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Bonds rise, stocks fall as investors rotate into fixed income OLUFIKAYO OWOEYE, OLUWASEGUN OLAKOYENIKAN & SEGUN ADAMS

Mahmood Yakubu (l), chairman, INEC, presenting certificate-of-return to President Muhammadu Buhari, winner of 2019 Presidential election, at the International Conference Centre in Abuja, yesterday. With them is Aisha Buhari, wife of the President. NAN

Focus shifts to Buhari’s secondterm economic outlook Analysts foresee ERGP sustenance, reforms to attract FDIs, others

IHEANYI NWACHUKWU

he 2019 Presidential and National Assembly elections are over and President Muhammadu Buhari of the All Progressives Congress (APC) has emerged victorious, defeating his main challenger,

Atiku Abubakar of the People’s Democratic Party (PDP), with 15.19 million votes to the 11.26 million. Much of the nation’s economic activities in past months were piloted against the backdrop of electoral uncertainty. But taking a cue from the outcome, emphasis has now shifted to what

President Buhari’s second term holds for the economy in 2019 and beyond. Many things are likely to play out within the first full year of the President’s second term, according to analysts who spoke to BusinessDay. These include sustaining the implementation of Economic Recovery and

Growth Plan (ERGP) to support economic growth at 2 percent; either termination or reappointment of CBN governor in June, and reforms to attract Foreign Direct Investments (FDIs). Others are sustaining the Federal Government’s welfare Continues on page 38

o l l a r- d e n o m i n a t e d government bonds on Wednesday rose to the highest in 5-7 months following the announcement of a second term for incumbent President Muhammadu Buhari. The Independent National Electoral Commission (INEC) in the early hours of Wednesday declared Muhammadu Buhari of the All Progressives Congress (APC) winner of the 2019 Presidential election. Mahmood Yakubu, INEC chairman and chief returning officer for the election, said Buhari secured a total of 15.2 million votes to defeat Atiku Abubakar of the People’s Democratic Party (PDP) who polled 11.3 million votes. Yields on Eurobond fell 1.81 percent to an average yield of Continues on page 38

Inside Fertilizer plant skyrockets Dangote’s net worth to $16.6bn P. 2

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Thursday 28 February 2019

Why trucks are still off Apapa roads, bridges days after election CHUKA UROKO, JOSHUA BASSEY & AMAKA ANAGOR-EWUZIE

he two major routes to Apapa, Nigeria’s premier port city, Ijora Bridge and Apapa-Oshodi Expressway, have remained largely free for motorists to drive through five days after the trucks which ‘live’ on the two routes vacated, giving motorists and residents some level of relief and comfort. The trucks have, in the past five years, made those two routes and the adjoining roads their parking bay. They went off the routes on the eve of the just concluded Presidential and National Assembly elections which have given President Muhammadu Buhari another chance to preside over the affairs of Nigeria for the next four years. The largely collapsed ApapaOshodi Expressway, as at yesterday morning, was an easy drive-through all the way from Cele Bus Terminal on the expressway down to Berger Cement Bus Stop which has never been the case on that that axis in the last five years. “The trucks have left the road because they want to start work (reconstruction) on it”, a Danfo (commercial bus) driver explained to BusinessDay, adding that the truck drivers had to vacate the roads before being forced out of the road by the contractor. But Adedamola Kuti, the Federal Controller of Works, South West Zone, dismissed that speculation, saying that if the trucks were off the expressway, it could be for reasons of the presidential and national assembly elections. “Yes, reconstruction

work has started on the expressway by reason of the flag-off in November last year. “However, whatever is happening now are preliminary stages of work which are off-site,” he said, disclosing that the reconstruction work, which will be undertaken by the Dangote Group, would be done in three stages. The first stage will begin from Creek Road to Cele Bus Terminal; the second from Cele to Anthony Bus Stop, and the third from Anthony to Oworonshoki. Other stakeholders also adduced reasons for the free Apapa roads. Tony Anakebe, managing director of Gold Link Investment Limited, told our correspondent in a telephone interview that business activities at the nation’s seaport have slowed down because people were being careful due to the uncertainties surrounding the elections. Anekebe added that the newly introduced call-up system for trucks using APM Terminals in Apapa port has also helped in reducing movement of trucks in and out of Apapa. He also alluded to the rumour making the rounds that the contractor to whom the construction works of Apapa-Oshodi Expressway was awarded, was perfecting arrangements to mobilise to site. “The uncertainty surrounding the just concluded elections has slowed business activities at the ports. Presently, Customs Licensed Agents and freight forwarders do not come to the ports early enough to do business and when they do, they also try to leave Apapa environment very early, due to fear of likely post-election

•Continues online at www.businessday.ng

Nigeria’s petrochemicals, refineries’ VAT contribution falls to 5-year low STEPHEN ONYEKWELU

etrochemicals and petroleum refineries’ contribution to Nigeria’s value added tax (VAT) basket has fallen to a five-year low, according to recent data published by the National Bureau of Statistics. This segment of Nigeria’s oil and gas industry contributed 57 percent less, representing N4.70 billion, to the VAT pool full-year 2018, from a high of N8.10 billion in 2014. Africa’s biggest oil producer’s petrochemicals and petroleum refineries’ contribution to the VAT pool has been falling since 2015, from N7.10 billion to N5.20 billion in 2016, and N4.81 billion in 2017. VAT is a function of value creation in any sector of the economy. A falling VAT means the sector is shrinking and creating less taxable value. Performance data of Nigeria’s refineries show they have been performing below installed capacity. Despite being one of the largest producers of crude oil in Africa in the last four decades, Nigeria has consistently struggled to keep its refineries functioning optimally without success. Ibe Kachukwu, Nigeria’s minister of state for petroleum resources, had said, “2019 is the target time. I target 2019. If I don’t achieve it, I will walk (resign). I put the date and I will achieve it.” But two months into 2019, none of the refineries work up to 30 percent of installed capacity. And Kachikwu had to retrace his steps in 2018 when

he said, “We are working hard to see the Nigerian National Petroleum Corporation (NNPC)’s four refineries coming up with 425,000 b/d in 2020.” The NNPC has four major refineries, two in Port Harcourt, Rivers State, which combine to form the Port Harcourt Refining Company (PHRC) with a combined installed capacity of 210,000 barrels per stream day (bpsd); the Kaduna Refining and Petrochemical Company Limited (KRPC) with an installed capacity of 110,000 bpsd; and the Warri Refining and Petrochemical Company Limited (WRPC) with an installed capacity of 125,000 bpsd. Port Harcourt Refining Company, Warri Refinery and Petrochemical Company, and Kaduna Refining and Petrochemical Company recorded an operating deficit of N13.59 billion in January 2018, deteriorating further from the N11.09 billion deficit recorded in December 2017, data from NNPC showed. Analysis from NNPC January 2018 financials showed modest gains of N36.7 million made by the stateowned oil company’s upstream and gas processing subsidiaries, such as the Nigerian Petroleum Development Company (NPDC), RETAIL and Nigerian Gas Processing Transportation Company Limited, were wiped off largely by its downstream subsidiary operations which recorded deficits north of N1.5 billion, according to figures from the organisation’s operations and financial report for 2018 actuals.

L-R: Aisha Abdullahi, board member, YIAGA Africa; Hussaini Abdu, board members; Samson Itodo, executive director; Nnamdi Aduba and Chris Kwaja, members, at the YIAGA Africa news conference on 2019 presidential election results verification at the WatchingTheVote Situation Room, in Abuja, yesterday.

Buhari receives certificate of return, appeals for cooperation ... Atiku heads to court, begs foreign investors not to divest ... ADD, YPP kick, say results ‘manufactured’, ‘doctored’ ONYINYE NWACHUKWU, TONY AILEMEN, INNOCENT ODOH & OWEDE AGBAJILEKE, Abuja

aving polled a total of 15,191,847 votes to defeat his closest rival, Atiku Abubakar of the People’s Democratic Party (PDP) who scored 11,262,978 votes, President Muhammadu Buhari of the All Progressives Congress (APC) on Wednesday in Abuja received a Certificate of Return from the Independent National Electoral Commission (INEC). Buhari was declared winner of the February 23, 2019 Presidential election in the early hours of Wednesday having attained the highest number of votes cast as well as at least a quarter of the votes at each of at least two-thirds of the 36 states and the Federal Capital Territory (FCT). Mahmood Yakubu, INEC chairman and returning officer for the election, presented the certificate to Buhari, president-elect, who was invited to sign and collect the certificate by Yemi Osinbajo, vice president and vice president-elect. Speaking after he received the certificate, Buhari appealed to Nige-

rians to stand united since “election is not war”, urging all citizens, going forward, to stand in brotherhood for a bright and fulfilling future. While thanking the over 15 million citizens who voted for him and condoling with families who lost loved ones in the electoral violence, he assured Nigerians that they would soon see “a country moving to the Next Level” as the APC-led administration consolidates on its fundamental areas of securing the country, reviving the economy, and fighting corruption. “Our government will remain inclusive and our doors will remain open. That is the way to build the country of our dream; safe, secure, prosperous, and free of impunity and primitive accumulation by those entrusted with public offices,” Buhari said. “The hard work to deliver a better Nigeria continues, building on the foundations of peace, rule of law and opportunities for all. We will roll up our sleeves afresh, and give it our all. We have no other motive than to serve Nigeria with our hearts and might, and build a nation which we and generations to come can be proud of,” he said. ButwhileitisjubilationintheBuhari camp, it is a sad moment for the oppo-

sition. Atiku Abubakar of the PDP and Buhari’s closest rival at the just-concluded presidential election formally rejected the outcome of the polls. Atiku trailed Buhari by almost 4 million votes, winning in 17 states and the FCT while Buhari won in 19 states. The 71 other candidates got 1.38 million votes combined. In a 17-page document sent out early Wednesday morning, Atiku said he would have conceded defeat and even helped to build a better Nigeria if the polls were free, fair and credible and not marred by the level of violence, thuggery and outright vote rigging that was witnessed by local and international observers. “Consequently, I hereby reject the outcome of the February 16, 2019 elections and will be challenging it in court,” Atiku said in the statement. He called the results a sham, said Nigeria’s democracy cannot be put to an all-time ridicule as was seen during last Saturday’s election, thanked Nigerians for trooping out to participate in the elections, and called on citizens and his supporters to be calm while the judicial process takes effect.

•Continues online at www.businessday.ng

Fertilizer plant skyrockets Dangote’s net worth to $16.6bn

...as Dangote Cement reports 91% rise in profits for 2018 SEGUN ADAMS

he richest man in Africa has become a whole lot richer, Bloomberg Billionaires Index shows, as Aliko Dangote’s net worth hit $16.6 billion, the highest level he has attained since 2015 when the business mogul was worth $18.3 billion around January of the year. Worth an estimated $10.8 billion only Tuesday, 26 February, Dangote’s valuationspiked$5.81billionor53.6per cent in a day as a new venture in Fertil-

izer adds significantly to his net worth. The Fertilizer plant capable of producing 2.8 million metric tons of urea a year, sits on more than 6,700 acres of land along the coastal line of southern Nigeria and has been valued at $5 billion. Situated close to his $12 billion oil refinery, the factory is set to bolster ‘’ Dangote Industries’ annual revenue from $4 billion to about $30 billion, roughly 8 per cent of Nigeria’s gross domestic product’’ So far in the New Year, Aliko Dan-

gote has grown his wealth by more than half its worth as the self-made sexagenarian plans to cement his legacy with the new businesses. With the fertilizer business set to commence operations in a few months and the refinery near completion, analysts are very optimistic about the prospect of both the fertilizer and refinery business, as well as nurturing an expectation of improved foreign exchange inflow

Continues on page 38

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PMI drops by 1.4 to 57.1 point HOPE MOSES-ASHIKE

urchasing Managers Index (PMI) of the manufacturing sector dropped by -1.4 percentage to 57.1 points in February compared with 58.5 index point recorded in January. The PMI report released on Wednesday by the Central Bank of Nigeria (CBN) showed an expansion for the 23rd consecutive month but on a slower rate. Ayodeji Ebo, managing director, Afrinvest Se-

curities Limited, said this might be attributed to electioneering as businesses might have held back on their investment decisions until the conclusion of the elections. According to the report, production level, new orders, supplier delivery time, employment level and inventories grew at a slower rate in February 2019. Consequently, 13 out of 14 subsectors surveyed reported growth in the review month. These include petroleum and coal prod-

ucts; electrical equipment; transportation equipment; plastics and rubber products; food, beverage and tobacco products; textile, apparel, leather and footwear; non-metallic mineral products; chemical and pharmaceutical products; furniture and related products; printing and related support activities; cement; fabricated metal products; and paper products. The primary metal subsector recorded decline in the review period. At 57.5 points, the production level index for the

manufacturing sector grew for the 24th consecutive month in February 2019 compared with 59.3 points in January. The index indicated a slower growth in the current month, when compared with its level in the preceding month. The new orders index grew by 56.9 points for the 23rd consecutive month, indicating increase in new orders in February 2019. The manufacturing supplier delivery time index stood at 58.2 points in February 2019, indicating slower supplier delivery

time. The index has recorded growth for 21 consecutive months as all 14 subsectors recorded improved suppliersâ&#x20AC;&#x2122; delivery time in the review period. In the PMI report, the manufacturing sector inventories index grew for the 23rd consecutive month in February 2019, at 56.2 points, growing at a slower rate when compared to its level in January 2019. Nine of the 14 subsectors recorded growth, 1 recorded unchanged, while 4 reported declined raw material inventories in the review

month. The composite PMI for the nonmanufacturing sector stood at 58.4 points in February 2019, indicating expansion in the Nonmanufacturing PMI for the 22nd consecutive month. The index grew at a slower rate when compared to 60.1 point in January 2019. All 17 surveyed subsectors recorded growth. Business activities in the non-manufacturing sector grew at a slower rate by 59.7 points when compared to 61.7-point level in the previous month.

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Accelerating financial inclusion through the capital market UCHE UWALEKE

inancial inclusion is said to be achieved when citizens of a country have easy access to a range of formal financial services that meet their needs at affordable costs. These services should be broad enough to enable access, choice and usage and include but not limited to payments, savings, credit, insurance, pension and capital market products. The major goal of Nigeria’s National Financial Inclusion Strategy is ‘’to reduce the proportion of adult Nigerians that are financially excluded to 20 per cent in the year 2020 from its baseline figure of 46.3 per cent in 2010’’. Since its launch in 2012, policies implemented in line with the strategy have encouraged financial inclusion in the country. Among others, tiered KYC requirements, ATM expansion and agent banking have resulted in enhanced financial possibilities for small enterprises and households in Nigeria. While these initiatives have brought more people into the banking ecosystem, attaining the goal of financial inclusion continues to pose a challenge not least because the efforts so far seem to have focused on the money market channels with little attention on the role of the capital market. An analysis of financial inclusion status as at 2016, contained in the revised NFIS report, showed that a total of 40.1 million of Nigeria’s 96.4 million adult population were financially excluded with over 80 per cent resident in rural communities. The ultimate goal of financial inclusion is inclusive growth and for this to

happen the place of capital markets cannot be undermined. Capital market products such as mutual funds play an important role in mobilizing household savings. Relative to the size of the economy, the Nigerian mutual fund industry is small and lags behind those of peers. In a country reputed to be the most populous in Africa, participation by retail investors remains very low while the uptake of capital market products, through equity, debt or other structured instruments, is nothing to write home about. On the positive side though, the implication is that there is ample room for growth. Indeed, the capital market can serve as a veritable channel for enhancing financial inclusion including through new products and services tailored to suit investors’ preference for risk and return as well as borrowers’ project needs and risk appetite. This challenge has since been recognized in other jurisdictions. In China for example, as a way of reducing the exclusion rate of Small and Medium Enterprises, an interbank bond market exists offering a number of innovative products such as the SME Collective Notes (SMECN) which is a special financial bond. The China Banking Regulatory Commission (CBRC) grants approval to commercial banks to issue special ﬁnancial bonds for the purpose of increasing the size of loans to SMEs. Another initiative that recommends itself, with respect to improved financial access, was undertaken by the Securities & Exchange Commission of Pakistan which came up with the idea of establishing Capital Market Business Hubs (CMBH) in smaller cities in Pakistan. Designed to expand the outreach of capital market institutions, the CMBH is a central location where all capital market related activities can be initiated. The first such Hub was established in the city of Abbottabad with participation of 12 institutions comprising asset management companies, brokerage firms, a bank and the Karachi stock exchange which opened their branches in the area. Empirical studies confirm that the

establishment of CMBH has helped in no small measure to increase outreach to smaller cities, enhance awareness and uptake of capital market products and by extension increase the level of financial inclusion in Pakistan. Back home in Nigeria, such onestop financial centres are needed in many of our state capitals. At present, provision of capital market services is concentrated in the major cities leaving investors residing in smaller towns and villages at a disadvantage especially with respect to awareness about capital market products and services needed for improving their economic well being. For example, the network of stock broking firms and other capital market operators is spread only in Lagos and a few other major cities and are yet to outreach many state capitals in a country where online access for many retail investors remains a big challenge. It goes without saying that the Nigerian capital market suffers from the absence of a strong retail investor base. To expand the pool of such investors, it is important to recognize that capital market literacy is a major component of financial inclusion. No doubt, the Securities and Exchange Commission and Nigerian Stock Exchange have done a lot in this regard. While some progress has been made, a lot still needs to be done as recent research indicates low level of capital market awareness in Nigeria. To buttress this point, the case of the Alternative Securities Market (ASeM), a specialized platform of the NSE with flexible listing rules and requirements for SMEs readily comes to mind. Many emerging businesses with high growth potential are not taking advantage of this window to access long- term capital due, in part, to lack of awareness of such Platform. Further, with enhanced investor education, the level of participation in the Federal Government of Nigeria Savings Bond that accommodates low income earners will certainly be higher. Given the high exclusion rate of SMEs in the country and the large informal sector, the development and delivery of capi-

