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news you can trust I ** thursDAY 27 february 2020 I vol. 19, no 508

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Inside

Nigeria, Australia to sign merit scholarship pact in April 2020 P. 2 Bayelsa: Supreme Court throws out Lyon, APC’s application for judgment review P. 2

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Ogho Okiti (l), managing director, BusinessDay Media, with Hassan Bello, executive secretary/ CEO, Nigerian Shippers Council, when BusinessDay management paid a courtesy visit to the Shippers Council office in Lagos.

… as NAICOM pushes shared infrastructure, co-habitation

Continues on page 38

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Insurance industry’s road to 100,000 agents lies outside major cities o encourage insurance companies to expand operations to the grassroots, the National Insurance Commission (NAICOM) is considering incentives that will make it attractive to them.

This is part of the commission’s effort to increase insurance penetration, drive financial inclusion and also increase wealth creation through insurance among majority of Nigerians.

The idea, according to the commission, is to encourage underwriting firms, brokers and agents to get closer to the grassroots by opening branches, outlets and partnerships to increase insurance presence and access to products.

“There are 25,000 agents in Kenya selling insurance to 40 million people, so Nigeria’s 200

fgn bonds

Treasury bills

NESG outlines urgent reforms for economy SEGUN ADAMS

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here might be no short-cuts for growth, but specific steps will be critical for Nigeria after 27 percent of the economy failed to grow last year, business leaders have said.

Domestic output grew by 2.27 percent in 2019, the biggest growth since 2015 when it grew

with 27% of GDP contracting

by 2.65 percent, but Nigerian CEOs say the headline number masks vulnerabilities that could cause Nigeria to slip again, especially if a 2016-like oil downturn repeats itself.

“Whilst the economy remains on the path of recovery ... (it) remains very fragile through

a combination of slow growth and vulnerability to changes in external conditions, especially oil price fluctuations,” said the Board of Nigerian Economic Summit Group (NESG), a nonpartisan private sector thinktank and advocacy group.

The warning from NESG,

whose members are leaders of some of the largest corporations across various sectors in the country, comes amid fresh concerns as crude oil on Tuesday sold about $2.24 per barrel below the budget benchmark of Continues on page 38

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news Nigeria’s worsening insecurity leaves private sector with few options

… as FG, security agencies seek public involvement ODINAKA ANUDU & GBEMI FAMINU

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errorism, banditry and herdsmen attacks in Nigeria’s northern region as well as armed robbery and kidnapping in the south are putting the private sector and its huge investments in constant peril, with many players left with little or no options.

Several farmers have fled the tense states of Adamawa, Borno and Yobe, and manufacturers have long withdrawn their staff and relocated their businesses after destructions of their factories and killing of staff members.

Telecoms masts running into billions of naira have been destroyed by Boko Haram insurgents, with some of the players avoiding many parts of Borno and Adamawa.

“Nigeria was ranked 148th out of 163 countries on the Global Peace Index (GPI) 2019 and was placed among the five least peaceful countries in subSaharan Africa along with violence-ridden countries

such as Somalia, South Sudan and Democratic Republic of Congo, Central African Republic,” Toki Mabogunje, president, Lagos Chamber of Commerce and Industry, said.

These rankings for Nigeria in the area of security give cause for concern, she said at the 4th edition of Security Meets Business held in Lagos on Tuesday.

Mabogunje said the current situation had significant implications for the business environment, including increasing cost of providing additional security by firms as they would not be able to conduct their business without providing additional security.

“As a promoter of private enterprise, it is our firm belief that we must continue to adopt innovative ways to address legacy and emerging security issues,” she said.

Security agencies, however, say they require the support of the private sector to function effectively.

Bayelsa: Supreme Court throws out Lyon, APC’s application for judgment review ... Slams N10m fine on Babalola, Olanipekun FELIX OMOHOMHION, Abuja

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he Supreme Court on Wednesday threw out the application by the sacked Bayelsa State governor-elect, David Lyon, asking it to review its judgment of February 13, 2020.

The said judgment had voided Lyon’s participation and that of his party, the All Progressives Congress (APC), in the November 16, 2020 governorship election in Bayelsa State.

The Supreme Court described the request by Lyon as vexatious, frivolous and an abuse of court process.

The court held that the suit filed on behalf of the APC and its sacked governor-elect lacked merit and accordingly dismissed it.

Delivering the unanimous decision of the seven-man panel of justices, Justice Amina Augie, who read the judgment, was visibly sad with the application for review.

The apex court held that the application was regrettable and a deliberate desecration of the judiciary.

She berated Afe Babalola (SAN) and Wole Olanipekun (SAN), counsels to Lyon and the APC. “I feel like shedding tears that senior counsel in this case would ever bring this kind of frivolous applications during my lifetime,” Augie said in an emotionladen voice.

She subsequently ordered the counsel to pay the sum of N10m to each of the respondents as fine.

Justice Augie said the

fine was to be personally paid by the lawyers.

In the judgment, Justice Augie held that by Order 8, Rule 16 of the Supreme Court, the court has no powers or authority to review any judgment delivered on merit save for clerical error.

“This court is not authorised and indeed lacks jurisdiction to review any judgment delivered on merit, more so when the applicants have not pointed out any accidental error or slip in the judgment,” Augie said.

“There must be an end to every litigation. This is final court and its decisions are final for all ages so as to ensure certainty in law. The two applications brought before us today lacked merit and constituted abuse of this court and they are liable

to dismissal and are hereby dismissed,” she held.

The apex court had on February 13, barely 24 hours to the inauguration of Lyon and his deputy to steer the ship of Bayelsa State, ordered the Independent National Electoral Commission (INEC) to withdraw the certificate of return issued them as winner of the November 16 governorship election in Bayelsa State.

The action of the apex court was predicated on the grounds that the APC deputy governor-elect was not qualified to have participated in the polls on account of supplying false information to INEC to aid his qualification for the election. And, that being a joint ticket, voided the parContinues on page 38

•Continues online at www.businessday.ng

Nigeria, Australia to sign merit scholarship pact in April 2020

… as 200 recipients to fly out in December Mark Mayah

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he long-standing friendly relations between Nigeria and Australia are billed to be accorded an official seal in April in Abuja when both countries are expected to sign a memorandum of understanding (MoU) on the merit scholarship scheme administered by the Australian Government.

The document is expected to provide a special scholarship package for Nigerian post-graduate students.

The scheme is expected to be implemented this year with the first 200 Nigerian recipients arriving in Australia in December 2020.

It is expected that Nigeria’s education minister, Adamu Adamu, and the Australian high commissioner to Nigeria, Claire Ireland, are billed to meet at a round-table in Abuja to sign the MoU. A source at the Federal Ministry of Education in Abuja told BusinessDay exclusively that Austra-

lia’s educational system is not necessarily identical with Nigeria’s as “the quality of education there is so high that it is a great pleasure to have Nigeria as one of the three commonwealth countr ies that would benefit from the scheme”.

The source, who craved anonymity, described the scheme as “an evidence of the great outward-looking policy of the Australian Government”.

BusinessDay gathered that aside from technical and cultural cooperation which was the cornerstone for development, there was the need for Australia to extend such gesture to Nigeria. No fewer than 650 Nigerians are already in Australia studying in various disciplines.

The merit scholarship scheme is to promote human resources development, through support for training within Australia for Nigerian students of exceptional academic merit.

In like manner, come 2021, another 250 Nigerians would benefit from the scheme. www.businessday.ng

Olubamiwo Adeosun (2nd r), secretary to the state government/representing Oyo State governor, cutting the tape; Debo Ogundoyin, speaker, Oyo State House of Assembly (l); Kola Balogun (2nd l); Suleiman Abdul-Kyari (m), chairman, Senate committee on Anti-Corruption and Financial Crimes, and Bolaji Owasanoye (r), chairman, Independent Corruption Practices and other Related Offences Commission (ICPC), during the commissioning of ICPC Oyo State Office complex in Ibadan.

Egypt shows how Nigeria can ease fuel subsidy pressures with CNG STEPHEN ONYEKWELU

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igeria has lessons to learn from Egypt’s bold energy sector policy reforms that have first phased out fuel subsidies and now converting formerly petrol- and dieselpowered vehicles to use compressed natural gas (CNG).

Egypt’s spending on fuel subsidies dropped by about 69 percent year on year to 7.25 billion Egyptian pounds ($451 million) in July-September 2019, according to Petroleum Minister Tarek El Molla.

But Nigeria, Africa’s largest oil producer, earmarked the sum of N305 billion ($1 billion) for fuel subsidy in the 2019 budget after it spent

N648 billion (($1.8bn) on fuel subsidies in 2018 as it kept prices pegged at N145 ($0.40), data from the Budget Office and state-owned oil company, NNPC, show.

Compressed natural gas (CNG) seems to present an opportunity to turn this narrative around and Egypt has been quick to latch on.

In Nigeria, CNG costs N100-N110 per unit (or a litre), Sumeet Singh, director, sales and strategy at Powergas Nigeria, told BusinessDay. This is below the N145 a litre cost of subsidised petrol.

Bigger trucks in Nigeria are already running on either CNG or liquefied natural gas (LNG). However, these heavy trucks come with dual fuel

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carriage systems and cryogenic facilities to enable them to utilise either CNG or LNG. “All our trucks run on CNG. This is a much better fuel, as it is cheaper and much cleaner,” Singh said on phone. “We strongly believe that it is a more viable alternative to petrol and diesel. However, market forces need to determine the price.”

Dangote Cement and 7up are also successfully using CNG to power their fleet, BusinessDay found.

Using gas as an alternative will not only ease out the pressure on the subsidies paid out by the Federal Government of Nigeria but will also provide the common man with a much cleaner and cheaper alternative fuel solution, Singh said. @Businessdayng

Gas investments require huge capital and investors want to be sure they can recoup their investments with some margin of profit. The absence of a clear legal framework that incentivises gas development stalls gas investments.

In terms of comparative cost analysis between petrol and CNG, gas is naturally cheaper. But what will determine the economic viability of powering vehicles with CNG in Nigeria is the conversion cost from petrol or diesel to a CNG engine and availability of refilling stations, Lukman Agboola, head of research at Sofidam Capital, said.

Technology has, though,

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news

Konga projects $10m daily turnover by 2024 Jumoke Akiyode-Lawanson

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opular e-commerce outfit, Konga, has revealed that the business is aggressively working towards hitting the $10 million daily turnover mark by 2024, as committed to investors.

To realise the target, the company discloses that the growth trajectory and overall operational efficiency backed by the steady reducedlossesithaswitnessedare critical factors in the projections.

Making known the brand’s ambitiousplanswasNickImudia, co-CEO, Konga (Online).

Imudia reveals that e-commerce is the riskiest business anyone can attempt in the 21st Century; however, Konga is puttingnecessarymachineryinplace to achieve the goal. To this end, he states that Konga will work assiduously to reach a target of $5 million daily turnover by 2022, as preparation towards realising the $10 million set target by the end of 2024. ‘‘It is an extremely ambitious target. But we must deliver as we donotreallyhaveachoice,”hetells journalists.

Since its entry into the Nigerian e-commerce market as one of the foremost pioneers in the sector, Konga has stood out; with its several revolutionary strides, first launching what is known as marketplace and then composite e-commerce in Africa, ultimately catapulting it to top position. Today, Konga occupies top position in Nigeria’s e-commerce sector.

“Konga has used the last decade to lay a solid foundation for e-commerce business in Nigeria and to build trustworthy relationships with customers and potential investors across the Nigerian business spectrum. With the high level of trust the brand has gained among shoppers in and out of Nigeria, it is safe to say Konga is ready to scale big in the early part of this third decade.

“Therefore, we are targeting a $10 million daily turnover by 2024. We shall attain half of this target at least by 2022. To meet this target, we would be relying on the efficiency we have brought to bear on the business and the renewed confidence the Konga brand enjoys among critical stakeholders.

“There is no iota of doubt that Konga remains in prime position

to attain this target, especially when one looks at the consistent growth the brand has recorded in the past years. Konga has grown overeighttimessincethebusiness was acquired by the Zinox Group.

“Secondly, we have consistentlyreducedourlossesbynearly 70 percent. Added to this is the addition of new and thriving business units such as Konga Travel, among others, all of which have enjoyed huge growth and massive acceptance by our rapidly expanding customer base,” Imudia states.

Konga, which remains the only e-commerce brand in Nigeria operating an omni-channel structure,currentlyhasmorethan 32 stores across Nigeria. With the aid of KongaPay, a Central Bank of Nigeria (CBN) licensed payment platform, which recently added AutomatedTellerMachine(ATM) card-less withdrawal and UnstructuredSupplementaryService Data (USSD) features, Konga has captured more Nigerians in the e-commerce net; while lending an unprecedented level of ease and refinement for online shoppers across the e-commerce landscape.

2019 NABTEB exam: 72.91% candidates score five credits in English, maths IDRIS UMAR MOMOH, Benin

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he National Business and Technical Examinations Board (NABTEB) says a total of 32,349 candidates, representing 72.91 percent, scored five credits and above in English language and mathematics in the 2019 November/ December examinations.

Ifeoma Isiugo-Abanihe, registrar/chief executive of the board, disclosed during the release of the results of the 2019 November/December examination conducted by the board on Wednesday in Benin City.

Abanihe said the 2019 academic performance was statistically the same with the

2018 November/December results where 29,274 candidates, representing 72.79 percent, obtained five credits and above in English language and mathematics.

She also disclosed that 40,605 candidates, representing 91.52 percent, scored five credits and above with or without English language and mathematics as against 36,367 candidates, representing 91.63 percent of all the candidates that obtained five credits and above with or without English language and mathematics.

While noting that the business of conducting national examinations is a tough one, she said the board had continued

to maintain credible examinations by strengthening its quality assurance mechanisms to checkmate examination malpractice.

She however said 603 candidates, representing 1.22 percent of the total candidates that sat for the examinations, were found to be involved in malpractice.

The NABTEB boss said the 2019 figure was less than the 2018 figure of 625, representing 1.40 percent, and assured that the board would continue to make efforts through more aggressive training of examination personnel and use of technology to further checkmate examination fraud.

Nigeria’s progress lies in devolution of powers – Sanwo-Olu JOSHUA BASSEY

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overnor of Lagos State Babajide Sanwo-Olu says only the practice of true federalism and devolution of powers can set Nigeria on the path of accelerated development.

Sanwo-Olu believes that decentralisation of some of the exclusive functions of the Federal Government, including provision of security, would provide instant answer to the current agitations threatening the unity of the country.

He spoke as a guest lecturer at the Freedom Online third annual lecture with the theme: “Nigeria: Foundation, Fundamentals and Future” which held Tuesday at the Sheraton Hotel, Ikeja, Lagos.

Represented by his deputy, Obafemi Hamzat, the governor said the emergence of “beggarstates” as the major constituents of the Nigeria’s federation would not take the country to the future it desires in a world that is developing rapidly.

According to Sanwo-Olu,

the flawed federalist ideals enshrined in the 1999 constitution had continuously limited the power of the states to pursue individual development at their own pace, stressing that Nigeria must holistically address the “fundamental question” of federalism, if the political class was serious about lifting the country out of the current political and economic quagmire.

Sanwo-Olu recalled that Nigeria was administered efficiently during the period of regional arrangement, pointing out that the feat was achieved because each region assumed autonomy on its resources and developed at its own pace without relying on hand-outs from the centre.

“One of the legacies of military rule was the abolition of powerful and largely financially independent regional governments, and replacement with weaker entities known as states.

These states were of course beholden to a very powerful central government that doled out resources to them and used every opportunity to make it clear that the states were appendages of

the centre.

“At the time, the regions worked hard, earned their revenues from exports, from taxes, and so on, and kept a large chunk of what they earned.

None of them came to Lagos – the then federal capital – with caps in hands for what we now refer to as ‘Federal Allocation’.

Every region survived mainly on its internally generated revenue.

There was also a healthy competition among the regions.”

The governor stressed that provision of security must be “highly” decentralised, adding that States must play significant roles in providing internal security, while the Federal Government must face the issue of defence, foreign policy, border controls, currency, and customs among others.

He also called for a review of the terms of fiscal federalism between the centre and state governments, saying that the Federal Government must consciously devolve more responsibilities and resources to states and local governments as those entities are the closest to the people.

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news

Reforms: Edo ranks second in states’ development index

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n the back of farreaching reforms and programmes by the Governor Godwin Obaseki-led administration, Edo State has been ranked second highest in developmental strides among states controlled by the All Progressives Congress (APC) by the Progressive Governors’ Forum (PGF) peer-review mechanism.

In a report by Salihu Moh Lukman, director-general of the PGF, the forum reveals that Edo State was on a steady progression with 12 developmental initiatives for the month of January, spreading across health, education, infrastructure, economy, agriculture, sports, justice and sensitidsation.

The report titled, “January 2020 Progressives Strides – Tracking Development Initiatives in APC States,” represented the performance of all states in terms of development.

According to the forum, “The entries for this edition witnessed more improvement as regards developmental strides collated from the Forum States. The information collated was readily available on public platforms and same reported to the Secretariat.

“In general, there is an allround increase in the pattern of initiatives introduced by the states with Gombe State recording the most initiatives of this month with 16 strides, spreading across health, education, infrastructure, economy, agriculture, sports and justice and sensitisation.

“Edo follows with 12 strides and Kaduna follows with 11.

Borno and Kwara record 10 strides each followed by Kano and Katsina with 9 each. Lagos and Osun get 8 strides each; Ekiti, Kebbi and Yobe follow with 7 each. Niger records 6 strides while Ondo follows with 5, and lastly Jigawa, Kogi, Nasarawa and Plateau states get three strides each.”

It noted, “The overall characteristics of this edition showed that all states in the Forum were represented and featured in this edition. Thirty percent of information attributed to primary sources and 70 percent from secondary sources.

“We hope to further engage state officials so as to improve on receiving information directly, as the secretariat is utilising all channels for publicising these in addition to those used by the states for a wider reach.”

SON blames non-involvement in port operations for influx of substandard products AMAKA ANAGOR-EWUZIE

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tandards Organisation of Nigeria (SON) has attributed the growth in volume of substandard goods coming into Nigeria through the nation’s seaports to the non-involvement of its officers in port operations.

Speaking in Lagos recently at a day Maritime Stakeholders Sensitisation Workshop organised by the SON with the theme: ‘Facilitating Trade Through SON Automated Services,’ Osita Aboloma, director-general of SON, said the absence of the organisation at the ports had continued to pose challenges, particularly to the agency’s compliance and monitoring units.

According to Aboloma, it is easier to fight the influx of substandard products at the points of entry than chasing them around all over the country in markets, warehouses and other places.

He charged importers to desist from importing substandard products capable of damaging and killing Nigerians.

Aboloma, represented by Obiora Manafa, director, Inspector and Compliance Directorate (ICD), also stated that SON was not happy destroying people’s products.

“SON is not out to get importers. We are only interested in safeguarding lives and properties of Nigerians. Importers should endeavour to apply for their SONCAP certificate before the arrival of their products in Nigeria,” he said.

He however stated that SON recently upgraded its Portal for the operations of SONCAP in order to enhance service delivery, promote quicker turn-

around time and reduce human interaction to the barest minimum.

“Our Portal has been running seamlessly since then.

Only those who fail to adhere to our offshore Conformity Assessment Program and documentation would have reasons to complain. Our application and approval processes for SONCAP is seamless,” he said.

While urging all importers to process their SONCAP or Import Permit along their preshipment processes, he said such would enable them to avoid a situation where products arrive the shores of Nigeria without SONCAP Certificates or Import Permits.

Tony Iju Nwabunike, president, Association of Nigeria Licensed Customs Agents (ANLCA), stated that Customs brokers and freight forwarders operating in the nation’s port industry had lost over N20 billion to the influx of fake products that do not meet up with the Nigeria Industrial Standard for imported products.

According to Nwabunike, in addition to being injurious to the national economy, the importation of these illicit products also spells doom for Nigerian citizens.

He further stated that his association had taken it upon itself to educate importers on the need to comply with standards in order to safeguard lives and avoid losses emanating from seizures and destruction of fake and substandard goods.

“Over time, Customs brokers have been victims of substandard importations by importers who in some cases fail to disclose to us the actual content or degree of compliance with extant rules like SONCAP,” he said. www.businessday.ng

Social Media Week: Stakeholders highlight investment opportunities for millennials

… say credit worthiness, research, risk management key for wealth management, business development Jumoke Akiyode-Lawanson

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usiness leaders and financ ia l investment stakeholders have urged Nigerian youths to make certain business decisions and conscious effort to ensure investing becomes a lifestyle in order to secure a future with better economic conditions.

With the emergence of several Financial Technology companies willing to grant loans and help manage finances, millenials are now open to a wide range of investment options rather than being confined to traditional investment options such as stock market trading and property purchase, which they may not understand.

Sp ea king We dnes day at the ‘Money Moves: Investment Opportunities for Millenials’ session at the Social Media Week in Lagos, Zephia Ovia, head, business development, fintech initiative at Vetiva Capital Management Limited, said

millenials need to understand that investing doesn’t have to wait until you have millions of money.

“With as little as N5,000 or N10,000 you can find something to invest in that will give you returns on your money. It might not be large returns but it’s something and we need to cultivate the culture of investing,” she said.

Ovia, who moderated the panel session, suggested that it might be helpful if millenials had a more structured investment plan geared towards their income rate and frequency, as this might help in containing the urge to want quick, fast return on investment.

I n Ni g e r i a , r i s k- f r e e government securities like Treasury Bills and FGN Savings Bonds offer between 10 percent and 14 percent per annum in returns. Corporate Bonds offer similar returns but require a larger capital outlay, which keeps it out of reach for many.

To m i e B a l o g u n , c o -

founder, Investment Club, said she decided to create a club that would educate young, working professionals and entrepreneurs on the powers of investment and how to create wealth.

“I realised that there were not enough books, resource tools on how to understand investment in this market, so millenials dabble into different things including Ponzi schemes and lose a lot of hard earned, saved up money,” she said.

Mutual Funds are increasingly gaining wide adoption among a number of working-class millennials. For most of them, it is at least better than keeping the money in the bank. However, the returns provided by these investment options are not eye catching.

Also speaking as a panellist at the session was Chiwete John-Njokanma, cofounder, FINT Technology Limited, an impact investing fintech platform that intends to simplify access to credit for genuine MSMEs

and individuals while also providing returns to lenders.

According to JohnNjokanma, it is of utmost importance for millenials to generate credit worthiness by always making sure that money loaned is paid back in due time, and that asking questions and carrying out research before investing, gives an upper hand.

“It is important to know the reason for your investment so that you can plan appropriately and weigh your risk options. Millenials should also take time to find out more about what they are willing to invest in, ask questions, and get involved with factual things,” he said.

Although today’s youths are more interested in investing and making money from cryptocurrencies rather than the stock market, financial experts say the Nigerian Stock Market is one that could deliver exciting returns if research and study are carefully carried out in selecting companies to invest in.

L-R: Robyn King, product manager, Canva (Australia); Babajide Oluwase, founder/CEO, RenewDrive Solutions/Social Innovators Programme (SIP) fellow; Ngozi Akinyele, head, strategic brand management, Union Bank, and Olusegun Alimi, manager, programmes, LEAP Africa, at the LEAP Africa’s 2020 Social Innovators Programme Workshop in partnership with Union Bank in Lagos.

Abbey-VFD strategic deal to facilitate bank’s growth plan, shareholders’ value ENDURANCE OKAFOR

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bbey Mortgage Bank plc has announced that the strategic partnership with VFD Group plc would enable the company play major roles in the financial services industry and ultimately boost shareholders’ returns on investment.

Rose Ada Okwechime, managing director of the company, assured stockbrokers on Tuesday that the company would leverage VFD’s innovative and aggressive drive to enhance shareholders’ value and boost profitability going forward.

“I am pleased to inform you that the strategic partnership

which Abbey Mortgage Bank plc has nurtured has resulted to VFD Group Plc acquiring 35 percent stake in Abbey Mortgage Bank plc,” Okwechime said during the ‘Bell Ringing Ceremony’ of the company held at the Nigerian Stock Exchange (NSE) in Lagos.

“The new investments will enable the two groups form a strategy that would propel us to play major roles in the financial services industry. Abbey’s stable, longstanding business ethics and customer-centric culture will blend and grow with VFD’s innovative and aggressive drive to create superior value,” she said.

According to her, the synergy would transform the firm into

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becoming a major player in the market, contribute to economic growth and deliver good returns to shareholders.

Abbey Mortgage Bank was incorporated in 1991 and licensed to carry on business as a primary mortgage institution (PMI) by the Central Bank of Nigeria on January 11, 1992. Full commercial operations commenced on March 11, 1992.

“This investment presents opportunity for quick wins across board. Beyond the new client base and geographic reach this investment presents us, it is strategic towards driving the value chain and upscaling of our real estate business,” Nonso Okpala, group @Businessdayng

managing director and chief executive officer of VFD Group plc, said while announcing the deals in Lagos last month.

VFD Group is a financial services-focused proprietary investment company that creates value by working within Nigeria’s informal financial sector to create innovative products and solutions that are accessible to the everyday Nigerian citizen and entrepreneur.

“While we continue to seek out viable investment in diverse sectors, this investment further enhances our ability to ring-fence financial service offerings and make VFD Group and its subsidiaries a ‘one-stop shop’ for varying customer needs,” Okpala said.

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Thursday 27 February 2020

BUSINESS DAY

RESEARCH&INSIGHT

In association with briu@businessday.ng

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

08098710024

The leading contributing sectors to GDP in 2019 ADEMOLA ASUNLOYE

bution recorded increase within Q3 and Q4 2019. agricultural sector, manufacturing sector and mining and quarrying sector all recorded a decline of 5.40 per cent, 3.61 per cent and 27.25 per cent respectively between Q3 and Q4 2019.

The agricultural sector alone contributed 26.09 per cent to the real GDP in Q4 2019 owing to the large contribution of “Crop Production”. This is followed by the trade sector with 15.99 per cent contribution while a 13.12 per cent contribution of the information and communication sector to total

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igeria Gross Domestic Product (GDP) at basic constant price (real GDP) grew by 2.27 per cent year-on-year (YoY) from N69.80 trillion in 2018 to N71.39 trillion in 2019 compared to 1.91 per cent in 2018. The growth was largely due to the contributions of the agricultural sector (N10.50 trillion), trade sector (N5.94 trillion) and the information and communication sector (N4.66 trillion) with 25.2 per cent, 16 per cent and 13 per cent shares of the total GDP respectively in 2019.

Similarly, the GDP grew by 2.55 per cent (YoY) in real terms in the fourth quarter (Q4) of 2019 to N707.57 billion compared to the N696.78 billion in Q4 2018 when it recorded a growth rate of 2.38

Source: NBS, BRIU

& communication). The significant Q4 2019 growth rate also stood as the highest quarterly growth performance since the 2016 recession.

In nominal terms, the aggregate 2019 GDP grew by 12.90 per cent to N144.21 trillion from N127.74 trillion in the

Source: NBS, BRIU

percent. This growth between the two periods which represents an increase of 0.17 per cent points and is largely because of the contribution of the three aforementioned sectors.

From the previous quarter (Q3 2019), a 5.59 percentage increase was also recorded in Q4 2019, whereas, only the agricultural sector from the three major sectors recorded a decline of 5.82 per cent with the remaining two having a significant 10.9 per cent (trade) and 22.2 percent (information

corresponding year; a major contribution from the agricultural sector (N31.90 trillion), trade sector (N22.51 trillion), manufacturing sector (N16.78 trillion), the information and communication sector (N15.40 trillion), as well as the mining and quarrying sector (N12.77 trillion).

Of the five sectors, agriculture contributed about 22.12 per cent to the total nominal GDP in 2019. It was followed by trade, 15.61 per cent; manufacturing, 11.64 per cent; infor-

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mation and communication, 10.68 per cent, and 8.85 per cent mining and quarrying contribution to GDP. In Q4 2019, aggregate GDP stood at N39.58 trillion in nominal terms. This was higher than the Q4 2018 which recorded an aggregate of N35.23 trillion, representing a YoY nominal growth rate of 12.34 per cent.

This rate was down by 0.31 percentage points relative to the rate recorded in the Q4 2018 and –0.96 percentage points lower than the rate recorded in the preceding quarter.

On a quarter-on-quarter basis (QoQ), the nominal GDP increased by 4.68 per cent from N37.81 trillion in Q3 2019.

However, only two out of the five sectors with major contri-

Source: NBS, BRIU

GDP was recorded in the same period owing to the growth in the “Broadcasting Subsector”.

The real GDP of the three sectors jointly contributed 55.20 per cent to the total GDP in Q4 2019.

Source: NBS, BRIU

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Of the three sectors, only the trade sector recorded a negative growth rate of -0.58 per cent in Q4 2019 real GDP compared to the corresponding year. Whereas, agriculture and information and communication were up by 2.31 per cent and 8.50 per cent in Q4 2019 YoY. “Crop production” at 90.28 per cent was dominant in the agricultural sector while “Broadcasting” was dominant in the information and communication sector in the sane quarter.

Since the Nigerian econ-

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omy can be categorized into for main sectors: First, the real sector which comprises all the producing and consuming units of an economy. Second, the external sector which accounts for the transactions of the economy (consume or provide) with the rest of the world. Third is the government sector, that is, the public sector (central governments, the local governments, public corporations) which takes from the rest of the economy. Fourth, the monetary sector, that is, the deposit-taking institutions (banks), there is need to make or improve on policies to increase productivity as these sectors do not work in isolation of one another, rather they influence one another.

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Chris Ngige: Mind your sef and… Spousal wickedness

ik MUO

L

ike most Nigerians, I knew Chris Ngige in 2003, following the Anambra political whirlwind of that era. I don’t know why, but whenever a David-Goliath scenario occurs, I always side with the David even though I may later call him to order. This is in line from our peoples” saying that the best thing is to save the cock from the kite before blaming it for straying into the danger zone.

In those days of political madness and chicanery in Anambra State, I was fully on the side of Ngige, and I deployed my writing skills, the only instrument available to me by the grace of God. I did several analyses on the Anambra-Ngige-Uba affair.

In the first one (Him whom the gods want to kill, BusinessDay, 16/7/03) I wrote on the first governorship abduction in Nigeria, when “After a fierce battle bordering on direct and indirect “resource control” the godfather struck. It was a coup achieved through civilian-police collaboration. I argued that it could only have happened in Anambra State “where the men of timber” always look the other way while the rest are busy chasing containers, where the civil servants’ loyalty is as cheap as that of Judas and where there is always a good supply of mercenary politicians; and in the PDP which is always its own opposition, where nothing is ever done transparently and where there is always a leader in addition to a chairman.

I concluded that, “Ngige fought a good fight; he displayed intelligence, courage and tact; but he who must go to equity must do so with clean hands.

He is standing with a wooden leg because of the big question mark about

his mandate. He also appeared to have forgotten that he who dines with the devil should use a long spoon and that the devil always gives with the right hand and retrieves with the left.

This incidence has shown once more that it is easier to give water to the monkey but very difficult to retrieve the cup, that sharing the loot always puts the thieves asunder”. And that The Governor is between the devil and the deep sea. On the right side, there is the electoral tribunal and on the left there is Chris Uba and his hirelings.

I further analysed the internecine war between Ngige and his traducers (Ngige vs. the allied forces, Round 2, BusinessDay, 21/1/04), which I started by calling Kwame Nkrumah as a star witness by quoting him thus: Whenever there is a battle between powerless conscience and conscienceless power ,the later will laugh first while the former will laugh last, and blamed the whole crises on “the PDP as a party, the National Assembly [controlled by the PDP] the police hierarchy led by an Inspector General who is simultaneously fast and slow depending on whom the piper is; some pay-as-you-go members of the judiciary (judges of the night); Enugu State which is providing critical logistic support and all those who are in a position to act and speak but have chosen to adopt the say nothing and do nothing strategy”.

My 3rd outing , which I wrote in “tears, sorrow and unimaginable mental agony” bemoaned the invasion and burning down of Anambra State during which thugs were hired, paid ,armed and given a simple and single assignment: to destroy everything that belongs collectively to the people of Anambra State [including the perpetrators]. I concluded that “The structures and equipment destroyed do not belong to Nigige; they do not belong to the Government[and by the way, who is the Government?]; they are the commonwealth of all Anambrarians and other stakeholders in the State” ( Anambra, Alu Melu, BusinessDay, 17/11/04).

In my final intervention done 14 years ago I prophesied that Ngige would bounce back( Ngige: out but not down; BusinessDay, 22/3/06).

In the concluding part of that intervention, I stated “Ngige won all the cases he instituted against the federal government; he won all the cases he instituted against the PDP; all those who participated in the various legal/ political ambush warfare against him are now gnashing their teeth or telling their stories on the other side; he came in through the window but through effective management of the situation, he turned himself into a darling of the people; he has a lot of physical projects to his name and he has even left something for the Governor to take off with. And he did this in a state that has not had real taste of governance and a country where governors talk more and do less. He has tried; the people are happy with him and he should be thankful to God. But now, he has to go; he has to go because he stood on a wooden leg-the fraudulent manipulation of the peoples will by a fraudulent party. But, Ngige will not be forgotten in a hurry. He is Out, But Not Down” That was 14 years ago, when Ngige left the Government House Awka and took a lonely walk into an uncertain and unknown future; into the political wilderness.

Today, Ngige has bounced back, to the surprise of those who doubted my prophetic capabilities. He is back and in government, where he is highly visible, even if for controversial reasons. Today, I don’t want to prophesy about his political future and I am not writing in solidarity with him. I am just telling him to “mind your sef. This is also in line with my prophetic responsibilities: to call those in authority to order”.

Prophets of old like Nathan, Elijah, Elisha and Amos, toed this line. Unfortunately, I am not so sure of the prophets of today!

Other matters: Spousal wickedness In the past two weeks, this segment of my weekly epistle focused on parental wickedness (12/2/2020) and on the wickedness and selfishness of the children (19/2/2020). Today, we are focusing on spousal wickedness; acts of wickedness perpetrated by spouses against each other, which at times also adversely affected the children. As you go through this

‘

Today, Ngige has bounced back, to the surprise of those who doubted my prophetic capabilities. He is back and in government, where he is highly visible, even if for controversial reasons

brief intervention, ask yourself why people who voluntary agreed to get entangled with each other, with the support and in the presence of family and friends “till death do us part”, will suddenly so hate themselves that they do the unthinkable to each other.

We start from Kastina where Samaila Musa, chained his two wives Fatimah Salisu, 25, and Hadiza Musa, 20, in a room for 10 months and did several unthinkable things to them.

According to Hadiza, “He shaved off my hair and pubic hair. He also cut my fingernails and ground them together. He mixed them up with my food and ordered me to eat it. He also put pepper in my eyes and private parts”! Is this a normal human being?

There is the story of this foreign based Nigerian who came in to take his family along, did a DNA as a requirement for a visa and discovered to his chagrin that his 3 children were not actually his! He lost it and brutally restructured the wife’ s facial and dental configuration. The wife’s inconsiderate infidelity and the man’s raw brutality make me ask two of them, was there love before? There was the case of Stella Peter who murdered the “husband” for failure to finance the daughter’s first year birthday party. She had demanded for N30,000 but the man, a phone repairer could only afford N3000. There was also the case of a woman who faked her own kidnap and demanded a ransom of N15 million from the husband while another followed the same route (Faked Kidnap) to force her husband to relocate her to America. There was also this Malawian woman who set her husband and two children together with their house on fire after her husband caught her in their matrimonial bed with another man.

So, what went wrong? How did the love go so sour that spouses defraud, batter and even murder their spouses? Are they no longer “one”?

Was there love in the first instance?

Have they forgotten the promises they made to each other? What actually is happening to the marriage and family institution?

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

The great treat and concern of the House of Representative

T

he various treat by the House of Representatives on this issues of the public funds that are not being accounted and submitted, has become worrisome and most be a great concerned to an average Nigeria’s, in which the different Chief Executives of Ministries , Departments and Agencies of Governments, failed to render their various account to the Auditor General of Federation, despite that Nigeria populace pay taxes. For instant the Central Bank of Nigeria (CBN) and the Nigeria National Petroleum Corporation (NNPC) and several other agencies in the country failed in remitting such action is a clear indication that they have something to hide.

While the Chairman of the House Public Accounts Committee, Chairman Rep. Wole Oke, frowned and threatened to stop further releases of budgetary allocations, to all Government Agencies, that fail to submit their audited account to the office of the Auditor

General of the Federation.; He also said that they are going to name and shame all MDAs that have failed to submit their audited account, aside deploying the constitutional instrument of arrest to the effect.

It is a big surprise that some of the MDAs of Chief Executives that were invited to appear before the Public Accounts and also failed come. We therefore requested for the proactive actions of some of the noted Non-Governmental Organisation like Center for Social Justice, Medias, some respected citizen in the country to see and find the necessary solution and safe us from the upcoming woes and financial Auditing failures in the country. A solidarity protest across the country should be organize and bring all the people that are responsible into book.

The alleged deliberated and reckless actions of some of the Nigeria Chief Executives Why some established, agencies, failed to render their audited account covering,

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some of the years from 2014 to 2019 to the Auditor General of the Federation. What is the really, issues? Life Audit problems?.

From the observation the organisation board of the Ministry, Agencies are yet to be established In which they have to oversee and look at the various accounting systems, the issues of employing a qualify Auditor and the building of the capacity of some of the chief Executives in accounting systems, while some of them gives flimsy excuses, saying that the different leadership leader are responsible form the different woes and difficulty in Auditing, their account and the previous government leadership.

Therefore there are urgent needs for a bill to being sponsor to curtail.

In the same time a ligations action, enforcement of these dubious attitudes of the Nigeria Chief Executives and stop those habits.

Any option of publishing the names of defaulting agencies

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Michael Adedotun Oke

The present treat by the house of representatives in the National Assembly in publishing the names of defaulting MDAs on the pages of the National Dailies is a wakeup call, while is there any other way and is that the best way in fighting the series of corruptions, while the different head of the past are responsible, while the Executive in the Ministries, Departments and Agencies of Governments, needs to be accounted and work towards a good accounting systems, to promote accountability and transparency and economy development of the country. talentupgradeglobalconcept@gmail.com 08027142077

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How to deal with the Nigerian state CHRISTOPHER AKOR

S

ince the Nigerian army violently crushed Isaac Adaka Boro’s twelve-day revolt in 1966, the Nigerian state has found it expedient to employ brute force to suppress any legitimate expression of frustration and dissent by the people of the region. Ken Saro Wiwa and his Movement for the Survival of Ogoni People (MOSOP) tried the peaceful means in 1990 to press for “political autonomy to participate in the affairs of the Republic as a distinct and separate unit” and the “right to the control and use of a fair proportion of economic resources for Ogoni development”. But, as usual, the Nigerian government responded to MOSOP’s demand with a brutal crackdown and, ultimately, decapitated the leadership of the group. Many towns in the region do not even have as much as a police post, but security forces – the army, police and navy – are constantly deployed to protect oil installations that dot the region.

