has been successfully carrying out transactions, and there is an urgent need to bring stakeholders on board in a bid to publicize and reposition themselves in the increasingly cluttered fintech space in Nigeria. According to him, the company’s corporate strategy pillars are to provide smart living solutions, stress free experience, leading edge technology and a winning team. Xpress Payment Solutions Limited is licensed as a Payment Terminal Service Provider and is currently ranked 6th by NIBSS out of 22 PTSP players. The company currently manages PoS terminals for over 18 merchant acquirers. Owolabi went further to reveal that the company stands at a vantage point by providing solutions that are innovative yet simplistic which he believes has provided the company with a competitive advantage over their competitors.

Interswitch promotes STEM education with masterclass for students

nterswitch, an Africa-focused integrated digital payments and commerce company is driving the growth of Science, Technology, Engineering and Mathematics (STEM) education in Nigerian secondary schools through its InterswitchSPAK 2.0 masterclass. The company’s corporate social responsibility (CSR) initiative which is supposed to intellectually motivate secondary school children had 81 students attend the second edition of the masterclass held in Lagos last Monday, out of over 13,322 students from various private and public secondary schools across Nigeria who wrote the National Qualifying Examinations in

April 2019. Interswitch held its annual masterclass for school children on in Lagos. The program which is in its second edition tagged InterswitchSPAK 2.0 Masterclass was attended by the top 81 students out of over 13,322 students from various private and public secondary schools across the 36 states of the federation, including the FCT who wrote the National Qualifying Examinations in April. The day-long masterclass which is geared towards redefining STEM education in the country, is a build up to the actual competition where the top three would emerge as winners of the competition. www.businessday.ng

Speaking at the event, Mitchell Elegbe, GMD/CEO, Interswitch Group described the event as an attempt at promoting STEM education in the country. “The importance of the masterclass is basically around the fact that the students are very smart with very high IQ, and as you know in life to succeed you need more than IQ. there is the social and emotional quotient. So what we are trying to do in the masterclass is to expose them to certain things that are critical for them, which they may not find in their traditional classes in school.” “ It is very common these days to have lots of events where people go in and they win money. If we are not

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careful, youths may begin to think that science is not important and as you all know, innovation is one big way to eliminate poverty. We think despite the challenges of our environment, we must continue to ensure that we encourage our young ones to go for STEM subjects. Not only because we want them to take part in technology oriented courses but the fact that STEM subjects has a way of helping to form the way you reason and that huge analytical ability can be applied anywhere,” he added. Elegbe also stated that the goal for the program is to become Pan-African, as Kenya held its maiden edition this year. @Businessdayng

“Ultimately, we would like to make this event Pan-African, of course starting in countries where Interswitch has a local presence and that is why we have gone to East Africa now. This year the Kenyans took part, next year we would like to extend it to Uganda and potentially Tanzania and Rwanda. We would also look at the west coast next year, maybe Ghana, Gambia and places where we do not do business today.” Also present to motivate the students were Ayokunnu Ojeniyi representing Jumoke Oduwole, senior special assistant to the President on Industry, Trade and Investment and Ola Orekunrin, managing director, Flying Doctors.

Tuesday 27 August 2019

BUSINESS DAY

property&lifestyle Good news for home Retail market records zero space supply in seekers as Lagos assures on speedy completion of H1Y as landlords foresee no rental growth ongoing schemes CHUKA UROKO

ormal retail market in Nigeria continued its struggle into the first half of 2019 when, unlike the prime office space market where 33,000 square metres space was supplied, no single project was delivered in the first half of 2019. After what was seen as retail revolution that ended in 2015 because of government unfavourable economic policies, formal retail in Nigeria has been on the throes of an ailing and fragile economy where disposable income and consumer purchasing power have dropped considerably. Though there are some projects that are nearing completion in the core and secondary markets, the sizes are such that landlords don’t see enough capacities in them to disrupt current price levels. “These projects measure below 10,000 square metres,” notes Amaka Ajaegbu, researcher at Broll Property Services, in the company’s recent Retail Market Viewpoint on H1.2019. The report listed the incoming projects to include The Landmark Retail Boulevard (approximately 6,000 )square metres and the Simbiat Ikeja Mall in Lagos state (4,900 square metres)7,The Oshogbo Mall in Osun state (roughly5,000 square metres) and a retail

project in Port Harcourt of approximately 9,000 square metres. Additionally, a number of developers, both local and foreign, in the formal and informal sectors, are currently conceptualizing a few developments in both the core and secondary markets. Ajaegbu pointed out that the international developers, who are relatively new to the market, are leaning towards the more traditional formal retail designs (10,000 square metres +) while the local developers are looking at smaller projects to suit the demographic locations in which they will operate. According to her, in the period under review, landlords highlighted certain factors that existing

occupiers now require to enhance the usability of their current space such as improved amenities, additional seating areas within the mall, free onsite parking to improve dwell time, early lease terminations and service charge reconciliations. “Moreover, possibly the most important factor that has been highlighted by existing tenants is a reduction in occupied box sizes. Medium to large box sizes have proven difficult to lease in both core and secondary retail markets as prospective tenants are unable to justify the financial costs attributed to acquiring these premises which range from 100 square metres to 1,000 square metres. “Overall, vacancy rates average 20 percent across

core and secondary market locations, although the very successful malls are operating at below 2 percent vacancy rate. Rents have remained largely unchanged in H1:2019 in secondary market locations, however, there have been notable revisions upwards in rental values in the core market”, she disclosed. Asking rentals in the successful malls in Lagos are above $100 per square metres per month for 50 square metres to 250 square metres boxes; while average asking rentals in other core market locations generally range from $40 per square metres per month to $75 per square metres per month, up from $30 per square metres per month to $70 per square metres per month recorded in H2:2018.

The report says that rentals are flat in secondary market locations at $15 per square metre per month to $25 per square metre per month, adding that landlords in the core market retail malls are less inclined to offer discounted rentals, as was once the case during the economic recession, especially as vacancy rates have declined in certain malls. On the demand side, the report notes that there is notable tenant activity in the formal retail space. Enquiries have increased moderately in key malls within the core and secondary markets. A number of transactions have been concluded in the food and beverage, fashion and accessories as well as beauty and personal care categories. But majority of these transactions have remained under 100 square metres in size. “Some existing tenants that have struggled to meet financial obligations in the past have been exiting malls as their lease tenures expire. This is despite financial concessions and payment plans offered by some landlords,” the report says, adding, “international brand interest in the Nigerian retail space has slowed down to a certain degree as strong enquiries in the formal retail market have not translated into actual transactions.”

Fashola’s second coming: Expectations centre on infrastructure, housing policies ENDURANCE OKAFOR

or Nigerian prope r t y d e ve l o p e r s, mortgage operators, analysts, real estate investors and potential home owners, infrastructure and workable policies are their top priorities and expectations as Babatunde Fashola is reappointed Minister of Works and Housing. The former governor of Lagos state was one of the 14 ministers from Buhari’s first term who were reappointed last month by the president for his second term in office. “The biggest problem in the sector is high cost of mortgage available. If they can develop a policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a real estate firm, said. Nigeria has more than 17 million housing deficit and over 90 percent of new homes built in the country are funded from personal savings.

Nigeria ranks 149 on the Ease of obtaining Construction Permit and requires 17 procedures, 118 days, and 27.5 percent of property value, a factor that encourages more informal construction of properties and increases risks in the real estate sector. Co mme nti ng o n t h e areas Fashola should pay close attention in his next four years as the Minister of Works &Housing, Abiodun Akanbi, Head of Strategy at Infinity Trust Mortgage Bank, said it should be in infrastructure, specifically

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on good road network, explaining that road network gives value to housing. According to the National Infrastructure Master Plan, Nigeria needs to spend $3 trillion and five percent of its GDP annually to bridge the infrastructure gap. From roads to bridges, down to power and railways, the country’s infrastructure has recorded significant depletion in the last 20 years, owing to poor maintenance culture, lack of sufficient funds and corruption. In his first coming, Fasho-

la noted that while the housing deficit was a problem that mainly afflicts urban centres like Abuja, Lagos and Kano, as a result of migration, there were empty houses in both rural and urban areas, but they did not meet the needs of most buyers. “This has led to the government’s decision to develop a pilot housing project that is currently running in 34 states, responding to different buyer needs, financial capabilities and cultural attitudes to housing, as well as the different categories of land,” he pointed out. “We are now at the infrastructure stage, and many of the houses are already finished. We are building roads within and between cities in every state in the country, increasing access and connectivity,” he added. Fashola has been relieved of the Power ministry, leaving him with Works and Housing. It is was a daunting task for him as

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minister in charge of three major ministries which is why it is expected that relieving him of one ministry will give him more time to do more. “It is very tempting to see financing as the main problem of the housing sector. However, we believe that we should focus on a well implemented programme, and financing will follow closely,” Fashola said, noting that it is only when banks see the viability of real estate projects that they will become interested in financing such projects. In the first quarters of 2019, sectorial credit allocation to real estate shed 0.2 percentage points quarteron-quarter and 2.49 percentage point year-on-year. “Finance is the key strategy to everything, the reason prices of properties are high is because the funding comes at a huge cost,” Adekunle Adbul, Managing Director of Metro & Castle Homes, said. @Businessdayng

CHUKA UROKO

t is a piece of good news for home seekers as the new housing commissioner in Lagos, Maruf Akinderu-Fatai, has assured that the state government would speedily complete ongoing housing projects in the state, adding that private sector participation would be energized to yield an added value in the sector. Lagos State has a large tranche of on-going housing projects, especially those meant for the Lagos Home Ownership Mortgage Scheme (LagosHOMS), an ambitious home ownership scheme initiated by the Babatunde Fashola administration and continued by the immediate past governor, Akinwunmi Ambode. The new commissioner hinted during a media briefing on Wednesday that Lagos was poised to compete favorably with other smart cities in the world in the area of provision of affordable housing for all. He noted that many people come to Lagos everyday from all parts of Nigeria without any plans of returning to their hometowns. “Lagos is a unique destination of choice for not only Nigerians but also nationals of neighboring countries. People come to Lagos for various reasons. They do not have any plans for going back, thereby increasing the housing deficit on a daily basis. We have to provide decent accommodation for them all”. Lagos has a dire housing situation. A report by Pison Housing Company on ‘The State of the Lagos Housing Market’ estimates housing deficit in Lagos at 3 million units, pointing out that the state needs to build about 200,000 housing units annually for the next 10 years to close this gap. A k i n d e r u - Fat a i s e e s considerable challenge in achieving housing for all in the state, but assured that the present administration was capable of resolving that on a consistent basis, hence the need for speedy completion of ongoing housing schemes and the energisation of private sector participation. “In spite of the present deficit, we are optimistic that Lagos state has the wherewithal to compete favourably with smart cities of the same category all over the world in providing housing; actualizing the vision of building a 21st century economy with decent shelter for all is within reach. Lagos is blessed with the potentialities and we are strongly committed to bringing it to fruition,’’ he said.

Tuesday 27 August 2019

BUSINESS DAY

property&lifestyle

Landlords yield more grounds to tenants as prime office market struggles …it remains tenant’s market, analysts say ISRAEL ODUBOLA

rime office space suppliers are, increasingly, yielding more grounds in incentives to existing and intending tenants as office market struggles over declining demand and more than enough supply. Renting or leasing below prevailing market rate, allowing flexible payment structure, lease or rent holiday, are some of the incentives offered by developers to attract tenants or stimulate demand. Additionally, erecting green buildings and furnishing them with ultra-modern facilities are also part of the strategies being employed by developers to differentiate their products and beat competition in an oversaturated market. All these are expected given the prevailing market condition. Broll Nigeria’s half-year report on office market shows that year-to-date (YTD), a total of 33,000 square metres have been completed while 110,000 square metres space are under construction and expected to be completed and offloaded into the market by year end, adding that, year-to-

date, gross absorption stands at 11,600 square metres while vacancy rate has risen to 61 percent, up from 57 percent in the last quarter of 2018. Analysts posit that prime office market remains tenant’s market, but industry players are of the view that the choice to sell or lease at discount or par with market price or rent is determined largely by the location of the property. “The most important factor to consider before decid-

ing whether to give incentive or not is location,” said Najeem Adeyemi, realtor at Lagos-based real estate firm, Ewenla & Mustapha Limited, arguing that if the location is strategic enough and fits the need of the buyer, he wouldn’t mind paying the market price. The property market which has, in the last five years, seen a surge in Grade ‘A’ office space amid weak demand now put developers in a tight corner.

A sales executive at a Lagos-based property development office that leases prime office space told BusinessDay that, in some situations, his firm gives out rent holiday ranging from two to six months depending on the lease tenure, to incentivize prospective tenants or encourage existing ones. According to the sales executive whole did not want to be named, some developers do compensate on referrals which involve giving additional space without extra cost. “The trend in the market has put buyers in advantageous position. Sometimes, the payment pattern doesn’t go in our favour,” he said. BusinessDay findings as regards the strategies used by developers to remain competitive in the market showed that developers are tilting towards Leadership in Energy and Environmental Design (LEED) certified buildings as a form of product differentiation. LEEDS includes a set of rating systems for the design, construction, operation and maintenance of green buildings that aims to help builders be environmentally friendly and resource-efficient.