‘

…the development and delivery of capital market products in partnership with Fintech companies, will go a long way in on-boarding these excluded groups

tal market products in partnership with Fintech companies, will go a long way in on-boarding these excluded groups. In this regard, the plan by the National Pension Commission to commence the micro-pension scheme for the informal sector is laudable. In order to reduce the high exclusion rates especially in Northern Nigeria, sub-national governments and corporate organizations should see the need to complement the efforts of the federal government in the area of providing non-interest capital market products such as the Sukuk. As mentioned earlier, mutual funds are ideal products for increasing financial inclusion because they offer the low-income and less informed investor professional management, diversification and safe custody of assets. The government can come in here by providing fiscal incentives for the mutual fund industry. By the same token, the supply of capital market products can be stimulated through fiscal incentives such as instituting preferential tax treatment of corporate profits for listed companies. The role of the government should equally extend to putting in place a structured, feasible and time-bound privatization programme through the Nigerian Stock Exchange targeting eligible large cap government Enterprises in key sectors of the economy. As part of initiatives to fast-track financial inclusion in Nigeria, the Securities and Exchange Commission should consider adopting rules and proposing amendments to the CAMA and the Investment and Securities Act 2007 that will permit companies to raise funds through equity or debt-based crowd funding. The Commission should also strengthen implementation of existing Investor Protection Frameworks to mitigate the risk of fraud and engender confidence in the market space. All said, financial inclusion in Nigeria can indeed be accelerated through the capital market. Uche Uwaleke of Nasarawa State University Keffi is Nigeria’s first Professor of Capital Market and the President of the Association of Capital Market Academics of Nigeria

The need to evaluate Nigeria’s transportation policy

Festus Okotie

ransportation in Nigeria is one of the key sectors that needs serious and urgent attention because of its strategic importance and relevance as the ‘gateway’ to the success of our economy. In developed economies, transport investments and improved technology over the last century have brought about the reduction in the costs of transportation,which in turn stimulated growth and economic development in our country. In developing countries, the current potential for transport policies to boost sustainable and inclusive growth appears to be larger because of the backlogs of low transport infrastructure investments in both rural and urban areas, very poor level of governance, inadequate regulations in the sector, rising social costs in terms of education, accidents, poor communication and information amenities in most African nations because of its

poor infrastructural networks which makes transportation costs higher. Transport investments are usually large and very transformative in nation building and development. The increase of world demand for transport services is growing at an alarming rate. For example, global demand for passenger transport services was predicted to grow from 26trillion passenger kilometres from 1990 to 103 trillion passenger kilometres in 2050 on average. Unfortunately, the rapid growth in transport demand strains the transport capacity unit as a result of inadequate expansion in transport physical infrastructure. Consequently, this situation poses capacity crisis which generates increase in congestion, pollution and safety problems in the system. Expansion of the infrastructure such as building new roads has a limited role to play in solving transport problems.What is required to meet the anticipated demand is a well coordinated intermodal and innovative solution, which will deal with solving the challenges within all the modes. This is a solution that will promote sustainable development, which is defined as developmental plans that meets the needs of the present challenges without compromising the ability of future generations and meeting their needs also. A strategy which achieves optimum improvements in inefficiency and accessibility without degrading the environment or increasing accident of any sort are clearly

more sustainable. These include: economic efficiency in the use of transport resources, accessibility within and outside the city by the different modes available such as air, land, pipeline, railway and maritime and an enhanced environment including land use, safety and economic improvements. Transport systems provide mobility, access and other benefits such as facilitating the productivity of the other sectors of the economy. At the same time transport contributes to several major environmental pressure including atmospheric pollution, traffic accidents and congestion, resources depletion, waste accumulation and disruption of nature and cities. In a similar vein, population growth, increased economic activity and growing incomes combine to generate higher demand for transport services which has some negative implications for development. These impacts are economic, social and environmental issues which pose constrains to sustainable transport system. Following the growth in transportation demand and the consequent negative effects; sustainable transport policy has been adopted in many parts of the world, in order to deal effectively with this challenges and simultaneously provide optimal mobility and access. Along the same line, the Federal Government of Nigeria (FGN) in 1993 introduced National Transport Policy (NTP), aimed at achieving sustainability in the transport system.

Although the NTP ought to guide decisionmaking in transport industry, it is observed that the policy has little influence. Despite the policy, for instance, Nigeria’s transport infrastructural facilities are deteriorating and quality of service is falling. Going by this occurence, it is apparent that, despite the Federal Government of Nigeria (FGN) huge expenditure in the transport sub-sector of the economy and the introduction of elaborate National Transport Policy coupled with the formulation of strategies for implementing the policy in 1993 and 2002 respectively aimed at promoting viable sustainable transportation, the system appears sluggish and unsustainable. Obviously, in the light of the above, there is need to evaluate the National Transport policy(NTP) to determine the extent to which the policy has achieved its stipulated objectives. The NTP stipulated objectives are to achieve sustainability in the three pillars of sustainable transport. According to World Bank (World Resources Institute, 2004) the three pillars of sustainable transport are: Economic and financial sustainability, Social sustainability and Environmental sustainability. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Tax exemption for educational institutions: Is the court redrafting the tax law?

Glenn Ubohmhe

he recent judgment by the Court of Appeal (COA), in the case between Best Children International Schools (BCIS) Limitedvs Federal Inland Revenue Service (FIRS), delivered in December 2018, has once again brought to the fore the question whether being an educational institution of a public character, is in itself, sufficient for exemption to Company Income Tax in line with the provisions of section 23(1)(c) of the Company Income Tax Act (CITA). Or are there other supervening conditions that if not met will cause the income of an educational institution to be liable to tax and if so, what is/are the relevant provision(s) either in the CITA or Companies and Allied Matters Act (CAMA) where it is so stated? Facts In 2014, Best Children International School (BCIS), a private company limited by shares engaged in educational activities, rejected a tax assessment of about N32.7 million by FIRS for 2008-2012 assessment years out of which about 88% or N28.9 million relates to Company Income Tax. The assessment was challenged at the Federal High Court (FHC) on the ground that its activities as an educational institutionis tax exempt. At the FHC, the Court in 2016 ruled in favour of FIRS holding the view that only companies limited by guarantee are qualified for tax exemption and that by virtue of BCIS’ status as a company limited by shares, it does not fall

under the exemption as contemplated by section 23(1)(c) of the CITA. Dissatisfied with the judgement of the FHC, BCIS proceeded to the Court of Appeal, Abuja Division. Court of Appeal’s Decision: A review The COA upheld the decision of the lower court and premised its decision on two grounds thus; • that the exemption under Section 23(1)(c) contemplates companies limited by guarantee as stipulated in section 26 of the Companies and Allied Matters Act (CAMA). In other words, the Court is of the view that the form of registration is one of the qualifying criteria for tax exemption • the failure of BCIS to prove that it is an educational institution that engages in educational activities of a public character It is important to interrogate the judgement of the COAwhether the form of business registration matters for tax exemption within the context of the relevant statutes specifically by examining the section 23(1)(c) of CITA and section 26 of CAMA. The provisions of section 23(1)(c) of Companies Income Tax Act, 2007 (as amended) addresses exemption to income tax by companies operating in Nigeria. The section provides that the profits of any company engaged in ecclesiastical, charitable or educational activities of a public character shall be exempt from tax in so far as such profits are not derived from a trade or business carried on by such company. Nevertheless, should an educational earn income from other sources other than from education activities, CITA provides for taxation of such passive income (dividend, interest, rent or royalty). From the foregoing, the view held by the COA appears inconsistent with the law based on the relevant provisions of CITA. Save for two constraining conditions that, if not met, disqualify an educational institution from tax exemption, any other impu-

tation is alien to the Act. The two conditions that must be met are that the educational institution must be of a public character and the income must be strictly from educational activities otherwise the exemption shall not apply. In fact, the CITA provides that any company engaged in ecclesiastical, charitable or educational activities, without qualification as to the form of registration - whether limited by shares or guarantee (emphasis on “any company”). In my view, reliance on section 26 of CAMA by the Court of Appeal as the basis for the affirmation of the assessment by FIRS and the endorsement of the decision of the Federal High Court is a judicial misstep – the reason is not far-fetched. Section 26 of CAMA states thus; “where a company is to be formed for promoting commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, and the income and property of the company are to be applied solely towards the promotion of its objects and no portion thereof is to be paid or transferred directly or indirectly to the members of the company except as permitted by this Act, the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee” For the purpose of emphasis, section 26 of CAMA specifies that the form of registration of a company formed for the purpose of promoting education shall be determined based on the application of the income of such a company. What CAMA did not say, either expressly or by implication, neither can it be construed as such, is that the form of registration shall be the basis for exemption from Company Income Tax. This is precisely because the CAMA is not a revenue statute and it does not lay pretense to be one. Therefore, the interpretation by the Court of Appeal with regards to the relevance of section 26 of CAMA to the BCIS case appears to go beyond

‘

the Court is manifestly wrong to have partly predicated its decision on the form of business registration

stretching the scope of both CITA and CAMA. The decision is tantamount to redrafting the Acts and it is a clear departure from the decision of the Tax Appeal Tribunal (TAT) in the case between American International School vs FIRS. However, if the decision was based solely on BCIS failure to prove that its activities are of an educational character, it is an issue for distinction and a justifiable ground for disqualification from the exemption contemplated by CITA. Therefore, I take the position that BCIS’s argument may have been impaired by the its inability to prove that it is an educational institution and not because the school is registered as a company limited by shares. As the court noted “in the instant case, the appellant from the record before the court never exhibited her particulars of its registration as an academic institution or an institution of a public character. What was placed before the trial court was the affidavit of urgency deposed to by the appellant’s accountant “.Therefore, I do not hesitate to assert that the Court is manifestly wrong to have partly predicated its decision on the form of business registration. The key issue in this case was whether educational activities of a public character is exempt from tax. The Judgment by the COA has set a judicial precedence at least for now, whether rightly or wrongly, unless the decision is appealed and subsequently overturned by the Supreme Court. What this implies is that educational institutions, and other companies listed in section 23 of CITA that are registered as a company limited by shares may be liable to Company Income Tax. Proper guidance from tax advisers is therefore required by affected companies who may find themselves in similar situations in order to avert unintended tax consequences. Glenn is a tax practitioner. He has B.Sc (Acct), MSc (Energy Fin.), LLM (Petroleum Tax. & Fin), MBA, ACA, ACTI.

The imperative of regulating the tobacco industry with prudence Akeem Ogunlade

he Nigerian Tobacco Control Act (NTCA) generated considerable interest among contending parties before its enactment on the 28th of May 2015, following its passage earlier by the National Assembly. The law regulates the sale, manufacture, advertising, promotion and sponsorship of tobacco products in Nigeria. In many parts of the world, governments are increasingly inclined towards stringent tobacco control legislations in line with laid down framework by the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC). In so doing, governments recognize that many issues are in contention – specifically, balancing the public health concerns and the economic contribution of the tobacco industry as tobacco is a legal product across the world. In the proceedings leading to the enactment of the NTCA, two major contenders were prominent. On one hand, the anti-tobacco campaigners who argued that there should be no consultation with the tobacco industry in view of article 5.3 of the WHO FCTC which advocates that tobacco control policies should

be protected from the commercial interest of the tobacco industry. The tobacco manufacturers’ position, on the other hand, was that as key stakeholders in the tobacco industry their views on the potential consequences of the proposed laws should be considered, as laws made on biases would always be detrimental to the proposed public health objectives in the long-term. Commendably, the approach adopted by the two legislative houses in the National Assembly was that of inclusion demonstrating a duty of fairness – that is, engaging all stakeholders and availing them an opportunity to proffer their views with respect to the draft tobacco control bill before its passage into law. More importantly, the then leadership of the National Assembly also made attempts to clarify issues by stating, categorically, that the effort at developing tobacco control legislation was not intended to ban tobacco products in Nigeria but to regulate the activities of the tobacco manufacturers and traders taking into consideration the public concerns of the health risks associated with the consumption of tobacco products. Tobacco control is indeed a complex and controversial subject. There is a misconception that all it takes to achieve a drastic reduction in smoking is to regulate the tobacco industry out of existence. For example, there is a school of thought which recommends effective tobacco control

through tax measures. However, these tax measures fail to take into consideration the direct relationship between extremely high taxes and increase in tobacco smuggling and counterfeiting which will negatively impact the set public health objectives as taxes only increase the price of tobacco products sold through the legal channels. The one-size-fits-all approach has proven to be detrimental to achieving the set public health objectives, if the peculiarities of the local economy are not taken into consideration. Another key regulatory approach has been to implement harsh regulatory restrictions on the tobacco operators which imposes unnecessary financial burden and process complexities on the legal manufactures. It is a known fact that tobacco control elicits varied interests. However, it is reasonable for all advocates on both sides to take a holistic approach, considering the long-term effect of tobacco control in Nigeria – specifically, the public health objectives and the socio-economic contribution of the tobacco industry which are both very important. The public health objectives should remain paramount as the health of a nation is the strength of the economy. Though tobacco is a legal product, its consumption is associated with the related health risks. The tobacco control framework should not only be focused on tobacco laws that implement visible health warning on retail tobacco packaging, harsh tax

measures, restrictions on tobacco constituents and components, ban on tobacco advertising, promotion and sponsorships, which are targeted at the legal tobacco industry operators, but also on strong advocacy from the public health institutions to address the demand for tobacco products through the advancement of science. A key question remains necessary to be answered by the anti-tobacco communities and the government on why tobacco regulations is mainly focused on the supply chain of the tobacco industry and aggressive measures are not taken to ensure smokers quit or safe alternatives to the conventional cigarettes are made available to reduce the prominent risk from smoking. There have been researches all over the world on safe alternatives to the conventional cigarettes and advancement of science, which demonstrates that there are products with lesser risks than conventional cigarettes. If the objective of tobacco control regulations is to reduce the harm from tobacco smoking, then the consideration of advanced science on less risky options should be encouraged. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Ogunlade is of the Centre for Promotion of Enterprise and Business Best Practices

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Thursday 28 February 2019

Nigeria’s declining FDI

o one really doubts that every country which seeks to develop these days seek to attract foreign direct investment (FDI) to complement the level of domestic investment. FDIs not only enables investments in critical sectors of the economy, it also helps in “securing economicw i d e e f f i c i e n c y ga i n s through the transfer of appropriate technology, management knowledge, and business culture, access to foreign markets, increasing employment opportunities and improving living standards.” Even the Nigerian government is gradually coming round to this realisation as it realises it does not have the huge funds needed for even the physical infrastructure needed to support Nigeria’s burgeoning population and it has to increasingly rely on FDIs. Indeed, the government’s Economic Recovery Growth Plan (ERGP) captured the problem well: “The value of Nigeria’s total infrastructure stock (road, rail, power, air-

ports, water, telecoms, and seaports) represents only 35 per cent of GDP. This is far below the level of peer emerging market countries, where the average is 70 per cent” This, perhaps, explains the country’s low ranking in the Africa Competitiveness Report by the World Economic Forum, which ranks Nigeria’s infrastructure 134th out of 144 countries. The plan stated clearly that Nigeria needs to invest $3 trillion in infrastructure over the next 30 years if it wishes to remain competitive. This has led to the realisation that both the government and the private sector must contribute their quarter towards building Nigeria’s infrastructure. Like other progressive governments, the Nigerian government is beginning to design policies to ensure a robust public-private partnership where the private sector can invest massively in infrastructure. But just as this is being done, figures indicate that FDI flow into Nigeria has consistently been on the decline in the last four years. From a high of $8.9 billion in 2011, FDI has declined to

a paltry $2.2 billion in 2018. This is not surprising. This is a country where the president came out to say matters-of-factly that he does not trust individuals in the private sector. In his words: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. What is more, PPPs have not been successful in Nigeria basically because the government has shown over the years that it does not regard validly executed contracts as sacred. In many cases, the government has resorted to self help in a bid to do away with contracts that it considers not favourable to its interest. The result is a lack of trust in government and therefore reluctance by the private sector to participate in PPPs. With low interest in PPPs, the government is forced to fund infrastructure from its low revenues budget that could easily be funded through PPPs and from borrowing, s ometimes, at exorbitant interest rates. Then there is the greater

problem of disregard for the rule of law and unpredictability in government policies, regulation and the undermining of the judiciary as an impartial arbiter in disputes. These reckless behaviours have consequences, which will deeply hurt the country and its corporate image among the comity of nations. First, no selfrespecting country will do business with a country that doesn’t respect its laws. Second, no foreign investor will invest in a country that has no regard for its laws and where the courts are not independent or cannot be trusted to arbitrate on contract and trade disputes impartially and efficiently. There is just no running away from the reality that the government must partner the private sector to provide modern and world class infrastructure. The government must begin to rebuild trust and get the private sector on-board efforts to invest in Nigeria’s infrastructure. Private capital has alternative uses and many countries are competing for them. The sooner we develop an attractive PPP model the better for us.