These security forces constantly engage in torture and extra judicial killings of people in the communities and are rightly viewed as henchmen of a distant government concerned primarily with securing the oil and gas facilities and installations scattered across the regions on which the Nigerian economy, and more particular, the Nigerian federation, depends.

Even with the return to democratic governance in 1999 and the attendant freedom of expression it guarantees, the people of the region still found out that the Nigerian state was unwilling to listen to any legitimate agitation and was determined to employ maximum force to crush any form of dissent and protect oil installations. Gradually and with time, the people of the region came to understand that the only language the Nigerian government understands is that of force.

Fortuitously, politicians in the region, who were locked in deadly struggles for the capture of state power, found it expedient to recruit and arm youth groups to fight their political battles.

Finding themselves well armed and knowing they would soon be dispensed with after elections are won and lost, the youth groups moved quickly to assert their own relevance by resuming the Niger Delta struggle but this time through arms struggle.

Thus, by 2005, violence became the chief means by which power and resources were negotiated in the region.

Consequently, the loci of power shifted from community elders – a group the government and particularly the multinational oil companies found expedient to negotiate with and settle to quieten agitations – to militant youth groups who have been using violent means to successfully challenge the legitimacy of the Nigerian state.

These disparate militant youth groups used the instrumentality of violence to successfully threaten the economic survival of the Nigerian state and consequently negotiate an amnesty programme, in 2009, with the Nigerian state, worth billions of dollars and set the precedence for violent confrontation as the only viable means of resolving

disputes with the state.

The Boko Haram insurgency virtually followed this template. The Nigerian state responded to the group’s growing influence the only way it knew; through violence. Yusuf, the founder, and many of the sect’s members were brutally and extra-judicially executed. Those who survived the crackdown took refuge in the forest and had no option left than to take up arms against the state. So lethal and successful had the group become that the Nigerian state, on several occasions, has offered them amnesty and continues to dangle the amnesty option before them just to get them to agree to come to the negotiation table. The rehabilitation and release of repentant militants, the proposed bill to set up a commission just to take care of ex-Boko Haram members are signs the Nigerian state has almost run out of options in fighting the group militarily and is desperate for some respite.

Shouldn’t that have taught the state some lessons about employing violence in response to largely peaceful and nonviolent agitations? You can’t bet on the Nigerian state to learn any useful lesson.

Upon coming to power in 2015, Buhari, an ex-military General and dictator, began another round of brutal crackdowns on largely peaceful groups.

In December 2015, the Nigerian Army massacred close to 500 members of the Shiite sect - the Islamic Movement of Nigeria (IMN) – in Zaria for having the temerity to block the convoy of the Chief of Army Staff. Not done, they proceeded to the group’s headquarters, destroying their shrines, killing people inside and taking the leader of the Sect, his wife and several other members, hostage.

Although those held hostage have since been granted bail by the courts, the government has refused to release

‘ Shouldn’t that have taught the state some lessons about employing violence in response to largely peaceful and non-violent agitations? You can’t bet on the Nigerian state to learn any useful lesson

t was Walter Savage Landor, an UK (English) writer and poet who philosophized many years back that when law becomes a science and a system, it ceases to be justice. Like never before, the Supreme Court’s decisions, particularly on election matters, have left many political observers confounded and further strengthen the contagious doubt and aspersion cast in the name of the judiciary. The question that pervades my reasoning since the recent decisions of the apex court is that, are Nigerian laws basically meant to attain justice in all ramifications or laws are merely applied, rather sheepishly, for sake of strict adherence to the letters of law? Indeed, my preoccupation on these apex court decisions has been borne simply of the far greater complexity in the nexus between law and justice which philosophers had given persuasive thoughts on the inseparability of the duo concepts.

In Salawu Ajide v Kadiri Kelani (1985) 1 NWLR 248 AT 269, Oputa J.S.C, on the need for truth to prevail in order to ensure justice is done poignantly cautioned that “justice is much more than a game of hide and seek. It is an attempt to discover the truth, on human imperfections, notwithstanding. Justice will never decree anything in favour of so slippery a customer as the present defendant/appellant” on this note, our courts have admitted that justice and truth are on the same ticket and that in doing justice the courts and all ministers in her temple, that is lawyers and all other stakeholders, must strive at discovering the truth regardless of legal technicalities”.

No doubt, the recent verdicts by the apex court in Nigeria have thrown more confusion rather than douse the tension of many Nigerians. Perhaps, these judgments have exhumed more complex questions in lieu of solving the convoluted issues, as regard the rights and the propriety of an electoral process, the basis of which forms the reasons why aggrieved parties in the electioneering processes approach the courts. The reason why many have been so concerned about the Supreme Court’s judgments

is that the court’s decision is seen as one subjugating their will to that of an umpire, which to the faintest, is never participant in the state’s election process, thus, making the whole exercise calling for the democratic principle of electing their leaders a mere formality or charade.

The prevalent legal ideology of judges in line with Austinian Positivist theory is undoubtedly what is observed, most often, by the Nigerian judges. One may ponder in dismay and trance in wilderness of reasoning, when asked the fundamental question of whether the judiciary is a dummy arbiter, meant merely to reel out what is written in the legislative codification? Or at best are really saddled with the sacred responsibility of given a professional interpretations to the letters of laws, that is, by juxtaposing the facts in factual sense with the letters of laws, solely, for the attainment of justice.

Professor Akin Oyebode aptly described the attitude of the Nigerian judges when he asserted that “when judges are confronted with a choice between applying law delegelata and law delegeferenda, the majority of the judges would opt for the former in accordance with the strict constructionist legal ideology which they have imbibed. There are different sets of theories that medieval philosophers have used to explain what law is, though, the Nigerian courts cannot appear obsolete, without purposeful attempt to juxtapose and fine-tune a workable rapprochement between facts and laws, with a view to attaining justice. I would not want to go into the details of these cases, since the facts are already in the public glare, however, for the purpose of clarity, I would at this juncture highlight these cases briefly.

Prior to the Thursday, 13th February’s supreme court’s decision on Bayelsa state’s gubernatorial tussle, the decisions of the Nigerian apex court on election matters have always been subject of torrent of criticisms leaving the populace in a state of utter quagmire. For example, in May 2019, the Supreme Court’s judgment on Zamfara’s APC primaries tussle cannot be forgotten in a jiffy, where in its

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judgment, the apex court ruled that noncompliance with INEC guidelines and directives on the date for the submission of candidates, vitiated the eligibility of the political party, APC, to participate in the elections. Therefore, it would be deemed, legally, that the party did not field any candidate or partake in all the elections that took place in the state, hence, the mindboggling judgment which robbed the party and the people of the state the real franchise to exercise the key tenet of democracy, which calls for fair representation of all and by the respect for the majority’s will. Of course the APC stalwarts perceived this as decision taken too far and a sheer over-flexing of muscle by the judiciary in order to suppress the will of the majority in Zamfara state.

What appears highly intriguing is the Supreme Court’s judgment on January 14, where in its revered wisdom saw the need to accept in evidence the votes from 388 polling units, which had earlier been wrongly rejected by INEC in the March 28 gubernatorial election in Imo state. In its judgment, the Supreme Court in its wisdom, consequently allotted almost all the rejected votes in the 388 polling units to the APC candidate, Senator Hope Uzodinma. That decision, which many Nigerians are still tongue lashing and still trying to grapple with the ratio behind the “confusing” judicial activism, clearly truncated and shatter the dream of the PDP and its candidate, Hon Emeka Ihedioha’s reign in Imo state.

Just like a football match, where penalty shoots are awarded by a perceived, skewed referee to the two sides of the game, the apex court, in another blockbuster, dealt a deadly blow to the APC, where it ruled that the infraction by an “appendage” to its major candidate, which touches on qualification, clearly robbed the candidate of the APC, who had been declared governor elect and indeed few hours to his inauguration, the bite of the hysteria of ruling the oil reach state, Bayelsa state. Whether the sacked deputy governor elect is the bona fide bearer of names in the series of certificates presented to INEC

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them. Many more members of the sect have been killed since then simply for protesting peacefully to demand the release of their leader being held hostage.

To add salt to injury, the government has outlawed the group, declaring it a terrorist organisation.

Similarly, in 2016, the army went on another killing spree, mowing down dozens of members of the Indigenous people of Biafra (IPOD), supporters and bystanders at three locations in the Onitsha town and environs. Initially, the army lied that they acted in self defence, that the protesters were armed and actually attacked the army first, but on the ground reports and investigation by Amnesty International put a lie to such concoctions. AI accused the Nigerian military of “Opening fire on peaceful IPOB supporters and bystanders who clearly posed no threat to anyone.” Such action, according to the watch dog, “is an outrageous use of unnecessary and excessive force and resulted in multiple deaths and injuries.” Indeed, “In one incident one person was shot dead after the authorities burst in on them while they slept.” The watch dog tagged these shootings “extra judicial executions”, calling for urgent and independent investigation and the bringing to justice of anyone suspected of criminal responsibility. Indeed, the watch dog averred that the exact number of deaths is unknown largely because the Nigerian army took away corpses and the injured.

To this day, members of the group are still being hunted and killed across the five eastern states. As you might guess, the government has since declared the group a terrorist organisation.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

Of technicality, justice and supreme court’s decisions (1)

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RILWAN BALOGUN is not the scope of this piece, rather, I am poised to x-raying whether in actual sense the people of Bayelsa state actually wanted and voted the duo of the APC candidates in the last guber election. More so, whether going by the tenet of democracy, which is the basis why election is allowed, interpretation of status by letters should be allowed to override substantial justice.

Based on these 3 scenarios, the knotty question that has been racking the brains of Nigerians, is that what is the stance of the Supreme Court when it comes to making a choice between legal technicalities, which is a concept that overrides the literal interpretation of the letters of the law on one hand and the sheepish adherence to the letters of the law on the other hand. The former demands a judicial exercise and what perhaps, may be technically called judicial activism. Of course, our court has had the reasons to take to this in some cases years back. For example, during the screening process of Hon. Justice Ibrahim Tanko as the 14 substantive chief justice of Nigeria, his lordship admitted that there are indeed technicalities in law by virtue of its inheritance from English law. While the latter on the other hand does not admit the discretion of the interpreter, rather he is expected to comply strictly with the letters of the law without room for “special” cases or exigencies.

The honourable CJN further submitted that technicality in law is something that has to do with perception of the way you think you will be able to achieve the goals of what you want to achieve. On the other hand, where the judges follow, without any judicial activism by way of philosophising that is doing what will best serve the interest of justice.

Justice does not only apply to the parties involved in the case, but the society, whose interest, at large, is at stake.

Balogun, a legal practitioner, writes from Lagos. rilwanbalogun60@yahoo.com

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BUSINESS DAY

Thursday 27 February 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Unseemly pressure on the Supreme Court with political cases

editor Patrick Atuanya

Rascally conduct of the political class is a threat to Nigeria’s democracy

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

W

hat is the latest joke amo n g th e nation’s leading political parties? It is to sue for a review of cases upon which the Supreme Court had adjudicated.

It is a new low that shows how far the parties are willing to go to undermine the judiciary as one of the last bastions of democracy in Nigeria.

The People’s Democratic Party announced February 24 its intention to approach the Supreme Court for a review of the presidential election case between its candidate Atiku Abubakar and President Buhari nearly one year to the date. The impetus for the PDP’s action is that it is vexed that the All Progressives Congress has approached the court for a review of its judgement that threw out the APC governor-elect David Lyon for the failings of his running mate. Between them, the parties want the Supreme Court to review its judgements in the

gubernatorial disputes in Zamfara, Imo and Bayelsa States.

In throwing darts at each other with the Supreme Court as the board, both parties cast doubts on the integrity of the court. They undermine its standing with rightthinking members of society.

They harm society above all.

In the last two months, the court has received buffeting from politicians of all types. For the first time, the pronouncements of the Court have elicited not mere public debate but street demonstrations. Their judgements have sparked tension, particularly those that appeared absurd due to the failure to get electoral sums accurately.

Administrative and presidential failings mean that the Supreme Court operates with 16 instead of 21 justices currently.

It needs more justices to carry out its many tasks.

Established at the advent of Nigeria’s republican status, the Supreme Court has appellate as well as original jurisdiction. It tackles appeals from the Federal

Court of Appeal. It also tackles directly matters concerning the interpretation of constitutional disputes or those involving the states versus the Federal Government. Judgements of the Court are binding on all other courts except the Supreme Court itself.

Because it is a multi-appeal court, cases of various types come to the Supreme Court. They concern commercial disputes, various land matters, issues around international trade and much more.

Increasingly, however, politicians are turning our Supreme Court into a single focus court tackling political disputes.

Various other cases requiring the analytical depth and wisdom of the highest bench in the land suffer delays. The justices themselves are under so much pressure to wade through many cases in double quick time such as the political cases demand.

The evidence is that the Supreme Court probably needs more assistance. We believe the National Judicial Council should consider some options.

One would be to decentralise the Supreme Court through the creation of branches in the six regions. The judiciary has done this successfully with the Appeal Courts and even with the decentralisation of the Nigerian Law School. Another option would be to have two sections of the court, one dealing with Constitutional and Political Affairs and the other with Commercial Issues.

The matter requires more than the internal adjustments of the Court. The political class must reach a consensus on values and how to treat our institutions such as the Supreme Court. They must prevent a slide to anarchy such as is possible when citizens and litigants disregard the highest court.

The rascally conduct of the political class is a threat to what Nigeria has achieved so far with democracy. We call on them to engage in sober reflections about where they are taking our country, including turning our Supreme Court into fodder for their brinksmanship. It is not acceptable and should stop forthwith.

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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Kudos to Frank Nneji and Aliko Dangote The Public Sphere

CHIDO NWAKANMA

T

he South East blogosphere buzzed endlessly all week as the good news came out from Emene about the resuscitation of one of the landmarks of the industrial development of the region. Industrialist and renowned transporter Frank Nneji announced the infusion of N63b into the South East economy by Africa’s leading industrialist Alhaji Aliko Dangote. Dangote placed purchase orders for 3, 500 Shacman trucks from the plant run by Transport Support Services.

Kudos to Frank Nneji and Aliko Dangote.

Transport Support Services is the new entrepreneurial platform of the man who innovated long-distance bus service in Nigeria. Nneji, Director of Transport in the Students Union government at the University of Nigeria, brought the concepts of luxury, onboard entertainment and courtesy to the buses that plied the routes from major cities West and North of Nigeria to the South East. ABC Transport became famous and grew into a big company quoted on the Nigerian Stock Exchange.

His venture into TSS has delivered an outstanding return. The Anammco plant was one of the highlights of the Shehu Shagari administration. It was and remains a major landmark in Enugu, further opening the Emene Industrial Area

which hosts the Akanu Ibiam Airport.

Anammco reigned in the years of similar plants across the country based on our import-substitution industrial policy. The others included Leyland Automobiles in Ibadan, Peugeot Automobile in Kaduna, Volkswagen of Nigeria Limited in Ojo, Lagos and the Steyr plant in Bauchi. Many companies sprang up to support these industrial ventures.

Nigeria’s import substitution industrialisation was based on the need to find alternatives to primary products, conserve foreign exchange, promote industrialisation locally, diversify the economy and increase employment. From 1986, the introduction of the Second Tier Foreign Exchange Market and other tools to manage the economy showcased foreign exchange availability or lack thereof as the Achilles Heel of the policy. The automotive industry went belly up.

For many years, therefore, Anammco suffered the consequences of a failed automotive policy. According to Nneji, the plant was shut for seven years in the recent past until he invested in retooling it. TSS collaborated with the Chinese Shacman Autos. TSS first brought in the trucks as logistics solution providers to Dangote Industries. They then went into the local assembly based on encouraging orders from Dangote Group.

As a young correspondent for Business Magazine in the 1980s, I went around the country’s assembly plants and the budding manufacturing enterprises that had emerged to support them. There were companies working in the key areas of the vehicles of that area.

A paper by the Nigerian Institute for Social and Economic Research showed that components of the motor car were sheet metal (45 percent of body weight), forged and special steel (20 percent), cast iron (10 percent) rubber (6 percent), glass (3.5 percent), aluminium (1.5 per-

cent) and others such as petrol, grease, water (7 percent).

Nigerian firms were producing brake pads, linings, some steel components, batteries and fabrication of body parts.

The excitement about the resuscitation of the Emene plant revolves around the promise of industrialisation based on the automotive industry. The automotive industry has played a significant and contributory role in industrial development across the world. It is a source of technological and managerial innovation.

As one report noted, “Vehicle production – including passenger cars, light commercial vehicles and heavy trucks – has driven the industrial development of many countries on several continents and has been a source of incessant innovations and technological improvements. Hence, the automotive industry has become an emblem of industrialization itself. The automotive industry’s role in the economy cannot be compared with any other manufacturing industry. If it were a country, it would be the fourth-largest economy in the world.

The size of the industry’s revenues – estimated at $3,500 billion and projected to reach $6,700 billion by 2030 (McKinsey 2016) – is comparable to Germany’s gross domestic product and is greater than that of the UK, France, India and Brazil. Moreover, the industry employs approximately 9 million direct workers all over the world. The automotive industry not only encompasses vehicle production.

More than 15,000 parts and components are required to assemble a single vehicle and several industries are involved in their production, such as steel, glass, plastic and rubber, textile and electronics. According to available estimations (OICA 2017), each direct automotive sector job supports at least

‘

The prayer is that Nigeria should sustain the Nigeria Automotive Industry Development Plan {NAIDP} through succeeding governments

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Fit to lead: Golden tips for sales leaders

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e cannot over-emphasised what leaders are expected to do all the time. Leaders are to achieve the result. Not one-off positive outcome but sustainable results. One of the essential functions that ensure the continuity of business organisations is the sales function.

The sales function is crucial to any organisation without which the essence for existence is threatened. Without a capable sales force, no business entity will survive competition or meets the objective of the shareholders. Sales as a function are pivotal to serving the customers with products or services and to gain market share that ensures positive returns on the shareholders’ investment.

In the 80’s the managing directors of companies are mostly subject matter experts. I have seen accountants, engineers and other experts becoming the chief executive officers of top companies. In today’s dispensation, you cannot lead any profit-oriented organisation successfully if you are not a salesperson.

You might not be a marketer by background, but your ability to organise the sales function, attract customers to your company’s products or services, and deepen the market share year-on-year is a sine qua non to success. In Practical sense, sales teams are vital because they affect the top and bottom lines of the company’s financial and performance outcome.

I discovered I was a natural salesperson when a leader deployed me to the sales functions after years of being in the middle and back-office roles. I am grateful to my past employer, where I was allowed to horn my selling skills. I have since being coaching people who are desirous of improving their

figures as salesmen and saleswomen. My coaching target is also people who are afraid to transits into the sales role for some reasons.

Sales role are not to be scared of but something to be embraced with the knowledge and desire to succeed. In life, you would one day sell for yourself either as a retiree, or a selfemployed person. For employees, deploying your service to the sales function is, therefore, a training platform for what you will eventually do for yourself.

I was in a coaching session with 100 salespeople last week sharing my thoughts and experience on how to win the business and loyalty of customers as sales leaders. My audience is sales leaders having responsibility for sales figures of their territories and team members. I shared thoughts from my book, the value chain banking with this group, though they are not employees of banks.

Being a sales leader or a sales team member with budget responsibility is like riding at the back of a tiger. I got this from one of my Indian friends and mentors who rhetorically use the proverb to inspire the need to keep working hard. What will you do when you are at the back of a tiger? If you do anything outside to keep riding, the tiger will eat you for lunch, breakfast or dinner, depending on the time of the day. As a sales leader, you must keep working with your team to drive the numbers using strategy to deepen your market share and increase the penetration of your products. Your approach must, however, take cognizance of the customers’ preference and the current economic reality to be effective. One way to ensure sales strategies are effective is to fully understand the customers both demographically and in the behavioural

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sense before making your products available and affordable. Any sales strategy not in alignment with the customer will fail. In order words, a sales strategy that is a product or service-oriented without the customer at the centre of its creation, will deliver a less than the desired outcome.

The customers of today are skilful and knowledgeable. Due to scarce resources and the need to maximise benefits from cost, customers are philosophers and higher degree holders naturally. All options are considered before parting with their money.

A salesperson must, therefore, be aware of the customers’ sophistication. Every customer is assessing his salesperson using what I termed the trust and respect quadrant in the value chain banking book. A customer like the CFO of an organisation is evaluating the banker if he or she can trust and respect the banker. The trust component is the customer’s perception of your ability to build a long-term mutual relationship with the company, your ability to keep confidential information and be a friend to his or her team. The respect component is your competence and integrity on the job.

Your competence is, therefore, your ability to understand your products, the industry and be a sales consultant and adviser to your customers.

The trust and respect quadrant will determine if the salesperson will be in any of the four customer’s levels of acceptance for any company or product. It is your trust and respect level that will place you in the empathic or total or moderate or no acceptance level with the customers. A high level of trust and respect will enable your team to win the heart, the loyalty and the unflinching patronage of

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another five jobs in the supply chain.”

With Dangote’s order, the Emene plant is showing the promise of job creation associated with the automobile.

Nneji stated, “With this {Dangote patronage}, many workers of ANAMMCO who had been at home had to come back to work. Some local suppliers of lubricants, electrolyte and the rest, had to return to business. And, because we are in Enugu, we use the Onne port to bring in components. From 2016, the Onne port has handled more than 3,000 containers of truck components for the ANAMMCO plant.”

The prayer is that Nigeria should sustain the Nigeria Automotive Industry Development Plan {NAIDP} through succeeding governments. It would provide an enabling environment for many other players to plug in as they did in the late 70s and 80s.

The investment also confirms the promise of the private sector and its merit-focused decisions. Note that the Dangote Group also has an investment in a truck assembly plant but chose to move across borders based on the performance of the Shacman trucks.

Nattering nabobs of negativism dwelt on whether the Dangote purchase order is an investment or not in the South East economy. US President Donald Trump is ecstatic about the $3 billion order for American planes from India. The Indians will not set up a plant in America.

An infusion of N63 billion that enables the resuscitation of various parts of an economy is a very welcome investment.

Once again, kudos to Frank Nneji and his key customer Alhaji Aliko Dangote.

Positive Growth with Babs Babs OlugbemI your customers.

As a sales leader, you are leading a a team that must be guided and mentored depending on whether the relationship is at the start-up, re-alignment, sustaining success or at the turn-around stage. The supervising strategy for engaging your team members will be dependent on their current budget achievement and the level of engagement in the the relationship they are managing.

One crucial pitfall in leading an effective sales team is the inability of the sales leaders to understand the psychology of the sales team. The average and experienced sales team members, including sales leaders with several years of experience, want to be held accountable for the result and be given independence for the process to get things done. I will use my experience as a sales coach to an experienced business manager to illustrate the importance of being flexible and holding people accountable for the result.

Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

@Businessdayng

14

Thursday 27 February 2020

BUSINESS DAY

cityfile NAFDAC raises alarm over adulteration of honey in Kano … as 3 suspects nabbed

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ational Agency for Food and Drugs Administration (NAFDAC), has uncovered a house in Kano where honey is adulterated with large quantity of sugar.

Shaba Muhammed, state coordinator of NAFDAC in Kano told newsmen after an operation in Yartutu community in Dawakin Tofa local government area of the state.

Muhammed said that the raid followed intelligence report that a lot people in the community were engaged in the business of adulterating honey, thereby endangering the lives of people.

He added that the operIsa Abdullahi (l), deputy director, welfare department, Army Administration, Nigerian Army, presenting cheque to Obinna Akataobi (son) and Stella Akataobi (widow), during the presentation of cheques to the families of fallen heroes in Abuja on Tuesday. NAN

How police officer shot, killed Makoko resident - Witness JOSHUA BASSEY

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prosecution w i t n e ss a n d community head of Makoko waterfront, Steven Aji has narrated to an Igbosere High Court, Lagos, how a police officer shot and killed one of his chiefs.

Aji said this while giving evidence in the ongoing trial of a dismissed police officer, Pepple Boma, charged with manslaughter.

The community head, who was led in evidence by the Lagos State prosecuting counsel, Hafeez Owokoniran, told the court on Tuesday that the

defendant shot and killed one Timothy Hunpoyanwa during the destruction of Makoko waterfront settlement.

He said that the state government had given the residents notice to vacate the settlement 24 hours before the incident occurred.

Aji said that he and his chiefs were already making arrangements to meet the government agents to ask for more time to enable them get another area to settle.

He told the court that they had been living in the Makoko settlement for a very long time, adding that 24 hours was not enough for them to pack out of

the area.

He narrated to Justice Module Nicole-Clay that immediately after the notice to vacate the area was given to them, government officials and police started destroying their houses.

“Some little children fell into the lagoon as we were trying to rescue them; we were beaten with horsewhip.

“While I was trying to pacify the officials to give us more time to enable us leave the waterfront, I saw the defendant shooting the deceased, Timothy Hunpoyanwa in the stomach.

“The defendant was shooting sporadically,” Aji narrated.

Another witness, the

deceased’s brother, Francis Hunpoyanwa, told the court that he was at home when he heard that his elder brother had been shot.

The state government had sometime in 2013, arraigned the defendant over alleged manslaughter.

The government alleged that the defendant unlawfully killed one Timothy Hunpoyanwa by shooting him with a gun. The government said that the defendant committed the offence on July 21, 2013 at about 1:20 pm. at Makoko, Yaba in Lagos.

According to the prosecution, the offence contravenes Section 222 of the Criminal Law of Lagos State, 2011.

Kidnapping: Nasarawa passes witness protection bill

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asarawa State House of Assembly on has passed the Witness Protection Bill to give witnesses the boldness, confidence and protection to testify in court.

Ibrahim Abdullahi, the speaker of the House, announced the passage of the bill at plenary after Tanko Tunga, the majority leader, moved a motion for the passage on Tuesday.

Abdullahi said that the bill, if assented to by the governor, would go a long way in curtailing the rate of crime in the state and the country at large.

He added that the bill would also give witnesses the opportunity to present evidence, expose and report to the police and other security agencies without fear of molestation.

Abdullahi further explained that the bill would www.businessday.ng

enhance criminal justice in the state and the country at large.

The speaker, thereafter, mandated the clerk of the house to produce a clean copy of the bill for Governor Abdullahi Sule’s assent.

Tunga while moving the motion for the passage of the bill, urged his colleagues to support the bill to allow it scale through third reading.

The motion was unanimously adopted by members when it was put to a voice vote by the speaker.

The sponsor of the bill, Mohammed Alkali, told newsmen that he was delighted with the passage of the bill.

“I want to urge the ministry of justice to sensitise the public on the importance of the bill as nobody will be afraid while testifying in court,” said Alkali.

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ation was in collaboration with the Joint Task force on small arms in the state.

“After obtaining intelligence report about the adulteration, we joined forces with the task force for the enforcement,” he said.

Muhammed revealed that three suspects were arrested in connection with the act as major dealers in the adulterated honey.

He said the agency would hand over the suspects to the appropriate authorities for prosecution.

He appealed to the public to inform the agency of any suspicious activity in their neighbourhood for appropriate action.

Oyo warns event planners against unauthorised road closure REMI FEYISIPO, Ibadan

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yo State government has warned event planners, owners of event centres, religious centres and club owners to desist from indiscriminate closure of public roads.

The executive chairman, Oyo State Road Transport Management Authority, Akin Fagbemi gave the warning when he led the special operation team to clear unauthorised blockade of roads for social events across the state.

Fagbemi said that the present administration in the state would allow willful disregard to extant laws and regulations guiding the use of public facilities, including roads and other infrastructure.

The chairman warned that blockade of roads was

an offence that attracts penalties as spelt out in the Oyo State Road Traffic Management Authority Act 2009.

“Henceforth, the state government would descend heavily on any individual or groups who willfully barricade any government roads thereby creating avoidable traffic loggerheads at strategic positions across the state”.

He, however, said it is expected of any individual or group who must for any reason whatsoever block any government road to first seek permission from the state government who would through OYRTMA, assess the resultant impact of such blockade and provide alternative route for commuters along the axis.

“Any person caught in the act would be made to face the full wrath of the law”, Fagbemi concluded.

Kano: NAFDAC seals warehouses for recycling expired drugs

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he National Agency for Food and Drugs Administration (NAFDAC) has sealed two warehouses at Sabon Gari Market in Kano, for allegedly recycling expired drugs.

The coordinator of NAFDAC in Kano State, Shaba Muhammed, told newsmen that an intelligence report exposed the illegal activities at the warehouses.

A c c o r d i n g t o Mu hammed, a surveillance team of the agency carried out an undercover inves-

@Businessdayng

tigation and confirmed the illegal activities at the warehouses.

He said that the sealed warehouses had been placed under security surveillance until investigations were concluded.

“It is our mandate to safeguard the lives and health of people through what they consume, yet the public need to work with us by informing us of such acts.”

Muhammed appealed to the residents not to panic but report such cases to the agency. NAN

Thursday 27 February 2020

BUSINESS DAY

COMPANIES & MARKETS

15

COMPANY NEWS ANALYSIS INSIGHT

TECHNOLOGY

IHS Tower hires Citigroup, JPMorgan bankers ahead of New York IPO OLUFIKAYO OWOEYE

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f r i c a’s l a r g e s t w i re l e s s tower operator, IHS Tower is reviving the plans for an Initial Public Offer with the announcement of Citigroup Inc., JPMorgan Chase &Co as banks that would coordinate activities for what may be the biggest initial public offering for an African company in the U.S. I H S s c ra p p e d p l a n s for a U.S share sale in 2018 due to uncertainty around Nigeria’s presidential election, its main market. The listing could value Africa’s largest operator of wireless towers as much as $7 billion.

IHS is seeking to raise about $1 billion in New Yo r k , a m i d e x p a n s i o n plans. The company says it is expanding its network of about 24,000 t o w e r s a s g ro w i n g A frican populations de-

mand cheaper and faster mobile connections. It tapped the debt market for $1.3 billion last year.

The company plans to

enter new markets in the Middle East and Southeast Asia.

In October last year a f t e r i t i n i t i a l l y b a c k-

tracked on its IPO, Helios Towers, one of the biggest telecoms tower leasing companies operating in Africa raised

$364 million after listing on the London Stock Exchange.

The company founded in 2009 with a $350 mil-

L-R: Ken Onyeali Ikpe, MIPAN president; Frank Aigbogun, publisher, BusinessDay Newspaper/panelist; Olu Akanmu, executive director, FCMB Plc/panelist; Kayode Oluwasona, former president, AAAN; Emeka Onwuka, Partner, and Head, Anderson Tax LP/keynote speaker; Steve Babaeko, vice president, AAAN; Steve Omojafor, chairman board of trustee, AAAN, and event chairman; Bola Thomas, member, board of trustee, AAAN; Ikechi Odigbo, president, AAAN, and Chinedu Ezomike, partner/head: commercial practice services, Anderson Tax, at the AAAN business outlook seminar in Lagos.

lion backing by Londonfounded private equity firm, Helios Investments, alongside investors including billionaire George Soros and former US secretar y of state Madeline Albright.

Eaton Tower, another player in the tower busin e s s o n t h e c o nt i n e nt also sold off its business to American Tower for $1.85billion in May last year. But, like with most businesses operating on the continent, power remains a major challenge for tower companies.

As par t of effor ts to c u t d ow n c o s t s, t ow e r companies are increasingly investing in hybrid power solutions like lithum-ion batteries and s o la r p ow e r. Th e re’s a net upside for local communities housing towers given the possibility of reduced diesel consumption for generators and an accompanying reduction in emissions and pollution.

OIL&GAS

Seplat committed to managing matured assets profitably - Okon OLUSOLA BELLO

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eplat Petroleum Development Company Plc has reiterated its commitment to managing old and matured assets profitably and growing returns.

Speaking to potential investors, industry professionals and other participants at the IADC Drilling Africa Conference & Exhibition 2020 held in Accra, Ghana, Effiong Okon, the Operations Director at Seplat, said companies needed the right strategy, administration, and technology to optimise mature or old resource wells and make the right profits.

Okon said: “With a capable organisation, robust/well-implemented strategy and deployment of latest technologies to optimise production capacity, companies can

cost-effectively access and produce the remaining oil and gas in smaller reservoirs.

“In this light, Seplat employs a pro-active and

innovative strategy towards optimising asset value and thereby extending economic life of small assets Ac c o rd i n g t o O ko n ,

who is also an executive director in the company, Wells, Reservoirs and Facilities Management (WRFM) is key to sweating the assets and arresting

L-R: Juliet Anammah, Jumia Nigeria Chairwoman and Head of Institutional Affairs, Jumia Group; Professor Salahu Junaid of Ahmadu Bello University, Zaria; Umar Garba Danbatta, executive vice chairman, Nigeria Communications Commission; Isa Ali Ibrahim (Pantami), minister of communications and digital economy; Kashifu Inuwa Abdullahi, director general, National Information Technology Development Agency (NITDA), and Abimbola Alale, MD/CEO Nigerian Communications Satellite (NigComSAT), at the inauguration of the committee for the expert review of the National Digital Economy Policy and Strategy yesterday in Abuja. www.businessday.ng

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production decline while developmental projects are aimed at filling existing facilities.

He added: “Technologies deployed targets bypassed oil, attic oil, thin oil rims, improvement in productivity, (4D seismic, horizontal wells, geosteering, well stimulation).

“Gas development of high and depleted pressure reservoirs (mechanical refrigerant vs JouleThompson), stripping out NGLs and LPG to maximize product yield and flares out.”

The Seplat executive director said the company’s Ovhor and Sapele fields that started production in the ‘70s were still producing after 50 years at over 22 million barrels of oil per day (Mbopd) and 10Mbopd with several infield drilling opportunities for production growth.

He said smart invest@Businessdayng

ment was required in the late-life of these assets with focus on activities that deliver incremental positive Net Present Value, NPV (low cost wells, commingled production, recompleting older wells, side tracks, infield appraisal/exploration).

Participants at the conference, therefore, pointed that the long-established African oil and gas producers are managing two distinct challenges at either end of the production spectrum: increasing complex and expensive new developments, and low value depleted fields under late-life investment or disposal.

It was argued that new production from historical producers was now in smaller reserve pockets, reliant on expensive new technology, or requiring ever deeper offshore water depths.

16

Thursday 27 February 2020

BUSINESS DAY

COMPANIES&MARKETS Taxaide introduces new technology to aid tax compliance, data protection ENDURANCE OKAFOR

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axaide Technologies Limited (TaxTech), one of the leading tax management and technology firms in Nigeria, has unveiled technological tools aimed at enhancing a more effective tax administration for Nigerians and tax authorities.

According to the Lagosbased company its new technology offers different tools that can help taxpayers and administrators in pursuing streamlined, discreet, transparent, and efficient tax functions that skilfully addresses all tax management and administration issues.

The company which believes that effectiveness of a high-performance tax function relies on access to and use of information and technology said it is well equipped to provide a wide range of tax management services with and without the integral use of its technologies.

Bidemi Olumide, CEO of Taxaide, said the firm, through its technology development subsidiary, produced PITApp to serve as an aggregator of all Personal Income Tax (PIT) obligations and urged all taxable Nigerians to ensure that they meet their PIT obligations before the deadline.

“As part of our work in building a more effective tax management system, we have built the PITApp to simplify the PIT returns filing and remittance process

for Nigeria tax residents,” Olumide said.

While describing the functions of PITApp, Taxaide, said the platform is both a web-based and mobile application service.

“The app is designed to make life easier for Nigerian taxpayers; especially in an increasingly technologicallydriven world,” Onatoye Onakomaiya, Chief Technology Officer of Taxaide said adding that “PITApp saves you time and money by reducing resources that would have been spent on undertaking these tasks manually.”

With an estimated 900 revenue collecting agencies (Federal, State and Local) in the country jostling for the attention of Nigerian taxpayers, Olumide said it is a huge distraction from the core economic activities that should generate the tax in the first place.

“Every taxable person or organisation should focus on its core commercial mandate while leaving the operational aspects of their tax compliance to accredited tax managers. This is the essence of Taxaide; to take care of those distractions. From tax audits management to payroll management, to PIT management, to corporate income taxes management, to the management of transaction taxes like Value Added Tax, Withholding Tax, etc,” Olumide said.

Some of the core competences of Taxaide include corporate income tax returns management, payroll man-

agement, Value Added Tax (VAT) management, audit and investigation management, withholding tax and other RTA audit management.

As one of the 27 Data Protection Compliance Organisations (DPCO) appointed by the National Information Technology Development Agency (NITDA) to assist with ensuring that Personal Data Controllers or Administrators are compliant with the Nigeria data protection regulation (NDPR), in September 2019 Taxaide said it started the conversation on a process for the automation of the filing of Data Protection Audit Reports.

“Without automation, it will be almost impossible for Nigeria’s 27 DPCOs to assist the estimated 5 million Data Controllers or Administrators, ensure compliance with the NDPR in 2020,” Olumide adding that “Nigeria’s ability to see that more organisations than not are compliant with the NDPR is an unspoken prerequisite for Nigeria to be adjudged a data protection compliant country.

According to the NDPR released on 25 January 2019

by NITDA, the failure to file could attract pecuniary sanctions of up to 2percent of the global turnover of the errant organisation or N10 million. Since the release of the NDPR, a significant number of Personal Data Controllers or Administrators have seen reasons to be compliant with the NDPR and avoid the wrath of NITDA.

Business Event

L-R: Chinedum Okereke, managing director, The La Casera Company (TLCC); Muhammadu Sanusi II, emir of Kano; Bayo Adeleke, director, The La Casera Company, and Bankole Animashaun, director, during the TLCC team courtesy visit to the Emir of Kano, at his palace in Kano.

L-R: Princess Nnaji, senior brand manager, home and hygiene, Unilever Nigeria Plc; Tosin Bamiro, managing director, Wembay Bakery and winner of Sunlight/WIMBIZ N1m ‘Empower a Woman’ Grant; Godfrey Adejumoh, corporate communications manager, Unilever Nigeria Plc; Sylvia Omenukwa, program officer, WIMBIZ, and Bilqees Odewale, brand manager, Sunlight, at the cheque presentation in Lagos.

INSURANCE

Spectranet partners Zenith Insurance, offers SpectraSure- a protection cover for MiFis, modems DANIEL OBI

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n line with its tag line ‘ D o Mo re’, awa rd winning 4G LTE internet service provider, Spectranet has launched another innovative offering “SpectraSure” in partnership with Zenith insurance.

SpectraSure, a unique insurance offering provides Protection Cover against theft and physical damage to customers purchasing new Spectranet devicesMiFis and HBDs(Home Broadband Devices). With SpectraSure protection plan, subscribers will get one-year free insurance packages on every purchase of Spectranet MiFi or HBD device enabling them to get a free replacement in case of theft or accidental

physical damage.