Experts canvass regular auditing, penalties to curb incessant building collapse GBEMI FAMINU

xperts in housing and infrastructure sector say regular inspection of both old and new buildings, evaluation of buildings to ensure strict compliance with initially approved plans as well as penalties on offenders will help to curb incessant building collapse across the country. Speaking at a breakfast meeting organised by the Nigeria-American Chamber of Commerce (NACC) in Lagos on Thursday, Adekunle Mokolu, president, Nigerian Society of Engineers (NSE), said there was a need for regular auditing of properties for documentary and record keeping, including enforcement of building regulations. He said building professionals must collaborate now more than ever to combat the menace of recurrent building collapse in the country. Mokolu, who was represented by Olasoji Olagunju, CEO, Hurlag Technologies, while proposing possible solutions, said stiffer penalties should be placed on owners

of collapsed buildings and the project handlers in the country, especially where lives are lost. He said this would serve as a deterrent to carefree developers in the country. He added that there should be regular enlightenment campaigns by stakeholders. He explained that buildings collapse due to various reasons such as bad design, faulty construction, foundation failures, and unnecessary additions that can be traced to the ineffectiveness of regulators, stressing that quality of work by regulatory agencies are key contributory factors. Ehi Braimah, vice president of NACC high, building collapses incidence in Nigeria was a matter of national concern affecting all stakeholders in the construction industry including professional bodies and associations, building consultants, government, developers, land owners and building users. At the breakfast meeting themed, ‘Building Collapse in Nigeria and the Need for Re-certification’, www.businessday.ng

Salako Idris, Lagos commissioner for physical planning and urban devt with Babajide Sanwo-olu, governor, Lagos State

Braimah stated that “the incidence of building collapse has become a recurring decimal in several parts of Nigeria which has raised much concern and anxiety about the safety of lives and properties.” “For ever y collapsed building, the footprints of destruction of lives and loss of properties in locations where they occur mostly in the urban cities of Port Harcourt, Abuja and Lagos in Nigeria are usually undesirable,” he added. Adetola Emmanuel-King, CEO, Adron Homes, stated that there was need to priori-

tise buildings and properties as they reflect the condition of the country, its economy and citizens. He challenged the government for turning the certificate of occupancy (C of O) into a revenue generation scheme, making it cumbersome for house owners while causing delays in approvals of building plans. “Just like human beings, buildings have a life cycle of 60 years after which they are to be renovated or demolished to avoid accidents, but proper maintenance of the buildings periodically can improve its life span,” Emmanuel-King said.

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Infrastructure Maintenance With Tunde Obileye Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Developing an effective water management system

iven that buildings or facilities will change over time from their original design or use, there is a huge responsibility on facility management practitioners in the area of water supply, sanitation and hygiene. These have a massive impact on health and prevention of diseases. As a facility manager, it is imperative to keep up with changes in the development of water quality strategy and risk management requirements in relation to water supply and sanitation monitoring. Water related diseases include cholera and legionella. It is possible to think that water is often not seen as a high business risk based on its relatively low cost, but the risk lies in the security of its treatment, supply and distribution which is paramount to the continued enjoyment of a residential property or productivity in a workplace. If the water supply to a building is cut off for more than a few hours, then the building becomes uninhabitable due to public health issues, and in turn becomes unproductive. In order to build confidence with clients, it is paramount to ensure a water strategy is implemented. It can be applied to any commercial, residential, industrial and/or public sector facility where, in the event of water failure, any water-reliant systems, that is, fire protection systems, cooling systems, wholesome drinking supply and sanitation are fully considered. Understanding water usage behavior can assist in providing an informed plan of action which can be further developed to mitigate risk. Such plans should include the detection of leaks and upgrade of ageing water infrastructure, as well as proactive measures and not reactive maintenance requirements. Issues associated with ageing infrastructure, such as pipe-work and sanitary fixtures often escalate and can require immediate action. When undertaking these upgrades, reactive or quick fix practices should be avoided as they will inevitably cause more financial burden than relief. Taking a proac@Businessdayng

tive approach to upgrades is beneficial. For example, replacing out-of-date, inefficient plumbing fixtures with low-flow outlets or alternatively providing fixtures with aerators to reduce water consumption are effective methods of addressing water efficiency issues. There can be significant savings associated with a complex building with multiple fixtures and fittings. However, the full extent of other consequences should be considered. For example, installing low flow fixtures within existing extensive horizontal high level sanitary drainage runs can cause blockages. Retrofitting waterless urinals may seem an effective solution but requires waste pipe-work to be fully assessed, as urine is acidic and can quickly corrode existing copper waste pipe-work. This quick solution is potentially an expensive problem requiring pipe-work replacement and is rarely budgeted for, therefore straining an already limited facilities budget and causing frustrations for facility managers and their tenants. Any water strategy needs to look at mitigating risks and maximising opportunities. It should be noted that opportunities can also present unanticipated costs or risks. For example, when considering the opportunity to implement and retrofit systems, the full life-cycle cost needs to be considered, and water is just one cost. The energy required to pump the water from the basement to all WC fixtures within a high rise office building can have a significant impact on electrical loads and costs. Energy efficient pumps may help; however, the full impact should be assessed, with consideration to the location of the water systems. Facility managers must adopt arobust water strategy that focuses on operational measures, as well as both short and long term engineering solutions. It must also be integrated with other strategies, for example energy management. A building is a complex network of interconnected systems that cannot operate in isolation of one another.

Tuesday 27 August 2019

BUSINESS DAY

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Tuesday 27 August 2019

BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Monday 26 August 2019 GAINERS Company

Global market indicators

LOSERS Company

Opening

Closing

Change

14.40

-1.60

-10.00

SEPLAT

441.00

-49.00

-10.00

8.70

JBERGER

18.55

-2.05

-9.95

0.10

8.62

CHAMPION

1.53

-0.16

-9.47

0.05

7.94

COURTVILLE

0.20

-0.02

-9.09

Opening

Closing

Change

ABCTRANS

0.33

0.03

10.00

SOVRENINS

0.22

0.02

10.00

JOHNHOLT

0.50

0.04

NPFMCRFBK

1.26

TRIPPLEG

0.68

FTSE 100 Index 7,094.98GBP -33.20-0.47%

Nikkei 225 20,261.04JPY -449.87-2.17%

S&P 500 Index 2,873.84USD +26.73+0.94%

Deutsche Boerse AG German Stock Index DAX 11,658.04EUR +46.53+0.40%

Generic 1st ‘DM’ Future 25,871.00USD +201.00+0.78%

Shanghai Stock Exchange Composite Index 2,863.57CNY

SEC to engage stakeholders on Master Plan Implementation Stories by Iheanyi Nwachukwu

he Securities and Exchange Commission (SEC) is to engage relevant stakeholders on the implementation of some initiatives of its 10 year Capital Market Master Plan Specifically, the engagements would be on E-Dividend registration a n d Mu l t i p l e Ac c o u nt s regularisation in a bid to reduce the unclaimed dividends profile in the Capital Market. This was stated by Acting Director General of the SEC, Mary Uduk at the end of the Second Quarter Capital Market Committee Meeting in Lagos. As part of the engagement, Brokers and registrars are required to make available to the Committee on Multiple

unclaimed dividends from building up from securities of newly-listed companies. According to Uduk, “ Another thing we need to do is developing the modalities for validating register of members, where the registrars are furnished with incomplete information such as missing account numbers. “We believe the capital market of our dreams can only be achieved through the collaboration of all stakeholders. Following the expiration of free e-dividend mandate registration period offered to investors, the Securities and Daniel Asapokhai, executive secretary/chief executive officer, Financial Reporting Council (FRC) of Exchange The SEC boss also unveiled Nigeria; Titilayo Fowokan, representative of the president of the Chartered Institute of Taxation of Nigeria (CITN); Muniru Umaru Wambai, FRC board member; and Iheanyi Anyahara, deputy director/Head, plans to partner the Central Strategy, Organisation, Research and Policy, Financial Reporting Council of Nigeria at the unveiling of Bank of Nigeria (CBN) to FRC’s individual registration portal for professional accountants and professionals engaged in financial e n su re t hat e - d i v i d e n d reporting held in Lagos recently. charges are included in the guideline for bank charges. transferred among operators This follows the expiration of Uduk said specific areas of Subscription Account, on a such as Brokers, Registrars the free e-Dividend mandate periodic basis, the number of engagement are Ensuring that and CSCS, Discouraging registration period offered to complete investor data are regularized accounts.

FCMB engages entrepreneurs in Oyo State

Seplat wins outstanding indigenous contributor to gas development award

…Extends free business finance training

eplat Petroleum Development Co mpa ny Pl c, a n independent oil and gas exploration and production company incorporated and operating in Nigeria, has been honoured with the award of Outstanding Indigenous Contributor to Gas Development in Nigeria. The oil and gas firm received the award at the recently concluded 2019 Annual Conference and Awards of the National Association of Energy Correspondents (NAEC) in Lagos. The theme of the conference was: “Harnessing Oil & Gas Potential for National Development”. Receiving the award for Seplat Petroleum, the General Manager, External Affairs and Communications, Chioma Nwachuku, said the Company plays an active role in the Nigerian gas to power sector with its 525MMscfd gas processing capacity, stressing that the Company currently contributes about 25% - 30%

of domestic gas to power supply in Nigeria. Nwachuku lauded NAEC for its industry-focused activities while also thanking the body for honouring Seplat Petroleum for its well-deserved recognition. The General Manager, Strategy Economics and Planning, Seplat Petroleum, A n t h o n y A g b o j o, w h o represented the Seplat Chief Executive Officer, Austin Avuru, on a Panel titled: “Commercial Viability in Gas to Power Value Chain”, reeled out Seplat’s huge investments in Nigeria’s gas value chain and the multiplier effects the intervention had had on the country’s economy. Agbojo said Seplat remained committed to infrastructural development across all its facilities while maintaining high standards of asset integrity; citing the over $300million invested in the Oben gas plant expansion project. He said: “Future infrastructural investments include a 75MMscfd gas plant installation in the West (Sapele) www.businessday.ng

and the Assa-North Ohaji South (ANOH) project in the East to add 300MMscfd capacity by 2021. With both projects, Seplat would increase its total operated gas processing capacity by 80 per cent. This is on course to achieving our target to own and operate 1Bcfd of gas processing capacity by 2021. Among the personalities and industry professionals present at the event were: the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari (represented by the Corporation’s Chief Financial Officer, Umar Ajiya); Managing Director of AITEO Group, Victor Okoronkwo; Chairman, Society of Petroleum Engineers, Nigeria Council, Debo Fagbami; representatives of the Department of Petroleum Resources, Transmission Company of Nigeria (TCN), Niger Delta Power Holding C o m p a n y , Ni g e r i a G a s Association (NGA), Oando Plc, ExxonMobil Nigeria, Total Nigeria, Shell Nigeria, amongst others.

investors by the SEC. According to Uduk, “SEC has been underwriting the e-dividend charges of N1.50 kobo but since we stopped, we have received a lot of complaints from investors due to the e-dividend charges. “But after extensive discussions with the capital market committee, the Commission intends to partner with the apex bank to issue charges on E-DMMS transactions. The CBN has a published charge for the banks. This means that any transactions carried out by any bank, there is an established charge.” She added: “The e-dividend charge is not part of the charges from the CBN and so because of that, investors are having issues with banks where they are charged for some transactions that are not listed as bank charges, which they do not know.”

undreds of existing and start-up entrepreneurs based in Oyo State have benefitted from the 7th edition of the First City Monument Bank (FCMB) organised free comprehensive capacity building programme, tagged, “Business Enterprises and Sustainability Training (BEST)’’, for Small and Medium Scale Enterprises (SMEs). The training, organised by FCMB Training Academy, the Bank’s Business Banking Group and seasoned facilitators, focused on business and skills development, marketing, finance and accounting for SMEs. It was held on August 24, 2019 in Ibadan, Oyo State and attended by over 300 entrepreneurs across various segments of business. The programme covered various topical areas such as identifying business op-

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portunities, surviving in a harsh business environment and improving productivity. Other major areas covered also include raising capital, optimising sales, cost and revenue management, among others. It is one of the value-added offerings of FCMB to complement its efforts in the areas of lending and advisory services to SMEs with the objective of stimulating their growth and contributions to overall national development. According to the Executive Director, Business Development of FCMB, Bukola Smith, the Bank recognises the increasing role and impact of SMEs. ‘’The BEST initiative is one of the innovative ways we empower, promote and lay a solid foundation for the long-term success of our SME customers. Without effective training and exposure, it could be quite difficult for their businesses @Businessdayng

to succeed. We believe this training will go a long way to impact positively on the SME operators who have participated in this programme. It will propel them to further develop themselves in order to compete favourably within and outside the Nigerian market. We, therefore, urge the beneficiaries to take advantage of the unique opportunities provided by this exercise. It is a veritable platform for them to take the lead to drive the diversification and growth of the Nigerian economy’’, she said. Also speaking, the Head, Training Academy of FCMB, Sola Oyegbade, stated that, ‘’BEST initiative is a proof of our commitment to the growth and sustainability of SMEs. We focus on helping and getting these businesses sustained, beyond just focusing on what value they add to our own Business on the immediate.

Tuesday 27 August 2019

BUSINESS DAY

Markets + Finance

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Kalambaina plant spurs CCNN to growth as profit surge BALA AUGIE

cross the globe, the aim of corporate structuring is to increase a company’s value, underpin efficiency, and improve on distribution and marketing network. Cement Company of Northern Nigeria (CCNN), the only cement company in North West Nigeria, is in a growth spurt as earnings are growing at a double digit since successfully implementing a corporate structuring exercise that consolidated its balance sheet. Following the merger with Kalambaina (owned by BUA cement, the majority shareholder in CCNN via a stake in Damnas Cement Limited ) in 2017, the company’s installed capacity increased to 1.5 million Mt/a from 500 million Mt/a. The new capacity has resulted in improved operating efficiency for the cement maker, making it more cost efficient, as the Kalambaina plant runs on coal, a cheap source of energy supply that can be sourced locally. The company recently released its half year financial statement that showed improvement in key performance

metrics, a stellar performance that validates management and board of directors’ focus and market penetration strategies. For the first six months through June 2019, CCNN’s revenue surged by 166.02 percent to N32.14 billion, the highest in the company’s history. The growth was laregly driven by both price increase in recovery in volume. CCNN is the only company that magnified sales among its peer rivals as Dangote Cement and and Lafarge Africa saw revenue reduce by 3.04 percent and 1.23 percent, respectively. CCNN has been controling direct costs attributable to projects since 2016, even amid a precipitous drop in crude oil price that stoked a severe dollar scarcity that tipped the country in its first recession in 25 years. See chart. Gross profit surged by 163.05 percent to N14.38 billion in the period under review as against N5.46 billion the previous. Gross margin stood at 44.15 percent in the period under review, a figure that is higher than the 38.43 percent recorded in 2015. In the past five years, cement maker has been turning top line inpresssive performance to bottom line growth. As at June 2019, operating profit stood at N9.62 billion, which is eight times the 2017 levels, supported by improve-

ment brought by the new plant. This translates in an ooperating profit margin (otherwise known as earmigs before interest and tax ) of 30.0 percent as at June 2019, which is nearly double 2017 level. CCNN’s profit after tax surged by 140 percent to N3.64 billion as at June 2019, that compares with Dangote Cement’s profit growth of 5.03 percent to N119.0 billion. Profit before tax followed the same growth trajectory as it surged by 102.05 percent to N43.36 billion in June 2019 from N2.15 billion the previous year. CCNN has utilized its investment investment in property plant and equipment to generate higher sales as evidenced in increased fixed asset turnover ratio. Fixed asset turn over (FAT) increased to 14.37 percent in June 2019 from 10.47 percent the previous year. Investors pay attention to this ratio because it tells them how new assets purchased by a company generates higher sales. The cement maker has produced more income from the use of assets as its return on assets increased to 2.06 percent in June 2019 from 1.42 percent the previous year. The return on assets ratio (ROA), often called the return on total assets, is a profitability ratio that measures the net in-

come produced by total assets during a period by comparing net income to the average total assets. It is calculated as net income divided by total asset. A higher ratio shows a company has put its resources to work in generating profit, and shareholders crave a corporation that deliver a higher return on investment in form of bumper dividend and share appreciation. C C N N ha s f i na n c i a l strength to expand its opera-