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DAY

Cutix appoints new CFO, grows revenue by 7.5 percent in Q3 2018

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

FINANCIAL SERVICES

Impressive Full Year outing boosts Africa Prudential to 11-month high SEGUN ADAMS

hares of Africa Prudential Registrars, a Lagos-based financial services company, on Tuesday, rallied the most in a day to the highest level since March of 2018, on the back of a strong Top to Bottom-line performance for the full year 2018 and dividend declaration by the company. In the day’s trading, Africa Prudential rallied 10 percent, the biggest daily gain in well over a year, to N4.84 where it sat snug as the biggest gainer for the day. Despite the Market dipping 0.69 following the rejection of the Presidential Polls result by the People’s Democratic Party (PDP) which showed Muhammadu Buhari of the All Progressive Congress (APC) in an early lead, Africa Prudential’s earnings fuelled an uptick of its Year to Date, 1,140 basis points higher to 25.1 percent, from 13.7 percent recorded in the Monday’s trading session. The performance of the financial services company was bolstered by the company’s investment in fixed

income instruments to take advantage of the high yield environment, growth in the company’s loan book in 2018 and a more than 50 percent increase in its retainership fee, as well as other services rendered. The Company’s financials report a value of N12.45 billion for the debt instruments at amortized cost as at 31st December 2018, the value which reflects an N293.6 million allowance for credit impairment. Gross Earnings of Africa Prudential which has been steadily increasing year on year, grew 35.28 percent to N4.5 billion-the highest turnover in at least five years. Revenue from contracts with customers rose some 51 percent from N935.43 million to contribute 32 percent of the Gross Earnings compared to 68 percent contribution from Interest Income which grew year on year by 29 percent in 2018. Buoyed by withholding tax credit notes recovered during the year, profit from the disposal of plants and equipment and Dividend income amongst other items, Other Income ballooned 981

percent to N49.2 million in 2017. Although Operating expense rose 45.63 percent and Finance Cost jumped 588 percent, Profit Before Tax rose 15.86 percent to N1.95 billion in 2018. Tax expense increased by 25.48 percent as Profit after tax rose 14 percent to N1.95

billion in 2018. Consequently, Earnings per share of Africa Prudential continued in its upward trend since 2016, as it rose to N98 in 2018 compared to N86 in 2017. Africa Prudential proposed a dividend of N1billion, compared to N800 million in 2017, which translates

to 50 kobo for each unit of the company’s share for stakeholders whose name appear in in the Register of Members as at the close of business on, Wednesday, March 13, 2019 and also amounts to a dividend yield of 10.33 percent based on Tuesday’s share price of N4.84. Africa Prudential PLC

provides share registration services, carving a niche in creating client-company registers of shareholders, maintaining the register, dividend and interest payment, issuing of shares and debenture certificates, attending to shareholders inquiries, and handling of scrip and right issues.

RETAIL

Shoprite announces share simplification plans amid decline first half year earnings OLUFIKAYO OWOEYE

frica’s biggest grocery store, Shoprite Holdings, has revealed plans to embark on share simplification plans. The plan will see its Billionaire Chairman, Christo Wisese, give up his extra voting rights a move intended to empower smaller investors and simplify the grocer’s share structure. Shoprite in a statement said it is currently negotiating to buy or redeem and cancel them. Currently, the Chairman controls close to a third of the votes through a deferred shares. Although an agreement to purchase the stake could come at a high premium. The company’s share also reacted to the announcement as it gained nearly 5% at R169 per share at close

of trading on Tuesday. It has also set up an independent board to consider the proposed transaction with Investec Ltd. appointed as financial adviser to Shoprite. According to the company, the new plan will align the company with interna-

tional best corporate governance practice and ensure that all remaining shares have equal economic and voting rights. Interim result of the Grocer for the first half year result ending December 2018 were negatively affected by

increased financial pressure on its core customers and challenges with certain IT projects, among others factors. A result it described as below expectations. In a statement to shareholders it said 2018 was a “transformational year”

for the group, adding the interim results should not be seen as a reflection of the fundamental strength of the business. Figures from first halfyear result shows its merchandise increased by 0.2% to R75.8bn. The trading profit decreased by 19.0% to R3.3bn, while earnings before interest, tax and depreciation and amortisation (EBITDA) decreased by 12.2% to R4.7bn. Diluted headline earnings per share of 398.5 cents over the six months is a decrease of 24.1% over the previous corresponding period. A dividend per share of 156 cents was declared compared to 205 cents in 2017. According to CEO Pieter Engelbrecht, the decline in headline earnings per share for the interim period must

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

be viewed in the context of various critical expansion and technology projects the group embarked on in the past five years to ensure future growth and modernise its technology landscape. “The timing unfortunately coincided with the deterioration of the South African and non-SA economies and consumer expenditure levels over this same period,” said Engelbrecht. He said that, in the external operating environment, economic conditions have left the group’s core customer under significant financial pressure. Currency devaluations severely impacted the performance of operations outside SA. Mastercard, Prime study shows Africa, Middle East consumers prefer Mobile payments option

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COMPANIES & MARKETS INDUSTRIAL GOODS

Cutix appoints new CFO, grows revenue by 7.5 percent in Q3 2018 ISRAEL ODUBOLA

utix Plc, a Lagos-based electrical company, has announced the exit of Chima Nwosu as the c o m p a n y ’s C h i e f F i nance Officer effective Ja n u a r y 1 , 2 0 1 9 , a n d appointed Favour Oti to take over from him. Meanwhile, the third quarter accounts for the period ended 31 January 2019 released Tuesday revealed that the company’s revenue grew 7.5 percent to N4.13 billion c o m p a re d w i t h N 3 . 8 2 billion in the previous comparable period. The new CFO holds a Bachelor degree in accountancy from Imo State University. She is also a Master’s degree student of accounting at Chukwumeka Odumegwu Ojukwu University, Anambra State. Oti is an associate member of the Institu t e o f C ha r t e re d Accountants of Nigeria (ICAN), and prior to her appointment, she was the Assistant Head of Accounts Department. While gross profit

appreciated marginally by 1.71 percent to N1.19 billion, however 21.23 percent elevation in distribution costs and 23.58 percent rise i n a d m i n i s t r a t i v e e xpenses pared earnings before interest and tax (EBIT) by 13.17 percent to N539.5 million in the review period. The company posted dw indled profitability performance evidenced by 9.39 percent decline in profit before and after taxation to N462.8 million and N300.8 million respectively. Furthermore, net profit margin fell to 7.82 p e rc e nt i n t h e re v i e w period as against 8.64 percent a year earlier, i m p l y i n g t h a t f o r e very N100 the company makes as revenue, N7.82 was retained as profit. Earnings per share declined to 16 kobo in the month under review as aga inst N37.71 a year prior. This connotes that every unit of shares held attract a profit of 16 kobo. The efficiency of the company’s sales operations remain unchanged as cost of sales to reve nu e rat i o c o nt ra c t e d marginally to 69.53 per-

L-R: Ego Ogbaro, acclaimed vocalist; Cobhams Asuquo, award winning producer; Rotimi Keys, versatile instrumentalist; Simi Drey, host of the event, with the Season 1 winners of the musical show, Jesse Alordiah, Caesar, and Tchella at the Grand Finale where the winners were presented with $18,000, 3 Kia Cerato and a hit track with Rudeboy.

cent in the review period compared with 70.99 percent a year earlier. The company recorded elevation in current and non-current assets. Total assets grew 3.49 percent to N2.54 billion while total liabilities dip 12.53 percent to N944.4

m i l l i o n i n t h e re v i e w month, making net ass e t s (o r t o t a l e q u i t y ) spiked 16.10 percent to N1.59 billion. Authorized share capital trended northwards by 154.49 percent to N1.45 billion in the period review.

Paid up share capital also appreciated 100 percent to N880.6 million, and the number of shares outstanding jumped to 1.76 billion units from 880.6 units in similar period a year earlier. At the close of business on Tuesday, share

price of Cutix Plc appreciated by 9.63 percent to N2.05, and gained 25 percent year to date. Cu t i x P l c ma nu f a ct u r e s e l e c t r i c c a b l e s, insulated power cables, irrigation cable and aluminium enamelled wire among others.

CONSUMER GOODS

Nestle Nigeria re-brands bottle water, vows to champion healthier generations ISRAEL ODUBOLA

estle Nigeria, one of Africa’s largest food and beverages companies, has re-launched its table water, the Nestle Pure Life and Nestle Pure Life Protect premium water bottles. Speaking at the launch of the new brand identity, Maucricio Alarcon, Managing Director of Nestle Nigeria, said that the company would continue to promote healthy nutrition and lifestyle in line with its commitment to enhancing

quality of life and contributing to healthier future. “Healthy hydration, which Nestle Pure Life supports, is key component of healthy nutrition”, Alarcon said, adding that Nestle Waters will continue to focus on caring for the environment through water education, provision of access to clean drinking water as well as development of recycling initiatives. Gloria Nwabuike, Marketing Manager of Nestle Waters, stated that the bottles have been re-branded to highlight the new logo that reflects a significant

and relevant environmental message from the brand. According to her, the new Nestle Pure Life logo reflects the commitment of Nestle Waters to a cleaner planet through efforts such as promoting environmental education, providing access to portable water in the communities, and using less of plastic in production. “The quality of water brand has a plastic collection initiative equally directed at caring for the environment”, Nwabuike affirmed, adding that the new brand aims to cham-

pion healthier generations in Nigeria. Also speaking at the launch, Issa Rabid, Business Executive Officer of Nestle Waters, said that the unveiling marks the beginning of a new purpose for Nestle Water which is about “Championing Pure Water for healthier generation” According to Rabid, the essence of the new brand is predicated on the belief that water is paramount to life, and should not be taken for granted. Nestle Pure life is committed to responsible water

stewardship and providing quality sage drinking water to support healthy hydration, making it easier for families to improve their health. Rabid said that the new blue planet logo is a symbol of Nestle Waters commitment to the environment and quality of water offered to consumers guaranteed by its 13 steps quality process. The re-launch was also held in the Federal Capital Territory to widen the awareness drive. Nestle Nigeria Plc is engaged in the manufactur-

ing, marketing and distribution of food products including purified water throughout the country. The company operates in two segments namely Food and Beverages. The food segment includes production and sale of Maggi, Cerelac and Golden Morn among others. The beverages segment focuses on the production and sale of Milo, Chocomilo, Nido, Nescafe and Nestle Pure Life. The company was founded in 1961, with Nestle S.A of Switzerland as the majority shareholder.

Thursday 14 February 2019

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TECHNOLOGY

MasterCard, Prime study shows Africa, Middle-East consumers prefer mobile payment options KELECHI EWUZIE

frica and the Middle East consumers prefer Mobile payments option. The Sixth Mastercard, PRIME research has shown. According to the research, Mobile payments represented more than 30 percent of the total social media conversation around payments in the Middle East and Africa, with total mentions doubling over the prior year. The Sixth Mastercard Digital Payments Study developed in partnership with PRIME Research, analysed more than 3.3 million conversations globally and 90,000 conversations in the Middle East and Africa from the past year across social media channels including Twitter, Facebook, Instagram and Weibo. The study indicated that consumers are looking to newer technologies to have an impact on their lives. In the past year alone, such mentions on social media increased 30 percent glob-

ally since the last study. “Today, nearly 20 percent of all mobile commerce payments are focused on contactless payments and mobile wallets. Beyond these primary focus areas, consumers are interested in how artificial intelligence, QR payments and wearable payments will impact their lives”, the study shows. Overall, people are increasingly positive toward these newer technologies. In the Middle East and Africa, virtually all (95 percent) mobile wallet conversations were favourable, with 22 percent of posts praising the speed, efficiency and simplicity of these products. “In the fast-evolving world of digital payments, it is crucial that we listen and understand the views of the people who ultimately use our solutions. The Mastercard Digital Payments Study highlights a willingness to adopt the latest payment technology solutions from users across the Middle East and Africa, and reinforces the increasingly important role that mobile payments play in everyday life,” said Gaurang Shah,

senior vice president of Product Management, Digital Payments & Labs for the Middle East and Africa at Mastercard. The study further shows that among the conversations analysed, consumers clearly continued to be focused on the security of their money and their data as a foundational requirement. In their posts, people recognise the value of new technologies on delivering this peace of mind across mobile payments. “Looking at the newer technologies: Biometrics reached a potential 111 million, driven primarily by an interest in voice payments and fingerprint scanners; Tokenisation and its critical role in supporting and protecting payments of all type was featured in conversations reaching a potential audience of 11 million viewers”, the study indicated. While breaking news around data breaches drove one-fifth of data-related conversations, another 13 percent of these conversations noted the potential of digital security technologies, including blockchain, tokenisation and biometrics.

CONSUMER GOODS

Promasidor backs micro-credit scheme for families with challenged kids TEMITAYO AYETOTO

romasidor Nigeria Limited has provided succour to more than 60 parents of children with disabilities through its low-interest microcredit scheme dubbed We Too Can Grow in the advancement of its corporate social responsibility (CSR) policy. The scheme, in partnership with Children’s Developmental Centre (CDC), which supports children and young adults with disabilities, has benefitted five cooperative groups to which these families belong, with three more to receive grants. Promasidor, makers of Cowbell Milk, Loya Milk among other products, initiated the scheme to provide funds to the cooperative groups located in Lagos and Ogun states through the CDC. It is facilitated by Surbpolitan Microfinance Bank. Commenting on the support received from Promasidor at a ceremony held for the cooperatives at the CDC in Lagos, the Project Director, Delphine Misan-Arenyeka stated that the company has shown that it cares for children as well as young adults with disabilities. She said a lot of progress has been made and that other groups would also get the funds after undergoing training with the Community Development Foundation (CDF), which is in charge of capacity building, in partnership with CDC. The training is for proper organisational development, which involves conflict management, credit and financial management and entrepreneurship.

Misan-Arenyeka added that four of the five cooperatives that have benefitted from the scheme are in Lagos, while one is in Abeokuta, Ogun State. They include Excellent Cooperative, Success Cooperative, Affectionate Cooperative, CDC/Parents and AtundaOlu. She commended Promasidor for the laudable scheme and eulogised the company for demonstrating that it cares for the less privileged while urging other organisations to emulate the gesture. “We Too Can Grow also includes the provision of Promasidor’s products to CDC which are sold to support the children through funds disbursed to parents,” the Project Director explained. On her part, Olayinka Akindayemi, CDC Service Director advised the benefitting parents to take adequate care of their children and make judicious use of funds provided to them. She said there are plans to extend the scheme to other cooperative groups for the wellbeing of children with special needs. In his remarks, Isiaka Lawal, the coordinator corporate communications, Promasidor Nigeria Limited, said: “We Too Can Grow is a way of saying that we recognise that children with special needs are members of the society. They have the right to pursue their dreams like other members of the society do.” At the ceremony, Akinyemi Akintola, CDF Executive Director affirmed that apart from the twoday training, which was held in languages the groups understand, its organisation’s role is also to monitor and ensure that loans are used properly by the cooperatives and paid on time for others

to benefit. He said CDF is involved in the partnership with CDC in order to bring to use its expertise for development in areas where the centre does not have and then continue from there. “It started based on this programme and will continue from there,” Akintola stated. On the impact of the training and the loans received, the Chairman, Affectionate Cooperative Group, Cornelius Akintola Kasunmu said the fund was well disbursed among the 22 members of the cooperative. He added that the training at CDF was quite useful as it has helped him to grow his business and also in attending to issues relating to his child’s wellbeing. Another member of the group, Ganiyat Falade explained that the training by CDF has broadened her knowledge on how to manage funds for investment purposes.“Now, l can adequately take records of sales and products l invest in. The training has been very useful,” she said. A member of Excellent Cooperative Group and a beneficiary, Femi Oladapo said the funds have enabled him to cope with the health of his child as well as his business. “I thank God for this initiative,” he stated. Ojo Olubukunola from Dayonmi Love Foundation, a cooperative group in Abeokuta, and Ishola Abiodun from CDC/Parents Cooperative Group in Lagos both commended Promasidor and CDC for the scheme. Exuding joy, Abiodun said: “My child’s health has taken me to places but Promasidor and CDC have brought relief to me. I thank Promasidor for this scheme.”

L-R: Derek Mitchell, president, National Democratic Institute (NDI); Fatoumata Tambajang, head of IRI/ NDI Election Observation Mission and former vice-president of the Gambia; and Dan Twining, President of International Republican Institute (IRI), during a news conference by the IRI/NDI Election Observation Mission on initial assessment of the 2019 presidential and National Assembly elections, in Abuja. NAN

L-R: Funke Opeke, CEO, MainOne; Niyi Ajao, acting CEO, Nigeria Inter-Bank Settlement System (NIBSS); Abiola Ogunsakin, GM, Market Development, Inlaks Limited; Adedayo Adesanya, lead consultant, Virtual Nigeria; Oluwole Oyeniran, west african systems and integration lead, Deloitte; Funto Olasemo, GM, Infoware and Victor Okigbo, chief technology officer, FBN Quest; during the Cloud/Cybersecurity session at Nerds Unite 2019, MainOne’s annual Technology conference, recently.

L-R: Francis Meshioye, chairman, Ikeja branch Manufacturers Association of Nigeria (MAN); Segun Ajayi, director general, MAN; Ahmed Mansur, president, MAN, and Okey Akpa, managing director, SKG Pharma Limited, during the visit of MAN to SKG Pharma Limited Lagos.