According to Chief Executive Officer Spectranet, Ajay Awasthi, “Based on the research conducted by us, a loss of device due to theft or physical damage is a major customer pain point. SpectraSure was conceived to give subscribers a reliable shield against damages, theft and ensure a worry-free internet browsing experience. We believe this innovative offering from Spectranet will help address this customer pain point in a significant manner and also help build a stronger bond with the Spectranet brand.”

Managing Director Zenith Insurance, Kehinde Borishade congratulated Spectranet team on launching this innovative and customer-friendly www.businessday.ng

offer and noted that the partnership will help to drive insurance uptake in the country by introducing more and more customers to the benefits insurance.

He said: “In arriving at this partnership with Spectranet 4G LTE, we considered the rising need for insurance packages and a supply chain vacuum that required attention.

As a point of reference, the parties involved (Zenith Insurance &Spectranet 4G LTE) will benefit immensely from this innovative move. It’s a mutually rewarding relationship and we are using this medium to restate our readiness to work with Spectranet 4G LTE to reach out to more prospects and sustain the partnership in the process.“

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L-R: Isreal Amuzie, co-founder, Isrina Schools; Okewole Lawal, PTA chairman, Isrina Schools; Nwamaka Onyemelukwe, public affairs, communications and sustainability manager, Coca-Cola Nigeria Limited; Alexander Akhigbe, chief environmental officer, African Clean Up Initiative, and Emeka Mbah, community affairs manager, Coca-Cola Nigeria Limited; at the Recycles Pay Launch, sponsored by The Coca-Cola Foundation at Ajegunle, Lagos.

L-R: Ayodeji Balogun, CEO, AFEX Commodities Exchange; Andrew S. Nevin, advisory partner and chief economist, PwC West Africa, and Olusegun Omosehin, MD, Old Mutual General Insurance Company, at the Ecobank Agribusiness Summit, in Lagos. @Businessdayng

Thursday 27 February 2020

BUSINESS DAY

Investor

17

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,222.89 1,204.42

367.35

129.45

510.79

242.21

1,912.48

1,189.50

1,042.87

357.65

126.71

476.30

239.12

1,885.76

1,201.64

1,028.66

-2.64

-2.12

-6.75

Week open (14– 2–20)

27,755.87

N14.456 trillion

2,352.39

1,108.92

734.99

Week close (21-2–20)

27,388.62

N14.268trillion

2,336.11

1,082.66

734.99

Percentage change (WoW) Percentage change (YTD)

-1.32 2.04

-0.30 10.39

-2.37 -6.00

0.00 0.00

-1.51 2.26

0.23

0.71

-19.66

-1.28

-1.40

-8.92

2.78

These stocks underperform NSE ASI Iheanyi Nwachukwu

ratings. The market which was hitherto celebrated as world’s best has eroded almost its entire gains. Amidst continued weak market sentiments, investors are advised to trade cautiously and take positions in fundamentally sound stocks.

While market breadth settles significantly lower, some analysts expect no deviation in future trading patterns.

Others are Fidson (-18.1percent), GSK (-26.2percent), GTBank (-9.4percent), Guinness

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(-16.1percent), Honeywell (-1percent), International Breweries (-25.8percent), Linkage Assurance (-15.1percent), Mansard (-9.1percent), May & Baker (-3.1percent), Mobil Oil (-9.9percent), MRS (-9.8percent), Nigerian Breweries (-20.3percent), NCR (-46percent), Neimeth (-27.4percent), NEM (-14percent), and Nestle (-23.1percent).

The bears have continued to dominate the domestic equities market, amidst continued risk-off sentiments and the absence of

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positive market catalysts.

For instance, Oando has lost 20.3percent of its value this year, PZ (-11.5percent), RedStar (-9.9percent), Royal Exchange (-23.3percent), Seplat (-8percent), Stanbic (-6.1percent), Sterling Bank (-24.6percent), Total (-3.5percent), Transcorp (-7.1percent), UACN (-2.3percent), UAC Property (-10percent), UBA (-4.2percent), Unilever ( - 3 1 . 8 p e rc e nt ) , Un i t y Ba n k (-9.4percent), University Press (-2.3percent), Wapic (-5.9percent) and Wema Bank (-20.3percent).

@Businessdayng

NSE Ind. Goods Index

NSE Pension Index

1.02

-1.36

11.72

-2.41

Investors exchanged N235.46bn worth of stocks in January

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igeria’s stock market has disappointed many investors lately but its dismal performance did not happen in isolation of some stocks.

No fewer than 50 stocks listed on the Nigerian Bourse tracked by INVESTOR have underperformed t h e m a r k e t ’s b e n c h m a r k performance index –the NSE All Share Index (ASI).

As at Tuesday February 25, the NSE ASI recorded year-todate (ytd) positive returns of +0.71percent, while its month-todate (MtD) negative return stood at -6.28percent.

S o m e o f t h e st o ck s t hat have underperformed the NSE All Share Index (ASI) this year and their record losses as shown in their price list are: ABC Transport (-22.2percent), Ac c e s s B a n k ( - 1 2 p e rc e n t ) , Ardova (-7.7p ercent), B O C Gas (-26.4percent), Cadbury (-22.3percent), Champion Breweries (-7.4percent), Chams (-18.2percent), CHI (-17.9percent), and Conoil (-2.7percent).

Also on the underperformers list are Courteville (-4.3percent), Custodian Investment (-9.2percent), Dangote Sugar (-11p ercent), Eterna (-38.9percent), ETI (-1.5percent), FBN Holdings (-13.8percent) and FCMB Group (-4.3percent).

Th e s e sto cks a nd ot hers either made analysts buy, sell, hold, reduce or even accumulate

NSE Lotus II

s at January 31, 2020, total transactions at the nation’s bourse increased by 84.03percent from N127.94 billion (about $417.41million) in December 2019 to N235.46 billion (about $767.23 million) in January 2020.

The performance of the review month when compared to the performance in the same period (January 2019) of the prior year revealed that total transactions increased by 92.87percent.

In January 2020, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by approximately 40percent.

A further analysis of the total transactions executed between the current and prior month (December 2019) revealed that total domestic transactions increased by 154.86percent from N64.80 billion in December to N165.14billion in January 2020.

Similarly, total foreign transactions increased by 11.35percent from N63.14 billion (about $206million) to N70.32 billion (about $229.42 million) between December and January 2020.

The value of domestic transactions executed by institutional investors outperformed retail investors by 2percent. A comparison of domestic transactions in the review and prior month (December 2019) revealed that retail transactions increased by 233.75percent from N24.47 billion in December 2019 to N81.67billion in January 2020.

Similarly, the institutional composition of the domestic market increased by 107.02percent, from N40.32 billion in December 2019 to N83.47 billion in January 2020.

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Thursday 27 February 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

‘We project 5.3% return on equities in 2020’ Bawo Oritsejafor is the Managing Director, United Capital Securities. With over 20years experience in securities trading and asset management, he speaks on the markets in this interview with Iheanyi Nwachukwu.

How has the equities market faired over the past year? n 2019, the performance of the Nigerian stock market, benchmarked against global peers, was underwhelming.

The NSE All share index, the proxy for market performance, fell by 14.6percent. Despite the relatively attractive valuation, Foreign Portfolio Investors (FPI) ignored the local stock market.

This was expected, as FPIs pumped money into OMO bills, given its lower risk and doubledigit yields. Also, the state of the Nigerian economy, evidenced by a modest growth in GDP, high unemployment and lower consumer spending and poor corporate earnings, weakened the investment case for equities.

Although performance was tepid, market activity was off the chart, due to notable corporate actions, which included acquisitions, divestments, heavyweight listings, IPO and several delisting. For context, 2019 witnessed the listing of MTN Nigeria Communications Plc and Airtel Africa Plc IPO, Nigeria’s biggest Telcos. Also, the merger of the year was completed, between Access bank Plc and Diamond bank Plc. What is the outlook for the equity market in 2020?

In 2020, we expect a mild recovery in the performance of the equities market, based on multiple positive factors. First, the low interest rate environment, driven by the CBN’s decision to boost money supply, will continue to bolster investment in the equity space, as market players aggressively seek for high-yielding instruments. Second, on a company-specific level, the low rate environment provides an opportunity for corporates to refinance expensive debt, or raise cheap cash to boost investments, massively improving profitability.

In addition, the increased wage bill as well as tighter border control is expected to support local demand and corporate turnover.

However, on the not so positive side, the segmented OMO market which favors FPIs, remains a challenge. In all, we project a return on equities at 5.3percent, driven by the low rates and increased system liquidity.

How has the OMO restrictions to FPI and banks impacted on the equity market?

The OMO restriction

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Bawo Oritsejafor

to FPIs and banks has been broadly positive on the market’s performance. Since

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With the large maturities expected from fixed income instruments in the coming months, as well as the unattractive rates for local players, we should see more inflow into the equity market. Although, we expect the excess funds to flow to stocks with strong fundamentals as well as some dividend paying names

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its announcement, we have observed a clear shift by local market players, to investing heavily in stocks with attractive pricing, large dividend yields and impressive earnings.

As a result, the NSE ASI has rebounded considerably since the CBN took the decision in October 2019. Taking a forward-looking perspective, about N10trillion worth of OMO Bills is anticipated to mature before the end of 2020, with close to N2.25trillion held by the excluded market participants.

Given this perspective, the appropriate time to lock into high quality stocks in now –that is what local asset managers currently do.

Is the new 27.50percent CRR implemented by the CBN going to affect the equity market?

Yes, it will. The 27.50percent Cash Reser ve Ratio (CRR) implementation is expected to impact huge the operating margins of the banks with a spillover effect on the stocks of these banks.

However, we envisage other factors will palliate this effect. To plug the liquidity shortfall and meet daily liquidity needs, we have seen some a mild upward repricing in Fixed Term Deposits, attracting local investors.

However, with the huge amount

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of funds maturing in the near term, the equities space is still expected to receive interests. Again, from a profitability point of view, we expect the banks to remain profitable, with ROE of about 20percent for the Tier-1 banks, the impact of regulation on the banks may be muted, thus providing a justification for investors to continue to bet on the banks in the equity market.

Looking at the coronavirus outbreak and its effect on the downtrends of oil prices, what will the future of the equity market look like?

No doubt, the coronavirus outbreak has fueled negative sentiments across global equity markets, with investors scrambling for safer instruments. Also, oil prices have declined, ravaged by the impact of the outbreak on economic and industrial activities in key markets. However, the OPEC announced its plan to cut production by a further 600,000b/d, causing oil prices to rally.

As a result, Nigeria’s forex earnings, external reserves and retained revenues, which impact the overall macroeconomy and determine the inflow of foreign capital, are somewhat ‘safe’ for now. In summary, the effect of the coronavirus on sentiments in the local equities market, though negative, is not expected to be significant. Also, the pull back in oil prices is positive for the earnings of oil and gas companies.

What are the factors affecting the equity market?

The factors affecting the equity market are both positive and negative. On the negative front, weakener consumer spending, muting Nigeria’s GDP growth at 2percent, inadequate infrastructure and an unfavorable business environment, are factors that have capped overall interests in equities.

In addition, attractive yields on fixed income securities have been the major contender for investments in Nigeria’s stocks.

On the positive front, earnings and dividends from listed companies, buoyant system liquidity, CBN’s drive to promote real sector lending and the low rate environment, are factors supporting the equities market.

On recapitalisation in the insurance sector, how will this impact investors views?

The recapitalisation of @Businessdayng

insurance companies is expected to have a positive impact, via increased corporate actions, on the local stock market. Already, some insurance players are looking to raise capital via right issues and talks of mergers and acquisitions are gaining ground.

For investors, the hope remains that the recapitalization will fuel an improvement in efficiency and value addition, as well as expected synergies in terms of business combinations. However, we believe insurance companies still has a lot to do in terms of improving product offerings, creativity and innovation and growing customer base.

How will the new VAT rate in creas e affe ct th e market outcome?

Generally, a VAT increase pressures transaction charges and other trade related fees. However, since the commencement of the new VAT rate, volumes traded have remained strong, showing that investors view the increased cost as negligible. As it appears, the profits made from trading and executing other market activities are sure to outweigh the effects of the VAT, making it a cost that investors can ignore.

With the low yield environment, do we expect influx of investors into the equity market?

As it is today, we are already seeing an influx of investors into the equity market. With the large maturities expected from fixed income instruments in the coming months, as well as the unattractive rates for local players, we should see more inflow into the equity market. Although, we expect the excess funds to flow to stocks with strong fundamentals as well as some dividend paying names.

What advise will you give to potential investors entering the equity space?

The first key point is education, which focuses on investors being enlightened about the stock market, risks involved, entering at the right price and potential returns. This also ties to enlisting the services of a sound and professional financial adviser, which could point them in the right direction.

Also, it is very key for investors to buy stocks with a long-term perspective, rather than taking s p e c u l at i ve p o s i t i o n s. A l s o, investments should favor of Stocks of companies with stable or growing earnings, a viable business model, as well as a profitable industry.

Thursday 27 February 2020

BUSINESS DAY

19

Investor Helping you to build wealth & make wise decisions

Still on Zainab Ahmed first visit to the NSE …says FG committed to deepening capital market Iheanyi Nwachukwu

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arlier this week (Monday February 24), the Nigerian Stock Exchange (NSE) hosted Zainab Shamsuna Ahmed, Minister of Finance, Budget and National Planning.

With a delegation comprising the Special Adviser to the President on Finance and Economy, Sarah Alade, and the Acting Director General, Securities and Exchange Commission (SEC), Mary Uduk, the Minister engaged in a series of interactive sessions with members of the Council and Executive Committee of the NSE, dealing member firms, members of the press and other capital market stakeholders.

Tagged, “A Day at the NSE”, the event marked the first visit of Zainab Ahmed to the Stock Exchange House.

The NSE’s history has not always been rosy. There have been “highs” during bull markets and “lows” when bearish investor sentiment prevailed.

After a record rally in January which placed the market as world’s best performing Exchange, it has failed to impress lately due to persisting negative sentiments and perceived unfavourable government policies affecting key sectors like the banks.

The NSE sees the portfolios under Zainab Ahmed as pivotal to the growth and development of the Nigerian economy, said Abimbola Ogunbanjo, president of the National Council, NSE. He noted that the NSE is committed to partnering with the Ministry to boost activities in the capital market, especially in view of the completion of NSE’s demutualisation exercise.

Federal Government’s economic aspirations for the 2020 fiscal year are anchored by the 2020 Budget.

The Executive’s renewed partnership with the National Assembly facilitated the passage of the 2020 Budget of N10.594 trillion on December 17, 2019 – marking the first time this administration has had a Budget in place before the start of a fiscal year.

On January 13, 2020, President Muhammadu Buhari assented to the Finance Act, 2019 – marking the first major reform of the nation’s tax laws in a decade.

Specifically, the Finance Act 2019, is focused on: promoting fiscal equity by mitigating instances of regressive taxation; reforming domestic tax laws to align with global best practices; tax incentives for investments in infrastructure and capital markets; supporting Micro, Small and Mediumsized businesses in line with the Ease of Doing Business Reforms; and raising revenues for Government.

Among other topical issues, the Minister highlighted a few of the targeted tax incentives in the Finance Act, 2019 for the Nigerian capital markets. This includes the tax incentives for SEC-regulated REIT as well as that relating to the counterparties in SEC-regulated Securities Lending Transactions (SLTs).

Another takeaway is that Federal Government is committed to moving away from what it described as blunt and expensive fiscal incentives – like Import Duty Waivers or lengthy Tax Holidays – that reward investors merely for their intention to invest.

Rather, government plans to design, and implement targeted and more efficient fiscal incentives that reward investors after they have kept their promises to invest, create jobs, deepen Nigeria’s capital markets, and abide by applicable rules and regulations.

“This is one in a series of the NSE’s renewed government relations, where key government stakeholders interact with the capital market community on important issues that affect both parties in terms of Nigeria’s economic management and policy reforms, ease of doing business environment, foreign and local investment attractiveness, capital market and ultimately economic growth and development”, said Oscar Onyema, CEO, Nigerian Stock Exchange.

“The volatility in the domestic capital markets since 2008 reflects the chequered record of Nigeria’s economic growth since that time”, Zainab Ahmed said.

F e d e r a l G o v e r n m e n t ’s commitment to achieving economic diversification has been at the heart of this Administration’s economic strategies under the Economic Recovery and Growth Plan (ERGP) which President Buhari launched in April 2017.

This medium-term development plan charted the trajectory for Nigeria’s economy to exit from recession and return to the path of sustainable, inclusive and diversified growth for the benefit of all Nigerians.

“This administration remains committed to maintaining this growth as we transit from the ERGP to longerterm successor socio-economic development plans. And we have seen the results. Growth in Real GDP has been sustained for 11 consecutive quarters, with 2.55percent recorded in the Fourth Quarter of 2019, up from 2.28percent in Q3: 2019.

“Overall, growth was 2.27percent in 2019, significantly higher than the 1.91percent recorded in 2018.

Inflation has been tamed from 18.72percent in January 2017, to 11.02percent in August 2019 and 12.13prcent in January 2020. This attenuation in the Consumer Price Index (CPI) was achieved through effective fiscal, monetary and trade policy coordination”, the Minister further stated.

“Given the need to accelerate reforms to attract the capital available for real estate development across the Continent, we have worked very closely with the SEC, industry groups and the Capital Markets Master Plan Implementation Council (CAMMI’), for several years, to reform our tax laws.

“As a result, the Finance Act, 2019 eliminates the multiple taxation of SEC-regulated REITs that are structured as Groups of www.businessday.ng

L-R: Oscar N. Onyema, chief executive officer, The Nigerian Stock Exchange (NSE); Mary Uduk, acting director general, Securities and Exchange Commission (SEC); Abimbola Ogunbanjo, the President of the National Council of the NSE; Zainab Shamsuna Ahmed, honourable minister of Finance, Budget and National Planning; and Sarah Alade, special adviser to the president on Finance and Economy during the visit of the Minister of Finance, Budget and National Planning to the Exchange in Lagos.

Companies, by taxing the rents and dividends distributed through Equity / Corporate REITs just twice – Firstly, at the bottom, when the rents are paid by tenants at the Project Special Purpose Vehicle (SPV) or Intermediate Holding Company level; and secondly, at the top, once the ultimate dividends are paid to the ultimate shareholders of the Parent or Holding Company,” she stated.

The Finance Act, 2019 eliminates the multiple corporate taxation under the “excess dividend tax” rule but it is only for approved REITs duly regulated by the SEC. As financial advisers and tax consultants unbundle the technical details of reforms of the Finance Act, 2019 for REITs, Federal Government expects to see: a significant increase in REITs listed on The NSE; higher flows of debt and equity capital being deployed in large-scale commercial, residential and other real estate projects nationwide; and the attendant multiplier effects from job creation, wealth aggregation, deepening capital markets and increased socio-economic development.

The Finance Act, 2019 also provides targeted tax incentives for SEC-regulated Securities Lending Transactions, which are often called “Stock Loans”.

A Stock Loan occurs when a longterm holder (for example, a Pension Fund or other Institutional Investor) of a share creates a secondary income stream for itself by lending its share, for a short period to brokers who are building portfolios of such shares for their clients.

As shares are fungible, the client can return an equivalent share of the same company, through its broker, to the share’s lender, at the end of the Stock Loan. To guarantee

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that the share will be returned at the end of the Stock Loan, Pension Funds and Long-term Institutional Investors require Brokers, and their Clients, to put up cash collateral that is equivalent to the value of the shares lent. At the end of the stock loan, the broker returns the lent share from its client to the Pension Fund or Longterm Institutional Investor (that is, the Lender) and this Lender returns the Cash Collateral to the Client, through its Broker.

From an economic point of view, the: Risk-adverse Pension Fund or Long-term Institutional Investor earns Securities Lending Fees from ‘renting out’ its Share for the duration of the Stock Loan. Risk-seeking Client is able to fulfill an Order Book of that particular type of Share to be exposed to the security’s underlying capital appreciation; and Broker earns its fees from facilitating the Stock Loan.

At the end of Stock Loan (which normally lasts less than a year), the: Pension Fund or Long-term Institutional Investor gets its Share back, together with the Securities Lending Fees that it has earned; Client obtains its Cash Collateral back, net of any ‘mark-to-market’ adjustments for rises or falls in the value of the Share that was lent; and Broker has earned its brokerage fees.

Through the secondary and tertiary trading that Stock Loans facilitate, stock exchanges across the world have been able to deepen their trading volumes, leverage passive holdings of Shares by Pension Funds or Long-term Institutional Investors, and catalyse their capital markets.

As our tax laws generally follow the legal form of a Stock Loan, there would normally be tax liabilities arising from each step in the transaction, even though this is economically, not an sale of the @Businessdayng

share, but rather a Stock Loan that is structured as an outright sale, with a legal obligation to Repurchase the Share, at the end of the transaction.

The Finance Act, 2019 simply allows the Federal Inland Revenue Service (FIRS) to ignore the tax liabilities arising from the intermediate steps of a Stock Loan, and only tax the counterparties’ income at the end of the Stock Loan, or the counterparties’ gains or losses in the event of the insolvency of any of the counterparties during the Stock Loan.

Now that our tax laws are consistent with the SEC’s regulations for Securities Lending Transactions, Federal Government expects to see increased growth in secondary and tertiary trading in shares on the NSE. NSE CEO told the delegation that over the past two months, the Nigerian Stock Exchange has been in the news “as we turn a page in the history of this 60-year old institution into a technologically and more commercially-driven multi-asset Exchange hub ready to support Africa’s largest economy into the era of the 4th industrial revolution.”

The NSE All Share Index had outperformed other Exchanges globally, with a return of 7.5percent year-to-date (ytd) in January 2020.

The Exchange still posted positive returns of 2.04percent ytd as at Friday 21, 2020.

“We recently launched the NSE Growth Board to encourage companies particularly SMEs with high growth potential to seize the opportunity of raising long term capital and promote liquidity in the trading of their shares.

“The Board presents an avenue for these companies in their growth phase to leverage the NSE’s platform and varied products and services to achieve their long-term business objectives.

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Thursday 27 February 2020

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The Big Idea: What so people really believe about climate change?

GRETCHEN GAVETT

work in sustainability, they put solar panels on the roof of at least one of their factories in Michigan and were using that to tout their green credentials. Consumers didn’t care much about that — they cared more about having a fuel-efficient car. What consumers want is for companies to empower us to live out our values.

That insight right there, I think, is at the heart of everything that all companies working in the broader sustainability space should be taking heed of and thinking about how to do. How can your products and services empower your customers to live out their environmental and climate values?

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nthony Leiserowitz directs the Yale Program on Climate Change Communication, studying how Americans respond to the issue of climate change. What do they understand (and misunderstand) about the causes, the consequences and the solutions? How do they perceive the risks? What kinds of policies do people support or oppose? And what kinds of behaviors (consumer, social and political) are people engaged in around these issues?

Leiserowitz’s research offers business leaders valuable insight into the attitudes and actions of their customers and employees.

Without this knowledge, decisions you make about advertising campaigns or getting internal buyin for sustainability projects can backfire. In this edited interview, Leiserowitz outlines what his data shows, how it’s changed over time and what it means for leaders today.

What do we know about climate change beliefs in the U.S.?

We’ve been doing nationally representative surveys of over 1,000 Americans twice a year for more than a decade. We’ve found that the United States is now at an alltime record high in terms of people accepting that climate change is real and that it’s caused by human beings. Worry levels are at an alltime high, and public support for many policies are at or near highs.

The longer-term trajectory is much more interesting. The prior high-water mark in public opinion was back in 2008, an upward trend that began in the early 2000s. This included the 2004 release of the global warming disaster movie “The Day After Tomorrow” (I did a national study on the impact and found that the film increased public climate change beliefs, worries and support for action among the millions of people who saw it); the 2007 report of the IPCC [Intergovernmental Panel on Climate Change], which was very strong in saying that humans are, indeed, responsible for climate change; “An Inconvenient Truth” in 2006; Al Gore and the IPCC winning the Nobel Prize in 2007; and Arnold Schwarzenegger passing AB 32, California’s global warming law, which has had enormous consequences for California and was a model for much of the rest of the world. And in 2008, the Republican nominee for U.S. president was Sen. John McCain, who, for years, had been one of the primary champions of climate action in Congress; in fact, climate action was a core part of his campaign.

Then 2008 happens. Barack Obama wins the election. And we see a dramatic drop in public opinion from 2008, bottoming out in 2010 — basically an 18-month period in which we saw a 14-percentage-point drop in the proportion of Americans who even believed global warming was happening (71% to 57%).

What happened?

We did a big analysis to understand why. We found that it wasn’t the economy or media coverage or cold-weather events like “Snowmageddon.” It seems to have been driven by one major factor: In political science terms, it’s what we call “political elite cues,” which is just a fancy way of saying that when leaders lead, followers follow. The key thing that happened in that time period was the rise of the Tea Party and the strong rightward lurch of the Republican Party. As a whole, they basically crawled out on the last twig on the longest branch away from climate science. It became a common Republican talking point that climate change is a hoax.

Over the intervening 10 years, we’ve slowly seen overall public opinion coming back until we are now at and slightly above (depending on which measure you’re looking at) where we were back then.

In one sense, we’re now back to where we were in 2008, but that obscures what’s going on below the surface. Using a political lens, you see that the primary shift has actually not happened among Republicans. The primary change has happened among Democrats and Independents, for whom concern about climate change has soared.

But among Republicans, it has pretty much stayed flat.

And how are Americans as consumers responding to climate change? What do companies need to know about their behavior?

Our work identifying global warming’s “six Americas” is a useful framework for a conversation about consumers. This framework is based on a segmentation analysis, analogous to a consumer market segmentation. These six audiences are not based on party, gender, race or income but, rather, on how people respond to the issue of climate change: how are they thinking about it, how are they feeling about it and what are they doing about it.

These six groups range in a spectrum. It starts with the “alarmed” at one end, people who are fully convinced it’s happening,

caused by humans and urgent, and who strongly want action but aren’t yet sure what exactly they can do.

“Dismissive,” on the other extreme, includes those who are firmly convinced that climate change isn’t real, and most of them think it’s a hoax. In the middle you have audiences we call the “concerned,” the “cautious,” the “disengaged” and the “doubtful.” Each audience comes at climate change from a very different starting point. As in any market segmentation, you need to tailor your communication and engagement efforts accordingly to your particular audience.

It’s useful to map this onto the “diffusion of innovation” curve.

You’ve got pioneers, early adopters, early majority, late majority and laggards. As a company, the way you communicate to the pioneers and early adopters on this issue is different from the way you communicate to the early majority.

Similar to consumer product marketing, different product attributes will likely be the selling points for those different groups.

Here’s an example I use in class: There’s a great ad for the Nissan Leaf from a few years ago. It showed a polar bear traveling south from the Arctic. It walks through city streets and eventually shows up in a residential suburban neighborhood. A guy comes out of his house carrying his briefcase on his way to work.

He’s about to get into his Nissan Leaf and he turns around and suddenly there’s this giant polar bear towering over him. They look at each other and then they hug.

Of course.

Right. Of course they do. Now, I’m someone who for years has been jumping up and down on my soapbox: “Stop with the polar bears.

It’s not just about polar bears. OK? This is a people problem.”

So my first reaction was that this was a terrible ad. And then I stopped for a moment, thought about it, and realized — wait a second, this is a brilliant ad. Because if you think about it in that diffusion of innovation curve framework, Nissan was trying to sell a car that costs more and does less. The original Nissan Leaf only went about 70 miles on a charge, and it cost more

than a comparable car. Who the hell is going to buy that? Why are they going to buy it? Nissan wasn’t going for the mass market; they were trying to get early adopters to buy one of these new innovative cars, because nobody had electric cars back then. So they used an ad targeting environmentalists and people who were already concerned about climate change (e.g., the “alarmed”).

Living one’s environmental values is a core part of their identity — they were the ones who were most likely to be early adopters and get the market for electric vehicles started. That was brilliant.

But that’s not how you sell electric cars to the masses.

How might you actually do that?

We’re in the process of figuring that out. But around 10 years ago, we looked at consumer perceptions of sustainable products and what was keeping people from buying them more often. There were perceptions that they didn’t perform as well as traditional products. And there was a perception that they cost more than regular traditional products.

These were some of the barriers that prevented people from purchasing more sustainable goods.

This is in part where Tesla has had an impact in much of the same way that Apple did. Apple totally reinvented the image of what a PC was. It’s not just this ugly metal box and processor that sits on your desk. It’s now a status symbol, an art form of design in and of itself.

And that revolutionized computers, because you couldn’t compete anymore with just another, cheaper version of a rectangular box.

In this same way, Tesla has made the category of electric cars and the electrified future beautiful, cool and higher-performance, albeit still at a higher price point.

It has become a status symbol in many parts of the country, even though sales are still small relative to all the cars that are sold. But we’re in the middle of an underlying shift in the consumer perception of sustainable products.

We also learned that consumers want products that empower them. For example, back when Ford was doing some pioneering

Do you see any crossover between that and the idea that companies should empower their employees to live out their climate change values?

I don’t study that directly. But what I have seen anecdotally is — absolutely. This is critical for companies that make commitments to become carbon neutral or to green their supply chains, et cetera. I mean, Walmart deciding that they were going to essentially make their entire value chain as sustainable as possible — that’s only going to happen if you have the buy-in of all your employees and contractors and vendors. You can force some of them to play along, but your employees are going to make a huge difference in terms of your ability to deliver on those goals, and my sense is that companies often don’t pay enough attention to that. Because this is about organizational change. And that’s not just simple information; it’s about how you empower your employees to help actually innovate, define those areas where you’re being needlessly wasteful, and, frankly, just to buy into the larger vision of the C-suite.

To get employees — and customers, for that matter — on board, you need to be an effective leader. What does this look like to you, be it in government or in a company as a steward and advocate of climate action?

Well, that’s a giant subject. But I’ll say a couple quick things. You’ve got to have a vision, especially if it’s about transformative change. And you also have to have a strategy to actually implement your vision.

This is really important for companies, because, by and large, Americans are pretty skeptical, if not downright distrustful, of the motivations of many companies when it comes to these issues.

There is a long, sordid history of “greenwashing.” So to quote an old friend of mine who is one of the leading communication professionals in Canada, James Hoggan: “There are three simple rules. One, do the right thing. Second, be seen doing the right thing. Third, don’t get the order of those two mixed up.” In other words, what you actually do is the most important form of communication. You’ve got to get that right before you start crowing to the world about how green and sustainable you are.

Thursday 27 February 2020

BUSINESS DAY

21

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Only 12% of commercial law firms in Nigeria make optimum use of legaltech – BusinessDay Survey reveals Ahead of our Legal Business Tech Forum, which holds on Wednesday March 4th, 2020 at the Four Points by Sheraton, Victoria Island, Lagos, we have published in this edition our LEGAL BUSINESS REPORT, which takes a critical look at the disruptions taking place in the legal industry and how the use of technology is shaping legal businesses and the legal market generally. In doing this, we have asked some pertinent questions and this report by our Researcher, LINDA ARIFAYAN attempts to shed some light on some of these issues.

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re Nigerian firms leveraging technology in the business and practice of law?

It is no longer news that technology is disrupting the way business is done in most industries. Developments and trends in technology such as big data and analytics, cloud computing, artificial intelligence and machine learning underpin the emergence of tools that significantly impact, and in many cases, radically change the traditional methods for doing business across virtually all business sectors. In the legal services industry, the last decade has witnessed an explosion in the creation and provision of applications and other technological tools designed specifically to support lawyers in the delivery of their services.

Together with other generic tools that are not specifically designed for the legal services industry, these tools provide opportunities for lawyers to enhance their capabilities in service delivery beyond the limits that were possible with “older” technologies.

As part of our initiative to explore key issues facing lawyers and the legal services industry, LBIU carried out a survey to determine the extent to which Nigerian law firms leverage new technology in the practice and business of law. In carrying out the survey, our overarching goal was to capture the state of the Nigerian legal practice market with respect to its use of technology. Our expectation is that the insights garnered will be useful to practitioners in the industry as they consider

their options for properly deploying technology in their practices.

This report, based on the survey, presents our findings on the use(s) of technology in the Nigerian legal services industry; and some of the key insights and deductions from our findings.

USE OF TECHNOLOGY IN LEGAL PRACTICE AND BUSINESS This section outlines the key ways in which respondents indicated that they use technology in their practices, juxtaposed, to the extent possible, to the use of the underlying technology in other, “more advanced” jurisdictions.

Research Research is a key part of all aspects of lawyers’ work.

Whatever its purpose, it is not deniable that technology has almost completely changed the way that research is done. Almost all of our respondents no long-

er rely on traditional print resources for research. They head instead to their firm’s internal resources or online; to free or subscription based resources.

Litigation research is one area that has been completely transformed by advancements in technology. Relying on advanced technologies such as machine learning and natural language processing, legal analytic software are able to clean up, structure and analyse raw data from millions of case records and documents to provide previously unobtainable insights. In other jurisdictions particularly in the United States where court documents are easy to access, the scope of legal analytic tools such as Lex Machina are quite wide enabling lawyers gain insights that enable them predict the behaviour of courts, judges, lawyers and parties. In a survey of AM 200 firms conducted on behalf

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SERAP condemns bill seeking to grant immunity to principal officers 25

particularly the world’s biggest law firms, with the resources available to large multinational corporations are relying on advances in data mining, fueled by increased computing power and advanced algorithms to conduct advanced searches that instantaneously spot relevant words and phrases and discern chains of events, relationships and patterns within a vast number of documents within databases that they have developed over the years, However, for this to work well, practically all of a firm’s data must be (a) available in machine readable, digital form, and (b) stored in databases that are accessible to all the lawyers that need to rely on them for research.

Digitisation and accessible databases Our survey findings indicate very wide divergence in law firm practices on digitisation and storage of digital data. The range of practices is illustrated by our findings on three firms discussed below.

The first, a leading firm with about 10 partners and 80 associates implemented a one-time massive digitisation initiative, scanning print documents into machine readable form and collating digital documents to create an office wide information system, which all staff could access for research purposes. The firm undertook perhaps the most extensive digitisation effort amongst the firms that we surveyed. However the benefits of digitisation were not fully realised, possible because the scanned documents were not ma-

chine readable, or the technology powering the search engine may not have been optimal. Staff are frequently unable to optimise their searches using keywords and phrases and frequently have to resort to reading individual documents to find relevant information, causing significant loss of time Another challenge highlighted by a partner in the firm was the inconsistency in updating digitised data since the initial digitisation exercise.

The second firm was similarly sized as the first and is similarly positioned in the Nigerian legal services market. But there had been no attempt to digitise the firm’s data or resources, or to store them in a manner that would be centrally available. Lawyers kept their own documents or work products, and all related data. This made research quite onerous as lawyers were essentially limited to only the data/ resources they had individually accumulated over time . If they needed to conduct research on areas that other colleagues had worked on, they would have to ask around, leading to a significant loss of time and efficiency.

The third firm, much smaller than the other two, had fully digistised its resources and continues to make updates. Digitised documents are uploaded unto Microsoft OneDrive.

This enabled lawyers to

Continues on page 22 LINDA ARIFAYAN, a researcher and analyst, is a member of the Legal Business team at BusinessDay.

LEGAL BUSINESS TEAM

I N S ID E The Nigerian Transmission Network System Conundrum and Viable Solutions

of LexisNexis, most of the firms indicated that they found Legal Analytic tools useful for winning cases, attracting new clients, pricing projects and cost savings Our research indicates that Law Pavilion Prime is the only Nigerian legal research tool that uses legal and predictive analysis. For most of our respondents, Law Pavilion is the go-to tool for research into Nigerian case law and 76% of our respondents indicated that it is the only local research software they used. It provides basic legal opinions, highlights conflicts in cases and outlines statements made by courts in the various levels of the judicial hierarchy at various times on the same legal principle. Most respondents were satisfied with its capabilities and agreed that it had resulted in significant time savings in conducting research.

However, 12% of our respondents, all from the biggest or top rated law firms in addition to Law Pavilion, were subscribed to more than one computer-assisted legal research (CALR) service such as LexisNexis and Westlaw in order to enable them to adequately advise foreign clients, keep abreast of developments in other jurisdictions and also access foreign judicial authorities for the purpose of using the cases as persuasive authority in Nigerian courts.

Beyond research requiring external resources, law firms are themselves a huge repository of legal data and related resources that have been accumulated over time and therefore often rely on their own internal resource . Many law firms,

Review of the guidelines issued by the FCCPC 23

Is a lien placed by FIRS on a taxpayer’s bank account a valid encumbrance 26

Tech Hacks for Lawyers

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Nigeria securities lending set for boost in opportunity for lawyers 26

THEODORA KIO-LAWSON

CHUBA AGBU

ONYINYE UKEGBU

Head, Legal Business

Legal Business Associate

Legal Business Associate

www.legal.businessday.ng legalbusiness@businessday.ng

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Thursday 27 February 2020

BUSINESS DAY

Only 12% of commercial law firms in Nigeria make optimum use of legaltech Continued from page 21

undertake advanced searches because of the underlying technology. Some lawyers in the firm also used plug-ins that enabled them to optimise searches, generating quicker and more accurate search results.

The clear take away is that Nigerian law firms are only just beginning to understand the potential for exploiting their data and so there are still significant efficiency gaps in their efforts so far.

Contract drafting Technology in contract drafting used to be about leveraging digital templates (compact discs or web resources).- These were merely sample contracts that lawyers could use as a guide in contract drafting. With developments in technology, web-based contract drafting tools began to include add-on features that aided drafting and generally made the process more efficient. Examples are drafting assistants that identify errors to ensure a better draft. These tools are also integrated with other tools such as reference books, files or other information and questionnaires that enable users to build their own contracts, thereby reducing steps in the drafting process and leading to significant efficiency savings.

Surprising, whilst all our respondents relied on internet based tools in one form or another for drafting contracts, none of them, not even the 30% using paid subscription drafting software, indicated that they utilised the automation capabilities of the tools that they subscribed to. It is also interesting to note that a significant proportion of the respondents that used paid subscription software also used free templates found from simple google searches. and did not seem to find a substantial difference in the benefits that they derived from these tools.

One noteworthy point is that in conversations regarding automation in contract drafting, several respondents referred to local Nigerian “lawtech” firms that provided automated contract services online to clients at significantly lower rates than the traditional Nigerian law firm would typically charge.

Some also commented that automated contracts were increasingly being used by in-house counsel, eliminating the need in many instances for external counsel. None of the interviewees indicated that their firms had began to offer their clients the option of automated contracts as is happening in other jurisdictions.