Africa’s largest economy. Historical Background Cement Company of Northern Nigeria Plc manufactures and sells cement in Nigeria under the brand name Sokoto Cement. The company produces CEM II type cement which is used by the home building and construction sectors in Nigeria for making cement blocks as well as for plastering and concrete works. CEM II type cement is renowned for its high early strength, rapid setting and low heat of hydration which is ideal for major construction works. The cement brand name is taken from the founder of the company, the Premier of the then Northern Region, Alhaji Sir Ahmadu Bello, Sardauna of Sokoto. It was incorporated tions, develop new product, pay dividend, and reduce debt as cash flow from operating activities surged by 705.88 percent to N10.96 billion from N1.36 billion the previous year. Operating cash flow margins increased to 34.11 percent in the period under review from 11.27 percent the previous year, which means the cement maker, is able to turn its sales into cash. It also shows how well the company is in managing its working capital. Investors prefer the free cash flow yield as a measure of valuation for a firm than the price to earnings ratio because unlike profit that can be manipulated, it difficult to tinker with cash. While CCCN has been recording strong earnings in the last 3 years, it operates in a tough and unpredictable macroeconomic environment. The cement industry has not been spared from the pains of a slow growing economy, with the sector recording precipitous drop in growth given that it tracks the performance of the economy, closely. Between 200-2014, the cement industry expanded at a robust CAGR of 13.70 percent. However, growth has averaged -1.0 percent in the past three years, with only a marginal recovery in growth to 4.50 percent in 2017. Similar, the other sectors that support the cement industry- real estate and construction – have been recording slower growth. Amid the harsh operating environment, analysts are

upbeat that the federal government proposed infrastructure spend will spur CCNN to growth as the demand for cement is expected to spike. Nigeria requires $15bn (N4.59tn at N306 to a dollar) worth of investments annually for 15 years in order to adequately develop its infrastructure nationwide, the Financial Derivatives Company, an economic and financial research firm, has said. Rising urbanization and a growing population is portends immense opportunity for CCNN and its peer rivals. The tax credit granted to companies for the provision of infrastructure will reduce tax liability hence bolstering the profit of cement makers in

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in 1962 and started producing cement in 1967 to meet the demand for cement needed for the expansion of Kalambaina Plant. Cement Company of Northern Nigeria Plc was privatised and a member of Heidelberg Cement Group, Scancem International ANS of Norway, was elected core investor and technical partner in 2000. A Nigerian-based firm, Damnaz Cement Company Limited, became the new core investor in 2008 when Heidelberg divested its stake in the business. BUA International Limited acquired Damnaz Cement Company and became the majority shareholder in Cement Company of Nigeria plc and its technical partner. The company’s head office is in Lagos, Nigeria.

Tuesday 27 August 2019

BUSINESS DAY

POLITICS & POLICY

LG funds: Controversy lingers as governors set for legal ‘war’ against NFIU INNOCENT ODOH, Abuja

he 36 state governors are set to drag the Nigerian Financial Intelligence Unit (NFIU) to court over its Guidelines that barred the governors from holding the State Joint Accounts over the local government funds. Facts emerged that the governors met in Abuja on Thursday and rejected a political solution to the disagreement with the NFIU over the Local Government statutory allocations from the Federation Account as they allegedly vowed through their pronouncements and actions to continue dipping their hands into the local government resources despite the NFIU guidelines which they considered as unconstitutional. (NFIU) Guidelines released in May, 2019 barred the 36 states governors from interfering with statutory allocation accruing to the Local governments directly from the Federation Account, which therefore means the governors have no business dipping their hands into the accounts of the 774 local governments and the FCT Councils. The Guidelines became effective from June 1 as the NFIU also threatened to deploy the powers within its disposal in collaboration with other security agencies to sanction any state government or official found to have violated the guidelines. Provision 9 of the NFIU guidelines stipulates that “ it’s hereby provided that any public officer anywhere in the country and/or any private citizen found undermining or violating these guidelines will be investigated and prosecuted under the NFIU Act 2018, the ML(PA), 2011(as amended), EFCC Act, 2004 and the ICPC Act, 2000”. Th e N F I U gu i d e l i n e s banned banks, governors other financial institutions, public officers and relevant stakeholders from tampering with the statutory allocations of Local Government Areas

President Muhammadu buhari

from the Federation Account. Individuals and companies, who default will face direct international and local sanctions. Some of the sanctions are possible blacklist of errant governors and the Chief Executive Officers of the affected banks, a complete shutdown of any bank and watch-list of violators in 160 countries where they cannot transact business or pay bills. The agency also imposed a daily N500, 000 cash transaction limit on all the 774 local governments in the country. The guidelines restored the financial autonomy of the local governments. Thus, each local government is free to spend its funds without taking directives from state governors who had hitherto hijacked the monthly allocations of the third tier of government under the guise of State Joint Local Government Account. The state governors had earlier protested against the Guidelines and went to court but a Federal High Court in Abuja in June refused to restrain the NFIU from imple-

menting its guidelines on the local government funds as requested by the governors. Justice John Tsoho ruled that the Joint Account should only be used to distribute allocation account to the local councils directly in order to maintain their autonomy. No higher court has ruled on the matter so far. The governors according to sources however, insisted that the NFIU Act 2018 lacks the power to issue guidelines on local government finances, especially imposition of sanctions. The governors also chose legal battle than political resolution in order to “lay the matter to rest once and for all.” The governors it was learnt also rejected the political solution to the impasse stressing that such option would amount to conferring legitimacy on “assumed powers by the NFIU which may set a bad precedent.” One of the governors was reported to have said that: “Initially, we thought of prevailing on the presidency to broker talks between the Nigerian Governors Forum (NGF) and

the NFIU because we are also committed to probity and accountability. “When we met, all governors agreed that the NFIU guidelines are unconstitutional and we should not use political rapprochement to confer legitimacy on the assumed powers of the agency. We have realised that the issues at stake border on the provisions of the 1999 Constitution. “All the governors have resolved that we should take the battle to the court for a clear cut decision which will guide the present generation of governors and their successors. “We want the court to interpret Section 7(6) (a) and (b) and Section 162(6), (7), and (8) of the Constitution. “If you look at Section 7(6) (a) and (b) of the Constitution, it gives the National Assembly and the State House of Assembly the powers to make provisions for statutory allocation of public revenue to the local councils in the Federation and within the State respectfully. “Section 162 (6) makes provision for the creation of the State Joint Local Government

Account (SJLGA) into which shall be paid all allocations to the LGAs of the State from the Federation Account and from the government of the state. “Section 162 (7) of the Constitution empowers the National Assembly to formulate the terms and manners in which funds from the SJLGA may be disbursed. “In Section 162(8), the 1999 Constitution mandates the State House of Assembly to prescribe the manner in which the amount standing to the credit of the local councils in the state shall be distributed.” “We see the whole matter as constitutional; we prefer to go to court instead of sleeping over our rights.” Another governor said: “Our position is that the guidelines are illegal, unconstitutional and cannot be binding on state governors. “Some of us tried as much as possible to prevail on the presidency to broker peace between the Governors’ Forum and the NFIU but the latter was not forthcoming. “At our meeting, we realised that we have a strong case. We will fight to the end. The beauty of democracy is that the judiciary is the arbiter. “If we have an under-thetable deal with the NFIU, it will backfire later. We won’t follow this path. “This is not the first time we are going to court. During the administration of ex-President Olusegun Obasanjo, the Excess Crude Account (ECA) was created and the governors challenged it because it was illegal.” However, a source from the NFIU told our correspondent in Abuja that it is not within the powers of the NFIU to sanction the state governments or its officials directly. He added that they only send intelligence to the relevant law enforcement agencies for investigation and prosecution of violators of the guidelines. He noted however, that the Unit can sanction the banks. “We cannot sanction the state governments or its officials; but we can sanction the banks and recommend

them to the CBN for further sanctions. “In case of the state government or officials we send the intelligence to the relevant law enforcement agency for investigation and prosecution since we do not have those powers,” he said. The NFIU source had said earlier that there appears to be some degree of compliance with the Guidelines as no local government has formally laid complaint to the agency. He promised that the agency will act on the receipt of complaints from the local councils. “For now there have been no other directives on the local government issues and the banks have been complying and I think the funds have been going to the local governments and anyone that has not complained it means that they are receiving their funds. The NFIU is saddled with the responsibility of receiving statutory reports from reporting agencies, analyzing them and disseminating them when necessary as intelligence to support investigations. BusinessDay on Friday contacted the National President of NULGE Ibraheem Khaleel Abdulkadir to speak on the latest development but he did not pick his calls neither did her respond to text messages. But in an earlier letter to all the chairmen across the 774 local government councils and the FCT, the NULGE President warned that any officer of the Local Government who “blindly follows the instruction of governors to transfer or divert local government funds to non-local government projects will be held personally liable.” As the stakeholders in the local government business meet in Keffi Nasarawa state on the 4th of next month and in Abuja on the 26th of the same month to dialogue on the implementation of the NFIU guidelines, there appears the need to apply more stringent measures against the state governors to obey the Guidelines as they appear to be devising more measures not to let go of the local councils funds.

Soyinka, Falana, Fasheun, others gets award as OPC marks silver jubilee INIOBONG IWOK

obel Laureate, Wole Soyinka, prominent lawyer, Femi Falani, the late Frederick Fasheun are among several eminent Nigerians to be honoured as the Oodua People’s Congress (OPC) marks its silver jubilee on Thursday, August 29. This was disclosed in a statement, Monday, by the Publicity Secretary of the group, Yinka Oguntimehin. Coordinator of the group

and the Aare Onakakanfo of Yoruba land, Gani Abiodun Adams, said the journey that started 25 years ago was tortuous, stressing that there is reason for celebration. The Aare Onakakanfo went down memory lane explaining that it was the annulment of June 12 1993 presidential election that culminated in the struggle to liberate the Yoruba nation, brought about the establishment OPC on August 29 1994. According to him, “The www.businessday.ng

zeal and patriotism of some Yoruba Nationalists to liberate Nigeria from the brutal, ferocious and savage hold of military junta led to the thrusting of Oodua People’s Congress (OPC) into national consciousness on August 29 1994”. “The late Frederick Fasehun, myself and seven others took a critical and patriotic decision that the mandate of the late Aare Moshood Kashimawo Olawale Abiola, annulled by former Military President, Ibrahim Baba-

ngida, must be actualised and Nigeria must be set free from the clutches of dictatorship”. “These and many other injustices from the then Head of State, the late Sani Abacha, led to the formation of the Congress, five years after the formation, democracy took a firm root in the country in 1999. “Today, it is a thing of joy that we have 20 years of uninterrupted, participatory democracy in Nigeria. But, this is not without sacrifice.

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The late Abiola, whose mandate was annulled on June 23, 1993, alongside OPC leaders, fought for the actualisation of the June 12, 1993 democratic wishes of Nigerians. “But sadly, the business mogul died in detention in controversial circumstances during the regime of General Abdulsalami Abubakar on July 7, 1998,” he further said. According to him, “Some Nigerians such as Pa Alfred Rewane, Kudirat Abiola, Alhaja Suliat Adedeji, Admi@Businessdayng

ral Tunde Elegbede, James Bagauda Kaltho, Shola Omasola, Oluwatoyin, Onagoruwa, Ken Saro-Wiwa and others were killed. “Activists and journalists, such as Chief Gani Fawehinmi, Olisa Agbakoba, Frank Kokori, Kunle Ajibade, Chris Anyanwu, Ben Charles-Obi, Onome Osifo-Whiskey, Babafemi Ojudu and others were detained and, some, jailed. Wole Soyinka, Asiwaju Bola Tinubu and others were forced to relocate from Nigeria.”

Tuesday 27 August 2019

BUSINESS DAY

news FG earns just N38m as VAT on brokers’ N759m commission in one month IHEANYI NWACHUKWU

T L-R: Gbenga Oyebode, chairman, technical committee on conference planning; Horacio Bernardes Neto, president, International Bar Association (IBA); Ibrahim Tanko Mohammed, chief justice of Nigeria (CJN); Obafemi Hamzat, deputy governor, Lagos State; Abubakar Malami, minister of justice/attorney general of the federation, and Paul Usoro, president, Nigerian Bar Association (NBA), at the opening ceremony of the 2019 Nigerian Bar Association annual general conference, with the theme “Facing the Future” in Lagos, yesterday. Pic by Olawale Amoo

Pipeline vandalism adds to Nigeria’s economic woes …N12.4bn spent on pipeline repairs, management in February …$101.3m lost to pipeline vandalism in May STEPHEN ONYEKWELU & DIPO OLADEHINDE

il theft and pipeline vandalism are oil songs from an oil hymn book in the Niger Delta, where there has been persistent political and social unrest with new allegations pointing to how Nigeria’s military may be aiding this illegal trade. A Joint Task Force (JTF) comprising personnel from the Nigerian Army, Air Force,

Navy and Police have been deployed in the Niger Delta region since the early 2000s. The JTF is tasked with tackling the militant threat in the region and preventing oil theft. But there have been indications that some JTF members are complicit in the twin crimes and tend to benefit from the oil assets they are mandated to protect in order to eradicate the illicit oil industry. “There are palpable allegations in this line and I think it is something the military headquarters should take

seriously and investigate because it is an act of economic sabotage,” said Adeola Adenikinju, a professor and director of the Centre for Petroleum, Energy Economics and Law at the University of Ibadan. Cost of Nigeria’s leaking pipeline In the month of May alone, Nigeria lost a total $101.3 million due to shut-in of production from leaking pipelines carrying crude oil from wells to flow stations in the Niger Delta, where more than 90 percent of the country’s crude is explored.