L-R: Toheeb Azeez, media manager, NB Plc.; Sarah Agha, portfolio manager, National Premium Brands NB Plc.; Kolawole Akintimehin, senior brand manager, Gulder NB Plc., and Freya Doessel, brand manager, Support Gulder, NB Plc., at The Unveil of Gulder’s New Brand Positioning – “Own Your Journey”

BUSINESS DAY

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2,165.23

399.27

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Week open 15 – 02–19)

31,070.0 32,715.20

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N12.200 trillion

2,255.10

1,514.11

793.13

Week close (22 – 02–19)

32,515.52

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1,498.95

800.75

Year Open

Percentage change (WoW) Percentage change (YTD)

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NSE Lotus II

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300.24

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303.17

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752.88

303.55

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1,245.15

-1.39

-1.50

2.16

3.12

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1,399.64

399.27

124.82

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435.55

128.78

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-1.00

0.96

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4.11

0.87

4.00

0.68 9.92

0.02 1.83

731.57

-1.53 0.54

0.13 0.44

-0.82 3.91

Investors target value stocks ahead of post-polls rally …election risk seen waning Iheanyi Nwachukwu

ore investors are cherr y-picking value stocks at the Nigerian Bourse in an attempt to position ahead of much expected post-election rally. These investors are further guided to buy fundamentally sound stocks following fading election risk, supportive macroeconomic picture, as well as earnings season which will soon enter full gears. The stock market opened this week on a positive note as investors keenly followed the outcome of last weekend’s presidential and national assembly elections. “We expect the market to find stronger support level on optimism surrounding the expected peaceful outcome of Saturday’s presidential elections”, research analysts at Lagos-based FBNQuest said in their February 25 note. Also, analysts at Lagos-based United Capital Plc said in their February 25 note that, “politics and earnings should be the two biggest themes that would guide trading sentiments this week. In the wake of the just concluded Presidential and National Assembly elections, markets would have to come to terms with uncertainties around the probable economic direction of the new (or old) government, even as earnings continue to trickle in”,

On earnings season, most of the notable counters like Zenith Bank Plc have released their audited full year scorecards. While there are proposal to reward investors with dividend payment; some other companies alike are at the verge of berthing with their scorecards. Among the companies that have also released their audited results for the full year ended December 31, 2018 are Nigerian Breweries Plc, United Capital Plc, Transnational Corporation of Nigeria Plc, and Transcorp Hotels Plc. Recently, FBN Holdings Plc notified the investing public through the Nigerian Stock Exchange (NSE) on the meeting of her Board of Directors holding on Wednesday, March 11, 2019, to consider the 2018 Audited Financial Statements. The Holding Company’s closed period started from Tuesday February 26, 2019, till 24 hours after the accounts are filed with the Exchange, in line with rule 17, 18 of part 2 (Issuer’s Rules) of the NSE’s Rule Book (2015). Last week, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 0.61percent weekon-week (wow) to close at 32,515.52 points, from a high of 32,715.20 points recorded the preceding trading week ended Friday, February 15. Also, the value of Nigeria’s listed equities decreased by N74billion to N12.126 trillion from a high of N12.200 trillion recorded the preceding week. Thirty-four (34) equities appreciated in price during the review week,

lower than 60 in the preceding week. Thirty-eight (38) equities depreciated in price, higher than 21 equities in the preceding week, while 96 equities remained unchanged higher than 87 equities recorded in the preceding week. “Barring any negative surprises at the polls, we anticipate a positive start to next week’s (Monday February 25) trading as investors price in improved certainty upon conclusion of the general elections”, said analysts at Lagos-based Vetiva Capital in their weekly market note. “The market had a bearish start

following the postponement of the general elections. Despite modest recoveries during the week largely due to positive reaction from earnings releases, the All Share Index still declined at the close of the week as investors booked short term gains. We therefore expect the market to settle higher this week, albeit modestly,” said Meristem Researchers in their ‘Weekly Stock Recommendation.’ “In the absence of a positive catalyst, as well as the still tense political milieu, we guide investors to trade cautiously in the short term. However, stable macroeconomic

fundamentals and compelling valuations remain supportive of recovery in the mid-to-long term”, said research analysts at Lagos-based Cordros Securities in their February 25 market update. Vetiva Research analysts in their February 26 note expect the anticipation of final election results and outcome to continue driving some cautious sentiment. They had in their Monday February 25, 2019 noted that they anticipate a positive start to this week’s trading as investors price-in improved certainty upon conclusion of the general elections.

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Thursday 28 February 2019

Investor

Helping you to build wealth & make wise decisions

Company Focus

Investor’s Square

Standard Chartered grows full year profit by 28% to $3.9bn

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

…makes $900m provision in respect of legacy financial crime control matters, FX trading issues. Iheanyi Nwachukwu

Corporate Treasury Series

The growing importance of the treasury function

tandard Chartered Plc (the Group) has released its results for the year ended December 31, 2018. The result made available to INVESTOR shows operating income of approximately $15billion in 2018 as against $14.3billion in 2017. The Group reported profit before taxation (PBT) of $3.9billion in the review financial year ended 2018 as against $3.01billion in the corresponding period of 2017. Underlying profit before tax of $3.9billion was up about 28percent, dr iven b y t h e G r o u p’s l a r g e s t segments and regions; while its statutory profit before tax of $2.5billion is stated after provision for regulatory matters and restructuring and other items and was 6percent higher. The Group made a $900million provision in respect of legacy financial crime control matters and FX trading issues. All figures are presented on an underlying basis and comparisons are made to the equivalent period in 2017. Return on ordinary shareholders equity increased to 4.6percent from 3.5percent in 2017. Basic earnings per share increased 14.2 cents to 61.4 cents. The Board has recommended a final dividend of 15 cents per ordinary share, up 36percent from 11 cents in 2017. Return on ordinary shareholders tangible equity increased to 5.1percent from 3.9percent ; while cost to income ratio declined to 69.9percent from 70.8percent in 2017. “We have made tremendous progress securing the foundations of the business since 2015, resulting in a third successive year of underlying profit growth. Our refreshed priorities announced today will help realise the true value of the franchise. “We will measure this not only in monetary terms with double-digit equity returns and significant shareholder distributions targeted by 2021, but also in the positive impact to our clients, stakeholders a n d c o m m u n i t i e s. We are deter mined to drive commerce and help our clients achieve prosperity, while doing everything that we can to make the world a cleaner, safer and more sustainable place”, said Bill Winters, Group Chief Executive, Standard Chartered Plc. “The operating income

of $15billion grew 5 percent. The group chief executive linked it to a strong performance in transaction banking, good growth in retail products “and slightly l ow e r g row t h i n w e a l t h management and financial markets more than offset lower income in corporate finance,” the Group Chief Executive said. The Group’s net interest margin increased to 1.58 percent and remained stable in the fourth quarter. Operating expenses excluding the UK bank levy of $10.1 billion were up 2 percent. Continued discipline on costs has e n a b l e d t h e G r o u p’s significant investment into improving the business with a greater proportion targeted at technology enabled productivity improvements. “Credit impairment of $740 million was lower by 38 percent reflecting the f o c u s o n h ig h e r- q u a l i t y origination within tightened risk tolerances. Other impairment of $148 million related primarily to transport leasing assets. The Group has taken the decision to discontinue its ship leasing business and future profit and losses associated with the related portfolio will be reported as restructuring. Profit from associates and joint ventures of $241 m i l l i o n w a s 1 5 p e rc e n t higher following a return to profitability of the Group’s joint venture in Indonesia,” Winters said. A n d y Ha l f o rd , G ro u p C h i e f Fi na n c i a l O f f i c e r, Standard Chartered Plc said, “We have made good progress turning around the Group’s financial performance with profits having increased s i g n i f i c a nt l y e v e r y y e a r since 2015. We are delivering returns that are now much closer to the targets we set out in 2015 and we have clearly defined the actions required to get us above a 10 per cent return on tangible equity by 2021.” “We have made a solid start

to the year, although income is down slightly compared to the equivalent period in 2018 due to strengthening of the US dollar and buoyant conditions last year in Wealth Management and Financial Markets in particular. While sentiment remains more cautious in the near-term, robust fundamentals across our markets mean we remain optimistic about growth in the medium term. “This franchise is capable of much more. The refreshed strategic priorities we have laid out today will reinforce our positions of strength and differentiation that are driving profitable growth while also addressing underperforming businesses and improving structural efficiency. We are investing s i g n i f i c a nt l y m o re t ha n we were in 2015 and an i n c re a s e d p ro p o r t i o n i s t a rg e t e d at t e c h n o l o g y enabled productivity improvements. Our balance sheet is fundamentally more resilient and the conduct and culture across the Group has improved markedly”, Halford said. José Viñals, Group Chairman, Standard Chartered Plc said “ The global economy has c o n t i n u e d t o g ro w , b u t geopolitical uncertainties and the spectre of trade protectionism remain. “We are realistic concerning the key issues and risks, but despite this, the opportunities in our markets remain substantial and the work that we have done in recent years in enhancing our capabilities and strengthening our resilience puts us now in a better place to capture them. “Based on our extraordinary footprint and the talent of our colleagues, I am confident that as we execute our new strategic objectives with discipline and energy we will create long-term value for all our stakeholders and become the best bank we can be,” Viñals said.

he Treasury function in any corporate has always been important in making sure that the business has sufficient liquidity to meet its obligations, whilst managing payments, receipts and financial risks effectively, writes Richard Martin, Head of Payments and Cash Management, Barclays Commercial. With the ever increasing pace of change to regulation, compliance and technology in the financial sector, Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company: for example, working with the sales department to establish good financial contract terms so that any trade discounts offered and the payment method agreed are beneficial to the business. Current market conditions also reinforce the need for corporates to ensure that their financial position is managed as efficiently as possible, with no excess working capital tied up in the business - the old adage ‘cash is king’ is certainly as relevant today as it has always been. Treasury departments need to cover the complete financial environment; from capital structure and long term investments to liquidity and working capital management. If Treasury can drive improvements in the PurchaseTo-Pay and Order-To Cash cycles, there can be a direct effect on the overall debt and investment requirements and

thus on the capital structure required in the business. The question then is: if the Treasury function is becoming more of a business partner, how can the department manage its time to ensure that day to day administration, processing and transaction execution is completed using the minimum of resource? The answer is that most larger companies automate the majority of their daily financial processing and administration tasks, supported by policy standards, control and m o n i t o r i n g p ro c e s s e s, embedding financial best practices across the whole business. Integrating corporate systems with those of their banks can achieve significant levels of automation, reducing the amount of time that needs to be spent on tasks such as calculating the daily cash position. At the same time, the efficient use of secure systems can minimise operational risk, increase operational security and maximise straight through processing. Add to this automatic reconciliation of bank account data and Treasury can then manage exceptions rather than every item, giving them the time to devote to delivering valueadded services across the company. As all treasurers are well aware, there are currently a significant number of developments in the financial markets, particularly in Europe, which affect most companies and their banks. Europe is becoming more

integrated, aided by the introduction of SEPA. This will help companies to do business more easily, although at the same time this will increase competition between banks. Then there is the effect of increasing globalisation, opening up new markets in different regulatory regimes, all of which need to be understood and managed to ensure financial propriety. European banking infrastructure and regulation is currently going through its largest re-organisation for many years - how will SEPA develop, which new payment providers will flourish, what clearing and settlement mechanisms will be available? These all have the potential to change the optimal bank account structure across Europe and need to be considered by Treasury for the benefit of the whole business. Technology development is continually providing new and enhanced ways for corporates to manage their financial position. An example of this is the development of SWIFT Corporate Access, enabling corporates to use SWIFT channels to communicate directly with their banks. T h i s, t o g e t h e r w i t h the development of more standardised file formats, for example XML, has the potential to change radically the systems and processes used in the business where the benefits outweigh the cost of introduction. For more information on the benefits of using SWIFT please see “The Quest for Differentiation through Common Standards”, TMI 158. Cash and liquidity management has always been a key task in every company to ensure debtor, creditor and stock levels are managed as efficiently and effectively as possible. When the business environment is more challenging, corporates can gain a competitive advantage through optimal management of every aspect of their financial position. As one treasurer of a multinational corporate commented at a recent cash management conference “During times of difficulty, treasurers demonstrate their true worth to the business”.

Thursday 28 February 2019

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Mutual Fund trading platform: Enhancing visibility of listed funds Iheanyi Nwachukwu

ast week, precisely on Friday February 22, the Nigerian Stock Exchange (NSE) in conjunction with Fund Managers Association of Nigeria (FMAN); Association of Stockbroking Houses of Nigeria (ASHON) and the Central Securities Clearing System (CSCS) Plc launched the NSE Mutual Fund Trading and Distribution Platform. This distribution platform is a new channel for accessing Mutual Funds which are listed on the NSE. Leveraging this new platform, both institutional and retail investors have the benefit of a single view of their Mutual Fund investment while being able to invest with multiple fund managers through a single broker. Investors will have the benefit of a single view of their mutual fund investment and ease variety of transactions like subscription, redemption, cancellation etc. The Mutual Fund trading platform will bring together market participants to facilitate electronic transactions with seamless interaction between NSE, CSCS Plc, Fund Managers and Brokers Dealers. A Mutual Fund is an investment vehicle made up of a pool of funds collected from numerous investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual Funds are operated by professional fund managers, who invest the fund’s capital and attempt to produce capital gains and income for the investors. One of the main advantages of Mutual Funds is they give small investors access to professionally managed, diversified por tfolios of equities, bonds and other securities. Each shareholder, therefore, participates proportionally in the gain or loss of the fund. Recently, there has been significant increase in the number of mutual funds in Nigeria, an indication of the growing interest in this investment vehicle. However there is significant room for growth in mutual fund assets, as the ratio of these to the Nigerian Gross Domestic Product (GDP) is estimated at less than 1percent. As at February 18, 2019, the numbers of registered mutual funds with the Securities and Exchange Commission (SEC) stood at 76 with Net Asset Value (NAV) in excess of N600billion. Out of these registered funds, 47 are listed on the NSE memorandum listing platform. “With the launch of this new distribution platform, we expect to receive more

From L-R: Efiok Efiok, Head, Investment Management Department, Securities and Exchange Commission, Nigeria (SEC); Oscar N. Onyema, OON, Chief Executive Officer, The Nigerian Stock Exchange (NSE); Chief Patrick Ezeagu, President, Association of Stockbroking Houses of Nigeria (ASHON); Wale Agbeyangi, Group Managing Director/CEO, Cordros Capital; James Ilori, CEO, First City Asset Management; Dayo Obisan, President, Fund Managers Association of Nigeria (FMAN); Hajara Adeola, Managing Director/CEO of Lotus Capital Limited during the closing gong ceremony commemorating the launch of the NSE Mutual Fund Trading Platform at The Exchange

applications for listing of mutual funds. This launch provides an opportunity for the 256 brokers in the market to distribute to existing 13.9million investors’ accounts in CSCS and attract new investors that may be interested in gaining exposure to the capital markets through mutual funds”, said Oscar Onyema, CEO of Nigerian Stock Exchange. “This restates our commitment to provide market operators, issuers, fund managers and investors with a reliable, efficient and an adaptable platform to create a more transparent, liquid and accessible market in line with global best practices. The platform will facilitate electronic transactions with seamless connection between NSE, CSCS, Fund Managers and Brokers,” Onyema added. Benefits of investing in Mutual Funds D iversification: Mutual Funds spread their holdings across various investment vehicles, reducing the effect any single security or class of securities has on the overall portfolio. Because mutual funds contain hundreds or thousands of securities, investors are less affected if one security underperforms. Professional Management: Mutual Fund accounts are managed by qualified professionals. These professionals invest only

‘

Through this platform investors can pool funds into chosen basket of securities which have proven to be a veritable means to optimise returns and reduce risks after careful analysis of the performance and prospects of different securities. It is a continuous process that takes time and expertise which will add value to your investment. Regulations: Mutual Funds are required to be registered with the Securities and Exchange Commission. They are obliged to follow strict regulations designed to protect investors. Affordability: As a small investor, you may find that it is not possible to buy shares of larger corporations. With Mutual Funds, small investors can get started b e cau s e o f t h e m i n i ma l investment requirements. Liquidity: With open-end funds, you can redeem all or part of your investment any time you wish and receive the

current value of the shares. Moreover, the process is standardised, making it swift and efficient. Transparency: As a unit holder, you are provided with regular updates, for example daily NAVs, bid and offer prices as well as information on the fund’s holdings and the fund manager’s strategy. Stakeholders view on the Mutual Fund Trading and Distribution Platform “ We a re d e l i g h t e d t o provide a solution that will enhance visibility for the listed mutual funds and promote financial inclusion, w h i l e s t i mu l at i ng re t a i l investor participation in our market. This reinforces our commitment to provide market professionals, issuers, fund managers and investors with a reliable, efficient and an adaptable exchange hub in Africa, to save and to access capital. “Through this platform investors can pool funds into chosen basket of securities which have proven to be a veritable means to optimise returns and reduce risks,” said O lumide Bolumole, Head of Listing Business Division, NSE. “This marks yet another milestone for the Nigerian capital market and we believe that it will serve as a step towards improving the level of financial inclusion in Nigeria by giving investors

varieties of investment products,” said Haruna JaloWaziri, Managing Director/ CEO of CSCS Plc. “A s p a r t o f o u r commitment to providing far-reaching benefits to the capital market, CSCS Plc has proactively invested in technology that would enable us provides seamless post-trade ser vices to a wide range of financial instruments including collective investment schemes. “A d d i t i o n a l l y , F u n d managers can now augment their product distribution strength using the brokerage communities’ network. We believe this will also contribute towards increasing secondary market participation whilst growing funds under management for Asset managers”, Jalo-Waziri added. “It is a great pleasure to see the platform launched and become operational. One of the initiatives in the FMAN 5-year roadmap was to develop and implement a nationwide distribution/ trading platform for mutual funds. “Over the past 18 months, The NSE, CSCS Plc, ASHON and the Securities and Exchange Commission (SEC) worked closely with FMAN to attain this great milestone, ” Dayo Obisan, President of

Fund Managers Association of Nigeria (FMAN). “ We i n t h e A S H O N a re h i g h l y d e l i g h t e d t o have been a par t of the development and emergence of the Memorandum Trading Platform. The project was directed at reawakening the small savers in order to take advantage of investing via mutual fund to have the synergistic benefit of a better return in the market”, said Patrick Ezeagu, chairman of the Association of St o ckb ro k i ng Hou s e s o f Nigeria (ASHON), noted. “We cherish the relationship we have built in the course of this project w ith the FMAN and the NSE, we have the firm belief that this success story will transcend to other areas of the capital market. The Memorandum Trading Platform will facilitate the ease of doing business in trading and distribution of Mutual Funds. “ It w i l l i n s p i re s ma l l savers thereby promoting financial inclusion which is an important focus of our members. We congratulate everyone that contributed to the success of this initiative and encourage all operators to embrace this new aspect of deepening of our market which is a formidable incursion into an erstwhile grey sector”, Ezeagu added.

