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FG’s declining military spending limits chances of defeating Boko Haram Lack of transparency in Defence budget fuels concerns on abuse, corruption T PDP accuses Defence Minister of diverting military funds for APC campaign B

Airtel to list Africa operations in London IPO

…Appoints J.P Morgan, Citigroup, Barclays Bank, Standard Bank, Goldman Sachs, Absa for share sale

JUMOKE AKIYODE-LAWANSON

CALEB OJEWALE, Lagos & OWEDE AGBAJILEKE, Abuja

oko Haram may no longer hold territories in Nigeria like it did in the past, but the war against terrorism is far from over. The government of Muhammadu Buhari had declared the

sect “technically defeated” but the continuous attacks, which are taking a guerrilla pattern, could see the war go on longer than the country can afford.

As it stands, Nigeria is close to a fiscal crises, with a potential revenue shortfall of N5trillion according to BusinessDay analysis. A protracted war, which

the Boko Haram’s new tactics may evolve into is likely to bring more strains on the struggling treasury. Continues on page 34

elecommunications service provider, Bharti Airtel has made major moves towards its plans to list its Africa operation in the London Stock exchange. One of such moves is the appointment of eight top international banks; J.P Morgan, Citigroup, BofA Merill Lynch, ABSA Group Limited, Barclays Bank PLC, BNP Paribas, Goldman Sachs International and Standard Bank Group to coordinate the London initial public offering (IPO) for its Africa business. “This follows the recent subscription of shares in Airtel Africa by six leading global investors comprising of Warburg Pincus, Temasek, Singtel, SoftBank Group international and others for an aggregate consideration of USD 1.25 Billion,” the telco said in a press release. The financial performance of Airtel Africa continues to improve, having turned positive in Continues on page 34

Inside L-R: Shakti Mohanty, marketing manager, Royal Engineered Stones; Bello Abdulrahman, admin manager, Royal Engineered Stone; Gabriel Aduku, former minister of state for health; Abubakar Bawa Bwari, minister of state for mines and steel development, and Lawal Idirisu, executive chairman, Royal Engineered Stones, during the unveiling ceremony of Royal marble, in Abuja.

More troubles for APC as Buhari counters Oshiomhole’s P. 4 directives

2 BUSINESS DAY NEWS

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Local vehicle assemblers make no headway despite acquiring 54 licences

L-R: Clare Omatseye, vice president, West African Private Health Federation (WAPHF); Chris Ogbechie, director, lbs Sustainability Centre; Mauricio Alarcon, MD, Nestlé Nigeria; Ijeoma Nwagwu, faculty, Lagos Business School; Kené Umeasiegbu, head of environment, Tesco UK, and Victoria Uwadoka, corporate communications and public affairs manager, Nestlé Nigeria, at the International Sustainability Conference at the Lagos Business School.

... New car market down 75% in 3 years MIKE OCHONMA& ODINAKA ANUDU

France puts Western countries under pressure with return of 26 stolen artefacts

... hope rises for over £20m Nigerian works in UK OBINNA EMELIKE

ith the assurance from Emmanuel Macron, president of France, over the weekend on the immediate return of stolen African artefacts in French museums, starting with 26 works to Benin Republic, Europeans countries are now under pressure to return thousands of illegally acquired artefacts in their museums and private collections. The African artefact repatriation by France, which is to be implemented in three phases, was induced by inten-

sified calls by the government of Benin Republic for the return of over 5,000 works taken by the French army in 1892, which are currently in the Quai Branly Museum in Paris. But the integrity and morality of the French leader in seeing the wrong in keeping illegally acquired artefacts is now challenging other European countries who took part in the plundering of Africa during the colonial era to right their wrongs with the return of the artefacts to the rightful owners across the world. The pressure is mostly felt by the United Kingdom government, the museums and private collectors who account for over 50 percent of stolen

African artefacts in the world. across museums in the United At present, there are over States of America, which were 8,000 stolen Nigerian artefacts loaned from some European in museums around the world museums. and in the hands of individual While describing the decollectors, including the over velopment as a milestone 4,000 pieces of artefacts stolen in the several calls and effrom the ancient Benin palace forts by African countries, that are in several museums agencies and individuals to and private collectors in the recover stolen works by the UK alone. colonial powers, Bruce OnoThe Benin works alone are brakpeya, foremost Nigerian valued at over £20 million, visual artist, urged other westwhile specific works such as ern governments, museums Queen Idia, the original Festac and collectors, to learn from 77 mask, still draw thousands the integrity and morality of of visitors, and researchers to president Macron in returnthe British Museum where it ing the stolen works in their is allegedly kept for “safety.” possession. The pressure is also on fa•Continues online at cilitators of hundreds of stolen www.businessdayonline.com Nigerian artefacts on display

BusinessDay’s Iheanyi Nwachukwu wins Capital Market Journalist of the Year award

t is indeed another positive for BusinessDay Media Limited as its head of capital markets desk Iheanyi Nwachukwu wins the “2018 Capital Market Journalist of the Year” award by The PEARL Awards Nigeria. The award was presented to him alongside other individual and corporate winners at a colourful award night on Sunday November 25 which was attended by notable leaders from both the public and private sectors of Nigerian economy. Nwachukwu clinched the award based on his “outstanding performance in the reportage and objective analysis of activities in the Nigerian Capital Market,” according to the Board of Governors of Pearl Awards Nigeria, the organizers. In 2012, Iheanyi won the “Gold Prize Award” of the Capital Market Essay Competition for Nigerian Journalists initiated then by Arunma Oteh-led

Tuesday 27 November 2018

Iheanyi

Securities and Exchange Commission (SEC). Also in 2014, he won the “Silver Prize Award” of the same Essay Competition organized by SEC. He joined BusinessDay as a trainee reporter over a decade ago shortly after completing the National Youth Service (NYSC) but has succeeded in creating a niche for himself in financial journalism. Iheanyi holds a BSc. Degree in Economics from Imo State University and MSc. in Management from University of Lagos. He has attended several

on-the-job trainings in Nigeria and abroad which include: Advanced Writing and Reporting Skills (AWARES-1) at Pan Atlantic University School of Media and Communications; News Agency Journalism at Indian Institute of Mass Communication (IIMC) New Delhi; and Capital Market Development and Regulation at the International Law Institute (ILI) Washington DC. Mary Uduk, Acting Director General of the Securities and Exchange Commission (SEC) in her remark during the award night at Eko Hotels Lagos commended the efforts of the Board of Governors and Management of PEARL Awards Nigeria for giving consideration to companies with good corporate governance practice in the award nomination process. She also enjoined PEARL Awards Nigeria that in future editions, emphasis should also be given to companies with technological innovation in the capital market, in the

advent of the convergence of Finance and Technology – FinTech. She said the SEC will continue to highlight and promote developments and trends in the Nigerian Capital Market and drive Financial Inclusion aimed at reducing adult exclusion from financial services. She said “Innovations in financial technology, has made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises, promoting financial inclusion and the affordability of financial services. “A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth--and will create million more jobs. The gains of having a more inclusive financial system are enormous, as it helps broaden financial markets and make policies more effective”.

ocal vehicle assemblers are not making any significant progress in Nigeria despite acquiring 54 different licenses from the National Automotive Design and Development Council (NADDC). Their vehicles are often too expensive for cash-strapped consumers who have shifted to more affordable secondhand vehicles coming into Nigeria in droves. “Nigeria has the lowest figures in new car sales relative to similar African countries. South Africa has 550,000, while Nigeria has just 7,000. Imported used car segment dominates the industry, accounting for 74 percent of all vehicle imports. Ten percent of imported cars are less than three years old, while 63 percent are over 11 years,” Andrew Nevin,

partner and chief economist at PwC Nigeria, said in Lagos over the weekend. Nigeria introduced the Automotive Policy in 2013 to encourage local vehicle assembly and cut imports. The policy imposed 35 percent duty and another 35 percent levy on imported vehicles, raising the prices of imported vehicles. Five years after the policy, very few and often very expensive vehicles are assembled locally, while smuggling and importation of vehicles involved in accidents remain on the rise. The National Bureau of Statistics (NBS) says Nigerians imported 105,189 units of vehicles in 2016 through the ports, which increased to 181,404 (72.46 percent increase) in 2017. The capacity of 54 licensed assemblers is 410,000,

Continues on page 34

Global Witness, others allege Shell, Eni denied Nigeria of N2.1trn oil revenue DIPO OLADEHINDE

n what was meant to be a cash cow for the benefit of Nigeria oil Industry, a report by a non-governmental organizations led by Global Witness have estimated that Nigeria will lose N2.1 trillion ($6billion) in revenue to International oil giants Shell and ENI over the sale of the most prolific oil field in Africa, widely known as Oil Prospecting License (OPL) 245. According to the report called Take the Future; Global Witness said its discovery of Shell’s dire terms for the OPL 245 oil block comes soon after Nigeria became the country with the highest rates of extreme poverty in the world. “The $6 billion in revenue

that the companies are set to deprive the Nigerian people of is equivalenttotwicethecountry’s annual health and education budget, or enough to train six million teachers,” anti- corruption group Global Witness said. ”Instead, we could see that money boosting profits for the European oil giants.” GlobalWitnessrevealedthat Shell executives knew the deal they were asking for was not a “Production Sharing Contract”, which would have given the Nigerian Government a share of the oil from their OPL 245 block. But Shell and Eni continued to call it that despite having removed the Nigerian Government’s share of oil entirely. Global Witness also noted that Nigeria’s civil servants

Continues on page 34

Tuesday 27 November 2018

BUSINESS DAY

4 BUSINESS DAY NEWS Nigerian banks, economy set to get relief from ATI HARRISON EDEH, Abuja

ublic and private sector investors will soon receive important support that will help boost key industries such as the banking sector as well as provide access to competitively priced credit and loan facilities for institutions in Nigeria. Relief is expected once Nigeria finalises its membership of ATI, which is nearing completion. ATI is Africa’s only multilateral credit and investment insurer, similar to the World Bank’s MIGA but with a focus purely on Africa. In order for a country to access ATI’s full slate of investment solutions, it must be a full member and shareholder. ATI held a forum on ‘Derisking Nigeria’s Investments and Trade today’ in Abuja to inform the private and public sectors about the benefits that await Nigerian firms, the government and its institutions once membership in ATI is finalised. Speaking at a press briefing following the forum in Abuja, ATI’s CEO, George Otieno, sai, “There are numerous benefits to Nigeria becoming a member of ATI. First, investors and international lenders will look favourably on this action and second the time couldn’t be

better for our solutions. “We can support the government to diversify the economy, boost banks liquidity, and even help the government to borrow internationally at more competitive rates. This year ATI’s products will stand behind around 5% of all new FDI into Africa so joining ATI literally boosts growth. Lastly, ATI is now paying dividends to shareholder making membership a near budget neutral decision for governments.” Specifically, ATI will help improve Nigeria’s economic outlook in the following ways: For the overall economy, ATI’s presence will help to reassure investors, particularly in the current election cycle - an environment that often leads to investors delaying their planned projects in any African country undergoing elections. This risk may already be reflected in Nigeria’s foreign direct investment flows, which totalled $1.2 billion in the first half of the year down from $1.7 billion a year earlier. ATI provides investors with political risk and investment insurance to protect their investments against any unilateral government-related action (including non-payment) that might negatively impact their investments or projects.

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More troubles for APC as Buhari counters Oshiomhole’s directives TONY AILEMEN, Abuja

he last may not have been heard on the crises rocking the All Progressives Congress (APC) over the nationwide primaries, as President Muhammadu Buhari on Monday issued a fresh directive that gives aggrieved party members the right to seek redress in court This is as the President also disowned a “Purported Presidential Committee on reconciliation” saying only the party’s National Working Committee (NWC) has right to constitute such committee. In a statement signed on Monday by Femi Adesina, special adviser to the President on media and publicity, the President countered an earlier directive issued by the party’s NWC, forbidding the aggrieved members from seeking redress in courts over the primaries. According to the President, “If anyone is displeased with the way and manner anything has

been done, and feels deprived of his/her rights, then such a person is at liberty to approach the courts for redress.” The statement noted that the President was reacting to the position of the APC, which recently forbade members from dragging the party to court. According to the President, “We can’t deliberately deny people of their rights. We agreed that party primaries should be conducted either through direct, indirect or consensus methods, and if anyone feels unjustly treated in the process, such a person can go to court. “The court should always be the last resort for the dissatisfied. For the party to outlaw the court process is not acceptable to me.” The APC, in a decision ascribed to the NWC, had last week threatened to punish members across the country that had dragged the party to court over various issues. “The Party intends to activate constitutional

provisions to penalise such members as their action is capable of undermining the Party and hurt the Party’s interest. “We hereby strongly advise such members to withdraw all court cases, while approaching the appropriate party organs with a view to resolving any outstanding disputes. In addition to this, aggrieved members are urged to take full advantage of the reconciliation committees the Party has put in place. “APC members should understand that as a progressive party that operates on the principle of change, it is not a matter of choice to keep to the rules,” according to the statement. The President also advised members “to work with the reconciliation committees empanelled for the six geo-political zones by the APC, and not a purported Presidential Committee on Reconciliation,” stressing that the Party was the only body authorised to constitute such committees.

Tuesday 27 November 2018

Abiola Salami becomes Fellow of Institute of Management Consultants

n recognition of his contribution to capacity development, Abiola Salami, was yesterday conferred the status of Fellow of the Institute of Management Consultants (IMC) with a global certification recognised in 55 countries. According to the board of trustees and governing council of the IMC, Salami is appointed as Fellow in recognition of his outstanding academic and professional standing, and demonstrated commitment to creating, maintaining, extending and promoting the highest world standards of management consulting practice, ethics, competence and client service. He can now be addressed as Abiola Salami, FIMC, CMC. Responding to the honour, Salami said, “I’m thankful to the Institute for the recognition. I will like to dedicate this fellowship to all the Champions we have served through all our multiple platforms. And every individual and organisation that has so far, supported us towards reaching the 10 million champions milestone across the 30 countries this 2018.

Tuesday 27 November 2018

BUSINESS DAY

6 BUSINESS DAY NEWS

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Nigeria’s taxpayer population hits 33m - Fowler

igeria’s taxpayer roll is set to hit 33 million. This was disclosed by Tunde Fowler, chairman, Joint Tax Board (JTB) and executive chairman, Federal Inland Revenue Service (FIRS), at the 142nd meeting of the JTB in Bauchi Monday. According to Fowler, the ongoing database consolidation of the JTB, an initiative being executed in collaboration with the Nigeria Interbank Settlement System (NIBSS), a National Taxpayer database with the data of well over 33 million individual taxpayers across the country is now a reality. He stated that having this consolidated database, which is clean and credible, opens the door to immense opportunities for the tax administrator at all levels. “As we build on this data, we shall also be ensuring that the technological infrastructure that will facilitate the seamless exchange of data across levels of competent authorities are present. This entails significant investment in Information Technology via the provision of required

infrastructure, equipment and as capacity building for personnel that will drive the processes,” he said. The JTB chairman expressed optimism that such investment in infrastructure will foster efficiency in taxpayer management and will align with the country being a signatory to the Multilateral Competent Authority Agreement (MCAA), which will trigger the Automatic Exchange of Information among Treaty Partners and two other initiatives of the Federal Government: the Voluntary Assets and Income Declaration Scheme (VAIDS), and the Voluntary Offshore Assets Regularization Scheme (VOARS). Fowler also celebrated the marked increase in revenue generation in Bauchi State, where the governor, Mohammed Abdullahi Abubakar, launched payment of taxes through Automatic Teller Machines (ATM) and through its website. The new e-payment system is being powered by Interswitch. The JTB chairman disclosed that the Internally Generated Revenue of the state has risen from about N4 billion to over N7 billion

monthly. “You may wish to note that Bauchi State is actually one of the success stories when matters of IGR are discussed, both at the regional and at the national levels. Your Excellency may wish to note a few of the impressive statistics on IGR collection of Bauchi State. Computation of IGR collection for Bauchi State for the nine-month period January to September 2018 hit N7.04 billion. This figure has already outperformed the full year 2017 IGR figure of N4.36 billion with a percentage margin of 61.2 percent. “Average quarterly growth rates for Bauchi as at Q3 2018 is 10.01 percent, which places it among the top ten highest average quarterly growth rates nationwide for the period. At the regional level, Bauchi State is actually setting a healthy pace for the region as her 9-month collection in 2018 is just over 26 percent of the entire IGR collected by the six states within the region,” Fowler said. He stated that the JTB seeks to play an important role in an “emerging global community where bounda-

ries have moved beyond physical geographic expressions and where financial flows have become seamless and electronic, making it increasingly challenging for Governments to collect the taxes that are due them.” Chairman of the Bauchi State Internal Revenue Service, Jibrin Jibo, said the state was able to improve its revenue collection as it has automated collection platforms, streamlined activities with other revenue generating agencies, and plugged revenue leakages. Governor Abubakar called state governors to ensure automation of their revenue authorities in order to improve Internally Generated Revenue (IGR). “The place of tax as the major thrust of economic growth is unquestionable since time immemorial. It is the first principle that defines an organized society. It is therefore disheartening that at this age where the cost of running government and provision of services is huge as a result of population growth, that some businesses and individuals still evades taxes.

Minister of Power, Works and Housing, Babatunde Fashola, and participants in a group photograph shortly after the opening ceremony of the capacity building workshop for Federal Controllers of Works in the Ministry of Power, Works and Housing with the theme,”Learning and Deveploment for Greater Stature” at the Fifth Chukker Polo Ranch, Jos Road, Kaduna State on Monday.

Lagos ETF disburses N7bn in 3 years … beneficiary says initiative adds value to small businesses JOSHUA BASSEY

agos State Employment Trust Fund (ETF) says about N7 billion has been disbursed to some 10,000 small and medium scale businesses in the last three years, with 25,000 direct jobs possibly created. This is as Adeoye Olumide, a beneficiary, whose business, Jetco Global Farms, secured a loan of N3.7 million from the ETF to expand operations, says the company has signed on more workers and thus fulfilling one of the objectives of the ETF to create jobs. According to Olumide, the multiplier effect of the

ETF loans is amazing. “The domino effect on the entire value chain with this empowerment is laudable and commendable,” Olumide said at the presentation of cheques to 2,000 new beneficiaries on Monday. The ETF was initiated by the Akinwunmi Ambode-led administration in 2015, targeting to create a pool of fund of N25 billion to which residents of Lagos with smart business ideas as well as existing small businesses can apply and secure loans at single digit interest rate, to expand their businesses and create jobs for themselves and others. Ambode, speaking while

presenting cheques to another batch of 2,000 beneficiaries, said the initiative was meeting the objectives of creating jobs and contributing to the growth of the Lagos economy. “I am particularly delighted to see for myself the manifestation of a small dream we had at the inception of this government and the little seed we have sown in the lives and businesses of Lagosians. I am happy to see the faces of the people whose lives and aspirations have been positively impacted by this programme,” Ambode said. “A validation of this programme comes from the over 25,000 new direct jobs created directly by these businesses in our state”.

Tuesday 27 November 2018

Security operatives rescue American abducted in Lagos JOSHUA BASSEY

epartment of State Security (DSS) has rescued an American citizen, Tawanda Lynn Jackson, who was held hostage by one Mathew Adedoyin, her acquaintance whom she had met on social media. Betty Adoki, the director of DSS, who paraded the prime suspect and his accomplice on Monday, said Jackson, 46, who had arrived Lagos on Sunday, November 11, and was received at the airport by Adedoyin was held hostage on November 21, at No. 7, Akanbi Street, Abule Egba, where the suspect allegedly raped her. According to Adoki, the American Embassy in Lagos had reported to the Lagos State Command of DSS about Jackson’s abduction, which led to the raid of the criminal hideout by a team of security operatives and military personnel of the 9 Brigade, Nigeria Army, Lagos.

Adoki said the suspect had lured the black American mother of five through social media, purportedly for a visit, claiming to be a wealthy prince from Arogbatesu royal family of Ile-Ife, Osun State, with the intention of extorting money from her. She explained that while on the dating site, Adedoyin, 40, lied to the victim that he was an exporter of ginger and bitter cola, with a large plantation of cocoa and palm oil, claiming that he had a lot of slaves working for him. “He also told the victims that his father was a former king of Ife Titun, Osun State and that he was heir apparent to the throne. He further cajoled the victim to believe that he owns several buildings in Lagos, including where Jackson was held hostage. But the victim started to suspect a foul play when he was losing patience and said he rented the place meanwhile, it was a ramshackle place he said his father owned,” Adoki said.

Obaseki tasks new HoS to fast-track ongoing reforms

do State governor, Godwin Obaseki, has charged the new Head of Service (HoS), Isaac Ehiozuwa, to urgently put to use his wealth of experience in fast-tracking the ongoing reforms of the state’s civil service in line with the vision of his administration. Obaseki gave the charge on Monday, at the Government House in Benin City, the state capital, during the swearing in ceremony of the new HoS. “We have resolved to give world-class trainings to our civil servants and you will help reshape the civil service to ensure that everybody that works for the state government must be Information and Communication Technology (ICT)compliant.

“We know you are hardworking and have the capacity to bring the desired reform in the sector,” the governor said. The governor explained that his administration’s vision was to reform all aspects of the state’s civil and public service for optimal performance. He maintained that work had started on the reform of the physical environment with the ongoing revamp of the buildings in the Secretariat Complex, and charged the new HoS to commence work with the reform of the people in the service. “One of the key responsibilities of the new HoS would be to reform the people in the service” he added, and urged Ehiozuwa to build on the legacies of his predecessors.

Worsening situation in Cameroon two years on – Mo Ibrahim

or the past two years, the Mo Ibrahim Foundation has continued to monitor and follow the governance challenges being faced by the government of Cameroon. This renewed focus was due to the November 2016 peaceful strike of lawyers, teachers and other professionals that escalated into violence, drawing out ethnic and religious tensions, and impacting on the stability and peace that the country had enjoyed for some decades. Today, the confrontation between Cameroon’s government and separatists continues to escalate resulting in casualties of civilians and state security officers. The scenes we see today of this continuing confronta-

tion bear no resemblance to the peaceful strike that began two years ago. A peaceful Cameroon is vital not only for the region but for the wider continent. Often described as ‘Africa in miniature’, Cameroon reflects the cultural, ethnic and geographic diversity of the continent. This young nation also follows the wider trends of Africa’s growing youth demographic, with 15-34-year olds constituting over 77% of the population in the country. The 2018 Ibrahim Index of African Governance, published a few weeks ago, highlights the ongoing Governance challenges in Cameroon and captures worrisome deteriorating trends. The Overall Governance measure contin-

ues to show decline particularly in the last five years. This decline is manifested notably in the category of Safety & Rule of Law as measured mainly by the unsatisfactory performance relating to the Absence of Government Involvement in Armed Conflict, Absence of Government Violence against Civilians, National Security, Absence of Domestic Armed Conflict or Risk of Conflict and the Reliability of Police Services. Performance in the category of Participation & Human Rights has shown no noted improvement and has been negatively impacted by the recent Presidential elections where voter turnout in Anglophone regions was reportedly very low.

Tuesday 27 November 2018

Afreximbank to grow loan book to $10bn by year-end HOPE MOSES-ASHIKE

n line with its strategic and business plans, the African ExportImport Bank (Afreximbank), a multilateral trade finance institution, established in October 1993, will continue to grow its loan book to over $10 billion by the end of the year, from the current loan balance of $9.5 billion. The bank on Friday released its unaudited financial statements for the nine months ended September 30, 2018, showing strong financial and operational performance, with gross income of $546.6 million, a 14.3 percent increase from $478 million recorded the same period last year. Included in the gross revenue was commission and fee income of $58.31 million in the nine-month period compared with $14.81 million in 2017. The solid growth of 294 percent was primarily driven by higher volumes of advisory mandates, which were completed by September 2018 compared to same period of 2017. Total assets of the bank closed the period at $12 billion as against $14 billion in 2017, a decline of 14 percent in line with its expectation, on the back of the successful conclusion of the COTRALF facility, which saw a decline in loan balances from $10.5 billion as of September 30, 2017 to $9.5 billion as of September 30, 2018. The bank, with a strong liquid assets to total assets ratio of 17 percent as of September 30, 2018 and ample sources of additional liquidity, has the liquidity necessary to fund the planned disbursements in the fourth quarter of the year when loan demands usually peak. Asset quality remained satisfactory and within strategic plan tolerance level with the non-performing loans (NPL) ratio at 2.54 percent in nine months compared with 2.4 percent in the preceding year notwithstanding the repayment of the $3.5 billion cash covered COTRLAF facilities, a reflection of effective credit risk management practices. Other highlights of the results released in Cairo, Egypt include proportion of non-interest/gross income of 11 per cent in the period under review versus 4 per cent in 2017; and net interest margin of 3.1 per cent (versus 2.8 per cent in 2017).

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7 NEWS

BUSINESS DAY

More Nigerians join unemployment market as LADOL terminates contract of another investor KELECHI EWUZIE

ore Nigerians have been put into the labour market as Lagos Deep Offshore Logistics (LADOL) has terminated the contract of Africoat Nigeria Limited from the zone. This action is coming barely two months after LADOL terminated the operating licence of Samsung Heavy Industries Nigeria (SHIN) Limited in LADOL Free Zone in Lagos. Africoat was conceived to take advantage of the investment opportunities left in

the pipe-coating market in Nigeria when Bredero Shaw decided to leave West Africa. The Nigerian and expatriate personnel of Africoat is made up entirely of ex-employees of Bredero Shaw with extensive technical expertise in worldwide pipe-coating operations. Africoat purchased a complete corrosion and concrete weight coating plants from Korindo in Indonesia in 2012, packaged for freight and shipped to Nigeria by charter vessel directly to LADOL, where it established a worldclass warehouse for pipecoating operations. However, investigation

has shown that Africoat has received a final notice from LADOL for the removal of its equipment/properties from the free zone after it had earlier terminated the Services Agreement it signed with Africoat. It was gathered that because the company’s operating licence was not renewed and its service agreement terminated, the company has lost opportunities of getting new businesses. A source in LADOL disclosed that Africoat failed to pay rent fees and file quarterly data and annual returns to LADOL. “Africoat also failed to commence operations since the completion and rental of

the pipe-coating facility. It also defaulted in the payment of ground rent and service charges,” the source said. But an Africoat official, who spoke with journalists, blamed his company’s predicament on what he described as the “toxic environment created by LADOL for companies operating in the free zone. “LADOL Free Zone is currently a toxic environment to operate as the company is in conflict with the only two independent operators in the zone – Samsung Heavy Industries Nigeria Limited and Africoat. Many Nigerians are losing their jobs because of

these conflicts. The solution to the crisis is for the Federal Government to encourage competition by issuing other free zone management operators licence at LADOL. “The quaysides should also be open for other operators to utilise because it belongs to Nigerian Export Processing Zone Authority and Nigerian Ports Authority (NEPZA/NPA). How can the Federal Government attract foreign investors and a Nigerian company chases the investors away after the investors have established operations in Nigeria? Competition is the solution to this impunity,” he said.

8 BUSINESS DAY NEWS

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Edo proposes N175.7bn for 2019 fiscal year … to fund budget with N27.4bn loan from CBN, World Bank … capital expenditure to gulp N95.8bn, recurrent gets N79.9bn IDRIS UMAR MOMOH, Benin

do State governor, Godwin Obaseki, on Monday presented 2019 budget estimates of N175.7 billion to the Edo State House of Assembly for consideration and approval. The appropriation bill tagged, “Budget of socio-economic inclusion” is geared towards consolidating on the gains of the last two years of the administration. Obaseki said the budget proposal was 9.2 percent above the 2018 budget of N146 billion, saying the budget comprises N79.9 billion for recurrent expenditure and N95.8 billion for capital expenditure. While noting that the 2019 budget is a budget of deficit, the governor said the sum of N27.4 billion would be borrowed from internal and ex-

ternal financial interventions such as the Central Bank of Nigeria (CBN) special programmes and the World Bank. According to Obaseki, the total revenue for the year is caped at N148 billion, which includes statutory allocations, IGR and grants. “We envisaged that there would be deficit of N27.4 billion, which we will borrow from the market. “The deficit in this year budget will be funded by a mix of internal and external loans from the CBN, where we expect N1.5 billion, especially intervention fund targeted at agriculture for jobs creation. The balance of N25.8 billion will be sourced from external project specific financing from the World Bank window. “From the fund expected from the World Bank, N15.5 billion will be deplored from projects specific funding

of the Nigeria Erosion and Watershed Management Project (New-Map) and the balance will be for the State Employment and Expenditure for Result (SEEFOR), Community and Social Development Project (CSPd) as well as FADAMA programme. These facilities currently exist and available to the state government.” He also the World Bank was providing another N10.3 billion to fund healthcare programme in the state so as to consolidate on the progress the state government had made in the last two years in the sector. The governor also added that the funding of the budget was hinged on $60 benchmark crude oil price increase with an average daily production of 2.3 million barrel per day as well as the increase in internally generated revenue.