Legal Practice management Electronic legal practice management tools have existed for a long time. Initially, these were primarily stand-alone billing and time tracking tools. Over time and with advances in technology, dedicated legal practice management software have emerged. These now offer firms integrated and intuitive solutions that capture the major aspects of a law-firm’s day to day processes. Common features of many legal practice management software include case management, contact and client relationship management, document management, document assembly, calendaring, time tracking, billing, accounting and payroll solutions. The advantage of integrating these features is that is enables firms to better use, man-

age, consolidate, share and protect information while also tracking their business processes.

About 50% of the firms that we spoke to have attempted to implement integrated electronic practice management tools. More than 40% of our total sample size used or had attempted to use indigenous software which provided multiple functions and aided integration. The local software providers also offered customisation to suit the needs of various firms. However, a significant number of respondents in this category stated that their firms had encountered problems which eventually led them to abandon the software. The problems ranged from software glitches -which led to inaccurate results, to difficulty in using the software.

Many respondents did not find the local offerings to be user friendly, and had difficulties integrating the applications that they were already using to these software tools. Some respondents also noted the challenges involved in ensuring continuous digitisation and the effect that this had on the accuracy of the results from the software tools.

A small percentage (about 12%) of the firms that we surveyed adopted a different route to integrated practice management.

These firms use generic software that are not specifically dedicated to law firm management, such as Microsoft Office 365 . Their position is that it is an easier and more cost-efficient way to implement practice management as they are able to integrate seamlessly with other Microsoft applications that they already use. They were able to save documents directly to cloud-based storage and to have access from multiple locations, whilst being assured of adequate protection. They also spoke of the various collaborative options that Microsoft Office provided and stated that to use other software would be a duplication of resources. In their view, most of the features contained in the locally available software were already available for “free” in the Microsoft applications.

Legal Transaction Management Legal transactions can be complex and often evolve in a manner that can seem chaotic. In many transactions, there are countless paper documents, revisions, and signatures to review, negotiate, and track. These often include many mundane administrative tasks as well as back and forth between all the parties involved.

These days, legal transaction management software that automate the most tedious parts www.businessday.ng

of managing deals are available.

They provide transaction-specific analytics and reports, enable legal teams and clients to collaborate on documents and automate -signature collection and archive transaction-related information to create digital “closing books” in a secure and trusted environment.

None of our respondents used software that enabled them automate workflows involved in legal transactions. However, a small number used software such as Microsoft’s SharePoint that enabled collaboration among their legal team and resulted in significant time savings. Teams were able to create sites to share documents and information with colleagues, which enabled collaborative real time editing and allowed everyone on the team to stay up to date and coordinate their efforts on a project regardless of location.

2. Key Insights Our survey clearly indicates that there are wide variations in the manner in which law firms and practitioners leverage technology in their practice of law. Whilst the survey does not present an exhaustive picture of the ways in which practitioners use technology for law practice, we are able to draw some key insights from their responses.

Much of emerging technology is already embedded in everyday tools that lawyers use Providers of technology solutions - both generic and dedicated legal tech tools are constantly using the latest technological innovations to enhance and refine their products.

For example, Microsoft 365’s suite of offerings are infused with AI capabilities that users can leverage. Developments in emerging technology have led to improvements in the offerings of Nigerian legal tech provider, LawPavilion.

It started as an ordinary electronic law reporting platform, progressed to Law Pavilion Prime which uses legal analytics to provide more solutions to lawyers, and now to ” TIMI”, an artificial intelligence powered legal assistant. Law Pavilion states that TIMI is, for now a chatbot, but the plan is to leverage evolving AI technology to develop it into an even more sophisticated tool.

However, our survey indicates that lawyers often do not avert their minds to or properly understand the technology underpinning these developments, or the linkages between the evolution of cloud computing, big data, machine learning and AI, and how these lead to tools that are now available to them, for improved performance and service delivery. In response to a question

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on the importance of technology in the legal industry, 96% of our respondents stated that it was not only important, but was also in helping firms exploit opportunities and differentiate their firms.

However, more than half of the same respondents showed overall low levels of awareness about emerging legal technologies in the area of machine learning, artificial intelligence and natural language programming and the impact that these have on legal technology tools and software that they currently use. At the other end of the scale, were lawyers who showed in-depth knowledge of emerging technology and understood how it interacted with various software to improve their work.

Our survey shows that these latter category of lawyers made better “legaltech” purchasing decisions because they not only understood the capabilities of various solutions that were available, they also had a better understanding of the workflows and processes of a law firm and how these may be impacted by technology. They were also able to optimise the use of free alternatives whenever available rather than pay for software that provided essentially the same results.

In firms where technology acquisition decisions were made by such lawyers rather than by less technology savvy lawyers or even I.T. departments, there was less duplication of software resources or purchase of resources that were not fit for the purpose for which they had been purchased.

Law firms currently use technology primarily to enhance internal processes Our survey indicates that our respondents leverage technology primarily for the purpose of saving time and enhancing efficiency.

Whilst this is generally one of the key objectives for investing in technology in any industry, tech use has grown beyond this level.

Most industries, including the legal services industry in other jurisdictions, now leverage technology for service delivery.

Driven by client expectations, the traditional model of legal service delivery is changing. Many of the world’s largest firms now offer multiple models of legal services delivery. Emerging models include applications and online platforms - which are capable of interacting with clients and solving their legal challenges. For example, Magic Circle law firm, Allen & Overy has developed an Advanced Delivery & Solutions toolkit. The solutions contained therein, range from client-centric tools designed to work collaboratively with client systems and personnel - such as such as online workflow platforms with autodrafting capabilities which help clients redraft specified contracts - to on-line subscription services designed to deliver the firm’s expertise in the form of reports directly to clients.

Our survey indicates that the Nigerian legal services industry does not face the same pressures from clients to use technology in service delivery.. However, there are several factors that suggest that it may be time for Nigerian law firms to begin to consider the use of non- traditional service delivery models. One of the key factors is the growing impact of lawtech businesses that provide legal services directly to clients. These use @Businessdayng

automated forms and contracts as well as intelligent interfaces - at much cheaper rates than traditional firms can. Although this industry is still at its infancy, these firms are already causing a disruption in the legal services industry.

They provide alternative solutions to clients and are therefore in competition with traditional law firms.

Another factor to be considered, is competition from in-house counsel. Apart from the fact that more work is increasingly done by in-house counsel in order to save costs, advancements in technology mean that in-house counsel, particularly for multi-national companies that have traditionally been the largest source of income for corporate practitioners, now have access to tools which enable them to do work which would have otherwise been outsourced to law firms. And the in-house lawyers can now deliver the work faster, often better and in a more cost-efficient manner. To increase the chances of winning work, law firms need to be able to leverage technology to deliver work to in-house counsel in more innovative ways.

Conclusion Most of our respondents use technology for the purpose of enhancing efficiency and saving time, particularly in the areas of research, legal practice management and contract drafting. Some firms have invested in dedicated legal tech tools for these purposes, while a few tech savvy firms and professionals are able to leverage on generic, free resources to achieve the same and sometimes better outcomes. Even in the areas where our respondents use technology, they are yet to optimise legal technology resources. For instance, our respondents did not indicate that they used the automation function in the drafting resources that they had. There are also many other areas where legal technology tools would result in significant time savings, such as contract review and due diligence, that are yet to be explored in the Nigerian legal services industry.

Considering this state of affairs, it is therefore not surprising that most law firms are yet to evolve to the stage of using emerging technology to deliver services to their clients, particularly as there appears to be no direct push from their clients to do so.

However, given developments in lawtech, the rising use of emerging technology tools by in-house counsel and advanced use of technology tools by global firms, practitioners in the Nigerian legal services industry must raise their technology game to the next level.

To do so, firms need to train their lawyers, devote more attention to technology education and training in their firms and seek innovative ways to combine their expertise with technology in order to deliver bespoke solutions to their clients. Designing and implementing a cohesive and efficient approach to utilising technology in legal practice can be expensive and time consuming, but the industry in Nigeria can borrow a leaf from what has been done in other jurisdictions.

The winning firm is one that hires multi-disciplinary talent, collaborates with other law firms, legal tech companies and I.T firms, and remains open to general innovation and development, to design solutions that deliver affordable, technology based solutions to clients.

Thursday 27 February 2020

POWERTALK

BUSINESS DAY

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with AYODELE ONI

The Nigerian Transmission Network System Conundrum and Viable Solutions

T

he level of the energy demand and utilization in a country’s economy, is largely indicative of its degree of economic development. It also gives a sense of its economic growth trajectory. To accelerate economic growth and development in the face of very poor grid power supply, the Federal Government of Nigeria (“FGN”) concluded it was pertinent to substantially privatize the Nigerian electricity supply industry.

Thus, the partial (but substantial) privatization of the Nigerian electric power sector forged ahead with the signing of the Share Sale and Purchase Agreements (“SSPA”) and the Concession Agreements (“CA”).

Apart from the SSPA and the CA, other relevant transaction and industry documentation, for 15 out of the 18 companies hived off the Power Holding Company of Nigeria (“PHCN”) were signed at the Presidential Villa, Federal Capital Territory, Abuja, Nigeria, on Thursday 21st of February, 2013. By November 2013, the companies were handed over to the new owners/ core investors and concessionaires.

The ownership of the transmission company, that is, the Transmission Company of Nigeria (“TCN”) was not handed over to the private sector. Rather, a Canadian Firm, Manitoba Hydro International (“Manitoba Hydro”), entered into a three (3) year management contract with the FGN to overhaul the transmission network. The management contractor, Manitoba Hy-

dro, was expected to work towards the overall improvement of the Nigerian transmission infrastructure as much as possible.

Post-privatization, some of the expected roles of the FGN included providing an enabling environment, supporting the Manitoba Hydro in improving the national grid and generally working with multilateral lending agencies to raise funds for the improvement of the infrastructural backbone for the power sector in Nigeria.

The teeming populace also expected that post Manitoba Hydro’s Management Contract, the government would, like the private sector, be more responsive when there is any damage or problem along the transmission network. There were, clearly, improved efforts and an example, in case, was the scenario where four (4) transmission towers were destroyed on April 18, 2014

as a result of heavy rain at Corner Mariga after Tegina, Niger State, Nigeria; causing power outage in the area.

The FGN owned TCN sprang into action (on the same day) and began to construct a transmission bye-pass to temporarily replace the destroyed 132kV transmission line from Tegina to Kontangora, Niger State. The TCN engineers isolated the defective axis of the 132kV transmission line from Tegina to Kotangora and re-energized the line from Shiroro to Tegina.

The TCN Manitoba Management Contract: That said, the management contract signed by Manitoba Hydro was performance based with emphasis on the service outcomes expected from Manitoba Hydro as management contractor. The expectations included the introduction of international best practices, improvement of the effi-

ciency and reliability of the transmission network with the incessant grid failures.

It was also expected that the experience of the management contractor in the development of the electric power sector in Canada will engender improved network capacity and service delivery by the TCN. Attached to the expectations, were incentives and punitive measures.

The management contract was designed for a five (5) year period divided into two (2) terms of an initial three (3) year period and another two (2) year period if extended. Although, the management contract was signed in the year 2012, it appears the necessary authorities (for proper implementation) was not received until March 2013. Upon receiving same, Manitoba Hydro, assumed management and operational control for TCN’s operations, which included system and market operations. The management contract was, however, terminated in the year 2016, having operated in less than ideal circumstances.

Specifically, there were consistent reports of hostility to the management contractor from staff and management of the TCN; thereby making it difficult for set targets to be met, in spite of the best efforts of Manitoba Hydro.

The problems with the transmission network have continued with the system remaining old, unreliable and unstable. There have, thus, been incessant partial and full system collapses due to inadequate redundancy within the transmission network. This insufficiency of redundancy of the transmission network

has led to instability along the transmission network and ensured that industrialization is unachievable as industrialization requires substantial power supply, especially through the grid and not off-grid systems.

The Way Forward: To be honest, the solutions are not anywhere near rocket science and start with the much-needed network expansion to accommodate increasing electric power generation in the country. It had always been germane to ring-fence and unbundle the key functions of the TCN; i.e., market operations, system operations and transmission service provision with ultimately having only the transmission service provision remaining with the TCN. Consequent upon the foregoing, it would be pertinent to create an Independent System Operator (“ISO”), such that those market and operations functions are hived off the TCN and vested in a separate company- the ISO, which will be an independent company licensed to perform those functions.

The foregoing, should drive more efficiency and reliability.

To achieve the requisite expansion, substantial funding and technical cum managerial expertise are of utmost importance.

The foregoing will assist in achieving the capacity recovery and expansion targets to accommodate increasing generation capacity; especially with the volume of redundant capacity because of gas and transmission challenges, which can then be brought on-stream.

The implementation of Public Private Partnership in

form of a Build Operate Own and Transfer deal which had been used in parts of South America and Asia, may also be considered in this regard as a full privatization of the transmission network is unlikely to be feasible and or viable.

pursuant to the provisions of Section 2(3) (d) of the Act, which extended the application of the Act to “… the acquisition of shares or other assets outside Nigeria resulting in the change of control of a business, part of a business or any asset of a business, in Nigeria”.

In essence, any foreign-toforeign merger that results in a change of control of a Nigerian business will come under the FCCPC’s regulatory purview.

Prior to the enactment of the Act, this was not the case.

Under the Act, a merger will have occurred where one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking. It may be achieved through (i) the purchase or lease of shares, an interest

or assets of an undertaking; (ii) the amalgamation or other combination with an undertaking; and (iii) a joint venture.

Key highlights of the Guidelines are as follows: 1. The application fee is based on the turnover of the Nigerian business, as set out below: 2. Parties are not required to pay a processing fee in addition to the application fee, as is the case for local mergers. For local mergers, processing fees are usually a percentage of the value of the transaction.

Conclusion: Research has shown that there is a strong correlation between economic growth and availability of affordable electric power. With Nigeria recently regarded as having the highest number of extremely poor people in the world together with the very poor availability of electric power, things may not improve substantially unless urgent steps are taken.

Also, except the steps being taken by the current administration continue and are expanded to address issues related to transmission, no substantial improvement will be experienced, as minigrid and off-grid solutions, alone, are not a sustainable solution to the challenges currently being faced in the electric power sector. The importance of improved power supply is, in the fact, that power availability is inextricably linked to the overall level of poverty in every country. For industrialization and other productive activities to thrive, there is need to improve the transmission grid.

Dr. Ayodele Oni (ayodele.oni@bloomfield-law. com), a Legal Practitioner, specializes in international energy (oil, gas & power) investment law and holds an MBA in power & electricity.

LAWREVIEW

Review of the guidelines issued by the FCCPC Act applies to all undertakings and all commercial activities within, or having effect within, Nigeria. It also applies to conduct outside Nigeria by any person in relation to the acquisition of shares or other assets outside Nigeria resulting in the change of control of a business, part of a business or any asset of a business, in Nigeria. Therefore, any merger or acquisition that results in a change of control of a business in Nigeria will come under the FCCPC’s regulatory purview.

We examine the key provisions of the Guidelines below.

TIWALOLA OSAZUWA AND DAMILOLA OGEDENGBE

S

ince its establishment in pursuance of the provisions of the Federal Competition and Consumer Protection Act 2018 (the “Act”), the Federal Competition and Consumer Protection Commission (“FCCPC”) has taken steps to implement the provisions of the Act. For this purpose, the FCCPC has issued two guidelines (both in 2019): 1. Guidelines on Simplified Process for Foreignto-Foreign Mergers, which provides for the process for obtaining approval for foreign-to-foreign mergers; and 2. Notice of Threshold for Merger Notification, which provides for the threshold for merger notification.

The Act, among other

things, repealed sections 118-128 (excluding section 121(1)(d)) of the ISA, thereby vesting the power to approve

mergers with the FCCPC in place of the Securities and Exchange Commission (“SEC”). The provisions of the

‘Guidelines on Simplified Process for Foreign–to-Foreign Mergers with Nigerian Component’ The FCCPC issued the Guidelines on 13 November 2019.

The Guidelines were issued

• To be continued next Week

Tiwalola Osazuwa and Damilola Ogedengbe, Senior Associates, Corporate & Commercial and M&A Practice Group at AELEX mergers-acquisitions@aelex. com

24

Thursday 27 February 2020

BUSINESS DAY

LEGALTECHHUB

Tech Hacks for Lawyers

B

eing a tech-savvy lawyer goes beyond being able to operate a computer or any other gadget. Since technology is a tool to make our lives easier, a tech-savvy lawyer must be able to combine available tech tools for maximum productivity. Contrary to popular reasoning, you don’t need expensive software to be tech-savvy; all you need is the ability to use what you have to achieve your goals.

We can make this article all about advanced tools such as transactional analytic tools or advanced due diligence tools that are barely customizable, expensive and may not deliver as much as you would want them to. But, how about using readily available tools to create your own solutions? For example, combining Microsoft Excel and Microsoft Teams to conduct due diligence easily?

We discuss this and other tips below.

Productivity Daily tasks of a lawyer may be boring and routine-like but it gets more boring and frustrating where a counter party edits a voluminous document without tracking their changes or leaving comments. Gosh!

How do you expect me to read through hundreds of pages just to hand-pick recent changes? But this is where the sad news ends.

Microsoft Word has a feature called “Compare”. Just like the name, compare allows you compare different versions of the same document without having to manually read through them. This feature, which comes bundled with Microsoft Word, shows you the changes in the document within seconds. This saves a lot of time spent in reviewing documents. Compare can be located under the Review tab of the Microsoft Word Application.

Another useful feature of Microsoft Word is “Read-Aloud”.

Your colleague may not be around to help you look through a document but Read-Aloud can help you know whether you make sense. Once you click on the Read-Aloud icon, Microsoft Word reads the document to you.

The “Idea” feature in Word 2018 is yet another feature that can help with a lawyer’s productivity. It not only corrects grammatical errors but is also able to ensure that your content is gender and politically inclusive. It

can read a document and suggest more suitable ways of drafting to eliminate the use of passive words or sentences.

Yet another tool that helps me eliminate spelling errors is Grammarly. It is built with artificial intelligence technology, and just like Idea in Word, Grammarly is able to read and understand the context of a write-up and help to correct the use of sentences as well as words.

Collaboration Most people are familiar with collaboration software like Slack, however very few people are aware of a great tool called Microsoft Teams which comes bundled with Microsoft Office365.

Microsoft Teams is the new Microsoft tool that helps to foster collaboration and manage projects amongst team members.

Various members of a team are able to work easily on the same document, invite guest users from outside their network and also track workflows and projects all within the same application. It also integrates well with all other Microsoft Tools. The features of Teams make it an ideal tool for legal engagements such as Due Diligence. Lawyers can upload checklists created in Excel directly to the platform and share same with other team members. Also, input and review of due diligence reports can be carried out almost simultaneously by various team members. Teams also come with a tele-video conferencing tool.

Agreement Precedents, Drafting and Review It can get really stressful when you have to draft boiler plate terms in an agreement, or where your client has requested an agreement in an area you are not so familiar with. Precedent books are good to have in this regard, but they are

not as productive as electronic tools like Onecle or Business in a Box (BIB). With Onecle, you can easily download an editable template and redraft it to suit your purpose within a very short time.

Tools like Law Repository deploy artificial intelligence algorithms to help you generate agreements within minutes. You can use the tool to generate a standard-type agreement and subsequently amend it to suit your purpose.

On a slightly different note, Thought River is another great tool that can be deployed by transactional lawyers to speed up agreement reviews. The software is able to analyze contract documents, answer pre-loaded questions, give you a summary of the obligations of a Party and help you insert standard type comments. This software would do the work of a first level associate and all you have to do is revise the suggestions and comments and send back to the counterparty within the shortest time possible. Donna is another great tool that solicitors can easily integrate as an add-in to their Microsoft Word application to assist them with Agreement drafting and review within the shortest possible time. The best thing about these tools is that they can be integrated with your Microsoft Word so you can use them within your favourite text editor.

Search Engine Optimisation (SEO) Increasingly, lawyers rely on search engines in the course of their work. Advanced searches help to ensure efficient, time –saving searches. Simple tricks such as adding quotation marks to a word or phrase, ensures that only materials with those words are brought up. Also, where you need to exclude a word, place a

minus sign (-) in front of the word that you don’t want. Conversely, you may place a plus sign (+) in front of words that you need the search engine to focus on.

Lawyers also need their web content to be easily located by their target audience. Search engines use artificial intelligence algorithms to match keywords with a user’s search word for the best results. It therefore means that your content must contain as many keywords as necessary to be able to match your content with a user’s search. Lawyers can leverage on search engine optimization (SEO) tools like “WebTextTool” (renamed to Textmetrics) to help them analyse written content and suggest words that will give their content priority on Google search as well as other search engines. Textmetrics can also be integrated with Microsoft Word as an add-in to make suggestions on making your content search engine friendly and finding the best keywords for your posts.

Creativity It is not too surprising that Lawyers avoid design and creativity in their presentations. But what is the essence of having a presentation that is not presentable?

Many lawyers bore their audiences with so much text, that it becomes difficult to remember anything on their slides. Thankfully, a new feature that comes packaged with PowerPoint allows you generate creative ideas for your slides without having to design them by yourself. When you create the headings and body of your presentation using the template textbox in PowerPoint, the “Idea” feature, using artificial intelligence has the ability to suggest artwork to complement the information on the slide. It also has the ability to recommend

alternatives to images you may have chosen, and arrange both image and text in a more presentable form. Using this tool, you are able to spend less time designing your presentation and focus more on delivering quality content.

A picture they say is worth a thousand words. This is why lawyers must evolve from the traditional way of communicating through writing to communicating through designs. To give you a head start at designing something really cool, you may use online software like Canva.

This software is built to help you get started with your designs in minutes. It has inbuilt templates in different sizes that will readily fit into any social media post area. Using the simple drag and drop function, you can select a background, add images and choose a text font that suites your design.

You can even animate your design with ease and without prior knowledge of animation.

Canva is available on both web and mobile devices and will save you a lot of the money that would otherwise be paid to a graphics designer.. Get up to speed with putting out that great law idea of yours today in a more memorable way.

Utility Sometimes, work can be so much that you start to feel like hiring a personal assistant. But when you consider your monthly pay, you might have a second thought. If you can’t afford to hire a personal assistant, it might be helpful to have an electronic assistant at least. Personally, I use tools like AnyDo, Trello or Asana to organize my day to day tasks, keep to-do lists, and also stay tuned to my schedule.

Alternatively, you may want to try Google Assistant on the android phone or Siri on an iPhone.

They are great assistants and can help you set tasks, reminders and alarms etc. With voice command activated, you can request phone calls, send text messages, translate languages, get directions, manage shopping lists, get updates on financial markets or any topic of interest. They can also take as well as read notes, texts or even emails to you. You can organize more with assistants and the best thing about them is that they come bundled with your phone’s or computer’s operating system (Siri), so you don’t have to pay extra money.

Thursday 27 February 2020

BUSINESS DAY

RIGHTSWATCH

25

THE BAR REFORMER

SERAP condemns bill seeking to grant immunity to principal officers

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ocio-Economic Rights and Accountability Project (SERAP) has condemned “the passing of a bill seeking to give leaders of federal and state legislatures immunity from prosecution for corruption.”

Responding to the development, SERAP deputy director Kolawole Oluwadare said: “Providing immunity for presiding officers against crimes of corruption is tantamount to ripping up the constitution. It’s a blatant assault on the rule of law and breach of public trust.”

SERAP said: “The leadership of the House of Representatives must immediately withdraw this obnoxious bill.

We will vigorously challenge this impunity.”

The statement read in part: “It’s a huge setback for the rule of law that the same privileged and powerful leaders of parliament that regularly make laws that consign ordinary, powerless Nigerians to prison for even trivial offences yet again want to establish elite immunity to protect them-

selves from any consequences for serious crimes of corruption and money laundering.”

“Whereas countries like Guatemala has voted unanimously to strip their president of immunity from prosecution for corruption our own lawmakers are moving in the opposite direction.”

“The message seems to be that in Nigeria, powerful and influential actors must not be and are not subject to the rule of law. It’s simply not proper for lawmakers to be the chief advocates of immunity for corruption.”

“It’s a form of political corruption for the parliamentarians to abuse their legislative powers, intended for use

in the public interest but instead for personal advantage. This is an unacceptable proposition as it gives the impression that both the principal officers of the National Assembly are above the law.”

“If the House of Representatives should have their way, this will rob Nigerians of their rights to accountable government.”

“Public officials who are genuinely committed to the well-being of the state and its people, and to the estab­lishment of an effective and functioning system of administration of jus­tice, should have absolutely nothing to fear.”

PHOTOFILE

Perchstone & Graeys teams meets with Youth and Sports Minister Perchstone & Graeys team at a strategic meeting with the Minister of Sports and Youth employmen, Sunday Dare, to discuss the future of sports post AfCFTA as well as other reform initiatives being embarked upon by the Hon. Minister.

OLUMIDE AKPATA

Rethinking our Law Firm Structures

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For a jurisdiction that churns out over 5,000 lawyers per annum, we really must do more to encourage the emergence of partnerships and large law firms that would improve our absorptive capacity, which is currently quite abysmal.

The diverse expertise and synergy that such structures offer will not only meet the needs of a broader range of clientele, but would be a step towards addressing the perennial issue of poor remuneration of lawyers

www.businessday.ng

https://www.facebook.com/businessdayng

‘‘

L-R, Kemi Areola, Special Assistant to the Minister), Tolu Aderemi, Partner, Perchstone & Graeys, the Minister, Sunday Dare and a Senior Associate of Perchstone & Graeys, Abuja office, Hokaka Bassey.

@Businessdayng

Thursday 27 February 2020

BUSINESS DAY

GREYMATTER

BD

26

LegalBusiness

Is a lien placed by FIRS on a taxpayer’s bank account a valid encumbrance against garnishee order?

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he propriety of an administrative notice issued by the Federal Inland Revenue Service (“FIRS”), directing a bank to freeze an account of a customer allegedly in default of a tax obligation, seems to have been judicially settled (See our Tax Alert 09). Whether or not such an administrative notice constitutes a lien, which can operate to impede the attachment of an ‘encumbered’ bank account in a garnishee proceeding, however remains an open issue which we seek to analyze and answer in this article.

T h e Na t i o n a l I n d u s t r i a l Court of Nigeria (“NICN” or “the Court”), in Olusegun Omotosho vs. Japaul Oil & Maritime Services Plc (Suit No: NICN/ LA/62M/2019) (“Omotosho”), recently held that an administrative notice issued by FIRS to a bank, ostensibly freezing the account of a party in a garnishee proceeding alleged to be in default of a tax obligation, cannot operate as aid or be elevated to the status of an order of court, and cannot therefore operate to frustrate an order of court or impede its efficacy.

In this article, we examine the issues raised in the Omotosho case, and the ruling of the NICN vis-à-vis relevant statutory provisions and judicial precedents.

The Omotosho case In the Omotosho matter, the judgment creditor brought an appli-

cation to attach funds in certain bank accounts maintained by the judgement debtor, in satisfaction of a judgment debt. The court issued a garnishee order nisi and ordered each relevant bank to file an affidavit to show cause, why the order nisi should not be made absolute. One of the banks disclosed in its affidavit that, although it held funds in the judgment debtor’s account, that the funds were not available for the purpose of the garnishee proceedings; due to lien placed on the account by the FIRS. On his part, the judgement creditor argued that the FIRS’ directive, being an administrative notice, could not impede or frustrate the order nisi being made absolute.

The judgment creditor further contended that the administrative notice of the FIRS could not oust the jurisdiction of the court to decide the case before it.

The court agreed with the judgement creditor and proceeded to make the order nisi absolute. The NICN noted that an order of court is superior to an administrative notice or other communication issued to a party in a proceeding before the court.

Commentary Whilst the NICN decision in Omotosho may raise concerns as to whether a garnishee order nisi should constitute a carte blanche for a judgment creditor to take funds that are otherwise encumbered; we believe that the proper issue for consideration should be whether an administrative directive of the FIRS, which directs a bank to freeze a taxpayer’s bank account (without the backing of a court order) could create a legally enforceable and or defensible lien, recognizable by a court of law.

Ordinarily, a lien (whether statutory or equitable) created over a bank account that is subject of a garnishee proceeding, should constitute constructive notice of the interest of a third party and therefore should be taken into consideration by a court of law. However, the legal weight to be attached to such lien would be determined by the validity of the process by which the lien was created.

Section 8(1)(g) of the FIRS (Establishment) Act, 2007 (the “Act”) empowers the FIRS to adopt any measure to identify, trace, freeze, confiscate or seize proceeds derived from tax fraud or evasion.

Further, under section 31 of the Act, the FIRS has power of substitution, whereby it may, by a written notice, appoint a person having custody of a taxpayer’s property (such as a bank) as an agent for recovering “any tax payable” to the FIRS. There may be a presumption that emanates from a combined reading of sections 8(1)(g) and 31 of the Act, that FIRS has a statutory right of lien over a bank account which belongs to a defaulting taxpayer. Such presumption would however be rebuttable or may be flawed, if due attention is paid to the fact that the operative words in both sections are “tax fraud or evasion” and “any tax payable”. In other words, FIRS’ right of lien does not, in all cases, cover the entire fund in an encumbered taxpayer’s bank account; except such amount equivalent to the sum of tax that has become final and conclusive.

This clearly suggests that a court of competent jurisdiction must have first tried and found the taxpayer guilty of either tax fraud or evasion and the taxpayer’s right of appeal must have been fully exhausted.

Thus, we believe that the powers of the FIRS to freeze or restrict a defaulting taxpayer’s bank account, is exercisable only in relation to an amount equivalent to a tax assessment, which has been determined to be final and conclusive, and such power must be exercised pursuant to a valid and subsisting order of court. This was the substance of the decision in Ama Etuwewe, Esq. (Carrying on legal practice under the name

and style of Ama Etuwewe & Co.) v Federal Inland Revenue Service & Guaranty Trust Bank Plc (Suit No. FHC/WR/CS/17/2019), considered in our Tax Alert 09 on the proper exercise of the powers of the FIRS to freeze defaulting taxpayers’ accounts and appoint banks as tax collecting agents.

We opine that the powers vested in the FIRS under sections 8 and 31 of its enabling Act is exercisable subject to restrictions. Thus, the creation of a lien pursuant to the powers conferred on the FIRS by virtue of the relevant provisions of its enabling statute, without more, is defective and of no moment, as pronounced in the Ama Etuwewe matter and held in the Omotosho case.

Further, an administrative notice of the FIRS, issued pursuant to the sections of its enabling statute, is subordinate to a court order, and only applicable in distraining funds held in a bank account in satisfaction of a tax obligation.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Nigeria securities lending set for boost in opportunity for lawyers ONYINYE UKEGBU

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here will be transaction and advisory opportunities for lawyers who understand the securities lending business, especially in relation to documentation, now that the Finance Act has brought changes that could lead to increased activity.

Securities lending is the market practice of temporarily transferring securities, for a fee, from their holder (the lender) to another party (the borrower), with the borrower agreeing to return the securities to the lender either on-demand or at the end of the agreed loan term. It usually requires the borrower to collateralise the transaction with cash or other securities of a value equal to or greater than that of the lent securities, in order to protect the lender against counterparty credit risk.

The Nigerian Stock Exchange’s securities lending market is valued at N1.07 billion ($2.96million) according to official data by the Exchange. The NSE, in its Securities Lending Report of October 2019, said 20.78 million shares were available for lending to investors, which is a 3,307 per cent increase from the 61,435 shares available for

lending in the whole of 2019.

Prior to the Finance Act, passed into law February 2020, security lending transactions were taxed based on their legal form rather than their economic substance which opened them up to the risk of multiple taxation. Now, security lending transactions will be taxed based on their economic value, and that is expected to encourage more transactions. It is also expected to be a boon for lawyers who understand the new rules and tax implications of the changes, according to Joseph Eimunjeze, of Udo Udoma &

Belo-Osagie.

“It will be difficult to provide an estimate on the revenue that the Nigerian legal industry stands to make from the changes…That will depend on how the market reacts to the changes and the extent of advisory work that will be available,” Eimunjeze, a Partner in the firm’s Banking and Finance, Corporate Advisory and Tax teams said in an interview with the BusinessDay Legal Business Unit.

Role of lawyers in securities lending after Finance Act Lawyers will be required to advise on the documenta-

tion and tax implications of the changes introduced by the Finance Act for regulated securities transactions, according to Eimunjeze.

“For example, the Act amends the Stamp Duties Act 2004 and clarifies the position in relation to certain income tax requirements, with the effect, to give a few examples, that receipts issued, securities transferred and instruments for the transfer of regulated securities by borrowers and lenders to each other, are now exempt from stamp duty,” Eimunjeze said.

This means that documents signed by parties to certain regulated securities lending transactions will no longer liable to stamp duty and will be readily admissible in evidence in civil proceedings before Nigerian courts and arbitral panels.

There are other key changes introduced by the statute, particularly in relation income taxes, which are aimed at encouraging the growth of securities lending business in Nigeria. Lawyers will be required to advise on the effect of all these changes and on the documentation for securities lending.

The Securities and Exchange Commission and the Nigeria Stock Exchange have existing rules and regulations

aimed at regulating securities lending transactions in Nigeria. Thus, the legal framework has been in existence for securities lending but operators in the Nigerian capital market were unwilling to rely on these rules to engage in securities lending transactions because of the tax issues.

“Hopefully now that the tax issues have been addressed in the Finance Act, operators will need to know now how the law will be implemented and to carry out analyses on the extent of how the changes will positively encourage these types of transactions,” Eimunjeze continued, “it is still early days as a gazetted copy of the Act has not been released by the Federal Government.”

It may also be necessary for the Federal Inland Revenue Service to issue guidelines on the implementation of the provisions of the Act in relation to securities lending. Lawyers say there is also a need to create awareness on the changes in the Act and possible impact in securities lending.

Both the Securities and Exchange Commission and the Nigeria Stock Exchange (in collaboration with capital market operators such as lawyers, securities dealers etc.) have a huge role to play in this regard. There is a need

to sensitize lawyers to understand the documentation for securities lending, particularly in relation to the suitability for the use of the global master securities lending agreement in the Nigerian market and whether it is necessary to have a master securities lending agreement for the Nigerian market.

According to the Financial Stability Oversight Council’s (FSOC) 2018 annual report, “the value of securities on loan globally reached a multiyear high of $2.6 trillion in the first half of 2018, with the U.S. share of global lending activity was also estimated to have reached approximately 55% in 2018. In the same period, the insurance industry had $55.6 billion in reinvested collateral for securities lending, up from $53.1 billion at year-end 2016.

Approximately 37% of reinvested collateral was in cash and cash equivalents, while mortgage-backed securities and asset-backed securities made up a total of 17.5% of the collateral. In addition, securities associated with repurchase agreements (repos) and reverse repos decreased from $25.9 billion at year-end 2016 to $20.8 billion at yearend 2017.

Onyinye Ukegbu is an Associate in the Legal Business Unit of BusinessDay

Thursday 27 February 2020

BUSINESS DAY

27

BUSINESS TRAVEL How Air Peace will shake-up competition in international routes leveraging price, service delivery … FG’s support needed for sustainability IFEOMA OKEKE

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igerian passengers are often worried about the cost of travelling to top destinations outside the country for summer, holidays, business trips and other important engagements. The average Nigerian still sees this as exclusively for the rich.

For instance, the average Nigerian may not be able to afford N400,000 to N500,000 for an air ticket to Dubai.

An average family of four or five may have to set aside a two-year budget just to buy tickets for a trip to Dubai considering the economic situation in the country.

However, the narrative is gradually changing with Air Peace shaking up competition on the route since it commenced flight to Sharjah, United Arab Emirates (UAE) eight months ago.

The airline has continued to see very good patronage on the route as the airline offers passengers almost 53 percent slash in ticket price from its competitors.

Despite the promo price on Emirates, BusinessDay’s checks show that a return ticket on Lagos-Dubai route using high-end airlines such as Emirates and Qatar Airways costs between N320,000 to N420,000, compared to AirPeace which is offering its passengers between N175,000 to N200,000 for a return ticket on the same route. These high end airlines have since reduced the cost of tickets since Air Peace commenced operations on the UAE route.

This huge ticket reduction has seen more summer passengers book for tickets, as Air Peace currently records almost 80percent load factor on its flight to Sharjah.

Air Peace offers travellers from Nigeria the opportunity of connecting 23 other destinations from the United Arab Emirates.

The destinations that could easily be connected from Sharjah international airport include: Riyadh, Madina, Jeddah, Beirut, Delhi, Colombo, Dhaka, Mumbai, Kathmandu, Moscow and several others.

In addition to this connectivity advantage, the

airline provides buses to take its passengers from the Sharjah airport to the city.

While some stakeholders raised doubts on whether the carrier will survive on the route, especially competing with well-established carriers such as Emirates and Etihad Airways, the airline has defeated all doubts as Nigerians in the last eight months have continued to patronise the brand over its price, service and connectivity advantage.

However while admitting that he is aware that the challenges would be daunting, Allen Onyema, chairman, Air Peace restates that Air Peace is well prepared to ride the storm.

Onyema said: “Before you go into any business, you need to study the business and the environment.

You have to know that airline business, for example, is a risky one. What are the factors that have made many airlines in Nigeria to fall by the way side?

You really need to know where you are coming from; where the other airlines are coming from and what has been responsible for their failure.”

He revealed that Air Peace drew strength from the very strong support it continues to receive from its bank, Fidelity Bank, which he said “has been very supportive and it is because we pay back our loans.”

He said the airline’s driving force is to disprove the notion that Nigeria is a failure in the global airline industry. “We have decided to make the difference. We want to prove that we are different and that we are a very resilient people in Nigeria. We have very rewww.businessday.ng

sourceful people. They have not been given that opportunity to rise; we are also contending with international aviation politics that is trying to bring Nigerian airlines down.

“So, we decided to do things differently, both in the way we run our affairs and in the way we expand.

We decided to acquire the single-aisle planes for our domestic operations and we have acquired the widebody planes for our international long haul flights,” Onyema added.

Expansion to other international destinations While the airline flies frequently to Africa’s West Coast countries, Dubai is just one out of the many destinations Nigerians go to, there is therefore no doubt that the airline would also shake-up competition on other international routes it plans to commence using the right equipment, strategy and partnerships.

Apart from Sharjah, the federal government of Nigeria has given Air Peace six destinations to operate.

These destinations include Mumbai, Guangzhou, China, Atlanta, Houston (US), Heathrow (London) and Johannesburg (South Africa).

Air Peace had earlier set a domestic record as the first Nigerian airline to acquire and register the Boeing 777 aircraft in the country.

Three of the four wide-body aircraft it acquired for its long-haul operations have so far been delivered, as it hopes to increase its fleet size to 67 in few years.

Job opportunities Apart from the advantage of price, service delivery and more choices for passengers, another

very important advantage of having Air Peace represented in the international space is creation of job opportunities.

While foreign airlines employ few Nigerians and more of its indigenes as pilots, crew and engineers, domestic airlines are creating more job opportunities for Nigerians by training and employing them.