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Leadership

Thursday 28 February 2019

Shaping people into a team

The big idea: when no one retires Paul Irving

he world is undergoing a demographic transformation. In many countries, the population is getting old. Globally, the number of people age 60 and over is projected to double to more than 2 billion by 2050 and those 60 and over will outnumber children under the age of 5. The reasons for this age shift are many — medical advances that keep people healthier longer, dropping fertility rates and so on — but the net result is the same: Populations around the world will look very different in the decades ahead. This societal shift will undoubtedly change work, too. Soon, the workforce will include people from as many as five generations ranging in age from teenagers to 80-somethings. Are companies prepared? The short answer is “no.” In general, corporate leaders have yet to invest the time and resources necessary to fully grasp the unprecedented ways that aging will change the rules of the game. And those who do think about the effects of an aging population typically see a looming crisis — not an opportunity. The reality, however, is that increasing longevity contributes to global economic growth. Today’s older adults are generally healthier and more active than those of generations past. In the workplace, they provide emotional stability, complex problem-solving skills and institutional know-how. Their guidance and support enhance performance and intergenerational collaboration. Transformation won’t be easy, but companies that move past today’s preconceptions about older employees will realize significant dividends. There’s broad consensus that the global population is changing and growing significantly older. There’s also a prevailing opinion that the effects on society will largely be negative. The World Bank foresees fading potential

in economies across the globe, warning in 2018 of “headwinds from aging populations in both advanced and developing economies, expecting decreased labor supply and productivity growth.” What’s at the heart of this gloomy outlook? Economists often refer to what’s known as the dependency ratio: the number of people not typically in the workforce — those younger than 15 and older than 65 — in a population divided by the number of working-age people. This measure assumes that older adults are generally unproductive and can be expected to do little other than consume benefits in their later years. This picture, however, is simply not accurate. While some older adults are unable to maintain an active lifestyle, far more are able and inclined to disprove assumptions about their prospects for work and productivity. The work of Laura Carstensen and her colleagues at the Stanford Center on Longevity shows that typical 60-something workers today are healthy, experienced and more likely than younger colleagues to be satisfied with their jobs. Yet the flawed perceptions persist, a byproduct of stubborn and pervasive ageism. Positive attri-

butes of older workers are crowded out by negative stereotypes that infect work settings and devalue older adults in a youth-oriented culture. There’s more: Deloitte’s 2018 Global Human Capital Trends study found that 20% of business and human resources leaders surveyed viewed older workers as a competitive disadvantage and an impediment to the progress of younger workers. The report concludes that “there may be a significant hidden problem of age bias in the workforce today.” For the most part, employers continue to invest far more in young employees and generally do not train workers over 50. In fact, many companies would rather not think about existence of older workers all. “Today it is socially unacceptable to ignore, ridicule or stereotype someone based on their gender, race or sexual orientation,” points out Jo Ann Jenkins, the CEO of AARP. “So why is it still acceptable to do this to people based on their age?” How can companies push past stereotypes and other organizational impediments to tap into a thriving and talented population of older workers? These best practices can help companies make real

progress: — REDEFINE THE WORKWEEK: To start, you need to reconsider the out-of-date idea that all employees work Monday through Friday, from 9 to 5, in the same office. Companies should invest instead in opportunities for creative mentorship, part-time work, flex-hour schedules and sabbatical programs geared to the abilities and inclinations of older workers: Many older workers say they are ready to exchange high salaries for flexible schedules and phased retirements. Some companies have already embraced nontraditional work programs for employees, creating a new kind of environment for success. The CVS “Snowbird” program, for example, allows older employees to travel and work seasonally in different CVS pharmacy regions. — REIMAGINE THE WORKPLACE: Your company should also be prepared to adjust workspaces to improve ergonomics and make environments more age-friendly for older employees. No one should be distracted from their tasks by pain that can be prevented or eased, and even small changes can improve health, safety and productivity. Xerox, for example, has an ergonomic training program aimed at reducing musculoskeletal

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

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disorders in its aging workforce. — MIND THE MIX: Lastly, you need to consider and monitor the age mixes in your departments and teams. Many companies will need to manage as many as five generations of workers in the near future, if they aren’t already. To achieve meaningful collaborations, they should emphasize workers’ shared value. “Companies pursuing millennial-specific employee engagement strategies are wasting time, focus and money,” Bruce Pfau, the former vice chair of human resources at KPMG, argues. “They would be far better served to focus on factors that lead all employees to join, stay and perform at their best.” By tapping ways that workers of different generations can augment and learn from each other, companies set themselves up for success over the long term. Young workers can benefit from the mentorship of older colleagues, and a promising workforce resource lies in intergenerational collaboration, combining the energy and speed of youth with the wisdom and experience of age. Start talking to your employees of all ages. And get them to talk with each other about their goals, interests, needs and worries. Look for opportunities for engagement between generations and places where older and younger workers can support one another through skill development and mentorship. Ignoring the realities of the demographic shift under way is no longer an option. CEOs and senior executives will need to put the issue front and center with HR leaders, product developers, marketing managers, investors and many other stakeholders who may not have it on their radar screens. This will take guts and persistence: To genuinely make headway on this long-range issue, companies will have to make tough, and sometimes unpopular, decisions. But isn’t that what great leaders do?

Paul Irving is chairman of the Milken Institute Center for the Future of Aging and the chairman of the board of Encore.org.

Thursday 28 February 2019

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BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Environment

Fuel supply: NNPC turns to African countries to augment supplies Olusola Bello

espite having four refineries with production capacity of 445,000 barrels per day, the Nigerian National Petroleum Corporation (NNPC) is now turning to African countries for fuel supply. The countries include Ghana, Sudan and Cote devoir. Although the quantity from these countries is not much as the larger part of the petroleum products still come from Europe, some industry operators see this development as a big disappointment for Nigeria to have to turn to countries that were formerly asking for fuel from Nigeria. A document seen at the Department of Petroleum Resources (DPR) shows that the NNPC patronises these countries for fuel supply, though the quantities range between 6,000 metric tons and 10,000 metric tons. A downstream operator who spoke to BusinessDay and chose to be anonymous described it as shameful if we

Port Harcourt refinery

now have to turn to these countries to import fuel while our refineries remain comatose without any solution in sight. He said it is not bad to buy fuel from these countries but that it is incomprehensible that we have all these refineries yet they are not working. Nigerians, he said, should have seen these countries as her own market which it supplies fuels to without problems.

However the hope of revamping these refineries is now dimmed as negotiation between the NNPC and financiers has broken down. After spending over one and half years negotiating with financiers for the revamp of Nigeria’s refineries, the NNPC declared that it could not agree with the investors on the commercial terms of the transaction.

Olusola Bello

any offshore oil and gas well fields a c ro s s t h e globe could cease production in another two years from now. Precisely by 2021 in the face of today’s bearish oil market. Because of this the decommissioning obligations of the oil and gas industry would rose to $11.7 billion last year and are projected to hold steady at an average of about $12 billion per year from 2019 through 2021, according to Rystad Energy. “2018 was an all-time high, and the next years are set to break this record,” said Rystad Energy partner Audun Martinsen. “To put this into context, the global oil and gas industry is facing total decommissioning obligations in the magnitude of six Johan Castberg field development projects in the Barents Sea within the next three years.”

gains derivable from such concession. Izuwah said, “For me, I’m looking into the future. Let’s look at our telecoms sector 16 years ago, imagine that we had Nitel up until now, what would it be like? Our lines will still be tossed, the incentives structure will promote corruption. The government must play a role to break the back of government dominance in the downstream sector and bring in the private sector. That’s the only way to go. “When you bring in the private sector, you will change the incentive structure. People will be incentivised and make the right level of investments. And what do I mean? Very simple; we should concession the NNPC refineries to the private sector. “The investments will come and, on a BOT (Build, Operate and Transfer) basis you concession them, they (investors) rehabilitate and upgrade them and recoup their money. There’s a huge opportunity in refining. It’s a profitable business. So, the role of government is to attract investments to change that sector”.

EXIDE plans to support power solution with launching of products

Global decommissioning set to hit $36bn in three years A challenging oil market outlook the research organisation said has put many ageing fields to rest as diminishing output proved insufficient to cover production costs. A Rystad Energy review of offshore assets shows that some 9000 wells globally are at fields currently struggling to stay profitable at $60 Brent oil prices. “This is a relatively high breakeven price that was the Achilles heel of many fields in 2018,” Martinsen said. Rystad Energy said it expects that these 9000 wells will be plugged and abandoned over a series of years, but emphasizes that the exact timing is still pending. “ In 2 0 1 3 a n d 2 0 1 4 , when oil prices where high, very few operators initiated plans to decommission older assets. Instead, they sought to maximize returns from their producing assets. However, as oil prices dropped to painfully low levels in 2015 and 2016, many of these field life extension plans were depriori-

Nigeria has four refineries. The Port Harcourt Refining Company is made up of two refineries. The others are the Warri Refining and Petrochemical Company and the Kaduna Refining and Petrochemical Company. The four refineries have an installed capacity of 445,000 barrels per day, but they have continued to operate far below the installed capacity for many

years. When confronted with questions on what the management of the corporation was doing about the abysmal performance of the facilities, during a session at the ongoing Nigeria International Petroleum Summit in Abuja , the Chief Operating Officer, Refineries, NNPC, Anibor Kragha, said a lot of issues were affecting the refineries. This came as the Infrastructure Concession Regulatory Commission charged the Federal Government and the NNPC to concession the refineries in order to make them functional and profitable. Kragha further stated that negotiations between the NNPC and financiers could not work due to the recent disagreement between the corporation and the investors as regards the commercial terms of the transaction. On the need to concession the refineries, the DirectorGeneral, ICRC, Chidi Izuwah, who was also a panellist alongside Kragha at the session, urged the NNPC and the Federal Ministry of Petroleum Resources to appreciate the

tized or scrapped altogether. Although oil prices have recovered to more sustainable levels, the elusive $100 dollar-barrel still seems like a distant dream for most operators. As a result, numerous operators have begun realizing their obligations to decommission elderly uncompetitive assets,” Martinsen remarked. Europe, driven in particular by the UK, has been the most active market for offshore decommissioning, with a global market share of more than 50% in recent years. The UK alone is forecasted to spend more than $2 billion annually on decommissioning activities within the next three years. But decommissioning activity is set to grow significantly in other parts of the world too. “In Asia, North America and Latin America, a growing number of fields are currently under evaluation for dismantlement in the face of today’s bearish oil market,” Martinsen said.

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

FRANK UZUEGBUNAM

ultipower Global Solutions Limited, one of the majors in power back-up and solar solutions industry, has obtained exclusive rights to distribute EXIDE Industries’ range of batteries with a particular intent on curbing the rising number of poor quality or counterfeit batteries being imported into Nigeria. Exide - known for its durable batteries like deep-cycle, telecom, traction and many more, catering to various other applications, provide a complete power back-up solution - offering genuine, high quality products to its customers while ensuring their safety at the same time. “Imposters are now selling various versions of EXIDE batteries, Solar inverters, Solar PCU, and other products, thus creating a negative impact on the dealers and consumers through these inferior products,” Lokendra Sharma, the company’s Country Manager for West Africa, He went on to identify some unique features to dif-

ferentiate genuine products from fake in line with the company’s “Buy Original” global campaign and how there is value addition when you buy EXIDE products. Training workshops have been planned to further educate partners and subsequently, the end users. These fake products are known to cause numerous safety hazards to work environments. Usually without authorization, they carry the trademark, service mark or copyright of another entity, with the intention to deceive unsuspecting customers. As the exclusive distributor of EXIDE Batteries in Nigeria and other West African countries, he stated, “We care about the safety of all Nigerians and their property. Ensuring the consumers are fully aware of the dangers of sourcing batteries and other storage devices from unverifiable sources. We need to ensure the protection of electrical and electronic equipment from unreliable power, which can lead – and has led to – explosions, fires and even deaths.” “Multipower is committed to anti-counterfeiting tech-

nologies and programs. We strive to protect our customers from counterfeits that exist in Nigeria by the quality of the companies we represent in Nigeria. Consumers and communities can protect themselves against dangerous and defective counterfeit electrical products by using only established vendors and authorized retailers; exercising caution in online transactions; checking for certification marks; scrutinizing labels and packaging; avoiding products that lack any identifying branding label or affiliation; and avoiding ‘bargains’ that seem too good to be true.” Sharma stressed how imperative it was to bring the EXIDE brand to Africa as he attested to the genuine nature of their batteries, being known for their impeccable quality and standard. “We are the sole distributor in Nigeria and West Africa for EXIDE Batteries sourced from the renowned Exide Industries Limited, manufacturers of a complete range of products for power backup & solar solutions. This range includes batteries, inverters, UPS and Solar Solutions.”

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

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Thursday 28 February 2019

Energy Report

30 FPSOs to be sanctioned in three years

...as new oil and gas project investments set to triple Olusola Bello

ystad Energy has revealed that it expects thirtythree floating production storage and offloading vessels (FPSOs) to be sanctioned from 2019 to 2021, “as oil and gas activity picks up in the offshore sector”. This is even as few projects are expected to come on stream in the country between this period also. These projects includes Bonga South West, zabazaba, and perhaps Exxon Mobil’s Owowo and other projects. Five of the FPSOs will require a production capacity above 200,000 barrels per day and ten will require a production capacity between 80,000 and 150,000 barrels per day, according to Rystad Energy. “This high capacity demand comes mainly from the developments in Guyana and Brazil whereas operators such as Exxon, Equinor and Petrobras [are] stepping up their deepwater production,” Rystad said in a company statement posted on its website. Five of the 33 expected FPSOs will require a production capacity between 60,000 and 80,000 barrels per day and the remaining 13 will require a production capacity under 60,000 barrels per

day, Rystad Energy revealed. In November last year, Rystad Energy announced that the global floating production market had stirred back to life after enduring a couple of years in virtual hibernation during the downturn. “Last year brought some relief to the market, with six new FPSO orders worldwide, and momentum has picked up further this year, buoyed by higher oil prices, technological advancements and lower costs,” Rystad Energy said in a company statement posted in November 2018. “The overall picture for the FPSO industry is bright, with dozens of new field development projects to

pursue over the next two to three years. A key challenge going forward will be project execution and cost control,” Rystad Energy added. Meanwhile new oil and gas project investment looks set to triple in 2019’s stable climes, according to industry research. The energy market can expect a surge in oil and gas project approvals in 2019, as operators in the sector are playing catch-up to clear final investment decisions (FIDs) on endeavors that were put on ice in the wake of the 2015 crude price slump. With Brent, the global proxy benchmark, oscillating in a range-bound $60-70 per barrel bracket, projec-

tions put forward by Rystad Energy suggest FIDs this year on new petroleum projects worldwide could see sanctioned volumes of oil and gas – excluding shale and tight oil and gas prospects – nearly triple compared to last year’s tally. The Oslo, Norway-headquartered global energy industry research and analysis firm reckons collective volumes could swell past 46 billion barrels of oil equivalent (boe). There are three main factors driving this growth in 2019, it adds. For starters, following the 2014-15 crude price crash, operators hit the drawing boards to try to make their projects fly at lower prices,

ENYO invests N8bn in downstream acquisition Olusola Bello & FRANK UZUEGBUNAM

NYO Retail and Supply Ltd., has invested of over N8 billion into downstream retail business with the aim of expanding market share in the downstream sub-sector. The new entrant to the retail market has also engaged in an aggressive expansion programme with the aim of having a good share of the downstream oil and gas market in Nigeria. Abayomi Awobokun, the chief executive officer of the company disclosed that despite the challenges confronting the sector, his team of investors is ready to expand beyond its present market share of one per cent in near future. He explained that Enyo’s service innovations is the first to offer customers what he termed loyalty scheme which he said is an opportunity to reward its loyal buyers. He said that the objective

for setting up the company was to impact positively in the downstream sub-sector of the oil and gas industry in Nigeria. The CEO said that despite the challenges confronting the sector, his team of investors is ready to expand beyond its present market share of one per cent in near future. He explained that Enyo’s service innovations is the first to offer customers a loyalty scheme which he said is an opportunity to reward its loyal buyers. “We want to use innovations and modern designs to our advantage to grow business in the downstream sector. Enyo doesn’t want to get involved in the business of importing products. We buy from those that import and then sell”. He then listed some of the challenges in the downstream sector which investors and government should look at such as stigmatisation, supply shortages, customer

distrust, congestion and poor road facilities. He further observed that the company was looking at delving into a 24-hour service in the future- with a combination of pumps where customers can either serve themselves, or be served by attendants, adding that the company is planning on buying-over stations across the country for rapid growth. According to him, “There are negative stigmas affecting the downstream sector. Past events have given it a bad name. There is general distrust between the customers and the marketers. “The Nigerian economy is also another challenge. Nigerians don’t buy fuel for luxury like driving from Lagos to Akure just for sightseeing. They buy fuel for essentials and not pleasure. “There is also the challenge of lack of basic infrastructure. Moving of products from the depots to the filling stations is very challenging. But despite all these chal-

lenges, there is still room for growth,’’ he said. Awobokun reiterated the company’s commitment to Nigeria and outlined its achievements in less than two years of operation in the country. “We are about 18 months old and our major investor is Folawiyo Energy and we have invested over N8 billion to build 56 retail stations across Nigeria. “We have 17 filling stations that are under construction which are expected to come on stream by June. Because we are in a competitive environment, we place importance on technologydriven innovations. “We are trying to change the narrative. We focus on training and career growth. “We are set to be a major player in near future because right now, nothing much is happening in the sector. Since we are focusing only on retail business, our business model is based on available margin,” Awobokun added.

resulting in project delays. “Now they are starting to play catch-up. These delayed projects can make up almost a quarter of the FID volumes in 2019,” says Readul Islam, Research Analyst at Rystad Energy. Secondly, as demand for cleaner fuels rises, the threat of an LNG undersupply developing by the mid-2020s is likely to spur sanctions for natural gas projects in Africa, Australia, the Middle East and Russia. LNG projects make up a third of the estimated FID volumes this year. Finally, Saudi Arabia “appears likely” to greenlight three major offshore shelf expansion projects that would collectively account for nearly a fifth of global FID volumes in 2019. “Put it all together, and we expect global FID volumes in 2019 to triple over last year, and 2019’s megaproject awards could lead to billions of subcontracting dollars in coming years,” Islam adds. “The only supply segment likely to shrink this year is the oil sands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth. From a geographical perspective, all regions are headed for robust growth except Europe and North America, still bearing in mind that shale plays are not included in these numbers.”