He noted that the 2019 budget proposal would propel Edo State to move closers to its dreams, having weathered through the shocks of different economic crisis in the last two years. He said the budget was proposed on a capital to recurrent expenditure ratio of 54.5 percent capital to 45.5 percent recurrent. The budget breakdown shows that N42.7 billion was allocated to infrastructure development, N9.3 billion for health, N26.8 billion for education, and N7 billion for investment promotion. Others are N2 billion for security, N9 billion for payment of pension, N967 million was allocated for the judicial, N2 billion to reinforce the state security architecture, N500 million for the development and construction of the Benin Royal Museum, among others

How African governments can deliver aviation benefits – IATA

nternational Air Transport Association (IATA) has urged governments in Africa to maximise the positive socio-economic power of aviation by working together to promote safe, sustainable and efficient air connectivity. Director-general of IATA, Alexandre de Juniac, gave the advice on Monday while speaking at the 50th annual general assembly (AGA) meeting of the African Airline Association (AFRAA) in Rabat, Morocco. The News Agency of Nigeria in Lagos obtained a copy of De Juniac’s speech. “African aviation supports $55.8 billion of economic activity and 6.2 million jobs. To enable aviation to be an even bigger driver of prosperity across the continent, we must work closely with governments,” he said The IATA boss highlight-

ed safety as a positive example of progress through collaboration, noting that Africa had recorded no jet hull losses for two years running, and was two years free of any fatalities on any aircraft type. “It is clear that progress is being made. But more needs to be done. We urge governments to recognise the IATA Operational Safety Audit (IOSA) in their safety oversight programmes. “With IOSA carriers performing three times better than airlines not on the IOSA registry, we have a convincing argument. Similarly, states must push forward greater adoption of ICAO Standards and Recommended Practices (SARPS),” de Juniac said. According to de Juniac, only 24 African states comply with at least 60 percent of ICAO SARPS, which is not good enough.

Osinbajo to declare National Printers confab open today MIKE OCHONMA

L-R: Wole Akinleye, executive director, corporate, South, Wema Bank plc; Kayode Fayemi, governor of Ekiti State, and Ademola Adebise, managing director, Wema Bank plc, during a courtesy visit to the governor in Ekiti.

Tuesday 27 November 2018

ll is now set for the first Nigerian National Printers Conference (ngprint) in collaboration with the Federal Ministry of Industry, Trade and Investment, to be declared open by Vice President Yemi Osinbajo today at Sheraton Hotel, Abuja. Osinbajo is expected to give a keynote address on ‘Government Plan for the Printing Industry in Nigeria’ in an event expected to attract an estimated 300 stakeholders in the printing industry. According to Change Group, organiser of the oneday event, the conference with the theme: The Role of Nigeria Printing Industry In Economic Development and Employment Generation, is being put together to address some of the anomalies plaguing the multi-trillion naira printing industry that is ca-

pable of employing one million Nigerians. Among others, the conference is expected to showcase the potentials in the printing industry. Other aims of the conference among other imperatives line up for discuss shall include; how to use the upcoming election to bring the attention of federal government to the importance and challenges facing an industry providing jobs for one out of every 20 working Nigerian outside the traditional farming business. The forum will also deliberate on how to halt the consistence loss of jobs in the printing industry as well as how to maximize the job creating potentials of the industry and ensure Nigeria jobs remain in Nigeria. Several prominent industry stakeholders as well government officials have been confirmed to make presentations during the conference.

Prizes for 2019 Pan African Re/Insurance Journalism Awards announced as submission deadline nears

Gas flare: Okowa calls for stringent measures

an African reinsurer Continental Re has announced prizes for winners of the 2019 Pan-African Re/Insurance Journalism Awards. The winners will receive a cash prize, training and mentoring on insurance reporting and will also enjoy a fully paid trip to attend the Awards Ceremony during the sixth CEO Summit in Mauritius in March 2019. The pan-African re/insurance journalist of the year will benefit from 12 months mentorship programme to be completed by the time of the 2020 awards. “We are proud to be at the forefront of building capacity among African

journalists by equipping them with the necessary skills needed to report on re/insurance matters accurately. Through our competent and dynamic panel of judges, we seek to recognise and award reporters who will demonstrate a great understanding of the re/insurance sector and display integrity in covering various issues about the sector,” Femi Oyetunji, group managing director/ CEO, Continental Reinsurance, said. The submission window for entries closes November 30, and to participate, interested journalists are required to enter one article per award category: Pan-Af-

rican Re/Insurance Journalist of the Year, Best Re/Insurance Print Article, Best Re/ Insurance Broadcast (TV/ Radio) Article and Best Re/ Insurance Online Article. ‘‘We have noticed improved coverage of insurance in various publications over the past year especially by journalists who have participated in the awards before. As part of our corporate social investment, we want to ensure business journalists are fully equipped with the necessary skills to report on insurance and continuously highlight challenges and opportunities that insurers can tap into,’’ Oyetunji said.

FRANCIS SADHERE, Warri

elta State governor, Ifeanyi Okowa, on Monday called on the Federal Government to put stringent measures in place to discourage gas flaring. Okowa said the call was necessary as such moves would create job opportunities and curb environmental hazards arising from gas flaring. The governor made the call in Asaba when participants of Course 41 of the Armed Forces Command and Staff College, Jaji, led by Major-General Felix Edafioghor, paid him a courtesy visit. “If you go to where gas is flared, which is still very com-

mon, you will understand why we need to be more serious about taking decisions as to stop the flaring. “Stopping gas flaring will be so much better for our people, because, the flared gas in itself has already destroyed the environment, not just the natural habitat in terms of farming, it has also polluted very badly the air that we breathe and only God knows the level of damage that it has caused. “We believe that the laws must be implemented in such a manner that gas flaring is not just tied up to fines because, as long as gas flaring is tied up to fines and the oil companies begin to realise that it may be cheaper or easier to pay the fines than to

stop the flare of gas, then, we obviously are not discouraging them. “I am aware that a lot has been done in the last few years but, there is a lot more that can be done because, the gas that we flare can generate a lot of income for the oil companies if only it can be properly utilised. “So, we must stay on our laws and ensure that we do what is right and stop tying the issue of gas flaring to fines because, the continuing tying of gas flaring to fines is injurious to our people and our environment,” the governor said. He decried the attitude of some of the oil companies to the effect of gas exploration activities on the environment.

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Tuesday 27 November 2018

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A new season of political intoxication

Mazi Sam Ohuabunwa OFR sam@starteamconsult.com

igeria has finally opened the gates to the 2019 bazaar. The good times are here again. Money will now flow and perhaps some blood will flow with it unfortunately. All the savings made in the last three years or so will be released to be frittered away in another season of political intoxication. Is it good or bad? Depends on where you are coming from. From the point of view of the suffering masses of Nigeria, I think it is good time in the short run. The money that some governments refused to spend in the last three years will be spent in the next three months or so. Workers who were not paid, contractors and vendors whose invoices have remained untouched may be lucky. Some salaries and overdue pension benefits may be paid this season as a way of “bribing” the beleaguered civil servants. Some long outstanding invoices may be paid now with “mandatory discount”. The political jobbers are back to business, renting crowd including thugs. Transporters are in season. Ordinarily, Christmas and end of year is good season for transporters, but this pre-election Christmas is added bonus. Hoteliers and food vendors are ready for the boom. The entertainers have greased their voices, hips and musical instruments. It will now be ‘buy the gala, pass the booze!’ Is anybody the loser at this game? All

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

here is a popular saying that when America sneezes, the world catches a cold. In terms of global economy, the world appears to have been infected with cold. And one wonders if globalization is no more the prescription for relieving the world of “economic cold”. Whether we like it or not, the world is now more connected or integrated than ever before. Thanks to globalization. Globalization is a choice and it’s under attack these days from several quarters. Globalization has left majority of the world’s population behind. According to UNICEF, the richest 20 percent of the world’s population gets 83 percent of the global income while the poorest quantile has just one percent. The trend is getting worse as reflected in a new UNDP report titled “Humanity Divided: Confronting In-

of us in the long run! National wealth, attention and priority are being diverted to “buy” votes. All the money to be spent by the government and the politicians at this season belong to us all and all that it will be used for, is to buy our votes, which again is not completely bad if only we can appropriately price our votes. The tragedy is that most of us will cheat ourselves by selling our votes cheaply- some for one thousand naira only! The truth is that most Nigerian voters are not interested in manifestos nor do they care about promises. Many have come to the painful conclusion that politicians never keep their promises. Otherwise, they would have gotten better price for their votes. Because if they were wise, they would ask certain pertinent questions to the politicians who want to buy their votes: “The promises you made us last time, how many did you fulfil them?” They will take the manifestos and tick the promises fulfilled, mark those unfulfilled and those outrightly denied by those who made the promises. If they were able to engage them in this way, it would be possible to properly negotiate the price of their votes. The man who fulfilled most or some of his promises would pay less whereas the guy who failed all or most of his promises would pay more. The guy who never made promises before but has something to show that he could do something will pay somewhat less whereas the guy who never made promises before, but comes now to say he would build a sky-scraper but cannot show a two-story building he has built before, will pay much more. That way we can get real value for our votes. But because we seem to treat all politicians and their promises the same way, we undervalue our votes. Also because we do not care about

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Only a small percentage of Nigerians do proper analysis and vote according to their conscience or on the superior performance of one candidate against the other. Many candidates have won elections in Nigeria, after refusing to participate in any debates-online or offline

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their manifestos, they come telling us another whole load of cock’n’ bull, and we acquiesce for little change. The question then arises, ‘suppose they refuse to give anything and go on to write the election result to suit their purposes, what shall we do?” Nothing! Just complain. Then the bazaar will shift to the courts- election tribunals, appeal courts and Supreme Court and the courts will then decide for us. Thank God for the courts. Sometimes they give us Barabas, other times they give us Judas. My worry therefore is, how long must this continue? When will Nigerians be in a position to make a righteous choice of leadership at all levels of our political architecture? Must we continue to sell our votes or in the alternative be forced to accept imposition of leadership? Both situations are reprehensible and cannot represent true democracy. Often we blame INEC but the question is, “Are Nigerian citizens as helpless as they seem or have we voluntarily capitulated to the whims

and caprices of politicians?” The power truly belongs to the people but because of our political underdevelopment and naivety, we allow the politicians have the upper hand and ride us. Many Nigerian voters are not prepared to ask anybody any question. Their choice of candidates is determined by relationships- ethnicity, tribalism, religion, and expectations of personal benefit or profit that will accrue. Some base their choice on rumours or what some candidates say about their competitors. Some politicians and political parties know how to carry propaganda against their opponents and many electorates buy these smear campaign, line, hook and sinker without interrogating the stories. Yes, they buy our votes (some on cash, others on I-owe-you). Only a small percentage of Nigerians do proper analysis and vote according to their conscience or on the superior performance of one candidate against the other. Many candidates have won elections in Nigeria, after refusing to participate in any debates-online or offline. Many discerning Nigerians wonder why a political office holder in Nigeria will be performing poorly, visible to all most everyone, yet the officer gets more popular. That’s because in Nigeria, criteria for assuming political leadership may not always be rational or logical. Which is why we seem to be moving in a cycle and for many, we often end moving backwards. Am I happy that another election season has arrived? To be true I have mixed feelings. Yes, it is good that we have a seeming opportunity to hold government to account, to question them about their past and current performance. As a man that feels for the common man, I am happy that the politicians (in power and out of power) will release cash into the economy and

some may trickle to many at the large base of Nigeria’s economy. I am hopeful that with some luck and divine intervention (as we had in 2015), Nigerians may have their way in a number of cases to put their preferred candidates in office. But when I consider the cost to the economy, I become saddened. Imagine the billions given to INEC to conduct elections (Nearly 200 billion Naira), imagine the money budgeted for the police and security forces (not less than 50 billion Naira), imagine the money that will be spent by the nearly 70 Presidential candidates, about 750 Gubernatorial, nearly 1500 for Senatorial, close to 7000 for House of Representatives, and about 15000 for State Houses of Assembly, and you will understand why I am not quite happy. Can you imagine if all this money which may run into a trillion naira was invested in education, healthcare and infrastructure? And that is not all. Many of the politicians who will take IOU to fund their elections and pay legal fees in some cases will spend at least the next two years in office settling those debts and that will come largely from national coffers. Is there no other way to conduct elections in Nigeria without this cyclical waste that puts so much pressure on our economic well-being? Perhaps this is why those who truly love this nation are clamouring for restructuring. We need to restructure everything concerning this country including our electoral processes and procedure. Nigeria’s electoral expenses must be one of the highest on per capita basis. Truly, we need to do something drastic about this!

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Is de-globalization imminent? equality in Developing Countries.” The report makes it clear that despite impressive progress made by humanity in many areas over the decades, it still remain deeply divided. The vital message of the report is that: “During the last two decades, income inequality has significantly increased in many countries. On average- and taking into account population size-income inequality increased by 11 percent in developing countries between 1990 and 2010. A significant majority of households in developing countries- more than 75 percent of the population- are living today in societies where income is more unequally distributed than it was in the 1990s. Increases in income inequality over the last 20 years have been largely driven by broad globalization processes but domestic policy choices have played an important role, too. Evidence show that increases in inequality over the last two decades were mainly on account of trade and financial globalization processes that weakened the bargaining position of relatively immobile labour vis-a-vis fully mobile capital. Trade and financial globalization were also accompanied by skill-based technical change that further increased wage inequality by driving up wage skill premiums. Moreover, national policy choices have exacerbated the adverse effects of globalization on income distribution.” Inequality has emerged as a major

source of concern for people all over the world who find it unacceptable that poverty should persist in a world of plenty. Undoubtedly, reducing inequality is needed - first and foremost - in order to fulfill people’s universal aspiration to dignity and respect. But despite these statistics, the UNDP report states that global GDP has increased from US$ 22 trillion in the last two decades to US$ 72 trillion. The trend observed today is the reduction in global trade, flow of capital, and movement of people. With respect to trade, scholars have argued that global demand is weak and that many nations are erecting import barriers. The flow of capital from bank loans has also dropped to about 2 percent of world’s GDP from a peak of 16 percent in 2007. Despite the movement of refugees into Europe, net migration from poor to rich countries decreased to 12 million between 2011 and 2015, down by 4 million in the previous 5 years. What are the reasons for this new trend? Unequal distribution of benefits of globalization, rising inequalities, job loss especially in developed countries are responsible for this new trend. There is equally a perception issue that workers from developing countries have stolen jobs from developed countries. This is one of the reasons behind the current trade war between the USA and China. It is this perception issue that has also given birth to Britain’s divorce from the EU (BREXIT). One other reason is the increased instances of terrorist attacks

and emerging security challenges across the globe. And lastly, the rise of populist leaders across the globe which, according to some experts, reinforces the trend. Accordingly, the world is experiencing a decline in economic trade and investment between countries. So, economic and market analysts are saying that there is “de-globalization of the world’s economy. These analysts have now observed a trend in which several countries want to go back to economic and trade policies that put their national interests first. One may recall the “America first” slogan of the US President, Donald Trump, and perhaps ask: If de-globalization is imminent? The objective of de-globalization is “not to withdraw from global economy but rather to trigger a process of restructuring the world economic and political systems in order to strengthen local and national economies instead of weakening them.” If it was true that the world is going back to protectionism, I pity Africa. Why, you may ask? Protectionism may take Africa back in terms of development by about half a century. Africa hasn’t been able to strike a balance between the forces of globalization and the demands of sustainable development. Globalization which is characterized by liberalization, competition, and free market policies undermined Africa’s political systems and economies for decades such that phenomenal developmental challenges have been created within the

continent. Driven by rapid changes in technology, globalization presents risks and opportunities not only for Africa but the entire world. Keeping pace with the processes of globalization demands a high degree of literacy and technical ability- skills which many Africans don’t yet possess. So, if the world goes back to protectionism which is production for the domestic market rather than provide for export markets, will this be the policy direction of most economies? Will most economies in Africa cope with protectionism? The idea behind protectionism is to shield local manufacturing by making imports costlier. How will Nigeria key into a de-globalized world with increased population but slow economic growth? Even if the government comes up with a philosophy of “be Nigerian, buy Nigerian made goods,” it’s going to be a herculean task to achieve because of infrastructure challenge in Nigeria coupled with inadequate human capacity. With protectionism, developed nations will not buy most products from developing nations. Rather, developed nations will be selling their products to developing nations. If Nigeria cannot develop in a globalized world, what will happen in a de-globalized market environment? Your guess is as good as mine.

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Banking in East Africa: Recent trends & outlook

Rafiq Raji “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

hat are the recent trends in the East African banking industry? And what does the future portend for the sector in the region? For perspectives on these questions, African Banker got the views of two highly-esteemed Nairobi-based banking professionals: George Mutua, managing director and chief representative officer for the Kenyan office of Societe Generale, a French bank, and Elizabeth Ndungu, head of research at Genghis Capital Investment Bank. Expectedly, Kenya, the region’s largest economy, dominates. And government policy there is perhaps the most stifling for the sector at the moment. Good news is there are indications some of the measures might be reversed. First is the capping of interest rates on commercial loans at 4 percent above the central bank rate by the Kenyan government. Another is the recently introduced 0.05 percent “Robinhood tax” on cash transfers of more than 500k shillings from 1 July; which halved daily interbank volumes in the first week alone. A proposed Financial Markets Conduct Authority in Kenya also adds to increasing concerns about over-regulation. There is probably a need for stiffer rules, though. For instance, 10 Kenyan banks are currently under investigation for accepting stolen funds. But stronger rules could be self-defeating if they end up weak-

JAMES BLACK AND KRISTA KOSKIVIRTA James Black is Counsel, Hogan Lovells and Krista Koskivirta, Associate, Hogan Lovells

t the recent Annual Banking Law Update, in South Africa, international law firm Hogan Lovells, reflected upon a common, positive theme: banks are sitting on a goldmine of data about their current account customers. At its core, open banking is about providing secure access to financial information. Whilst historically, the banking relationship has been a very closed and private relationship between banker and customer, open banking challenges that model and promotes the sharing of the customer’s transactional banking data with trusted third parties. The consequence is that customers will have more choices about who to share their information with and what data they want to share. The open banking movement is predicated on the basis that - data belongs to the customer and that the customer should have control over how it is used and with whom it is shared. Depending on the legislative background, an ‘open banking’ solution might involve a bank collaborating privately with a third party and

ening the ability of central banks to rein in erring banks. For evidence, reformist Central Bank of Kenya (CBK) governor, Patrick Njoroge, put it bluntly: “The [Financial Markets Conduct] bill emasculates the central bank”, adding the CBK “…is under attack.” Without a doubt, there is increasing political interference in the region’s central banks and indeed elsewhere on the African continent. Curiously, Tanzania’s president John Magufuli, well-known for his heavyhandedness, does not plan to bail out struggling banks in his country: “I will not give any money to failing banks,” Mr Magufuli said earlier this year in March, adding “it’s better to have a few viable banks than dozens of failing banks.” The recurring theme is clearly one where on the one hand, governments in the region are more overbearing on banks with more regulations while on the other hand, in the Tanzanian case, for instance, not so supportive of those that flounder. Reduced profits, rising NPLs Undoubtedly, top-of-mind amongst bankers in East Africa is the expectation that the Kenyan government would repeal the law capping interest rates. Since the legislation, credit has slowed. Mr Mutua lets in on his expectations: “We expect the interest rate caps to be repealed through an act of parliament- sometimes in 2018. This should lead to more lending by commercial banks to the SME sector. Easier access to credit will drive economic growth and should improve GDP growth.” Ordinarily, banks were increasingly loading up their books with government securities. The rate cap made doing so more a necessity than a strategy. Should the rate cap be abolished, SG’s Mutua believes “banks would invest less in government securities and more in the private sector.” The move would be beneficial for banks’ bottomlines certainly with “interest margins to increase gradually as banks take more risk and charge relatively

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higher margins to the private sector,” Mr Mutua adds. Genghis Capital’s Ndungu provides additional insights: “The banking industry in Kenya has experienced a challenging operating environment over the past year. This has mainly been attributed to interest rate caps introduced in the third quarter of 2016 that has seen banks record reduced profitability on account of reduced net interest income. In response to this, we have witnessed banks adjust their business models through a combination of initiatives aimed at reducing costs such as cutting down branches, laying off staff and enhancing operational efficiency, coupled with revenue diversification so as to tap into non-funded income.” On interest rate caps, Ms Ndungu’s view is thus: “While the interest rate caps have been a pain to the banking sector in Kenya, the East African region has been grappling with increasing nonperforming loans (17.4% in Burundi, 12.4% in Kenya, 8.2% in Tanzania and Rwanda, 6.2% in Uganda), primarily on account of the high interest rates in neighbouring countries and inadequate risk assessment, which could affect economic growth in the region adversely. Lending rates in Uganda, Tanzania and Rwanda range between

18.0% and 21.0%, which has seen borrowers suffer the full brunt of accessing credit and led to high default rates. This in turn has stifled private sector credit growth as banks enhance risk management to curb this trend.”On NPLs, for Kenya at least, SG’s Mutua observes “no major shift in NPL levels considering that banks have been forced to clean-up their books and make provisions in good tome by the Central Bank of Kenya,” however, and expects “credit growth in agriculture, construction, manufacturing, retail/ FCMG- as banks come up with a lending mandate in support of the president’s Big Four [agenda]”. Stiffer regulation, consolidation, regional expansion& new entrants Even as it is expected the authorities would abolish interest caps in Kenya, they would continue to rein hard on banks who charge their customers disproportionately. SG’s Mutua believes there would be “stiffer regulation on how and what banks charge to borrowers [with] the Central Bank of Kenya [insisting]…on transparency on the type and amount of financial cost”. Another development Mr Mutua expects is “…more consolidation in the banking industry – across the industry in the region. We still have too many small banks in Kenya, Uganda, Tanzania and there’s need for consolidation. It will be pushed by both business viability needs and regulatory requirements on adequate capital levels. We see the big local banks continuing to expand and deepen their presence across the region. [And] top local banks in Kenya, Tanzania, Uganda will start looking for regional dominance.” Mr Mutua also sees “the continued adoption of mobile-money and digital solutions by banks over additional/ new investments in brick and mortar network [and an] increase of the agency banking model. Furthermore, there should be “more and better market segmentation with a new emphasis on wealth management, financial planning solutions,” SG’s Mutua believes.

On the outlook for NPLs and banking in the East African region, Genghis Capital’s Ndungu says: “Going forward, we expect this trend to be managed as banks tow in line with the requirements of IFRS 9, that requires a forward looking approach in loan provisioning. This will force banks to be more prudent in their assessment and will also require fiscal consolidation (government support) in order to ensure that private sector credit growth in the region does not deteriorate as a result of the crowding out effect. With a population growth rate of 3.0%, compared to other developed countries below the 1.0% mark, coupled with increasing financial inclusion and more uptake of financial services products, the East African region offers an attractive proposition for long term investors looking to take advantage of the attractive valuations.” SG’s Mutua also sees the “entrance of new global and regional payers- the likes of JP want to establish a rep office covering East Africa in Nairobi. The replacement of Barclays by ABSA in Kenya and Tanzania. He also expects “more competition from local banks- empowered by mobile money solutions, agency banking, and digital banking- the “traditional” local banks will pose new competition to established international brands in the region.” In conclusion, Societe Generale’s Mutua sees “more and better regulation of banks in Tanzania, in terms of how they classify and provide for bad debt in their books, more focus on supporting/financing intra-Africa trade [as] banks in East Africa…target traders involved in exports and imports across Africa, better and stronger relationships with multilaterals, DFIs, insurance bodies, to put in place guarantees and de-risking solutions that will make certain sectors [like]agriculture, commodity trading more bankable. • An edited version was published in the Q3-2018 issue of African Banker magazine

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Open banking: A step towards financial inclusion allowing controlled access via an application programming interface (API), as in the case of the Nigerian Open Banking NGO, or it may be mandated by law, either as an obligation on providers individually to provide access or an obligation imposed collectively. Open banking can be a force for good as it allows third party providers to access financial data where a customer chooses to allow access. Customers are no longer restricted by the sometimes limited additional services that their own bank offers, but can access more efficient and effective services offered by third party providers without having to change banks which increases choice. This increased choice can encourage competition on several levels. Where access is opened up through a standardised open banking framework, third party providers will find it easier to access customers and more products and services will appear. This in turn should encourage banks to provide a better service to their customers by either developing their own competing services or by partnering with (or acquiring) popular third party providers. As payment service providers (both new and old) become more competitive and are able to reach new

markets, innovation is likely to increase to help participants stay relevant and competitive. With the lower costs of digital innovation, more entrants will join the market with competing products, and as the market broadens, new customers and needs will be identified. It will be crucial to the success of any open banking project that all participants understand the legal basis on which third parties are entitled to access. From a legal perspective, the overriding concern will always be to create a framework that ensures the security of the account and credentials, facilitates the customer’s freedom of choice, and allocates risk and liability appropriately to protect the customer. Where account providers are obliged by law to permit access, however, one of the first considerations for legislators will be whether those account providers can agree (or impose) contracts on third parties or not. Where this is not permitted, the law should ideally extend further than might otherwise be the case in terms of setting the rules and limits of access. Since open banking is primarily about access, one of the main issues that an open banking initiative will need to grapple with is how to ensure safe and reliable access. Hence,there are a number of issues that require careful consideration before an open banking system can be implemented.

One of them being legal issues. There are particular legal issues that are unavoidably linked with open banking, which will influence the shape that the open banking system takes. Each open banking system will have to make decisions about means of access, liability, banking secrecy, and data protection, as well as the nature of the rights and obligations between participants. The burning question for legislators is therefore whether – in the long term – the aims of open banking are better achieved through ‘enabling’ legislation that removes obstacles and then relies on competitive forces to make it a success, or through mandatory legislation that may result in more activity sooner, but may also result in a narrower and more restricted end product. This may be seen as a threat by some incumbent banks but it also presents great opportunities for innovative banks, new providers, and customers, as well as bringing the potential for positive social change. For these reasons, open banking may be both exciting and alarming to banking regulators, for whom the challenge is to allow it to flourish in a controlled manner that does not undermine the regulator’s overriding objectives of stability and security.

However as explained in the presentation by James Black and Krista Koskivirta, Hogan Lovells International LLP, inaction is not the answer because in many cases these changes are coming whether incumbents want them or not, and any provider that lacks a response will be left behind. In reality, there are two broad options: compete or collaborate. Incumbents that are innovative and flexible will be able to compete by putting out new products and services that are more aligned with the new multi-party banking industry. For incumbents that are unable or unwilling to do that effectively, collaboration may be the key to opening up access to new customers and markets. In either case, survival will be determined by how quickly the sometimes antiquated banking systems can be adapted to reap the benefits of open banking for customers. Although, open banking in Nigeria is driven by an NGO that is backed by industry participants and is aiming to provide open source non-profit API standards that are free for banks and FinTechs to use. This concept needs to be buttressed upon to increase competition, choice, innovation and ultimately financial inclusion.

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

Bashir Ibrahim Hassan

Tuesday 27 November 2018

How to solve the revenue challenge: End fuel subsidy

fortnight ago, the Statistician G eneral of the Federation, Yemi Kale, came out to say the agency couldn’t complete work on the unemployment figures this year because of funding challenge as only about 25 percent of the agency’s budget has been released to it. While some were quick to read political motives into the non-release of money to the agency, those familiar with the state of the nation’s finances know that it has more to do with revenue challenge. Even as Kale noted, most agencies of government have only received 10 percent of their capital allocation so far this way. Truth is, for many years now, successive governments could not finance the capital expenditure component of the budget, which is usually between 20 and 30 percent of the budget and had to resort to borrowing. This year isn’t any different. Recently, Nigeria was forced to raise a new $2.86 billion Eurobond at very high interest rates to fund its N9.1 trillion ($29 billion) budget which has a deficit of N2.4 trillion and could widen if

ambitious revenue targets are not met. But why is it difficult for the government to meet its revenue projections even as oil prices continue to rebound throughout 2018 – up to £72 per barrel at a time? The simple answer is subsidy on petrol. Nigeria currently spends N3.76 billion daily and N1.4 trillion ($3.9 billion) on importing petrol. How do we rationalise spending $3.9 billion on a crippling subsidy on fuel when 100 percent of its capital expenditure is borrowed? How can we rationalise such expenditure in an economy declared the poverty capital of the world where over 87 million people live in extreme poverty and 8000 people slide into extreme poverty every day. How can we justify this in a country where the health, education and s ocial infrastructure are almost broken and with little or no investments in these sectors? How can we justify this in a country with record high unemployment rate, high dependency rate, security challenges and the absence of right economic policies and programmes that will be a catalyst to lifting

people out of poverty? But the government should be concerned about its debts that keep piling up. As at the end of December 2017, the country’s total debt stock stood at N22 trillion, which is the equivalent of US$71 billion, data from the Budget Office show. The debt stock went up by US$4.4 billion or N1.4 trillion in 2017. A breakdown of the debt shows that US$18.9 billion is owed to external lenders while the balance of N15.9 trillion is owed to domestic creditors. Already, the federal government has exceeded its own target of ensuring that the country’s total debts do not exceed 19.39 percent of economic output or GDP in any year. When the government clos ed its books in 2017, country’s total debt stood at 20.12 percent of GDP. However, what would have given the government more concern is the rising debt service burden which is beginning to eat up two thirds of government revenues. Debt service consumed a total of N1.8 trillion in 2017. This represents 75 percent of the government actual revenues in 2017. The government is spending an average of eighty kobo of every

one naira it earns servicing the debts it is accumulating. The amount spent on debt service is higher than the N1.6 trillion released for capital expenditure in 2017, of which N1.4 trillion was the amount actually utilized. The country is now spending more money servicing debts than putting in place the infrastructure that will help grow the economy to repay those debts. The government is even seeing a fresh $6 billion from the China Exim Bank for the construction of the Ibadan-Kano rail line. This is enough to set off alarm bells, but there seem to be a conspiracy of silence. Yet the government has continued to borrow. This is never a sustainable way to run a country or manage an economy. The best that could happen to the country is a return of the pre2015 crushing debt burden. This electioneering period will provide Nigerians an opportunity to demand from those who wish to govern the country to explain in clear details their economic management plans and how they will handle the revenue challenge and the crushing subsidy on petrol. Nigerians must not miss that opportunity or allow sentiments take over.