BusinessDay’s checks show that for every aircraft deployed on a route by a domestic airline, it creates over 300 direct and indirect jobs for Nigerians.

With over 12,000 jobs already created by AirPeace for Nigerians, the airline is sure to increase these numbers in the near future when it increases international flights.

Need for FG’s support Onyema had earlier said in an interview that domestic airlines may not succeed in international operations without the support of the government.

He however commended Hadi Sirika, Minister of Aviation for making efforts to address multiple frequencies for foreign airlines, which implies that he wants the survival of indigenous airlines, adding that more needs to be done to address the issue.

According to him, “Government must discourage unfair competition. The American government did the same thing for their airlines.

The Gulf airlines brought unfair competition, the airlines in America complained and the American government stepped in and that stopped. Multiple and proliferation of designations to foreign airlines

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into Nigeria, multiple frequencies are disservice Nigeria “When you land in America, they only allow you one more stop. If you land in New York and you want to go to Atlanta, you must use their local airlines to move about.”

He explained that when domestic airlines are protected, they create jobs, thereby reducing militancy, kidnapping other vices.

He reiterated that the private sector needs the enabling environment to create more jobs; and that is what Air Peace is doing.

“The more the airlines come up, the more jobs they provide for Nigerian people.

The sky is too big for all of us, if two airlines are doing UAE from here, two more airlines can do it from Nigeria also.

“If we don’t give opportunity for airlines in Nigeria to survive, they would continue complaining that airlines are not strong, and it hurts me. It hurts me when they say our airlines are not strong, that they are indebted. I am not indebted, but even if we are, we are servicing our debt,” he said.

Ado Sanusi, managing director, Aero Contractors told BusinessDay that government has to protect domestic so that they could compete with other airlines outside the country.

According to Sanusi, “We are not saying that they should ban all international airlines from coming but they should protect meaning that if for instance BA or Lufthansa are requesting for second frequency, we need to ask them which of the airlines in Nigeria they will be willing to partner with. Or if they want three frequencies, we must insist, they partner with domestic airline for cargo.

“These are the things we need to protect the industry and grow it. If you give multiple frequencies, it will be good for the customers flying out of the country but it is not good for the aviation sector. It is the same thing with the agricultural sector.

“The rice farming is going higher and in the next five years, we will specialise into different kinds of rice farming. So now you can @Businessdayng

see that we can now become proficient in this rice production.

“So, it is the same thing with aviation. If you tell international airlines seeking second frequency to partner with any local airline, you will now be creating more capacity for that airline. You are giving them opportunity to grow. I think this is the way forward for the aviation industry.”

John Ojikutu, a member of aviation industry think tank, Aviation Round Table (ART) and chief executive officer, Centurion Securities, listed some ways government could support domestic airlines.

First, Ojikutu said there should be a careful assessment of their business plans to ensure the airports designated for their operations are well equipped to support and sustain their day and night operations and even during inclement weather.

Secondly, he explained that government policies on open skies and commercial agreements with foreign airlines must limit their operations in domestic routes. He said concessions given to foreign airlines for multiple destinations must be reduced to two in different airports outside Lagos and Abuja.

“The foreign airlines incursion into domestic routes is seriously affecting the growth of local airlines,” he said.

Potential for expansion Domestic airlines have the potential to expand if government can therefore create enabling environment for them to operate.

BusinessDay’s checks show that 39 foreign carriers operating in Nigeria realised over $3.1 billion dollars from ticket sales, up from $1.7 billion in 2018 and $1.7 billion in 2017. This improved revenue based on the bilateral and multilateral air services Nigeria has signed with other countries shows the extent of funds repatriated to foreign countries.

Experts say these figures show that the travel market is indeed huge and domestic airlines can leverage government support to tap into this huge market.

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Thursday 27 February 2020

BUSINESS DAY

FEATURE The Oceanna: Changing the narrative in Nigeria’s luxury property market Many developers are currently investing billions of dollars into building various kinds of luxury real estate products in order to meet the growing market demand. These products come in different dimensions covering areas like commercial, retail or residential property. However, only few developers like Grenadines Homes are being creative by combining these three dimensions to make life more liveable, writes AMAKA ANAGOR-EWUZIE.

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s the major financial centre with the highest population density in Nigeria, Lagos is Nigeria’s largest urban city that is recording high traffic congestion, which largely affects the day-to-day living of its residents.

Arguably, greater proportion of Lagos population lives in the mainland area as well as several suburbs in the metropolis but ironically, majority of these people work on the Island, which include Victoria Island (VI), Ikoyi and Lekki.

This explains the reason for traffic congestion experienced daily on Lagos roads especially those routes that lead to the highbrow settlements, particularly the commercial areas on the Island where offices are located.

As a result of this, many Lagosians spend quality man-hours commuting from home to their work places.

The situation is gradually changing as traffic congestion in Lagos has also extended to even the highbrow areas of Ikeja, Lekki, Ikoyi, VI and others, meaning that people who live in these areas and work in Victoria Island or other places, also find it difficult to escape from the hustling and bustling nature of the city.

But today, forward thinking developers such as Grenadines Homes are beginning to change the narrative by redefining the concept of living and working in a busy city such as Lagos with ease.

With the introduction of The Oceanna into the Nigeria’s luxury property market, a multi-functional community built with the idea of ensuring that Nigeria’s upper class, lovers of good living as well as expatriates, can escape the difficulties that come with commuting to work from home on a daily basis.

At the Oceanna, the developer would be able to cover the three dimensions of real estate including commercial, residential and retail properties.

With this, people who invest to acquire different properties in the resort can actually live, work and play in the same community.

Situated on Water Corporation Drive, off Ligali Ayorinde, Victoria Island, The Oceanna consists of four towers designed to have two mixeduse and two residential towers.

These towers are called Caerulean, Indigo, Aqua and Azure. The Oceanna was conceived with a transformation agenda to redefine the skyline of the Nation. At completion, the developer would have created an iconic project that is inspiring a change in Nigeria’s skyline and the outlook of the industry.

As an architecture that is inspired by the sculpted beauty of seashells, which punctuate the shores of Victoria Island, as well as the artful personality of colonial

Construction work in progress at ‘The Oceanna Caerulean’ designed as a mixed-use tower.

houses of Ikoyi, The Oceanna buildings would, no doubt, become the face of Nigeria just like Burj Khalifa is to Dubai.

“Although there are many impressive freestanding developments in the world, The Oceanna’s story in revolutionising design and engineering in Africa, will act as symbol of expertise and human ingenuity pioneered by Nigerians. An unrivalled 360 degree offering, yet to be seen in the region, The Oceanna is pioneering new ways to live, work and play, truly a platform for endless possibilities,” said Adeyinka Adesope, group managing director of Palton Morgan Holdings, the parent company of Grenadines Homes.

To him, the Oceanna will inspire a sense of hope, pride and awe for Nigerians, expats and the world. He pointed out that it would reflect an inspiring story about a magnificent nation claiming its place in history, residents and visitors will be compelled to become a part of this story by making the Oceanna their home, their place of business, their must go destination.

“It will without a doubt be an iconic place for iconic people and a conglomeration of man-made innovation and organic, natural beauty displayed in luxury apartments in Lagos,” he said.

Adesope stated that investing in the massive project was prompted by the singular vision that The Oceanna is set to be one of the main characters in this new era of optimism in Nigeria, when it has become clear that the country is striving to position well in an era when global investors and business leaders look to Africa especially Nigeria as the next region of transformative economic growth.

Presently, the developer has

started construction at the project site as work is currently ongoing at the first tower called The Caerulean, a mixed-use tower.

According to the developer, construction work has reached the 10th floor and expectation is high that the residential apartments, office spaces, retail outlets and hotels to be situated on this tower would meet the desire of prospective buyers.

“It was expected that the first tower would be ready for use by the owners in the next 12 months,” projected the developer.

Product on sale The Oceanna Offices allows individuals and businesses looking to break away to own their office space without having to worry about setting aside funds for rent.

It is one of the Oceanna products that is right now in the market waiting for buyers.

One good thing about this product is that buyers do not have to break the bank to buy because the developer has created a flexible payment model that allows buyers to pay between 6-36 months period.

These offices space are fitted with state-of-the-art fixtures, amenities and systems – befitting any Grade A status that is currently in the real estate market. Located in The Oceanna where construction is currently ongoing, there seems to be a positive acceptance of the product in the market today as many futuristic Nigerians have started subscribing to it.

Being a mixed use building, it means that an office owner has the privilege to locate his or her office in a tower that equally has a hotel, residential apartments, offices as well as retail outlets for shopping.

By this singular fixture, the office

owner would have the opportunity to live, work and even have important office related meetings or conferences in the hotel that is in same tower with his or her work place.

According to the developer, the offices would be equipped with an ICT infrastructure that allows businesses to carry out regional and international related works – at the best internet speeds, and in turns, making connection would become simple and seamless.

With a location that puts companies at the heart of Victoria Island in Lagos, moving between The Oceanna Offices and arguably the most diverse business city in Africa would be easier.

Office towers would be serviced by a high-speed elevator system. It is going to be a definitive destination for top-notch businesses in Nigerian commercial city of Lagos, the developer assured.

“It is said that innovation inspires business elevation. That is why The Oceanna Offices are crafted with a unique vision in mind, a motivated, connected and synergic business space that fosters collaboration between individuals and companies,” said the developer.

Unique fixtures Before choosing a location for an office and residential apartments even venue for conferences, ease of movement as well as accessibility becomes a deciding factor in Lagos.

BusinessDay findings show that at The Oceanna, the developer has been able to deal with this particularly challenge by building a community that can be accessed through water, by road or using helicopter.

For instance, at the top of the Oceanna Indigo, a tower that is also

going to be a mixed use just as the Caerulean Tower that has office spaces, residential and hotels, the developer is also building a helipad for landing helicopters.

On the other hand, the beach front makes Oceanna a beach front resort, which not only adds to the beauty and nature that surrounds the community, but also serves as an access in and out of the community.

Other important fixtures of the resort, is that each element of The Oceanna has its unique personality and they include its distinct facade, the blue ocean, the green plants, the grey skies and the white walls all fused together to make up a picturesque destination in the city of Lagos.

“Other outstanding fixtures include indoor and outdoor swimming pools, tennis court, virtual golf, retail shops, ultramodern gym, private museum and fine dining restaurant for both residents, visitors and workers in the community,” he said.

Many prospective investors that have come in contact with this product would be wondering the people behind the construction of this modern and iconic edifice. Due to the gigantic size of the project, the developer, Grenadines Homes, contracted the best contractors and credible partners in Nigeria and the global construction industry to handle the project.

Grenadines Homes partnered with Cappa & D’Alberto Plc, the main contractor, which is one of the foremost construction companies in the country with over 83 years’ experience in building construction.

Another partner in the project is the foremost Brash Brands that created Burj Khalifa in Dubai, Chelsea Barracks in London and Piramal Group in India. Brash Brands thrives in the business of originating great ideas and transforming them into vivid and touchable experiences.

Ecad Architects, a company that has 20 years experience in architectural design in Nigeria, is one of the partners, which works alongside HOK to design an iconic project to meet the needs of savvy clientele.

HOK Architects is the largest architectural & engineering firm in America and UK with 60 years’ experience in architectural design, which has 25 offices spread across two continents.

Another partner in this project is Morgan Omonitan & Abe Ltd., an engineering and development consulting firm in Nigeria, with recent expansion to Ghana in West Africa.

While CA Consultants Limited handles all aspects of mechanical, electrical and piping (plumbing) engineering planning, design and supervisory services for residential, commercial and industrial buildings on major construction projects.

Thursday 27 February 2020

BUSINESS DAY

29

ENERGYREPORT Oil & Gas

Power

‘Govt should review oil and gas policies for ease of doing business’ olusola Bello

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he Federal Government has been advised to review some of the policies in oil and gas industry so as to enhance the ease of doing business in the sector.

Doing business have become extremely challenging in the country with all the red tapes that investors have to overcome in the course of carrying out their business transactions.

Things that investors pay for have increased significantly. This is starting from meeting the conditions NIPEX have put in place to getting licenses from the Department of Petroleum Resources (DPR) to paying for safety and standards.

The policies in respect of the above mentioned obligations, investors say need to be

reviewed and streamed lined as they claimed there are so many things they are paying money for in the industry yet there is no businesses.

They therefore advised the government to do some reviews at the policy levels so that the constraints on ease of doing business in oil and gas industry would be eliminated.

Ese Avanoma, group managing BRADE Group, One the investors that expressed his view about the problems being faced by investors spoke to BusinessDay on the sideline of the just completed Nigeria International Petroleum Summit (NIPS).

He stated that L ocal content needs to be better, strengthen and supported while duplicated policies should be looked at and be reviewed by the government.

The government he explained must see how it can reduce the bureaucratic bot-

tlenecks in the industry which have really increased.

The BRADE Group boss who said his six companies operate across Nigeria, Ghana and Uganda doing drilling and completion operations, explained that oil and gas wells drilling are core areas of the group operations. The group also focuses on heavy duty equipment used for these jobs, such as oil Pipes and line Pipes. In addition, it is looking at the adaptation of a new technologies in the industry that would reduce the cost of crude oil production.

Most recently, the group went into the production of chemicals as well.

“So in summary we are into drilling and completion of oil and gas well, heavy equipment to service the oil industry, manufacture of chemicals and new technology adaptation in Nigeria,” he said.

Speaking further on the

adaptation of new technology in industry, he said, the oil and gas industry has undergone some major reviews in recent past which have negative and positive impacts, stating however that cost has been the major driver of many changes in the industry.

“As you must have noticed the oil industry have undergone major review in the past few years, cost is one of the major drivers, we use to have a barrel of crude oil costing $100, today, it cannot be anywhere higher than $60 per barrel. We will bring in new technologies and adapt them to the Nigeria environment to see how they can reduce the cost of producing a barrel of oil here”.

He said the cost of producing oil is so high in the country explaining that such new technologies will change the way things are done traditionally for better results.

FG reiterated commitment to local content development …gives award to MG Vowgas on investment Olusola Bello

L

ocal content development was the major the focus of the recently concluded Nigeria International Petroleum Summit ( NIPS) and the Nigeria Content Development and Monitoring Board (NCDMB) was very active in all the engagements.

To demonstrate the level of support the local content development has garnered from the federal government, Sylva Timipre, Minister of states for petroleum emphasised the importance government attaches to ensuring that there is in- country capacity development in all segments of the oil and gas industry.

At the award Dinner to some companies, Timipre Sylva noted that the awards represent recognition of the contributions of the awardees to the growth and development of the Nigerian oil and gas industry.

“The Oil and Gas industry is the mainstay of the Nigerian economy,and anyone who is awarded recognition by the industry is being recognized

by Nigeria as a country,” he remarked.

Turning to the two local companies that were given award at the dinner, MG Vowgas and Walter Smith he Olusola Bello, Team lead,

Simbi Wabote, executive secretary Nigerian Content Development and Monitoring Board presenting award to David Ettang, manager, local Content Development MG Vowgas Nigeria Limited during the recently held Nigeria international Petroleum Summits (NIPS) held in Abuja.

urged them to do more to save Nigeria from the embarrassment of depending on foreign expatriates for services that Nigerian firms can provide.

MG Vowgas was given award of recognition for investment in in-country capacity in oil and gas for 2019

by NIPS. The executive secretary NCDMB, Simbi Wabote who presented the award said he was not surprised that MG Vowgas was recognised as it has worked very hard to put in place facilities that can do a lot of works in -country.

The MG Vowgas fabrication yard marks a new dawn in local content development in Nigeria as it has invested

Graphics: Joel Samson.

on multifunctional facilities needed for any form of fabrication in the country.

The facilities at the fabrication yards would convince the international oil companies that never believed that indigenous companies can do great and complex works that meet international standards.

Analysts that visited the yard said International Oil Companies (IOCs) will now have no excuse to carry their jobs outside the country.

MG Vowgas installed high tech equipment that reduces the timelines for even difficult jobs.

It has also perfected arrangement to start fabrication of modular refinery and

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boilers for both refineries and oil companies. Fabricating modular refineries would go a long way to solve the problems of raising foreign exchange for promoters of modular refineries in the country.

The company which is purely an indigenous one is also into engineering, procurement and commissioning (EPC) of projects such as fabrication of topsides, building of structural steels, platforms, pressure vessels and has also been active in flow lines repairs. It also provides marine support services by building marine vessels. All of these activities are carried out under the supervision of ASMES.

Renewables

Harnessing potentials of renewable energy in Nigeria Anu OGUNRO

W

ith the increasing power need for domestic and industrial purposes, some of the challenges posed by conventional nonrenewable energy sources include damage to the environment, their exhaustive nature, fluctuation in the prices of oil etcetera. Power generation in Nigeria is mainly from hydro and gas-fired thermal power plants Renewable energy sources, which are naturally replenished, such as sunlight, wind, rain, tides, waves, biomass and geothermal heat provide some succour as they are less damaging to the environment and naturally replenished.

However, the enormous potential of this source of power is largely untapped, notwithstanding the fact that Nigeria is blessed with these renewable energy sources.

The main source of renewable energy in Nigeria is hydro. In recent times, there is a gradual evolution of solar. Renewable energy sources like biomass, which could solve the problem of waste while in turn providing power is under harnessed. Same goes for other renewable energy sources like wind.

In Nigeria, a plethora of legislative enactments, regulations, and policies govern the generation and use of power from renewable energy sources. These include: • Electricity Power Sector Reform Act, 2005; • Environmental Impact Assessment Act, 1992 • Nigerian Electricity Management Services Agency Act, 2015 • Nigerian Electricity Regulatory Commission (NERC) Mini-Grid Regulation, 2017; • NERC Renewable Energy Feed-In Tariff Regulations, 2015; • National Electric Power Policy, 2001; • Nigerian National Energy Policy, 2003; • Renewable Energy Master Plan, 2005; • Renewable Energy Policy Guidelines, 2006; • The Renewable Electricity Action Programme, 2006; and, • National Renewable Energy and Energy Efficiency Policy, 2015 It is noteworthy that the National Renewable Energy and Energy Efficiency Policy (NREEEP) issued by the federal government was developed as a robust policy document to consolidate the objectives of the previous policies. It provides a blueprint for the sustainable development, supply and utilization of renewable

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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Environment

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energy resources within the economy for both on-grid and off-grid energy solutions.

However, much of the objectives of this policy is yet to be achieved.

Some of the Challenges hampering the generation of power through renewable energy sources include: • Multiplicity of Policies, Regulations and Regulators: Active players in this industry and investors would have to deal with a plethora of government institutions and agencies. They have to deal with NERC, Energy Commission of Nigeria (ECN), Federal Ministry of Power and so on.

Others include lack of Finance, public awareness, poor quality control of locally manufactured and imported technologies, poor legal enforcement mechanisms: Thus, to promote the production of power through renewable energy sources in Nigeria, it is also necessary that the government and regulatory agencies of the power sector ensure the following: • Effective collaboration and co-operation between the existing regulators to avoid duplication of functions. This will help attract potential investors; • Power Production Tax Credit proposed by the NREEEP should be implemented. This will make the production and sales of power from renewable energy sources viable; • Liberalization of the electricity market by offering consumers the right to choose their energy provider; • Leveraging on Public Private Partnerships (PPPs) for the financing of renewable energy project through Design- Build - Operate and Transfer arrangements; • Adequate dissemination of information on renewable energy resource availability, benefits and opportunity to the general public. This will raise public awareness and generate activities in the area; and, • Promoting research and development in the renewable energy industry.

A good energy mix will help solve the power challenges in Nigeria. Harnessing the potentials of renewable energy will increase access to on-grid and off-grid power solutions, while addressing environmental issues associated with power generation.

Thus, promoting the social and economic wellbeing Nigerians and meeting the sustainable development goals.

Anu Ogunro , Managing Partner, Top-Notch Legal Practitioners

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Thursday 27 February 2020

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

consumer spending

Consumer goods firms’ unimpressive performance validates manufacturing slow growth

T

he unimpress i v e p e r f o rmance of consumer goods firms in the last 2 years mirrors the manufacturing industry’s slow growth, as the coronavirus ravaging the globe continues to dampen the industry outlook.

Companies have been reeling from energy costs as they spend money to buy diesel oil to run factories and offices across the country.

Others challenges they face include rising inflation, imposition of hefty levies by government, and delay of raw material at the Apapa Ports.

Manufacturing, which contributed 11.37 percent to the country’s GDP fourthquarter GDP, grew by 0.80 percent in the fourth quarter of 2019, this compares to the 2.10 expansion in the corresponding period of 2018, according to a recent report by the National Bureau of Statistics (NBS).

Analysts are not surprised at the poor numbers because economic activities have been slow and the consumer goods firms are struggling to stay afloat.

Cash in the pockets of people continue to be worthless as time ticks as

inflation hit a 21 month high at 21.13 percent in January, thanks to border closure that balloon the price of basic food.

Disposable Personal Income in Nigeria decreased to N1.75 million first quarters of 2019 from N2.0 million n in the fourth quarter of 2018, according to data from the NBS. Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 dollars a day, which means they have little in their pockets to go shopping.

According to data from Fitch solutions, household income is estimated to have grown by 8.8 percent year on year to $4,252 in 2019 from $3,908 2018. 2019’s 8.8 percent years on year growth comes in lower than the 10 .7 percent year on year (y/y) growth in 2018.

The earnings season started a few weeks ago and results hitting the website of the Nigerian Stock Exchange (NSE) shows most manufacturers recorded their worst results in more than five years, while valuations remain unattractively expensive.

Unilever Nigeria Plc’s revenue dipped by 57.86 percent to end 2019 financial year, the sharpest drop in over 10 years as the producer of homecare, personal care, and food categories

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posted a loss of N4.67 billion as at December 2019, the first loss in more than a decade.

Nascon Allied Nigeria’s revenue reduced by 7.01 percent to N27.57 billion as at December 2019, the steepest drop in more than five years while it net income fell by 56.0 percent to N1.94 billion in the period under review.

International Breweries’ revenue dipped by 5.83 percent to N35.09 billion as at December 2019, the drop in revenue could not cover

‘

We retain our outlook on the sector, while noting that expected currency pressure in H2 2020 could limit access to imports of essential commodities which could weaken sector growth rising operating expenses and spiralling debt as the brewer recorded a loss of N9.13 billion to end 2019 financial year.

Guinness Nigeria revenues were flat at N68 billion in the period under review, as its profit dropped by 49 percent to N1.31 billion as at December 2019.

While the increased public sector spending like the new minimum wage will add impetus to consumer wallets, analysts say there still has to be some fiscal adjustment plans by the Federal Government.

The Federal Government, through the Ministry of Finance, hiked the Value

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‘

BALA AUGIE

added Tax (VAT) to 7.50 percent from 5 percent, as it also approved the increase of excise rates on tobacco and alcoholic beverages.

An increase in excise duty is a double whammy for brewers that are already struggling with weak sales as beer drinkers are downgrading to cheaper brands.

Analysts said that the future for companies is bleak amid a myriad of challenges.

Analysts at CSL Stock Brokers say FMCGs particularly businesses with product portfolio skewed towards personal care will continue to struggle with volume growth in 2020 as @Businessdayng

familiar challenges continue to bite.

The research house added that beverage producers-particularly cocoa related)- would witness significant pressure on margins in 2020 as the cartel formed between Ghana and Ivory Coast (both of whom control 60 percent of world cocoa output) would keep cocoa prices high, hence significantly impacting material costs.

Analysts at NOVA Merchant Bank Limited stated that the CBN’s push for higher credit to the private sector will result in improve activities within the manufacturing space.

However, they said they yet to see a transmission impact over Q4, but they do not rule out the possible timeframe between credit acquisition and facility expansion.

“As such, we retain our outlook on the sector, while noting that expected currency pressure in H2 2020 could limit access to imports of essential commodities which could weaken sector growth,” said analysts at NOVA Merchant Bank.

Thursday 27 February 2020

BUSINESS DAY

Retail &

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consumer business

EconomY

Analysts proffer solution on Nigeria’s trade sector negative growth … as sector still in recession for 4th consecutive year BUNMI BAILEY

A

s the wholesale and retail trade sector enters recession for the fourth consecutive year, analysts have proffer solutions on combating the myriad challenges in the sector.

According to Gbolahan Ologunro, a research analyst at Lagos-based CSL Stockbrokers, the reopening of the land closure is a good starting point towards reviving the trade sector.

“This should ease price pressures as the supply gap narrows, leading to a spillover effect on consumer demand given lower pressures.

Additionally, a broad based implementation of the new minimum wage across all states should impact consumer wallets albeit marginally owing to the hike in Value Added Tax (VAT),” Ologunro further said.

Ologunro also added

that reforms are needed in removing barriers that negatively impact the supply chains of local manufacturers to reduce the cost of production and make locally manufactured goods more affordable for consumers.

According to the recently released GDP data by the National Bureau of Statistics(NBS), the sector contracted by -0.38 percent in 2019, compared with -0.63 percent, -1.05 percent and -0.24 percent in 2018, 2017 and 2016 respectively. Ever since the Nigerian economy slumped into recession in 2016, annual average growth of the trade sector has been negative.

The trade sector which is the second largest sector after agriculture has been on a negative trend due to challenges ranging from unpredictable government policies to weak consumer demand.

‘The combined impact of high import duty, ports inefficiency and infrastructure

challenges are affecting the sector and the land border closure further weighed on the already fragile growth of trade,’Damilola Adewale, a Lagos-based economic analyst said.

“That is why improving the infrastructure at the ports is pertinent. Trade via seaports account for over

80 percent of cross border trade which shows how important it is. Government trade policies need to be clear. Our protectionist policies don’t help competitiveness. And now that trade is not doing well, how will it fare once the African Continental Free Trade Area (AFCTTA) starts,” Adewale

further added.

In June 2019, the Federal Government increased the exchange for customs duty by 6.5 percent to N326 per dollar from N306 per dollar with aim of generating more revenue. This recent development implied that importers and exporters whose products

are value and transacted in dollars will now have to pay additional N20 per dollar worth of goods.

Also in August 2019, Nigeria unexpectedly closed its land borders to trade in goods, explaining that it wanted to put an end to smuggling, particularly of frozen rice or chicken from Benin, which crosses the porous border illegally and in November, the government closed the borders completely to both imports and exports.

“We need to facilitate international trade. Our currency does not allow tirade in the sense that it is still overvalued. It is not cost beneficial to locals in Nigeria to want to sell their goods in China. China keeps its currency undervalued to the U.S and it is helping them as they have a good trade sector and we should also improve on the quality of what we produce,” Abiola Gbemisola, a Consumer analyst at Lagosbased investment firm, Chapel Hill Denham said.

company

Pepsico gets regulatory approval for Pioneer Foods acquisition, vows more resources for African markets OLUFIKAYO OWOEYE

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epsiCo Inc is getting close to the final acquisition of SouthAfrican-based Pioneer Foods with receipt of approval from the South African Competition Commission to acquire Pioneer Foods.

The Commission has recommended to the country’s Competition Tribunal the approval of the proposed transaction in which Simba (Pty) Ltd, a subsidiary of PepsiCo, intends to acquire Pioneer Foods Group Limited subject to certain conditions.

“That will give us a lot of

scale in Africa, which serves also more focus than what we had in the past, and we’re also allocating additional resources to Africa, which will help us expand in that continent,

which obviously has a huge opportunity for our products,” the company said.

Pepsico had announced it has struck a deal to buy Pioneer Foods in a deal worth

$1.7billion.

In 2015, Pioneer Food acquired a 50.1% stake in the Baked Goods Division of Food Concepts Plc, a Nigerian firm and owners

of Chicken Republic, Butterfield Bakery and Free Range Farms as part of the South African firm’s expansion drive into the Nigerian market. Its brands include Weet-Bix, Liqui-Fruit and Ceres. With the acquisition by PepsiCo, it gains ownership rights of Butterfield Bakery, sausage-roll, and Yum Yum brands, all of which are produced by Food Concepts Pioneer in Nigeria.

PepsiCo, through Simba also supplies several readyto-eat products in South Africa under well-known brands which include Simba, Lays, Dorito’s, NikNaks and Fritos.

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Pioneer Foods is a South African producer and distributor of a range of branded food and beverage products.

It operates mainly in South Africa, providing wholesale, retail and informal trade customers with its products and exports to more than 80 countries. Its food brands include Sasko, White Star, Weetbix, Safari and Wellingtons, while its beverage brands include Ceres, Liquifruit and Fruitree.

Through its acquisition of Pioneer Foods, PepsiCo gains a foothold for expansion into the rest of Africa. PepsiCo will gain brands and manufacturing facilities in Nigeria, Kenya, and South Africa.

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Thursday 27 February 2020

BUSINESS DAY

Corporate Social Impact

Why Africans shouldn’t do the Kirk Douglas – leave it all to charity ONUWA LUCKY JOSEPH

K

irk Douglas lived in the storied cinematic generation dominated by westerns. And he was one of the leading men of that era. Though he never won an Oscar for performance (he was nominated thrice) the Academy bestowed on him a Lifetime Achievement Award for his oeuvre of work which was deemed immensely beneficial to the industry. And having breathed his last at the age of 103, his will stipulated that all his earthly goods be divvied up to the poor and less privileged.

Yes, there’ve been hurrahs from many corners, especially the non-profit industry which hopes that more individuals will toe the legendary Kirk’s path. Even out there in the West, not everyone has the mindset and mentality of Kirk Douglas, father of the formerly rambunctious and twice Oscar winner, Michael (Fatal Attraction, Basic Instinct, Romancing the Stone, Wall street, War of the Roses, the American President) Douglas.

But there were snickers here and there from those who thought the high achieving Michael (75 years old) and his three siblings ought to have been left some of that pile at least. They may not exactly need it. But you know how ‘kids’ love to know that their parents loved them, enough to leave them something that they didn’t have to personally work for. An inheritance!

It is important to not forget however, that what Kirk did in death, he had done all his life.

Having grown up in utter poverty, living with an alcoholic father and six sisters he was determined, after he made it to the other side, that he would be instrumental to the lifting of many away from poverty. He developed a lifestyle of giving that continued till death.

According to Wikipedia, “Douglas and his wife donated to various non-profit causes during his career, and planned on donating most of their $80 million net worth. Among the donations have been those to his former high school and college.

In September 2001, he helped fund his high school’s musical, Amsterdam Oratorio, composed

by Maria Riccio Bryce, who won the school Thespian Society’s Kirk Douglas Award in 1968. In 2012 he donated $5 million to St.

Kirk Douglas

Patrice Motsepe

Mohammed Dewji

Mo Ibrahim

Lawrence University, his alma mater. The college used the donation for the scholarship fund he began in 1999.

“He donated to various schools, medical facilities and other non-profit organizations in southern California. These have included the rebuilding of over 400 Los Angeles Unified School District playgrounds that were aged and in need of restoration.

They established the Anne Douglas Center for Homeless Women at the Los Angeles Mission, which has helped hundreds of women turn their lives around. In Culver City, they opened the Kirk Douglas Theatre in 2004. They supported the Anne Douglas Childhood Center at the Sinai Temple of Westwood. In March 2015, Kirk and his wife donated $2.3 million to the Children’s Hospital Los Angeles.

“Since the early 1990s, Kirk and Anne Douglas donated up to $40 million to Harry’s Haven, an Alzheimer’s treatment facility in Woodland Hills, to care for patients at the Motion Picture Home. To celebrate his 99th birthday in December 2015, they donated another $15 million to help expand the facility with a new two-story Kirk Douglas Care Pavilion.

Douglas donated a number of playgrounds in Jerusalem, and donated the Kirk Douglas www.businessday.ng

Theater at the Aish Center across from the Western Wall.”

Before now, at the behest of Warren Buffett, 40 billionaires pioneered the sign off in 2010 to give at least half their wealth to charity either during their lifetime or at their death. The Giving Pledge is a commitment by wealthy individuals and families to give away more than half of their wealth to causes including poverty alleviation, refugee aid, disaster relief, global health, education, women and girls’ empowerment, medical research, arts and culture, criminal justice reform and environmental sustainability.

Among the signees were the late Paul G. Allen, Michael R. Bloomberg (now a contestant for the presidency in the US), Warren Buffett, Barry Diller and Diane von Furstenberg, Larry Ellison, Bill and Melinda Gates, Barron Hilton, Jon and Karen Huntsman, Joan and Irwin Jacobs, Pierre and Pam Omidyar, George Lucas, David Rockefeller and Ted Turner. Currently, over 150 billionaires have signed up, 4 of them Africans: Patrice Motsepe, the South African mining mogul; Mo Ibrahim of the famous Mo Ibrahim Foundation, from Sudan; Strive Masiyiwa, the Zimbabwean who brought Nigeria’s first cellular company, Econet; and Mohammed Dewji from Tanzania. No Nigerians on

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the list.

The Agenda for African Billionaires and Millionaires To paraphrase one of the popular sayings of Jesus, for an African rich man, especially those in Sub Saharan Africa, his/her dependants are squarely people of his own house. And by extension, people of his own village, his home town, his home local government, his home state, his home country, his home continent. He does not need to look far to see them. He does not need to look far to see the needs. They are all up there in his/her face, crying for resolution. They can see the beggars, the dilapidated schools, the potholed roads, the hospitals they will never step into, not even when they have a headache, the hungry millions, the out of school kids, the widows living on the tender mercies of innumerable preying men, ex servicemen (veterans) jobless and without support, armies of young aspiring entrepreneurs unable to raise start up funds, potential world beaters everywhere with no facilities to train; the needs are innumerable.

For the African billionaire, the giving pledge needs be domesticated, more specific and, very important, be geographically contained. By reason of bequests, grants, etc. the ambitious @Businessdayng

pledge would be to lift as many people as possible out of poverty in their lifetimes. Let’s face it, by the peculiarity of our cultural practices, not much of what’s left behind can be used for the public good after they are gone.

If a man’s will regarding his immediate family is disregarded by his larger family soon as he dies, would a will concerning people not considered family not be adequate reason for unending community contentions?

The wealthy African simply cannot afford to live under the heady intoxication of new money. The idea of living large while around you reigns supreme misery does not help with advancing the cause of humanity.

And we are not here advocating socialism, which is how red neck capitalists would describe this.

Rather, we ask that enlightened self interest be the name of the game. How rich is the rich when the poor stays poor? The rich man’s wealth, if not his life will soon diminish.

So again, we must talk true African solutions. In the West, there’s been a ratcheting clamour for the rich to pay their fair share of taxes. We would advocate the same here. However, it is more important that those with the means pay their dues themselves directly to beneficiaries rather than using government as intermediaries. Such government mediated transactions are usually aborted by the systemic corruption which gives fat cats in government the opportunities to keep getting fatter while the reason for which the tax was paid stays neglected.

The Big men and Women of Africa must rise up to the plate and become catalysts for change.

Let it be their legacy most desired that more Africans live above the poverty line because they invested their time and resources to ensure it. We can get all the aid or do all the trade, but if quality of life in Africa stays abysmal, the respect the African gets wherever we find ourselves can only be proportionate to the perception of poverty by which we are globally identified.

African billionaires/millionaires have their work cut out for them. If they do get to work, the results will soon be evident.

Give it all to charity while alive.

Okay, that’s clearly asking for too much. Give a substantial portion of the wealth to charity while alive. It just might be uncharitable to leave it all to charity.

Thursday 27 February 2020

BUSINESS DAY

Corporate Social Impact

33

Onuwa Lucky Joseph (08023314782) Editor.

A letter of gratitude to Bill Gates from Xi Jinping ONUWA LUCKY JOSEPH

B

ill Gates has always been lionized in China. And that was even before the commencement of his philanthropy initiatives. The respect was more out of his acknowledged tech wizardry and his preference for looking the other way, so to speak, when the Chinese were wildly pirating his Windows software.

Like Kevin Platt reported for the Christian Science Monitor in 1997, that singular strategic move was responsible for the enormous popularity of Windows in China.

So Bill being a businessman, always had his need for China, the world’s biggest consumer market. And despite his acceptance by the mass of Chinese people, has courted the market assiduously, visiting China again and again to personally play his part in deepening Microsoft penetration of that market.

In 2017, Bill Gates was given one of China’s highest academic honours – an accolade most-

Xi Jinping and Bill Gates, Source: AP

ly reserved for top scientists and engineers. He was elected to the Chinese Academy of Engineering for work done to develop advanced nuclear technology. And in view of the ‘strict political clearance’ inductees must have, it is clear

One Million Diaspora Nigerians to adopt a toilet each per household ONUWA LUCKY JOSEPH

O

pen defecation happens all over Nigeria, including in big cities. In Abuja, for instance, the Mabushi flyover area reeks of faeces, night and day. It wasn’t always so. But street urchins and sundry pedestrians took up the practice and having not been challenged by the authorities, go at it right there in the open every time nature calls.

It also used to be that in Lagos, and this I recall from memory, at the Obalende under bridge; young men would perch themselves delicately on the road railings, right there in the afternoon, doing the drops and triggering a gathering of unruly flies that moved from mound to mound and sometimes settling, even if briefly, on wary pedestrians already suffocating from the noxious stench. This went on for too long. I haven’t been there in a while so I’m just hoping that in between the Fashola and Ambode governments they were been able to end the practice.

However, even if public defaecation practitioners are forced to move from the public spaces they’ve designated for putrid exertions, they can adopt the guerilla style of doing it anywhere except measures are put in place to force compliance. But how can this be done without serious

alternatives? One such alternative is that public toilets be made available and accessible to the general public. The other option, of course, is for every household to have its own toilet. Now, that’s a long shot as households come in a plethora of forms, some not having the structure to sustain a room, never mind toilet.

However, when more households can have their own toilets, the incidence of public defaecation will come down considerably.

That is what The Organised Private Sector on Water, Sanitation and Hygiene (OPS-WASH) had in mind when its coordinator, Nicholas Igwe, mentioned recently about commencing discussions with the Nigeria Diaspora Commission as to the possibility of one million Diaspora Nigerians adopting one toilet each per household.

Now, that would be something, wouldn’t it?

But we hear a lot of these things that never make it to implementation. No doubt, Diaspora Nigerians will want to contribute their bit. But they also need to know that there are measures in place to frustrate diversion of funds pooled for the purpose.

But looking beyond Diaspora Nigerians, Mr Igwe believes that corporate organisations, by factoring this into their CSR budgets, can play a big role with regards to scaling up water and sanitation services in the country. www.businessday.ng

that Mr. Gates has quite a chummy relationship with the powers that be in Beijing.

Fast forward to 2020 and the raging coronavirus epidemic that is threatening to contract the economy of China while at the same time decimating

thousands worldwide if not well and quickly managed.

The Bill and Melinda Gates was quick to express its support by throwing in $100million to help combat the scourge. It is the single biggest donation so far from amongst a growing

collection of luminary donors.