While 2019 is poised to be a bumper year, Rystad Energy data indicates that FID levels have been gradually improving. Things got off to a good start in the first half of 2018 and were on track to outpace the tally for 2017, but several project deferrals during the fourth quarter – coinciding with a steep drop in oil prices – prevented that from happening. However, there are downside risks to this forecast. “This year’s harvest of FIDs are incredibly top-heavy: delays to a few megaprojects currently expected to be approved in the second half of 2019 could turn the volume down significantly,” cautions Islam. And Rystad Energy does not expect that the 2019 FID surge will result in a proportionate increase in contracting opportunities for the oilfield service (OFS) sector. When considering fields of 25 million boe and above, which account for more than 97% of the forecast volume, there is an increase of less than 12% to the 2019 FID count in relation to the number of individual projects sanctioned in 2018. “The silver lining for many suppliers as they navigate an ultra-competitive landscape is that the huge projects sanctioned during 2019 will generate contracts worth billions of dollars for facilities and services in the years to follow,” Islam concludes.

Ibadan Disco achieves 365 days safety milestone

he Ibadan Electricity Distribution Company (IBEDC), says it re cently achieved a milestone of 365 days ‘Lost Time Injury’, translating to 1.6 Million safe man-hours. The company in a statement signed by Angela Olanrewaju, head, Branding and Corporate Communications quoted the company’s Chief Technical Officer, Ade Ayileka, to have said it meant that business had no time lost to injury with staff in 365 days. “This safety achievement is a big milestone in the power sector considering the level of risks involved in the day-to-day activities and the extent of free access to electrical installations. “The power sector by nature is fraught with highlevel hazard and occupational risk. To achieve a year with no lost time Injury is definitely a milestone to recognise,” Ayileka said.

He said the company was determined to put safety at the forefront of all its operations, as its mission was to attain the vision zero incident by 2020. According to him, the major milestone was achieved due mainly to the emphasis placed on safety within IBEDC which has formed part of its core strategic business goals consistently for over three years. Ayileka said this also included, extensive customer education, sensitisation on safety and huge investment on safety gear and equipment for staff. “To ensure we continue to keep safety as a culture as we work toward the International Standard Certification, which specifies requirements for an Occupational Health and Safety (OH&S) Management System, Ibadan Disco has obtained the services of an accredited environmental consultancy firm.

Thursday 28 February 2019

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Spending Trends

Jumia poised to magnify market share with planned listing BALA AUGIE

-commerce platf o r m s - Ju m i a and Konga- are poised to cons olidate their position in the Nigerian online shopping market with a planned listing on the New-York Stock Exchange (NYSE). Jumia is planning an Initial Public Offer (IPO) of $1.5 billion in New York Stock Exchange (NYC) in 2019. Experts are of the view that the strategic plans are expedient to the firm as it will provide the leeway to acquire broadband facilities, expand branch network across the globe and tap into Nigeria’s population craving for consumption. For instance, the World Bank forecasts that the country’s population – now at 200 million – will hit 400 million by 2020. Also the e-commerce firm can leverage on the

adoption of mobile technology and spread of telecommunications coverage, and increased internet usage to bolster earnings. Currently, the e-Commerce market in Nigeria is worth about $13 billion, according to a report by London based Economist Intelligence Unit (EIU). Experts in the Nigeria financial service sector have also estimated that Nigeria’s e-commerce market value could rise to $50 billion (N15.45 trillion) over the next 10 years. Experts say for e-commerce to reach its maximum potential, infrastructure bottlenecks will have to be removed. Logistics problems across the country have been causing delay in delivery of products across the country. According to Konga, the e-company has a customer pool of 750,000 online shoppers. However, there are only 200,000 active customers.

Another challenge that beset the industry is low internet penetration in the rural areas. A recent report released by Jumia on the Nigerian Mobile Sector has revealed that 70 percent of Nigerians

preferred the cash on delivery option to other forms of payment (like the credit/ debit cards payment, and the mobile money option). Nigerians are getting poorer as 87 million people live below $1.90 baseline,

almost one out of every two national (44 percent) lives in extreme poverty, implying many do not have money in their pockets to make online purchase. While GDP expanded 2.38 percent in the fourth

quarter of 2018, population is growing faster than the economy as evidenced in a per capital income. Inflation for the month of January stood at 11.37 percent, but the figure is lower than the central bank’s 6 percent and 9 percent range. The myriad of challenges have forced some e-commerce firms to close down. Efritin an e-commerce firm and subsidiar y of Saltside Technologies in 2017 shut down its operations citing high cost of data and harsh economic conditions. OLX, a subsidiary of Nasper, equally ended operations, resulting in loss of jobs. However, it claimed the decision was in line with plans to consolidate its footprint across the globe. Konga a $34 million valued company was recently acquired from Naspers and ASB Kinnevik by Zinox Technologies one of the strategic tech companies in the nation.

2018, while white beans fell by 2.32 percent from N344.72 reported a month prior. Both types of beans were

most expensive in Ebonyi. Bauchi (N278.57) and Kano (N225.01) recorded the least price in brown and white beans respectively.

CPI Inflation falls as food prices jump 0.02 percent BUNMI BAILEY & ISRAEL ODUBOLA

onsumer price inflation fell for the 13th consecutive months in Januar y as food prices are flat and communal clash between herdsmen and farmers have been curtailed. Inflation rate reduced to 11.37 per cent in January 2019 from 11.44 per cent in December 2018. This repre-

sents a 0.07 per cent points slower in inflation rate for the period. The prices of agric eggs, tomatoes, yam, and garri and 39 other food items increased marginally on a month-on-month by 0.02 percent to N611.54 in January 2019 compared to compare with N610.15 recorded in December 2018, according to the National bureau of Statistics (NBS) food prices report. On year-on-year basis, average price of 43 commodities covered in the

report declined by 6.75 percent from N624.84 in January 2018. The average price of a dozen of agric egg medium-sized rose to N469.85, indicating 0.62 percent expansion over N466.97 reported in the previous month. Highest average price for this food item was recorded in Anambra (N551.17) and the least in Gombe (N412.27). The cost of brown and white beans in January s t o o d at N 3 8 2 . 7 6 a n d N336.72 respectively, the

least prices in 12 months since January 2018. The cost of brown beans declined by 1.04 percent from N386.78 in December

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Thursday 28 February 2019

Bitters War: Competition heightens among Bitters makers OLUFIKAYO OWOEYE

he market for bitters is gradually heating up in the Nigerian beverage market. In recent times there has been a surge in the volume of sales of Bitters in the country. It is like a ‘scourge’ suddenly unleashed on the land. They are so popular that even at highbrow retail outlets the various brands have become more visible on shelves, with brewers trying to claim some market share in the lucrative bitters market. Currently, it is like a raging bitters war at every shop, bar and no social events is complete without sight of bitters. Bitters made its entry into the Nigerian market about 10 years ago, and since then it has gained acceptance among all classes of consumers in the country. It is no longer strange to see commercial drivers, even the smartly dressed ones, hurriedly buying bottles of bitters early in the morning before heading off for the day’s work. The drink which is mostly taken to enhance sexual per-

formance and virility is also acclaimed to have plants and herbs that are good for blood circulation, with anti-malaria and anti-fever properties. In the past, Swedish and German bitters were scarcely marketed in the country and because of the limited distribution line, there was not much awareness. Also, some consumers who would have possibly used the Swedish and German products believed that they were for the rich and perhaps, not affordable by the common man. A ‘disruption’ however came in 2011, when littleknown Kasapreko Company Limited of Ghana made entry into the Nigerian market with the introduction of Alomo Bitters brand, while Intercontinental Distillers Limited (IDL), another major player in the Nigerian beverages segment, joined much later with its Action Bitters brand. The introduction of Alomo into the market was well received by consumers whose purchasing power have dropped due to economic contraction and seek alternatives from the costly beer brands. Interestingly, the Bitters also came at pocket-

friendly bottles and prices. Last year, the Alomo brand sold 580,000 cartons of the product in the country, translating to 13.9 million bottles. The giant brewers (Guinness and Nigerian Breweries) have also launched their various bitters brands into the market. Guinness launched its Origin Bitter brand into the market, while Nigerian Breweries also introduced Ace Roots into the market. Since the Kasapreko Alomo’s entrance into the market, other brands with very funny names emphasising on the aphrodisiacs nature of the drink have also made their way into the market. This includes Erujeje, Black Wood, Bajinotu Poka, Kerewa, Koboko, Kogbebe, Dadubule,

Foreign winemakers continue to eye thirsty Nigeria market David Ibemere

espite economic uncertainty, and low consumer spending, winemakers are seriously looking into Nigeria wine market with an estimated value of N460 billion, and increasing at 6 percent average year –to-year since 2007. This continue growing appetite in the last two years have seen an increase of several brands from South Africa, Asia and Europe berthed in Nigeria which are being embraced by consumers. Among such brands includes, Wild Africa Cream a South African brand, Aviva wine from Spain, Ciroc by Diageo a French company among others and are keen to tap into the market. Europe and USA market are currently experiencing a shift in consumers buying habit as more and more millennial are cutting down on how much they spend buying wine, according to Washingtonpost. At the launch of Wild Africa Cream, in September last year Barry Badenhorst brand manager KWV Wines describe

Nigeria as a market too big to ignore. A recent global forecast by Zion Market Research on the wine market titled Wine Market by Colour (Red Wine, Rose Wine, White Wine, and Others), By Product Type and By Distpribution Channel: Global Industry Perspective, Comprehensive Analysis, and Forecast, 2017 - 2023” shows that the global wine market is valued at approximately $ 302.02 billion in 2017 and is expected to generate revenue of around $ 423.59 billion by the end of 2023, growing at a CAGR of around 5.8 percent between 2017 and 2023. Despite Middle East and Africa and Latin America in the report are expected to witness the least growth in

comparison to other regions, Nigeria consumers increase demand for premium wines and growing westernization is seen as a factor that could drive its growth. Winemakers have realised this and are targeting the Nigeria market that has continue to develop an increasingly preferences for premium imported brands, despite the quality products by local manufacturers. Although Nigeria market remains a highly price-sensitive demanding more of low priced products, a significant number of hotels and restaurant visited in Lekki, Victoria Island, Ikoyi and Ikeya are stocked with foreign brand wines. According to Euromonitor, importer distributors account for around 70 percent of distribution, with the balance imported directly by retailers and the hospitality sector. However information on the level of consumption has remain a problem, as the bulk of wine consumed are sold through the traditional markets, grocery stores, and supermarkets-and other informal outlets—where sales are not usually recorded.

Baby Oku, Pasa, Goko Bitters, etc., have also emerged to command significant market presence, thus eroding the market share of both the traditional brands and those of the established big players and multinationals in the Nigerian beverages market. Other brands have continued to play on the fringes include Yem Kem Nigeria’s Yoyo cleanser Bitters and Ruzu Bitters among others. A visit by BusinessDay to the popular Ojota motor park shows that the sale of Bitters is a booming market. Akeem, a commercial driver at the park after deciding to speak with me beckoned to a seller in the kiosk shop, she emerged with two small bottles of Agbara Bitters and

handed them to him. He deposited one inside his shirt pocket and gave the woman some cash. He then opened the other bottle, threw his head back and emptied the contents in three quick gulps. While speaking with Business Day he said the drink has become part of his life as his wife also has a shop where she sells various alcoholic drinks. “The drinks are very cheap and they come in a small size or sachet,” he said. A seller at the park popularly called Iya Sharp noted that highest selling alcoholic beverages in town these days are the Bitters. “You find them everywhere you go,” she said. “They are the kings of all drinks. The fact that they are cheap, alcoholic and the belief that they are very natural, having been made from herbs, leaves, and barks made many people to easily fall in love with them. The general belief that they boost sexual performance is another reason many people go for the bitters. And everyone wants a piece. That is why you see so many variants of bitters everywhere you go” she added. Tajudeen, another driver who spoke with Business Day

said the advent of bitters and other herbal drinks in the Nigerian market has saved a lot of marriages from untimely collapse. “Let’s be sincere to ourselves, these drinks called bitters are saving marriages and building homes,” he said “Due to the foods we consume, the environmental hazards that we face, and the stress that most urban dwellers experience every day, the sexual life of many men have become virtually dead. These alcoholic bitters are doing a lot in saving homes by giving new life to many men. That’s the truth. No woman wants a man that is weak and powerless when it comes to bedroom affairs. And these bitters give strength and vitality. They serve as aphrodisiacs. I will only advise that people consume them moderately, because of their high alcohol content,” he added. BusinessDay also noticed that some of the bitters brands do not have regulatory numbers. Regulatory agencies such as NAFDAC and SON must however double down on their efforts to rid the Nigerian market of unlicensed herbal bitter drinks that may be injurious to unsuspecting members of the public.

Twice As Nice, Pepkor Holdings, emerge best footwears in 2018 BUNMI BAILEY

wice As Nice emerged as the leading player in Nigeria’s fragmented apparel and footwear specialist retailer channel in 2018, followed by Pepkor Holdings which came in second, according to the Apparel and Footwear Specialist Retailers report. According to the report by Euromonitor International, an independent global market research company that provides strategic research services for the consumer markets, Twice As Nice’s position can be attributed to the fact that it offers a variety of global brands in outlets across the country. “Also Pepkor Holdings, which operates the global Pep brand ranked a close second to Twice As Nice Clothing thanks to the quality and affordability of its apparel but also the fact that it had the highest number of outlets, opening several more during the year,” the report stated. Nigeria’s rising demand due to its growing population which is becoming more urbanised attributed to the good performance of the apparel

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous

and footwear specialists over the review period. The Nigerian economy faced various challenges when it entered recession in 2016 and in mid-2017, it started to recover slowly, with this continuing in 2018. According to the National Bureau of Statistics, the country was in recession for five consecutive quarters but returned to positive growth of 0.72 percent in the second quarter (Q2) 2017 from -0.67 percent in Q1 2016. And for the full year of 2018, it ended in 1.9percent But despite the recovery of the economy, there is still weak consumer purchasing power impacting demand and this has made other retail brands to introduce a new concept. “Due to still weak consumer purchasing power impacting demand, Persianias Group, which is responsible for retail brands such as Max, Hugo Boss, Lacoste, and Puma, introduced a new concept called “The Mix”,” “In some locations where demand is not particularly strong, the company offers a mix of brands in its outlets instead of operating monobrand stores, which would not be profitable,” the report

further added. Twice As Nice which was established in 2000 leads the pack of fashion purveyors entrusted to providing unique style and fashion solutions to an array of fashion aficionados spread across the length and breadth of the West African nations. And Pepkor Holdings Limited, together with its subsidiaries, operates as a retailer focusing on discount, value, and specialized goods in Angola, Botswana, Lesotho, Mozambique, Malawi, Namibia, Nigeria, South Africa, Swaziland, Uganda, Zambia, and Zimbabwe. It sources and retails general merchandise, apparel, and footwear products, household goods, furniture, appliances, consumer electronics, building materials, and cellular products and services, as well as offers financial services. The company sells its products and services through discount and value, and specialty sales channels. It sells its products across a retail footprint consisting of 5,100 stores. The company was formerly known as Steinhoff Africa Retail Limited and changed its name to Pepkor Holdings Limited in August 2018.

Thursday 28 February 2019

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Onuwa Lucky Joseph (08023314782) Editor.