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

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Tuesday 27 November 2018

BUSINESS

COMPANIES & MARKETS

DAY

Nigerian study selected for WhatsApp $1m research grant

Pg. 14

C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

MARKETS

CBN dollar interventions slide to one-year low as oil prices retreat

…Weekly trading between banks and clients falls below $1bn to lowest since March LOLADE AKINMURELE

igeria’s central bank sold the least amount of dollars so far this year in October, as special sales of the greenback sold in defence of the naira totalled $547 million, which represents a 47 percent decline from interventions made in September and less than half the total in January, when $1.2 billion was sold. Analysis of the weekly dollar interventions in the foreign exchange market by the Abuja-based bank showed that the highest intervention was made in February with $1.49 billion, while $1.38 billion was sold in March and $1.03 billion in April. Some $1.06 billion was sold in May, while $1.29 billion and $970 million were sold in June and July respectively, according to data compiled by Business Day. For the month of August, about $957 million was injected into the foreign exchange market to defend the naira while a further $1.04 billion was pumped into the market in September. The CBN’s interventions, which have come at the expense of its external reserves, have proved useful in protecting the naira from weakening against the dollar, shrugging off pressure from a dip in dollar inflows that has battered emerging market currencies from the Mexican Peso to the South African rand. Rising interest rates in the US has brought pain for emerging market currencies that have shed around 20 percent since the start of the year, while the naira is only down 2 percent although pressure is fast building amid declining oil prices and thinning CBN external reserves. The Nigerian naira fell against the US dollar over the weekend as Brent crude; the international benchmark was down 5.9 per cent to $58.9 a barrel, its lowest point since October 2017. For the reporting weekended November 23, 2018,

the CBN official rate weakened to N306.75 per US dollar from N306.70 per

dollar recorded the previous week-ended November 16, according to FMDQ data,

as the naira also weakened to N364.70 per US dollar at the Investors and Export-

ers window from N363 per dollar. In the Bureau de Change

(BDC) market, the exchange rate fell to N367 Continues on page 14

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Tuesday 27 November 2018

COMPANIES & MARKETS TECHNOLOGY

APPOINTMENTS

Nigerian study selected for WhatsApp $1m research grant

AXA Mansard CEO made member of West African Insurance Institute Academic Board IFEOMA OKEKE

Jumoke Akiyode-Lawanson

hatsApp has announced the recipients of its $1 million research grants to a ca d e m i c s f ro m a rou n d the world for the purpose of studying misinformation and its impact on society. WhatsApp, the freeware and cross-platform messaging and voice over IP (VoIP) mobile application service, with a user base of over one and a half billion, making it the most popular mobile app globally, decided to set aside $1million to give as grants for studies on fake news, calls for violence, election-related propaganda and other topics. The research topic; ‘The use and abuse of WhatsApp in an African election: Nigeria 2019’ has been chosen as one of the research studies to be funded by Whatsapp.

The goal of the research award is to facilitate high quality, external research on a wide range of topics by academics and experts who are in the countries where WhatsApp is frequently used and where there is limited research on the topic. Tagged ‘WhatsApp Misinformation and Social Science Research Awards’, ap p rox i mat e l y 6 0 0 p ro posals were submitted and reviewed with the awardees representing the highest quality projects a c ro s s s e v e r a l re l e v a n t research areas. WhatsApp awarded 20 grants up to $50,000 each to researchers in several countr ies including Nigeria, Brazil, India, Indonesia, Israel, Mexico, Netherlands, Singapore, Spain, United Kingdom, and United States. Among the winning projects is the research

topic; ‘The use and abuse of WhatsApp in an African election: Nigeria 2019’, an international collaboration put together by Jonathan Fisher (University of Birmingham), Idayat Hassan (Centre for Democra c y a n d D e ve l o p m e nt, A b u j a ) , Ja m i e H i t c h e n (AREA Consulting) as well as Nic Cheeseman (University of Birmingham). The study employs multi-method social science research instruments including incountry interviews, focus groups and sur veys to explore how WhatsApp is used by political candidates, and their campaigns and supporters to tailor messages to key audiences during elections. The research will focus on two gubernatorial elections in the upcoming 2019 Nigerian polls – those of Kano (northern Nigeria) and Oyo (southern Nigeria).

he Governing Council of the West African Insurance Institute has appointed Kunle Ahmed, the chief executive officer of AXA Mansard Insurance plc., as a member of the Academic Board of the Institute. The West African Insurance Institute was formed in 1978 by UNCTAD and the five Anglophone countries in West Africa, with commitment to the growth of insurance and the improvement of insurance personnel skills in West Africa. The Institute provides professional insurance education and in conjunction with both University of South Africa and Cambridge Graduate University also conducts Master’s degree programmes in Risk Man-

agement & Insurance and Marketing. It also serves as a center for the collection of technical and other insurance data. “My appointment as a member of the academic board of the West African Insurance Institute comes as great news to me and the entire AXA Mansard team.’ Kunle Ahmed said as he commented on the appointment. “Having graduated with distinction from the same institution several years ago, I am excited to serve my alma matter on this board. I will be contributing my quota, through the Academic Board, towards the achievement of the lofty goals of the Institute for the West African Insurance Industry.” The roles of the Academic Board include overseeing all academic matters of the Institute

regarding course curriculum, assessment procedure and lecture delivery. The board also reviews all examination results first before they are presented to the Governing Council for final approval and release. Ahmed noted that, “AXA Mansard like WAII is committed to investing in personnel development and we believe this is key to sustaining superior service standards and world class insurance practice. I am confident my appointment will further strengthen this resolve, as well as motivate our people to continually innovate and excel.” AXA Mansard Insurance plc is a member of the AXA Group, the worldwide leader in insurance and asset management with 166,000 employees serving 105 million clients in 62 countries.

MARKETS

CBN dollar interventions slide to one-year low as oil prices... Continued from page 13

per US dollar Friday, from $/364.50 the week before, traders told Business Day. From its most recent peak in October, oil prices have fallen more than 30 per cent as fears of a supply glut mount. OPEC is likely to respond with an output cut of between 1.4 million to 1.6 million barrels daily, at a keenly anticipated meeting between the influential oil cartel and its allies in Vienna on Dec. 6. Any sustained decline in oil prices will be painful for Nigeria which just emerged from an oil induced recession, and whose Federal Government gets 70 percent of its budget, and 95 percent of dollar earnings from proceeds of oil sales. It could also eat into the external reserves thereby reducing the firepower the CBN has to defend the naira. The CBN has already seen its reserves slide from a yearhigh of $47.25 billion in July to $45.90 in August; down to $44.45 billion in September and $42.13 billion in October and $41.52 billion as at November 22.

Fx activity dips three weeks straight

Source: FMDQ Oil bleeds as market awaits OPEC decision Dec.6

Source: Bloomberg

The apex bank has demonstrated that it is ready to sacrifice its reserves to keep the exchange rate steady ahead of presidential elections next February where incumbent President Muhammadu Buhari will seek a second term. Any significant depreciation in the naira could prove costly as the exchange rate is typically used by majority of Nigeria’s 190 million people in gauging the performance of a government. Meanwhile, trading activities in the Spot FX market between the DMBs and their clients fell below a billion dollars for only the third time this year in the week-ended Nov 16, according to data compiled by Business Day

and sourced from FMDQ. Total trading for the week under review stood at $895.43 million (average daily turnover of $179.09 million), representing a decrease of 12.33 percent when compared to the $1.02 billion (average daily turnover of $204.26 million), recorded the week-ended November 9, 2018. A review of trading activities in the Spot FX market among banks for the week-ended November 16, 2018, revealed an increase of 30.69%, as a total turnover of $323.60 million (average daily turnover of $64.72 million) was recorded, against $247.60 million (average daily turnover of $49.52 million) reported the week-ended November 9, 2018. In the Investors’ & Exporters’ (I&E) FX Window, the total value of trades for the week ended November 16, 2018 was $0.69 billion, representing a 5.48% ($0.04 billion) decrease on the $0.73 billion reported for the previous week, bringing the year-to-date (YTD) value of trades at the window to $52.08 billion.

Tuesday 27 November 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

TECHNOLOGY

SKYSAT targets bigger market pie in Nigeria with new generation printers FRANK ELEANYA

s global printers market continues to grow with businesses investing more in retail infrastructure, SKYSAT Technologies a partner of Europe-based Konica Minolta Business Solutions has moved to capture a bigger share of the market in Nigeria. The company on Tuesday, 20 November, unveiled a new range of printers at the Develop Dealer Conference in Lagos. According to the company in a statement BusinessDay received the launch which held simultaneously in Nigeria and Ghana was to cater for SKYSAT’s numerous clients in government, education, corporate and commercial sector. “DEVELOP as a brand of

Konica Minolta Business Solutions stands for modern and professional office communication solutions,” the statement noted. “We are trendsetters and are making a confident and creative contribution towards shaping the future. Our understanding of advice far exceeds mere analysis and recommendations: We assess, design and guide. Our primary objective is increasing the productivity in our customers’ environment.” SKYSAT is hoping to expand its products in Nigeria by leveraging its significant dealer channel comprising of independent distributors and specialist outlets. In Nigeria and Ghana, SKYSAT operates through a network of eight offices and service centers, 150 staff, 90 dealers and services 4,000 clients. The new products will not be sold directly

to consumers, but to dealers who will then sell to the end-users. Ramzi Debs, executive director, SKYSAT Technologies said the strategy enables the company leverage the extensive reach of the dealers to customers living in areas the company would ordinarily not be able to reach. It also resolves the challenge of educating the end-users about the features of the products. As part of value-add, SKYSAT provides its dealers training on the various products as well as upgrading their engineering skills. The dealers also have the option of financing for the products they buy. First Bank and Sterling Bank are the two strategic financial partners of the company and has promised to provide flexible and attracting financing packages.

L-R: Isioma Gogo-Anazodo, chairman, committee programs, education and examination; Pattison Boleigha, president, and Abimbola Adeseyoju, director, partnership, strategy and communication, all are Compliance Institute Nigeria (CIN), at the press conference to announce the 2nd investiture and induction ceremony of CIN in Lagos.

TECHNOLOGY

Tecno leverages artificial intelligence in new Camon 11 series SEYI JOHN SALAU

he adaptation of artificial intelligence (AI) by Tecno Mobile in its new Camon 11 series leverages AI technology to allow smartphones users create high quality self portraits with natural skin colour, optimizing the image to achieve brighter colours and sharp shots. The Camon 11 series back camera is supported by quad-LED flash and High-dynamic-range (HDR) imaging. However, the front shooter camera of the Camon 11 Pro and Camon 11 smartphone comes with a 24-megapixel with f/2.0 aperture and it supports 4 in 1 technology, AR Emoji and LED flash. Both series of the Camon 11 cameras support AI-features ranging from AI bokeh effects, AI beauty, AI scene detection, AI HDR, and night shots. “The revolutionary AI technology embedded in Camon 11 pro and Camon 11 camera will

elevate the Smartphone selfie entirely. Selfie-lovers will enjoy the high-end 24 or 16 megapixel front camera, which has advanced with intelligent features based on artificial intelligence,” said Luke Pan, the Tecno mobile brand manager, at the recent launch of Camon 11 series in Lagos. At Tecno, we do not adopt a one-size-fits-all approach in developing our products. We take insights from our consumers’ habits, preferences and needs to develop the next groundbreaking product that fits perfectly into their lifestyle and consequently displace the competition. According to Pan, Camon 11 series device is designed for productivity and style. “It is not just another camera phone, but one that any smartphone lover with the desire to have an all-in one tool, should have. At Tecno, we pledge our continuous commitment to delivering top-notch products that come with a lot value-added services”. Jesse Oguntimehin, the strate-

gic partnership manager at Tecno Mobile said the launch of the Camon 11 series set the device apart with a 6.2-inch Super full view 19:9 IPS LCD capacitive touch screen, that comes with 720 x 1520 pixels. According to him, the Camon 11 Pro is the highest variant in the Camon series, while the screen resolution and display are the same with the Camon 11 model. “Apart from that luxurious feeling, amazing cuts, rounded corners and others coupled in the design, the Camon 11 Pro Android Smartphone arrives with an advanced camera features at the back, the sensors and lenses are also improved over the last generation,” said Oguntimehin. The Camon 11 Pro comes with a dual camera setup at the back, which surpasses both the Camon X and Camon X Pro combined together with single lens. Camon 11 consists of 16-megapixels AF and a secondary 5-megapixel for depth sensor capturing.

BANKING

Polaris Bank’s Ahmad bags Corporate Governance Fellowship IFEOMA OKEKE

he Society for Corporate Governance Nigeria (SCGN) has inducted Muhammad Ahmad, the Chairman of Board of Directors, Polaris Bank Limited, as a honorary Fellow of the Society. Ahmad was conferred with the fellowship award at the 2018 President’s Dinner/Induction Ceremony of the Society, held in Lagos on Thursday, November 22. In his citation read at the event, SCGN said Ahmad was honoured in recognition of his unblemished professional records in the public and private sectors as well as positive contributions to the socioeconomic development of Nigeria. The Society described the Polaris Bank chairman as an astute professional with impressive footprints across various public-sector organisations and financial services institutions where he played strategic roles and acted as the catalyst for the entrenchment of

good corporate governance. Speaking at the ceremony, Pascal Dozie, President of the Society for Corporate Governance Nigeria, said the conferment of the honorary fellowship on Ahmad and three other recipients was in line with the key objective of the body. “The Society is a registered, not for profit organisation and is committed to the development of corporate governance and best practices. Leadership, accountability, collaboration, diversity and quality, integrity of character remain the pillar of this organisation. Since its inception 13 years ago, the Society has contributed to the development of good corporate governance in this country. The society prides itself in research work some of which have been published in the journal of corporate governance”, he said. Responding on behalf of the other fellows, the Chairman of Polaris Bank expressed delight at the recognition and said they would continue to remain the ambas-

sadors of professional excellence. “For every society, there are professional standards. And professional standards worldwide are more onerous. Therefore, for us, we are taking additional responsibility. Having been made fellows, what it means is that we should be consistent; we shouldensure that whatever the Society for Corporate Governance Nigeria stands for, we should stand for as well”, he affirmed. Commenting, Tokunbo Abiru, group managing director/CEO of Polaris Bank, said the award was a celebration of the exemplary leadership capabilities of the Polaris Bank’s Chairman. “On behalf of the management and staff of Polaris Bank, I congratulate our amiable chairman on this welldeserved honour and recognition by the highly respected Society for Corporate Governance Nigeria. Under Ahmad’s leadership, we see a rewarding, bright future for our bank”, he said.

L-R: Ken Opara, general manager, Fidelity Bank Plc; Lucy Newman, managing director/CEO Financial Institutions Training Centre (FITC), and Akanji Emmanuel, divisional head strategy, Heritage Bank Limited, during the Nigeria Credit Industry Awards 2018 organized by the Institute of Credit Administration (ICA) where Newman received the Credit Management Director of the Year award in Lagos.

Pix from left; Darkey Africa, consonl general, South Africa Embassy in Nigeria, Babatunde Savage, chairman , Internastional Chamber of Commerce Nigeria, Yaw Nsarkoh, execuitive vice president Unilever Ghana-Nigeria,\ special guest of honour, Helges Bandeira, deputy consul general of Brazil Emassey in Nigeria, Raymond Ihyembe, vice chairman, Internastional Chamber of Commerce Nigeria, and Segun Olugboyegun, member, Internastional Chamber of Commerce Nigeria, during the 2018 annual dinner dance , and presntation of Book by Internastional Chamber of Commerce Nigeria, in Lagos. Pic by Pius Okeosisi

L-R: Ehioma Onaro ,business manager, The Audrey Pack Company Ltd; Lilian Odim ,CEO, The Audrey Pack Company Ltd ; Obinna Ukachukwu, executive head, business development & strategy, Hygeia HMO, and Tobilola Banwo, manager, products & partnerships, Hygeia HMO; at the official announcement of Hygeia HMO- The Audrey Pack partnership in Lagos recently.

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Tuesday 27 November 2018

BUSINESS DAY

Tuesday 27 November 2018

Prima Garnet CEO offers suggestions to sleepy Nigerian states on positioning … For more earnings Stories by Daniel Obi Media Business Editor

t is estimated that more than US$2 billion is spent every day on international tourism and this figure is increasing. Many nations and cities including some African countries such as Rwanda are seriously embarking on destination branding and marketing as a lucrative product to tap into the opportunities this offers as next industry. Last weekend, Lolu Akinwunmi, the CEO of Prima Garnet therefore offered some suggestions to sleepy Nigerian states, using Lagos as a case study to shirk off lethargy, induced by easy oil money and key into international tourist destinations with the objective to generate sufficient earnings to ensure economic growth. Recognising that there is no perfect brand, as nations and cities have their

strengths and weaknesses, Lolu who spoke at Brand Journalists Association of Nigeria annual lecture in Lagos strongly advised Lagos State in addition to other states to set up a structure as part of PPP arrangement for their branding project, a trending global scenario. Under the structure, he suggested for an ad hoc committee made up of seasoned professionals and experienced civil servants to determine the strategy and scope of the branding project. “On approval of its recommendation, the committee will hand over to a special purpose vehicle set up by the government to be known as the Lagos Branding Project Business Support Group (LBPBSG). “The mandate of the group would be to implement the agreed strategy of the Committee by putting a structure and strategy in place to run the project. It will also generate the funds and goodwill needed for

Lolu Akinwunmi

the implementation through the agreed PPP process, but especially from the private sector, showing them opportunities and benefits for involvement”. Lolu further said that for reasons of probity and ac-

countability, and to assure prospective sponsors and the Nigerian public, “we propose the setting up of the Lagos State Branding Project Fund (LBPF) which will be managed under the supervision of whomever the governor

designates, the CEO and the LBPBSG Advisory Board. The LBPF will be independent of direct government control and be open to regular audit from a properly appointed independent audit firm. The board and management will also ensure that quarterly reports are generated which will be made available to all sponsors and donors and all stakeholders to the Fund. We expect this to further engender believability and trust from stake holders. The state government should be prepared to add its own counterpart fund for every Naira generated through this source”. He said what states like Lagos need is a strategic brand management plan which goes beyond the traditional approach of brand promotion. “This way, the start-up point is a holistic audit of Brand Lagos through the eyes of all its stakeholders” However, Lolu, former chairman of Advertising Practitioners Council how-

ever said the government needs to “live the brand”. “What you are saying must not be any different from what you are projecting”. During the panel discussion, Mary Ikoku, a media expert encouraged marketing professionals to help states by projecting positive aspects of Nigeria. Shola Fajobi of Brooks and Blake PR, challenged government to put infrastructure in place and citizens will be the first marketers of Nigeria. Odion Olebua, a PR expert regretted that the state of international airport in Lagos, first entry point of most foreigners is not in good condition and should be addressed by the government, while Joe Onuorah of APCON called for the strengthening of law and order as a strategy to achieve state branding. Speaking earlier, former chairman of BJAN, Goddie Ofose said the discussion on destination branding was aimed at eliciting stakeholders’ awareness on tourism.

Expert underscores efficacy of storytelling in consumer-brand connection

Media stakeholders call for fair political campaigns ahead of 2019 election

emi Odugbemi, a multi-talented movie producer and director, has looked at the positive effect of weaving powerful and relevant stories around brands and encouraged brand owners to engage in employing storytelling as tool to create necessary connection between brands and consumers. Speaking at Advertising Association of Nigeria, ADVAN 2018 awards in Lagos, he said the business of marketing and the art of storytelling have a binary relationship that ensures one is impossible without the

ith commencement of campaigns for the 2019 general election, stakeholders in the communications industry gathered recently in Abuja to discuss critical issues around the management of electioneering campaign communications and highlighted the rules of engagement applicable to the development and deployment of such communications. At the forum on Political Communication, organized by the Advertising Practitioners Council of Nigeria, they called for campaign communications to be fair and truthful enough to aid democratic choice by the electorate and devoid of any traits that could precipitate violent conflicts. In his paper titled, “Trends and Consequences of Smear Political Campaigns” the Group Managing Director of SO&U Group, Udeme Ufot said “smear campaigns utilize unverifiable rumours and distortions, half-truths and

other. Stating that storytelling has always been the language of commerce and its value in the marketplace is an African heritage, he said the remarkable difference is that the market square of stories is now virtual, global and ten times more immediate. According to him, it is not enough for brands to just position themselves for sales with a sleek positioning of what it can do for us. “It must first prove itself to be one of us with all the nuances of imagery and sounds that make

our stories told compellingly. It must actively deepen the living experiences of us, its audiences. Brand stories must speak to the things that matter most to us, it must inspire and educate us. Brand stories must provoke and incite reflections and conversations around community, around service and around human growth and development”. He said a story is great when it moves people to take action and foster change. He told the advertisers that in what direction our stories move people becomes our historical and moral burden to bear. According to Odugbemi, brand stories should have an emotional effect on consumers. “Stories are powerful; they make consumers understand the complexities of life.” He stressed that storytelling is a tool to create a connection with the consumer, more so because digitalization has made it possible for brand to tell their stories better using technology.

even outright lies. Even when the facts are seen to lack substance, the reputation which is the target, in most cases, is often already tarnished before the truth is known. Often such targets are typically forced to focus on correcting the false or erroneous impression rather than the real issue” In his presentation, he cited that when political campaigns are not issue based, there is a strong tendency to dwell on theatrics, verbal assaults and character assassination. Contrasting this with more sophisticated environments, where political campaigns often combine the three prong approach of advocacy, contrast and attack, he stressed that “their campaigns are more professionally packaged to associate the candidate with salient issues and subject the electorate holds dear” To succeed, Ufot charged communicators to engage deeply with the people, conduct research and analysis to arrive at communication that

would most resonate with the people. Reiterating that such exercise requires some rigor of process, sound strategizing, discipline on the part of the candidate to subject himself to the professional management of his communications consultants, as well as effective programme funding In the same vein, he challenged media organizations to maintain a professional stance by discouraging political advertisements without due vetting and approved by the regulatory authorities. Whilst charging, industry regulators to live up to their statutory responsibilities by ensuring that all contraventions of the regulatory process are appropriately sanctioned.

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Sticking to ethical principles will assist Nigeria deal with economic volatility, say experts

panel of reputation managers has critically assessed the relationship between volatile, unpredictable economy and ethical practices and concluded that if professionals and government officials stick to the foundational principles of ethics which does not change, regardless of changes in society, then the nation will able to deal better with an economy that is volatile and unstable. According to the panellists who included, Emeka Opara,Vice President, Corporate communication of Airtel Nigeria; Yomi Badejo-Okusanya, the CEO of CMC Connect; John Ehiguese, CEO of Mediacraft, the resultant effect of volatile and complex economy is the disruption of trust and ethics and the professionals first challenge must be on how they can rebuild that trust so that the various component of a nation or an economy can start working on the basis of trust. Leading the discussion at the 2018 Caritas Reputation Leadership Roundtable tagged “Ethics, Reputation and Technology in a Volatile,

Uncertain, Complex and Ambiguous (VUCA) economy, Opara said the topic comes at the right time as election is coming when renowned professionals are side-lined and charlatans are patronised. According to him, the economy cannot grow under such scenario. Taking the issue from media perspective , he said the issues of fake news, unauthorised recording, manipulation and distortion of facts, images and videos, and hate speech were issues that must be tackled in the country as such moves were targeted at ruining the reputation of an individual, a firm or an economy. He noted that the situation had even been compounded with the prevalence of technology, as some media platforms used incorrect facts and information in the name of dishing out news. He subscribed to punishment to check lawlessness in order to enthrone ethical standard for the growth of the economy. “We must also be ready to test the cybercrime law of 2014 that was signed by former President Goodluck Jonathan, as this would install sanity in government offices,” he

added, citing scenarios where public officials go unpunished even after being found guilty of offences. On his view, Yomi Badejo-Okusanya regretted that in Nigeria, there is a trust deficit between government and the people and because of this, it is difficult for people to respond accordingly to government. At this period, people always query government intentions. He challenged the government to re-engineer its way of relationship with the people. “Government must get the trust of the people. If it takes action against lawlessness, it will boost ethical standard”. Also speaking, Bolanle VictorLaniyan, Head, Sustainability in Access Bank said ethics is knowing what is right and doing it. “If we do what is right, it will lead to benefits in the long run” Speaking to BusinessDay, the CEO of Caritas, Adedayo Ojo said technology has become a bigger issue in an economy that is volatile, uncertain, complex and ambiguous but if Nigerians stick to the principles of ethics we will able to move forward as a nation.

Tuesday 27 November 2018

Marketers continue to struggle with integrated campaigns - Survey

ewer than one in five marketers are very confident in their ability to integrate data for insights, impacting the ability to measure and prove ROI. Marketers globally continue to struggle to assess their marketing performance due to disconnects in strategies for reaching consumers. A failure to understand cross-channel behaviour and uncertainty around optimising their media investment are the primary reasons. The findings are according to the Insight Division at Kantar’s annual state of marketing study, Getting Media Right, released recently. Kantar which is part of WPP is foremost world data, insight and consultancy company. The result in these disconnects is that many marketers are missing opportunities for growth, with 40% still using ROI measurement approaches that are primarily focused on short term-sales, despite an overwhelming majority of respondents, 85%, saying that the most important approach to ROI is a blend of both short and long-term measures. The report said Getting Media

Right examines the current state of marketing in a connected world and it is based on input from 468 senior marketers spanning advertiser brands, media companies and agencies globally. It reveals an industry that continues to diversify its media usage and increasingly requires better understanding of how ideas, content and media need to be activated in tandem to create holistic marketing that drives brand growth. Key findings include: While confidence has grown from last year, less than half of advertisers are sure of their ability to create insights from data. Even within agencies and media, fewer than 20% are very confident, indicating the industry is struggling to manage all the data that is available. It is also found out that creating insights is dependent upon pulling together the right information and tools to monitor and optimize campaigns, yet marketers are struggling to connect the dots on performance across channels. 78% strongly or somewhat agree that it is difficult to assess how well brands perform across channels.

JCDecaux enters Nigerian market

… Partners local investment firm Grace Lake Partners Daniel Obi

Emeka Oparah, vice president, Corporate Communications & CSR, Airtel; Omobolanle Victor-Laniyan, head sustainability, Access Bank; Adedayo Ojo, MD/CEO, Caritas Group/Author of the book, ‘Public Relations Thoughts and Deeds’; John Ehiguese, president, PRCAN; Yomi Badejo-Okusanya, president, APRA and Tunji Abioye, CEO Fuel Communications at the Caritas Communications Reputation Leadership Roundtable and Book Presentation held in Lagos recently.

Habari, Nigeria’s platform for music, shopping, lifestyle content goes live

frican financial institution, Guaranty Trust Bank plc, has announced the launch of Habari, Nigeria’s largest platform for music, shopping, lifestyle content and more. Unveiled recently in Lagos at a special event attended by renowned personalities in the entertainment, media and technology sectors, Habari offers users direct access to the largest catalogue of local and foreign music online, a seamless shopping experience and an exciting way to connect with friends, amongst

other features. Built around the everyday lives of customers, Habari is said to be the first mobile platform in Nigeria created by a financial institution that focuses on enabling people’s needs and lifestyles rather than providing a limited bouquet of regular banking products. The mobile application which is open and free for all to download, does not require mobile banking details and offers a wide range of services, all of which are accessible to anyone regardless of where they choose to bank, the bank said. Habari is designed with a clean user interface as well as a seamless navigation experience that ensures everything, from the music to listen to, to the bills to pay, are just two clicks away. Among the exciting services available on Habari are its catalogue of local and foreign music, the largest

ever in Nigeria, carefully curated videos that range from short engaging self-help kits to captivating full-length movies, and books that cut across all literary genres. Habari also offers an end-to-end shopping experience that allows users buy goods and services directly from over 10,000 small businesses. On Habari users can also shake their phones to find and connect with friends, split bills, transfer and receive funds as well as pay for utilities, subscriptions and other services. Commenting on the launch of Habari, the Managing Director and Chief Executive Officer of Guaranty Trust Bank plc, Segun Agbaje, said; “By reimagining the role of banking and driving innovation in how we serve customers, we have built a platform that is less about us as bank and more about our customers and everything they need to enable their lifestyle.”

CDecaux S.A., an outdoor advertising company that operates globally, has entered the Nigerian market in partnership with Grace Lake Partners, an indigenous investment and advisory firm based in Lagos, Nigeria, with a philosophy of creating shared value. The arrival of JCDecaux in the outdoor advertising market of Nigeria is expected to increase the market’s value estimated at €115 million, (about N47.8 billion); offering brands an unprecedented digital communications platform to grow their audience. JCDecaux will operate in the outdoor advertising industry in Nigeria through an exclusive partnership and licensee agreement between JCDecaux and Horizon Outdoor Advertising Limited, a wholly Nigerian owned subsidiary of Grace Lake Partners, GLP (Horizon is Advertising Practitioners Council of Nigeria “APCON” certified and a member of the prestigious Outdoor Advertising Association of Nigeria “OAAN”), the company said.

The partnership (“JCDecaux Grace Lake”) has commenced work installing four city-wide public service programmes, all at no cost to the citizens of Lagos. The programmes cover the installation, operation and maintenance of: Traffic Information System (“LATIS”): a network of 94 sq.m. digital traffic arches designed by Marc Aurèle providing real-time traffic information to commuters at strategic driving decision points across Lagos – currently installed at Oworonshoki and Fadeyi; It has also provided a self-cleaning automatic public toilets programme, located at the city’s busiest bus stations and free to use for Lagosians – currently installed at Oworonshoki and Ogudu Berger Bus Stops; This partnership gives JCDecaux a foothold in Nigeria, the largest economy of the continent, with GDP of over €332 billion in 2017 and the most highly populated country in Africa, with 190 million people (a population which will double in the next 30 years). The partnership will also help maximise the economic potential of Lagos, Africa’s biggest city, the economic capital of the country.