The loss comes from 1.5 million barrels of crude oil that the Nigerian National Petroleum Corporation (NNPC) said in its May monthly report that it could not take to the market due to shut-in pipelines. Combined production shut-in from all the six terminals which include Forcados, Bongo, Bonny, Brass, Egina, Oyo, and Amenam in May was 1.5 million barrels worth, with a total value of US$101.3

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1, 973 private sector institutions shut out from FG contracts over non-compliance with pension law MODESTUS ANAESORONYE

bout 1,973 private sector institutions that failed to comply with the Pension Reform Act 2014 have lost the opportunity to participate in Federal Government businesses and contracts in the current year. The institutions were refused pension compliance certificate by the National Pension Commission (PenCom) due to non-remittance of pension contributions for the appropriate period and/or non-provision of group life insurance policy for their employees. This follows an agreement PenCom reached with Bureau of Public Enterprises (BPE), Bureau of Public Procurement (BPP), and ministries, departments and agencies of government as part of efforts

to deepen compliance with the pension law. According to PenCom, during the first quarter of 2019, the Commission received 6,630 applications for the issuance of compliance certificate out of which 4,657 certificates were issued, while 1,973 applications were declined. The Commission in the first quarter report stated that the sum of N45.90 billion was remitted to 105,382 employees’ Retirement Savings Accounts (RSAs) by the 4,675 organisations that were issued with compliance certificates. Susan Oranye, executive secretary, Pension Fund Operators Association of Nigeria (PenOp), said compliance among employers and actual remittance were critical for the continued sustenance of the scheme. Oranye said it was rather

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unfortunate that some employers that have three employees and above have not thought it wise to embrace the scheme for the benefit of their employees and their organisation. Compliance, she said, not only enhances employees’ commitment to duty and increased productivity but also opens door for the institutions to partake in government contracts. “I believe that for the benefit of the citizens, the workers, and the economy as a whole, those in authority – BPE, the Bureau of Public Procurement and even the ministries, parastatals and agencies – should insist on compliance with the Pension Act as a precondition to participate in government contracts, irrespective of the size and nature,” she said. To enhance compliance with provisions of the Pen-

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sion Reform Act in respect of group life insurance and contribution remittances, PenCom in February 2019, in an advertorial titled ‘Notice to All Employees on Their Rights to Life Insurance Policy and Pension Contributions’, charged workers to demand for their rights. “This is to remind all employees in the public service of the federation, Federal Capital Territory and States that have implemented the Contributory Pension Scheme as well as private sector, that it is their rights, under section 4(5) of the PRA 2014, to have life insurance policy taken on their behalf by their employers for an insured amount not less than three (3) times their annual total emolument,” the advertorial read.

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he Federal Government has made just N38 million from Value Added Tax (VAT) on commissions earned by stockbrokers for equities trading in one month. The VAT charged on the commissions earned by stockbrokers is remitted to the Federal Inland Revenue Service (FIRS) following the nonrenewal of a five-year VAT exemption on such transactions which expired on July 24, 2019. The Federal Government had granted exemption from VAT such commissions earned as stated in an “Exemption of Commissions on Stock Exchange Transactions Order (Order)” issued on July 25, 2014 by Ngozi OkonjoIweala, the then minister of finance and coordinating minister for the economy. Barring any further extensions from the Federal Government, VAT is now charged on all commissions applicable to the market’s transactions. It became effective on July 25, 2015. The VAT is charged on commissions earned by dealing members on traded values of shares and payable to

the Nigerian Stock Exchange (NSE) and the Central Securities Clearing System plc (CSCS). When you want to buy or sell stocks, stockbrokers collect commission of 1.35 percent of the equities consideration. With an additional VAT of 5 percent on their commission, it brings their total charges to 1.4175 percent. The NSE charges a fee of between 0.3 percent and 0.5 percent of the purchase consideration. They also charge a VAT of 5 percent of the fee. CSCS charges a fee of 0.06 percent of the purchase consideration. An additional 5 percent of the fee is charged as VAT. CSCS charges another 0.03 percent of the purchase consideration when you sell and charge a further 5 percent of the fee as VAT. BusinessDay check shows that in one month of trading stocks valued at N56.21 billion after the expiration of the VAT exemption, stockbrokers made cumulative N759 million as commission. This implies that 5 percent VAT on this commission amounts to N38 million.

•Continues online at www.businessday.ng

Enugu airport repairs fail to kick off 4 days after shutdown …as PH, Owerri, Asaba airports see passenger patronage IFEOMA OKEKE

our days after the Federal Airports Authority of Nigeria (FAAN) shut down Akanu Ibiam International Airport, Enugu for the resurfacing of the runway, the repair is yet to commence, BusinessDay’s findings show. Industry stakeholders have raised concerns on why the airport was shut down if FAAN had no plans on ground to immediately commence repairs, as airlines and passengers face inconvenience trying to link alternate airports. The Enugu airport was remodelled in 2010 when former President Goodluck Jonathan upgraded it to international status. Minor resurface works have since then been carried out at the airport while the runway has continued to cave in. The repair is coming at a time of increased insecurity on Nigerian roads, deteriorated roads infrastructure, especially with the rainy season, and depletion of aircraft size, making it increasingly difficult for airlines to meet demands. Olumide Ohunayo, head research and corporate travel,

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Zenith Consult and Travel, told BusinessDay that contractors have yet to report at the airport which is critical as the only international airport in the South-East. “As at the time they closed the airport, I expected all the necessary materials to be in place. What was the rush to close it when the contractor was not ready?” Ohunayo queried. In March 2017, Hadi Sirika, the minister of state for aviation, had promised to repair the Abuja runway in six weeks and it was completed within the timeframe. However, no specific timeframe has been given for the completion of the repair on the Enugu airport runway as the airport was shut indefinitely. According to Ohunayo, concerned authorities need to make the repairs as quick as possible considering that fact the airport is strategic for South-East region. He said arrangement must be made for airlines and passengers to access alternate airports such as Owerri, Asaba and Port Harcourt.

•Continues online at www.businessday.ng

Tuesday 27 August 2019

BUSINESS DAY

news CBN, Bankers’ Committee introduce... Continued from page 1

after the meeting in Lagos, said the new clause would be included in the offer letters that would be granted by the banks going forward. “In our view, if all the banks that are required to meet this requirement actually meet it, we will see growth of about a trillion added to the credit balance sheet. We also in addition to that pronouncement looked at the challenges and factors affecting banks’ willingness to lend,” Ahmad said. T h e l e n d i n g c l au s e, which is going to be more or less a credit risk protection clause that will be in all the offer letters, will basically contain the Bank Verification Number (BVN) and Tax Identification Number (TIN) details of the customers. “It will be a commitment by the customer that in taking the loan you agree and promise to repair the loan and that you also agree that should you default, the total amount of asset or deposit you have across the industry would be applied towards repaying the loan,” Ahmad explained. “We are very optimistic that this will enable the banks to lend more with confidence and enable more Nigerians to get access to loan particularly in the SMEs, retail sectors. We are also looking at revitalising the mortgage sector,” she said. The Bankers Committee also came up with mortgage interest drawback fund which is supposed to resolve the high cost of mortgages. This will help reward those that have the capacity to repay their loans and reduce the cost of mortgages by half. The CBN and the Bankers Committee also introduced the mortgage guarantee company which is supposed to help de-risk the mort-

gage sector. This will help to get some funding back for mortgages that are bad. The mortgages that qualify for this are those that meet the underwriting standard required. The mortgage guarantee company, which will be private sector-driven, is also expected to help all the mortgage institutions like the primary mortgage banks that have created mortgages based on the underwriting standards to be able to get part of their money when there is a default. Ahmed Abdullahi, director, banking supervision of the CBN, said the committee was working on a credit scoring system whereby all obligors with a credit score would have easy access to credit and that would help improve the industry. Others who addressed journalists include Herbert Wigwe, group managing director/CEO, Access Bank plc; Segun Agbaje, managing director/CEO, GTBank; Tomi Somefun, managing director, Unity Bank plc, and Isaac Okorafor, CBN director, corporate communication. Wigwe said the Bankers Committee paid a lot of attention to the creative sector. He said the committee was collaborating with the Lagos State government on a pilot project to develop the adjoining area to the National Theatre and provide support to fashion, music, Nolywood and creation of an IT hub. On his part, Agbaje said one of the things the CBN wants to do is pure consumer credit where customers start to get loans to be able to buy cars, where supermarkets start to extend credit. As an incentive to help the banks, he said, a multiple of 1.5 percent from the calculation of the 60 percent loan-to-deposit ratio would apply to consumerand mortgage-type loans.

Pipeline vandalism adds to Nigeria’s ... Continued from page 37

million, using the average price of the international Brent crude, the benchmark for Nigeria’s crude oil which sold for an average price of $66.83 in May. The NNPC admitted that payments into the Federation Account were affected after adjusting crude and product losses and pipeline repairs and management cost incurred during the period. The state-controlled oil company’s pipelines suffered a total of 2,014 vandalised points in the 12 months between May 2018 and May 2019, fuelled mainly by crude oil theft and vandalism, with the corporation admitting that this incessant vandalism

has put it at a disadvantaged competitive position. The corporation said it spent N12.4 billion for pipeline repairs and management in February alone. The role of the armed forces According to sources, members of the Nigerian armed forces have enabled and benefitted from the illegal trade in a number of ways. Often, this benefit comes from providing “protection” either from ensuring military officials turn a blind eye to the illegal activity or protecting oil thieves’ access to extraction points from rivals – in exchange for financial bribes. A Chatham House report has suggested that JTF officers have stood guard at illegal tap www.businessday.ng

L-R: Ben Afudego, partner, advisory leader, West Africa, Ernst and Young (EY); Adegbolahan Olugbemi, facilitator; Lateef Dabiri, vice chairman, Association of Chief Compliance Officers of Bankers in Nigeria (ACCOBIN); Bashir Babagana, facilitator, and Hameed Mustapha, facilitator, at the 2019 ACCOBIN compliance workshop, with the theme “Emerging Technologies: Risk/Opportunities for Compliance” in Lagos. Pic by Olawale Amoo

FG/Siemens power deal: Parties expect financial ... Continued from page1

crease capital expenditure to improve TCN’s ability to upgrade its transmission network. BusinessDay learnt that t he DisCos were given the

option of picking a shopping list of assets that would be upgraded or replaced within their distribution network. A shareholder loan arrangement is being discussed to pay for the assets and a default could impair the shares of the core investors in the DisCos. The Nigerian government currently controls 40 percent shares in the DisCos. However, before Siemens commits to the deal, the DisCos are required to demonstrate an ability to repay, a source said. The electricity sector regulator, the Nigerian Electricity Regulatory Commission (NERC), is reviewing electricity pricing towards making it sustainable for the operators and consumers.

points and provided armed escorts to ships loaded with stolen crude. Similarly, a 2015 report from the Stakeholder Democracy Network (SDN) said JTF members are actively involved in oil theft, from providing security to local oil thieves as they install taps that divert oil from pipelines to collecting “transportation taxes” for vehicles transporting oil and demanding “regional security payments” from illegal oil refineries for on-going protection. SDN’s community interviews suggest that military involvement in oil theft approaches the systematic, with high-ranking officers reportedly overseeing the deployment of units to protect illegal refineries and key information is passed on as units rotate in and out.

Analysts say the success of the deal will benefit all parties and the country in general. According to the Power Sector Recovery Programme, a World Bank-sponsored study to improve the power sector, the Nigerian economy loses over $29 billion annually due to inadequate power supply. “The deal is a good one for all the parties, that’s why the DisCos signed up, but it is fraught with risks in the event of a default,” said Chuks Nwani, an energy lawyer based in Lagos. To ensure the success of the deal, NERC will effect two minor tariff reviews in January and August 2020 to the Multi-Year Tariff Order (MYTO), the template used to model electricity pricing in Nigeria. The regulator recently published a model of cost-reflective tariff for all the DisCos which showed that even if cost-reflective tariffs were in place since 2015, DisCos would still be indebted to the tune of

N196.9 billion based on market shortfalls attributed to their poor collection ability, electricity theft and power lost through a poor grid network. NERC has further directed that DisCos promptly meter all government ministries and departments to reduce market shortfall. “This Order reiterates that the responsibility and initiative for revenue collections from all customers including Ministries, Departments and Agencies of States and Federal Government rests with the DisCos,” NERC said in a directive to each DisCo. “Accordingly, this Order makes it mandatory for all DisCos to meter all MDAs with appropriate meters of their choice within 60 days from the effective date of this Order. All DisCos reserve the right to disconnect any MDAs defaulting in the payment for electricity in line with the Regulation on Connection and Disconnection Procedures for Electricity Services,” it

“JTF and pipeline vandals are working hand in hand…They have the boys’ phone numbers and feed them with useful information. Even when their commander is transferred, they leave the phone numbers of the boys in their file for the new commander,” world’s leading non-governmental anti-corruption organisation Transparency International said in its 2019 report. An investigation by an Abuja-based media firm reported conversations among workers involved in oil theft discussing the bribes they pay to military personnel to turn a blind eye to their activities. In October 2018, the Navy was forced to deny allegations that personnel collected huge bribes from oil bunkers

in exchange for allowing them to operate freely in Bille coastal communities in Rivers State. Given the extent of the illegal activities and the potential complicity of a key state institution meant to be curbing these very activities, Civil Society Legislative Advocacy Centre (CISLAC) and Transparency International researchers have attempted to gauge the scale and depth of military involvement in oil theft with the hope of informing the policy debate and empowering agents of change aiming to reform the oil industry in the Niger Delta. Six independent researchers conducted interviews and focus group discussions in the Niger Delta between February and July 2018 focusing on local communities includ-

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said. According to the proposed deal, the German company will upgrade transmission and distribution networks which could double Nigeria’s electricity generation and raise distribution capacity three-fold to 11,000 MW by 2023. It will aggregate all DisCos’ investments in their network including cables, switches, transformers and substations to raise distribution above the current 4,000MW. BusinessDay gathered that Siemens will also try to resolve gas constraints to power plants by seeking to tap into the AKK pipeline for fuel supply so abandoned turbines can be restarted and use previously flared gas. Half of Nigeria’s 13,000MW generation is constrained due to lack of gas. Through smart metering and improvement of DisCos capacity, it is hoped the DisCos would raise collections and repay Siemens investment, which may be classified as a shareholder loan from the FG in their books.

ing those who were familiar with illegal activities and who had witnessed oil theft in the region such as Nembe and Yenagoa in Bayelsa State, in Calabar in Cross River State, and in Port Harcourt in Rivers State. Operators of artisanal refineries told (CISLAC) and Transparency International researchers that the JTF knew exactly where the bush refineries were located and how they are operated, and used that knowledge to extract payments. “The JTF knows where every single cooking pot in the Niger Delta is, they know how to get there, and they know who owns it and they even have their phone numbers,” the researchers said. According to the research•Continues online at

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Tuesday 27 August 2019

BUSINESS DAY

news NSACC holds breakfast forum in Lagos

igeria-South Africa Chamber of Commerce (NSACC) will hold its August 2019 Breakfast Forum scheduled for Thursday, August 29, 2019, at Eko Hotel and Suites, Victoria Island, Lagos, by 7.30am. Kolawole Oyeyemi, general manager, customer experience, MTN Nigeria, will be the guest speaker. Oyeyemi, as general manager, customer experience function, he tasked with developing, executing and measuring the continuous delivery of the Customer Experience vision and strategy and drives the Customer Centric culture change across the business. He will share insights on the topical issue: “From ROI to ROE: Locating the Customer at the Heart of the Business’’ in our ever evolving society. NSACC executive sec-

retary, Iyke Ejimofor, states that the event is primarily for captain of industries, business owners and top-level executives as well as other interested parties. He says the chairman of the Chamber, Foluso Phillips, and other executive directors are expected to attend the forum, noting that as in previous times, this edition will be educative and also insightful. Ejimofor, on behalf of the Chamber, encourages everyone who wants to grow and strengthen his or her business or gain insights on how to thrive globally to make effort to attend. He expresses the hope that the meeting is a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on.