President Xi Jinping, not hitherto renowned for his effusiveness, was so moved by the gesture he had to bring out his pen to write and sign a letter that conveyed his gratitude: “I deeply appreciate the act of generosity of the Bill & Melinda Gates Foundation and your letter of solidarity to the Chinese people at such an important moment”.

The Gates Foundation says the money will be used to strengthen detection, isolation and treatment efforts, including protecting at-risk populations and developing vaccines and diagnostics. Interventions are critical as the virus has shown itself resilient and very stubborn. Hopefully, these efforts will yield results so that the many quarantined in different parts of the world, especially in China, will be released to live free again. As things stand, coronavirus has become another word for imprisonment. The world needs to break free, and quickly too.

Amazon boss Jeff Bezos has pledged $10bn (£7.7bn) to help fight climate change.

T

he world’s richest man said the money would finance work by scientists, activists and other groups.

He said: “I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change.”

Writing on his Instagram account, Mr Bezos said the fund would begin distributing money this summer.

MrBezoshasanestimatednetworth of more than $130bn, so the pledge represents almost 8% of his fortune.

Some Amazon employees have urged him to do more to fight climate change. There have been walkouts and some staff have spoken publicly. Also, Mr Bezos is financing the Blue Origin space programme.

Compared to some multi-billionaires, Mr Bezos had done only limited philanthropy. His biggest donation before Monday’s pledge is thought to have been $2bn in September 2018 to help homeless families and fund schools.

He has also been criticised for not signing the Giving Pledge, under which the super-rich promise to give away half of their wealth during their lifetimes.

The Seattle-based company is a neighbour of Microsoft, which in January unveiled a plan to become carbon negative by 2030.

Mr Bezos’s full Instagram post read: “Today, I’m thrilled to announce

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Jeff Bezos

I am launching the Bezos Earth Fund.⁣⁣⁣ “Climate change is the biggest threat to our planet. I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share. This global initiative will fund scientists, activists, NGOs - any effort that offers a real possibility to help preserve and protect the natural world.

“We can save Earth. It’s going to take collective action from big @Businessdayng

companies, small companies, nation states, global organisations, and individuals. ⁣⁣⁣ “I’m committing $10bn to start and will begin issuing grants this summer. Earth is the one thing we all have in common - let’s protect it, together.”⁣⁣⁣

(Culled from BBC) (Kindly send feedback to 08023314782 / csrmomentum@ gmail.com)

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Thursday 27 February 2020

BUSINESS DAY

news

T-Bill auction records N157bn failed transactions on excess liquidity ENDURANCE OKAFOR

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ore than N157.42 billion worth of failed transactions were recorded at the Nigerian Treasury Bills (T-Bills) auction conducted Wednesday by the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria (FGN) due to excess liquidity in the financial system.

Fixed-income investors seeking high-yielding securities were disappointed, as attempts to buy the federal government short-term debt instruments at attractive rates were denied.

Investors bid at rates which were as high as 4 percent, 6 percent and 13.18 percent on the 91-day, 182day and 364-day bills, respectively.

Subsequently, the apex bank lowered rates to 3 percent, 4 percent, on the 91-day, and 182-day maturities; flat rates, as the rates were the same at the stop rate from the previous auction.

Investors’ rush for the long-term maturity crashed the rate to 5.7 percent away from the 6.54 percent reported the last auction.

Ayodeji Ebo, managing director of Afrinvest Securities Limited , said investors were

bullish on the longer maturity resulting to further decline in the stop rate.

“The continued high liquidity in the financial system due to the maturities is responsible for the sustained high demand. Investors were not very aggressive at the short and medium T-Bills spectrum due to other investment alternatives with higher yields,” Ebo said.

Investors jostled for the N104.11 billion the CBN sought to raise at the auction with N261.53 billion, meaning investors oversubscribed by a tune of N157.42 billion, as compiled from the auction result seen by BusinessDay. A breakdown of the result reveals that Wednesday’s sale was oversubscribed by almost three times with most demand for the long term paper.

The bid for the 364 -day maturity was oversubscribed by almost four times. While the CBN offered N51.99 billion for the 182-day instrument investors jostled for N175.08 billion.

“The market performance was due to the massive liquidity that was in the system already. You can see the evidence in the wide bid range,” Yinka Ademuwagun, research analyst, FMCGs, United Capital plc, said add-

ing that it was expected that the rates will fall further.

The matured Open Market Operation (OMO) bills worth N440 billion coupled with Bond of N606 billion brought excess liquidity to Nigeria’s financial market.

“We have had huge OMO maturities over the past 2 weeks which many local investors and banks have not been able to roll over, the PMA served as an opportunity to invest this excess liquidity. This was ultimately going to force rates lower,” Ayorinde Akinloye, a research analyst at CSL Stockbrokers, said.

Further analysis of auction result revealed that the 91-day medium-term paper was oversubscribed

by N20.89 billion. The CBN offered N20.37 billion but investors were ready to put in N41.26 billion into the instrument.

The apex sold N31.75 billion worth of bills for the 182-day paper, but investors were ready to subscribe with N45.19 billion.

Meanwhile, the apex bank obtained all the allotment it had put in for auction at N104.11 billion.

“One thing kind of clear, investors would not be happy to accept anything lower on the short and mid-dated bills,” Ademuwagun said.

Nigeria’s mobile transfers surge to 4-year high in January 2020 BUNMI BAILEY

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he volume of mobile transfers carried out in Nigeria in January 2020 skyrocketed to its highest level in four years, supported by the Central Bank of Nigeria’s (CBN) raft of policies to enhance access to affordable financial products and services.

According to latest data by Nigeria Interbank Settlement System (NIBSS), the number of bank transactions done via mobile devices surged yearon-year by 914.5 percent to 7.35 million in January 2020, from mere 724,803 recorded in similar period in 2019.

A further look at the data shows that the volume of mobile transfers stood at 269,594 and 470,442 in 2017 and 2018, respectively.

Analysts are of the opinion that the convenience associated with doing transactions on mobile device coupled with the fact that Nigeria has a huge youthful population, who are digitally savvy as well as the CBN lenient policies on financial inclusion, fuelled the astronomical rise in the vol-

… CBN’s policies seen as key driver ume of mobile transfers.

“This shows that the CBN’s effort towards boosting financial inclusion is gradually paying off,” Damilola Adewale, a Lagos-based economic researcher says.

The use of mobile phones by people in rural and urban areas to make transactions, improvement in internet services across the country and data availability have actually increased investments in those areas to ensure there is a reliable telecom’s system to support the banks’ payment systems, Ayodele Akinwunmi of corporate banking department, FSDH Merchant Bank Limited, notes.

Late last year, the Nigerian apex bank reviewed the guide to charges by banks, other financial and non-bank financial institutions. Some of the changes introduced included downward review on charges for electronic transfers as well as reduction on ATM withdrawal charges and card maintenance fees, among others.

Furthermore last year, the CBN gave licences to some

payment service banks, as part of efforts to scale up Nigeria’s financial inclusion rate to 80 percent and 95 percent by 2020 and 2024, respectively.

Before May 2017, the average charge for inter-bank funds transfers across Nigerian banks was N100 per transaction. But the CBN has reduced the average charge to N50.

The increased penetration of e-payment systems also an impact on the volume of cheque transactions as it fell by 11.7 percent.

Also, the volume of Pointof-Sales (POS) activities rose year-on-year by 46.7 percent to 41.3 million in January 2020, from 28.2 million in January 2019, while its value increased by 40.6 percent.

“This is driven more on consumers or the banking population shifting towards the use of electronic banking channels for financial transactions.

So, there is an increased use of digital channels for transactions and mobile payments,” Gbolahan Ologunro, research analyst at CSL Stockbrokers, says.

APPEALS: Lagos targets poultry, fish, rice with 4,000 farmers to boost food production JOSHUA BASSEY

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ome 4,000 trained agro entrepreneurs will be leveraging World Bank assisted Agro-Processing Productivity Enhancement And Livelihood Support (APPEALS) project to up food production in Lagos State.

Lagos is one of the six states benefitting from the $200 million World Bank project fund that targets increased food production in Nigeria.

With an estimated population of 21 million residents and population density of 5,000 people per square kilometre, food and other agricultural products are in very high demand in Lagos.

Indeed, figures from the Lagos State Ministry of Agriculture show that over one million metric tons of rice are consumed in the state per annum.

Deputy Governor of Lagos State, Obafemi Hamzat, said on Wednesday that government under the APPEALS project was focusing on three agro value chain where Lagos had advantage in terms of production and market. These include rice production, poultry and aquaculture.

According to him, farmers, which include women and youth, have been trained under the project and would be assessing the APPEALS

grants to raise their level of food production along the identified value chain.

Hamzat, who chairs the State Steering Committee (SSC) of the project, said Wednesday’s meeting considered project’s work plan and budget for the year.

“Right now rice farmers are doing two tons per hectare. That is too small; they need to get it to six tons per hectare. The reality is that we need to encourage our farmers to do better than they are doing now in terms of productivity in these three advantaged agricultural areas and also to improve the understanding of the market so that farmers can live well and we all can also have food to eat, that is why we are committed to the project”, he said.

The state project coordinator of APPEALS, Oluranti Sadge-Oviebo, said APPEALS was collaborating with the Lagos State government to deliver its mandate.

“We want to support farmers to diversify and produce more than what they are currently producing, the government is looking at how to support youths and women to do this,” she said.

Some 1,620 of the agripreneurs, which formed the first batch of the targeted beneficiaries of the Lagos APPEALS grants, were recently graduated in the state. www.businessday.ng

L-R: Tokunbo Habeeb, Lagos State coordinator, Raw Materials Research and Development Council; Ahmed Mansur, president, Manufacturers Association of Nigeria (MAN); Oranu Chris Chidume, chairman, corporate affairs and strategy planning committee, MAN, and Ambrose Oruche, acting director general, at the press conference for the 2020 Nigeria Manufacturing and Equipment Expo (NME) in Lagos, yesterday.

Pic by Olawale Amoo

Dangote Cement pays N16 per share dividend, records growth in volume

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angote Cement plc’s investment across Africa is bearing the desired results as pan-African sales volume grew in the year 2019, hitting 9.6Mt from 9.4Mt. According to the full-year report released on the floor of the Nigerian Stock Exchange, Dangote Cement Plant, Mtwara in Tanzania recorded a 94 percent increase in volume within the review period. Dangote Cement Plant, Pout, Senegal put up a remarkable performance with sales up more than 100 percent of rated capacity.

The board has proposed a final dividend of N16 per share subject to ratification by the shareholders at the coming annual general meeting (AGM).

Speaking on the result, Joe Makoju, Group chief executive officer, Dangote Cement, said Dangote Cement maintained strong financial performance despite a low growth environment, pricing pressure and increasing competition in key markets.

“The Nigerian operations maintained volume and revenue performance in a challenging environment. Export sales were affected by the border closure in the second half of 2019. Looking ahead, I expect an increase in volumes in 2020 as we commence clinker exports via shipping from Nigeria,” Makoju said.

“Pan-Africa volumes were slightly up notably supported by Tanzania and Senegal. I am glad to report that Tanzania contrib-

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uted positively at EBITDA level. In 2020, I believe Dangote Cement will see an increase in profitability in pan-Africa driven by higher volumes and further efficiency improvements,” he said.

Makoju said as he retires from Dangote Cement, he is proud to have watched it grow from a local producer back in 2007 to a major forceinglobalcementproduction.

“Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries. I wish Michel Puchercos all the best as the new group chief executive officer of Dangote Cement,” he said.

Dangote Cement is Africa’s leading cement producer with @Businessdayng

nearly 46Mta capacity across Africa. It is a fully integrated quarryto-customer producer, with a production capacity of 29.25Mta in its home market, Nigeria.

Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and Gboko plant in Benue state has 4Mta. In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).

Thursday 27 February 2020

BUSINESS DAY

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news

Cyber Africa Summit: Experts proffer solutions to threat-laden organisations in Nigeria Jumoke Akiyode-Lawanson

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ith digital transformation at the helm of affairs in almost all business organisations, the increased usage of internet and digital tools and the constant evolution and sophistication of cyber threats globally, cyber security experts say it has become more than necessary for businesses to ramp up investment in security systems.

During the 2020 Cyber Africa Summit held in Lagos, February 25 - 26, IT industry leads, professionals in associated risk, compliance, cyber law and forensics gathered to discuss, and ultimately proffer possible ways to reduce cyber risks in organisations in Africa.

As security threats become more complex, companies going through transformation in order to compete with digital native start-ups are increasingly finding that the intelligence and threat protection tools they need to

… as security against current, future threats remain priority for Microsoft remain a step ahead of attackers are in the cloud.

These are the IT transformation components to support the business’ digital transformation that will provide both challenges and opportunities for information security. While the challenges are significant, there is also a massive opportunity to solve longstanding security problems with this next generation of computing.

Technology giant, Microsoft, which was one of the major event partners at the event, said it ws committed to providing organisations with a trusted and secure environment within which to digitally transform.

Pratik Roy, business group director, security and modern workplace for Middle East and Africa Multi-Country Cluster (MEA MCC) covering Africa, Levant and Pakistan at Microsoft, told BusinessDay that the company had over 3,500 people purely dedicated

to working on cyber security and had invested about $1 billion in cyber security research.

“Microsoft has always been at the centre of empowering businesses to secure the environment in which they operate in. Our unique insights into the threat landscape create a hub where all endpoints are protected, attacks stopped, and response time accelerated. We’ve been able to do this through educating through such forums and facilitating our customers move to the cloud – adoption of modern platforms and embracing comprehensive identity, security and management solutions,” he said.

Speaking during a panel session discussing ‘The evolving cyber landscape: Why being secure is not enough,’ Opeyemi Okesola, deputy CIO, African Alliance Insurance, said constant education and awareness of cyber threats and its extreme dan-

gers was equally as important as network security.

“Although network security is of extreme importance, there must also be training and retraining of employees to secure the whole enterprise. Organisations should also try to open up about being attacked in order to save others,” Okesola said.

According to Okesola, “The wannacry attack of 2017 really affected a lot of organisations in Nigeria but it was never reported. We should be more vocal about things like this in order to create awareness and save other companies from also falling victim.”

Vipin Chawla, chief technology officer, Eat n Go Limited, said companies need to be more proactive in insuring data and security.

Microsoft says its security solutions housed by the AI capabilities are trained on eight trillion daily threat signals and the insights of 3,500 security experts.

NNPC to expand domestic gas footprint from 1.1BSCF to 2.2BSCF HARRISON EDEH, Abuja

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igerian National Petroleum Corporation (NNPC) has assured of plans to expand its domestic gas footprint with the delivery of the Escravos-Lagos Pipeline System (ELPS) II to double capacity from 1.1 billion standard cubic feet of gas (BSCF) to 2.2BSCF, and the OB3 gas pipeline to connect East and the West.

Group managing director of the corporation, Mele Kyari, confirmed this at the ongoing fourth Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos.

Speaking on the conference theme: “Oil & Gas as an Enabler for Economic Transformation in Sub Saharan Africa”, Kyari stated that the NNPC would commence the construction of the Ajaokuta-Kaduna-Kano gas pipeline in Q2 2020 to serve as an enabler to further boost the eco-

nomic activities of the country.

Represented by the chief operating officer, Gas and Power, Yusuf Usman, Kyari in a statement on Wednesday said the recent passage of the Deep Offshore Act into law had set the industry on the path of irreversible growth.

Kyari noted that Nigeria as Africa’s leading exporter of LNG and the fourth in the world after Qatar, Australia and Malaysia, was ready to capture more LNG market with the Final Investment Decision of the NLNG Train 7.

“Oil and gas resources have remained the major source of revenue that has kept the wheels of Nigeria moving for over five (5) decades. Oil, as we all know, has served as key enabler to the economic transformation of many nations like Norway, Saudi Arabia, UAE, Qatar and many other oil resources dependent nations,” Kyari said.

According to Kyari, it is not a new story that most resource dependent nations rely on their

dominant natural resource to drive other key economic initiatives and activities, noting that this is true of Nigeria and many other countries represented at the conference.

He informed that the connection between Oil and Gas Industry and the Nigeria economy was intricate, stressing that the state of every aspect of the nation’s economic and social life revolved around the hydrocarbon resource.

Kyaricalledformorehardwork todiversifytheeconomyawayfrom over dependence on oil revenues in order to avoid the risk of market fluctuations that may impact the nation’s fiscal equation.

“The current Government under the leadership of President Muhammadu Buhari has made it a priority to ensure revenues from oil and gas resources are utilized to support the emergence and growth of other nonoil sectors of the economy. In order to achieve this objective, it means more money will be

required from the oil and gas to fund new economic projects outside the Oil and Gas Industry,” the GMD stated.

First Bank wins 2019 oil and gas banker award

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irst Bank of Nigeria Limited was recently presented with the Oil and Gas Banker of Year 2019 award at the Patrons’ Dinner and Industry Awards of the Nigeria International Petroleum Summit held recently at Transcorp Hilton, Abuja.

The four-day event, comprising conference and award dinner, is acclaimed to be Nigeria’s government official platform for the petroleum industry gathering, which has evolved to become Africa’s premier business and technology conference for not just oil and gas but for other industries in the economy, notably; maritime, automobile, banking and finance, power (electricity), pipelines, LNG, infrastructure, engineering and construction amongst others.

Speaking on the award, Adesola Adeduntan, the bank’s CEO, said, “We take pride in this recognition, as it represents the nation’s identification with our leading role in promoting the growth of the oil and gas industry.

We remain steadfast on being the financial partner of first choice to Nigerians and, indeed across Africa as we collectively strive towards the continued growth of the economy at large.”

The event had in attendance Adesola Adeduntan, CEO, First Bank of Nigeria Limited, represented by Bashirat Odunewu, the bank’s group executive, Energy and Infra-

Imo economy set for a boost as Uzodinma signs State Revenue Administration Law 2020 Iheanyi Nwachukwu

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mo State governor, Hope Uzodinma, on Wednesday assented to the amendment to Imo State Revenue Administration Law 2020 as part of efforts to boost the economy of the state.

He said the law will assist in improving the revenue base of the state by closing revenue leakages occasioned by the engagement of multiple consultants who rip-off the state.

Expressing his views on the operational status of the law before the amendment, Governor Uzodimma noted: “Before now, the law provides for consultants that collect 10% of the total revenue, 10% goes to the Board of Internal Revenue (BIR), 20% to ENTRACO and 10% to OCDA. At the end

of the month, 50% of the IGR is gone, leaving the state with only 50% of the internally generated revenue collected.”

This he said is in violation of the provisions of the 1999 constitution as amended.

The Governor said the amendment he assented to, empowers the Board of Internal Revenue to spend 5% of the Internally Generated Revenue (IGR) for the payment of salaries of their workers and other personnel services. This expenditure, the governor said, will be subjected to appropriation by the State House of Assembly.

Uzodimma explained that, with the amendment, the state now stands to gain more as 95% of the total IGR will go directly to the state coffers as against the 50% which was the old order.

Also speaking, the Speaker, www.businessday.ng

Imo State House of Assembly, Rt. Hon. Chiji Collins said that the law before its amendment, which is similar to Lagos State Revenue Law, has not benefitted the state in terms of its operation. He expressed dismay that half of what is generated as IGR goes to consultants at the detriment of the state.

The amendment, the Speaker said, will reduce the volume of money that the state loses through consultancy.

“We have enough manpower to do the job. What we agreed with the Executive is to allow the Board of Internal Revenue take 5% of the revenue generated which will be used for salaries and personnel cost of the agency with appropriation that will come from the House of Assembly before the fund will be used. https://www.facebook.com/businessdayng

@Businessdayng

structure as a panellist to deliberate the topic ‘What are the key challenges when it comes to managing risk and generate sustainable long-term incountry value development environment.’

Other speakers in the panel were Olayemi Anyanechi, managing director, Partners Sefton Fross; Bank Anthony Okoroafor, chairman, Petroleum Technology Association of Nigeria (PETAN); Bitrus Bako Nabasu, permanent secretary, Ministry of Petroleum Resources, and Patrick Olinma, executive director, Oil & Gas Commercial, Total E&P Nigeria.

Over 5000 individuals and corporate bodies from across 43 countries including; Sun Xiansheng, secretary general, International Energy Forum (IEF); Jean-Marc Thystère Tchicaya, Minister of Hydrocarbons, Republic of the Congo; Omar Farouk Ibrahim, OPEC governor for Nigeria; Jens FrolichHolte, state secretary, (International Development) Ministry of Foreign Affairs, Norway; Carri Lockhart, SVP Portfolio and Partner Operated Development and Production International Equinor; Gabriel Mbaga Obiong Lima, Minister of Mines and Hydrocarbons Republic of Equatorial Guinea and Magda Chambriand, Former CEO, National Agency of Petroleum Natural Gas and Biofuels Government of Brazil among others, participated in the event.

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Thursday 27 February 2020

BUSINESS DAY

news NESG outlines urgent reforms for...

Continued from page 1

$57 in 2020.

The Federal Government hopes to rake in N2.64 trillion oil revenue in 2020 which is around 32 percent of total expected income.

But economists have warned that the coronavirus outbreak will hurt the global economy and commodity prices around the world, prompting OPEC+ to plan to cut output.

Informed by the recent events, the IMF, which underestimated Nigeria’s growth in its forecast last year, recently lowered 2020 growth projections for the country by half a percentage point to 2 percent.

With the odds not in Nigeria’s favour, it must address challenges constraining growth in trade, real estate, oil refining, metal ores, quarrying and other minerals, electricity, gas, steam and air conditioning, public administration, and three other sectors that make up 27.1 percent of the economy but failed to grow last year.

In terms of structure, Nigeria remained serviceled with a slowly-growing agriculture sector due to certain issues that include “rising incidences of insecurity and continuing closure of the nation’s bor-

ders”, NESG warned.

The NESG urged the government to work with regional neighbours towards resolving the issues around border closure and reopening the borders to counter rising adverse impact of the closure, especially on trade, employment and cost to Nigeria.

While the recent tax reform by the government aimed at boosting non-oil revenue through a VAT hike to 7.5 percent – among other things – was commended, the group warned that using tax solely as a tool to raise money for the government might be a trade-off for investment and job growth which could choke fragile growth.

On the decline in Foreign Direct Investment into the country over the last five years, the private sector leaders said the trend could be halted if Nigeria demonstrates a commitment to attracting and protecting investments.

Policy inconsistency, insecurity and other business constraints such as inadequate infrastructure were identified as the key hurdles for businesses.

Noting Nigeria’s continuing progress on Ease of Doing Business and the work of the Presidential Enabling Business Envi-

Insurance industry’s road to 100,000...

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million people should have at least 100,000 agents,” Coenraad Vrolijk, regional chief executive officer, Allianz Africa, told BusinessDay during his recent visit to Nigeria.

The road to achieving these 100,000 sales agents in order to deepen insurance penetration lies not in the cities but in the hinterlands, analysts say.

“We understand that the challenges why many insurance companies are not able to operate offices in the localities are as a result of economics of scale. We will support in this regard to help deepen penetration,” Sunday Thomas, acting commissioner for insurance/CEO, NAICOM, said.

In this regard, Thomas said the commission would encourage companies to have joint offices, shared infrastructure and co-habit for economics of scale.

Africa’s most populous country of 200 million people has insurance penetration of 0.6 percent, according to Insurance Penetration in Sub-Saharan Africa (by country) published in 2017 by Jennifer Rudden.

Nigeria came number 14 on the table, trailing behind South Africa at 16 percent, Namibia (6.69 percent), Lesotho (4.76 percent), Mauritius (4.18 percent), and Zimbabwe (4.09 percent), among others.

Insurance business has largely concentrated in the

Bayelsa: Supreme Court throws out...

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ticipation in the election.

The apex court subsequently ordered that the candidates of the People’s Democratic Party (PDP), who came second in the election, be sworn in as duly elected governor and deputy governor of the state.

However, not satisfied

with the decision of the apex court, the APC and Lyon applied to the court for a review and setting aside of its judgment that disqualified them from the November 16 poll.

The applicants specifically wanted the Supreme Court to set aside the “wrong” interpretation given to its judgment of February www.businessday.ng

Asue Ighodalo (m), chairman, board of directors, The Nigerian Economic Summit Group (NESG), in a meeting with board members in Lagos.

ronment Council (PEBEC), NESG called for the “next level of reform” which would focus on areas like power supply, ports administration, and rail infrastructure development.

“To achieve this, the government needs to strengthen all laws governing PPP agreements and must demonstrate sincere commitment towards upholding agreements and protecting investors,” the group said.

The NESG said the fact that Nigeria signed the continental trade agreement was not sufficient as the country needs to ratify the agreement to

become a ‘State Party’ and participate effectively in the on-going negotiations of the treaty, as well as align domestic policies and regulations to maximize trade gains.

On the decline of Nigeria’s external buffers and dominance of foreign investment inflows which are majorly short-term portfolio investments, NESG recommended that the Central Bank considers managing the naira by allowing the currency fluctuate within a predetermined range not exceeding 5 percent.

According to the group, such fluctuation would serve

to reduce the net outflow of reserves by improving confidence in the economy.

The World Health Organisation (WHO) has listed Nigeria along with 13 other African countries as nations where an outbreak of the coronavirus is possible, but the health risk is one of many threats to the country, NESG said.

The group called for public policy to note the adverse effect of the coronavirus on global economic growth, especially commodity prices, and adjust to ameliorate these adverse effects.

The rising cases of harassment of businesses

cities with little attention at the local governments and rural areas, accounting for why corporate businesses produced 73 percent and public sector 15 percent of the N491.8 billion total Gross Premium Income generated by insurers in 2019, according to figures released by Agusto & Co. Going by geographical location, Lagos (83.6 percent), Abuja (6.6 percent) and Rivers (2.4 percent) accounted for 92.8 percent of the total Gross Premium Income in 2019.

Thomas said “while effort is being made to encourage deployment of technology to help insurance distribution, brick and mortar are still relevant”.

He said because of the rather low level of educa-

tion in the rural areas, human beings still need to interact with consumers and insurance agents would play a key role in that regard.

Vrolijk said it is only by increasing the number of sales agents to about 100,000 that retail distribution could reach all over the country, and that would then be supported by technology.

NAICOM, it will be recalled, has licensed three microinsurance companies including Goxi Microinsurance Company Limited, Casava Microinsurance Limited and CHI Microinsurance Limited.

These are expected to help deepen penetration at the grassroots, in line with the commission’s financial inclusion strategy.

Egypt shows how Nigeria can ease fuel...

13, 2020 and the subsequent execution by INEC. Among others, APC contended that the Supreme Court, in its judgment, misinterpreted the November 12, 2019 judgment of the Federal High Court, Abuja which it affirmed.

The party argued that the Supreme Court acted without jurisdiction and denied it fair hearing when it proceed-

ed to disqualify its governorship candidate even though the Federal High Court, in the judgment by Justice Inyang Ekwo, which the apex court affirmed, refused the prayer to disqualify Lyon.

The APC also faulted the interpretation given to the Supreme Court judgment

by INEC in deciding to issue certificate of return to the candidates of the PDP.

https://www.facebook.com/businessdayng

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driven down the cost of conversion of vehicles to anywhere from $100-$1,000 depending on how the car owner wants it.

Egypt had taken the cost of conversion head-on. To offset the initial cost of converting vehicles from petrol to CNG engines, Egyptians were receiving concessions.

Two oil-affiliated companies, Car Gas (Natural Gas Vehicles Company) and Gastec (Egyptian International Gas Technology Company), have continued to offer concessions to drivers who want to transfer cars to natural gas and to study the development of new and affordable payment systems. The companies offer easy payment facilities to car drivers who want to transfer their cars through instalment systems without advance or interest and with simplified contracting procedures.

“The rest of the world is moving towards the use of gas to power economic growth and to develop natural gas vehicle (NGV) technologies.

Nigeria must do something about this,” Inibong Jackson, managing director and chief executive officer, Nigeria’s Oil & Gas Free Zones Authority, told BusinessDay on phone.

“To achieve this, a strategic long-term plan will be need@Businessdayng

in the guise of raising revenue was also an issue NESG said the country needs to address through the use of a transparent and fair tax collection process that would encourage compliance.

Also, the advocac y group called for the government (legislature and the executive) to continue to work harmoniously to ensure the timeous enactment of economyenhancing legislation, in particular, the Petroleum Industry Bills, the Companies and Allied Matters Amendment Bill and the Investment & Securities Amendment Bill.

ed. It cannot be an overnight transformation.”

Today, a CNG plant can be built in every petrol station and cars can do the same journey which one litre of petrol can at N110 for CNG and N145 for petrol.

Egypt has probably done the math and has signed agreements that will lead to the establishment of 54 natural gas refuelling installations across 15 governorates, including a number of car-conversion centres, by 30 primary and 24 secondary phase stations. Furthermore, it is intended that 350 new stations would be completed in six years after the study and selection of suitable sites.

In Nigeria, NIPCO, a downstream oil and gas company, claims it has converted a total of 5,600 vehicles into CNG engines at the company’s workshops in Benin, Edo State and Ibafo, Ogun State as one of the company’s efforts at providing access and an alternative to motorists to power their vehicles.

But Agboola reckons that the use of CNG might not be viable in the country yet.

“If we considered the viability of natural gas cars in terms of demand, the outlook does not look good for Nigeria, because there is none currently,” Agboola said.

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200,000 ‘rich men’ are Nigeria’s biggest tax evaders – Agusto OLUFIKAYO OWOEYE

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former director-general, Budget Office, Bode Agusto, has alleged that 200,000 wealthy Nigerians are the biggest tax evaders in the country.

Speaking during the 17th Annual Aret Adams Memorial Lecture in Lagos, Agusto said the biggest culprits with respect to tax evasion are the wealthy 0.1 percent of the population (or 200,000 individuals) who ought to self-assess themselves to tax but fail to do so, noting that the focus should be on them, not businesses and those in employment who are already largely compliant.

“They should enforce by auditing a sample of individuals; if they have underpaid, ask them to pay such amounts plus a stiff penalty. If they fail, impound their assets, sell and pay government,” he said at the lecture with the theme ‘Nigeria’s economy after oil: How prepared are we?’.

Agusto said there was a need to increase non-oil tax revenues in the country, adding that non-oil taxes collected by all tiers of government in Nigeria averaged 4 percent of national income in the past five years.

“Nigeria generating significantly lower tax revenues than other key economies in sub-Saharan Africa? In my opinion, it is largely due to poor tax compliance in Nigeria. In Angola, it was 8 percent; Ghana, 16 percent; Kenya, 18 percent ; South Africa, 24 percent, and in the OECD countries, 32 percent,” he said.

“What if Nigeria were able to increase non-oil tax revenue to 15 percent of national income? This means that Nigeria will generate an additional N14.4trn in revenues every year,” he added.

Agusto said it also meant that total government revenue would be 20 percent of national income or N28.8trn per annum compared to the current figure of N10.4trn.

He said to raise the level of non-oil tax revenue, the government should focus on Personal Income Tax, Value Added Tax and Companies’ Income Tax, and make tax laws simpler.

“The next step is for Mr. President to make his PIT returns public annually, then make it obligatory for all those want to work for him to do the same. He should then look at all of us in the face and say, ‘Woe betides you if you don’t comply going forward,” he said.

Sokoto increases health facilities, deploys N400m counterpart funding to tackle polio SEGUN ADAMS

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okoto State has achieved an increase in the number of health facilities that offer routine immunisation against polio, states spokesperson said Monday as efforts strengthen towards eradicating the paralysisinducing virus in the state.

Dedicated health facilities to stamping out the virus have grown from 553 to 597 in the last one year, Governor Aminu Waziri Tambuwal said.

The state government also said the commissioner for health, Ali Inname, has within one year releasedN400masitscounterpart fundingoftheprogramonimmunization in which Sokoto partners the Bill and Melinda Gates Foundation(BMGF),DangoteFoundation (DF), United States Agency for International Development (USAID) and the United Nations Children’s Fund (UNICEF) Tambuwal, highlighting achievements recorded by his administration at the end of the year(2019)routineimmunization Memorandum of Understanding (RIMoU)meetingheldatGovernmentHouse,Sokoto,saidthestate was recording success in its fight against poliovirus.

“Thereductioninthenumber of circulating vaccine-derived poliovirus (cVDPV) identified in 2019 is a pointer to improvements in our routine immunization

program and the quality of the outbreak response campaigns.”

He also noted consistent monthly meetings on polio eradication, immunization of 55 per cent sampled children and the conduct of State Data Quality Assessment in 23 local government areas.

Tambuwal assured that the state’s “health team will continue to work to intensify strategies to eradicate the occurrence of cVDPV in the coming months.”

He noted the observations by various partners in the meeting, including BMGF, DF, USAID and the UNICEF; and assured that “necessary adjustments” and improvements would be made to address the gaps.

Bill Gates, chairman of the BMGF, urged the state government to follow up on local government counterpart funding and ensure that the transition from Routine Immunization Memorandum of Understanding (RIMoU) to Primary Healthcare Memorandum of Understanding (PHC MoU), should surmount all difficulties earlier experienced.

Chairman of the Dangote Foundation, Aliko Dangote, also featured at the meeting via Skype, commended the state government for its efforts in engaging traditional rulers and other stakeholders in the campaign against polio, noting that there are some problems militating against the health tracking system.

Edo APC leaders kick, condemn Oshiomhole for instigating violence, undermining peace across Nigeria

C

hieftains of the All Progressives Congress (APC) in Edo State have condemned the suspended national chairman of the APC, Adams Oshiomhole’s inclination to violence, which has resulted in the undermining of public peace and safety in Edo, Bayelsa and Rivers states as well as the Federal Capital Territory (FCT), Abuja.

The chieftains, in separate interviews with journalists, condemned the actions of Oshiomhole, particularly his unguarded outbursts against the Supreme Court justices over their verdict on the governorship election in Bayelsa State, following which Douye Diri was sworn-in as governor of the state.

A chieftain of the APC from Edo South Senatorial District, Charles Idahosa, said Oshiomhole in his characteristic manner of attempting to assert himself and his view on people and undermine public institutions, triggered off a chain of events that lead to destruction of property and undermining of peace in Bayelsa State, which resulted from his threats that ‘no government would exist in the state’ after the Supreme Court verdict.

According to Idahosa, “We are very concerned about the actions and utterances of Comrade Oshiomhole in recent weeks.

We had raised the alarm that he characteristically undermines public order with his actions in Edo State and reported him to relevant authorities to take action. We are more concerned now that his actions have taken a national dimension as his utterances have led to attacks on the residence of a justice of Supreme Court in Abuja and Rivers State and also civil unrest in Bayelsa as was seen the past few weeks.”

Another chieftain of the party, Oteghe Adams, said it was regrettable that the suspended National Chairman has exported his penchant for violence to other states of the federation, noting that it was high time he is cautioned and made to take responsibility for his indiscretion.

“Over time, the state government has continuously insisted that Comrade Oshiomhole not only breaches protocol but also instigates violence. This was made manifest on national television and we saw what it resulted to in Bayelsa and other states,” Adams said.

A chieftain of the party in Edo North Senatorial District, Makor Shaka Momodu, said Oshiomhole’s penchant for violence was now a threat to the entire country, adding that failure to call him to order would spell dire repercussion for the country.

CHRISTIANS MARK ASH WEDNESDAY

Catholic Faithful during a prayer procession against insecurity and other problems facing Nigeria in Enugu. NAN

Catholics attend churches and have ash smeared on their foreheads as a symbolic reminder that “dust thou art and unto dust thou shall return” called Ash Wednesday.

New Nyanya, Rev. Fr. Paul Eze (r), resident priest of St. Sylvester Parish, applying ash on Catholic faithful, at the Ash Wednesday Mass to mark the beginning of Lent in Nasarawa.

Parishioners of St. Francis Catholic Church outstation located at Ikosi Ketu, all wore black attires to Ash Wednesday Mass to mourn the killings of Christians in Nigeria as directed by the Catholic Bishop Conference of Nigeria, yesterday in Lagos.

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@Businessdayng

40

Thursday 27 February 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 26 February 2020

Top Gainers/Losers as at Wednesday 26 February 2020 LOSERS

GAINERS Company

Opening

Closing

Change

BUACEMENT

N35.9

N37.15

1.25

Company

Opening

Closing

Change

N116

N112

-4

MTNN

N5.2

N5.5

0.3

VITAFOAM

N4.51

N4.06

-0.45

UBA

N6.85

N7.15

0.3

REDSTAREX

N4.01

N3.61

-0.4

GUARANTY

N26.8

N27

0.2

ETI

N6.5

N6.25

-0.25

FCMB

N1.75

N1.86

0.11

UPL

N1.25

N1.13

-0.12

EKOCORP

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

26,974.38 3,831.00 228,376,852.00 2.737

Global market indicators FTSE 100 Index 7,042.47GBP +24.59+0.35%

Nikkei 225 22,426.19JPY -179.22-0.79%

S&P 500 Index 3,163.39USD +35.18+1.12%

Deutsche Boerse AG German Stock Index DAX 12,774.88EUR -15.61-0.12%

Generic 1st ‘DM’ Future 27,286.00USD +169.00+0.62%

Shanghai Stock Exchange Composite Index 2,987.93CNY -25.12-0.83%

14.052

Global investors stash more assets into goldbacked ETFs

G L – R: Niyi Adenubi, executive director, VFD Group Plc; Rose Ada Okwechime, managing director/CEO, Abbey Mortgage Bank Plc; Olumide Bolumole, head, Listings Business Division, The Nigerian Stock Exchange (NSE); Lolita Ejiofor, head of Compliance/Business Review System, Abbey Mortgage Bank Plc; Geoff Amaghereonu, company secretary/ chief Legal Counsel, Abbey Mortgage Bank Plc; Andrew Nwosisi, executive director, Abbey Mortgage Bank Plc; and Jude Chiemeka, head, Trading Business Division, NSE during a Closing Gong Ceremony to commemorate Abbey Mortgage Bank Plc’s successful listing of additional shares on the Exchange in Lagos.

NSE ASI plunge intensifies as stock market suffers further loss Stories by Iheanyi Nwachukwu

N

igeria’s stock market rout continued on Wednesday February 26, pushing the All Share Index (ASI) lower by 0.22percent and yearto-date (Ytd) return down to +0.49percent.

A combination of fac-

tors –the impact of coronavirus which continues to shake the global market and not too impressive corporate scorecards at the local bourse – spooked investors and caused the NSE ASI turn negative.

The All Share Index closed at 26,974.38 points against the preceding day close of 27,033.10 points.

The market capitalisation lost N31billion to close at N14.052 trillion against

preceding day close of N14.083 trillion.

Eleven stocks gained as against 15 losers. MTNN declined most, from N116 to N112, losing N4 or 3.45percent, while Vitafoam followed after dipping from N4.51 to N4.06, losing 45kobo or 9.98percent.