TomTom wins ‘Best Digital Campaign’ award

omTom, the foremost candy brand from Cadbury, has won the ‘Best Digital Campaign in Nigeria, for 2018,’ at the Advertisers Association of Nigeria (ADVAN) Awards for Marketing Excellence, which took place in Lagos, recently. In a statement, the Corporate and Government Affairs Director, Cadbury West Africa, Bala Yesufu, attributed the award to the holistic exploitation of TomTom as the ‘Official Candy of the Super Eagles,’ Nigeria’s national football team, which was executed across major media platforms including Digital.

“The award is a clear demonstration that these campaigns resonate quite strongly with all our stakeholders, particularly, our consumers,” Yesufu said. “TomTom will continue to drive innovation within the fast moving consumer goods (FMCG) space in Nigeria.” TomTom ran a series of innovative campaigns this year, both online and offline, in support of the Super Eagles. TomTom gave out free candies to all the fans in Uyo, the Akwa Ibom State capital, last month, during the match between the Super Eagles and the Mediterranean Knights of Libya. Nigeria won the match 4-0.

Tuesday 27 November 2018

BUSINESS DAY

EDUCATION

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Higher

Human Capital

Professionals build ethical business practices among future leaders for sustainable economic devt

…As Rainbow College wins ACCA’s finance competition Stories by KELECHI EWUZIE

or Nigeria to achieve sustainab l e e c o n o m i c development, it has become very imperative to start from the grassroots to enhance the skills of young people by cultivating ethical business practices among the next generation of future leaders. This was the focus of the maiden edition of the Inspiring Future Leaders in Finance Competition, held last week in Lagos, by the Association of Certified Chartered Accountants (ACCA) for secondary school students. The case study, which was given to the students to decipher, was aimed at building the next generation of people that will occupy positions such as financial advisors of captains of industry, banks, business owners and other relevant stakeholders. It also helped to open the young minds to knowing how to do business ethically in line with the global Sustainable Development Goals (SDGs). Out of the 10 schools that participated in the com-

L-R: Olutola Senbore, Chairman, First City Monument Bank Plc; Razak Adeleke Jaiyeola, president, Institute of Chartered Accountants of Nigeria (ICAN); Isma’ila Muhammadu Zakari, immediate past president, and Oyemolu Olugbenga Akinsulire, honorary treasurer, at the 62nd ICAN induction ceremony for new members in Lagos. Pic by Olawale Amoo

petition, Rainbow College Boarding took the first position, winning N15, 000 prize while their teacher went home with additional N50, 000; Cayley College took the second position, winning the sum of N125, 000 while the teacher got additional N40, 000 and Atlantic Hall took the third position, winning N100, 000 while the teacher was given N30, 000. Faith

Academy emerged the Most Innovative School as Corona won the Best Presenter award. Speaking with BusinessDay, Aderonke Adebule, business development manager of ACCA, said that the competition, which was targeted at high schools, was aimed at creating awareness on relevant skills of the future. According to her, ACCA

qualification has different milestones, and that Foundation in Accountancy (FIA) is relevant to secondary school level. “This challenge actually helps to build skills among students and supports the development of young talents in Nigeria. “FIA is globally regulated by the Office of Qualification and Examinations Regulation of United Kingdom, which in

Parents, students explore Greensprings School inclusive education opportunities

s part of its all round inclusive education for stakeholders, Greensprings School, Lekki, Lagos recently opened its doors to prospective parents, students, as well as parents of current students for its ‘Get to Know Us’ programme. The event offered guests an opportunity to tour the schools infrastructure, observe ongoing lessons in the classrooms, as well as feedback sessions. Helen Brocklesby, Director of Education, Greensprings School while speaking on reasons behind the programme said there was need to open the doors of the school to let people who desire to come and explore exactly what the school is all about. According to her, “We want them to understand how special Greensprings is and how we are offering a unique and quality education in Nigeria to all our students”.

Brocklesby observes that education is going through huge change globally and it is important for the school to ensure that it is replicating and leading in those changes. According to her, “Whether it is to do with curriculum which is interactive and joined up, we don’t experience the world in isolation, we experience it in a thematic way and that is how we teach. Whether it has to do with technology or the resources we offer or thinking skills”. To her, “Thinking is incredibly important; being able to problem-solve, being able to analyse, and we teach the children to be able to do that. So it is an education experience that is world class which has proven result. We have top in country and top in the world students and we are very proud of what they have achieved.” On the relationship between parents and the school,

Brocklesby said: “We operate an open door policy; what that means is that parents are able to come in and talk to us about what is going on with their children, good things, bad things, challenges the children are having and we work together with the parents to tailor the support and help we give the children to make sure they achieve what they can achieve. It is a working relationship.” Oluranti Bankole, Head of Admission of the school said it is a programme that shows that the school has nothing to hide and there is no secret to its success. According to her, “It takes diligence, passion for what you do and when you are doing everything in love and the child is the centre of all the decisions you make, definitely you are going to have a good school and turn out good students at the end of the day.” Bankole says the pro-

gramme is about absolute visibility for the school as it avails parents and other stakeholders the opportunity to go into the classrooms, speak to our teachers and there is a panel where they engage the head of school, students and they just ask any question they want about anything and there are people around to answer.” On her part, Bunmi Olabode, a mother who has three children in the school, said the school is not only concerned about academics, but also about raising grounded children that can think for themselves, who are life-long learners so that they can be useful to themselves and the society. “I am very impressed with what they give my children and the children in the community; and the environment is very clean; it is very safe and very child-friendly and it just keeps getting better.”

2018 approved ACCA as an awarding organisation. ACCA’s foundation level qualification is listed on the Regulated Qualifications Framework (RQF),” Adebule stated. Adebule further disclosed that FIA is global regulated such that any student that writes FIA exams up to a certain level, can gain direct entry into over 100 tertiary institutions globally. Stating that some secondar y schools such as Corona and British International School have already started writing the FIA exams, she said that FIA does not have enough awareness that was why the competition was held to help position the FIA qualification in Nigeria. ACCA, she said, hopes to repeat the competition next year in a better way having taken away important lessons from this year’s event. “We have 10 schools participating in the competition and 12 schools in attendance. ACCA is a global qualification that comes with a prize that was why we started with premium secondary schools where students can afford the qualification, but we hope to

widen the number in future. On the yardstick for judging the performance of the students, Dolapo Onayemi, moderator of the event, said that the case study was focused on triple bottom-line currently being used to measure the performance of businesses. “The focus is shifting away from numbers in financial result of companies such as profit after tax and others. The triple bottom-line focuses on three aspects of business including social, environmental and financial aspects,” he explained. Onayemi advised that the students should take their learnings from the challenge and apply it in their future business dealings. Kolawole Agunbiade, regional finance controller of ACCA for Africa, said that the association is a global body that not only sustains accounting profession, but also grooms young minds towards chosen Accounting as their profession, He said that ACCA wants to make these young students to start thinking as the next Chief Financial Officers (CFOs).

Lagos GCUOBA get business leaders to mentor creative youths

agos Branch of Gove r n m e nt C o l l e g e Ughelli Old Boys’ Association (GCUOBA) as part of its effort to give back value of future benefit hosted 28 students and seven teachers from six schools at a mentoring event in Lagos. Victor Eromosele, chairman, organising committee of the event said it is important to fire-up imaginative young minds early to produce the desired great business leaders of the future.” Charles Majeroh, Symposium chairman and GCUOBA national vice-president, emphasised the need for today’s youths to envision how to leapfrog using their advantages to make Nigeria of the future, globally competitive. GCUOBA Lagos Branch president, David Binitie said: “As an active association of old students of a school with a long history and rich tradition of excellence, we feel impelled to do something to connect the critical dots of success: men-

tor and mentees, education and enterprise.” Last year, the inaugural event held with the theme: “Connecting education and technology.” While using their careers as case studies, the speakers had good advice for the students and their teachers. “Don’t wait as an entitled young person, differentiate yourself,” urged author Ronke Onadeko urging students never to stop learning and never fail to spot opportunities. Mudiaga Enajemo, an old boy of GCU, attributed the success of the MUDI Africa brand to hard work. That has seen the brands’ outlets in six African countries that include South Africa, Kenya and Ghana. He urged the students to believe in themselves adding that, “If you want to go places, you must have discipline, passion and drive,” He promised during 2019 to donate a tailoring workshop to Government College Ughelli to help upskill interested students early while still at school.

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EDUCATION Caverton’s lecture theatre donation boosts education infrastructure in LASU Stories by KELECHI EWUZIE

s part of effort to support government boost e ducation infrastructure in public tertiary institution in Lagos, Aderemi Makanjuola, chairman, Caverton Offshore Support Group has donated a 500-seater lecture theatre to Lagos State University (LASU). Akinwunmi Ambode, executive governor of Lagos State while speaking at the commissioning of the lecture theater expressed the governments’ gratitude to Remi Makanjuola for building such exceptional edifice and said government needed more of this kind gesture from individuals and corporate organisations to address infrastructural deficit in the education sector. Ambode observes that while it was a fact that education was a bedrock for national development, running a qualitative educational system is capital intensive. He stated that the compet-

L-R: Yoyinsola Makanjuola, wife of the donor; Akinwunmi Ambode; Aderemi Makanjuola, Donor; Olanrewaju Fagbohun , vice chancellor, Lagos State University and Adebayo Ninalowo at the event

ing demand of different sector of the economy, the scarce resource Government needed support of individuals and corporate organisations to provide adequate infrastructure for public schools. According to him, “Whatever we need to do in terms of endowment we need to

start thinking about legacies that we will leave behind for posterity” Aderemi Makanjuola, Chairman, Caverton Offshore Support Group, said his desire to give back to society especially LASU was borne out of his involvement with the institution having been

part of the governing council since late 80s. “Education is important and I believe if we have good environment for education, student will excel. I felt that I should do something because when you help people you are helping yourself. Again, anything for Lagos should be

NECO lauds Promasidor for promoting scholarship in Mathematics

he National E xamination Council (NECO), which conducts the Senior Secondary Certificate Examination and the General Certificate in Education in Nigeria, has stated that Promasidor Nigeria Limited deserves a National Award for promoting scholarship through the Cowbellpedia Secondary Schools Mathematics TV Quiz Show. Speaking at the finals of the 2018 edition of the competition in Lagos recently NECO’s acting registrar, Abubakar Gana, who was represented by the Director of Examination Development, Mustapha Abdul commended Promasidor for the Cowbellpedia initiative and pledged the council’s continued technical support for the project. He described the project as a laudable mission which enables students from across the country to compete openly. “Promasidor deserves a National Award for promoting scholarship through this Cowbellpedia initiative for over the years. I will encourage them to continue and I want to tell them to keep up the good work,” he told jour-

nalists at the venue. Meanwhile, in the final encounter in Lagos, Akinfoluhan Akinleye of The Ambassadors College, Ota, Ogun State; and Chinedu Mgbemena, a student of Graceland International School, Port Harcourt, Rivers State emerged the 2018 champions in the junior and senior category of the competition respectively. In the two-round final contest for the junior category crown, Akinfoluhan contended with Splendour Nwankwo of Jesuit Memorial College and Favour Okarike of Graceland International School, both in Port Harcourt, Rivers State, who finished as first and second runner-up respectively. Chidozie Uzochukwu of Nigerian Tulip International School, Abuja; Gabriel Akogun from Welkin International and Loluwa Abiodun of The Ambassadors College, both in Ota, Ogun State, all lost in the first round of the final. An elated Akinfoluhan dedicated his victory to his father and his Mathematics teacher, Kayode Adebayo. “I feel very happy to win today and my father will be so happy too,” he disclosed.

The breath-taking senior category contest saw Chinedu shrugged off every challenge to breast the tape ahead his closest rivals. A second timer in the competition, Praise Isinkaye from Federal Government Academy, Suleja, Niger State emerged the first runner up, while the second runnerup position went to Juliet Ekoko, the 2016 junior category champion, from The Ambassador College, Ota, Ogun State. Other contestants whose journey ended at the of first round of the final were Jessica Austine of Federal Government College, Owerri, Imo State; Enoch Adenekan of The Ambassadors College; and Nafisat Abdulwaheed from Reality High School, Ilesha, Osun State. Chinedu, who was also contesting for the second in the competition, was full of gratitude to God and his Mathematics teacher, Christopher Olasupo for guiding him to win the title. “I have been praying for this and God did it for me,” he said. In fulfilling its pledge to double the prize money to mark the 20th anniversary of Cowbell and Mathematics in Nigeria, Promasidor

the best”. Makanjuola encouraged all to be of help to mankind and be forward-looking. “Opportunities are there and that is why we should encourage the younger ones. On his part, Olanrewaju Fagbohun, vice chancellor, Lagos State University, lauded the Lagos State Government for giving the university a face-lift. Adding that this kind gesture boosts the confidence of both students and teachers of the institution and even made the Alumni proud of this beautiful citadel of learning. Fagb ohun des cr ib e d Makanjuola as a benefactor and hero, adding that since the establishment of the institution, it has produced eminent people who have gone out to shape both social political and economy of the nation. Gov. has changed the narrative by changing it from a perceived glorified secondary school to a university that can be proud of. His commitment no doubt has opened flood gates of goodwill which we are benefitting today from

unassuming businessman and philanthropist. Today, that 500-seater lecture theatre is standing tall and it has changed the landscape of LASU. The name Remi Makanjuola has now become part of the legacy of LASU.” Wale Babalakin, chairman of Bi-Courtney Group in his remarks canvassed for more funds for high institutions, saying that it is a self-protective policy to spend more on education sector. “If we fail to develop our universities, we will face the consequence in the future. So, we must meaningfully invest in Nigerian education for the sake of posterity,” he said. Babalakin said that Nigeria education sector was at cross road and needed more funds to perform effectively. To him, “Education is at cross road today in Nigeria and if we don’t find a solution early enough we will all regret it. If we don’t spend a lot of money on education from all sources, government, public, private, and donor and so on alumni we have a long way to go.”

‘Private sector investment will strengthen competiveness of next generation youths’

rewarded the champion in each of the categories with N2 million each, a 100 percent more than the previous prize money. The company will also sponsor the two winners to an all-expense paid educational excursion outside the country, while the first and second runners-up got N1.5 million and N1 million respectively. The teachers of the champions were also given N500, 000, while those of the first and second runners-up received N400, 000 and N300, 000 respectively. In his welcome address, the Managing Director of Promasidor Nigeria Limited, Anders Einarsson congratulated the finalists for their excellent performance and reiterated the commitment of the company towards education and the future of Nigerian children. While affirming that Cowbell has provided a platform to identify and reward excellence in Mathematics, he recalled that from its beginning in 1998, Cowbell and Mathematics has expanded in size, scope and prizes as it now holds in over 200 centres across the nation and in over 11,000 schools.

ndustry experts insist that continuous investment by private sector in educational development is the best solution for Nigeria if she hopes to grow the next generation of globally competitive youth population. Ekuma Eze, managing director, Nigerian Bottling Company Limited (NBC), the Country CSR Manager says private sector involvement in education is to complement the efforts of the government in providing necessary educational infrastructure to boost learning. Eze while speaking at the commissioning of a renovated block of four classrooms for Ngwo-Uno Secondary School in Udi Local Government, Enugu State said NBC embarked on the project because it was identified as an impactful way to support development in one of its host communities, with the knowing that students learn better when they view their learning environment as positive and supportive. The school block which was initially constructed by NBC in 1997, in a bid to bridge the infrastructure gap identified in the school at the time, was recently renovated to maintain the facility as a conducive environment for students to keep learning. Commissioning the fa-

cility, Cecilia Ezeilo, Deputy Governor of Enugu State, commended the Nigerian Bottling Company Limited for the worthy initiative which would help enhance the learning environment for children in the school. “This NBC project compliments an on-going initiative of the state government on the extensive renovation of school buildings and the construction of new structures in schools at all levels in the state”. “In addition, the state government is providing instructional materials and other necessary equipment to the schools. It is refreshing to see the commitment from private organisations to positively impact lives and living standards in their local communities,” she said. She further encouraged other well-meaning private sector organisations as well as individuals and groups to emulate the efforts of the Nigerian Bottling Company Limited and make their own contributions towards providing a better learning environment for children. Also speaking at the ceremony, the Chairman, Post Primary Schools Management Board, Nestor Ezeme assured the management of NBC of the board’s support in ensuring that the facility remains conducive for learning.

BDTECH

BUSINESS DAY

Tuesday 27 November 2018

In association with

Why Guarantee Trust Bank launched Habari app …moves from just a banking app to social, entertainment, lifestyle platform Stories by Jumoke Akiyode Lawanson

t is no news that financial institutions in Nigeria are at the forefront of innovation, but as technology tends to evolve everyday, more needs to be done to stay relevant. As we know, banking mobile applications are the most downloaded apps on Android and iOS devices in Nigeria, apart from social media applications which a foreign built software apps. Although a number of banks have included entertainment and lifestyle to their standard banking app, Guarantee Trust Bank recently blazed the trail by launching ‘Habari’, a mobile app, totally separate from its GTBanking app, that seeks to be a one stop platform for socializing, e-commerce, music download and streaming, news, lifestyle and more. Its hashtag #someonehadtodoit trended on Twitter and Instagram all weekend. Unveiled on Friday, November 23, 2018, Habari which is available to download on smart devices, offers users direct access to the largest catalogue of local and foreign music online, a seamless shopping experience and an exciting way to connect with friends, amongst other features. Built around the everyday lives of customers, Habari is the first mobile platform in Nigeria created by a financial institution that focuses on enabling people’s needs and lifestyles rather than providing a limited

bouquet of regular banking products. The mobile application is open and free for all to download, does not require mobile banking details and offers a wide range of services, all of which are accessible to anyone regardless of where they choose to bank. Why Habari A lot of people might wonder why the bank has decided to diversify from its core business of providing banking services. During the official launch of Habari, questions such

as; “why would I want to socialize with people on Habari when I have Instagram, Facebook, Twitter, Snapchat, Whatsapp and other popular social media platforms?” People also asked why they would need to shop on Habari rather than using other well known e-commerce platforms, or why they would need to listen to music on Habari. Segun Agbaje, CEO, Guarantee Trust Bank plc said; “By reimagining the role of banking and driving innovation in how we serve customers,

L – R: Chris Uwaje; software specialist, Sunday Dare; executive commissioner (stakeholder management), Nigerian Communications Commission, Umar Garba Danbatta; executive vice chairman/CEO, NCC, Olabiyi Durojaiye; chairman, NCC board of commissioners, Ernest Ndukwe; former EVC, NCC and chairman, panel of experts on Blueprint for ICT Research, and Titi Omo-Ettu; chairman, Digital Bridge Institute (DBI), after the submission of final report by panel of experts on design of curriculum for ICT Research in Nigeria at the NCC headquarters, Abuja, recently.

we have built a platform that is less about us as bank and more about our customers and everything they need to enable their lifestyle.” Agbaje said; “Think of Habari as a mobile Harrods, your one stop shop to everything you need.” He further stated that “Habari is not a mobile banking application; it is the start of our journey towards building a platform that connects our customers to everything that they need, and which continues to evolve with their lifestyle. We are excited about this journey and we are confident that our customers will see in Habari a simple, smart and exciting digital experience that adds value to their lives, everyday.” Features of Habari Habari is very simple to use and is designed with a clean user interface as well as a seamless navigation experience that ensures everything, from the music to listen to, to the bills to pay, are just two clicks away. Among the exciting services available on Habari is its large catalogue of local and foreign music, its carefully curated videos that range from short engaging self-help kits to captivating full-length movies, and books that cut across all literary genres. Habari also offers an end-toend shopping experience that allows users buy goods and services directly from over 10,000 small businesses. The most exciting feature for me is the ability to find friends and connect with them wherever they may be in the world, just by shaking your phone. You can split bills, transfer and receive funds as well as pay for utilities, subscriptions and other services on the app.

Smile introduces SIM with free voice minutes, eliminates data roaming charges

mile Nigeria has taken steps to further delight its teeming customers, by introducing the All-in-One SIM offer in such a manner that customers can connect and enjoy free Smile to Smile voice and video calls and lower rates to call any local operator and affordable data plan on reliable network.

The All-in-One SIM offer comes in a N3, 000 package which gives unlimited on-net calls, 250 minutes to call any local network, 250 SMS, 1.5GB data and zero roaming charges while abroad. Customers can make calls from abroad at local rates within the valid period of 30 days. To enjoy these benefits, new

customers need to purchase the Smile All-In-One SIM, download and activate the app while existing customers only need to download and activate the Smile voice app from their App Store or Google Play Store. Lotanna Anajemba, head, brands and communication at Smile Communications Nigeria said that the of-

fer will be available To existing customers and new customer prospects through all Smile distribution channels including retail shops, kiosks, Field Sales Representatives (FSRs), Independent dealer outlets and online. On activation, the customers will receive their respective activation data GB, Voice minutes and SMS.

LCCI unveils plans for 2019 ICT and telecommunications Expo

he Lagos State Chamber of Commerce and Industry (LCCI) has unveiled plans to host the biggest Information, Communication, Technology and Telecommunications (ICTEL) exhibition and conference in July 2019. The LCCI has commenced plans to make the fifth edition of the ICTEL its biggest event yet, where industry stakeholders and experts from across the continent and beyond, will gather to point a way for Nigeria in the fourth industrial revolution. Leye Kupoluyi, chairman, ICTEL Exhibition committee revealed while speaking to journalists at the recently held Trade Fair in Lagos, that preparations for the fifth edition of the yearly ICTEL Expo has begun. Kupoluyi also disclosed that the theme for 2019 ICTEL Expo is “The fourth Industrial Revolution and the Nigerian Economy”. Justifying the theme, the Chairman stated: “As a nation, we cannot but move with the global trends. Experts have stressed that the fourth industrial revolution is disrupting almost every industry in every country at a speed that has no historical precedent. They have identified some countries and Africa-including our dear country-to be the least prepared for these current breakthroughs in Industrial revolution-just like it was with the first, second and third industrial revolutions. So, we have decided–through ICTEL- to raise national consciousness and ensure necessary preparation, so that we can join the world, not only to cope with the trend, but to see how we can ensure a positive impact of the fourth industrial revolution on our economy and indeed on our nation as a whole,” he said. Gabriel Idahosa, vice president, Lagos Chamber of Commerce and Industry, who is also the chairman, Specialised Exhibition Committee (SEC) of the chamber, assured that everything that must complement early preparation will be done to ensure significantly improved results in the 2019 edition of the ICTEL EXPO. “Let it be clear to all, that the vision for ICTEL is to make it the main ICT event in Nigeria, the defining ICT event in the country. The vision is that it will stop being an LCCI EVENT, but a national ICT industry event leveraging on the LCCI brand and its network.

BUSINESS DAY

Tuesday 27 November 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

How Accenture identifies innovation leaders in Nigeria’s Banking and Fintech space Stories by JUMOKE AKIYODE-LAWANSON

n today’s highly competitive markets, innovation is critical for competitive advantage. Ideas are the new currency, but having good ideas is not enough. Organisations who will retain and grow market share are those who generate better ideas and implement these ideas at a faster pace. Against the backdrop of disruption, driven by digital, only organisations that seamlessly integrate innovation into everything they do will achieve sustainable growth and retain competitive advantage. 13 Banks and 17 Financial Technology companies (FinTechs) participated in the maiden Accenture Nigeria Innovation Index 2018, providing insight on how they leverage innovation to stabilise and drive growth for maximum benefit. “On average, organisations invest 35 percent of annual revenues on innovation and realise a 40.5 percent return. However, a few outliers invest 22 percent of revenues and achieve returns of 61 percent – 1.5x the market average,” said Niyi Yusuf, Accenture Nigeria country managing director. “We are calling these organisations Innovation Leaders. As we dug deeper to understand what they do dif-

L-R: Anthony Osaji; head, corporate sales, Jumia Nigeria, Thomas Simonet; chief marketing officer, Jumia Group, Lee -Ann Cassie; head of Africa region for Telcoin, Juliet Anammah; chief executive officer, Jumia Nigeria, Salma Beacherif; chief marketing officer, Jumia Nigeria, and Stanislaus Martins; head of growth marketing, Jumia Nigeria, pictured to commemorate the partnership between Telcoin and Jumia in Lagos recently.

ferently to achieve such returns on their innovations, a number of key themes stood out as differentiating factors. Strategy, Innovation, Culture, Talent, Collaboration, Business Intelligence and Digital; innovation Leaders scored significantly higher across these areas than other organisations,” he further explained. According to Accenture, leaders make significant investments in innovation strategy and lay a solid foundation for a high performing innovative culture, ensuring a steady flow of ideas from an engaged workforce.

“Innovation leaders prioritise projects, foster a stronger collaboration culture central to their innovation strategy, use digital as a business enabler and revenue generator, leverage the power of ecosystems to gather intelligence and apply insights that help them differentiate offerings in the market,” said Toluwaleke Adenmosun, managing director – financial services. The research methodology scored the oranisations based on strategy, ideation, absorption, execution, impacts and benefits. Another differentiating

theme is collaboration, the ability to break down silos and collaborate within and outside the organisation gives Innovation Leaders a distinct edge in ensuring long-term success. There is a stark contrast in how Innovation Leaders and the rest of organisations generate ideas. “100 percent of Innovation Leaders make use of dedicated-multifunctional innovation teams as well as external platforms and channels to generate new ideas compared to 28 percent of other organisations. Innovation Leaders clearly see opportunities in leveraging the broader

Bambooks promotes e-reading culture with launch of mobile app

ambooks, Nigeria’s first reading subscription service which includes thousands of book titles, magazines and comics has launched its mobile application for its users to seamlessly access thousands of eBooks, magazines and comics through any internet connected device. The app which can be accessed on mobile phones, tablets and computers has a very friendly user interface which makes it easy for users to customise the service based on interests and preferences. Bambooks is a subsidiary of iConcepts, a leading technology company that pioneered the mobile content business in Nigeria and launched some of the first VAS services in the

country such as CNN Breaking News alerts, Sky Sports, ChannelsTV news and Ring back Tunes. Their subscription services generated over $15 million in annual revenues for the mobile operators in an industry that grew to a market size of $250 million. Ebooks on romantic fiction, entrepreneurship, self-help, religion, educational books, and many other genres can be accessed on the Bambooks website or by downloading the mobile application form the Google Play store or Apple iOS store for free. Users become members of the club and get access to premium content from the many authors on the platform after they have taken a subscription. Subscription which goes for as low as N500

monthly or the yearly plan of N5000 grants unlimited access to the library and read already downloaded books even when offline. Ugo Okoye, founder & CEO of Bambooks says Bambooks will not only entertain and educate people but also improve literacy levels, break the cycle of poverty and create a better future for Nigerians. Citing the change in publishing, with regard to the difficulties faced in distribution of physical books as well as piracy issues, Bambooks also seeks to empower local authors by distributing and monetising their craft across Nigeria and the continent. “It’s a platform that really empowers African authors in particular, we wanted to create something for Africa by Africans, that’s what Bam-

books is about,” Okoye said while speaking at a Press Conference to launch the new app. The security of its users as well as authors is something which the company has taken into great consideration that’s why the platform has been designed with up to date technology. Arese Ugwu, author Smart Money woman says that partnering with Bambooks has been a great development, as readers are gradually changing in the way they hope to get books. “I’m hoping that with Bambooks this is the beginning of African authors being able to monetise and protect their content so that it is not pirated and they can genuinely make their money,” Ugwu said.

ecosystem: 85 percent look to academia, clients, customers and suppliers to crowd source information to innovate,” said Adenmosun. Innovation Leaders leverage Business Intelligence and Analytics to drive their innovation agenda. The explosion of data and, importantly, analytical solutions to help make sense of the data, has significantly improved how organisations make decisions; enabling them to approach opportunities, risks, partnerships and customers differently – with foresight not previously available. 70 percent of Innovation Leaders (others 14 percent) emphasise Business Intelligence and Analytics. Complementary use of traditional data-gathering methods and newer digital platforms provided the opportunity to tap into big data and social media channels to stay in touch with market perceptions, see what competitors are doing, generate ideas and react with precision. Digital technologies are adopted by Innovation Leaders to drive efficiencies and operational excellence. All index participants indicate that innovation investments focus on business improvements, especially process modification and/or automation (100 percent). Organisations are beginning to weave innovation into the fabric of how they

think and serve customers; focusing on improving existing products, adding new products to their portfolio and delivering a positive end-to-end customer experience which translate into significant cost efficiencies. Digital capabilities are a competitive advantage for optimising customer value. By investing in digital, Innovation Leaders improve their cost-toserve and response times to customers. These organisations use digital technologies: social media for product and service promotion and technology apps to improve service delivery and, ultimately, customer satisfaction. “Innovation is a foundation for growth and business sustainability in a digital era, so getting the right people, business, technology and innovation structures in place are vital. Nigerian banks and fintechs are on the right path,” said Adenmosun. Possessing all the mentioned characteristics, as well as building strong innovation engines by investing in innovative skills, Accenture named Access Bank and Wema bank, innovation leaders in banking in terms of strategy, ideation and absorption while Flutterwave and Paystack lead in the Fintech space for the same category. Wema Bank and Flutterwave stood out as innovation masters and Alat by Wema Bank lead in terms of innovation concept.