Entrepreneurs laud President Buhari on power minister choice GBEMI FAMINU

i g e r i a n Fo r u m o f Yo u n g E n t r e p r e neurs has applauded President Muhammadu Buhari for his choice of Saleh Mamman to oversee the Ministry of Power. This is coming as the Forum also congratulated Mamman on his appointment as the new minister of power. Mamman was inaugurated alongside other 42 ministers on Wednesday in Abuja, the nation’s capital. The Forum in a statement by its coordinator, Olawale Olatunde Lewis, said President Buhari again did the right thing by appointing an electrical engineer, a core professional to manned the

critical sector. Lewis described Mamman’s appointment as round peg in a round hole. The Forum called on the minister to work in tandem with the Next Level agenda of the President in achieving a steady power supply for the close to 200 million Nigerians, most especially young entrepreneurs whose business solely relied on steady power supply. The Forum said: “While congratulating the Minister and wishing him the best in the onerous task ahead, we wish to call your attention to the urgent need of steady power supply for the country, which, amongst others, remained the catalyst for the growth of the nation.

Edo urges residents in riverine areas to move to safety, as water level rises

he Edo State government has issued a warning to residents living in flood-prone riverine communities to move upland and take refuge in safe havens that have been provided in selected local government areas across the state. In a statement, special adviser to the Governor on Special Duties, Yakubu Gowon, in Benin City, said: “This is to alert people living around river banks and riverine areas across Edo State that water levels are rising as a result of heavy downpour.” He said, “Government has prepared the Internally Displaced Persons’ (IGP) camps for possible evacuation of residents living in these areas. They should

be ready to relocate to the camps when the order is given by the government.” The governor ’s aide urged members of the public to take precautionary measures to forestall incidents that may arise from increased water levels, urging them to: “Stop dumping refuse indiscriminately, avoid building on low plains and waterways, stop erecting structures on the moat and don’t engage in excavation of any kind without government approval.” In the past, the Edo State government identified riverine communities in Ikpoba-Okha, Ovia North -East, Esan South-East, Estako Central and Etsako East local councils as areas prone to flooding. www.businessday.ng

L-R: Victor Daminabo, head of operations, Gokada; Fahim Saleh, founder/co-CEO, Gokada; Ayodeji Adewunmi, co-CEO, Gokada, and Kyle Kapper, chief operating officer, Gokada, during the re-launch of Gokada’s upgraded operations in Lagos, yesterday.

IPOB has nothing to do with President Buhari in Japan - Presidency Tony Ailemen, Abuja

residency on Monday urged Nigerians to disregard rumours of harassment of President Muhammmadu Buhari in Japan by members of the proscribed Indigenous People of Biafra (IPOB). A statement by the special adviser to the President on Media and Publicity, Femi Adesina, on Monday, said, “Proscribed (IPOB) group has had nothing to do with President Muhammadu Buhari since he arrived Yokohama, Japan, on Monday.” The statement therefore advised Nigerians at home and in the Diaspora to disregard “the concocted stories, backed with spurious visuals, of any protest or harassment

of the President and his team.” Adesina described the allegations as “the stock-in-trade of hate mongers, who do not realise that the rest of Nigerians have left them far behind.” President Buhari, he said, will make his presence at the Seventh Tokyo International Conference on African Development (TICAD7) count for Nigeria, adding, “No scaremongering or sabre-rattling will detract from the outing.” President Buhari and his delegation that arrived Yokohama, Japan, since on Sunday, is expected to push for broader Japanese assistance in the areas of science and technology, innovation, human resource development, education, agriculture, power, health and disaster risk reduction, among others. With the theme, “Africa and Yokohama, Sharing Pas-

sion for the Future,” the Opening Session of TICAD7 will be performed by the Japanese Prime Minister and host, Shinzo Abe. President Buhari will deliver Nigeria’s statement during Plenary Session Three in which he will appraise Nigeria-Japan relations and takeaways from TICAD6. He will also attend a State Banquet and also honour the invitation of Emperor Naruhito to a Tea Reception at the Imperial Palace, Tokyo. In addition to a bilateral meeting with Prime Minister Abe, the Nigerian President will also attend some sideevents and meet chief executive officers of some Japanese companies with huge investments in Nigeria. Formed in 1993, the now triennial TICAD, which has been convened alternately

in Japan and Africa since TICAD6, according to the organisers, is the largest international conference held in Japan, which “provides an open forum that generates innovative discussion among various stakeholders on African development.” Participants are drawn not only from African countries, but also international organisations, private companies and civil society organisations involved in development. TCAD7 is expected to focus on Africa’s “economic transformation and improvements in business environment and institution through private investment and innovation; promotion of resilient and sustainable African society for human security; and peace and stability in support of Africa’s domestic proactive efforts.”

Investor apathy persists as total transaction on NSE in July dropped 61% OLUFIKAYO OWOEYE

espite the initial public offering by Airtel on the Nigerian Stock Exchange (NSE) last month, figures from NSE on its Domestic and Foreign Portfolio Investment (FPI) flows for July show that a tepid atmosphere still persists on the nation’s bourse. According to the NSE, as at July 31, 2019, total transactions at the nation’s bourse tanked 61.82 percent from N297.25 billion (about $970.1m) in June 2019 to N113.47 billion (about $370.4m) in July 2019. Foreign inflows also plummeted from N44.3 billion in

June to N28.38 billion in July. The performance in July when compared to the performance in the same period in July 2018 of the prior year revealed that total transactions also decreased 22.31 percent. In July 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 2 percent. Further analysis of the total transactions executed between the current and prior month June 2019 reveals that total domestic transactions decreased significantly by 72.22 percent from N200.51 billion in June to N55.69 bil-

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lion in July 2019. Similarly, total foreign transactions also decreased 40.27 percent from N96.74 billion (about $315.7m) to N57.78 billion (about $188.6m) between June and July 2019. The value of domestic transactions executed by institutional investors outperformed retail investors by 8 percent, a comparison of domestic transactions in the current and prior month, June 2019, revealed that retail transactions decreased by 83.59 percent from N155.12 billion in June 2019 to N25.44 billion in July 2019. However, the institutional @Businessdayng

composition of the domestic market reduced by 33.28 percent from N45.34 billion in June 2019 to N30.25 billion in July 2019. The massive sell-off in equities by investors has seen most capitalised firms on the nation’s bourse shed N2.36 trillion year-to-date. The NSE30 index, which consists of the 30 most capitalised firms on the exchange, lost value, with share prices on a free fall, analysis of the entire NSE 30 index further shows that 80 percent of total listed companies in the index underperformed the ASI eroding more than 12 percent of investors’ worth on the exchange

Tuesday 27August 2019

BUSINESS DAY

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Tuesday 27 August 2019

BUSINESS DAY

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Tuesday 27August 2019

BUSINESS DAY

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Tuesday 27August 2019

BUSINESS DAY

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44 BUSINESS DAY

Tuesday 27 August 2019

news FG earns just N38m as VAT on brokers’ N759m Commission in one month Iheanyi Nwachukwu

he Federal Government made just N38 million from Value Added Tax (VAT) on commissions earned by stockbrokers for equities trading in one month. The VAT charged on commissions earned by stockbrokers is remitted to the Federal Inland Revenue Service (FIRS) following the nonrenewal of a five-year VAT exemption on such transactions, which expired July 24, 2019. The Federal Government had granted exemption from VAT on such commissions earned as stated in an “Exemption of Commissions on Stock Exchange Transactions Order (Order)” issued on July 25, 2014, by the then coordinating minister for the economy and minister of finance. Barring any further extensions from the Federal Government, VAT is now charged on all commissions applicable to the market’s transactions. It became effective on July 25, 2015. The VAT is charged on commissions earned by Dealing Members on traded values of shares, and payable to the Nigerian Stock Exchange (NSE) and the Central Securities Clearing System plc (CSCS). When you want to buy or

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sell stocks, stockbrokers collect commission of 1.35 percent of the equities consideration. With an additional VAT of 5 percent on their commission, it brings their total charges to 1.4175 percent. The NSE charges a fee of between 0.3 percent and 0.5 percent of the purchase consideration. They also charge a VAT of 5 percent of the fee. CSCS charges a fee of 0.06 percent of the purchase consideration. An additional 5 percent of the fee is charged as VAT. CSCS charges another 0.03 percent of the purchase consideration when you sell and charge a further 5 percent of the fee as VAT. BusinessDay check shows in one month of trading stocks valued at N56.21 billion after the expiration of the VAT exemption, stockbrokers made cumulative N759 million as commission. This implies that 5 percent VAT on this commission amounts to N38 million. The CSCS automated the deduction of VAT charged on commissions payable to the NSE and the CSCS; and Dealing Members resumed the deduction of VAT on commissions earned; they are remitted to the Federal Inland Revenue Service (FIRS). As at that week, investors @Businessdayng

exchanged 759.266 million units of equities valued at N14.038 billion. In this week alone, stockbroker earned N189 million as commission. The accrued 5 percent VAT on the review week’s commission payable to Federal Government was N9.45 million. In the week ended August 9, the brokers traded 1.08 billion shares valued at N12.014 billion. As at that week, they earned N162 million as commission, and the 5 percent VAT on this earned commission is N8.1 million. Further check shows that in the week ended August 16, dealers exchanged 726.609 million units valued at N10.459 billion. The commission they earned was N141 million, while the VAT on it N7.05 million. In the week ended August 23, investors traded 2.337 billion units of equities valued at N19.712 billion. The cumulative commission collected by Stockbrokers on this value of stocks traded was N266 million, while the 5percent VAT on this commission was N13.3 million. Looking at the NSE, which charges a fee of between 0.3 percent and 0.5 percent of the purchase consideration, assuming the upper bound holds, it made N281 million from charges, while VAT on the charges amounts to N14.05 million.

Tuesday 27 August 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper MICHAEL PEEL IN BIARRITZ

onald Trump has claimed Beijing is seeking talks on a deal to end a trade war between the US and China that has spooked financial markets and stoked fears of a global economic slowdown. The US president said on Monday that he was optimistic about the prospects for an agreement with Beijing, 24 hours after he appeared to suggest he was having second thoughts about imposing further tariff rises on China. “China called last night our top trade people and said, ‘let’s get back to the table’, so we’ll be getting back to the table, and I think they want to do something,” he said on the margins of the G7 summit in the French coastal resort of Biarritz. “I have great respect for the fact that China called — they want to make a deal. This is the first time I’ve seen them where they really do want to make a deal, and I think that’s a very positive step.” The remarks are the latest twist in an uncertain few days over US trade policy towards Beijing. China’s renminbi weakened on Monday to a new 11-year low and stock markets in Asia-Pacific fell sharply after the White House on Sunday suggested that Mr Trump in fact wanted to raise tariffs on Chinese goods even higher. However, global markets stabilised

Donald Trump says China is seeking talks to end trade conflict US president hails ‘very positive step’ after weekend of rising tensions

after Mr Trump said China had requested further talks. Mr Trump praised Xi Jinping, China’s president, but gave no details of the alleged Chinese overture on trade talks. “They’ve been hurt very badly but they

understand this is the right thing to do,” he said. There was no immediate response from Beijing. In separate remarks on Monday, Liu He, Chinese vice-premier, said China did not want further trade hostil-

ities with the US. “China . . . resolutely opposes the escalation of the trade war,” he said. “An escalation of the trade war is not good for China, it’s not good for the US, and it’s also not good for the interests of people across

the world.” China has never officially threatened to stop talking to the US on trade, despite the rhetoric from Washington. Beijing has expected negotiations would start next month. Mr Trump grabbed attention on Sunday in Biarritz when he appeared to suggest a possible rethink over widening the trade tariff war with China, just two days after increasing duties on almost all Chinese imports. Beijing also slapped higher levies on some US products. Asked if he was having second thoughts about imposing additional levies on Beijing, the US president said he was. “I have second thoughts about everything,” he added. But a White House spokesperson later said Mr Trump’s answer had been “greatly misinterpreted”, and that the president wanted to pursue an even more aggressive trade policy towards China. “President Trump responded in the affirmative — because he regrets not raising the tariffs higher,” the spokesperson added. Additional reporting by Tom Mitchell in Hong Kong

Big Tech may be losing its Amgen to buy Celgene’s allure for talented staff Otezla in $13.4bn deal