Where is the Philanthropist in Mike Adenuga? Onuwa Lucky Joseph

s of 22nd February, 2019, according to Forbes real time estimations, Mike Adenuga was worth all of $9.2billion. Now, don’t waste good time trying to figure out the sheer immensity of that and what your life could be like if you could somehow corral just a fraction of that. Fact is, Mike Adenuga didn’t get to where he is by daydreaming stuff up. He’s a man famed for his doing, for his derring-do, actually. His focus and tenacity are the stuff of legend. He’s not called The Bull for nothing. He likes to lock horns with the object of his focus and to end up bullying (and bloodying, if need be) whatever that thing is to submission. His entrepreneurial chops can’t be faulted. The man who was a taxi driver in New York came back to Nigeria and has cobbled together an empire whose vastness could only have been the consequence of brimming audacity, the type that entrepreneurs everywhere beg the gods for no more than just one drop to change their fortunes. His son Paddy was in the media last week where he described his old man as the GOAT. This acronym was, in time past, exclusive to boxing aficionados and fans and usually with respect to Muhammad Ali and his claim to being the Greatest, as in the Greatest of All Times (GOAT). These days, every sport has gotten on board. Basketball, American Football, Soccer (the real football, never mind the Americans), Baseball, Swimming, Sprinting; they all now have an ongoing GOAT discussion, the candidates being those whose sublime skills transcend times and seasons and impress at every level. But you know how we humans are subjective and in thrall to what holds us in thrall, no matter the evidence before us. So Paddy says his father is the GOAT; which not a few would take issues with: not with Aliko Dangote still tightly hugging the totem pole and in no hurry to let go of his Richest Man in Africa title, something he duly acquired by virtue of his transition from merchant to manufacturer/industrialist/power broker. But Paddy is not as acquainted with Dangote’s footprint as he is with his Daddy’s of whom he says “…. it’s never been easy being his son because he is tough as nails… I can’t deny that he is the hardest working human being I have ever known in my 34 years and in Nigeria he is still the GOAT (greatest of all time)”. Truth be told, anyone who hears Chief Adenuga talk business, knows he has it locked on. “Business is a combination of many things”, he says in an interview with Bisi Olatilo. “First and foremost, whatever business you are in, you must know your business very well. In business, you talk of occasionally being able to strike it, but you don’t get too far relying on flukes. First and foremost”, he reiterates, “try to know your business, try to know it very well, and you have to work hard at it, very very well. You have to close-mark it. Business doesn’t work well on its own; you

have to close mark it from one stage to the other and of course you pray to God and you beg for God’s blessings”. Anyone who’s done some business knows that the man has it down pat. Lots of struggling entrepreneurs the world over can identify with what he said. They know how they missed it by not close-marking. The word is closemarking. If you don’t close-mark, your business may not be exactly yours. It was by close marking that Adenuga got Conoil to be where it is. Same for Devcom Merchant Bank, which was eventually subsumed in another Adenuga bank Equitorial Trust Bank (ETB), and which ended up swallowed by Sterling Bank, of which he is reputedly the 4th largest shareholder. He was as well close-marking when Globacom (Global Communications) launched onto a terrain that seemed too tight for it to thrive. But his entry strategy of per second billing changed the game altogether. Today, Glo is the second largest network in Nigeria, eclipsing Airtel, which was the first to launch in the country, in its incarnation as Econet, ad second only to MTN. Aside these, he is also, according to Nairametrics, the largest single shareholder in Julius Berger Nigeria Plc. where his daughter and another long time staff sit on the Board. Adenuga’s business exploits are many and this despite the conspiracy theorists here and there whose stories about how he made it do nothing to vitiate from the consistency and enormity of his achievements over time. Business people know that it’s not about what you start with; it’s about how you groom and grow it to the point where where you started from looks puny compared to where you are. Even if you have find yourself thrust onto the lap of fortune and you do not do the needful to retain the fortune, it soon will dissipate and you will be back right where you began. So indeed, Adenuga’s achievements need be attributed fully to his tenacity of purpose, to his stick-to-itiveness, and all the other proven virtues that good businessmen require to stay right on top.

So we give Adenuga all the credit. What is sorely missing from Adenuga’s repertoire of smarts is philanthropy. That’s the one place it seems that the man with the Midas touch is lagging behind. There is very little information in the public domain with regards to Otunba Adenuga’s open handedness, except for where they directly impact on the fortunes of the

business. Looks like a man who insists on keeping all the money he makes as diligent businessmen are supposed to do. The outflow to areas of need is hard to trace even if there are some opaque suggestions to that effect. Philanthropists in Africa mention a 2011 N500m donation to flood victims in Bayelsa, and that’s a figure that crops up in every find. Good enough. The same Philanthropists in Africa also talk about how the Mike Adenuga Foundation leverages partnerships to achieve on its goals. Despite our targeted asking around, however, it was very difficult to find any body or group that had funding from the Foundation or from Chief Adenuga himself. We would be happy to meet and share their experiences if they exist. KUDOS, THOUGH We can’t say what we say without acknowledging what we know for a fact that Glo has done. It has stayed true to its Nigerian cultural sensibilities beginning with Glo’s sponsorship of the Ojude Oba Festival in Ijebuland,

where its chairman comes from. To this, the company added the Ofala Festival in Onitsha which it has sponsored consistently for at least seven years now. We are also aware of Glo’s sometime sponsorship of the Nigerian football league, as well as the national football teams. In fact, in 2007, the company undertook to pay the 600,000 euros annual salary of then national coach Berti Vogts. This might sound like a lot, and the country owes the Chief and his companies a debt of gratitude. That said, however, the respected Chief needs to up his game in the Philanthropy and CSR departments. There’s something about being worth N9.2billion that requires a greater cascade to society. And this needs be done in a structured way to enable nosey characters like this journalist see a trend, see a pattern so to enable us have a measure of the social impact that Chief Adenuga and his companies are making. It can be argued that for a lot of the things the company embarks upon, there is a clear business return from it; e.g. football sponsorship, sans the payment to the coach. It’s a strictly business investment with expected returns in mind. That’s why companies compete to sponsor the premiership r teams considered viable. We make bold to say that Giving Back is today, an imperative of business, whether the businesses pay their statutory government obligations or not. It’s a well-known fact that well reported corporate responsibility executions help obviate tax obligations. The competition in telecommunications ought to point the way. The MTN Foundation, for instance, is strong and funds its activities with 1% of MTN Nigeria’s profit after tax. It is involved in numerous efforts including Mother &Child Health, Youth Empowerment, Arts & Culture, Nominate your Community for a Project, Season of Surprises, etc.

Another competitor, Airtel Nigeria has a vision to be Nigeria’s most loved brand. And it is going about this primarily through its Flagship CSR Programme, Touching Lives, while also adopting schools, executing an Employee Volunteers Scheme, Christmas Charity programme, etc. 9Mobile, while it was still Etisalat, and now thereafter, has become known more for its Nigeria Prize for Literature, the last edition of which was won by the late poet Ikeogu Oke. That is aside lots of other signature efforts including M-Health Initiative, Adopt A school, Fight Malaria Initiative, to help cement its place in the hearts and minds of its stakeholders and host communities. That was just an industry comparison. Other Nigerian-based businesses are pulling their weight much stronger in the CSR and social impact arena. In the banking sector, GTBank, First Bank, Access, FCMB, UBA, etc. are showing the way. We also have big players across other sectors of the economy, including FrieslandCampinaWAMCO, DeUnited Foods, Nigeria Breweries, Guinness, Coca Cola, etc. Not to mention the individual personalities like TY Danjuma, Otunba Subomi Balogun, Fola Adeola, Tony Elumelu, Jim Ovia, Aliko Dangote, etc. Amongst the richest people in Africa, of whom Otunba Adenuga is ranked second, the social impact footprint of others seem bigger: Aliko Dangote, Folorunsho Alakija, Strive Masiyiwa, Abdulsamad Rabiu, Mohammed Dewji, Patrice Motsepe, and Nicky Oppenheimer, amongst others. To be sure, we are very proud of Otunba Mike Adenuga. His giant strides give us confidence in our ability as Nigerians to brave the odds. His fortunes, must however have a more structured and telling impact on Nigerians who happen to be his primary stakeholders. He can choose the fields to play in, the areas where he can have the most impact; but choose he must. It’s a different time, and businesses are no longer judged solely by the revenues they pull in but even more now by their concerns: for the underprivileged, the environment, education, health, social justice, infrastructure, their staff, workplace, and for their efforts at sustainability. Corporate citizenship demands that corporates pull the less privileged up from the ground to an elevated environment. These are increasingly the metrics by which today’s businesses are judged, And that’s why someone like Bill Gates would leave Microsoft to focus full time on spending his cash on the development of malaria vaccine, eradication of polio, treatment for Alzheimer’s, availability of toilets to ensure disease prevention, aside numerous other humanitarian pursuits. (Should this write-up be deemed less than charitable and there are CSR projects and schemes attributable to Chief Adenuga and which are not here captured, kindly reach us on csrmomentum@gmail. com/08023314782)

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Corporate Social Impact

How Bill Gates helped Jeff Bezos become the richest person in the world Onuwa Lucky Joseph

eff Bezos has a net worth of $105.1bn, according to Bloomberg, surpassing Bill Gates’ $93.3bn and making him the richest person alive. But Bezos wealth did not exceed Gates’ just because of Amazon’s growth. It’s because Gates keeps giving his money away. Gates and his wife Melinda, started the Bill & Melinda Gates Foundation in 2000. The Foundation helps with

charitable causes like eradicating polio and improving global health. The couple has donated $2.9bn and 700 million shares of Microsoft. And they plan to give a majority of their wealth away. They even created The Giving Pledge with friend and billionaire Warren Buffett to encourage other wealthy individuals to give more than half their wealth away. If Bill Gates had held onto his assets instead, he would have $150bn. (Adapted from CNBC)

Bill Gates

Jeff Bezos

GLOBAL CSR EXEMPLAR:

Aero Contractors, Arik Air, and the Promo Fares for Voters

he first leg of the elections may not have gone as well as many hoped, but two airlines played their part in ensuring that more citizens were able to travel affordably and more comfortably in order to perform their civic obligations. Chika Ubendu, Aero Contractors spokesperson, said the airline has decided to slash its fares by 50%, effective February 18 for travels between February 21 and February 25 on all her routes. Similarly, Arik Air’s spokesperson, Adebanji Ola, said the N16,000 Fly to Vote promotion was to encourage Nigerians to

Wells Fargo Donated $444 Million to 11,000 Nonprofits in 2018 ells Fargo, the multi financial institution that’s 10% owned by Berkshire Hathaway increased its philanthropic impact in 2018 by donating $444 million to nearly 11,000 nonprofits to help communities and people in need. The company is reported to have increased its philanthropy 25 times over the past 28 years. “We approach philanthropy with a problem-solving mindset,” said Wells Fargo CEO and President Tim Sloan. “We want to help people find an affordable place to live, work with diverse small business owners on growth and expansion, and support young people in learning job skills that can translate into a steady income. It is a privilege to collaborate with non-profits in the U.S. and around the world to make a difference in the communities where we live and work. And we recognize that families and neighborhoods need the public and private sectors to work together in providing both resources and expertise.” Its areas of impact for 2018 include: Affordable Housing: With more than $117 million to help people buy a home, including down payment assistance, homebuyer education and financial coaching. More than $75 million was given through NeighborhoodLIFT®, the company’s long-running homeownership program for low- and moderate-income communities in partnership with NeighborWorks America Small Business Growth: With $24 million to provide access to capital and training for entrepreneurs in rural and urban markets. As part of this total, $20 million went to empower diverse small business owners as part of a previously announced Wells Fargo Works for Small Business: Diverse Community Capital (DCC) $175

million commitment through 2020. Since its inception in 2015, DCC has helped small business owners retain and create 36,000 jobs, according to Opportunity Finance Network. As part of the DCC program, the Carolina Small Business Development Fund is working with Historically Black Colleges and Universities as one of nearly 45 Community Development Financial Institutions that received grants across 25 states and Washington D.C. in 2018. In San Francisco, La Cocina tapped its grant to nurture women food entrepreneurs and aspiring restaurant owners with technical training and access to its commercial kitchen. Economic Equity and Inclusion with $216 million allocated to nonprofits that serve diverse and historically underserved groups. Access to Education with $90 million allocated to education in local communities Recognizing Team Member Philanthropy and Volunteerism Well Fargo team members collectively pledged $75.4 million in 2018 during Wells Fargo’s internal Community Support Campaign, which aims to lift communities and

take on challenges like economic disparity, hunger, homelessness, animal welfare and more. Wells Fargo team members also donated 2 million hours of volunteer time in 2018. More than 96,000 team members across the U.S. volunteered at local schools, food pantries, homes for veterans and underserved families, animal shelters and more. Wells Fargo offers 16 hours of paid volunteer time annually. Supporting Team Members during Times of Need Wells Fargo has a long tradition of helping its team members during times of financial hardship. In 2018, $6 million in emergency grants for team members were made available in the company’s WE Care Fund. The fund was established in 2001 to help team members suffering unexpected medical issues, natural disasters and other life-changing events. The Wells Fargo Team Member Dependent Children Scholarship Fund is another employee resource that helps cover college costs so parents and students can worry less and enjoy the college years more. (Adapted from 3BLMedia)

travel to their respective wards to cast their votes during the elections. The customers must however “present a valid Permanent Voters’ Card (PVC) at the point of purchase and at check-in to be eligible to fly,” he said. “The Fly to Vote promotion is available for sale from February 18 till March 11 for travel between February 21 and February 26 as well as March 7 till March 12”. Thumbs up to Arik and Aero. (For feedback, contact us at csrmomentum@gmail. com/ 08023314782)

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Nigeria’s ScholarX to compete for $1m prize in Dubai FRANK ELEANYA

igerian-based ScholarX has been shortlisted as one of 30 startups, leveraging technology to solve problems in education that will compete for the $1 million Global Teacher Prize and the award of the Next Billion Edtech Prize in Dubai. According to a statement BusinessDay received, the 30 finalists will compete in a pitch contest taking place at the Global Education and Skills Forum (GESF) 2019 from the 22 to the 24 March. At the forum in Dubai, ScholarX and the twenty-nine startups will have opportunity to meet players from the spheres of both education and technology. The players include venture capitalists, education ministers, foundations, academics and some of the world’s best teachers. The networking is expected to help the startups nurture their expertise to build products that will work as well in

the classroom as they do at a pitch competition. “The Next Billion Prize was created to shine a light on those gifted entrepreneurs that are not only ingenious, but also bold and persistent enough to bring forward the revolutionary ideas that are desperately needed to transform edu-

Samsung, Huawei, set pricey outlook for foldable phones FRANK ELEANYA

he unveiling of foldable phones by Samsung and Huawei may have launched the smartphone into a future of breath taking innovation but it is one that millions of people at the lower rung may not be able to get their hands on in the very near future. Samsung’s phone set for release in April has a starting price tag of $1,980 (N716,760) and Huawei phone will cost anyone wanting to own one $2,700 (N977,400). The Galaxy Fold demoed during Samsung’s Unpacked event in San Francisco and the Huawei Mate X launched in Barcelona at the Mobile World Conference (MCW) have all the features that will make any phone lover swoon with envy. The Galaxy Fold for instance comes with 12 gigabytes of RAM and batteries on each side of the phone. It also has six cameras, with three on the back, one on the front and two inside. The three rear cameras have capacity of a 12-mega pixel wideangle and a 12 megapixel telephoto camera and a 16 megapixel ultra wide camera. The two cameras inside are a

10 megapixel selfie camera. The Fold does not have a microSD slot and it comes with 512GB of memory. Its fingerprint scanner is on the phone’s side, like the Galaxy S10E, instead of using an ultrasonic, in-screen fingerprint reader like the rest of the Galaxy S10 line up. The Mate X also packs a big punch with its 8-inch flexible OLED panel which gives the user three screens. When it’s folded, it is a one 6.6 inch, notch-free, and bezel-starved main display combined with an elongated 6.4 inch rear display. The rear display lets the user take selfies with the main camera system. “This phone is not only for today for 5G but also for future 5G,” says Richard Yu, head of Huawei’s consumer business group. “On all the benchmarks you can see the performance; the speed is the fastest for 5G in the world.” As impressive as the features of these devices appear, the do not inspire so much confidence in terms of wide reach, at least in the short term. It could be argued that with time, as other smartphone manufacturers latch on to the foldable phone fever, the prices will have to come down.

cation in those parts of the world where there is limited access to high quality teaching,” says Vikas Pota, CEO of Tmrw Digital the organisers of the Next Billion Prize. The final 30 startups selected for the Next Billion Prize are: Talk2U, OxEd, Whetu, Signa, SimBi, Moi Social Learning, Kuwala,

Etudesk, PraxiLabs, Langbot, Seppo, Lesson App, Eneza, Aveti Learning Pvt. Ltd., Utter, Dost, Solve Education, M-Shule, eLimu, Wizenoze Ltd, ScholarX, Sabaq, Silabuz, Zelda, MTabe, Ubongo, Fineazy, TeachPitch, Big Picture Learning/ Imblaze, and AugLi. The Next Billion Prize

was named to remind the world of the billion young people – a number growing every day – that are being denied an education that allows them to make the most of their talents. ScholarX is a social impact startup focusing on education financing to help young Africans from low income backgrounds access quality education through scholarships, crowdfunding and e-learning. After downloading the app from Google Play store and iTunes, users create an account then search for a list of scholarships that match their qualifications. “The Next Billion Prize highlights technology’s potential to tackle the problems that have proven too difficult for successive generations of politicians to solve. The power to change education systems at all levels no longer lies exclusively in the hands of the political and business elite through the traditional models of global policymaking. Changemakers can be those who work away from the spotlight in

startups located across the world,” says Sunny Varkey, founder of the Next Billion Prize Six of the startups will be selected to return to the main GESF stage for the grand final in front of judges and a live audience. The best three will each be awarded $25,000 and the winner will be awarded the Next Billion Prize trophy. Finalists from last year’s Next Billion Prize have gone from strength to strength over the past year, using the contacts made at GESF to sign country-wide distribution contracts, receive new investment and achieve rapid growth. For example, after connecting at GESF 2018, Learning Machine and the University of Bahrain have partnered to launch one of the first blockchain credentialing initiatives in the Middle East. BizNation meanwhile has since been named by the World Economic Forum as one of the 50 companies reshaping the future of LATAM, has hired 11 new staff and seen revenues grow by 55%.