Telcoin partners Jumia to boost e-commerce with Blockchain technology

elcoin, a technology platform provider based in Tokyo Japan, offering telecoms focused blockchain solutions, has partnered with Jumia, a leading online e-commerce marketplace to increase online sales with the synergy of Blockchain technology. With this collaboration, Telcoin will help Jumia to serve a Diaspora audience by converting digital currency to shopping vouchers for easy payment for goods and services on the Jumia e-commerce platform in future. Lee-Ann Cassie, head, Africa business, Telcoin says; “we will focus on and explore avenues to increase the sales traffic from Nigerians in the diaspora, adding value to cross-border

e-commerce transactions as well as creating valueenhancing e-commerce transactions within Nigeria.” On her part, Juliet Anammah, CEO, Jumia Nigeria says; “Jumia is excited, to say the least, about our partnership with Telcoin, because we believe this will have a huge impact on our commitment to improving the lives of Africans through the internet, helping them to save time and money. With this partnership, we can now serve Nigerians in the diaspora who are looking to convert their digital currency to shopping vouchers on our platform. We rely on and trust Telcoin to facilitate the currency conversion since digital currency is, in the interim, not a payment method on Jumia.”

Tuesday 27 November 2018

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BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Angst for Nigeria’s economy managers as oil price rolls downstream STEPHEN ONYEKWELU

Three month Brent Crude price

lumping oil price, fears about national revenue shortfalls and banks’ exposure to the oil and gas sector are coalescing to foreshadow potentially turbulent economic times ahead for Africa’s biggest crude producer. Oil prices slumped up to nearly 8 percent to the lowest in more than a year in the week ending Nov. 3, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output. Nigeria depends on exports of crude oil for approximately 70 percent of government revenue and 90 percent of foreign exchange earnings. Continuing decline in the price of crude oil will pose foreign exchange challenges for the Central Bank of Nigeria (CBN) and a fiscal challenge for the government. The loss of revenue derived from the sale of crude oil will increase the budget deficit. Nigeria’s typical pro-cyclical policy response to address this fiscal challenge has often been a combination of spending cuts, improved tax collection, and domestic and international borrowing. Reduced oil revenue will also strain state governments and many are struggling to pay civil servant salaries. Reduced government spending, greater tax

Source: Nasdaq collection, and low oil prices were factors that contributed to the slowdown in economic growth in 2015. “If oil price continues to fall such as we have seen in the last few days, then there is need for concern. Already when oil price was at $72 per barrel we used about $3 billion of the foreign reserve to defend the naira” Johnson Chukwu, managing director/chief executive officer Cowry Asset Management Limited said. “At $59 per barrel and falling, this will put pressure on the naira, increase inflationary pressure, and reduce the standard of living and purchasing power.” Nigeria’s foreign reserves have been falling partly because the CBN has been using the reserves to defend the naira. CBN data show the foreign reserve fell from

$47.25 billion in July to $45.90 in August. Then it went down to $42.13 billion in October from $44.45 billion in September and at $41.52 billion as at November 22. Furthermore, about a third of all domestic commercial bank credit is extended to the oil and gas industry. If its entire upstream, midstream and downstream operations and supply chain were added together, analysts estimate oil and gas lending would make up as much as half of banks’ loan books, London-based Financial Times had stated in a special report of Nov. 22. The system-wide non-performing loan ratio, a key metric for banks’ health fell to 12.5 per cent in June from 15 per cent a year earlier, according to official figures. But by August, it had risen to 14.7 per cent.

In a communiqué the following month, the Central Bank of Nigeria’s monetary policy committee said it was “concerned with the rising level of non-performing loans (NPLs) in the banking system, traced mainly to the oil sector”. Oil supply, led by U.S. producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organisation of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6. But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014.

Environment

Access to stable electricity biggest obstacle to economic prosperity in Nigeria

ccess to stable and affordable electricity is one of the biggest hurdles in the way of rapid industrialisation and sustainable economic development in Nigeria. This was the view of Dmitry Shornikov, chief executive officer of Rostom Central and Southern Africa who said that the World Bank Enterprise Survey stated that electricity is the greatest obstacle to business development in Nigeria. Dmitry who spoke at the Future of Energy conference and exhibition stated that the survey showed that 70 percent of large firms on the average experienced 44 electrical outages per month for on the average 11 hours which results in losing one fourth of annual revenue. He stated that another World Bank study showed that outages reduced direct exports of African firms by 6 to 12 percent. “Shortage of sustainable and affordable energy sources makes it difficult for African nations such as Nigeria to implement their strategic industrialisation goals” Shornikov said. “This is against a background of growing urbanisation as well as demands for employment and modern infrastructure.” He advocated that Nigeria should begin to look in the way of Nuclear Energy to boost it power portfolio as recent analysis conducted by the Nuclear Energy Institute (NEI) found that nuclear plants create

some of the largest economic benefits when compared to all other generating sources. Advantages that can be derived gained from the implementation of Nuclear Power Projects (NPP) include local investments aimed at maintaining the well-being of the people and developing science, technologies, medicine and service sector. In a long run, the continuous development of these sectors he said will transform the country into a major economic force on the continent and on the global market. “Within the past recent years Russia and Nigeria signed agreements on cooperation in the design, construction, operation and decommissioning of the Nuclear Power Plant and the Multipurpose Research Reactor Complex (MRRC) on the territory of Federal Republic of Nigeria” Shornikov said. These agreements provide for appointment of authorized organizations for the projects’ development and implementation and determine their framework. Considering the project on construction of the Multipurpose Research Reactor Complex, this Complex will ensure wide application of nuclear and radiation technologies in healthcare, science, industry and agriculture in Nigeria. “The MRRC will bring various economic advantages such as new technological industry platforms, national industry development, improved regional investment climates, agricultural,” he said.

swamp and offshore terrains. According to Uzu, GPPS will use the opportunity to display its operational efficiency for a superior service quality delivery in line with the highest industry standards and best practices and in accordance with the tenets of ISO 9001:2015 with attestations for the young company from Exxonmobil; Total, NLNG and Shell Companies “GPPS uses the best of equipment to offer services such as pipeline cleaning, de-oiling, hydro-testing, pipeline de-watering, drying and nitrogen services to the oil, gas and power industry. The company is also involved in

pressure pumping, nitrogen pumping, fluid pump support, lube oil flushing and high pressure water jetting and blasting services”, Uzu said. Uzu has more than 26 years oil field experience in drilling operation (Sedco Forex), production technology (SPDC) and process and pipeline services (BJ Services) and supervised many successful projects in Nigeria, America and the United Kingdom. GPPS is a success story of indigenous specialists coming together to form an enduring partnership in the oil and gas service sector based on international standards and best practices.

Olusola Bello

GPPS shows oil, gas content policy yielding results …Wabote, McGrath lead stakeholders to unveil firm STEPHEN ONYEKWELU

ight years after, Nigeria’s local content act in the oil and gas continues to yield significant results and recently gave birth to the Global Process and Pipeline Services (GPSS) Limited, a fully Nigerian pipeline process and services company to be commissioned Nov. 30. GPPS is the only Nigerian company focused solely on process and pipeline services. It has major projects completed in the deep-water applications in her product service line and has attracted competent hands in the in-

dustry from multinationals to work for her with an expansion plan into other West Africa and Sub-Sahara African countries. Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB) and Paul McGrath, chairman and managing director, ExxonMobil Affiliate Companies in Nigeria will be joined by Chidi Izuwah, acting director general and chief executive officer, Infrastructure Concession Regulatory Commission (ICRC) and Bank-Anthony Okoroafor, chairman, Petroleum Technology Association of Nigeria (PETAN) and other stakeholders in the oil and gas industry

in Port-Harcourt at the unveil event of GPSS’ office complex and operations base. “Since 2010, the implementation of the Nigerian Oil and Gas industry Content Development Act has raised the share of in-country sector spending, contracting and funding which has enabled lo-

cal expertise and organisation to flourish”, Obi Uzu, managing director, GPPS said. The high point of the event is showcasing GPPS’ local content driven initiatives through facility tour of the operations base depicting its capabilities and machineries as a frontline oil services company on land,

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Fifen Eyemisanre Famous.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378

BUSINESS DAY

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Tuesday 27 November 2018

Energy Report

Total gives conditions for achieving growth opportunities in oil, gas industry

How to make Nigeria’s electricity market competitive ive years ago, Nigeria set off a comprehensive reform of the power sector, in a privatisation move that was acclaimed by players in the space as one of the boldest reforms but faced by insufficient cash flows due to losses along the power value chain. This reform was designed to achieve two things: fix chronic efficiency gap in the old state owned public utilities and attract private capital needed to drive the sector to meet Nigeria’s fast growing electricity demand. Half a decade later, the power sector has not recovered from one of its biggest challenges, ‘shortage’. From gas availability to electricity units delivered to the end-user, there are severe constraints that not only threaten the viability of the sector, but practically repel fresh funding and investment across the value chain. This has led to suboptimal utilisation of generating capacity, inadequate transmission infrastructure and distribution losses and low rates of collection. To illustrate this, over 3, 000 MW of generating ca-

mission, NERC, had shown that Nigeria’s 11 Electricity Distribution Companies’, debts to Nigerian Bulk Electricity Trader and Market Operator, are still below 30 percent as they paid only N51.2 billion of the N163.1 billion issued to them in the first three months of 2018. Total debt stock in the power sector is close to N800 billion, a source with knowledge of the matter told BusinessDay. Creative financial deals, backed by sovereign guarantees would be needed to free the power sector of this debt. Secondly, the government needs to give up its 40 percent equity holding in the DisCos. This could take place in stages. First, the 40 percent could be managed by a consortium and some commercial banks. However, the government will have to ultimately give up its equity entirely. This is not completely novel because, September 25, 2017, Babatunde Fashola, minister of power, works and housing, stated that the federal government would be open to welcome new and tangible offers that would lead to it divesting its 40 percent shares in Nigeria’s 11 DisCos. The other point is to ensure that government, going forward, would not owe Discos.

pacity is stranded due to gas constraints. Transmission capacity can transport 50 – 60 percent of installed capacity, while collection losses range between 40 – 60 percent at the electricity distribution companies (Discos) level. People with deep knowledge of the sector say insufficient cash flows have significantly impaired the ability of electricity generating companies (Gencos) and Discos to recover all costs and generate appropriate return on investment. BusinessDay investigations show that to make Nigeria’s electricity market competitive some urgent steps must be taken to push reforms in the sector further along market oriented lines. To find sustainable solution to the power sector woes, experts have suggested some steps. Data from The Nigerian Electricity Regulatory Com-

It must budget for power in the way that it budgets for diesel and travels. “We have done that in the 2017 budget; we will do it again in the 2018 budget, and enforce compliance by agencies to pay their debt” Fashola said. This will help in bringing stability to liquidity problems in the power sector, ultimately for the benefit not only of the Discos but the entire value chain. Thirdly, transmission company Nigeria (TCN) needs to be broken-up and privatised. Experts say this is necessary if the market it to be optimally deregulated. In other countries where the electricity industry was formerly a government owned, vertically integrated, monopoly the reforms have generally involved splitting the industry into separate generating, transmission and distribution sectors.

STEPHEN ONYEKWELU Olusola Bello

otal Exploration and Production (E&P) has said to achieve growth and sustain it in the oil and gas industry, stakeholders must come together and fully explore the opportunities that abound in the sector, especially in the offshore and gas. The company believes that with the growth opportunities in the Nigerian oil and gas industry especially in the offshore if explored, the Nigerian economy would be better for it. Nicolas Terraz, managing director of Total Exploration and Production expressed this view at the just concluded Nigerian Association of Petroleum Explorationists (NAPE) who spoke on organic growth in Nigeria oil and gas industry: “Next phase, where and how it can be achieved.” He said Total believes there are still many opportunities and potentials for growth in the industry that is why it moved from a predominantly land based production in the 1960s to offshore in the 1980s and

deep offshore in 2005, developing a technically skilled industry workforce in the process. Terraz said his company has added over 3 billion barrels of oil equivalent to the country’s production and with its Egina project coming on stream in the coming weeks, it will add another 200,000 barrels per day, which is approximately 10 percent of the country’s oil production. “For the future, our focus will be on two main areas:

offshore and gas. In deep offshore as earlier mentioned, Egina project will soon be come on stream and we are ready working at realising future projects like Ikike in the conventional offshore and Preowei on deep offshore”, he said. He said the oil and gas industry has new rules on gas flaring, which are opening up opportunities in the domestic market markets and power generations. According to him these opportunities are not limited

to the oil and gas industry alone, but other sectors of the economy where conversation on fiscal regimes have been opened also on account of the inauguration of the President Enabling Business Environment Council which is saddled with the tasks of attracting investment into Nigeria as well as diversify economy. The Nigerian economy he stated is gradually regaining the confidence of the global investment community and opportunities are unlimited.

Senate C’ttee recommends Issele-Uku-BEDC model for disconnected communities Olusola Bello

mpressed by the cordial relationship between Benin Electricity Distribution Company (Disco) and Issele-Uku Community in Delta State the Senate committee on power has urged other communities to emulate the model. Eyinnaya Abaribe, chairman Senate Committee on Power, said the Issele-Uku community model of self-help adopted in regulating and mobilising residents to work hand in hand with Benin Disco to

resolve their outage issue and get reconnected to the national grid, after seven years of being without electricity supply could be a template for other communities in the country. The Committee on Power which was on oversight visit to Benin Disco franchise area commended the self-help model adopted by residents of Issele-Uku stressing that the community had through self-help and collaboration with Benin Disco, showed other communities the way to follow. Issele-Uku was adopted as a model community in Delta to rate the operations of Benin

Disco. The lawmakers commended Issele-Uku for defying all odds to partner with the company in surmounting the numerous challenges in order to enjoy electricity and urged Benin Disco to be considerate with the community in the face of scarce electricity commodity, by assisting to absorb part of the cost incurred by the community to get electrified. Abaribe, who was welcomed by the monarch of Issele-Uku, Agbogidi Obi Nduka, affirmed that “we are here to do what the law requires of us, which is oversight on the distribution companies, in this case the Benin Disco. IsseleUku was chosen as a model, based on what the Benin Disco managing director, Funke Osibodu, briefed us they went through as a community to get electrified”. Expressing hope for a better Nigeria, Abaribe declared that the job of the committee was to review the state of power in respect to distribution companies (Discos), saying that there was a comprehensive discussion going on with regards to the privatisation

exercise between the Bureau of Public Enterprises (BPE) and the privatised companies. “The stand of the committee is that privatisation in itself is not bad, but when you have agreements, all parties must keep to the terms of such agreement. The Federal Ministry of Power, National Economic Council and BPE are all working on this to ensure that decision to be taken over emerging issues connected with the privatisation will be in the best interest of all stakeholders” he stated. Speaking during the visit to Issele-Uku, Funke Osibodu, the managing director/CEO of Benin Disco, applauded the commitment of the community to ensuring that residents resume electricity consumption again after over seven years of outage, adding that it was also a commendable feat by BEDC. She averred that some of the sundry issues pointed out by the community for resolution were parts of the teething problems of the first phase in the electricity supply process, promising to resolve most of them by the first quarter of next year.

Tuesday 27 November 2018

AVIATION

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GUIDE

BUSINESS DAY

in association with

What has sustained our operations is sticking to our business plan - Mbanuzuo Obi Mbanuzuo is the accountable manager, Dana Air. In this interview with Ifeoma Okeke, he speaks on some of the airline’s experiences since it started operations ten years ago and prospects for the future.

ow do you feel marking ten years in the aviation industry? We feel good. We know some other airlines did not get up to five; some didn’t even get up to three; so it is a huge achievement that we have recorded ten years operating in Nigeria. We are about the third airline to clock ten years. I must say that the system is harsh for scheduled airline operations, so we should be congratulated for being able to brave the storm and remain in operation. Forustohavesustainedouroperation for the past ten years, we must be doing something differently. And one thing I will say is that we have followed our own plan. There will be people who would want to push you one way or the other but we have maintained our own plan. We believe in doing things gradually, one by one and that is why we have been able to last this long. We have faced the pressure to re-fleet but we did not succumb to such pressure. In 2016 we were very close to financing aircraft but for the economic situation in the country then. So what we do basically is to follow our own plan and not other people’s plan. What has kept you in this business, especially operating in a very harsh environment? The people that describe the environment as harsh are not wrong. Those who are outside the industry may look at it and say what is harsh. We have actually been here for ten years and it is not because of but in spite of the challenges. We go throughdaytodayoperationalchallenges, we go through the structural challenges, fuel availability, price, the policies, day to daychallengesofpoorlandingaidssimply because there is no power, not because the landing aids are not there. However, in some places the landing aids are not there, some places the power is epileptic. Thereareagencies’challenges,withsome doing better than others. There are lots of deficiencies in different places. When you say the environment is harsh, imagine a place where you can’t land after 6pm or where maybe a state government has tried to help the system or the environment by providing equipment and then sometimes the people who are supposed to look after them vandalise them. Airports are not places where anyone on the street can get access to, so telling me that someonehasstolenthelandingaidsisnot tenable. The people who work there have done that. There are also inter-agency squabbles,whereforexampletheFederal AirportsAuthorityof Nigeria,(FAAN) says the lighting should be our business and anotheragencysays,‘noitshouldbeours.’ We are all affected by these.So when we

say the environment is harsh, it is truly harsh and ten years is not easy but we go through it. All we do every time is we highlight these things, we say what it is because things will not get better without highlighting some of these things. FAAN has given some justifications on the proposed increment of Passenger Service Charge, (PSC).What is your take on it? If I want to do something, whether good or bad, I will find a justification to back up my point of view. From a user’s point of view, those justifications don’t holdwater.IfFAAN’sproperlyconstituted aviation act says they should have a board and they should issue reports yearly, the International Air Transport Association, (IATA) which is the industry body has a principle which we fully support. The principle says that service providers have to charge in the principle that it is cost recovery. So, we are in support of FAAN recovering any cost for their business but all we are asking FAAN and all the other agencies is to show us what the costs are. Show us financial reports you have issued inthelastfiveyears.Istandtobecorrected, FAAN has not issued any financial report in the last five years. What are your revenues, what are your expenses? If these clearly show a shortfall, the airlines will pay to make up that shortfall. FAAN is supposed to charge just like the Nigeria civil Aviation Authority (NCAA) to cover their costs. Show us what your costs are andifthatrequiresustopaymorePSC,we willdosobutwithoutdoingthat,whatever justification they give, doesn’t hold water. On passenger complaints, there seems to be a gap in communication between the airlines and passengers. Why is this so? I once boarded a flight in London, British airline. They started the engine and one started but they couldn’t start the second one. The captain told the passengers that he could not start his engine and there was a problem. He said the engineers will come onboard and they will look at it and fix it, after which the journey will continue. The engineers came onboard and did all they needed to do. This took about one hour and no one complained. They fix it and everyone stayed onboard and the aircraft took off. Nigerians, for many reasons are superstitious, religious or simply afraid of something they don’t understand and I will not blame them. This is why we always try to educate people. So, if what happened in London had happened in Nigeria, I bet you that half of the passengers will have left the plane. Flying is the safest form of travelling based on the number of people travelling and the number of incidents that occur. We are still trying to encourage and educate people, which is also why we

Obi Mbanuzuo talk to the media a lot. Sometimes, certain media live on sensationalising. If they don’t sensationalise something, then it is not news. This also sends a message to the public who read the publications and say they won’t go near the airplane. When the people who have the fear of flying read that article, it will even increase their fears. Sometimes the airlines try to give them as much information as possible. I am also not a fan of ‘operational reasons’ said by airlines because operational reasons could mean various things. For instance, currently in Nigeria, there is a lot of VIP movements that delays flights. By law, the airlinescannottellpassengersthatthereis a VIP movement delaying their flight. We will be sanctioned if we do this because it is a security issue. Sometimes, we then have to say operational reasons. It could also be a technical problem. In essence, you are making the journey safer for the passengers but once you mention that technicalproblem,allkindsofdiscussions go on. For example, why was luggage carried with the passengers? Very rarely can an airplane carry the maximum amount of payload they can lift together with the maximum amount of fuel. The airplane has a maximum take-off weight which it cannot reach with both maximum passenger load and fuel load. If it reaches maximumpassengerload,itcannotcarry maximum load. So, in that case, some bags will have to left behind or you then have to reduce fuel. Sometimes, there is no fuel in the destination airport; so, you then have to take maximum fuel, which

means you have to leave something behind. It is either you leave the human beings themselves or you leave some of their bags. In Dana Air, we always prefer to tell passengers that they may have to go without their loads. It might be difficult to convince the passengers but things happen. Things will happen, flights will get delayed but the question is how do you deal with that problem? Since 2015 the new administration came up, they made it compulsory that agencies must pay money into federal government coffers. The money is not brought back and there are so much infrastructuredeficiencies.Isitthatthey are not sensitive to these issues? By law, aviation act, 2006 that set up all the agencies such as NAMA, NCAA and FAAN; these are independent agencies and they should finance themselves. But thegovernmentcomesin,probablytrying to reduce corruption or increase their revenue intake, sets up a TSA system, where everyone pays into one account. The money goes in and doesn’t come back out.WiththePSC,theyaretryingtopayfor theChineseterminals;thedecisiontotake up these Chinese terminals should have been taken by FAAN if it is a properly run airport company. FAAN should be able to finance itself from its own revenues. If it needs huge capital inflow, it can go to the bank to finance it or go to the Chinese but this is FAAN’s decision as FAAN and not someone in the ministry calling the Chinese and getting FAAN to pay back. FAAN never decided to go to the Chinese;

someone sat down and made that decision. The agencies should be able have financial autonomy, so that we the users and airlines know what we are paying for. The decision is distorted as agencies pay into somewhere, not sure of what they are paying. In the past, we heard of bullet proof BMW being purchased and as elections approach, people will be told to produce certain billions. We are the ones suffering. As far as I know, NCAA does not have a board currently constituted and I’m not sure if FAAN or NAMA does. As far as I know, the airlines have to sit on some of those boards but there are no boards. We could also sit down and demand what we really want but because it isdoneinsuchawaythattheairlinesdon’t contribute or see what is happening, then all of these go on. Do you think FAAN will be more efficient if there are no interventions by the federal government? I do not see the fact that the ministry runs Bilateral Air Service Agreement (BASA) as inefficiency because the Civil Aviation Authority (CAA) should purely be the regulator. BASA should still remain underthegovernment,ifthatistheministry of aviation that is fine. The CAA should be the regulator but what is happening currently is that the regulator regulates only the airlines. The regulator should regulatetheindustry;theyshouldregulate NAMA and check to see if NAMA does its air traffic control well. If the NCAA properly regulates FAAN andNAMA,thesetwowilldomuchbetter than they do. This also relates to financial autonomy. FAAN gets enough revenue to run its business, although there are 22 airports, of which only three are viable. However, if FAAN, with all the revenues theyget,stillsaytheywanttoincreasePSC, then what about the one they currently collect.IftheysaytheywanttopaytheChinese, is it FAAN that called the Chinese? The loans are there, it is just following the right thing. The regulator should simply regulate the system, the airlines, pilots, engineers and Air Operating Certifocate amongst others. What is the situation with Value Added Tax (VAT) removal on importation of aircraft spare parts? Is it now effective? The situation is much better now but again it requires proper executive approval. What I mean is that tomorrow someone else should not come and change it. The current administration has given instructions that this is what should happen but in the books, nothing has changed. So, if the minister changes or the administration changes, things will change. This is not the way things should be. Things should be documented and put properly the way they ought to be.

BUSINESS DAY

Tuesday 27 November 2018

FG’s failure to encourage local content in construction industry slowing growth

...as Construction Kaiser marks 25yrs of delivering value in Nigeria Stories by CHUKA UROKO

he failure of the Federal Government of Nigeria to encourage local content in the country’s construction industry is slowing its growth, industry operators have said. The industry, which is a major employer of labour, has been in slow growth (and currently in recession) due to a combination of factors which the local operators blame mainly on the domination of the industry by foreign firms. Experts argue, however, that the slow growth in the industry stems from lack of capacity and confidence in local operators. They also blame the situation on the inability of the local operators to synergise for growth. Macro-economics, poor government spending, oil & gas contracts being stalled, and security issues, which significantly affect foreign investments, have also been adduced as reasons for the industry’s slow growth. But the operators think differently. They insist that if the Local Content Act is properly and comprehensively implemented, it will drive growth in their industry just as the Act has made it easier and encouraged local industrialization in the oil & gas sector of the economy. “We have built all the capacity, acquired the relevant knowledge and also garnered the requisite experience and expertise to handle any of the big ticket jobs which are given away to foreigners”, said Igbuan Okaisabor, vice chairman/CEO, Construction Kaiser, who spoke to journalists as part of activities marking the 25th anniversary of the company. From a very humble beginning as a 5-man organization carrying out minor renovation works, Construction Kaiser has grown phenomenally to become a foremost and leading indigenous construction firm, delivering value through quality products and services.

L-R: Robert Oseghale, regional director, South South and South East; Opeyemi Oni, ED/regional director,Western Region; Igbuan Okaisabor, vice chairman/CEO; Ewoma Oloye, group head, Human Resources, and Shaibu Ikiebe, GM, Western Region, all of Construction Kaiser Limited, at a press conference in Lagos recently.

Across its three main branches in Abuja, Lagos and Port Harcourt, the company maintains 220 staff comprising core construction professionals and support staff. “Since 1993 when we started out, we have been at the forefront of providing world class construction services in Nigeria. We are a wholly indigenous company and have successfully maintained global standards while being committed to developing local talent, empowering Nigerians and building a sustainable future”, Okaisabor said. “However, with all that we are doing, we are not getting support from the government. We want the government to help us to grow this industry by encouraging local content. In our 25 years of operation, it was only last year that we got government contract, for the first time, from Lagos State government, meaning that in 24 years, we had been dealing with only the private sector”, he lamented. Besides local content, Okaisa-

bor said that industry operators also needed incentives like tax holiday or special construction tax from the government, pointing out that 5 percent withholding tax which construction firms pay to the government was as punitive as it was insensitive because “it tends to show that our margins are in double digits whereas they are not”. As part of efforts at building capacity in the industry, empowering the youth and growing the industry generally, Construction Kaiser uses its affiliate companies, especially the M & E Kaiser Limited (Mechanical, Electrical and Plumbing Installation Works) and KaiserLite, to drive growth initiatives. The company has also formed alliances and entered into partnerships with Lagos State government, University of Lagos, Peri Formwork and Lafarge Africa, all in the effort to grow the industry and also to ensure quality service delivery. Beyond its industrial, commercial and residential services offering, the

company, two years ago, created the Kaiser Foundation for Social Development (KFSD) which, the CEO explained, was aimed to spearhead change and strengthen the indigenous construction industry. Some of the KFSD schemes are STEM Construction Summer Camp; Mentorship Scheme; Soft Skills Undergraduate Training; Graduate Entrepreneurship Scheme (GES); Artisan Training Programme (ATP); Graduate Scholarship Scheme and Research Collaboration. The youth mentoring programme, particularly, is strategic and futuristic as it is designed to empower youths in all things construction. It provides a platform for the STEM Construction Summer Camp Alumni (mentees) to work during holidays, together with more experienced people (mentors) on live training sites. The mentors offer one-on-one mentoring sessions, site training and support on career guidance in construction, engineering and work-life skills.

Expectations as stakeholders seek real estate industry knowledge at RIS

xpectations are high in the real estate industry as stakeholders gather in Lagos to discuss and seek knowledge at the Refined Investors Series (RIS) already slated for next week, Tuesday. The expectation is that knowledge garnered from this gathering will not only engender growth in the industry, but also guide investment and home ownership decisions by individuals and institutions. RIS, as a real estate thought leadership initiative, is targeted at astute high net-worth investors, economic influencers, real estate developers, industry leaders and real estate enthusiasts who are interested in exploring, understanding and unlocking the opportunities

that abound in the Nigerian property market. The series, which is jointed promoted by Fine and Country and Institute of Real Estate Excellence (IREE), is also aimed to provide accurate and current insight to investors, and to build a definite roadmap for the real estate market through innovative ideas that come from those who open their minds to possibilities. This year’s edition of the series with the theme, ‘Collaborating for New Heights and National Development’ also aims to produce high level industry discourse that will significantly improve the knowledge, performance and results of real estate stakeholders and participants.