After decades as the world’s coolest place to work, Silicon Valley has an image problem LUCIE GREENE

izza stations, gyms, lavish headquarters conceptualised by starchitects, and the promise of a lucrative career that also has the potential to solve world problems. For a long time, working in Big Tech was the dream for many young people. But is its status starting to change? Big Tech might be concerned about government fines and PR emergencies, but its biggest problem could be failing to recruit and keep talented staff. Some high-profile leavers are going public with their complaints about the companies and the lure of Big Tech for graduates is being eroded. Last month, for example, Meredith Whittaker — one of the leaders of 2018’s 20,000-strong Google staff walkout to protest against the company’s handling of sexual misconduct cases — announced she was leaving the company to focus on her work at the AI Now Institute (which researches the ethical implications of artificial intelligence). In April, Ms Whittaker

said she had been told she would have to “abandon” that work if she wanted to remain at the group. This month, an anonymous employee memo went viral at Google. “I’m Not Returning to Google after Maternity Leave, and Here is Why” alleged discrimination by a manager. According to a recent CNBC report based on conversations with former Facebook recruiters, the company has been struggling to win over graduates in the wake of last year’s Cambridge Analytica scandal. (Facebook has denied this.) The report says: “Among top schools, Facebook’s acceptance rate for full-time positions offered to new graduates has fallen from an average of 85 per cent for the 2017-2018 school year to between 35 per cent and 55 per cent as of December.” It also charted a flight from Facebook to competitors (Google), or rising companies such as Airbnb, Stripe and Lyft. The report cited ethical and political concerns among candidates, as well as the relevance of Facebook as a brand among young people. www.businessday.ng

Deal helps advance Bristol-Myers Squibb’s $90bn takeover of rival biotech giant Celgene HANNAH KUCHLER, JAMES FONTANELLAKHAN AND ERIC PLATT IN NEW YORK

mgen agreed to buy Celgene’s Otezla, a treatment for psoriasis and Behçet’s disease, for $13.4bn on Monday, allowing Bristol-Myers Squibb to push ahead with its mammoth $90bn takeover of Celgene. The multibillion-dollar sale of Otezla is the latest in an industry that has seen a staggering amount of dealmaking this year, which kicked off in early January when Bristol-Myers Squibb agreed to buy Celgene. As part of that deal, Bristol and Celgene said they expected to divest assets to win regulatory approval. “This agreement represents an important step toward completing our pending merger with Celgene,” said Giovanni Caforio, chairman and chief executive of Bristol-Myers. Pharmaceutical and healthcare companies’ deal frenzy this year has been partly driven by

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the desire to sell non-core assets or buy innovative medicines as their own drugs are close to losing patent protection. Major pharmaceutical groups are focusing on becoming one of the top three players in whatever category they operate. So far this year, more than $700bn worth of transactions have been agreed in the pharmaceutical and healthcare sector, according to Refinitiv, including AbbVie’s decision to buy the maker of Botox, Allergan, for $63bn; Pfizer’s sale of its off-patent drug business to Mylan for $9.5bn; and Roche’s $4.8bn takeover of gene therapy company Spark Therapeutics. Bristol-Myers’s acquisition of Celgene is the largest in the largest pharma deal so far this year. Shares in Bristol-Myers Squibb jumped 4.2 per cent to $48.52 in morning trading in New York, while Amgen stock rose 2.2 per cent to $203.42. Geoffrey Porges, an analyst at SVB Leerink, said the deal was positive for Bristol investors but @Businessdayng

“marginally negative” for Amgen shareholders, because the price is higher than expected. He also questioned whether the Federal Trade Commission would approve the deal, given Amgen already has a significant presence in the same disease area. But Amgen said it feels “confident” that it is an appropriate buyer, with the key drugs complementary while not targeting overlapping patient populations. B r i s t o l - My e r s a l s o a n nounced that it plans to buy back $7bn worth of shares, up from the previously planned $5bn share repurchase. The move follows strong business performance and encouraging clinical developments across the pipeline of its portfolios. Under the terms of the agreement, Amgen will acquire Otezla and its related intellectual property, plus any other associated assets and liabilities. The deal will also affect Celgene employees who produce Otezla, who will transfer to Amgen.

Tuesday 27 August 2019

BUSINESS DAY

NATIONAL NEWS

Church help for migrants sparks backlash in Arizona Clashes highlight divisions in US border state over asylum seekers CAMILLA HODGSON IN PHOENIX, ARIZONA

few weeks ago, pastor Angel Campos had a difficult conversation with a member of his congregation at Monte Vista Baptist Church in Phoenix, Arizona. The house of worship had been providing shelter to Central American asylum seekers — and the young man wanted that to stop. “He came to me and said, ‘I’m Republican’,” said Mr Campos. “And I said: ‘Good for you, what does that have to do with me?’ He said: ‘What you’re doing is very Democratic.’ I said: ‘No, it’s biblical’.” The argument ended there, and the young man, along with his parents, quit the church. Undeterred, Monte Vista continued its work as part of a grassroots network of nonprofit groups that are helping tens of thousands of migrants from Guatemala, El Salvador and Honduras as they arrive in the US. The non-profits are pitching in as Donald Trump’s administration has been cracking down on illegal and legal immigration. The White House said on Wednesday it was scrapping a 20-day cap on the amount of time migrant families entering the US illegally could be detained — allowing for families to be held indefinitely. Earlier this month, the Trump administration rolled out new rules that will make it harder for legal immigrants to enter and stay in the US if they claim government benefits such as food stamps, housing subsidies and Medicaid. Churches in Phoenix, 250km from the US southern border, began sheltering migrants in late 2018 as US authorities sought help in dealing with growing numbers of arrivals from Central America. The congregations provide food and shelter for a few days at a time for a subset of migrants — families with children who have a sponsor in the US and have been released from custody while their asylum claims are processed. US Immigration and Customs Enforcement had traditionally helped newly released asylum seekers make travel arrangements, giving them 10 days to make it to their sponsor’s address and check in with local ICE officials, or risk being detained again. But last October, ICE suspended such assistance. Hundreds of families with young children were released from detention centres, with little more than bottles of water and instructions to make their way to court hearings. In Phoenix, many migrants wound up on the streets or at the Greyhound bus station — nicknamed “the ditch”. Volunteers began showing up, offering food and water, said Connie Phillips, chief executive of the Lutheran Social Services. A “scramble” for beds would follow. “There hasn’t been a humane response [from the government],” said Beth Strano, asylum seekers and families co-ordinator at the International Rescue Committee. “There’s been plenty of time to pick

up the slack.” Mr Campos, a native of Mexico who is now a US citizen, became involved in October after hearing that immigration officials were appealing for help from non-profit groups. One day after he called ICE, 75 asylum seekers stepped off buses outside Monte Vista. Before long, Mr Campos said, “we were getting people every day”. By December, so many immigrants were arriving that Mr Campos told authorities he could only receive groups on Mondays — unless families had nowhere else to go. The number of incoming asylum seekers has slowed since May as the scorching desert heat has discouraged travel. But since December, ICE in Arizona has released around 40,000 family members, with individual churches welcoming hundreds a week. Phoenix volunteers expressed shock at the treatment of the migrants. Upon arrival in the US, families are detained in crowded border patrol facilities so cold their residents refer to them as “the icebox”. “They’re told that they’re worthless, they’re useless, they’re filthy, they’re stupid, they’re criminals,” said Jennifer Buck, founder of volunteer group All Hands AZ. “America doesn’t want you is a big one . . . That’s what we hear from every single group.” Mr Campos said a Guatemalan woman travelling with her baby told a particularly harrowing tale. “Her baby was crying in the border patrol camp — she didn’t have breast milk,” the pastor said. “The baby was hungry, and the guard got milk and poured it on the ground in front of her.” Providing help in historically Republican Arizona has not been easy. Last year, three garbage dumpsters outside Mr Campos’s church were set on fire, and his car was broken into. He blamed protesters, though the Phoenix police were unable to identify the culprits. This year, a group of churches, including Monte Vista, filed a lawsuit to seek protection from two far-right groups they said were turning up at shelters — often armed. Security guards have been posted outside some churches housing asylum seekers. Three days after Christmas, two reputed members of the far-right Patriot Movement AZ, appeared outside Monte Vista with a megaphone and accused Mr Campos of being paid by the government to assist “illegal” immigrants. “At what point are Americans going to stop being screwed over by this invasion?” asked one, in a video posted on Facebook. The pair of protesters returned on New Year’s Eve, chanting “shame on you, fake pastor”. On the pavement, a wheelchair-bound man passed the women protesters. “Don’t ask them for help, sir, because they won’t help you,” one of the woman told him. “You’re an American.” Additional reporting by Lauren Fedor in Washington www.businessday.ng

Japan’s land of dreamers, robots and folding start-ups Fate of Laundroid robot is a sobering lesson in how not to back entrepreneurs LEO LEWIS AND KANA INAGAKI IN TOKYO

our years ago, a Tokyobased start-up called Seven Dreamers stole the show at Japan’s biggest technology trade fair with Laundroid — an artificial intelligence robot that could neatly fold clothes. Despite Laundroid taking well over five minutes to process a single T-shirt, the machine became an instant superstar and Japan’s collective imagination — always eager for the next miracle robot — was piqued. By 2017, said its makers, the $16,000 machine would be on the market. By 2018, it would be sold to nursing care facilities. By 2020, there would be a Laundroid unit ready for ordinary people’s homes. Unfortunately, the start-up itself has proved it was better at folding. Technical problems mounted, commercialisation was elusive and not a single unit ever sold. Seven Dreamers filed for bankruptcy in April, and in late July liquidators said they could still not find a

buyer. The death of Laundroid, say analysts, is a parable of Japan’s relationship with high-tech, venture capital and, particularly in the field of robots, the gulf between promise and reality. The huge success of Laundroid’s pitch was nevertheless viewed at the time as a pivotal moment for Japanese start-ups, long seen as fighting an impossible war in a system rigged against entrepreneurs and starved of the disruptive Silicon Valley spirit. Seven Dreamers, whose credentials were bolstered with former staff of Sony and Fujitsu, quickly attracted over $50m in backing from blue-chip Japanese corporations including Panasonic and homebuilder Daiwa House. That was soon augmented by investment from the two founders of private equity firm KKR, Henry Kravis and George Roberts. Initially, Seven Dreamers seemed to represent an antidote to Japan’s perplexing shortage of “unicorns” — privately held companies with a notional valuation of $1bn or more. Despite its reputation as a technology powerhouse, Japan has failed to punch its weight

in unicorn-breeding — one effect, said CLSA strategist Nicholas Smith, of the huge problems that would-be unicorns face in Japan gaining access to funding on the far more supportive scale and terms available in the US and elsewhere. Another issue, highlighted by Mizuho strategist Masatoshi Kikuchi, is that Japanese start-ups are too easily enticed to float their shares prematurely in Tokyo, forcing them to submit to market discipline before they have privately attained unicorn status. Jesper Koll, the head of Wisdom Tree Japan, said the problem was mischaracterised as a lack of entrepreneurship in Japan. Instead, he said, the growth of unicorns was stunted by the lack of the sort of ecosystem that, in other countries, fuses tech with the necessary business elements. “It takes five or six components to build a business and to take a piece of technology to commercialisation. There is plenty, plenty of innovation in Japan, but it is very difficult to assemble those components around it. You need more than a good robot to commercialise a robot,” he said.

Brazilian businesses fear backlash over Amazon crisis Concerns rise that environmentally conscious buyers could boycott the county’s produce BRYAN HARRIS AND ANDRES SCHIPANI IN SÃO PAULO

eading Brazilian companies and trade groups have joined the global outcry over surging wildfires in the Amazon as fears grow that the environmental crisis could hit business. Many of the fires that have been ripping through swaths of the world’s largest rainforest are seasonal. But some are believed to have been started illegally by ranchers keen to clear land who analysts say have been emboldened since the election last year of President

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Jair Bolsonaro, who wants to open the Amazon for commercial activity. After initially blaming non-profit groups for starting the fires and sparring with French president Emmanuel Macron who claimed he had “lied” about Brazil’s environmental promises, Mr Bolsonaro ordered local governments in the afflicted regions to take emergency action and sent the army to battle the blaze. The move, however, has done little to stem the tide of global discontent, with Brazilian businesses — many of which are at risk of boycott — joining the fray. “There is no question this is a concern for the private sector,” said @Businessdayng

Gabriella Dorlhiac, head of policy at the International Chamber of Commerce in Brazil, which represents some of the country’s biggest companies. “There are a lot of good people in the private sector doing good work [on sustainability. But] that does not exempt us from saying nothing. The private sector wants to show it is doing its part and has sustainable practices.” Many Brazilian businesses, particularly in the massive agribusiness sector, feel they are being unfairly tarred by the actions of illegal or unscrupulous actors operating in the sparsely populated and lightly monitored Amazon region.

Tuesday 27 August 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Viking curbs investor redemptions to aid VC push Hedge fund limits withdrawal window to once every two years for some clients MILES KRUPPA IN SAN FRANCISCO

iking Global Investors, one of the largest US stock picking hedge funds, is imposing more restrictive redemption terms on some of its longtime clients, as it pushes deeper into venture capital and other difficultto-value investments. Last month, Viking told investors who put money into its $5.2bn Viking Global Opportunities fund in 2015 that they will be allowed redemptions only every two years, not annually as previously agreed. Clients who do not consent to the change by September 30 will be handed back their money, the firm wrote in a letter reviewed by the Financial Times. The restrictions would begin affecting investors next year, after their initial five-year lock up expires. Investors who have put money into VGO since last year are already subject to the two-year restriction, and affected clients can still make annual withdrawals on some proceeds from private investments. The tighter restrictions reflect how hedge funds are increasingly interested in illiquid investments that may be tough to sell, especially

in times of market stress, but can offer better returns to compensate for the risk. Neil Woodford, one of Britain’s best-known stock pickers, was forced to suspend redemptions from his Equity Income fund in June after accumulating outsize positions in illiquid securities. Viking’s VGO funds, split roughly evenly between public and private companies, manage almost $3bn in illiquid investments, including stakes in the plant-based burger company Impossible Foods and make-up delivery service Birchbox. It has also been an investor in Uber, the ride-sharing pioneer than went public in May, since 2015. The firm said its plan to limit redemption opportunities for earlier investors was due to the “evolution” of its private investment program, which invested more than $580m in the first half of this year, according to the letter. “While some of our deals have relatively short closing periods, others can take over a year to negotiate and obtain requisite approvals,” Viking wrote to investors. “We believe this two-year rolling lock-up period better aligns VGO’s liquidity terms with our deal sourcing efforts by providing our investment staff with greater visibility into available dry powder.”