BUA Cement rallied most, from N35.9 to N37.15, adding N1.25 or 3.48percent. UBA, Zenith Bank, Access Bank,

Transcorp, and United Capital were actively traded stocks.

With market breadth coming in relatively higher, coupled with increasing buying interest in some mid cap /large cap stocks, analysts expect that the market will trade upward Thursday except for significant declines in major large cap stocks.

The volume of stocks traded de-

creased by 5.52percent from 241.71million to 228.37million, while the total value of stocks traded decreased by 22.98percent, from N3.55billion to N2.73billion in 3,831 deals.

The Financial Services sector led the activity chart with 192.28million shares exchanged for N1.64billion; followed by Conglomerates with 15.35million shares traded for N36million.

lobal investors are stashing more and more assets into gold as the coronavirus outbreak spreads and appetite for risk takes a hit, wire service report shows.

The global tally of bullion in exchange-traded funds (ETFs) swelled by the most in more than a month on Tuesday as equities sank.

That was the 25th consecutive day of inflows, a record. At 2,624.7 tons, the holdings are the largest ever. After surging 18 percent last year, gold has extended its rally in 2020, with prices hitting the highest since 2013. The haven has been favored as the virus outbreak has spread beyond China, threatening a pandemic and slower growth.

Goldman Sachs Group Inc. has said that should the disruption from the disease stretch into the second quarter, prices may rally toward $1,850 an ounce.

Spot bullion was last at $1,644.67, up 0.6percent.

It touched $1,689.31 on Monday. A global recession is likely if the coronavirus becomes a pandemic, according to Moody’s Analytics Chief Economist Mark Zandi. The odds of that outcome now stand at 40percent, up from 20percent, he said in a note.

Dangote Cement proposes final dividend of N16 per share ... despite muted full year 2019 earnings

D

angote Cement Plc has proposed final dividend of N16 per share for the period ended December 31, 2019. The full year revenue of the largest cement maker came in lower in 2019 at N891.671billion

against N901.213billion in 2018, representing a decline of 1.06percent.

Profit before tax (PBT) of N250.479billion in 2019 as against N300.806billion in 2018 represents 16.73percent decline. www.businessday.ng

The group’s after tax profit for the full year 2019 period printed at N200.521billion from a high of N390.325billion in 2018, representing 48.63percent drop.

The proposed final dividend which is subject to the https://www.facebook.com/businessdayng

appropriate withholding tax and approval will be paid to shareholders whose names appear in the Register of Members as at the close of business on May 25, 2020.

The register of shareholders will be closed on May 26, 2020. @Businessdayng

Stock investors on the Nigerian Bourse failed to price-in this dividend as the share price remained at N170.

Earnings Per Share (EPS) decreased to N11.79 from a high of N22.83 in 2018, down by 48.36percent.

Thursday 27 February 2020

FT

BUSINESS DAY

41

FINANCIAL TIMES

World Business Newspaper

Democratic rivals pummel Bernie Sanders during TV debate Presidential frontrunner attacked over leftist policies ahead of South Carolina primary DEMETRI SEVASTOPULO

B

ernie Sanders came under heavy fire in the Democratic debate in Charleston, as the party’s other presidential contenders tried to wound the Vermont socialist who has emerged as the clear frontrunner ahead of the South Carolina primary on Saturday.

Mr Sanders, who is far ahead in the national polls after his victories in New Hampshire and Nevada, was attacked on Tuesday night over everything from his economic and healthcare policies to his foreign policy and over claims that Russia was trying to create chaos by interfering in the US electoral process by supporting the senator.

“If you think the last four years has been chaotic, divisive, toxic, exhausting, imagine spending the better part of 2020 with Bernie Sanders versus Donald Trump,” said Pete Buttigieg, the former mayor of South Bend, Indiana who beat Mr Sanders in Iowa.

Michael Bloomberg, the billionaire former New York City mayor, said there was no way the selfdescribed socialist could beat Mr Trump in November’s presidential election, asking rhetorically: “Imagine moderate Republicans going over and voting for him?”

Elizabeth Warren, the US senator from Massachusetts and other progressive in the race along with Mr Sanders, rebuked Mr Bloomberg, saying progressive policies were popular.

“Bernie is winning because progressive ideas are popular . . . But I would make a better president,” Ms Warren said. “Getting a progressive agenda enacted is going to be really hard and it’s going to take someone who digs into the details

Bernie Sanders, the US senator from Vermont, during Tuesday’s debate: ‘I am hearing my name mentioned a little bit tonight. I wonder why?’ © AP

to make it happen.”

South Carolina voters probably watched in large numbers. They heard a lot of things about Sanders they didn’t know — and some won’t like what they heard Larr y Sabato, University of Virginia Mr Sanders came under such sustained attack that he quipped: “I am hearing my name mentioned a little bit tonight. I wonder why?”

In the face of attacks about his ultra-progressive stance, and amid questions about how he would pay for his policies, the US senator from Vermont said the American people wanted a president to tackle “issues that I raised four years ago”, including raising the federal minimum wage to $15 and making public colleges and

universities tuition free.

Mr Sanders has dragged the party to the left over the past four years since his failed bid against Hillary Clinton in 2016. But he has sparked concern among the party establishment who believes he is too leftwing to beat Mr Trump.

Larry Sabato, a politics expert at the University of Virginia, said the debate had not dramatically changed the race, but that it could raise some concerns about Mr Sanders and, as a result, shore up Mr Biden’s waning support in the state.

“Sanders gave as good as he got,” Mr Sabato said. “But one caution: South Carolina voters probably watched in large numbers.

They heard a lot of things about Sanders they didn’t know — and some won’t like what they heard.”

The contenders also sparred over how the US should deal with China and Xi Jinping. Mr Bloomberg criticised China over its lack of press freedom and its “abominable” record on human rights. But he said the US had to work with China on issues such as climate change.

Asked about a previous remark that Mr Xi was not a dictator, Mr Bloomberg said that while the Chinese president had “an enormous amount” of power, he did not have absolute authority since he answered to the Communist party’s politburo.

That prompted a sharp critique from Mr Sanders, who earlier came under fire about comments in which he had praised aspects of the regime of Fidel Castro in Cuba.

“I was really amazed at what

Mayor Bloomberg just said,” Mr Sanders interjected. “He said the Chinese government is responsive to the politburo but who the hell is the politburo responsive to?”

Joe Biden, the former US vicepresident who needs a good result on Saturday to save his campaign, took a strident line on China, saying Mr Xi was a “thug” who put millions of Uighurs in concentration camps and didn’t have a “democratic . . . bone in his body”.

Ms Warren hit Mr Bloomberg by suggesting that he might have conflicts of interest in dealing with China. “Mayor Bloomberg has been doing business with China for a long time. And he is the only one on stage who has not released his taxes,” she said.

Mr Sanders also came under attack for his record on gun control.

Mr Biden said he voted five times against the Brady Bill, which mandated federal background checks, to avoid being attacked by the National Rifle Association.

The senator responded by hitting Mr Biden over his vote for the Iraq war before conceding, “I have cast thousand of votes including bad votes. That was a bad vote.”

While most candidates focused on Mr Sanders, Ms Warren was relentless in keeping up her attacks on Mr Bloomberg, slamming him as she did last week in the Nevada debate about his record with women. She repeated an allegation that Mr Bloomberg once told a pregnant employee that she should have an abortion.

“I never said it, period, end of story,” Mr Bloomberg said, in one of several contentious exchanges between the two contenders.

The stakes in South Carolina are high. Mr Biden needs a win to convince voters that he has broad appeal and could beat Mr Trump.

European stocks dive as coronavirus concerns mount Stoxx 600 index falls as much as 2.9 per cent as outbreak spreads and companies warn on impact

PHILIP GEORGIADIS

E

uropean stocks and US futures tumbled again on Wednesday as the global rout induced by concerns over the impact of the coronavirus outbreak intensified.

Stock markets across Europe fell nearly 3 per cent, sending the regional benchmark Stoxx 600 index to its lowest level since December. The index has now lost more than 9 per cent of its value over the past week as investors dump stocks and move into traditional haven assets.

The fall came after Wall Street shares plunged on Wednesday

with a sell-off accelerating after the US Centers for Disease Control and Prevention warned it was likely the outbreak would evolve into a pandemic that could cause “severe” disruptions to daily life in the US. The S&P 500 dropped 3 per cent, bringing its losses to 7.6 per cent since hitting a record high last Wednesday.

US futures pointed to falls of more than 1 per cent at the open in New York, following a sharp sell-off in the first two days of trading this week. Asian markets dropped for a third day in a row.

The sell-off across global stock markets has developed into one of the most significant www.businessday.ng

market retreats since the 200809 financial crisis, with investors selling riskier assets on growing fears that the impact of the virus will be more widespread than first hoped.

The number of people infected by the novel coronavirus continued to rise overnight, pushing past 81,000 as the outbreak rippled around the world.

Six new cases were announced in Spain on Wednesday morning, while companies including Diageo, Lufthansa and Danone outlined hits to their businesses.

“The recent swings indicate the complacency that appears to have settled over markets during the earlier stages of the

https://www.facebook.com/businessdayng

outbreak has been dislodged,” said George Efstathopoulos, multi asset portfolio manager at fund manager Fidelity International.

“In our view, the volatility isn’t as surprising as the fact that it took so long to rear its head”.

Writing in the Financial Times, Nouriel Roubini, professor of economics at Stern School of Business, said the risk of a global recession was building. “Investors are deluding themselves about how severe the coronavirus outbreak will be.

Despite this week’s big sell-off in equity markets, the worst is yet to come,” he said.

Investors moved further into @Businessdayng

the safety of government debt, sending the yield on the benchmark 10-year US Treasury note to a fresh low of 1.32 per cent.

Yields fall when prices rise.

In Asia, stock markets fell despite traders pointing to what they described as possible buying by government institutions in an attempt to lift markets.

On Wednesday Japan’s Nikkei 225 closed 0.8 per cent lower after falling as much as 2.1 per cent through a key technical line in morning trading. China’s CSI 300 finished the day down 1.4 per cent after being whipsawed between gains and losses, pushing the benchmark into the red for 2020.

42

Thursday 27 February 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Fuel-cell producers jump on new hydrogen ‘hype cycle’ Analysts who recall 90s craze wonder whether excitement over alt-fuel is justified HENRY SANDERSON

H

ydrogen-linked stocks have raced to their strongest levels in more than a decade, as investors bet that efforts to cut emissions will make hydrogen a viable alternative to fossil fuels in vehicles.

For backers of this alternative fuel source, it has been a long wait for interest to rekindle since a brief flare-up more than 20 years ago.

But for markets, the comparison also holds a cautionary lesson: how quickly excitement around a particular technology can dissipate.

The current wave of optimism has lifted the share price of London-listed Ceres Power — a maker of fuel cells, which turn hydrogen and oxygen into electricity — by 57 per cent so far this year, notwithstanding the fact that the company has yet to turn a profit. Peers Ballard Power, based in Canada, and US-headquartered Plug Power are up 300 per cent since the beginning of last year, despite also being lossmaking.

The big rally in the sector is a realisation that a move away from fossil fuels “is not just about batteries, you need fuel cells as well”, said Phil Caldwell, chief executive at Ceres. For believers, the rising share prices reflect an expectation that hydrogen will benefit from a big push to decarbonise the global economy — and as an input in the making of steel and cement.

New shareholders can point to another category of investor: some of the largest industrial companies, including Bosch and

For some investors, the exuberance has a strong feel of the late 1990s © AFP via Getty Images

Cummins, that have poured about $1bn into fuel cell companies over the past few years. China’s largest diesel engine maker Weichai Power owns a stake in Ceres and Ballard.

“The long-term benefits of hydrogen are compelling and we see a lot of commercialisation of new products,” said Claes Orn, chairman at Thematica, a Luxembourgbased fund which invests in the sector. “When we talk about the environment and you see all the media discussions everywhere, it’s really a hot scene.”

For some investors, this exuberance has a strong feel of the late 1990s. Back then, interest in hydrogen companies spiked after big carmakers started to invest in fuel-cell technology. This powered

Ballard’s share price to a record high of C$165.05 in September 2000, before plunging below C$15 two years later after consumer demand failed to materialise.

“Hydrogen is getting a lot of attention at the moment. I think it’s very similar to previous hype cycles,” said Gniewomir Flis, an analyst at Aurora Energy Research.

Analysts at Panmure Gordon said it was “prudent to pause for a much-needed breath” after the run-up in share prices. The sector trades at a multiple of 22 times enterprise value to this year’s expected annual sales, the brokerage said. That compares with a ratio of two across the FTSE All-World stock index.

The high valuations have been driven by a wave of investment

funds focused on environmental, social and governance factors, said Craig Irwin, an analyst at Roth Capital. “It’s part of a secular rally in sustainability which I expect to be a multiyear bull run,” he said.

The concern for investors is the same as the last time around: whether the excitement is justified.

Most hydrogen is produced from fossil fuels such as natural gas. One of the big challenges, analysts say, is that production from renewable sources of energy and from electrolysis of water is a long way from being cost-competitive.

Mr Flis said the current cost of producing “green hydrogen” via electrolysis was about $3.50 a kilogramme, but it needed to drop to $2 to compete with generation

using fossil fuels. That could take a decade, he added.

The Hydrogen Council, an industry-backed body, said that about $70bn in investment was needed by 2030 in order for hydrogen to catch up with other low-carbon alternatives. That would require a big increase in the capacity of electrolysers; investment in refuelling and distribution networks; and upgrades to gas pipelines.

Max Slee, a fund manager at Tortoise Advisors in London, said another way to gain exposure to the investment theme was to buy into renewable power producers, which will benefit from the vast demand for zero-carbon power needed to produce green hydrogen in Europe.

Still, Mr Caldwell is hopeful that China — as well as Korea and Japan, which plan to put millions of hydrogen-powered vehicles on the road — will help make the gas competitive more rapidly than people think. He gives the example of lithium-ion electric batteries, where mass production in Asia helped costs to fall by more than 80 per cent per kilowatt-hour since 2010.

“Those same economies that embraced batteries are now embracing fuel cells as the next big technology they need,” said Mr Caldwell.

Ceres’s solid oxide fuel cells are already in use as a range extender on natural gas-fuelled buses in China owned by Weichai, which makes about 600,000 diesel engines a year. “This time it’s sustainable,” Mr Caldwell added. “Twenty years ago it got ahead of itself, but now there is a strong market need.”

LSE’s $27bn deal for Refinitiv faces heat in Brussels

London bourse’s transformative acquisition is facing more scrutiny than expected JAVIER ESPINOZA AND PHILIP STAFFORD

T

he London Stock Exchange Group’s $27bn acquisition of financial data provider Refinitiv is already facing intense scrutiny in Brussels, raising the risk that regulators will subject the blockbuster deal to a much lengthier probe than the companies expected.

The companies have yet to notify competition regulators formally of the deal, a step required to start the review of an acquisition that was acclaimed by the LSE’s shareholders when it was announced in August last year.

A plan to do so by the start of the month slipped because of the unexpected scrutiny of the deal in the so-called prenotification phase, according to three people with direct knowledge of the discussions.

Few shareholders and analysts anticipated the tie-up would face significant hurdles, with the companies having previously indicated it would close in the second half of the year. However, the LSE and Refinitiv are now gearing up for a protracted legal battle, the people said.

The so-called pre-notification stage is becoming an increasingly important one in Brussels, offering both com-

panies and regulators a chance to identify potential concerns and remedies before a formal probe starts.

However, a lengthy prenotification period is often a signal that regulators will embark on a lengthy probe that only a minority of deals face.

“The deal is likely to go into a lengthier probe and we are not on the clock yet,” according to one person involved in the discussions. “It could spill into next year.”

That prospect is a blow to LSE chief executive David Schwimmer, who is betting the capture of Refinitiv, best known for its Eikon desktop terminals, will give the more

than 300-year-old exchange the scale and skills in financial data to compete with the industry heavyweights like Intercontinental Exchange and CME Group.

Those deals that are eventually subject to a lengthy investigation are being held up for longer in the informal, pre-notification stage, according to a report last month from Dechert. The average period has climbed from 3.2 months in 2011 to almost 8 months last year, the report found.

Advisers to the LSE are frustrated that regulators are asking too many questions at this early stage, according to

one person familiar with the discussions. They have complained the process is making their lives “too miserable”, the person added.

The deal was hailed as transformative for the LSE and the FTSE 100 company’s shares have surged 82 per cent over the past 12 months.

Once regulators complete a lengthier probe, they can force companies to sell businesses or even block a deal.

The LSE and Refinitiv said they were still aiming to close the deal by the end of the year.

They declined to comment further. The European Commission declined to comment on the process.

Thursday 27 February 2020

FT

BUSINESS DAY

43

ANALYSIS

Disney defends new big cheese at the Mouse House Bob Iger is handing over to parks chief Bob Chapek, overlooking the media group’s streaming head ANNA NICOLAOU

W

alt Disney has spent the past three years making a high stakes transition to online streaming, as the century-old owner of films, television shows and theme parks looks to confront entertainment industry disrupters such as Netflix head-on.

Bob Iger, Disney’s wellregarded chief executive for the past decade and a half, has repeatedly called the shift the “number one priority” at the world’s largest media company.

It therefore came as a surprise on Tuesday when Disney abruptly announced that Mr Iger was retiring, with nearly two years left on his contract, to be replaced “immediately” by Bob Chapek, a little-known company veteran who has minimal experience in streaming.

“You thought you were going hard right, and all of a sudden you went hard left,” said Rich Greenfield, a media analyst and partner at Lightshed, the research company.

He likened the choice to Apple’s decision to replace Steve Jobs with Tim Cook: “You’re choosing the operating executive instead of the visionary, dynamic CEO.” In an interview with the Financial Times, Mr Iger defended the choice of Mr Chapek as his successor. “No one knows the Disney brand better than Bob [Chapek]. That is a prerequisite to being able to run this company well,” he said. “It’s less important that he knows the specifics of one business, and more important that he appreciates how all of these businesses fit into one company.”

However, analysts questioned the timing of the news: on a random Tuesday afternoon just a few weeks after Disney reported quarterly results, and with no pressing reason to announce a succession plan.

Mr Iger told the FT that Disney’s board had considered both internal and external candidates in what was a “thorough” succession process.

“We’ve been working on this for a while,” he said.

“There’s no magic to the date,

Bob Iger, left, has stepped down as Disney chief executive to be replaced by company veteran Bob Chapek, a move that took Wall Street by surprise © FT montage; Getty Images; Bloomberg; AP

other than I felt the sooner we do this, the quicker it gives Bob the chance to run the company and for me to shift my priorities.”

Mr Chapek has worked at Disney for almost three decades. The 60-year-old Indiana native, who holds degrees in microbiology and business, worked in brand management at Heinz before joining Disney in the 1990s, where he helped craft the company’s VHS and DVD strategy. He later led Disney’s consumer products division, and most recently ran theme parks, which have been a strong source of profitability for the group in recent years.

Mr Chapek told investors on Tuesday that his experience gives him a “broad overview” of how Disney operates but admitted: “obviously I have not spent as much time on the media side or the direct-to-consumer side”.

Mr Iger, 69, said he told the board that he needed to focus on “creative endeavours”, which should be the “real priority of the company”, and to do so needed to hand the reins of day-to-day management to someone else. He will remain as executive chairman, with Mr Chapek reporting directly to him, until the end of next year.

When asked what “creative endeavours” entails, he said: “I intend to really focus on the

creative engines of the company . . . movies and TV, very specifically . . . encouraging people to take smart creative risks.”

The appointment of Mr Chapek came as a surprise because analysts had thought that Kevin Mayer, another longtime Disney executive, was being groomed for the top job. Mr Mayer has made a name for himself as a dealmaker, helping orchestrate a string of successful acquisitions — Pixar, Marvel, Lucasfilm and 21st Century Fox — that built Disney into the powerhouse it is today.

More recently, Mr Mayer was appointed to run Disney’s streaming and international businesses — a high-profile job given Mr Iger’s emphasis on streaming as the future of the entire group. The promotion, in early 2018, heightened speculation that Mr Mayer would eventually become chief executive.

Mr Iger has bet the group, and his own legacy, on an ambitious push into online streaming. He postponed his retirement to guide Disney through the transition, having gained Fox’s prized entertainment assets from Rupert Murdoch in a $71.3bn deal 18 months ago.

Last April, Disney laid out its ambitious plans for its new streaming service. During a crucial pitch to investors Mr

Iger greeted them at a sound stage on Disney’s studio lot, followed by Mr Mayer, who took the platform to demonstrate a prototype of Disney+, the new service. Nearly a dozen other executives also presented during the hourslong event, but Mr Chapek was not among them.

The plan went down well with analysts on Wall Street, with Disney’s stock having risen 10 per cent since.

The early results have been promising. Disney has already lured nearly 30m US subscribers to Disney+, which offers programming from Marvel, Pixar and Star Wars for $7 a month, in the first three months since its debut. In comparison, it took Netflix a decade to reach 60m US subscribers.

But the push is an expensive gamble and one that the group expects to lose money from for years. Earlier this month, Disney revealed that its total costs in the three months to December had jumped to $18bn, up 51 per cent from a year ago, partly due to the launch of Disney+.

The group’s consumer and international business that is responsible for the streaming service reported an operating loss $693m.

In its last set of annual results, for the year to September, Disney reported net income of $10.4bn, down 17 per

cent year on year.

Brian Wieser, president of business intelligence at GroupM, noted that in Mr Chapek Disney’s board have chosen an executive with extensive experience in the more profitable parts of Disney’s business.

“Look at the businesses he’s been in charge of. They have nothing to do with streaming, but everything to do with profitability,” he said. “What Disney is doing [with streaming] almost certainly erodes margins. If I were the board, I would probably have been questioning that.”

On a call with investors on Tuesday, both Mr Iger and Mr Chapek looked to reassure investors that there was no big strategic shift ahead. “We just had a fairly major reorganisation,” said Mr Chapek, adding that Mr Iger’s strategy was “well entrenched” at Disney.

But the out-of-the-blue announcement still took Wall Street by surprise, sending shares down 3 per cent in after-hours trade.

“Companies usually go to great pains to telegraph these things in advance. They typically make sure the executives have some exposure to the analyst community,” said Mr Wieser. He added that the abrupt nature of Mr Iger’s succession announcement “raises questions: is Disney+ really going all that well?”.

44

Thursday 27 February 2020

BUSINESS DAY

FT

NATIONAL NEWS

Hunt for next chiefs puts Europe’s banks to test Task of replacing leaders is frustrated by shallow pool of candidates DAVID CROW, STEPHEN MORRIS AND NICHOLAS MEGAW

E

uropean banks are facing tough questions about succession planning and c o r p o rat e g ov e rnance as they scramble to find a new generation of chief executives amid the biggest shake-up of the industry’s top ranks since the financial crisis.

In the past three months alone, two-thirds of the largest 15 European listed banks have either switched the top job or started preparing to find a new chief executive.

The synchronised changeover presents challenges. Bank executives, board directors and external headhunters interviewed by the Financial Times all warned of a shallow pool of candidates to choose from and the difficulty that European banks will have attracting executives from the US, where the pay is significantly higher.

They also said that the next generation of leaders would need to have different qualities compared with the crisis managers appointed following the financial crash, or the subsequent crop of CEOs, who were hired in anticipation of a period of revenue growth that failed to materialise.

Ronit Ghose, banks analyst at Citi, recalls that the “class of 2015” — Standard Chartered’s Bill Winters; former Credit Suisse CEO Tidjane Thiam; Jes Staley at Barclays; and John Cryan, the ex-CEO of Deutsche Bank — “were all meant to be heroes”.

He added: “They were The Avengers coming in to save these companies, and how did that

work out? We all got so excited, but it’s been a really difficult time. Look at what’s happened to them.”

The changing of the guard kicked off in November with the appointment of Alison Rose as chief executive of Royal Bank of Scotland. Earlier this month, Credit Suisse appointed a replacement for Mr Thiam, who was ousted after a spying scandal. Shortly after, UBS named Ralph Hamers, chief executive of Dutch bank ING, as its new leader, prompting the Amsterdambased lender to start a search for his replacement.

The merry-go-round will not stop there.

HSBC is still hunting for external candidates to lead the bank after UniCredit CEO Jean Pierre Mustier ruled himself out of the race at the weekend.

Barclays has fired the starting gun on the race to replace Mr Staley, who is preparing to retire from the bank next year. Lloyds is in the process of recruiting a new chairman, who is expected to kick off the search for a replacement for António Horta-Osório, chief executive since 2011.

Mr Winters at Standard Chartered has been bruised by an investor row over his pay package. Two colleagues said they expected him to leave the bank sooner rather than later, with one describing him as having “checked out”. StanChart denied that Mr Winters had any plans to resign. Andy Halford, the bank’s chief financial officer, said: “Anyone who thinks Bill has checked out clearly doesn’t work with him very closely.”

Meanwhile Frédéric Oudéa, who has been in the job at Société Générale since 2008 and is the longest-serving of the group www.businessday.ng

of 15, is not expected to extend his tenure when his contract expires in 2023.

With European banks facing a long period of negative or low interest rates, which will reduce the amount they make from lending, boards are looking for executives who can cut costs and introduce automation to make way for further redundancies.

Several directors also said they wanted to find more modest, understated CEOs, following a string of scandals that had little to do with strategy.

Santander aborted its attempt to recruit former UBS dealmaker Andrea Orcel as CEO over disputes over pay — which has resulted in a €100m lawsuit.

Other scandals include the spying affair at Credit Suisse, the row over executive pay at Standard Chartered, and the opening of a regulatory investigation into the relationship between Barclays’ CEO and Jeffrey Esptein, the deceased paedophile financier.

“We have had enough drama,” said one director at a large European bank.

Mike Rake, who was a director of Barclays from 2008 to 2015, said: “After all the turmoil, boards now want lower-profile people — still leaders, but [not] flamboyant. They want their CEOs to avoid unnecessary highprofile social attention. They have to have the right public profile without being too dull and boring.”

Citi’s Mr Ghose said that journalists and analysts sometimes overstate the importance of the CEO, arguing that a bank’s performance was determined by three factors: macroeconomics, the market and management.

“We tend to have a ‘great man’ view of leadership. While a good

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CEO can help differentiate between peers, returns are driven more by macro and market.”

Mr Hamers typifies the new breed of chief executive. His appointment as CEO of UBS this month surprised investors, given that he has relatively little experience of wealth management or investment banking — UBS’s two main businesses. But the Swiss lender’s board were impressed by his ability to reduce operating expenses at ING, in large part by digitising the bank.

Mr Hamers’ low-key style was also a factor. Although he presided over a money-laundering scandal, sparred with Dutch politicians over executive pay, and criticised central bankers for negative rates, he has not made the unforced personal errors that have hurt some rival CEOs. Little surprise, then, that Mr Hamers was in high demand.

HSBC also approached him about becoming its next chief executive, according to two people briefed on the talks, which was a factor in UBS’s decision to speed up his appointment.

The high level of interest in Mr Hamers also underscores another problem for banks: a paucity of potential candidates exacerbated by the number of jobs that need to be filled.

European bank boards would like to be able to fish for talent in the US, which has the deepest pool of expertise, especially in investment banking. But the pay differential often proves insurmountable. In the UK, for instance, chief executives at the five largest listed banks earned about £24m in aggregate in 2018.

In contrast, the CEO of Citi, who is among the lowest paid of the large US banks, alone earned $24m (£21.8m). @Businessdayng

A further complicating factor is that a large chunk of their pay is usually awarded in the form of deferred stock. This tends to be forfeited if they resign to work for a rival, meaning that banks have to pay a chunky “buyout” to convince them to leave their current employer. Such payments, known as “golden hellos”, are unpopular with European investors and politicians.

“The public scrutiny on remuneration . . . leads to less is more,” said John McFarlane, the former chair of Barclays and TheCityUK, a lobby group. “Material differences in the capacity of organisations to pay . . . make it difficult to attract candidates from the US and Canada in particular”.

A headhunter working on a live CEO search for a European bank said they were also “finding it incredibly difficult to attract interest from the US, because the remuneration rules are so different and there is less investor pressure on pay”.

They added: “It is very hard to pull a US executive from an existing role at a [pay] rate that is going to be OK for the European investor community.”

A director at a UK bank that is searching for a CEO said international candidates were also put off by Britain’s Senior Managers and Certification Regime, which holds financial executives liable for failings on their watch. “In the US and Asia, you get paid more with less risk, so it’s very difficult to get people to come [to the UK],” he said.

Mr McFarlane added that while UK bank boards had a “sincere desire to employ the best in the world”, often they had to settle for “the best . . . available”.

Thursday 27 February 2020

BUSINESS DAY

45

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 26 February 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 319,907.03 9.00 - 124 22,339,297 UNITED BANK FOR AFRICA PLC 244,525.86 7.15 4.38 579 81,116,783 ZENITH BANK PLC 598,103.21 19.05 0.26 640 31,009,031 1,343 134,465,111 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 193,834.58 5.40 -0.92 183 3,645,970 183 3,645,970 1,526 138,111,081 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,279,705.46 112.00 -3.45 81 2,133,804 81 2,133,804 81 2,133,804 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 225 3,563,603 LAFARGE AFRICA PLC. 249,670.83 15.50 - 63 759,217 288 4,322,820 288 4,322,820 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 5 2,273 5 2,273 5 2,273 1,900 144,569,978 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 1 500 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,405.05 3.15 - 6 221,818 7 222,318 7 222,318 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 7 222,318 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 5,000 OKOMU OIL PALM PLC. 64,865.88 68.00 - 3 1,210 PRESCO PLC 49,850.00 49.85 - 4 20,024 8 26,234 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 15 335,889 15 335,889 23 362,123 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 36,989.67 0.91 1.11 42 12,461,908 U A C N PLC. 24,491.02 8.50 - 78 2,896,967 120 15,358,875 120 15,358,875

BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,568.00 22.40 - 33 313,201 ROADS NIG PLC. 165.00 6.60 - 0 0 33 313,201 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,338.56 0.90 1.12 17 1,531,480 17 1,531,480 50 1,844,681

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,341.89 0.81 - 0 0 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 24 48,345 INTERNATIONAL BREWERIES PLC. 189,377.58 7.05 - 25 26,299 NIGERIAN BREW. PLC. 367,857.49 46.00 - 121 409,632 170 484,276 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 145,200.00 12.10 - 42 185,739 FLOUR MILLS NIG. PLC. 94,308.73 23.00 - 51 637,197 HONEYWELL FLOUR MILL PLC 8,326.71 1.05 9.38 14 992,100 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 34,442.70 13.00 - 9 42,128 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 116 1,857,164 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 16,903.82 9.00 - 30 123,679 NESTLE NIGERIA PLC. 895,701.56 1,130.00 - 47 133,818 77 257,497 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,078.43 4.06 -9.98 31 951,271 31 951,271 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 19,852.39 5.00 - 29 240,941 UNILEVER NIGERIA PLC. 86,175.08 15.00 - 28 121,332 57 362,273 451 3,912,481 BANKING ECOBANK TRANSNATIONAL INCORPORATED 114,684.70 6.25 -3.85 59 967,962 FIDELITY BANK PLC 59,977.83 2.07 0.98 65 5,242,198 GUARANTY TRUST BANK PLC. 794,641.84 27.00 0.75 193 6,788,107 JAIZ BANK PLC 15,616.05 0.53 -8.62 15 852,128 STERLING BANK PLC. 40,306.59 1.40 -0.67 56 7,440,290 UNION BANK NIG.PLC. 200,933.19 6.90 - 22 93,283 UNITY BANK PLC 6,312.24 0.54 - 22 961,760 WEMA BANK PLC. 21,601.70 0.56 -5.08 42 4,492,515 474 26,838,243 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 9,290.77 0.82 -5.75 32 2,587,728 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 3 30,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,357.70 0.29 -9.37 3 155,000 CORNERSTONE INSURANCE PLC 8,248.52 0.56 - 4 112,734 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 4.17 16 1,917,195 LAW UNION AND ROCK INS. PLC. 3,780.77 0.88 - 8 263,092 LINKAGE ASSURANCE PLC 3,280.00 0.41 - 9 239,833 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 10,561.01 2.00 - 5 115,000 NIGER INSURANCE PLC 1,547.90 0.20 - 3 250,000 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 2 8,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 4 251,363 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 30,101 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 2 203,078 WAPIC INSURANCE PLC 4,148.65 0.31 -3.12 30 2,182,451 122 8,345,575

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,561.03 1.12 - 4 18,650 4 18,650 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 10,100.00 5.05 -1.17 105 3,112,228 32,056.16 5.45 - 3 5,695 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 540.00 0.36 - 0 0 FCMB GROUP PLC. 36,833.04 1.86 6.29 66 4,322,092 ROYAL EXCHANGE PLC. 1,183.44 0.23 - 1 40,000 STANBIC IBTC HOLDINGS PLC 404,441.24 38.50 - 6 38,433 19,620.00 3.27 -2.39 195 11,452,625 UNITED CAPITAL PLC 376 18,971,073 976 54,173,541 HEALTHCARE PROVIDERS EKOCORP PLC. 2,742.30 5.50 5.77 2 420,050 710.63 0.20 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 420,050 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,299.36 2.54 - 3 1,200 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,501.03 4.60 - 13 116,520 MAY & BAKER NIGERIA PLC. 3,226.19 1.87 - 10 119,885 873.61 0.46 2.22 10 238,032 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 36 475,637 38 895,687 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 -4.55 4 1,706,927 4 1,706,927 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,206.13 0.41 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 262.44 2.43 - 0 0 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,220.98 0.26 -3.70 5 754,133 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 5 754,133 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 5 1,033 5 1,033 14 2,462,093 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 6 18,300 BUA CEMENT PLC 1,258,060.75 37.15 3.48 52 1,070,242 CAP PLC 17,220.00 24.60 - 6 20,126 MEYER PLC. 244.37 0.46 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 64 1,108,668 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,465.85 1.40 - 1 370 1 370 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 1 141 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 141 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 1 18 1 18 67 1,109,197 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 2 25,100 2 25,100 INTEGRATED OIL AND GAS SERVICES OANDO PLC 39,531.89 3.18 - 51 437,492 51 437,492 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 48,031.29 133.20 - 8 11,187 ARDOVA PLC 21,751.43 16.70 - 11 17,837 CONOIL PLC 12,491.14 18.00 - 16 80,351 ETERNA PLC. 2,869.12 2.20 - 9 152,917 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 1 100 TOTAL NIGERIA PLC. 36,328.84 107.00 - 14 22,867 59 285,259 112 747,851 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,128.08 3.61 -9.98 16 582,742 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 16 582,742 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,515.34 1.21 - 6 121,880 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,781.64 4.05 - 0 0 6 121,880 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 956.60 1.24 - 1 20,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 487.49 1.13 -9.60 19 1,120,695 20 1,140,695 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 530.46 0.32 -8.57 5 653,859

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@Businessdayng

46

Thursday 27 February 2020

BUSINESS DAY

Garden City Business Digest $360m so far released for Ogoni clean up is intact – HYPREP official • Says Ogoni Trust Fund account is different from Project Coordination Office account • With IOCs, UNEP, ministers, MOSOP, sitting on the money, nobody can pinch it • So far, only $30m has been put to use; Coordinator cannot sign out up to N2.5m Ignatius Chukwu

T

he $360m or N110Bn said to have so far been released for Ogoni clean up is sitting pretty in the appropriate bank account whose headquarters is in London, so declared an official of the agency created to handle the funds. This comes in the wake of speculations that such huge amount had been released by the federal government but was swept into private pockets, leaving Ogoni high and dry.

Those who recommended the release of $1Bn in 2011 to help clean up Ogoni may have known very well that if strong structures were not erected to receive and deploy the funds, that looting would replace cleaning. Thus, an Ogoni Trust Fund (OTF) was created to warehouse the funds before ever a dime would be released, and a Project Coordination Office (PCO) account was created to receive approved sums for day to day project execution.

Several mechanisms were put in place to ensure that processes were followed for any drawdown. What is critical is that the OTF has persons like the managing director of

President Buhari

Shell and other IOCs, UNEP representative, MOSOP, ministers, etc. This seems to create confidence.

In fact, Shell officials recently told newsmen that it is not easy to spend $1Bn, and that the task at hand is how to spend, not money to spend.

With N110Bn sitting pretty to be spent, this assertion must be true. At another meeting with MOSOP leaders and some NGOs, there was suggestion that the conditions for release of funds and the bureaucracy around it is too difficult to carry out speedy

action. They appealed for waivers to allow work move on, else, the masses would think the clean up was a hoax, because all funds and no action is nothing. Another major issue may be inadequate information to stakeholders including the mainstream media. This seems to make knowledge of efforts to stop at the Aba Road office of the agency and at the project site, whereas those who fought for the Ogoni struggle are mostly in the media and in the NGOs. Isa Wasa, Head, Communi-

cations/Community Engagement Unit of the Hydrocarbon Pollution Remediation Project (HYPREP), who made effort last week to reach a section of the mainstream media, explained in detail.

Detail: The on-going environmental clean-up of hydrocarbon impacted sites in Ogoniland is hinged on the recommendations of the United Nations Environment Programme (UNEP) Report of 2011. The report recommends an initial take off grant of $1Bn to be lodged in an Ogoni Trust Fund Account for the remediation of polluted sites in Ogoniland and restoration of livelihoods of people in impacted communities.

In implementing the recommendations of the report therefore, the Federal Government of Nigeria set up the HYPREP to be responsible for the interpretation and implementation of the UNEP Report; and to ensure that the clean-up funds are not mismanaged.

The Federal Government also set up the Governing Council to formulate policies for the project and the Board of Trustees to manage the funds of the project and the Project Coordination Office (PCO) to drive the day to day affairs of the project.

Sharon Ikeazor, minister of Environment

The Federal Government through the Nigerian National Petroleum Corporation (NNPC) on behalf of the Joint Venture Partners has so far released into the Ogoni Trust Funds, domiciled with the Board of Trustees of HYPREP, the sum of $360m out of which the Project Coordination Office (PCO) has only spent less than $30m. The PCO receives releases from the Board of Trustees to fund projects and activities that it generates and nothing more.

The PCO does not operate nor have access to the Ogoni Trust Fund Account which has so far been credited with $360m. In fact, the Project Coordinator can only ap-

prove money from the PCO Account that is below N2.5m.

The truth and simple explanation is that no money is missing or misappropriated but that since the PCO is the face of the project the average man thinks that when money is said to have been paid by the International Oil Companies (IOCs), it goes to the PCO account. This is not so. The $360m is lodged with the Board of Trustees and the banker is the Standard Chartered Bank of London.

The funds came in two tranches of $170m each in 2018 and 2019. The Group Managing Director of Shell will not sit on the Governing Council to superintend over the looting or misappropriation of his company’s contributions to the Ogoniland clean-up project. Same with officials of the UNEP, Movement for the Survival of the Ogoni People (MOSOP), and the representatives of the oil producing communities on the Governing Council and Board of Trustees.