“RIS 2018 seeks to garner diverse industry knowledge to enhance real estate industry insights and proffer solutions which will have a direct influence on the real estate sector and its players across the value chain. “This year’s edition will adopt a multi-sectorial and related stakeholder approach, drawing case studies from real estate, oil & gas, finance, legal etc. We expect that by providing a platform for stakeholders to connect and discuss, leaders and real estate stakeholders will be inspired to new heights and new opportunities in the years ahead,’’ Okonjo assured. She hopes that this year’s multisector approach will consolidate last

Opportunity opens for offshore investors as firm offers property finance

year’s edition which held in London, UK aptly themed, ‘Taking Nigeria to the world’. Since its inception, the annual RIS has hosted over 800 private investors and notable key speakers including Jim Ovia, chairman of Zenith Bank, Atedo Peterside, Myma Belo Osagie, Dan Agbor both of Udo Udoma and Belo Osagie; Fabian Ajogwu, and the British Trade Department Envoy. The 2017 edition hosted at the prestigious Landmark Hotel in London under the chairmanship of Peter Obi, former governor of Anambra State, had in attendance industry leaders, leading Diaspora professionals and entrepreneurs.

or Nigerian offshore investors, property finance opportunity is knocking on doors for investment in one of the world’s mature and burgeoning real estate markets. This is a compelling opportunity for investors in an environment like Nigeria where property finance is difficult to find and, where available, too expensive to afford. This is what Dave Kubak Consulting, a new real estate brokerage firm, is in Nigeria to offer potential investors in the US property market, especially in Chicago. “Financing can be a little tricky if you’re not sure how to go about it or who to talk to. What we do at Dave Kubak is to help clients gather all the requirements necessary to access financing from our lenders who can approve up to $5 million for residential and investment property”, explained Yele Kufeji, the company’s CEO. Kufeji is a licensed real estate broker in the State of Chicago with Berkshire Hathaway, but has just set up Dave Kubak Consulting in Lagos, Nigeria to offer financial services. He told BusinesDay in Lagos that “interest rates are between 4 percent and 8 percent with a variety of options within a 30-year loan period. These include 5-year fixed rates with 25-years fluctuating, 7-year fixed rates with 23-fluctuating, and 30-year fixed rates”. Dave Kubak advises and helps to structure clients’ applications that would make lenders offer them lowest rates possible. It also helps clients shop for the kind of property that doesn’t require a monthly contribution from clients personally to cover the mortgages and taxes. In other words, the company helps clients to get a property where renting out to tenants would most definitely cover their monthly commitments. Kufeji offered insights on why Chicago was the new investment destination where both local and global market fundamentals were not only looking up but also driving up prices in favour of buy-to-let investors. In his reasoning, the sentiments and uncertainty of Brexit is seen to create a ripple effect across major cities in the world. Frankfurt, for example, has seen real estate values rise by over 50 percent since 2015 which is huge for an already developed major city. “A recent study by Swiss Bank, UBS, says Hong Kong has the most overvalued housing market while Chicago offers bargains, suggesting that real estate prices in most big cities remain too high, even though they’ve slipped lately”, he noted. According to him, the UBS Global Real Estate Bubble Index has found that Chicago is the most undervalued major city in the world in a list that includes Toronto, London, Paris, Zurich, New York, Hong Kong and Frankfurt. Kufeji projected that the Obama Presidential center to be completed in Chicago in 2020 was certainly going to drive real estate values across the city. “The election of Jay Pritzker as governor of Illinois is a promising sign for the state. Pritzker is a business man whose family owns one of the largest hotel chains in the world”, the Hyatt Hotel Group, he said.

Tuesday 27 November 2018

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BUSINESS DAY

Economic, socio-cultural factors drag Nigeria mortgage industry Stories by Endurance Okafor

roperty analysts polled in a BusinessDay survey linked the poor performance of Nigeria’s mortgage industry to legal, economic and socio-cultural factors coupled with lack of advocacy, as studies have shown that only one out of 15 adults in the country understand what mortgage means. Nigeria with about 20 million units housing deficit has one of the lowest mortgage to Gross Domestic Product (GDP) rate at about 0.6 percent, which obviously lags Ghana’s 2 percent, South Africa’s 30 percent, the U.S and UK rate at 60 percent and 70 percent respectively. Abiodun Akanbi, Head Strategy at Infinity Trust Mortgage Bank said “in the society when you say you want to borrow to buy a house, people will look at you and ask; why will you go and borrow to buy a house? And that is one of the social issues, and it is still there, whether we like it or not.” According to Association of Housing Corporation of Nigeria (AHCN), underdevelopment of Nigeria Mortgage sector in driving home ownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “I have seen a lot of my friends who I tell to come take a mortgage and they will say no because they have one

plot and they intend to be building the house gradually,” Akanbi said. He explained that his friends do not understand the fact that they might not finish the house in the next 10 years but with mortgage they can move into the house immediately. “And they can start enjoying the house and pay for it for say the next ten years. Life itself is borrowed so why can’t you borrow to have a good life, as far it is within your legal income you can repay back the loan, so that is one of the issues,” he added. Although mortgages are also loans which mean that they come with interest rates, and typical mortgage interest rates in Nigeria range between 7-10 percent for the Federal Mortgage Bank 0f

Nigeria (NHF) and between 15-25 percent for commercial mortgage institutions. Property experts say the rate is one of the highest in the world. Aside from the interest payable, the potential buyer must also have a certain percentage of the total amount needed for the purchase readily available; this amount is known as equity and should range between 30-70 percent of the total cost of the home. So, in Nigeria for instance, a Mortgage of N25million at 15 percent per annum interest rate means repayment of N37.9million in interest only over the 15year period, which is even more than the principal itself. The trick here is that at 15 percent interest rate, it takes a lender approximately 7years to recover the

N25million it lent to you. That is about 6 years if the interest rate is 20percent. With that sort of interest rate, many are left with the question of if anyone can, not just afford a mortgage but be willing to take one on even with a steady salary. This therefore refers to the economic factor that drags the sector. “The spending power of an average Nigeria is another issue, if you ask an average Nigerian how much he can actually put down to use in investing in property even in a situation where affordable housing could be an option, you will be shocked,” Hakeem Sodiq CEO of Zama, a real estate advisory firm said. Another industry analyst who asked not to be quoted due to his office said the

social-cultural, the economic and more importantly the legal issues peculiar to Nigeria is one of the factors that is limiting the growth of the industries . “How many Nigerians can tell you that they can confidently use 30 percent of their salary to pay for property? But if the government can provide infrastructure that can help reduce cost of developing houses, this can make it easier for an average Nigeria to access property at a rate affordable to them over time,” the analyst said on the condition of anonymity. Speaking on the sector’s legal frame work in relation to the non-existence of foreclosure law in Nigeria, Akanbi said it is one of the biggest problems of the industry. “If you lend out money,

and the borrowers refused to pay, you are at the mercy of the debtors because you cannot reforclose, as there is no foreclosure law in Nigeria, that is the major problem, and because people know that there is no foreclosure law, they just go to court, get an injunction and trail for 6, 7 years,” the head strategist said. Another industry expert who pleaded anonymity cited that the administration of the land use act means that everything must be issued by the governor, which according to him takes a lot of time. “Then when you want to register a mortgage you must also have the governor’s consent, it comes with the cost. Most of the land registering we are still using are old, some are brazing up by using technology. The transaction cost of perfection sometimes gets between 7 to 8 percent of the loan amount; you will see a situation whereby you want to borrow N10 million and you need another N1 million or N700,000 as perfection cost,” the analyst explained. On the way forward in bridging Nigeria’s housing deficit specifically through mortgage, the property industry experts cited advocacy and government intervention. “I think it is an industry that has a lot of potential to grow, it is a sector that can turn around Nigeria, because it creates labour for both formal and informal groups. So one of the things government can do for the prosperity of this nation is to make the housing sector as vibrant as it can be,” Akanbi concluded.

FMBN inches closer to N500bn recapitalisation, recovers N3bn debt

he Federal Mortgage Bank of Nigeria (FMBN) seems to have made significant progress in its loan recovery drive, as the bank has reported 25 percent increase in the loans retrieved so far in 2018. The nation’s mortgage bank reported the recovery of N3billion so far this year, compared to the N2.4 billion it recovered in 2017, the Managing Director of FMBN, Ahmed Dangiwa stated this at the recently held 2018 Annual Management Retreat with the theme; Improved Transaction Turnaround Time: Getting it Done. Also, to strengthen the work done so far, the Bank is working in partnership

with the Special Presidential Investigation Panel for the Recovery of Pubic Property in a move that is likely to recoup N43billion from the Bank’s debtors within the next 18 months. “The current Executive Management of FMBN has notched significant milestones in its strategic plan to reform and reposition the Institution as a more effective provider of safe, decent and affordable housing for Nigerians despite many challenges,” Zubaida Umar, Group Head, Corporate Communications, FMBN said. Specifically, the MD of FMBN, Dangiwa revealed that after twelve years of failed attempts at institu-

tional restructuring, Management’s proactive stakeholder engagement drive has resulted in the successful passage of key amendments to the Laws establishing the Institution and the National Housing Fund (NHF) by both chambers of the National Assembly. T h e a m e n d e d l aw s, when assented to by the President, would birth a new, more independent and financially stronger FMBN with a robust capital base of N500 billion. Me a n w h i l e, Ni g e r i a government had disclosed plans to inject N500 billion ($1.4 billion) into its low-cost mortgage lender over the next five years in an effort to spur home

ownership that has failed to take off in Africa’s most populous nation. To this effect the government obtained a N9.1 billion ($25 million) loan from the World Bank to run the Nigerian Mortgage Guarantee Company (NMGC), pending equity investments by the owners. “The additional liquidity and operational flexibility will greatly enhance FMBN’s capacity to more effectively deliver on its mandate to provide access to affordable mortgage finance for home ownership by Nigerian workers,” Dangiwa said in a statement. He reported that the Bank was strengthening its collaboration with its key

stakeholders, especially the labour unions, whose members constitute the bulk of contributors to the National Housing Fund Scheme. This has culminated in the commencement of a need-targeted housing delivery program across the country – the National Affordable Housing Delivery Programme (NAHDEP) for Nigerian workers, in collaboration with the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA). The MD said the groundbreaking ceremonies have been done and construction work has commenced in earnest in five states, spread

across the six geopolitical zones of the country. “Others are in the pipeline as we intend to cover every State across the country. Part of the central focus is to establish a template for affordable housing delivery in Nigeria,” he said. Accordingly, the implementation concept is said to be unique with the housing designs and bill of quantities (BoQ) directly commissioned by the Bank to ensure the profit motive is greatly minimized. “This template has given us the leverage to guarantee that the selling prices for the housing units range between N3.1m and N8.3m for 1, 2 and 3 bedroom dwellings,” Dangiwa explained.

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

May and Baker expects revenue to hit N50bn by 2023 ... Q3 net profit rises 90.97 percent ...Rights issue to magnify shareholders’ earnings BALA AUGIE

first glimpse of May and Baker Nigeria Plc shows there has been marked improvement in profitability and margins since 2015. Investors could conclude that the drug maker is able to turn each Naira invested in revenue in generating higher profit while creating assets to propel bottom line. The company’s lower gearing ratios, consistent earnings growth, lower cost,

and strong working capital position means the additional capital it plans to raise will be used to further add impetus to shareholders earnings in form of higher dividend payment and share appreciation. May & Baker is raising N2.45 billion in new equity funds through a rights issue to existing shareholders. The company is offering 980 million ordinary shares of 50 kobo each at N2.50 per share to existing shareholders. The drug maker intends to use proceeds of the Rights issue on some key projects.

For instance, over N400 million of the expected N2.45 million will be used to finance part of its equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production. Over N500 million will be expended on capacity expansion for one of its cash cow products, paracetamol for which the firm is building a dedicated plant. Marketing and brand is expected to take over N500 million. “Our new strategic focus since 2017 is to build an international brand within the

sub Saharan Africa,hence we adopted a new vision, to become a leading healthcare brand in sub Saharan Africa,” said Nnamdi Okafor, managing director, May & Baker Nigeria Plc. There are possitve prognoses for shareholders and investors as the drug maker expects quantum leap in revenue and profit in the next five years. It expects to hit N50 billion turnovers by 2023. “These projections have taken cognizance of the maturity of some of new in-

BD MARKETS + FINANCE Analysts: BALA AUGIE

vestment in vaccines, sickle cell drugs and herbal medicines,” said Okafor. Financial Performance in the last five years For the first nine months through September 2018, May and Baker recorded net income of N414.75 million, this compares with N218.50 million recorded in the corresponding period of September 2017, N44.39 million in 2016, and N41.25 million in 2015. Earnings Before Interest and Tax (EBIT) followed the same growth trajectory as it surged to N892.75 million in September 2018l from N470.40 million recorded in 2015 and surpassing prerecession levels of 2014. The Nigerian drug maker has been turning each unit of sales into higher revenue as net profit margin, a measure of efficiency, improved to 6.33 percent in September 2018 from an all time low of 1.29 percent in 2014. EBIT margins, a measure of operating efficiency, improved to 13.64 percent in September 2018, from an all time low of 8.23 percent in 2016, albeit lower than the 15.7 percent in 2014. Gross margin increased to 36.47 percent in the period under review as against 32.75 percent recorded in 2014, which means the company has enough money to pay operating expenses. The stellar performance of May and Baker means it has overcome the headwinds brought on by the sudden drop in crude oil

price of mid 2014 that stoked a severe dollar scarcity that crippled many businesses. Hence, the country slipped into its first recession in 25 years in 2016. However, the combination of a rebound in crude oil price and output, and the introduction of a flexible exchange rate by the central bank helped the country exist the recession in the third and fourth quarter of 2017. May and Baker can easily pay interest on its outstanding debt as evidence in a favorable interest coverage ratio. Interest coverage cost improved to 2.97 times operating profit in the period under review, from 1.10 times earnings in September 2015. 1.5 is generally considered to be a bare minimum acceptable ratio for a company and the tipping point below which lenders will likely refuse to lend the company more money, as the company’s risk for default may be perceived as too high. The proportion of debt in the capital structure of the drug maker has reduced as its debt to equity ratio fell to 47.51 percent in September 2018 from 80.54 percent in 2017. Total debt (both long and short term) reduced by 29.45 percent to N1.82 billion in the period under review as against N2.58 billion the previous year. Debt levels could further drop as the company plans to use about N400 million out of the proceeds of the rights issue of N2.45 billion, to offset part of its current loans portfolio while the remaining will be used to buoy working capital. “We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors. The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.

Tuesday 27 November 2018

LegalPerspectives

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With

BUSINESS DAY

Odunayo Oyasiji

Case Review

Union Bank of Nigeria Plc V. Awmar Properties Limited (2018) Lpelr-Sc.453/2017

hat to note: This is a matter that was recently decided at the Supreme Court of Nigeria. It bothers on issue right of a buyer i.e. remedies available to a buyer where the seller refuses to deliver the goods after payment of the purchase price. It also touches on the issue of express and implied contract. Facts Yaman Fuel Filling Station obtained various loans from the appellant and on this basis the filling station was legally mortgaged to the appellant as security for the loans. Due to the default in the repayment of the loan and in a bid to recover the indebtedness of the company (Yaman Nigeria Limited) the appellant exercised its right of sale by selling the filling station to the respondent for the sum of N300 million. The respondent paid the money in four instalments of N150 million (on November 23, 2015), N60 million (on November 26, 2015), N10 million (on November 27, 2015 and N80 million (on November 27, 2015). On this basis, the appellant handed over the title documents to the property (filling station) to the respondent. The respondent requested that the property be physically handed over to it. However, the appellant was unable to hand over the physical possession of the property to the respondent as the company resisted the move to physically handover the filling station to the buyer (respondent). In the light of the foregoing, the respondent approached the court for the

recover y of the purchase price of N300 million that was paid to the appellant. This is because the appellant was unable to handover the physical possession of the property to the respondent. The suit was brought under the undefended list procedure. The undefended list procedure as in Order 23 Rules of the High Court of the Federal Capital Territory, Abuja (Civil Procedure) Rules states that “1. Whenever application is made to a Court for the issue of a Writ of Summons in respect of a claim to recover a debt, liquidated money demand or any other claim and the application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the Court shall, if satisfied that there are good grounds for believing that there is no defence thereto enter the suit for hearing in what shall be

Issues for determination

he issues on which the Supreme Court determined the matter are – “1. Was the Court of Appeal right, given the circumstances of the case when it decided that transfer of the property coupled with physical possession are crucial ingredients of the purchase or sale agreement between appellant and the respondent? 2. Was the Court of Appeal right when it held that the conflicts in affidavit evidence of the appellant and respondent can be resolved

with the aid of documentary evidence without calling oral evidence to resolve the conflict in an undefended list application? 3. Was the Court of Appeal right when it held that the trial High Court did not violate appellant’s right to fair hearing when the trial High Court Suo Motu raised the issue of forfeiture of purchase price paid by the respondent and resolved same against the appellant without affording the appellant any hearing on the issue?”

called the “Undefended List” and mark the Writ of Summons accordingly and enter thereon a date for hearing suitable to the circumstances of the particular case.” The above style is meant to avoid a full blown trial where the court is convinced that there is no reasonable defence on the side of the defendant. The court being convinced issued judgement in favour of the respondent and the Court of Appeal affirmed the judgement too. The appellant being dissatisfied then appealed to the Supreme Court.

Argument/submissions

earned counsel to the appellant argued that the affidavits of the parties conflicted – especially with regards to the issue of vacant possession of the property that was sold to the respondent. Therefore, the Court of Appeal should have ordered that the case should be transferred to the general cause list. He also submitted on the issue of whether the transfer of the property and physical possession of the property are essential ingredients of the sale of the property to the respondent, he submitted that the appellant

Judgement of Court

he Supreme Court in the course of determining the appeal held that – “It must be made clear that one cannot make a proper sale of immovable property which he knows is encumbered but fails to disclose same to the buyer. This kind of behavior is fraudulent and the seller cannot be allowed to keep the money he collected from the sale. I agree with the Court below that the transfer of the property from the seller to the buyer in a document cannot be the end of the sale. The seller must take steps to put the buyer into physical possession free from all encumbrances. Where the seller fails to put the buyer in physical and peaceable possession of the property, the buyer is entitled to sue for damages plus restitution of the money paid to the seller with interest…I am fully in agreement that, the appellant, having collected the sum of

N300,000,000 being the purchase price of the filling Station from the respondent, and having failed to put the respondent in possession of the property due to the disagreement between the appellant and his client the original owner of the filling station, the Respondent was firmly entitled to sue for the return of its money.” The court further held that “It needs be said that the appellant cannot escape from responsibility merely because in the agreement, the terms implying the physical handover of the property were not engraved in stone. The clear covenant by the parties was evident from the exhibits showing what the parties had intended to be in the agreement between them and there is no running away from that. In other words, without the physical possession handed over to the respondent upon that payment of the purchase price the trans-

did not enter into any agreement with the respondent indicating that the physical possession of the property will be handed over to the respondent. The counsel to the respondent on the other hand argued that the Court of Appeal was right in affirming the judgement of the lower court and holding that there was no conflict in the affidavit of the parties. He further noted that handing over the physical possession of the property to the respondent was part of the contract and very crucial to the sale agreement. However, the appellant have failed to hand over the physical possession.

action cannot be explained in any other way as there is nothing else to explain what the money parted from one to the other was meant for and the appellant has not proffered another explanation to cover the payment by the respondent and the receipt thereby for the N300,000,000.00.” Conclusion There are some terms that can be impliedly read into a contract and parties cannot rely on the fact that they were not expressly stated to deny their existence. The need for the physical hand over of the property that was sold was held to be an implied part of the sale agreement between the parties. Furthermore, the buyer who hasn’t been given possession of what he bought have the right to approach the court to claim damages and also recover what the money he paid for undelivered goods.

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2019: People’s Trust presidential candidate pledges to expand economy to $4trn ...to pay N50,000 minimum wage for workers YOMI AYELESO, Akure

he Presidential Candidate of People’s Trust (PT) Gbenga OlawepoHashim has assured workers in the country that if elected as president in 2019 ,he would pay N50,000 as minimum wage. Olawepo-Hashim who stated this in Akure, Ondo state capital, during the inauguration of South West Women for Hashim, added his government would create four million jobs yearly. He said: “In 1983, when Nigeria first had N125 minimum wage, the equivalent of N50, 000 today. So if we are worth N50, 000 at the first anniversary of our presidency, we will only be giving what was given in 1983. “So, those who are complaining about paying N30, 000 minimum wage, tell them that they lack initiative and cannot think as far and as seriously as those who govern Nigeria in 1983. “We will pay workers minimum wage, and will celebrate our first anniversary with N50,000 minimum

Olusegun Obasanjo, a former president (L) cuddling one of the grandchildren of Atiku Abubakar, presidential candidate of the People’s Democratic Party (PDP) and former vice president, at the official turbaning of Atiku as the 7th Waziri of the Adamawa Emirate Council, Sunday.

wage for workers.” He revealed that he would accord women the 35 percent affirmative in terms of appointment and elected positions. “I fought for this when I was Secretary of Youth and Women sub-

Ortom urges Buhari to caution his aides against unguarded utterances Benjamin Agesan, Makurdi

enue State Governor, Samuel Ortom has urged President Muhammadu Buhari to caution his aides against unguarded and inflammatory statements that could rekindle embers of discord among ethnic nationalities in the country. He stated this today at the Benue Peoples House, Makurdi in a closing remarks at the Benue State Stakeholder Engagement on Local Level Security and Conflict Prevention Mechanisms organised by the technical committee on farmers/herders crisis under the National Economic Council, NEC. The governor noted that such comments especially as it concerns farmers and herders’ crisis further raise suspicion and apprehension among Nigerians and could aggravate the already tensed atmosphere in the country. He stated that already, the non arrest of prime suspects in the Benue killings by security agents despite several appeals to that effect had created room for suspicion, adding that making inflammatory statements on the subject matter further gives credence to allegations of connivance and collaboration by those in high places. He commended the new steps

taken by the Ministry of Defense by setting up a fact finding committee to identify the remote and immediate causes of the herders invasion of the state with a view to finding lasting solution to same, stressing that his initial steps of apportioning blames were incorrect. The Governor acknowledged the untiring efforts of Operation Whirl Stroke in restoring peace in the state, stressing however, that boundary areas of neighbouring states needed to be further safeguarded to give more confidence to the displaced persons to return home. Earlier while addressing another committee on farmers/ herders crisis from the federal ministry of defense led by Brigadier General Umar Ibrahim, Governor Ortom noted that Benue indigenes who live in other states obey the laws of those states, pointing out that the Benue Open Grazing Prohibition and Ranches Establishment Law should also be respected by those who wish to rear cattle in the state. Leader of the NEC delegation and secretary of the committee, Andrew Kwasari, and that of the committee from Ministry of Defence, Brig. General Ibrahim, promised to convey the submissions of the stakeholders to the appropriate authorities for necessary action.

committee of transition of beginning of President Obasanjo in 1999. We realised that in the cabinet, there were more than 30 percent almost 35 percent of women in that cabinet when Obasanjo was elected. “I will exceed that projection

when elected as president because I once fought for it. We will achieve that and we will ensure that affirmative percent,” he assured. Apart from this, the People’s Trust Presidential candidate, promised to put an end to cervical cancer if

elected president, saying his government would sponsor vaccine for all girls from age nine to age 25. “We will vaccinate against cancer and that is what I am going to do for all Nigerian girls and young women. “They will have the vaccines against cervical cancer when I am elected president in 2019. As commander in chief, I will do it within 6 months of being sworn-in. This is a major program for women that will protect them in the future against falling ill to cancer.” Olawepo-Hashim, a former deputy national publicity Secretary of the PDP also promised to create four million jobs annually if elected president in 2019 and said: “I’m somebody who knows how to create jobs. I will create jobs for your children. “I will create four million jobs every year by removing the obstacles to investment in Nigeria because it is only the private sector that can create jobs, not the government. “We are going to expand the economy from the $510 billion to a $4 trillion economy. That will be achieved with the New Nigeria Economic Development Plan.”

Metele Massacre: APCO condemns APC for accusing Atiku of ‘selfishness’ Innocent Odoh, Abuja

he Atiku Abubakar Campaign Organisation APCO has chided the ruling All Progressives Congress (APC) for accusing former Vice President and Presidential Candidate of the People’s Democratic Party (PDP) Atiku Abubakar of ‘selfishness’ following his prompt response to the massacre of over 100 soldiers of the 157 Task Force Battallion in Metele, Borno State by the Boko Haram sect. The APCO made this known in a statement on Monday made available to BusinessDay even as they

advised the APC to follow Atiku’s leadership and offer tangible support for the military. “Our attention has been drawn to a statement by the All Progressives Congress casting aspersions on Atiku Abubakar, Presidential candidate of the People’s Democratic Party on the day of his birthday and turbaning as Waziri Adamawa. “Incidentally, the APC’s statement accused former Vice President Atiku Abubakar of ‘selfishness’ and ‘mercantilism’ which is very curious as the Waziri dedicated his birthday, not to himself, but to celebrating the 100 or so heroes of the 157 Taskforce Battalion of the Nigerian Army who lost

their lives to Boko Haram at Metele in Borno State,” the statement said. The statement recalled that the Waziri Adamawa asked for anyone who wished to give him birthday gifts to instead endow such on the families of the slain heroes is the opposite of selfishness. It said that ironically, the All Progressives Congress that is now accusing Atiku Abubakar, has not seen fit to pay tribute to these gallant men who gave their lives in order to secure the lives of others. “As a party, they have not issued even one statement condoling with the slain or their families, neither have they offered any tangible support to the families of these fallen heroes.

2019: Atiku yet to fix date for campaigns, says Lagos PDP, group Iniobong Iwok

he Lagos State chapter of the People’s Democratic Party (PDP) and an Atiku’s presidential campaign group, Atiku mandate, has denied media report that former vice President, Atiku Abubakar, would kick-off his presidential campaign from Lagos State on Wednesday, stressing that it was unaware of such move. There were widespread media reports last weekend, stating that the newly turbaned Waziri of Adamawa, would kick-off his presidential campaigns from Lagos on Wednesday November 28 for the Southwest geopolitical zones. While Kano would hold on De-

cember 1, for Northwest, Enugu December 5, for Southeast, Ilorin December 8 for North-central zone, Port-Harcourt December 12, Southsouth and Bauchi December 15 for Northeast. Atiku, the report further stated, was also expected to start a marathon state campaign shuttle from Sokoto on December 18. But the chairman of the PDP in the state, Dominic Agboola, in an interview with Business day Monday, denied such report, stating that the party was unaware of any plan to host Atiku and his campaign team in the state on Wednesday. Dominic stated that the campaigns schedules of the former Vice president has not been released, adding that

party was however ready to start full campaign in the state ahead of the next year’s general elections. “We are not aware of Atiku coming to Lagos to campaign on Wednesday, it has not been finalised, his campaign schedule have not been released and I have not seen it. “But campaigns for next year’s elections have begun and we are ready for the campaigns”. Dominic said. Also speaking in similar vein, national chairman one of an Atiku’s campaign group, Atiku mandate and a member of Atiku’s strategy media campaign committee, Lawal Tunde, denied knowledge of the former vice president visit to the state, stressing that no decision had been taken on his campaign schedules.

Tuesday 27 November 2018

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BUSINESS DAY

Analysts question Atiku’s ambitious GDP target …only a pro-market president can expand GDP Endurance Okafor, David Ibidapo & Cynthia Ikwuetoghu

otivated by the growth potential of the Nigerian economy, Atiku Abubakar, former vice president of Nigeria and presidential candidate of the People’s Democratic Party (PDP) showed optimism about the country achieving a 125 percent growth in real GDP size by 2025, compared with the estimated year-end (2018) size of US$400 billion. This was stated in his manifesto entitled, ‘The Atiku Plan’. According to Atiku, “Our policy priority is to build a broadbased, dynamic and competitive economy with a GDP of approximately US$900 billion by 2025. This would raise Nigeria’s GDP per capita from the current levels of approximately $2,000 to $5,000, with additional significant impact on jobs and poverty”. Since 2014, Nigeria’s GDP has declined at an average of 10 percent to $371.8 billion in 2017, from $569 billion. Atiku’s optimistic growth projection will require that GDP grow by an average of 10 percent annually over the medium to long-term. This is, however, 7.7 percent higher than IMF GDP growth projection of 2.3 percent and 7 percent higher than 3 percent projection as stipulated in the 2018 budget. Atiku further highlighted major drivers for achievement of double digit growth in GDP to include enabling business environment, effective public and private investments in infra-

structure and maintain a stable macro-economic environment. BusinessDay analysis of the report shows that the crux of Atiku’s plan is the reduction of dependency on crude oil and strengthening private sector commitment in boosting the Nigerian economy. The former vice president plans to increase flow of foreign direct investment (FDI) into the non-oil sector of the economy by identifying key strategic sectors for FDI, strengthening credit guaranteeing initiatives of InfraCredit, achieving lowest corporate income tax rate and achieving lower transactions costs. “We shall attract and increase the stock of our investment from 15 percent to 35 percent of GDP within 5 years and FDI shall be a key component. “By 2025, we shall increase the inflow of direct foreign investment to a minimum of 2.5

percent of our GDP, as FDI is a critical driver of economic growth especially for a developing economy like Nigeria. It can help raise productivity, competitiveness, and living standards over the long term” Atiku said. “We must begin to visualize a new Nigeria without crude oil,” he concluded. FDI into Nigeria declined significantly by 19 percent on the average between 2014 and 2017. The country recorded a flow of foreign direct investment of $2.3 billion in 2014 while as at 2017, FDI declined by 57 percent to $981.75 million, representing about three percent of GDP as of 2017. Despite Atiku’s flowery promise of expanding the GDP to $900 billion, analysts believe it is easier said than done. Omotola Abimbola, a fixed income and currency research specialist at Ecobank, said:

“Nigeria is still a low income frontier country. Per capital income is still around $2000, so Nigeria growing from $450billion to $900billion in the next five to six years could imply per capital income of about $4000, which would also mean doubling per capital income. But the major thing is, do you have the political will to implement long-term favourable reforms to unlock growth opportunities in the country?” “Going by the forecast by most analysts and organisations, Nigeria is projected to have a GDP growth rate of less than three percent over the next four to five years. Even if you adjust for nominal, they are not forecasting us to grow at anything close to $900billion. So, this target is quite ambitious based on what we currently have in the country, in terms of the growth forecast. At $900 billion, it means that

Nigeria will be growing at near double digit level to achieve that target. The most important question is, what are the reforms that can take us to that level?” Abimbola asked. Also responding, Rafiq Raji, chief economist at Macroafricaintel Investment , said: “Even if you grow by 10 percent consecutively for seven years, it will still not be double the current GDP. So, it clearly shows that it is a little bit ambitious, but to be realistic, it is not likely that we will be able to achieve that target, although it is impressing to have that ambition.” Gbolahan Ologunro, research analyst at CSL Stockbrokers, has a slightly different position. “The critical policy priority of the main opponent to the ruling party, Atiku, towards achieving a GDP of $900bn by 2025 is not unrealistic given the vast amount of natural and human resources that the country is endowed with, majority of which are still largely untapped. “However, achieving this target will require the implementation of auto centric and promarket policies that will create job opportunities for the teeming population, eliminate structural rigidities, improve the productivity of the non-oil sector and attract both domestic and foreign sector investments into the critical sectors of the economy” Ologunro recommended. He said the huge supply gap evident in major agricultural products produced locally suggests that diversifying the economy from oil still remains a major catalyst that can improve the contribution of the non-oil sector to economic growth.