Central bankers rethink everything at Jackson Hole Policymakers debate regime shift in global economic conditions in which little is certain BRENDAN GREELEY IN JACKSON HOLE

or the world’s central bankers gathered in Jackson Hole, there was a sense that things would never be the same again. The developed world had experienced a “regime shift” in economic conditions, James Bullard, president of the St Louis Federal Reserve, told the Financial Times. “Something is going on, and that’s causing I think a total rethink of central banking and all our cherished notions about what we think we’re doing,” he said. “We just have to stop thinking that next year things are going to be normal.” Interest rates are not going back up anytime soon, the role of the dollar is under scrutiny both as a haven asset and as a medium of exchange, and trade uncertainty has become a permanent feature of policymaking. Policymakers acknowledged they had reached a turning point in the way they viewed the global system. They cannot rely on the tools they used before the financial crisis to shape the economic environment, and the US can no longer be considered a predictable actor in economic or trade policy — even though there is no imminent replacement for the US dollar in sight. The gathering at Wyoming

came as US president Donald Trump on Friday vowed to raise tariffs on $250bn worth of Chinese imports. His threat capped a tumultuous day on the world’s financial markets that began with Beijing announcing new levies on $75bn of US imports and saw Jay Powell, Federal Reserve chairman, caution that it was not the central bank’s job to run trade policy. The resulting market sell-off suggested investors were waking up to the reality that there will be no deal between the world’s two largest economies and no clear end to the trade conflict, just continued uncertainty. “They’ve priced in that there’s going to be uncertainty, there are going to be tweets, there are going to be threats and counter-threats,” said Mr Bullard. “And that’s the way it’s going to be.” He said it was becoming clear that there had been two longterm changes to the underlying economic environment. The first is that central banks will not be able to return to the policies they relied on before the global financial crisis. Policy rates will not rise again to 5 per cent and central bank balance sheets will not soon return to zero. This problem is worse for Europe and Japan than it is for the US, but given the interconnectedness of the global economy it is relevant around the world. www.businessday.ng

Viking Global Investors, founded by Andreas Halvorsen, has taken stakes in private companies including Impossible Foods and Uber © Bloomberg

German banks wade into negative rate debate Idea of prohibiting the passing on of costs has been gaining political traction in Berlin MARTIN ARNOLD IN FRANKFURT

erman banks grappling with the burden of negative interest rates are fighting back against a proposal to ban them from passing on the costs to their retail depositors. They warn that such a move could unleash “dangerous instability” on financial markets. Markus Söder, the ministerpresident of Bavaria, proposed the ban last week in response to fears that banks could start charging their depositors if, as expected, the European Central Bank cuts interest rates further into negative territory next month. The idea is gaining political traction in Berlin. The ECB’s deposit rate of minus 0.4 per cent already costs German banks €2.4bn a year. Some German lenders contacted by the Financial Times, including the country’s biggest savings bank Hamburger Sparkasse, said they had started passing on some of this cost to their largest depositors. Olaf Scholz, Germany’s finance minister, said last week that officials would examine the legal implications of blocking banks from levy-

ing so-called “penalty interest” on retail deposits of up to €100,000. The Federal Association of German Banks has hit back at the idea. “Legal prohibitions are alien to the system, do not help the customer any further and can ultimately lead to dangerous instability on the financial markets,” it said in a statement. “In a market economy, credit institutions — like all other merchants — calculate their prices and fees on the basis of the market environment on their own responsibility,” said the body, which represents more than 1,500 institutions. “This is also true in times of negative policy rates that the banking industry cannot ignore.” The spat highlights how the unconventional monetary policies of the ECB have stirred up controversy in Germany, a nation of savers who are outraged at the idea of being charged to deposit their spare cash. German banks are hit the hardest in Europe by negative interest rates because they hold about a third of the total excess deposits on which the ECB levies negative rates. “What should an honest and law-abiding German citizen think

when their finance minister, a high-ranking representative of the state, is investigating whether he can protect them from the actions of another state body, the central bank?” asked Stefan Schneider, chief economist for Germany at Deutsche Bank, in a note on Friday. Some banks have passed the cost of negative rates on to companies and other financial institutions that hold deposits with them. But most have not done so for households, fearing that consumers could move their money to a cheaper rival or withdraw it as cash. This has squeezed banks’ profit margins, particularly those that rely on retail deposits for a large part of their funding, adding to the woes of a eurozone banking sector that still has not fully recovered from the 2008 financial crisis. The ECB is expected to mitigate the cost for banks of lowering its deposit rate in September by introducing a tiering system that excludes a portion of excess deposits from negative rates. This would be similar to rules already in place in other countries with negative deposit rates, including Japan, Denmark and Switzerland.

Joko Widodo names Borneo site for new Indonesian capital East Kalimantan to host planned $33bn city to replace Jakarta

PRIMROSE RIORDAN IN HONG KONG

ndonesia has named the site in East Kalimantan on the island of Borneo where it plans to build a new capital to replace Jakarta, President Joko Widodo announced on Monday. The long-touted new city would be located between the regions of Kutai Kartanegara and North Penajam Paser, near the port city of Balikpapan, a two hour flight from Jakarta, Mr Widodo said. Jakarta sits on swampland and is one of the fastest-sinking cities in the world. Parts of the megacity could be completely submerged

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by 2050, researchers say. The city is also nearing traffic gridlock and suffers severe pollution. Euromonitor International, the market researcher, estimates that Jakarta will overtake Tokyo to become the world’s most populated city by 2030, when its population is set to reach 35.6m. Mr Widodo said the East Kalimantan site had been chosen for several reasons, including that the risk of natural disasters was “minimal, whether from floods, earthquakes, tsunamis, forest fires, volcanoes or mudslides”. He is also keen to set up a new technology-focused city to address unequal wealth distribu@Businessdayng

tion between the island of Java, where Jakarta is located, and outer islands in the Indonesian archipelago. The idea of moving the capital has long been discussed, but Mr Widodo’s government has said it hopes construction will begin by 2021, with government functions to start moving to the new city from 2023-2024. The Indonesian leader asked parliament to sign off on the relocation plan earlier this month. The new city is expected to cost Rp466tn ($32.7bn), with funding coming from public-private partnerships, the private sector and state-owned enterprises.

Tuesday 27 August 2019

BUSINESS DAY

ANALYSIS

How Amazon abused its precious store of staff loyalty Using workers as a prop to promote company interests is bound to backfire ANDREW HILL

ow likely are you to recommend your company as a place to work? Would you boast about your company to your friends? Now, how do you feel about bigging up your workplace publicly, or remonstrating with critics who attack it? I sense your diminishing enthusiasm. The first gauge of commitment seems innocuous. You have probably answered a version of the question in an engagement survey. Plenty of companies, particularly those battling to hire, say, scarce software engineers, actively reward staff who convince qualified contacts to apply for jobs. Queasiness really only sets in with the call to display public loyalty and devotion. It is no longer so unusual for people to show spontaneous online appreciation for the place they work — or, more often, the people they work with. But when Amazon “fulfilment centre ambassadors” took to social media this month to defend the company against criticism of working conditions, Twitter’s inauthenticity klaxon sounded immediately. Amazon has been coy about the details, stating the ambassadors — who first became visible a year ago — are real warehouse staff and part of a wider education programme that also includes tours of fulfilment centres. Twitter users dealt with this creepy public relations campaign in the way they know best, trolling Amazon’s dime-a-dozen diplomats and imitating the accounts so it became impossible to distinguish reality from parody. Terri Gerstein, a former labour lawyer now at Harvard Law School, pointed out on Slate that the initiative was part of a

more general rise in “ventriloquist employers” that use “workers as a prop to serve company interests”. Whatever you think of Amazon’s methods, the logic of the programme is impeccable. Chief executives have a bigger megaphone than staff. Yet people believe that “regular employees” are more credible when talking about their company than the boss or the board. As a 2013 survey by consultancy Bain highlighted, the snag is that engagement also declines the lower a staff member sits in the hierarchy. Top-down messages of corporate loyalty are mostly taken as read. Amazon’s Jeff Bezos left little doubt about how he votes on the engagement survey when he took to the stage with singers Katy Perry and Lil Nas X last week at a concert for employees, to celebrate July’s “Prime Day” midsummer promotions. “The curiosity, the passion, the hard work, everything that I see when I get to work with you guys, it’s just amazing to me and it’s aweinspiring,” he told the audience, according to Business Insider. Attempts to harness the positive views of staff, though, are far more delicate and prone to failure. I suggested earlier this year that worker dissent operates on a rising 5-point scale — from deflecting orders, via disregarding, diverting or disrupting them, up to demonstrating actively against company policy. Similarly, happy workers start by engaging with their employer and progress through endorsement, to enthusing (or excusing) it and, finally, if the company is very lucky, extolling it in public. But just as research suggests that trying to curb dysfunction at work may increase bad behaviour, coercing staff up the scale towards cult-like corporate celebration also risks being counter-productive.

Shared-office group IWG explores spin-off of US business Development comes as rival WeWork prepares for stock market listing JOSEPHINE CUMBO

WG, the world’s largest sharedoffice group, is in talks to spin off its US business into a separately listed company in New York. Mark Dixon, chief executive of the London-listed group, has held early stage talks with investment banks about the plan, which was first reported by Sky News this weekend. Mr Dixon believes a spun off US business could be worth as much as £3bn, according to Sky. People close to IWG said over the weekend that no formal talks had been held with bankers and no advisers appointed. A New York listing is one of a number of options under consideration to create value for the business, the people said. IWG declined to comment. The development comes The We Company, parent of the sharedoffice provider WeWork, is preparing for a New York listing. WeWork’s

prospectus said the company would raise $1bn in its initial public offering but the expectation is that it will raise much more. IWG’s current market capitalisation is £3.64bn. Earlier this month, IWG, owner of the Regus brand, announced plans to sell assets in the face of competition from WeWork. It is also aiming to move over to a franchising model within two to three years to boost growth. Under a “master franchise” deal agreed this year, IWG sold its Japanese operations for £320m cash to TKP, a Tokyo-listed provider of rented conference rooms and banquet halls, which will operate 130 flexible working centres under IWG’s brand. This month, Knotel, a New Yorkbased flexible office rival to WeWork founded only three years ago, reached “unicorn” status with a valuation above $1bn following a $400m funding round led by a Kuwaiti statebacked investment firm. www.businessday.ng

Gerard Piqué sets new goals with revamped Davis Cup Efforts by footballer’s investment group to shake up century-old flagship men’s event divide tennis MURAD AHMED, SPORTS CORRESPONDENT

hen Croatia beat France in the final of last year’s Davis Cup, the flagship team event in men’s tennis, the victory marked the end of an era. From this year, the 119-yearold tournament comes under the financial control of a Spanish investment group run by footballer Gerard Piqué, whose radical plans have triggered a battle in the sport as intense as any match on court. The International Tennis Federation, the body that runs the Davis Cup, sold the competition’s commercial rights in a deal worth $3bn over 25 years. The buyer was Kosmos, a sports investment vehicle founded by Mr Piqué, the FC Barcelona defender, and Hiroshi Mikitani, billionaire chairman and chief executive of Japanese internet retailer Rakuten, which has secured investors such as venture capital groups China Media Capital and Sequoia. “I just want to bring one of the most important tennis competitions to the top again,” Mr Piqué told the Financial Times. Kosmos is making big changes to the competition. Instead of ties being played home and away between nations over the course of the year, the final stages will be concentrated into a week-long event in Madrid this November, with 18 nations competing. Javier Alonso, chief executive of Kosmos Tennis, said the revamped format meant “[spectators] will continue to follow as you do for the World Cup of football . . . Without that change I don’t think Davis Cup would have survived.” Kosmos says that many top players, such as Spain’s Rafa Nadal, are enthusiastic. Others have been sharply critical. Switzerland’s Roger Federer has

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said “the Davis Cup should not become the Piqué Cup”. The company’s efforts also face opposition from leading tennis bodies, such as the ATP, which runs the men’s tennis world tour and is launching a rival team event that takes place just after the Davis Cup. Under the terms of its deal, Kosmos will pay $40m a year to the ITF, while covering other operational costs, such as the $18m prize pot for players. These financial commitments are worth $3bn over 25 years, said Mr Alonso. The group said early expenditure meant the competition would be lossmaking for up to three years. But it is quickly moving to recoup its outlay with a string of commercial deals in recent months. Madrid’s authorities are paying €11m a year to host the Davis Cup finals for the next two years. Rakuten became the Davis Cup’s title sponsor in June, with Mr Alonso saying the Japanese company would pay broadly the same amount as its previous main corporate partner, the French bank BNP Paribas. So far, Kosmos has secured 10 sponsors for the competition, up from just four last year. According to its annual report, the ITF made roughly $20m in 2018 from sponsorship deals related to its events, of which the Davis Cup is the biggest. Kosmos must retain a sevenyear global television deal with beIN Sports signed in 2015, but has secured an agreement that it can sell screening rights for the competition in countries where the Qatari broadcaster has not agreed packages for the Davis Cup. To that end, Kosmos announced a TV deal with Movistar in Spain last month. It is in talks in other territories, such as with Amazon for UK screening rights, and the Sinclair Broadcast-owned Tennis Channel in the US. @Businessdayng

“Davis Cup is the only tennis event where fans support countries instead of players,” said Mr Piqué. “From a financial perspective, this new format is more attractive for sponsors as the event will be broadcast worldwide with 18 countries competing.” Success depends on the best players taking part. Mr Alonso suggested “95 per cent” of top men’s players had signed up. But among the holdouts are the biggest names in tennis. The world’s top ranked player, Novak Djokovic, has not yet agreed to play. “I just feel like the date of the Davis Cup is really bad, especially for the top players,” the Serbian said last year, adding he intended to prioritise the ATP’s World Team Cup, a 24-nation tournament taking place in Australia in January. While Federer has signalled his disapproval, he is not eligible to play this year as Switzerland have not qualified for the finals. Chris Kermode, the outgoing chief executive of the ATP, has said that scheduling the expanded Davis Cup so close to his organisation’s new team event was “insane”, in effect pitting the two tournaments against each other in a battle for fans, players, broadcasters and commercial partners. Kosmos, ITF, ATP and organisers of other tennis competitions, such as the four Grand Slam tournaments, have been in talks for months to resolve problems around the congested calendar. So far, there is no resolution in sight. Yet Mr Alonso insisted a transformation was necessary to gain a greater global following for the competition. “Davis Cup was shrinking . . . because it was disconnected in the year,” he said. “So, last year: France against Croatia. In Spain, nobody knows who was at the final. Nobody cares, because we lost in September and you disconnect.”