Conclusion: HYPREP said it is committed and focused, and that it needs cooperation. Observers however say it has to work harder to gain this trust. Its word must have to stand above that of rumour mongers.

Frequent changes in NDDC seem to distract the Commission Port Harcourt

by Boat

IGNATIUS CHUKWU

C

hange in appointments brings excitement but the numerous changes in Niger Delta Development Commission (NDDC) seem to lose that euphoria, except maybe for a few friends who may benefit directly. This is because even family and friends find that before the appointee gets familiar with the terrain, a shocking change would come.

Those counting their fingers have counted up all the five on one palm, meaning that the next palm is set, all in one year of change of CEOs. They count Nsima Ekere who was not removed, anyway. He went after greener pasture, or what he thought was one, in Akwa Ibom State, and missed a step. He left at about February in 2019, preparatory to the gubernatorial plunge in March the following month. Many had appealed to him to keep a job that has about N300Bn per

year as budget so that the state would have a total of about N800Bn budget access every year, going by Akwa Ibom’s N500Bn annual budget or thereabout.

Many reminded him that his budget of N300Bn per year was 92 per cent capital whereas the one by the governor in Uyo is most made up of huge recurrent budget which would go to salaries, overhead and pensions. It is in the little capital budget left after recurrent that he could manipulate, they hinted. Besides, an NDDC CEO is like the governor-general of the Niger Delta. He or she gets carpet treatment in most of the nine states. Of late, the CEO of the NDDC reported directly to the Presidency and thus had huge access to very important movers of the polity.

He did not seem to see that point, until he made Akwa Ibom to lose that diadem.

The scramble for what Akwa Ibom’s Ekere threw away began and landed on a professor of Pharmacology from the Niger Delta University (NDU) in Bayelsa State, Nelson Brambaifa. It was to be on acting capacity whereas Ekere’s was a tenured position.

What Brambaifa did right or wrong is not the subject of this musing but the shock of change from Ekere to Bayelsa’s Brambaifa in February was huge. Directors, staffers, contractors, and state governors began fresh round of lobby. Sign that lobbying was heavy is found in the fact that in less than one year, the professor had awarded contracts of over N1trillion within a N300Bn budget year, the Commission later revealed. In

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a Buhari era, such red flag is dangerous.

By September of same year, just when Brambaifa was billed for some international events that ought to shore up the reputation of the Commission and the region, he was asked to go. In came another Bayelsan but a female one married to a Rivers man, Akwagaga Enyia.

Enyia is nobody’s friend and nobody’s enemy, as they would say. She is a director and knew exactly where the issues were, especially the fact that the Commission loved to remain in a temporary (rented) complex at huge cost instead of moving muscle to move to the Commission’s own property. Many say paying rent brings huge and instant booty to any CEO or manager of major corporations. This is not the focus of this piece or the concern of this columnist, but Enyia, who was state director in the Rivers State office next door which is enjoying its own property, moved all muscles to move to the permanent site. It was also the time forensic audit was announced and the Ag CEO was to handle it. In which case, there would be no board till audit report was done and the Commission reshaped. She began exposing dirty deals and hundreds of jobs cornered by one man and how one person was pocketing N1Bn every month to collect funds due the Commission, sums many felt should simply walk in.

The next bomb was that this woman, one of the neatest and strictest, was asked to go. In came the non-compromising Joi Nunieh, daughter of the first Ogoni lawyer, in January 2020. She moved fast but fiercer. She began with contract

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verification, something nobody wanted done.

This drew the battle line. She fell, just in one month. Now, it’s another medical professor from the NDU in Bayelsa, Pondei.

Nobody explains what anybody did wrong to warrant sack. Keeping silent does not do them any good because it fuels speculations. What the people around here believe is that the last two women did not want to support or hide looting, and they fell. Has FG now brought someone they think will play ball? That does not look tidy because it creates room for suspicion. That is what silence does to good men and women.

The sad aspect is that in all the appointments and sacks, nobody has mentioned credibility, merit and ability. It means these factors may not be what the Presidency is after. Nobody said Akwagaga or Joi failed to perform. So, is performance not the yardstick any more? What really makes one the right choice?

Each new CEO addresses the staff to announce new policy, new direction. So, how many policy directions do these workers now have in their brains, all in one year? Has any policy been tried to the end since the five passed there? Are interim CEOs right in the first place to initiate policies when the real CEO will one day come?

So many questions! We are watching. Whatever the case, these frequent changes point to one fact; poor hiring capability because a bad workman quarrels with every tool.

@Businessdayng

Thursday 27 February 2020

BUSINESS DAY

47

Investing in Rivers State New NDDC boss re-commits to IFAD $129m Agric partnership project Ignatius Chukwu

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n the face of frequent changes in the Niger Delta Development Commission (NDDC) and the attendant fears in the myriad of partners and stakeholders over policy summersaults, the new Acting Managing Director of the Commission, Kemebradikumo Pondei, has moved to reassure partners in the whopping N40Bn ($129m) Agric project meant to boost agriculture and reduce poverty in the rural areas.

Speaking at a project facilitation training of the $129.17 million Livelihood Improvement Family Enterprises Programme in the Niger Delta, LIFE-ND project in Port Harcourt last weekend, the professor of Microbiology said that the Commission was committed to its partnership with the International Fund for Agricultural Development (IFAD) and the Federal Ministry of Agriculture and Rural Development.

Pondei, who was represented by the NDDC Director Agriculture and Fisheries, George Ero, said that LIFE-ND was planned with a fi-

Kemebradikumo Pondei

nancing gap of six years, adding that it had both a first phase of six years, with parallel finance from NDDC to the tune of US$30million and an additional six years to be financed in the future by other partners and additional IFAD loan.

According to the new CEO, the

NDDC would at all times support activities that benefit the citizens of the region, noting that the goal of the LIFE-ND project was to transform the rural economy in the Niger Delta.

He said: “The project directly supports the Federal Government’s

agricultural policy and the Strategic Framework for youth employment and job creation. This strategic framework addresses the large and growing number of restless unemployed youths, especially in rural areas. It seeks inclusion of young people in profitable agribusiness.

“LIFE-ND is designed to be implemented in the nine Niger Delta states, commencing with 10 local government areas and 10 communities per LGA, with option of expansion over time.”

The NDDC boss noted that IFAD had a global mandate of eradicating poverty through agricultural interventions targeted at rural communities, stating that: “The FGN/ NDDC/IFAD partnership is a novel one designed to improve the living standards of the rural populace.

This in turn is expected to reduce rural-urban migration and criminal activities.” Pondei reiterated the commitment of the NDDC to continuously partner with development organisations like the IFAD in bringing the best to the people of the Niger Delta region.

In his address, the National Project Coordinator for LIFE-ND pro-

gramme, Sanni Fatai, emphasized that the project would enhance the income, food security and job creation for rural youths and women through agricultural enterprise development on a sustainable basis in the Niger Delta.

Fatai said that the project implementation training was a significant step towards attaining the goals of the LIFE-ND project, stating that the main target were the newly recruited staff at both the national and state coordinating offices.

He explained that the implementation would be facilitated by different committees, including the National Steering Committee, Technical Support Committee and State Project Steering Committee.

In her remarks, the IFAD Country Representative, Nadine Gbossa, explained that the LIFE-ND programme would give additional opportunities to the youths and women in the Niger Delta region.

She said that IFAD was very keen to see the success of the programme, noting that the UN agency would give priority to it and collaborate with the other funding partners to ensure its success.

Rivers closer to refund of about N126Bn spent on federal projects Ignatius Chukwu

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federal team is in Rivers State measuring and assessing projects said to have been built by the Rivers State government on behalf of the government at the centre. This seems to boost hopes that refund may happen after all.

The host governor, Nyesom Wike, had spoken with vitriolic gushing in the past months against what he regarded as silence over the refund quest and felt it was politically motivated. This was also how his predecessor, Chibuike Rotimi Amaechi, used to cry out against the Goodluck Jonathan-led FG saying the centre hated Rivers State, even when a Niger Delta son or Port Harcourt boy (Jonathan) was president for six years.

The scenario of hostility between the state and the centre seems real and began in the very last days of Peter Odili administration. Odili was close to clinching the presidency to the chagrin of his former friend, President Olusegun Obasanjo. Odili had built the Airport Road that had defied a federal contractor for many years.

He also rebuilt the runway of the Port Harcourt International Airport or at least provided the funds. These were said not to have ever been refunded.

Other states who copied the Rivers model were said to have later got some refund, before the presidency put harder rules on such claims.

By the time Amaechi was leaving, he put a demand for N105Bn and included this as ‘money’ left behind for his successor, Wike. His argu-

ment was that Wike was part of the Jonathan team that sat on the refund and should thus inherit it. This means Wike is expected and is right to pursue the refund. Now, Amaechi is part of the President Muhammadu Buhariled FG that Wike accuses of sitting on the refund. Many wonder if it is a case of one bad turn deserving another.

Wike is building three flyovers on federal roads at the cost of N21Bn. He has paid 70 per cent. If this is added to the Amaechi claim of N105Bn, the

state would be expecting N126Bn, but the FG has issued its own guidelines.

The FG says it was not involved in evaluation most of the projects that states now put claims on.

Now, the FG has assured the Government and people of Rivers State that it would effect a refund of monies expended on those projects. Addressing government house reporters after embarking on the verification of the projects, Minister of State for Education, Chukwuemeka Nwajiuba, said

that the Buhari Administration would always abide by set rules.

He said: “The Federal Government has always cooperated with the people of Rivers State which is the strongest economic base of the country and anything that the FG will do for the people of the State, the FG will respond accordingly.

“The President is a stickler for the rules. We have addressed this everywhere, except for five states, that we are now verifying. No state has had

Gov Nyesom Wike, Minister of State for Education, Chukwuemeka Nwajiuba and Permanent Secretary, Cabinet Office, Office of the Secretary of Government of the Federation, Babatunde Lawal during the verification of Federal Government Projects executed by the Rivers State Government on Monday. www.businessday.ng

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@Businessdayng

an issue.” He said that the Rivers State Government over the years did a splendid work in the construction of key projects in the state.

“The Governor has taken us on extensive review of more than the six projects that we came to inspect,” he said, and expressed happiness with the tour of federal road projects executed by the Rivers State Government.

He said: “I am glad we took time out to go and see all of them and verify them physically. We are really sure that the State Government has done what is right. “ In an interview, Gov Wike said he is confident that the Federal Government will effect a refund. He said: “The Minister has come with his team and I believe they will refund us the funds expended on the road.

“We have made submissions for refund, but we are yet to receive any refund from the Federal Government.

I believe this last verification will come to fruition. I have confidence that they will refund us the money expended on Federal Projects.”

Governor Wike said if the Federal Government fails to effect the refund as promised, the Rivers State Government will raise an alarm.

“If they don’t refund , we will raise alarm and tell the world to help us ask we are being denied the refund.

“Now we are talking of governance and we need these funds to do more projects for our people. He has given us assurance that the Federal Government will effect a refund this time around”, he said.

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Thursday 27 February 2020

FRANK ELEANYA

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he advent of digital technology in the past 20 years has not only transformed the way people live, it has also changed the way they receive information. Prior to now, the traditional media houses were the main sources of information.

However, the increased accessibility and affordability of digital technology has ensured that the news consumed can from any source. Its ease of mobility also means that people are able to consume information, anywhere, anytime and anyhow.anyhow.

And nearly everyone can become a publisher. The development of mobile technology has played an important role in shaping the impact of social media.

Perhaps the biggest influence of digital technology tools like social media is the access it has given to professional writers including journalists and book authors to engage directly with their audience.

"Feedback on your writing on social media is spontaneous which shapes your style," said an excited Jude Idada, winner of 2019, Nigeria Literature Prize. He

was a member of a panel on who shared insights on Digital Writing and How it Connects Communities.

He makes the point that social media has created

more writers than traditional publishing. This is underscored by mobile phone and internet penetration mobile phone and internet penetration. Ni-

FRANK ELEANYA

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hile Nigeria’s population is disproportionately growing and has become a constant source of concern for policy makers, digital agriculture may be the most viable way to survive, says Segun Oworu, Digital Farming Lead, Bayer Middle Africa.

Data from the National Population Commission (NPC) shows that Nigeria has an annual population growth rate rate of 3.2 percent as of 2016. The GDP growth has neither matched nor exceeded population growth in the past five years. The implication is that Nigeria's economy is not growing fast enough to cater for its citizens.

As part of efforts in grappling with this reality, the federal government in recent times has been making frantic efforts to

geria sits at the summit of the mobile phone market in Africa with 176 million users.

As a writer, Idada says social media has helped him

deepen productivity in the agriculture sector, leveraging new technology. The push has also spurred the emergence of start-ups using technological innovation to bring solutions in the sector.

“In the race of digital agriculture, we cannot compete with developed economies because our agricultural needs are different. What we should do is to leverage on areas where we have comparative advantage such as our rich tank of information.” Oworu said during a panel session on the third of the Social Media Week Lagos.

Digital agriculture refers to the use of new and advanced technologies, integrated into one system, to enable farmers and other stakeholders within the agriculture value-chain to improve food production.

The technologies used for digital agriculture includes sensors, communication networks, Unmanned Aviation Systems (UAS), Artificial Intelligence (AI), robotics and other advanced machinery and often draws on the principles of the Internet of Things.

While startups are championing the digital agri-

create a democratic style in terms of learning from other writings. Also feedback on your writing on social media is spontaneous which shapes your style and speed, he said.

"I have spent 8 years writing on Facebook. That space is my gym. I have learnt to write better through social media. I am able to develop my own language. It attracts likeminded people towards me," he said.

Sophia Horstaff, manager, Corporate Communications and Public Affairs, NLNG, said social media was instrumental to easing the process of transmitting messages to staff across many locations at the same time. The company has adopted platforms like WhatsApp, Yammer, and live streaming to share important messages and moments and to deliver projects quickly and within cost.

Also the use of social media helps pick up important conversation and build on them.

Tony Odili Ujubuonum Chief Creative Officer, Brand Aristotle says that every writing makes you take action.

“It speaks to you and your heart. Digital writing gives power to people. Writing must be accessible and must connect to the readers. Digital platforms make storytelling possible," he said.

culture revolution, financial institutions which are exposed to it through the loans they give to the entrepreneurs and farmers are also paying attention.

Wole Oshin, head, Agribusiness, Stanbic IBTC, while at the panel session the bank hosted at the Social Media Week, said it has partnered with its parent organisation, Standard Bank Group, to come up with satellite monitoring technology where farmers can monitor their farmlands.

"In addition, we have tools and digital platforms to support farmers. We also have various funds we can use to support farmers at a single digit interest rate.”

Oshin said.

Apart from significantly improving productivity of farm produce making them more consistent, digital agriculture can also make use of time and resources more efficiently. This brings critical advantages for farmers and wider social benefits around the world. It also enables organisations to share information across traditional industry boundaries to open up new, disruptive opportunities.

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Thursday 27 February 2020

BUSINESS DAY

POLITICS & POLICY Buhari swear in Lawan, Omo-Agege’s aides to head NASC

...Presides over FEC Tony Ailemen, Abuja

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ominees of the principal officers of the National Assembly, including those of the Senate President, Ahmed Lawan and his Deputy, Ovie Omo- gege, dominated the list of those sworn in as the chairman and members of the National Assembly Service Commission

by President Muhammadu Buhari.

The newly inaugurated Chairman, Ahmed Amshi, was immediate past Chief of Staff to the Senate President, aside being a fellow, Nigeria Society of Engineers and former Executive Secretary of the Society, while Atanomeyorwi Francis (Delta, South-South), nominee, was the Director-General of the Ovie Omo-Agege campaign organisation.

Another member, Bailyaminu Shinkafi, representing Zamfara, State, North West, Nigeria, was adviser to the Speaker of the House of Representatives, Femi Gbajabiamila, in 2019, before he was nominated to serve as commissioner in Zamfara State.

Those sworn in include

Ahmed Amshi, chairman (Yobe, North East); Babagana Modu, member (Borno, North East); Abubakar Tutare (Taraba, North East); Hakeem Akamo (Lagos, South West); Tunrayo Akintomide (Ondo, South West); Others are Bassey Etuk (Akwa-Ibom); Saidu Kazaure (Jigawa, North West); Julius Ucha (Ebonyi, South East); Auwalu Aliyu Ohindase (Kogi, North Central); and Muazu Is’haq (Nasarawa, North Central) The President performed the swearing in ceremony which preceded the weekly meeting of the Federal Executive Council, which he also presided over.

With the inauguration of the National Assembly Service Commission, the body is now fully set to play its role as supervisory body over the National Assembly bureaucracy which exercises similar powers and functions equivalent to those of the Federal Civil Service Commission (FCSC).

The body is coming after several complaints over the President’s refusal to recognise a similar team sent to him by the 8th National Assembly, which experts said was largely responsible for stalling several activities performed by the

Muhammadu Buhari

body, including recruitments, discipline, remuneration and other staff issues.

BusinessDay checks reveal that Sections 3 and 4 of the National Assembly Commission Act, 2000, empowers the Senate to nominate members of the Commission and pass them to the President for appointment.

The unique crafting of the law establishing the Commission is said to be part of diplomatic power play in

31 parties remain deregistered, case still in court – INEC …As Chekwas Okorie seeks to actualise Igbo presidency in APC Iniobong Iwok

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he Independent National Electoral Commission (NEC) has said that it had not obeyed the Federal High Court order retraining it from deregistering 31 political parties because a final ruling has not been given on the matter.

Anwuli Chikere of the Federal High Court, Abuja, had on 17th February, restrained INEC from deregistering 31 political parties.

The judge in her ruling, said having failed to counter the application by the applicants, the affected political parties had the legal right which must be protected.

33 political parties had approached the court to stop INEC from deregistering them; however, two of the parties were eventually not delisted

by INEC when the names were announced.

Chairman of INEC, Mahmood Yakubu, had announced de-registration of 74 political parties few days earlier.

The commission said it was vested with powers to register and regulate the activities of

political parties.

INEC said the parties had breached part of the requirements for registration as a political party which among others was to at least win 25 percent of the votes cast in one state of the federation in a presidential election or 25 percent of the votes cast in one local government area of a state in a governorship election which they failed to achieve.

However, in an interview with BusinessDay, Festus Okoye, chairman, Information and Voter Education of INEC, said the parties remained deregistered because the motion filed by the parties to reverse their registration was still pending.

He said the courts did not restrain completed acts, stressing that the 74 political parties remain de-registered and can no longer be accorded legal existence until there is a final judgment on the matter by the highest court.

According to him, “The commission de-registered 74 parties on the 6th February 2020. But they got a restraining order in question on the 17th February. We cannot act until the www.businessday.ng

substantive matter has been adjourned to the 27th February 2020. Courts do not restrain completed acts. The motion filed by the parties to reverse their registration is still pending.

“The 74 political parties remain de-registered and can no longer be accorded legal existence.” Meanwhile, Chekwas Okorie, national chairman of the de-registered United Progressives Party (UPP), has said that the decision of the members of the party to move into the ruling All Progressives Congress (APC) was because of the need to actualise the Igbo presidency in 2023.

Okorie’s UPP was among the 74 political parties deregistered

by INEC. But in an interview with BusinessDay, Okorie debunked reports that his decision to join the APC was for personal gains, while dismissing insinuations that he has abandoned the struggle for the political emancipation of the Igbos.

He said the APC remained the best platform for the region to achieve its aims, lamenting that the region was poorly treated when the People’s Democratic Party (PDP) was in power.

the doctrine of separation of powers.

The Act, while arrogating itself with the power to nominate persons to serve on the Board, the National Assembly nevertheless recognised the fact that only the President of the country can make nominations into boards of Federal Government commissions.

Section 5(3) of the Act however, gives the President 30 days to make the returns to the National Assembly once

he has received them.

“This has been the procedure and has been followed since the establishment of the body in 2001,” Umar Ibrahim el-Yakub, senior special assistant to the President on National Assembly Matters (House of Representatives), said.

El-Yakub also dismissed insinuations that the President’s wholesale approval has something to do with the new found love between the Legislature and the Executive under the current dispensation.

El-Yakub, who spoke exclusively to BusinessDay on the issue after the inauguration at the Presidential Villa, Abuja declared that there was “nothing unusual with the nominations made by the Principal officers of the National Assembly. The Act allows members of the National Assembly to nominate the members of the Commission “They understand the workings of the National Assembly and of course, those who are suitably qualified to implement provisions of the Act.” Speaking on the N37billion NASS renovation plans for the National Assembly, El-Yakub rejected insinuations that members of the Commission

were coming to protect their former bosses as the National Assembly prepares grounds for the implementation of the N37b NASS complex renovation plans.

According to him “Nigerians must be made to understand the imperatives of the renovation of the complex.

This is our national edifice, our pride as a people. If you go to the South African Parliament building or those of Russia, or even smaller African countries, you will understand why we must imbibe the culture of maintenance.

“In some parts of the building, they use buckets to collect water from the leaking roof, when it is raining. Most of the old parts of the White House building are without water in their toilets, just to highlight a few of the issues,” he said.

The Presidential aide noted that part of the funds would be used for the “e- Parliament, equipping offices and repairs of dilapidated units.

“In any case, it is also good to let you understand that members of the Commission have nothing to do with the Capital expenditures of the NASS, as this rests squarely on the shoulders of the Federal Capital Territory (FCDA),” he said.

Finally, Ogun PDP resolves conflict, 12 years after Solomon Ayado, Abuja

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he long crisis that embroiled the Ogun State chapter of the People’s Democratic Party (PDP) for the past twelve years has finally been resolved.

The party has had two parallel executives in the state and both had engaged in litigations against another.

The crisis was said to have culminated in the defeat of the party in the 2019 governorship election.

On Wednesday, the factional executives stormed the PDP Legacy House in Abuja and announced their resolve to end the crisis. The harmonised Exco was received by the National Chairman of the party, Uche Secondus.

Speaking on behalf of the executive, the immediate governorship candidate of the party, Ladi Adebutu explained that it became imperative for the party to harmonise and unite so as to reclaim the lost mandate.

He said: “The party in Ogun has been embroiled in conflicts for 12 years. So, a chapter that had 100percent of all the elective positions in the state have now moved to a party that only has just one out of the 40 elective

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positions.

“In these 12 years, we have had two parallel executives in the state that have not always worked together. This culminated in a situation where in the last election when the party produced me as the candidate of the party, the other faction has another candidate. At the end of the day, unfortunately we lost the election woefully.

“Happily today, it is my pleasure by the grace of God to now present to you the state working committee of the other faction. Our own faction we have been at peace and we have been recognised by the National Working Committee of the party. And to the glory of God today, am happy to present to you the Secretary of the Ogun faction of the PDP, by name Honorable Semiu Sodipo.

“Of the state four14 working committee members, one is still at loggerheads with us, because he was a candidate in the last election. But interestingly, out of the 13 that are left, 10 are presently very active with the PDP and have aligned with the decision of the PDP national headquarters.

“Three are still drifting in and out, some days they claimed they are with us, another day they are with APC. @Businessdayng

But however, what this means is that out of 14 we have 10 led by the factional secretary returning fully to the mainstream and total alliance to the dictates of the party at the national level.”

“The belief is that by this, all issues of litigation will be put to rest. Our party shall become one strong force again and shall remain the singular strongest opposition in Ogun State. And I can assure you that 2023 you can count on Ogun State in the kitty for our party,” Adebutu stated.

Semiu Sodipo, the factional party secretary who has just returned, in his remarks said: “I want to join our leader; I’m informing you that the crisis in Ogun State has really come to an end. I was part of the problem, I have been acting secretary; I was acting secretary 2009 to 2010. I was the one who conducted one of the congresses in 2011 election.”

Receiving the executives, Uche Secondus said the resolve has shown clearly that PDP has an internal conflict resolution mechanism to settle issues that have been lingering for long time.

“By your statement and your submission today, it means that all rumbling in Ogun State have been put to rest, including the legal issues.

Thursday 27 February 2020

Innovation

Apps

BUSINESS DAY

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

35

TECHTALK

Broadband Infrastructure

Bank IT Security

How Decagon is tackling software talent deficit one squad at a time FRANK ELEANYA

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report released last year

by Indeed, a US-based tech talent recruiter, estimates that 9 in 10 business owners are struggling to find and hire the right IT professionals in the US with a very mature tech market.

In Nigeria where the tech space is still a long distance away from maturity, finding and hiring these professionals also comes with significant headaches. One of the factors responsible is the neglect of quality teaching of STEM subjects like science, engineering, and IT in Nigerian schools.

But there is a talent market now building and giving young people, including married women with children such as Lesi Samson, the opportunity to realise their dreams of becoming software engineers.

These young people do not need to have a prior degree in mathematics, science or computer science, just the passion to succeed and the focus to see through every task assigned to them.

In fact, Decagon one of the organisations filling the shortage gap with well-trained software engineers brags about its capability to turn novices into sought after developers within months.

“I have learned to keep learning,” Sampson said. She was addressing her colleagues at the passing out of Decagon’s Squad 3 on Friday, 21 February.

Founded in 2018 by Chika Nwobi, Decagon Institute is on a mission

of training 5000 software engineers, creating 30,000 jobs, and generating about $1 billion in export revenue by 2023.

The institute has had three squad graduations so far; squad 1 (7 graduates), squad 2 (22 graduates), and squad 3 (34 graduates).

Training software engineers around the world is an expensive venture, more so in Nigeria. Andela once told BusinessDay that training one engineer takes as much as $10,000 (N3.6 million).

Decagon said it spends N3 million on every candidate they train.

Cost and the need to ensure only the best-qualified candidates make the program are partly the reason for

the rigorous selection process the company has adopted.

Justina Dika-Oha, head marketing and communication, Decagon, describes the entire six months program as “An intensive and immersive in-house software engineering program that is taught by world-class engineers using an Agile delivery framework. It consists of a project focused instructor-led training.” Last year the institute received 1500 applications and eventually selected about 1 percent.

Usually, every candidate is placed on a Pay-as-you-start-earning model that enables them to go through the program without the burden of paying the N3 million

tuition. This is also responsible for the 100 percent completion rate of the program Decagon has recorded.

The institute also has a scholarship program designed for students who are extremely smart to be part of the program. Prior to selecting candidates for the scholarship, Decagon has a pre-qualification booth camp. At the end of the Bootcamp the top three males and top three females are selected and interviewed by ACA. The final selected often comes down to a male and a female. Lisa Sampson is one of those on scholarship.

After completing the program the software engineers are placed with hiring partners. The hiring

partners collaborate with the placement team to ensure the students get the required experience. There are also career fairs (Decagon Hire Day) where the institute gives companies the opportunity to interview, assess and hire engineers.

“We have relationships with companies within the local tech ecosystem like Seamfix, Access Bank, Stanbic, Workforce Group, and Terragon,” Dika-Oha said. “We also have partnerships with companies outside of Nigeria and we are actively growing our remote work capabilities.”

Beyond partnering with companies, Decagon also taps into a network of knowledgeable individuals. For instance, Aruma Oteh, former treasurer vice president of the World Bank was a special guest at the squad 1 graduation ceremony.

“I believe we should be telling more success stories like Decagon, that is one way we would encourage our young people,” Oteh told BusinessDay. Nwobi who has founded four companies and exited them in the past, agrees with Oteh that young people need all the encouragement they can get. This, he said, aligns with Decagon’s mission.

“To whom much is giving, much is expected,” Nwobi said.

After graduation, the software engineers will become part of an alumni program Decagon is creating. As part of plans to keep them connected to the institute, there are a series of events and career growth and specific training that will be made available to the alumni going forward.

Here are the best tech startup cities outside Lagos FRANK ELEANYA

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or many years, Lagos with its unwieldy noise and patiencesapping traffic, has been the first port of call for many entrepreneurs launching a dream tech business in Nigeria for obvious reasons.

It is the commercial capital of Nigeria boasting over 20 million people.

It has one of the most extensive road infrastructure (not the best) in the country; a middle class with more liquidity than most in other states; good internet; a functional international airport; fairly stable electricity and access to quality technical talent and software developers.

Importantly, the economy of Lagos alone is bigger than that of the whole of Kenya, East Africa’s most dynamic country, with a nominal per capita income of more than $5,000, more than double the Nigerian average.

But Lagos may also represent a nightmare for many startups in other ways; the state is unexplainably - if not undeservedly - expensive; multiple taxes and many points of extortion; unending traffic gridlock; fear of SARS and flip-flop economic policies.

While it attracts the most investments - about 95 percent of total investments in the tech ecosystem in Nigeria, Lagos is also responsible for a sizeable number of dead startups.

Many of them did not see their third year birthdays.

Notwithstanding, Lagos remains the most viable city any startup can hope to make the big times.

While other cities are not in the league of Lagos, there are quite a number of them that have shown promise in terms of providing support and creating an enabling environment for startups to thrive. These states are already attracting the big names in Nigeria’s tech ecosystem.

In 2019, Sim Shagaya, founder of Konga, founded a new startup uLesson, an education tech company.

Rather than make Lagos the headquarters of the company, Shagaya moved the operations centre to Jos. There is a Lagos office which caters to the company’s software engineers and the company’s marketing unit.

This is becoming an increasing trend in the tech ecosystem as founders begin to pay more attention to burgeoning operating cost.

Ibadan, Jos, Ogun, Akwa Ibom,

Kaduna and Cross River are gradually emerging as viable alternatives for startups. Enugu, Abuja, and Port Harcourt are also said to be showing some promise for start-ups and developers.

Three of the states particularly gets our attention: Ibadan While Seyi Makinde of Oyo State is considered one of the most progressive-thinking governors in Nigeria, tech cluster development in the city of Ibadan predates him. Prior to his arrival in the government seat, a good number of tech clusters had begun to spring up in the capital city of Oyo. For instance, Wennovation Hub, located on the 3rd floor, Alpha & Omega Building, Queen Elizabeth Road II, Mokola Ibadan, was established in 2011. The hub is considered a pioneer innovation accelerator in Nigeria. As of 2018, the hub has supported over 300 startup teams and well over 6000 youths physically with as much as $2.5 million.

Other hubs in Ibadan include LPI Innovation Hub; ALF Tech Hub; iBridge Hub; Ecco Hub (Ibadan’s first incubation hub was founded in 2016);

and SteinServe Hub. Apart from a very active state government, Ibadan also has the advantage of being one of the major beneficiaries of the new Lagos-Ibadan railway, which is near completion.

When completed, it will become easy for people and products to access Lagos markets and developer community within a shorter and safer route.

“Access to developer and start-up community is critical as well,” said Adedeji Olowe, CEO of Trium Networks. “While a lot could be done online, physical meetups still have an allure that online can’t match.”

Adewale Yusuf, co-founder of TechPoint Africa, describes Ibadan as the best place to move a startup’s engineering team because of “better electricity supply; cinemas, supermarket, etc; rent is affordable; no crazy traffic; university for hackathon; 1.30hrs drive to Lagos; and food is cheaper.”

In 2018, TechPoint Africa took a tour of several cities outside Lagos to understand the level of development of the startup ecosystem.

Jos The city once known for its scenic

topography and Europe-like weather, has in recent times been linked with herdsmen and farmers’ restiveness.

But Jos is a lot more than that. To the startup founder it could be a haven of cheap taxes, low cost of living with a high quality of life that is comparable to other cities, and quiet environment to help the mind create new ideas.

Sim Shagaya adds that Jos with its about 3 million population provides the media and technology space, talent needed to build the business.

“We also found that the climate and little to no traffic lends the city to creativity,” he told BusinessDay. “That said, our commercial team is based in Ikeja, Lagos, as that state remains incredibly important from a commercial point of view.”

While uLesson is the first Jos and northern-based startup to close funding of over $3 million, it is not the only success story in the city. nHub, founded by Daser David, is the first technology hub to emerge in the Northern region of Nigeria. With a capacity to house 200 to 300 people, the nHub was created for freelancers or in-house developers and designers. Jos is also the state with the first ICT Development agency.

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

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industry Insight

BUSINESS DAY Thursday 27 February 2020 www.businessday.ng

Why Nigeria’s industrial clusters are losing traction Odinaka Anudu

T

he state of Nigeria’s clusters raises more questions than answers. Many of the clusters are hard hit by poor road networks while others are battling with lack of funding and poor access to market.

For starters, an industrial cluster harbours manufacturing firms or companies carrying out similar industrial-related activities. According to the United Nations Industrial Development Organisation (UNIDO), firms in a cluster produce similar or related goods or services and are supported by a range of dedicated institutions located in spatial proximity such as business associations and technical assistance providers.

In a working paper, the Bank of Industry (BOI) explained that industrial clusters would provide a platform for enterprises to share infrastructure, equipment and knowledge, leading to economic transformation.

For the purpose of this piece, industrial clusters will be seen as a group of manufacturing firms localised in a particular industrial environment.

Typical examples of industrial clusters are Aba leather cluster (Abia), Aba fabrics cluster (Abia), Kano leather cluster (Kano), Nnewi cable and spare parts clusters (Anambra), Apapa cluster (Lagos), and Ikeja cluster (Lagos). Others are Amuwo-Odofin cluster (Lagos), Ogbaru cluster (Anambra), Kaduna leather cluster (Kaduna), and Agbara cluster (Ogun), among many others.

The challenges of each cluster are mostly similar, but sometimes different. Starting from Lagos, Nigeria’s industrial epicentre, Amuwo-Odofin cluster is unfortunate to be located close to Apapa and Tin Can ports, where entry and exit are nearly impossible. Company vehicles struggle to deliver raw materials to the factories or finished products to the customers. Like the Apapa cluster, workers and their managers park their vehicles far away and then negotiate to their factories with commercial vehicles or other means of transportation.

Amuwo-Odofin hosts big manufacturing companies such Nosak Distillery, Hongxing Steel Company, and Agary, among others.

“Overall, it is estimated that over N20 billion is lost annually by manufacturers within the Amuwo Odofin and Kirikiri industrial zones as a result of dilapidated infrastructure, and this is not good for a nation that wants to open up its economy to trade with others in the continent,” Frank Onyebu, chairman, MAN, Apapa branch, said last

year.

Osaro Omogiade, managing director of Nosak Distilleries, told BusinessDay that the Amuwo-Odofin cluster had been taken over by trucks.

“They line up along the road and block everywhere. To access our factory is a very big challenge,” he said.

“It is not just us, but all companies in Amuwo-Odofin. At times, you park your vehicles somewhere and walk down to the factory. It is a huge challenge. The pains are enormous; the various players in AmuwoOdofin know what they are going through,” he further said.

The pains of manufacturers in Apapa are much more. Tankers and containers sit on entry bridges for weeks, blocking entry and exit. Big firms such as Flour Mills of Nigeria, Dangote Sugar, Kneipe, and Honeywell, among others, incur huge logistics costs simply because the federal government and Lagos State government are clueless about what to do.

According to the Lagos Chamber of Commerce and Industry (LCCI), about 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day. The LCCI report said the ports were originally meant to accommodate only 1,500 trucks, but they now have over 5,000 each day.

“Government is trying to ensure it decongests the ports, but it is just the sheer volume that

is the problem,” Paul Gbededo, CEO of Flour Mills of Nigeria, told BusinessDay recently.

“If we construct the roads, it makes orderly arrangements for trucks to enter, but it is still beyond the capacity. Technology needs to be employed and other infrastructures need to be deployed,” he suggested.

The Aba leather and fabrics clusters host over 100,000 entrepreneurs working hard every day to churn out products for the consumers. One million pairs of shoes are produced by the leather segment each week.

It has a lot of huge potential, with traders from West African neighbours storming it every week to buy different products and designs.

“We are already struggling to meet demands,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN), who produced Nigerian armed forces shoes in 2016.

However, the cluster is operating in chaos, with poor road infrastructure, inadequate funding and lack of organisation hurting players.

Small businesses in the cluster are poorly structured, with many not registered at the Corporate Affairs Commission.

Exports are made informally, making tracking and planning difficult.

Their machines are crude and much of their work is still done

‘‘

The pains of manufacturers in Apapa are much more. Tankers and containers sit on entry bridges for weeks, blocking entry and exit

‘‘

If we construct the roads, it makes orderly arrangements for trucks to enter, but it is still beyond the capacity. Technology needs to be employed and other infrastructures need to be deployed by human labour.

“This is where the problem lies. We in Aba have no good machines,” Anyanwu of ALAIN said.

“The Bank of Industry has done its best by giving some of us N300,000 each, but it takes $250,000 to N750,000 to set up a standard shoe factory. So, what can N300, 000 do when the industry is capital intensive?” he asked.

Ma ny ro a d s i n Aba a re bad. The Aba-Ikot Ekpene road which links Abia to Akwa Ibom, two states in the oil-rich South-East and South-South regions of Nigeria, is in a bad state. In the 1990s, Aba shoe and textile makers ferried their products to Akwa Ibom through the road, but the road now looks as forlorn as its passers-by. The Aba section is overrun by dirty water. The middle of the section bordering Umuokpo and Onicha Ngwa communities in Obingwa Local Government Area is covered by comfortablysat green grass.

The Agbara cluster in Ogun State, from 2017 to 2019, had terribly bad roads. Vehicles were always frequently stuck in the mud. More so, the then state government levied heavy taxes on manufacturers within the cluster, but refused to rehabilitate the Agbara-Igbese road. At a point, the government suggested a 60/40 arrangement, where manufacturers would provide 40 percent of the funds for road rehabilitation while it would contribute the rest 60 percent. This does not augur well for a country determined to industrialise.

More so, the Kaduna and Kano textile clusters have emaciated because of absence of textile firms in Nigeria, which shut down on the back of a cacophony of wrong policies, smuggling and poor patronage/market access.

Experts say one of the simplest ways of rejuvenating industrial clusters is through the provision of good infrastructure, particularly energy.

“Ultimately, government needs to decide to give industrial clusters energy. There needs to be a decentralisation of energy.

If you make it in small sets, it is easier to manage,” Paul Odunaiya, managing director and CEO of Wemy Industries, told BusinessDay. Many clusters like Agbara have joint transformers or energy-generating instalments that reduce their production costs, but others do not have.

But analysts urge manufacturers to jointly set up facilities to cut production costs.

Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN), believes it is the duty of the government to provide such facilities.

“Areas like Kano have Sharada, which is an industrial cluster, but everybody provides energy, water, warehousing and other things themselves. So, you can’t call that a cluster,” he said.

“Government can partner with the private sector to provide power, water and other utilities in the clusters. If you go to Ethiopia, you will see the way clusters are developed. Government does it alone or partners with the private sector. If you set up a common power facility, you can save half of the energy cost,” he further said.

“You can set up a water facility so that people can use it in common, rather than allow them to sink boreholes individually or provide water themselves. This is what makes industrial clusters efficient. If these things are not available, the clusters will not be efficient, and you can’t call them industrial clusters,” he said.

•Continues online at www. businessday.ng

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