LCCI insists only private sector-led economy can engender development …says spending on refineries economic waste JOSHUA BASSEY

he Lagos Chamber of Commerce and Industry (LCCI) says only private sector-led economy can pave the way for real growth and development, noting that the billions of public funds spent on such public enterprises such as refineries are tantamount to economic waste and need be halted. The nation’s four refineries have been plagued by improper maintenance and security-related issues,

resulting in gross under performance over the last one decade. Muda Yusuf, director-general of LCCI, spoke in an interview with BusinessDay recently, as well as on a TV programme monitored in Lagos on Wednesday. He said that associated public sector bureaucracy and efficient running of a business enterprise cannot go together. A combination of the both, he argued, cannot produce exciting results. According to Yusuf, the way to engender growth and development

is to ensure that public enterprises, which have direct impact on the economy (such as refineries), are efficiently run, and this can only be guaranteed when the economy is private sector-driven. Yusuf explained that at below 30 percent utilisation, publiclyowned refineries are no longer adding value to the economy but a burden to the government. “Government’s continued funding of the refineries is a burden to itself. There is a lot of logic in privatising them. There are, of

course, areas where the government will continue to play a key role- health, education and social services, but the private sector can better handle the oil sector. “There was a time when the government had shares in banks, but they sold those shares and the fortunes of the banks were turned around. In fact, where you cannot privatise, liberalise. Public sector bureaucracy is not needed in a business enterprise,” said Yusuf. Speaking further, the DG argued that government should focus on

policies and implementation of same to create the right environment that would attract private capital into the economy. As at January this year, Port Harcourt Refinery, according to the Nigerian National Petroleum Corporation (NNPC), performed at 20 percent while the Kaduna Refinery was at an abysmal 4.7 percent utilisation. Similarly, the Warri Refining and Petrochemicals Company Limited ebbed to zero performance but managed to return to 10.70 percent utilisation in August.

BUSINESS DAY

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Tuesday 27 November 2018

Kingsley Moghalu’s vision for Nigeria ODINAKA ANUDU

ingsley Moghalu is a political economist, lawyer, former United Nations official, former deputy governor of the Central Bank of Nigeria and professor of International Business and Public Policy at the Fletcher School of Law and Diplomacy, Tufts University. He is the presidential candidate of Young Progressive Party (YPP). Moghalu recently released a book, downloadable for free on pdf, in which he articulated his Build, Innovate and Grow (BIG) vision for Nigeria. Moghalu’s thoughts in this book are not essentially his manifesto but what he thinks Nigeria must do to fix its leadership question. Moghalu pays an unusual attention to leadership in this book. He believes that Nigerians must confront and overcome the critical challenge of leadership if their democracy is to yield good governance; if the entrepreneurial talent expressed in the narrative of an Emerging Africa is to yield true economic transformation, and if the dynamism and ingenuity of Nigerians are to translate into an explosion of innovation that can make the people competitive in a globalised world. “We have seen impressive leadership by Nigerian entrepreneurs. These businessmen and women are altering our national narrative from one of poverty and foreign aid to one of creativity and wealth creation. Nigerian entrepreneurs are making progress against all odds. But they remain outliers in a sea of poverty, successful not because of good leadership and governance in our country but rather in spite of bad leadership and governance,” he says. “Our country’s leadership problem is located mainly in our venal politics. But it is precisely this space that determines what kind of society, economy, education and health system that we have. The first order of business is that of our minds. We must reinvent the Nigerian mindset. Our minds determine whether or how we understand what leadership means or doesn’t. Our minds determine what kind of worldview we bring to the task and responsibility of leadership. And our minds determine whether we have, or can acquire, the character and competence of leadership,” he states. Moghalu says that great leadership must be transformational. The

Kingsley Moghalu

YPP presidential candidate points out that he always approaches the subject of leadership with the end in mind. “What, for example, would be said about my service after I have completed a specific leadership task or responsibility?” he asks. “Indeed, to envision more radically, what will be said at my funeral? I have applied this understanding to every leadership role in which I have had the privilege to serve – from national reconciliation and nation-building work by the United Nations in New York, Cambodia, Croatia and Rwanda to institutional and management reform in the UN; from building global partnerships and raising billions of dollars for social investments in developing countries by The Global Fund in Geneva to structuring and facilitating investments in emerging markets; from leadership roles in monetary policymaking and banking sector reform in Nigeria in the wake of the global financial crisis to serving as a professor in one of America’s premier universities, my vision has always been to leave the situation, institution or assignment I was tasked to handle much transformed from where I met it,” he recounts. He believes that leadership is about utilising appointive, elective or situational authority to envision, to inspire, and to take calculated risk. For him, a leader’s

task is to take societies, family units, organisations or institutions from A to Z or whatever point in the 26 alphabets is relevant, necessary, and possible. Moghalu believes that Nigeria’s leadership jinx flows out of three conundrums, which are ‘us versus them’, the ‘power versus responsibility’, and the ‘loyalty versus competence’ syndromes. He explains that the ‘us’ v ‘them’ is the problem of ethnic religious or other atomistic identities that define the acquisition or exercise of political power in African countries. “An extreme attachment to these primordial identities creates factions. This problem exists even in mature democracies and economically advanced countries such as the United States, Belgium and Spain, but because these countries have already achieved advanced economic progress, the problem is an imperfection or a characteristic in their democracies, and is better managed in the wider national interest. In Nigeria it manifests as ethnic or religious identity politics in which politicians feel they can only trust persons of their tribe or faith. This narrow worldview is a foundational problem that has prevented the development of exceptional leadership. The effect of these divisions on leadership selection and practice is that contests for political power in Nigeria

are based not on ideology or clearly articulated leadership goals, but are in reality contests for ethnic or religious dominance.” He states that political power obtained on this basis can hardly be exercised as transformational leadership, as it breeds a ‘governance’ culture of patronage based on divisive identities. On ‘authority v service/power v responsibility’, he says in Nigeria, as in many other African cultures pre-colonial rule, the power of traditional kings was absolute. This cultural reality has not adapted well to concepts of modern statehood, democracy, and the checks and balances offered by the separation of executive, judicial and legislative power, he laments, stating that political leadership is often perceived in Nigeria more as authority than service, as raw power rather than responsibility. He explains that this cultural reality is beginning to change, however, in a gradual but irreversible direction as democratic practice matures toward substance rather than the mere formality of holding elections. This power/responsibility conundrum is also reflected in a prevalent culture of sycophancy in political leadership, he elucidates. “This culture of prioritising a place in the good graces of a leader’s ego over actual work performance creates a strong incentive for leadership failure. (‘L’elat c’est moi’) (‘I am the State’), as the French King Louis XVI famously stated. Many Nigerian political leaders have this mindset.” On ‘loyalty v competence’, Moghalu explains that the ‘us versus them’ instinct combined with that of ‘power versus responsibility’ creates an exaggerated need for Nigerian leaders to surround themselves with ‘loyal’ aides. Often, personal loyalty is reified above competence because career politicians want to feel secure in the loyalty of subordinates with whom the leader is personally acquainted, he says, pointing out that this tendency often excludes competence from a leader’s immediate orbit, precisely because transformation is not the leader’s real priority. On the contrary, he continues, African leaders who have placed a strong accent on technocratic competence in countries like Rwanda and Nigeria during the presidency of Olusegun Obansanjo from 1999 to 2007, have been able to achieve transformational or at least significant progress, in particular in economic management, which is Africa’s real contemporary challenge.

What is the way out of the conundrum? Moghalu suggests a citizen-solutions approach. “Fortunately, democracy offers a great oppo`rtunity for an improved process of leadership selection. This brings to my mind the role of the citizen. In a normal scheme of things, it is leaders that shape the destinies of nations, but in functioning democracies, citizens act as a check on leadership performance. In a country such as ours, then, where so-called leaders have performed so poorly, it is time for citizens to stand up for their own future. “Our citizens must exercise their democratic rights more effectively and make choices informed by objective leadership selection criteria. That criteria need to include character, competence, and relevant experience, as well as the track record of persons seeking positions of leadership. To do so, voters must understand what really is in their best interest. He suggests that a paradigm shift in leadership selection will require voter education by civil society organisations. “It calls for increased demands for democratic accountability by citizens and civil society, the institution of a real social contract between states and citizens as demanded by the latter, and an all-important emphasis on leadership training for the up and coming generation of youth who we should want to be real leaders, not rulers, of tomorrow,” he adds. He articulates that the next president of Nigeria must take the following leadership actions beginning on Day 1 of his/her four-year term of office: Communicate clear goals based on a unifying vision of Nigeria’s national destiny; Uphold high ethical and moral standards of governance; Lead by example based on the principles of transformative leadership; and ensure the execution of the appropriate training for the effective management that must support such transformative leadership across the length and breadth of Nigeria’s public service. The president must personally (not delegate ministers or other government officials) hold regular town hall meetings across the country to communicate a new vision of leadership and governance in Nigeria and get a 360-degree ‘leadership audit’ from the citizens of Nigeria. He must support and empower the ‘Office of the Citizen’ to hold the government and governance accountable to the citizens of Nigeria, Moghalu further says.

Tuesday 27 November 2018

Harvard Business Review

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hen you’re tired, you’re less effective at your job — it’s as simple as that. To prioritize sleep, start by accepting that working more doesn’t necessarily mean you’re doing better work. Sleep deprivation takes a toll on your cognitive abilities, whether you notice the effects or not. Your caffeine consumption can be a good litmus test: If you need coffee just to make it through the morning, or even the afternoon, that may be a red flag. Make a plan for how you’re going to sleep more. Some

Make your out-of-office message a little more personal

will speak to your audience, like an article or a new piece of research. It could be related to taking a vacation (there are lots of great stats on why time off is so important!) or something that potential clients might be interested in. A personal — but still professional — message allows you to connect in a new way with colleagues, clients and vendors.

(Adapted from “Why You Should Put a Little More Thought Into Your Out-ofOffice Message,” by Michelle Gielan.)

simple ideas: Set an alarm for when you’ll put down your work and leave the office. Stop using devices at least an hour before you go to bed. (Maybe even go to bed early once in a while.) Start the day with a short to-do list of essential tasks — and once it’s done, go home. Remember, there will always be more work to do tomorrow.

(Adapted from “You Know You Need More Sleep. Here’s How to Get It,” by Christopher M. Barnes.)

isappointments are inevitable and unpleasant — a missed promotion, a failed project, a poor investment — but you can always learn something from them. To constructively deal with your next setback, think through what happened. Distinguish situations that were predictable and preventable from those that were unavoidable and beyond your control. Ruminating over something that didn’t go your way — and that you couldn’t control — will only frustrate you further. For situations that you could have handled differently, consider them in positive terms: What can you do differently next time? What lessons can you learn from the mistakes you made? And remind yourself of what’s going well in your life, so you don’t let the disappointment take an outsize role in your brain. It might sound like a cliché, but keep the setback in perspective — and try to let it go. You may be tempted to play the situation over and over in your head, but staying preoccupied with it will only create unnecessary stress.

(Adapted from “Dealing With Disappointment,” by Manfred F. R. Kets de Vries.)

Improve your emotional intelligence with The more you work from home, the more you need to build relationships with colleagues a specific, feedback-based plan orking from

Getting Better at Handling Disappointments

Get. More. Sleep.

Protecting Workers 98%: The U.S. Bureau of Labor Statistics found that 98% of companies have sexual harassment policies in place. + Professional Ties 2 times: Research shows that candidates are twice as likely to be hired for a job through a connection from their professional network than their personal network. + Manager’s Remorse 19%: According to a study from Leadership IQ, companies consider only 19% of new employees to be successful hires. + Health Benefits $1.1 trillion: American companies pay an estimated $1.1 trillion on health insurance costs. + An Action Plan for Climate Change 500: Almost 500 companies around the world have set sciencebased targets to reduce emissions, according to the Science Based Targets initiative.

Tips & Talking Points

TALKING POINTS

ost of us write our out-of-office messages as we’re running out the door for vacation or a business trip. But putting more thought into what the message says can help you build relationships with the people who try to reach you while you’re away. Instead of just including the dates when you’re out and who to email in your absence, consider sharing why you’re gone. Where are you going on vacation, and why did you pick that location? What are you learning at the conference? You can also share a resource that

BUSINESS DAY

t’s not always obvious how to improve your emotional intelligence skills, especially because we often don’t know how others perceive us. To figure out where you can improve, start with a reality check: What are the major differences between how you see yourself and how others see you? You can get this kind of feedback from a 360-degree assessment, a coach or a skilled manager. Next, consider your goals. Do you want to eventually take on a leadership position? Be a better team member? Consider how your ambitions match up with the skills that others think you need to improve. Then

identify specific actions that you’ll take to improve those skills. Working on becoming a better listener? You might decide that when you’re talking with someone, you won’t reply until you’ve taken the time to pause and check that you understand what they said. Whatever skill you decide to improve, use every opportunity to practice it, no matter how small. (Adapted from “Boost Your Emotional Intelligence With These 3 Questions,” by Daniel Goleman and Michele Nevarez.)

home can be a coveted perk (No commute! No interruptions!), but it can also cut you off from coworkers and your friends at the office. How can you combat loneliness when you work remotely? First, make sure you see your colleagues’ faces from time to time. Instead of phone calls, use videoconferencing so that you can see the other person. This helps you read their body language, creating a more natural conversation. Second, don’t skip the small talk. When you work from home, you may try to avoid “wasting time” by keeping the conversation on work topics. But small talk is the cement that creates rapport. So before a meet-

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

ing starts, ask your colleagues about recent vacations, their kids’ sports matches or upcoming wedding plans. These small details can build deeper relationships that are both personally gratifying and professionally beneficial.

(Adapted from “How to Avoid Loneliness When You Work Entirely From Home,” by Dorie Clark.)

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FG’s declining military spending limits... Continued from page 2

Nigeria’s military spending in 1975 at approximately $7 billion, is about four times what has been budgeted in any particular year since 2015. BusinessDay’s findings have also shown that apart from 1975, when Nigeria significantly upgraded its military and acquired some of the equipment still relied on, the last major attempt to re-equip the military was during the regime of Good luck Jonathan, in what has since become an arms scandal. The Military Expenditure Transparency in Sub-Saharan Africa report published last week by the Stockholm International Peace Research Institute (SIPRI) noted that Nigeria was the largest military spender in the region in 1969–80. Its soaring military expenditure in the period was initially due to the Biafran War (1967–70) and later funded by increasing oil revenues. The numerous military coups since the state’s independence also gave the military enormous power and likely partly explain the sustained high level of military expenditure. Nigeria’s military spending peaked in 1975 at $7.0 billion, having grown by 1943 per cent in real terms since 1966. After 1975 it fell rapidly to a low of $395 million in 1989, a 94 per cent decline. With military spending of $1.7 billion in 2017, Nigeria was the fourth largest spender in SSA, behind Sudan, South Africa and Angola.

While Nigeria’s defence budget increased in Naira terms (and on paper), actual value and military spending has been declining in dollar terms, which is the currency of note in international arms purchase. The entire defence budget itself, has also been far from transparent. This has given room to speculations that the post-Jonathan era arms scandal, may also be reoccurring under Buhari’s watch. ThemilitaryoperationagainstBoko Haram in the Northeast as observed in Federal Government budgets from 2015 to 2018, has its own allocation, captured separately from the Ministry of Defence. The components of the multi-billionnairaallocationsarenever provided, at the same time, several emergency funds are committed to the same operation yearly. In 2015, Operation Zaman Lafiya, which preceded the current Operation Lafiya Dole had an allocation of N20.1 billion in the budget. In 2016, the allocation to Operation Lafiya Dole declined 60 percent to N8 billion. The allocation appeared to increase in 2017, but in a rather vague way. Under a heading “Military Operations: Lafiya Dole & Other Operations of the Armed Forces”, a provision of N25 billion was made. In 2018, the same vague heading was used, and the allocation increased to N78 billion. Unlike in the past, it is currently unclear how much of these funds will be committed to Operation Lafiya Dole, which is

concerned with the war against Boko Haram, or the modalities for sharing these funds among the different armed forces operations. How much of these funds are eventually released, and what they are used for remain shrouded in secrecy. Complaints of inefficient equipment and insufficient arms continue to be made by members of Nigeria’s military. Worse still, nothing is known about the $1 billion for which President Buhari sought approval to purchase military equipment earlier this year. From May 2011 till date, at least 30,851 deaths have been recorded involving Boko Haram insurgents, according to BusinessDay analysis of data from the Nigeria Security Tracker (NST), a project of the Council on Foreign Relations’ Africa program. The NST classified deaths in two categories; those involving only Boko Haram which were put at 15,585 deaths and those involving both Boko Haram and state security services, which is 15,266. To avoid double counting, the NST says it “distinguishes between incidents in which one perpetrator is involved and in which more than one perpetrator is involved.” In 2015, when Muhammadu Buhari was sworn in as President, the death rate declined from 8,410 to 1,605 at the end of 2016. It subsequently increased to 1,828 deaths in 2017, and currently stands at 1,269.

•Continues online at www.businessdayonline.com

Tuesday 27 November 2018

CRe African Investments to acquire Nigeria’s Continental Reinsurance ... proposes 30% premium to delist shares on NSE MODESTUS ANAESORONYE

ontinental Re Insurance Plc (CRe Nigeria) on Monday announced an offer for acquisition of all its outstanding and issued shares by CRe African Investments Limited. CRe Nigeria in a notice to the Nigerian Stock Exchange and the Investing Public informed that the Board of CRe Nigeria has received an offer from CRe African Investments Limited (“CRe Investments”), to acquire all the outstanding and issued shares of CRe Nigeria. According to the statement, CRe Investments is making this offer in order to initiate a much needed restructuring exercise for CRe Nigeria, with a view to consolidating the CRe Nigeria’s operations and repositioning it for enhanced competitiveness in the global insurance market. “It is intended that the transaction will be executed through a Scheme of Arrangement (the “Scheme”), under Section 539 of the Companies & Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004 and other applicable rules and regulations.” The notice says that CRe Investments is offering N2.04 per share for the

10,372,744,314 ordinary shares of 50 kobo each or 1 ordinary shares of US$1 each in the capital of CRe Investments for every 176 ordinary share of 50 kobo each held in CRe Nigeria. It says the proposed Scheme Consideration represents a 46.76 percent premium to the last traded share price of the Company on October 5, 2018, being the last business day prior to the date the proposal was received from CRe Investments and a 36.00 percent premium on the trading price as at close of the last business day on November 19, 2018. CRe Nigeria said it has received the Securities & Exchange Commission’s No Objection to the Scheme, and also subject to the approval of the shareholders at a Court-Ordered Meeting as well as the sanction of the Federal High Court. The company assured that further details will be communicated to the market upon relevant approvals from shareholders and regulators, while also urging its shareholders to exercise caution when dealing in CRe Nigeria’s shares until a further announcement is made. Continental Re is one of the two local reinsurance companies in Nigeria, with impact cutting across African markets.

Local vehicle assemblers make no headway... Continued from page 2 Ahmed Lawan Kuru (r), managing director/CEO, Asset Management Corporation of Nigeria (AMCON), receiving an award from the president of the Alumni Association of the National Institute (AANI), Khaleel Bolaji, at the Presidential dinner for the graduating senior executive course 40 participants at Army Headquarters Command Officers’ Mess, Asokoro, Abuja.

Airtel to list Africa operations in London... Continued from page 1

terms of net profit and operating free cash flow. As reported in the October 2018 Quarterly report, during the second quarter ending 30 September 2018, Airtel Africa’s revenues grew in constant currency by 10.8 percent year on year, led by the growth in data and Airtel money transactions. Indian telecommunications company, Bharti Airtel owns telecom assets in 14 African countries. Nigeria remains Airtel’s most profitable market with over 41 million subscribers according to current data by the Nigerian Communications Commission (NCC) followed by Ghana where it has more than 10 million subscribers after merging with Tigo in 2017. Airtel has about 78 million subscribers in Africa and 460 million

customers globally. Industry analysts say that Airtel’s move to list its Africa business in London will make it easier for the company to raise capital for expansion and will better position the telco to compete with major rivals in other operating markets such as Nigeria where MTN is market leader with over 64 million subscribers, owning about 40 percent of the telecoms market share. “Capital raised from the IPO would most likely be pumped into expansion and improvement of data services across the continent where a major part of its future revenue growth will come from,” Subomi Sodipo, CEO CF mobile told BusinessDay. Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay that “Airtel group has deemed it fit to go to the most dynamic

stock exchange in the world to raise capital, not only to service their long term loans but also to invest in network expansion. This shows that there is still appetite for investment in Africa.” In the quarter ending June 2018, Airtel Africa revenue was Rs 20,100 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) were Rs 6800 crore. In the quarter ending June 2018, it posted revenue of $3 billion with EBITDA of more than $1 billion. Yesterday, the shares of Bharti Airtel went up 3 percent to Rs 338 on BSE (Bombay Stock Exchange) in intra-day trade. Earlier this month, Airtel Africa also announced its newly constituted Board of Directors that includes representatives from Bharti Airtel and investors. The new Board of Directors brings a wealth of industry and governance experience to further drive the Airtel Africa business.

the same as Morocco with only two assembly plants. “Even with Automotive Policy, we have not slowed down on the number of cars we import. In some areas, they will be described as scraps and allowed. In some areas, they will be allowed into the borders of neighbouring countries. For those that come through the ports, you have to ask yourself a question: If we want to develop a market for 54 companies that have got licenses with 410,000 capacity plants and we import a huge number of used vehicles, how are they going to support vehicles being assembled, since the one assembled locally will be more expensive? Naira is weak, interest rates are high and the banks have taken collateral and they want their money. The cars are already expensive and I am now competing with cars that are one-thirds to one-fifths less the price?” Bambo Adebowale, chairman, Auto and Allied Sector group of the Lagos Chamber of Commerce (LCCI), said in a recent interview with BusinessDay.

He wondered why Nigeria is promoting the manufacture and assembly of combustion engine vehicles when the original owners of these vehicles have announced plans to phase them out. Experts say the volume of new car sales in Nigeria are only 7,000, which is too puny to attract global car makers. About 11.7 million vehicles ply Nigerian roads. “There is no market for them to invest in,” said Thomas Pelletier, managing director, CFAO Nigeria. “The fact is that cars are too expensive. We have seen a market drop of 75 percent in the last three years. Increase in duties has increased smuggling. We need to introduce financing to sell new cars,” Pelletier said. Okechukwu Enalamah, Nigeria’s minister of industry, trade and investment, said changing the policy now would be counter-productive. “We can review the policy. If you crash the policy, you will be a dumping ground. There will be no employment and we will be back to structural adjustment programme SAP days.”

Global Witness, others allege Shell, Eni denied... Continued from page 2

objected, calling the deal “highly prejudicial to the interests of the Federal Government” but Nigerian ministers appeared to have ignored or overruled the concerns of their civil servants. Barnaby Pace from Global Witness said “Shell and Eni execs set the deal up so that Nigeria would earn some $6bn less than it could have. This scandalous deal must be cancelled.” The breakdown which was carried out by Resources for Development Consulting on behalf of Global Witness, as well as other NGOs such as Human and Environmental Development Agenda (HEDA), RE: Common and The Corner estimated losses were calculated using an oil price of $70 a barrel as a basis. To do the analysis, Resources for

Development Consulting explained that it used discounted cash flow modeling which is an industry-standard methodology used for valuation by oil companies and for revenue forecasting by governments as field data contained in this analysis came predominantly from the companies themselves: Shell and Eni. “The basic field data comes from a 2006 Valuation document prepared by Shell in support of arbitration proceedings. This data has been updated based on information from subsequent Shell reports and information published by Eni in 2011 as well as public domain sources from analogous blocks in neighboring countries.” According to the report from Resources for Development Consulting.

•Continues online at www.businessdayonline.com

BUSINESS DAY

Tuesday 27 November 2018

Live @ The Exchanges Stock market opens week on a negative note …investors book N53bn loss Stories by Iheanyi Nwachukwu

rading on the Nigerian Stock Exchange (NSE) o p e n e d this week on a negative note as equity investors booked loss of about N53billion after the sound of the closing gong at the nation’s bourse on Monday November 26. Only 17 stocks gained as against 18 losers. Nigerian Breweries led the basket of loser after its share price declined from N81.5 to N79.4, down by N2.1 or 2.58percent; while Chemical and Allied Products Plc led the advancers after its share price increased from N29.2 to N31.95, up N2.75 or 9.42percent. From the preced-

ing trading day high of N11.565trillion, the value of listed stocks decreased to N11.512trillion; while the NSE All Share Index (ASI) which tracks the performance of listed stocks on the Lagos Bourse declined from Friday’s high of 31,678.70points to 31,533.50 points. While the NSE ASI was down by 0.31percent, the market’s yearto-date (YtD) returns moved further into the negative territory of minus 17.42percent. In 2,911 deals, stock dealers exchanged 104,868,530 units valued at N1.941billion. The record loss adds to about N140billion which investors lost last week on Custom Street. This is the last trading week in the month of November.

Otudeko to chair NBCC 2018 annual president’s dinner, awards

reparations are in top gear for this year’s Nigerian-British Chamber of Commerce (NBCC) annual presidential dinner and awards. The Shell Petroleum Development Company of Nigeria Limited is a sponsor of the event which will be chaired by the founder and chairman of Honeywell Group, Oba Otudeko. The event which is the most anticipated social event of the association is billed to take place on November 30, 2018 at the Oriental Hotel Lagos. Also expected to grace the ceremony is John Momoh, Chief Executive Officer, Channels Television who is the event’s Guest Speaker and other distinguished professionals from various sectors. The 2018 NBCC Presidential Dinner and Awards will offer networking opportunities with some of the best in corporate Nigeria; extending our gratitude by giving out awards to individuals and companies such as Guardian Newspaper, Ernest and

Young to mention a few, the dinner will also feature live entertainment from a band and Edufirst campaign artistes. According to the Director General, Nigerian-British Chamber of Commerce, Bunmi Afolabi, the 2018 Presidential Dinner and Awards would create a platform for high level networking among icons of Nigeria’s business community and highlight the organization’s leading role in fostering closer business ties between Nigeria and Britain. “It is also an excellent occasion to celebrate deserving individuals and corporate organizations who have distinguished themselves in their chosen field in an evening that promises to be relaxing and entertaining” she stated. Tasked with promoting two-way trade and investment opportunities between Nigeria and Britain, the NBCC is one of the country’s largest and most broadly-based business organization, revered for its high-quality policies and strategic advocacy

L-R: Iheanyi Nwachukwu, head capital markets, BusinessDay; receiving the Pearl Awards Capital Market Journalist of the year 2018 from Oluwatoyin Sanni, member board of governors The PEARL Awards Nigeria and Umar F. Abdullahi, immediate past chairman The PEARL Awards Nigeria, during the award ceremony which held Lagos recently.

Presco wins Agriculture Company of the year award

resco Plc, a key leader in the agricultural sector of the Nigerian Stock Exchange (NSE) has emerged winner of the Agriculture Company of the year 2018 award by the Pearl Awards Nigeria. At a colourful ceremony held at Eko Hotels in Lagos on Sunday night, the Board of Governors of Pearl Awards, organizers of the event also announced the Managing Director of Presco Plc, Felix Nwabuko as the Chief Executive Officer (CEO) of the year 2018. Nominated alongside Presco Plc for the agriculture company of the year were Livestock Feeds Plc and Okomu Oil Palm Plc. At the ceremony attended by personalities in the Nigerian Capital

market like Mary Uduk, Acting Director General Securities and Exchange Commission (SEC); Abimbola Ogunbanjo, president, Nigeria Stock Exchange among others government and corporate dignitaries, the Board of PEARL Awards commended Presco’s dedication, resilient and contributions to Nigeria’s economy. In her remark, Acting DG of SEC restated commitment to pursue initiatives that would aid financial inclusion of Nigerians as this is capable of growing the nation’s economy. Mary Uduk stated this in her remarks at the 2018 PEARL Awards Night held in Lagos, Sunday. Uduk said that the SEC will continue to highlight and promote developments and trends in the Nigerian Capital Market and drive

Financial Inclusion aimed at reducing adult exclusion from financial services. She said “Innovations in financial technology, has made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises, promoting financial inclusion and the affordability of financial services. “A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth-and will create million more jobs. The gains of having a more inclusive financial system are enormous, as it helps broaden financial markets and make policies more effective”. While commending the efforts of the Board of

L-R: Felix Nwabuko, managing director, Presco Plc receiving certificate of the 2018 Agric Company of the year award from Nike Akande (middle) immediate past president, Lagos Chamber of Commerce and Industry (LCCI) who is also board member The Pearl Awards Nigeria and Sam Ohuabunwa, past chairman, Nigerian Economic Summit Group, also a board member The Pearl Awards Nigeria during the 2018 awards ceremony held recently in Lagos.

Governors and Management of PEARL Awards Nigeria, for giving consideration to companies with good corporate governance practice in the award nomination process, Uduk also enjoined them that in future editions, emphasis should also be given to companies with technological innovation in the capital market, in the advent of the convergence of Finance and Technology – FinTech. Uduk also disclosed that the SEC is implementing various initiatives which are aimed at making our market deeper, vibrant and more effective. According to her “The forbearance window for shareholders with multiple subscriptions has been extended by another year from the December 31, 2018 deadline previously communicated. Consequently, we enjoin those who have not come forward for the regularization of shares purchased with multiple identities, to do so. “We have also developed a two-pronged approach to addressing the intractable challenges associated with transmission of shares related to the estate of deceased investors. The first step would involve engagement with and enlightenment of the Probate Registry with a view to providing solutions to the cumbersome process of transmitting shares. Secondly, Rules would be developed around the time frame for transmission shares and the fee structure”.