Tuesday 27 August 2019

BUSINESS DAY

FEATURE Anambra: Sustaining the gains of defunct SURE-P maternal, child health programme EMMANUEL NDUKUBA, Awka

he withdrawal of the FG’s SURE-P MCH programme and the accompanying incentives in Anambra State affected the trust of service users, health providers and MCH service utilisation the state. Following a one-day Health Policy Research Group (HPRG) workshop held in Awka which highlighted some of the issues, Emmanuel Ndukuba writes on the need to sustain the gains of the SURE-P/MCH in the state. In response to poor maternal and child health (MCH) indices in Nigeria, the Federal Government in 2012 introduced the Subsidy Reinvestment and Empowerment Programme (SURE-P/MCH). The aim was to improve the lives of the most vulnerable populations. SURE-P/MCH comprises both supply and demand components. The supply side component aimed to expand access to quality maternal health services and improve MCH outcomes through recruitment, training and deployment of 2,000 skilled midwives and 11,000 community health workers (CHWs), supplies and medicines, infrastructure development, and activation of ward development committees (WDCs), particularly in rural communities. The demand side, on the other hand, aimed to increase utilisation of health services during pregnancy and at birth by providing conditional cash transfers (CCTs) to pregnant women who registered at public primary health care (PHC) facilities, where they receive comprehensive MCH services. In 2015, however, the programme was withdrawn by the Federal Government. The withdrawal of the programme and the accompanying incentives affected trust of service users, health providers and MCH service utilisation in Anambra State. This was among the submissions at a Health Policy Research Group (HPRG) workshop held in Awka, the state capital, recently, anchored by Dr Enyi Etiaba and Prof BSC Uzochukwu of the College of Medicine, University of Nigeria, Enugu Campus (UNEC). Participants at the one-day workshop were drawn from a wide range of stakeholders – Anambra State Ministry of Health, Ward Development Committees (WDCs), officers-in-charge of PHCs (OICs), Anambra State Health Insurance Agency (ASHIA), journalists, Save One Million Lives, amongst others. Educative and informative findings at the workshop included a complex of factors in Anambra State that build or hinder interpersonal relationship between the provider and service users as well

as in the impersonal relationship between the provider and the health system/government during and after the SURE-P/MCH programme. The provision of good quality MCH care in a conducive environment by well-motivated health workers during the SURE-P MCH programme enabled trust, confidence and satisfaction among service users. But the sudden withdrawal of the programme and various incentives associated with it led to service users’ lack of trust in the health system and subsequent reduction in utilisation of MCH services. However, unwavering trust was seen in some service users despite the programme withdrawal. The withdrawal of the programme triggered inadequate staffing, increased overload, reduced opportunities for staff training and supervision resulting in lack of trust in government by the health workers, amongst others. On security of primary health care to achieve MCH between October 2012 and May 2015, 12 health facilities were selected initially in Anambra State, and many supply- and demand-side interventions were implemented to improve access and utilisation of facility-based maternal and child health services. However, the programme design did not clearly outline whose responsibility it was to provide human security (i.e., the national SURE-P programme or the community). These selected facilities were located at Onitsha (Modebe and Court Road), Awka (Okpuno), Enugwu-Ukwu, Nise, Awka-Etiti, Nobi, Oraeri, Umuawulu, Akwaeze and Nkwele-Ezunaka. Before the SURE-P/MCH programme, most of the facilities in Anambra State were not fenced and did not have gates and/or security men to safeguard health workers and patients. This created a feeling of fear of crime among health workers and their patients. www.businessday.ng

In facilities where night-time security was not present, health workers resorted to locking the facility doors at night and would not respond when potential service users knocked as they could not be certain they were free from any threats. During the SURE-P/MCH programme, the health facilities had adequate number of staff and this made it possible for health workers to run shifts. In some facilities, the feeling of companionship through this made them feel safe enough and confident to provide roundthe-clock service, even in the face of other security challenges. This contributed to improved service delivery, access and utilisation of services. Where communities were not in position to sustain programme inputs or provide facility security after the SURE-P programme ended, this led to provision of MCH services only during the day, thus putting a constraint on round-theclock services due to the perception of insecurity at night time by both providers and users of MCH services. Consequently, there is need to provide adequate security in health facilities to improve access to grassroots-level maternal and child health services, participants at the workshop said. Federal and state governments need to work closely with local government authorities and facility managers to ensure the security needs of PHCs are met. Communities should be incentivised by the government to enable them employ community members as security personnel for facilities, as these people stand a better chance of knowing how to protect the facility and whom to protect it from. There is growing recognition among policymakers and researchers that well-trained, adequately skilled and motivated primary health care (PHC) workers are essential for attaining universal health coverage and ensuring

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healthy lives and well-being of people of all ages (WHO, 2014). The inputs required to ensure staff performance (e.g., supportive policies, resource availability, staff supervision and salaries) are mediated through staff motivation. While there is abundant literature on the determinants of health workforce motivation, the existing literature on mechanisms of motivation and how these are related to contextual circumstances is limited particularly in low-and middleincome countries (LMICs). The workshop also highlighted key motivators and practical measures to improve staff motivation using insights from the SURE-P maternal and child health (MCH) programme in Nigeria as well as informed facility/district health managers on effective ways of motivating PHC staff. A complex interplay of individual, organisational and societal factors affected PHC workers’ motivation during SURE-P/MCH implementation in Anambra State, the workshop found. Consequently, policymakers in Anambra State were advised to promote health reforms that provide optimal and comfortable working conditions of PHC workers, create opportunities for growth/career development among PHC workers, and encourage community support for PHC workers. Effective advocacy is important to achieve quality MCH in Anambra State. The WHO describes advocacy for health as a combination of individual and social actions designed to gain political commitment, policy support, social acceptance and systems support for a particular health goal or programme. When groups come together, they tend to create a common objective and have a composite position in advocating to the government or partners. However, effective advocacy should be context-specific and should involve leveraging existing links/relations and using available evidence at the right time for its maximum effect on different decision makers and other stakeholders. There should be improvement in quality of MCH data within the Health Management Information System (HMIS) in Anambra State. The findings raise questions about the quality of HMIS data in the state. Incomplete and inconsistent data hinder the use of secondary data for evaluation of services and programmes, and for evidencebased policy decision-making and research. It is important to have accurate and readily available secondary data in developing countries, where it may not always be feasible to fund primary data collection for @Businessdayng

evaluations and research. A participant at the workshop, Henry Onyekwele, wants the state government to continue to support MCH through adequate budget and prompt release of fund to Anambra State Primary Healthcare Development Agency (ASPHCDA) and other health agencies. Onyekwele, who is chairman of Health Reform Foundation of Nigeria (HERFON) in the state, also wants wealthy Anambrarians and corporate bodies to partner with government towards the health of the citizens. He said it was pertinent to the continuously sustain the Anambra State Health Insurance Agency (AHIA) to reduce health financial burden of the people, buy new equipment for PHCs and state hospitals to replace obsolete ones, train more health workers and avoid issues of strikes. Joachim Achor, another participant, overwhelmingly commended the organisers for the initiative, saying the present state government has been proactive in healthrelated matters. Achor, who is director of Budget Services in Anambra State, affirmed that the state government had instituted the Community Charter of Demand, a strategy of equitable distribution of dividends of democracy to all the nooks and crannies of the state through the famous ‘Community Choose-YourProject’ programme, where all the 179 towns throughout 21 local governments areas of the state receive equal whole sum amount of N20 million each to execute their chosen projects according to pressing needs of the people. He commended the state government for establishing a Primary Healthcare Development Agency (ASPHCDA) to effectively implement and supervise all primary healthcare activities in the state. The agency also monitors the maintenance of a minimum acceptable standard as well as mobilises state, national and international resources to support its programmes for development of primary healthcare in the state. In achieving its mission of providing excellent leadership in developing community-based systems and universal health coverage, ASPHCDA engages leaders of the communities in carrying out their programmes. “These leaders usually have strong influence on their people and they also have a way of persuading people to do the right thing,” Achor said. “Our state government is focused in all health-related issues to sustain the gains of SURE-P MCH, particularly as it concerns maternal and child health care services,” he said.

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BUSINESS DAY Tuesday 27 August 2019 www.businessday.ng

Awele Vivien Elumelu: Investing strategically to redefine healthcare delivery in Nigeria CALEB OJEWALE

he story of Aw e l e Vi v i e n Elumelu is not just that of another bright mind that studied medicine in order to get work as a doctor and save lives. She has pushed her dreams even further, by becoming one of the big players in Nigeria’s healthcare sector, investing in both provisions of medical services as well as health insurance. She is cur rently the c h a i r p e r s o n o f Av o n Healthcare Limited, and chief executive officer of Avon Medical Ser vices Limited, overseeing the healthcare investments of Heirs Holdings. She is also African Ambassador for Gavi, the vaccine alliance driven by a public–private global health partnership committed to increasing access to immunisation in poor countries. Vivien Elumelu holds a Bachelor of Medicine and Bachelor of Surgery degree from the University of Benin. Her experience as a medical doctor includes medicine, surgery, paediatrics, obstetrics, gynaecology, and emergency medicine. In Nigeria, she has worked with the Lagos University Teaching Hospital and, in the UK, with Grantham and District Hospital, Grantham. Avon Medical Practice, where she is CEO, as noted on its website is a multispecialty private hospital group with centres in Surulere and Lagos Island, as well as in Delta State and Abuja. As part of the Heirs Holdings group, the company’s says it maintains a culture of continuous learning, improvement, and excellence. With the dearth of standard medical facilities in Nigeria, as well as Africa as a whole, Avon Medical says it is committed to providing world-class healthcare that can cater to the needs of every individual in Nigeria. It runs a network of fullservice clinics and onsite facilities with corporate institutions, with medical professionals providing a wide range of specialist services from cardiology and internal medicine to

orthopaedics and surgery. “In all that we do, the overriding interest remains our patients,” reads a message from Elumelu on the company’s website. “They are at the centre of and the reason for all we do. From gestation and infancy through to adulthood and seniority, we provide endto-end care that covers prevention, diagnostics, management and recovery for our patients. Your wellbeing is how we measure our success.” Avon HMO, her other health concern, was registered by the National Health Insurance Scheme (NHIS) to operate as a national Health Maintenance Organisation (HMO) in October 2012 but commenced operations in 2013. It is also a subsidiary of the Heirs Holdings Group, an investment company described as committed to the economic transformation of Africa. In an earlier interview with BusinessDay, Vivien shared her vision behind setting up Avon and the brands underneath it, describing it as a simple vision of “Being able to provide affordable healthcare of what I believe should be of global standards.” Speaking about healthcare is one Vivien does passionately, and as she emphasised, Nigeria is in dire need of quality (and affordable) healthcare. “We know there are issues with healthcare,” she said, and having come to this conclusion, decided it wa s s omewhere she could come in and play a part in helping to improve the economy. “Because, whether we like it or not we need a healthy workforce. We need a healthy nation to be a wealthy nation,” she said. Coming into the healthcare space was for her, an opportunity to address some of the many issues bedevilling the sector, by investing in the provision of health ser vices, and enabling access to health care delivery through insurance. He r s t rat e g y wa s t o venture into healthcare delivery both in providing healthcare, as well as in providing access

Awele Vivien Elumelu

to healthcare. This she planned to do through setting up a HMO and also providing healthcare through the hospitals and the clinics. The vision she reiterates was simple; just wanting to be able to help provide affordable, quality healthcare to Nigerians. Ni g e r i a’s h e a l t h i n surance coverage ranks among the lowest in the world with less than 5 percent of the population covered. This also implies the country continues to lag in terms of Universal Health Coverage. According to Elumelu, one of her strategies in improving this index is through advocacy. Realising that beyond private sector inter vention (where she already plays), there is a need for the government to support the health sector. This has formed the thrust of her advocacy, including the need for government to support the healthcare act, and being able to provide the system and infrastructure

for people to be able to access healthcare. “ In i n s u ra n c e, t h e y need to make it such that people understand the importance of it,” she said. “I think for now, as you said it is just 5 per cent coverage. The government needs to step in and do something about it to ensure that more people are enrolled in insurance;

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Whether we like it or not we need a healthy workforce. We need a healthy nation to be a wealthy nation

more companies take part in insurance, and make sure that more employees are insured for proper health coverage.” According to her, even as health insurance companies, they continue to have engagement to see how things can be improved. Again, this goes back to the advocacy in getting government to do more and even amongst private sector providers; that they also do more. She has also been committed to strengthening the relationship between health insurance agencies and healthcare providers. “We need to be able to work together to be able to deliver healthcare at the level that we would all like it to be,” Elumelu said. Her businesses at least as indicated on the Avon Medical Practis e website, are a proponent of ‘Africapitalism’, the principle which says that Africa’s future depends on private institutions like

them to invest long-term in healthcare and other sectors, creating jobs and generating local wealth as well as having a positive social impact on the African society. Vivien Elumelu’s role in healthcare also extends to immunization, where Nigeria is again, notoriously poor in terms of coverage. As African ambassador for Gavi, she leads advocacy in ensuring proper coverage, particularly for children. As she explained, “We also need to continue to get the message out ; we need more companies to come in and support, we need the parents to be enlightened as to the importance of vaccines, we also need the government to provide more support.” Married for 26 years to Tony Elumelu, she described it in an interview as a journey, though not easy, but a fulfilling, and exciting one. Her husband she said “is someone who believes strongly in whatever (goals and dreams) he believes in. This makes it easy for you to believe along with him because he does not give up, he does not get tired, and he is tireless. It has been one hell of a ride as they say.” For younger women and girls with aspirations like her, she advised; First of all, you should be genuinely interested in improving yourself and improving the society around you. A bit of selfless interest, I would say. I wanted to talk about contentment but then, I would say even though you should be content with what you have, at the same time, don’t be content. This is especially when you see that things are not going the way they should, with mediocrity or with things that you feel could be better. In addition, Vivien Elumelu advises young women to persevere and not give up. “I know we have a lot of challenges in our society, in our country, but persevere. It is only through persevering that we will all get there. “If we all fold our arms and say there are too many challenges and there is nothing we can do, we will not make any progress,” she said.

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