Tuesday 27 November 2018

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Tuesday 27 November 2018

FINANCIAL TIMES

World Business Newspaper

GM to halt production at 7 plants in restructuring Carmaker seeks $6bn in cost savings to protect against economic downturn and trade war PETER CAMPBELL

eneral Motors will stop production at seven plants next year as it seeks $6bn in cost savings to bolster the carmaker against a downturn in its home market and the impact of the global trade war. GM on Monday outlined plans to cease production at three assembly plants and two engine plants in the US and Canada, and two sites internationally, and slim product offerings in a bid to save costs. The group aims to lower costs by $4.5bn and reduce capital spending by $1.5bn a year. The group will double resources allocated to electric and autonomous cars over the next two years, it added. “We’re taking these actions while the company and economy are strong to stay ahead of what we all know are very challenging environments,” said GM chief executive Mary Barra. The move comes against a backdrop of rising costs, falling car sales, and shifting consumer habits. Trade tariffs have hurt the business, costing it $1bn in raw material costs in the US. “There have been a lot of headwinds,” Mrs Barra added, but denied that the company was expecting an imminent downturn

in the US economy. She said the carmaker was seeking to “right-size” the business, increasing the utilisation of its North American plants. US car sales fell last year and are expected to continue sliding into next year.

Nissan chief says Ghosn arrest an ‘opportunity’ to review alliance

Mitsubishi also wants to look at the three-way partnership, risking a split with France KANA INAGAKI & LEO LEWIS

issan’s chief executive has called the ousting of Carlos Ghosn “a good opportunity” to review the Japanese carmaker’s alliance with Renault in comments to staff that are likely to unnerve its French partner. In his first comments to employees since Mr Ghosn’s arrest and dismissal as chairman last week, Hiroto Saikawa pointed to the unbalanced nature of the alliance and said there had been too much power concentrated in Mr Ghosn. “When Carlos Ghosn was here, no matter what we discussed with Renault, we often did it through him,” Mr Saikawa said, according to a person who heard him speak at a packed hall at Nissan’s Yokohama headquarters on Monday. “We actually see this as a good opportunity to explore how the alliance can be healthy and sustainable into the future.” Renault and the French government have said they want to

retain the status quo while Mr Ghosn is held in a Tokyo jail on suspicion of understating his pay in financial reports. Renault has appointed an interim leadership team but has maintained that Mr Ghosn will remain chairman and chief executive. Adding to the JapaneseFrench divide, Mitsubishi Motors, the third member of the alliance, echoed the comments of Mr Saikawa. After ousting Mr Ghosn as chairman on Monday, Osamu Masuko, said there would be a review of the alliance. Following a one-hour board meeting on Monday, Mitsubishi said Mr Masuko would take over as interim chairman, while the company stressed the alliance would continue to evolve even in the absence of Mr Ghosn. Mitsubishi joined the RenaultNissan alliance in 2016 after Mr Ghosn played a central role in orchestrating a deal where Nissan injected $2.3bn into the smaller Japanese rival as it was struggling to survive a scandal over inflated Continues on page A3

At the same time customer demands are changing, with a shift away from saloons towards sports utility vehicles and pickup trucks. GM offered buyouts to 18,000 staff last month, aiming to reduce its US salaried headcount.

On Monday, the company said it would issue no fresh work to three assembly plants — Oshawa in Ontario, Canada, Detroit-Hamtramck in Detroit, and Lordstown Assembly in Warren, Ohio — as well as two engine plants, Baltimore in White Marsh, Maryland,

and one in Warren, Michigan. The group will also seek to close two international plants by the end of next year. Over several years the company has withdrawn from struggling or unprofitable markets, such as Europe, Russia and India.

US hits at Russia over capture of Ukrainian ships Seizure of vessels is dangerous escalation and violation of law, says UN ambassador HENRY FOY, ROMAN OLEARCHYK, MICHAEL PEEL & COURTNEY WEAVER

he US has accused Moscow of “provocation” in response to Russia’s capture of three Ukrainian naval ships and their crews under gunfire in the disputed Black Sea region, the most serious maritime incident between the warring neighbours since the 2014 invasion of Crimea. Nikki Haley, US ambassador to the UN, used an emergency meeting of the Security Council on Monday to blame Russia for Sunday’s incident in the Kerch Strait and said the US would continue to support Kiev’s territorial integrity. “We strongly support Ukraine’s sovereignty and territorial integrity within its internationally recognised borders extending to its territorial waters. We express our deep concern over the incident which represent a dangerous escalation and violation of international law,” Ms Haley said. She added that the statement was also made on behalf of the UK, France, the Netherlands, Poland and Sweden. Ms Haley said she had spoken to Donald Trump, US president, and that the statement reflected views at “the highest level”. Neither Mr Trump, the White House nor the State Department has issued a

statement on the incident. Ms Haley’s statement came as Ukraine’s parliament debated whether to support President Petro Poroshenko’s call for a 30day period of martial law after the naval clash, in which Russian ships fired on the Ukrainian vessels and injured several crewmen before detaining them. Moscow has said Russian naval forces were provoked and only captured the Ukrainian ships after they illegally entered its territorial waters near a maritime chokepoint shared by both countries. It warned Kiev and its western partners against inciting further tension. “We would like to warn the Ukrainian side that the line pursued by Kiev in co-ordination with the US and the EU to provoke a conflict with Russia in the waters of the Azov and Black Seas is fraught with serious consequences,” the Russian foreign ministry said in a statement. “The Russian Federation will firmly stop any encroachment on its sovereignty and security.” Ms Haley was speaking at an emergency meeting called by Russia to discuss the incident. A motion proposed by Moscow to condemn territorial violations by the Ukrainian ships was voted down in the UN Security Council debate, with China joining Russia

in voting in favour. Mr Poroshenko, who commands a majority in parliament, has called for sweeping powers to mobilise Ukrainian forces and step up military preparations. He has rebuffed claims by opposition politicians that such a move could affect presidential elections scheduled for March, where polls suggest he is unlikely to win another term in office. “Martial law does not mean a declaration of war,” he said in a televised address ahead of the vote that sought to ease concerns that the emergency powers would curtail civil liberties. “Martial law does not mean our turning away from diplomatic efforts. “We need to be maximally prepared due to our unfortunately, aggressive and unpredictable neighbour,” he added. The EU and western governments have urged both sides to step back from further provocation amid fears of a renewed flare-up in hostilities. The two countries have been involved in a low-grade conflict since Moscow’s 2014 annexation of the Crimean peninsula and its support for a separatist insurgency in east Ukraine. Kiev has seized on Sunday’s incident to demand fresh international sanctions against Moscow.

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FT Nissan chief says Ghosn arrest an...

Trump demands Mexico deport migrants massing on US border

Continued from page A2

fuel economy data. “It was an agonising decision,” Mr Masuko, who had close ties with Mr Ghosn, told reporters after the meeting. “We had no choice but to prioritise what we needed to do to protect our company and our employees and their families.” Mr Ghosn and Greg Kelly, another Nissan board member, were arrested and accused by prosecutors of understating Mr Ghosn’s salary by $44m over five years in financial statements. The Japanes e car maker said an internal investigation, sparked by a whistleblower, found that Mr Ghosn had made personal use of company funds, and identified Mr Kelly as “the mastermind” of the alleged misconduct. The top executives of the three carmakers are expected to exchange opinion on the future of the alliance at a regular meeting scheduled for later this week. At the time of his arrest, Mr Ghosn was planning a merger of Renault and Nissan, a move that the Japanese carmaker opposed and was looking to block, according to people familiar with the matter. Questions on the alliance comes as Mr Ghosn prepares for a prolonged fight to clear his name, according to two people briefed on the situation, in a country where the odds are heavily stacked in favour of prosecutors. New York-based law firm Paul, Weiss, Rifkind, Wharton & Garrison has been hired to represent Mr Ghosn. Motonari Otsuru, the former Japanese prosecutor famous for overseeing the investigation of accounting fraud at internet company Livedoor, will also represent the 64-year-old head of the RenaultNissan-Mitsubishi Alliance, according to people familiar with the appointment. Mr Otsuru was not immediately available for comment. Previous cases suggest it is highly likely Mr Ghosn will spend a minimum of 20 days under interrogation at the Tokyo Detention Centre, and legal experts warn he could be there for much longer. Tokyo prosecutors are also looking into whether Mr Ghosn properly reported deferred compensation he was set to receive after retirement, according to people with knowledge of the investigation. Mr Ghosn has denied to Tokyo prosecutors that he intentionally understated his pay in financial documents, according to NHK, the Japanese broadcaster. Mr Ghosn and Mr Kelly could not be reached for comment. Neither has been formally charged with any crime.

Border crossing in Tijuana temporarily closed over weekend after US guards fired tear gas

MARK ODELL

D Theresa May will tell MPs on Monday that if they reject the deal agreed in Brussels, it would take talks ‘back to square one’ © Bloomberg

Theresa May begins campaign to sell Brexit deal Prime minister has 2 weeks to rally MPs and public after EU approves her plan GEORGE PARKER

heresa May on Monday embarks on a two-week campaign to sell the historic Brexit deal agreed by European leaders, telling MPs that if they reject it, they risk plunging the country into “more division and uncertainty”. The deal, approved in Brussels on Sunday, aims to deliver a smooth divorce to end Britain’s 45-year involvement in the European project, although many details of the future relationship between the two sides have yet to be agreed. Mrs May will tell MPs that if they reject the deal agreed in Brussels, it would take talks “back to square one”. She will add: “It would open the door to more division and more uncertainty, with all the risks that will entail.” The prime minister will also rally her cabinet in support of the deal, amid concerns in Downing Street that some Eurosceptic ministers — including environ-

ment secretary Michael Gove or transport secretary Chris Grayling — have not been publicly selling the plan. Steve Barclay, the new Eurosceptic Brexit secretary, suggested that some of his colleagues needed to get off the fence. “It’s up to all of us in the cabinet to make the case to our colleagues,” Mr Barclay told the BBC’s Today programme on Monday morning. He said that the Commons vote, pencilled in for December 12, would be “challenging”. Mr Barclay also downplayed warnings from French president Emmanuel Macron that Britain’s future relationship with the EU would be tied to beneficial access for EU fishermen to British waters. “We have not agreed to any linkage between access to waters and access to fish,” he said. Meanwhile some members of Mrs May’s cabinet are canvassing support for Plan B scenarios, should the prime minister fail to win backing for her deal in a

Commons voted scheduled for December 12. Mr Gove and Amber Rudd, the pro-EU work and pensions secretary, have argued that a “Norway-style” model could be taken off the shelf in the event of a stand-off at Westminster. Both have floated the idea that Britain could temporarily stay in the European Economic Area, giving Britain access to the single market, pending the negotiation of a looser Canada-style free trade agreement with the EU. But such a plan would be even less acceptable to many Eurosceptics than Mrs May’s deal, since it would imply free movement, payments for EU projects and rule-taking from Brussels. Some MPs would fear the “temporary” plan could become permanent. Meanwhile Andrea Leadsom, the Eurosceptic leader of the House of Commons, is exploring ways to “manage” a no-deal exit, agreeing side deals with the EU to limit the potential chaos if Britain left the EU without any deal at all.

‘I need a selling season’ — bitcoin falls below $4,000 Cryptocurrency’s continued fall puts losses at 72 per cent for year CAMILLA HODGSON

itcoin was down again on Monday morning after a rocky weekend that saw it slump on Sunday to its lowest level since September 2017. The cr yptocurrency was down 0.5 per cent at $3,905 on Monday, having dropped below the $4,000 mark on Saturday and continued to slide over the remainder of the weekend. The fall comes in the wake of a broad cryptocurrency sell-off sparked by disagreements within the coin developer community and persistent concerns about regulatory scrutiny. The latest fall brings bitcoin’s loss for the calendar year to date to 72 per cent. Responses within the crypto community were mixed: writing on online forum Reddit, one user

expressed excitement at the lower price saying it was good news for prospective investors and enthusiasts looking to buy more: “Last year I could only dream of owning 1 bitcoin, now it’s possible . . . I wanna see this thing go so low I can afford to buy 20.” Another was more pessimistic: “I would be [excited] if I had any money left to buy with . . . I need a selling season, not a buying season.” One user appeared to have more mixed feelings:” [bitcoin’s] price has stopped dropping like a rock, but I am concerned there isn’t enough buy volume coming in to call a bottom,” the user said. “C‘mon bulls, let’s make some more money before we trash this useless experiment.” One commonly discussed topic within the community is regulation. On Monday several users expressing frustration that they were prevented from cashing out

their crypto holdings since they were unable to answer banks’ anti-money laundering questions about coins’ provenance. “I lost track of the purchase of my historic, (pre 2014 bitcoin) and also I flipped between coins using shape-shift,” said one, adding they were told their bank account would be frozen “if I tried to cash out large sums.” Another echoed this concern: “I also moved my coins a lot to claim the airdrops and trade and now it is almost impossible to prove where they come from.” One solution is buying legitimately, the first said: “Now the price is low again I am going to buy, but this time it will be legitimate, buying through Coinbase,” they said. “I will keep all records and if the price goes through the roof again I should be able to cash out and pay my taxes no problem.”

onald Trump has demanded that Mexico deport thousands of Central American migrants congregating on the border with California after US border guards fired tear gas at a group who tried to storm the fence over the weekend. The US president repeated his determination that the would-be asylum seekers would not be allowed to cross and should be sent back to their own countries. “Mexico should move the flag waving Migrants, many of whom are stone cold criminals, back to their countries. Do it by plane, do it by bus, do it anyway you want, but they are NOT coming into the U.S.A. We will close the Border permanently if need be. Congress, fund the WALL!”, Mr Trump tweeted on Monday morning. As well as firing tear gas, US border agents temporarily closed a border crossing into California on Sunday after a group of people rushed the border fence Several hundred migrants, including children, had marched from Tijuana’s town centre towards the border in an attempt to raise awareness of their plight. Mexican police tried to hold them back from reaching the border but a group broke away and made for the US side, where armed officers have been deployed. More than 5,000 migrants — mostly from Honduras but also from Guatemala and El Salvador, who are fleeing poverty, violence and extortion — have poured into Tijuana in recent days. That number is expected to double as other caravans of migrants making their way through Mexico arrive at the border in an attempt to cross to the US. Mr Trump’s latest intervention will further raise tensions over the fate of the would-be asylum seekers that will test Mexico’s president-elect, Andrés Manuel López Obrador. The US president has authorised troops to use lethal force against migrants “if necessary” and has deployed 5,200 activeduty troops to the southern border to bolster more than 2,000 members of the National Guard already providing assistance to the border patrols. Mexican authorities have deported 11,000 Central Americans since October 19, a week after the departure of the first caravan from Honduras. Of that total, 1,906 voluntarily requested repatriation, the interior ministry said in a statement. Alfonso Navarrete, Mexico’s interior minister, said some 500 migrants involved in Sunday’s disturbances would be deported.

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Tuesday 27 November 2018

BusinessDay Banking and Financial Institutions Award 2018

Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Business Law (NBA-SBL), Lucy Newman, MD/CEO, FITC, presenting Most Customer Friendly Bank of the year award to Idoko Negedu of Garanty Trust Bank

L-R Shehu Mohammed, Sarkin Kano representing Emir of Kano, Bayo Ajayi, Executive Director & CFO, RMB Nigeria & Frank Aigbogun, Publisher/CEO, BusinessDay Media Ltd during the Business Day Awards Ceremony where RMBN received Merchant Bank of the Year Award.

R-L : Kenny Acholonu ; Joe Itah, head, corporate communications, NEPC, and Coker MD/CEO Rack Centre.

L-R: Frank Aigbogun, publisher/CEO, BusinessDay; the year award to Stanley Oriakhi, CFO, LAPO Microfinance Bank . Priscilla Ogwemoh, council member, Nigerian Bar Association-Section on Business Law (NBA-SBL), Lucy Newman, MD/CEO, FITC, presenting Microfinance Bank of the year award

L-R Akinwande Ademosu, CEO, Credit Direct Limited receiving the Consumer Finance Company CEO of the year award form Tunde Coker and Frank Aigbogun .

L-R: Bayo Olugbemi, MD/CEO; Abayomi Oluwato, group head, business development, and Rauf Bello, head compliance, all of First Registrars.

L-R: DIKE Umezurike and Rotimi Adewoyin both of Zenith Pensions Custodian Limited; Ifeoma Anonyai and Funmi Makinwa. L-R : Tokunbo Afolabi and Titilayo Folorunsho both of Bank of Agriculture.

L-R: Patrick Ilodianya of SFS; Jubril Enakele of Zenith Capital; Tony Ibeziako and Femi Onifade, both of Nigeria Stock Exchange. Pictures by Pius Okeosisi and Olawale Amoo

L-R: Olubunmi Oguntoye, Charity Ekwubiri, Titilolu Olukorede and Oladipupo Olabisi all of First Registrars.

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BusinessDay Banking and Financial Institutions Award 2018

L-R : Benson Ijomoni and Tayo Lawal, both of Zenith Pensions . Tope Olabode and Mendy Akata, both of SFS.

L-R : Femi Mogaji and Oluwatosin Oyebola, both of Credit Direct Limited.

L-R; Kabir Karim,and Adedoyin Onayemi, both of Credit Direct Limited ; Emmanuel Comla and Diran Olojo, both of FCMB.

L-R : Tajudeen Ahmed, general manager, business development, BUA Group; Paula Nwankwo, zonal manager, Lagos central, LAPO Micro Finance Limited, and Henry Owie, banking services advisor/consultant, LAPO.

L-R : Babalola O, ED, SIAML; Nike Bajomo, ED, SIPML, and Olu Delano, head, clint coverage.

L-R: Akin Ogunranti, Justin Osogbo, Nnamdi Edekobi and Adamu Lawani, all of Zenith Bank.

L-R :Adamu Ibrahim, Shriff Salawu, and Muhammad Abdulkach ,all of Nigeria Incentive based Risk Sharing System for Agricultural Lending( NIRSAL).

L-R : Bode Ogunlere; Dimeji Adegboye, and Ifeanyi Chigbufue, all of AIICO Capital.

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Tuesday 27 November 2018

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news you can trust I TUESDAY 27 November 2018

INSIGHT/INNOVATION A search for the Nigerian hero as patriot

Tunji Olaopa, PhD Olaopa is a retired federal Permanent Secretary, Professor of Public Administration, Lead City University and Executive Vice Chairman, the Ibadan School of Government and Public Policy ISGPP tolaopa2003@gmail.com

he search for a Nigerian hero or heroine has remained one of the few significant planks in my understanding of the Nigerian national project. I have argued that it deserved to be considered as a serious variable in the academic and intellectual interrogation of the postcolonial realities in Nigeria. In this sense, I am only just attempting to domesticate to Nigerian postcolonial realities the historical theory of Thomas Carlyle, the Scottish philosopher and historian, who propounded the idea of heroic leadership and the Great Man theory of history. This theory simply states that rather than viewing history as a compilation of minor and major events, we should see it as ‘the biography of great men.’ In other words, the twists and turns of historical dynamics can be directly or indirectly attributed to influential and world-historical individuals who have the capacity to impact historical trajectory through their wisdom, notoriety, political abilities, and charisma. Napoleon, Lenin, Hitler, Karl Marx, Genghis Khan, Stalin, Einstein, Julius Caesar, Newton, Robespierre, St. Augustine, Plato, Gandhi, Martin Luther, Darwin, Buddha, Abraham Lincoln, Attila the Hun, Gutenberg, Galileo, Confucius, Jesus Christ, Shakespeare, Michelangelo, Muhammad, Winston Churchill, Justinian, etc. are world-historical figures in this regard. There are two points from which I would differ from Carlyle. The first is that I am not ready to

PROPHYLAXIS

Ayuli Jemide Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

s the 2019 elections draw closer one of the major issues on the table is the amendment to the Electoral Act which has been subject of an interesting game of ping-pong between the President and the legislators. The Senate has recently transmitted yet another amended version of this bill to the President for assent - I think for the 4th time. Whilst we await Mr. President’s signature or decline, it is important to understand some key amendments the bill seeks to introduce and how they play out in the political space. The amended electoral bill seems to have introductions that if well implemented may serve the purpose of tightening the electoral process and reduce the possibility for election rigging to the barest minimum. One major highlight is the use of card readers or other technological devises to accredit a voter. The current law says a Presiding Officer will only issue a voter a bal-

go too far in arguing that Nigerian history is just simply the “biography of great men.” On the one hand, my own search for heroes is not a masculine project. There are heroines too whose activities influence the direction of nations. On the other hand, however, I will insist that the trajectory of a nation’s development cannot be summed up essentially as just the biographies of great men or women. The second point is to differentiate between Carlyle’s “great man theory of history” and my own understanding of political heroism. For instance, within my own context, Adolf Hitler and Joseph Stalin will not be considered to be politically heroic. This is simply to say that political heroism connects directly to acts that move a nation forward. In other words, there must be a strict relationship between heroism and patriotism. What is the relationship between patriotism and heroism? We can clarify this question with two statements. First, those whom we consider as patriotic may actually not be those who are capable of any heroic acts. In this sense, I am referring to those who, like politicians, unjustly benefits from a state without adding anything to it in return. It is so easy to be a “patriot” in this regard, mouthing silly slogans of national unity and the oneness of Nigeria. Being heroic or even patriotic does not arise from benefiting unjustly from the common weal. However, it is most likely that those who are truly heroic would not be considered as patriotic. This is because heroism stands at the border of perception between the patriotic and the unpatriotic. In other words, being heroic sometimes means speaking uncomfortable truths to one’s state, power and its leadership in a way that undermine the leadership’s complacence and legitimacy. A patriotic hero or heroine would not be one who cheers his or her nation or state whatever the state or nation is. Within Nigeria’s postcolonial and development realities, I know heroism and patriotism are two fundamental concepts that have become nearly compromised. No one can be patriotic who cannot relate with the Nigerian state in terms of infrastructural development. An average Nigerian is not patriotic because the state has refused to fulfill its own part of the social contract, which involves empowering Nigerians and making their lives meaningful. Heroes and heroines are also Nigerians who have been struggling to make sense of Nigeria’s

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....the Nigerian state is not hero-friendly. Yet, we have produced countless of them. But it does not seem that we have made sense of their significance in the collective act of re-imagining the Nigerian nation. On the contrary, Nigeria ignores, maligns, disgraces, represses, jails, and even kills her heroes and heroines. And when they die, the leadership writes glowing eulogies to their memories, and then they are promptly forgotten!

frustrating infrastructural deficit. And yet, they hold their vision of a better Nigeria. They are usually and always at loggerheads and constant bickering as to what to make of their visions and the incumbent leadership’s understanding of that vision. However, when these individuals hold their nations to a sense of responsibility, there is the tendency for that nation to see them as dissidents, traitors and saboteurs. This is why those like Stalin and Hitler will fail the test of political heroism. It is also in this sense that Nigeria has remained in constant conflicts with those who have the interest of Nigeria at heart. Heroes cannot be expected to support a status quo that is antithetical to the dream of what a nation ought to be. In most cases, heroes and heroines see farther than what the political class sees at any point in time. And this is all the more so to the extent that corruption beclouds the perspective of the corrupt. Heroism is fundamental because it has a leadership capability. Political heroism challenges the decisional capacity of any incumbent leadership at any time. This is because whether in political position or outside of it, heroes see differently. And this

leads to the second reason heroism is significant: heroes constitute a source of potential decisions and insights for resolving a nation’s predicament. Heroism comes with its own unique moral dynamics and dilemmas. Heroes and heroines are members of the same society as we all are, yet they must hold themselves to higher moral standards if their voices are to be heard, their views and perspectives considered, and their recommendations and suggestions approved. So, most times, they have to struggle against the current. And most time, they fail. Yet they press on with a vision of the nation which others find strange and which they oppose fiercely. As I have written before, the Nigerian state is not hero-friendly. Yet, we have produced countless of them. But it does not seem that we have made sense of their significance in the collective act of re-imagining the Nigerian nation. On the contrary, Nigeria ignores, maligns, disgraces, represses, jails, and even kills her heroes and heroines. And when they die, the leadership writes glowing eulogies to their memories, and then they are promptly forgotten! How do we get the patriotic Nigerian heroes and heroines? My answer is that we start searching for them by first identifying those who, in my assessment, qualifies already. Those we are classifying as heroes are Nigerians (a) who, either directly through their careers or professions or outside of it, have engaged critically with the Nigerian predicament, sometimes to the detriment of their lives; and/or (b) whose ideas and perceptions have achieved a timeless relevance, especially to the urgent task of rebuilding a drowning nation. I know my choice of heroes and heroines would not go without a vociferous intellectual challenge, but I am not afraid to name a few—Herbert Macaulay, Queen Amina of Zaria, Chief Obafemi Awolowo, Ahmadu Bello, Nnamdi Azikiwe, Aminu Kano, Anthony Enahoro, Adekunle Fajuyi, Moshood Kasimawo Abiola, Chief Simeon Adebo, Chief Jerome Udoji, Bolanle Awe, Chinua Achebe, Ken Saro-Wiwa, Gani Fawehinmi, Fela AnikulapoKuti, Dr. Stella Ameyo Adadevoh, Gambo Sawaba, Wole Soyinka, Billy Dudley, Ayodele Awojobi, Eni Njoku, Funmilayo Ransome-Kuti, Hubert Ogunde, Amos Tutuola, Ben Nwabueze, Chimamanda Ngozi Adichie, Asa Bukola Elemide, Dele Giwa, Ebenezer Obey, Tai Solarin, Margaret Ekpo, Chike Obi, and so on.

Will Mr. President assent to the amended electoral bill? lot paper once he confirms that his name is on the register of voters. However, the amendment seeks to ensure that the proof that your name is on the voters’ register should be via card readers – so technology must be deployed to determine if your name is on the voters register and you are who you claim to be. Along these same lines, the bill now has a provision that mandates INEC to conduct elections by electronic voting or any other method of voting as it may determine from time to time. Electronic voting (or E-Voting) refers to voting using electronic means to either aid or take care of the chores of casting and counting votes. Depending on the particular implementation, e-voting may use standalone electronic voting machines or computers connected to the Internet so that people can cast their votes and the computer counts automatically. In addition to the above, the new amendment now mandates INEC to go beyond printing the voter’s register – INEC is now required to duplicate and save voters register in an electronic format. With this system

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As we wait to see if the President finally assents to this bill, I think as citizens we owe it to ourselves to constantly keep abreast with the electoral process and how it affects our right to make our votes count

anyone can request INEC to issue certified copies of the voters register either in printed copies or electronic formats. In relation to observers, the legislators have sought to amend the law to create additional observation privileges for polling agents by allowing inspection of election materials, as well as making written and audio visual recordings of their inspections before commencement of elections. Accredited observers and officials of the Commission are also added to the list of persons who can make these inspections under the proposed amendment. There is also an amendment that mandates digital storage and archiving of election results by INEC at its national headquarters. And a related amendment that mandates the Commission to record details of electoral materials such as the quantities, serial numbers, particulars of result sheets and other sensitive materials used to conduct elections. Failure to do so shall cause the election to be invalid. The legislators have tried to address the issue of arbitrary and exorbitant fees imposed on candidates by political parties with a new provision that prescribes limits for nomination forms for each elective offices:N150,000 for a Ward Councillorship aspirant in the FCT;N250,000 for an Area Council Chairmanship aspirant in the FCT;N500,000 for a State House of Assemblyaspirant;N1,000,000 for a House of Representatives aspirant; N2,000,000 for a Senatorial aspirant;N5,000,000 for a Governorship aspirant; andN10, 000,000 for a Presidential aspirant. This provision outlaws any requirement or criteria for candidates outside of those in the Constitution i.e. age, citizenship and school certificate qualification. But includes barriers like: conviction for fraud, dishonesty, certified lunatic, bankruptcy. The amendments also touch on campaign donations and increases the individual donation limit from 1 Million Naira to 10 Million Naira. There is a section which addresses the question of over-voting and stipulates that the results of

a polling unit where the number of votes cast exceeds that of registered voters should be declared null and void. There is an amendment which increases the limits on election expenses incurred by candidates. For example, a Presidential candidate is now N5billion instead of N1 Billion and a Governorship candidate is now N1billion instead of N200m. Political pundits says that the mother of all proposed amendments is the clause that seeks to take away INEC’s discretion regarding the sequence of elections. The amendment seeks a set sequence for elections as follows: (a) National Assembly Elections; (b) State Houses of Assembly and Governorship Elections (c) Presidential election. The legislators have argued that there should be some consistency in the sequence of elections. They further argue that as a norm (2015 elections being the only exception since 1999) the Presidential elections has always come last on the time-table so this amendment is just simply converting an established tradition into law. Behind these fair arguments is the politics of it all: the buzz on the street is that it is believed that if the Presidential election comes first there would be a bandwagon effect in favour of the party that wins the Presidency, and this can turn the apple cart against some legislators and governors in waiting. There are also whispers in the street corner about the ruling party not being in favour of this proposed sequence because victory at the National Assembly and Governorship polls of a handful of influential political opponents may increase impetus and resources to change their fortunes during the Presidential elections – the bottom-to-top bandwagon effect is a real threat. As we wait to see if the President finally assents to this bill, I think as citizens we owe it to ourselves to constantly keep abreast with the electoral process and how it affects our right to make our votes count. This we must do! As John F. Kennedy once said: “The ignorance of one voter in a democracy impairs the security of all.”

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