Poor internet service reduces earnings of Nigerian content creators on YouTube CALEB OJEWALE

ven though Mark Angel could be currently making around $1 million from his comedy channel on YouTube, he can be making five times as much if internet service in Nigeria has not been a limiting factor. Not just Mark Angel but also every single content producer in Nigeria has been denied the opportunity to earn more revenue because of poor internet service, which worse still is expensive. YouTubers, that is, content creators on the popular video sharing platform have been leveraging on it as a way to distribute their content, monetise directly, and also indirectly through clients who may need them to render professional services away from YouTube. However, all of these remain limited if audiences can hardly view their content on YouTube in the first place. “Sometimes it can be discouraging when you put in a lot of effort to produce a video and then it gets very

little views,” lamented Tobi Ayeni who runs the MissTechy channel. Mark Angel, who has Nigeria’s biggest YouTube channel with 715 million views and 3.5 million subscribers, said the “Biggest challenge is data and Telcos.” According to him, there are no policies in favour of the users, and these need to be put in place. The more people use internet, the more they are likely to consume content, and this will in turn be a source of revenue for content producers. For instance, Google has a system in place, which pays them by views. As Mark explained, people are often hesitant to visit video streaming platforms like YouTube and that is a big disadvantage to content creators. “If people are unable to watch videos, content producers will equally be unable to make money from their work,” he said. Eric Okafor, with 24,000 subscribers and 5.4 million views, also expressed the view that a content creator cannot let data be his/her

problem as a YouTuber, if at all that should be the concern of viewers. The internet is an essential tool for the job, but for many potential viewers, it is considered a luxury, even though it should not be seen as such. Emeka Erem, a standup comedian known as Ajebo had been producing comedy skits and sharing on different social media platforms just as a way of making his work known. He would later find out some people were aggregating his works, and putting them up on platforms where they made money from it. This prompted him to set up his own channel, as way of monetising his creative work directly. In an interview, Ajebo explained he is making some money from the YouTube channel, but not as much he wants. Invariably, meeting his revenue expectations, just as other content creators will be a function of how many people get to view his works in the first place. Internet service plans vary by different mobile

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com

networks and Internet Service Providers (ISPs), but the costs are considered high. Internet service is not only considered expensive, but perhaps more important, of very poor quality. The Speedtest global index ranks Nigeria 138 in quality of fixed broadband with an average download speed of 10.90 Mbps, whereas the global average was 55.32 Mbps. For Mobile network speed, Nigeria is ranked 107 in the world with an average speed of 12.76 Mbps in January 2019, whereas the global average speed was 25.38 Mbps. The quality of internet service, apart from the numbers provided, manifests for everyday internet users in Nigeria. When they struggle to get their internet working, the last thing they want is to stream videos with it. But then, for as long as poor internet service, which is also expensive, remains the norm in Nigeria, then those who rely on online content consumption will not realise their full commercial potentials.

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Features Otunba Balogun: The Enigma of our time turns 85 Otunba (Dr) Michael Olasubomi Balogun, the Olori Omo-Oba of Ijebuland, founder of First City Monument Bank (FCMB), philanthropist and a Renaissance man, is one of the rare gems that have shaped time in a world where people have allowed themselves to be defined by their circumstances. In this write-up, OSA VICTOR OBAYAGBONA and SEGUN ADAMS examine the various parts that make this Octogenarian thick.

Michael Olasubomi Balogun

with the Nigerian Stock Exchange (NSE) on behalf of Icon (and later on, City Securities Limited), a romance that earned him a place on the Council of the Stock Exchange between 1973 and 1988. There is no gainsaying Otunba is the harbinger of many business gurus today, himself being the very colossus of the commercial sphere, a most distinguished baron of the Nigerian Capital Market, one who has walked the length and breadth of the banking sector and singularly extended the frontier of possibilities and contributed immensely to nation building. Otunba left employment in 1977 in yielding to his entrepreneurial spirit and established City Securities Limited, which was both an Issuing House and Stockbroking firm - the first of its kind. The accomplishment, however novel, was to be one of many firsts for the brilliant and business savvy mind of Otunba Balogun. In 1979, he established FCMB, the first merchant bank in Nigeria, fully owned by an indigene. The interesting story behind the establishment of FCMB could easily be lost to a summary, but the act accomplished was never on a platter of gold. Otunba was said to have taken destiny into his hands and put himself on the path of fate when he and his wife decided to confront late Dr Alex Ekwueme, at the then Vice President’s place of worship. Surprised by the non-issuance of the banking licence he had applied for, Otunba was reported to have braved the security of the Vice President and the drama that ensued from it could only be imagined. Dr Ekwueme, stunned by the unusual move, acceded to Otunba’s appeal and initiated the process leading to the issuance of the licence. Today, FCMB stands as one of the leading financial institutions in Nigeria on account of the willingness

of Otunba to put in the extra effort to dare the impossible. A Fellow of the most distinguished professional bodies including the Chartered Institute of Stockbrokers, Chartered Institute of Bankers, and the Nigerian Institute of Management, Otunba has served as a member of the National Presidential Advisory Committee on the Recovery of the Nigerian Economy. He has also served on the board of a number of private institutions. Otunba, who holds a professorial chair at the University of Ibadan, is a recipient of numerous awards including the Leadership and Achievement Award of the BusinessDay Banking Awards. Known for his benevolence, one remarkable thing about him is, he gives without the spirit of showmanship, which characterises most acts of charity today. Simple to a fault, this philanthropist who is a member of a multinational chamber of commerce has been and still is a benefactor to many of the poor and lowly in society. Today, Otunba’s name is im-

‘

At his 60th birthday, he demonstrated his benevolence in an uncommon philanthropic gesture - given how individualistic most elite in society are - in donating millions of naira for the construction of the Otunba Tunwase National Paediatric Centre (OTNPC)

‘

n his own way and among different phases of life, Otunba Balogun has also redefined fatherhood and leadership in a time people have lost faith in inspirational headership, and epitomised the values that remain a beacon for an iniquitous society. Like a city set on a hill that cannot be hidden, the reputation of Otunba Balogun, the Baba Oba of Ijebu-Ife and the Asalu-Oba of Ijebu Mushin, a member of the Commander of the Order of Niger (CON), precedes him to the very ends and even beyond the borders of the nation. In fact, the life and character of this retired banker, is trans-generational acknowledgement of what virtuous life men and women can still lead and the heights attainable with hard work, perseverance and faith in God. It is no exaggeration when eloquent orators and gifted writers admit to the inadequacy of words as it is with Otunba Michael, a living legend, whose remarkable life ink and words cannot do justice to. Born on March 9, 1934, to the Balogun Family in Ijebu-Ode, Ogun State, Otunba grew to become a father of nations, an inspiration to generations and a patriarch in many regards. He attended Igbobi College, Yaba, Lagos, where in spite of being born into a Muslim family, grew a conviction of the Christian faith; a decision that portended the resilient spirit of the then young man. He had a stint in academics where he demonstrated his passion not only for gaining knowledge but also for impacting others, as a secondary school teacher for a year, after which he moved to London School of Economics to study Law in 1956. He graduated with a Second Class Honours degree in June 1959, and was called to the English Bar six months after. Since then, his life has been about defying the norms and doing the impossible. After earning his law degree, he returned to Nigeria to join the Ministry of Justice, Western Region, where he was a Crown Counsel, and later served as a Parliamentary Counsel in the Federal Ministry of Justice, Lagos. His course into the world of banking and stock brokerage might have been informed by his time as First Principal Council and Company Secretary to Nigeria Industrial Development Bank between 1966 and 1975, where he got exposure to the world of investment banking, stockbroking and finance. His rising through the ranks has been a product of diligence and the grace of God, as in 1973 he was appointed Director-in-charge of the operations of Icon Securities Limited, which operated till October 1974, when it was converted to Icon Limited (Merchant Bankers). He served as an Executive Director at Icon Limited and interfaced

mortalised at the University College Hospital (UCH), Ibadan, where he was moved by the pathetic state of infrastructure and committed to lifting the face of the hospital. He took it upon himself to refurbish the children emergency ward, and the hospital moved by this, decided to rename the ward in honour of Otunba. At his 60th birthday, he demonstrated his benevolence in an uncommon philanthropic gesture - given how individualistic most elite in society are - in donating millions of naira for the construction of the Otunba Tunwase National Paediatric Centre (OTNPC). Where the typical “philanthropist” would give in eye-service and refrain from ensuring the sustainability of the work, Otunba showed commitment to the Paediatric Centre Project. Over the subsequent years, the centre received support from him as he doled out resources cheerfully to improve the standard of the OTNPC. In 2000, he donated all the proceeds from the sale of his Memoirs “ The Cross, The Triumph and The Crown’’ to ensure the OTNPC vision was realised. The hospital today stands out, on a 50-acre of land along the SagamuBenin Expressway, Ijebu Ode, where it enjoys the status of a tertiary referral centre for teaching, research and healthcare delivery for infants and children. The Centre is equipped with 10 incubators, two boreholes, and operating theatre units with a large facility to accommodate both student and Resident Doctors. Information from the University of Ibadan’s website confirms that as at the time of the formal handing over to the University authority, close to N3 billion had been invested on facilities and other overhead costs to make the Centre the biggest individual philanthropic initiative in the health sector. The then Vice Chancellor of the

University, Professor I.F. Adewole, applauded the Otunba for his donations while urging other well-meaning Nigerians to emulate the good works and give back to society. Aside giving to literally save lives, the banker par excellence has been involved in the education of many young Nigerians in Ijebuland. Otunba has fanned the embers of education in the country through his active participation in donating for the cause. Touching the lives of the disheartened in society, Otunba has extended a hand of love to the Nigerian School of the Blind at Oshodi, Lagos, and has created a platform for The Challenged to realise their dreams through the Annual National Marathon Championship for Disabled Athletes. He set up the ‘’Iye Subomi Scholarship’’ in honour of his mother, the cradle and bedrock of his accomplishments. Among the numerous contributions he has made in education, the University of Lagos, Yaba College of Technology and Olabisi Onabanjo University are a few of the beneficiaries in the number. As a son of the soil and right hand to the Awujale of Ijebuland, Otunba has demonstrated his love for his people and belief in the preservation of the traditions, heritage and values of the Ijebuland by supporting the Ojude Oba festival - a colourful event held amid cultural display, feasting and fanfare. As testament of his tolerance and goodwill for other faith, the Asiwaju of Ijebuland and first class Chief has supported Muslims in the state, including giving financial rewards to outstanding students of Islamic faith. The Muslim College in Ijebu-Ode is accustomed to the benevolence of Otunba who in honour of his late father, a Muslim, grants scholarship to the best students in the school. In recognition of the undying love of Otunba for Christ and his works in promoting the spread of the gospel in Ijebu, he was conferred with the title ‘’ Asiwaju of Ijebu Christians,’’ on March 9, 1997. The title literally speaks volumes of the man and his work; a pacesetter in the Christian faith amongst the Ijebus and a resilient soul who when just thirteen years of age, defied oppositions against his conversion and held on to the truths he was convinced of. Possessing the rarity of ancient wisdom, the vigour of youth, the fulfilment of a long life well lived and the undying faith of the saints of old times, Otunba whose feet have remained steady in all affairs, gives all gratitude to the Almighty, the giver of life, wealth and peace. The Otunba is married to Olori Abimbola Adetutu Balogun, the Yeye Olofin of Ijebu-Ife, the Yeye Tunwase of Ijebu and The Yeye Oba of Ode Remo, with whom he has four sons who are themselves fathers and are excelling in their profession in the Finance Industry.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE NBA-SBL unveil plans for 13th annual business law conference

A primer on Nigeria’s federal competition and consumer protection act Nigeria that results in the change of control of a business, part of a business or any asset of a business in Nigeria (Section 2 (3)).

Chukwuyere Ebere Izuogu

30 United Kingdom moves for competition law reform

31 Lawyers, stakeholders engage at NBA-SBL Agric committee Members’ forum

B&I features prominently in Chambers & Partners Guide for leading law firms globally

n 6 February 2019, the President of the Government of Nigeria (GoN) signed into law the Federal Competition and Consumer Protection Act (the Act). This Act has had a tortious and prolonged history since its introduction to the federal legislature at the beginning of this legislative session. In this article, I highlight the pertinent provisions of this Act. The Act in its explanatory memorandum seeks to provide for the establishment of the Federal Competition and Consumer Protection Commission (the Commission) and the Competition and Consumer Protection Tribunal (the Tribunal), and for the promotion of competition in the Nigerian markets at all levels by eliminating monopolies, prohibiting abuse of a dominant market positions and penalizing other restrictive trade and business practices. Accordingly, the Act firstly regulates 3 business practices, namely; restrictive agreements (Part VIII); abuse of a dominant (Part IX); and mergers (Part XII). Secondly, business practices deemed to be anticompetitive are subject to review by the Commission. Lastly, the Act creates a number of enforceable consumer rights (Part XV).

Scope of Application The Act applies to all undertakings and all commercial activities within, or having effect within Nigeria (Section 2 (1)). In addition, all agencies of the GoN engaged in commercial activities, and a body corporate in which the GoN of government of a state or an agency of government or any state or local government has a controlling interest where such body engages in economic activities will come within the scope of the Act (Sec-

tion 2 (2)). The Act has an extra-territorial reach to conducts committed outside of Nigeria by a citizen of Nigeria or a person ordinarily resident in Nigeria; a body corporate in Nigeria carrying on business within Nigeria; any person in relation to the supply or acquisition of goods or services by that person into or within Nigeria; or any person in relation to the acquisition of shares or other assets outside of

Administration and Enforcement The Commission The Act creates the Commission (Section 3 (1)) primarily charged with the administration and enforcement of the provisions of the Act (Section 17 (a)) including the prohibition and approval of mergers (section 17 (k)), protecting and promoting of consumer interests (Section 17 (1)), and the imposition of administrative fines (Section (Section 18 (1) (h)). In carrying out its statutory function, the Commission has several investigative tools at its disposal, such as the power to enter and search any premises (Section 27 (1) (a)), and power of inspection and removal of any article, extract or document from a person (Section 27 (1) (b). The Tribunal The Tribunal is statutorily charged with the adjudication of conducts prohibited by the Act and exercises the jurisdiction, powers and authority conferred on it by the Act and or any other enactment (Section 39 (2)). The Tribunal shall consist of a chairman, who Continues on page 30

Aluko & Oyebode and South African law firm, Webber Wentzel announce bilateral agreement Theodora Kio-Lawson

he agreement is expected to deepen and formalise the relationship between these leading firms and create a stronger platform to serve clients in Africa. The agreement also puts in place concrete measures to enable consistent and collaborative best practice sharing and more joint thought leadership as well as training and legal secondments. Speaking about this development, Kofo Dosekun, Managing Partner, Aluko & Oyebode revealed that the agreement was only a formalisation of a long history of co-operation and shared values between both firms. She said, “Our firms seek to put our clients’ interests first as they find themselves in a global setting, requiring the best skills in any jurisdiction. This will create a one stop shop with no

Chris Els, Senior Partner, Webber Wentzel

Kofo Dosekun, Managing Partner, Aluko & Oyebode

boundaries. We look forward to further strengthening this long-standing relationship with Webber Wentzel in the coming years. We believe this will be of significant benefit to both our clients and attorneys.” Also speaking about the

agreement, Christo Els, Senior Partner, Webber Wentzel said, “We are seeing many international and South African companies and clients investing in Nigeria. We are also increasingly seeing matter complexity growing with advice requiring exper-

tise from multiple African countries. This bilateral agreement between two leading advisers from the largest economies in Africa is another means of ensuring seamless, exceptional service to our clients. He added, “We have built a relationship with Aluko & Oyebode over many years and we look forward to deepening that relationship and exploring new and further ways of collaborating. As part of the celebrating this milestone, we will be jointly engaging with our clients in the coming months.” Aluko & Oyebode and Webber Wentzel have worked together for many years and have a long and established relationship. With 150 years of experience and industry knowledge, Webber Wentzel is a leading fullservice law firm on the African continent, which has alliances with Linklaters and several outstanding law firms across Africa. It has achieved 56 overall individual rankings in Chambers

Global; ranked by IFLR1000 in the Top Tier for the categories of Banking, Capital Markets, Power, Energy, Infrastructure, Mergers & Acquisitions, Mining, Oil & Gas and Project Finance (2019); and received the most Tier 1 rankings from Legal 500 – more than any other firm in South Africa (2018). On the other hand, Aluko & Oyebode was the Winner of the Chambers Global Africa 2018 Nigeria Law Firm of the Year Award, 2018. It has been Awarded Band 1 recognition by Chambers Global for: Banking & Finance, Corporate/ Commercial, Dispute Resolution, Energy & Natural Resources (2018). It has also been awarded the highest number of Tier 1 rankings by Legal 500 – more than any law firm in Nigeria and recognised as Top Tier law firm by IFLR 1000 for: Banking, Capital Markets, Energy, Infrastructure, Oil and Gas, Mergers & Acquisitions, Project Finance (2019).

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NBA-SBL unveil plans for 13th annual business law conference Theodora Kio-Lawson

he Nigerian Bar Association Section on Business Law (NBA-SBL) on Tuesday officially announced plans for the 13th Annual Business Conference. The conference, which is the flagship event of the section, is scheduled to hold from June 26-28, 2019 and will take place at the Eko Hotel and Suites, Victoria Island, Lagos. Speaking about this year’s event, the chairman of the Conference Planning Committee (CPC), Dr Adeoye Adefulu disclosed that the 2019 theme will focus on growth, investment and employment; beyond rhetoric. According to him, the conference will dig in deep to search for practical solutions to achieving inclusive

Conference Planning Committee Chair, Adeoye Adefulu

economic growth, maintaining, attracting and retaining investment and increasing employment options for the youth within the Nigerian Economy He said, “At this Conference, we will be assembling a host of esteemed speakers both international and domestic who will discuss key topics within our theme such as the role of the private sector, moving Nigeria from an oil exporting economy to value additions, creating an enabling business environment and so many other topics with the aim of broadening our perspectives as lawyers.” The conference chair also revealed that there would be an additional, line up of social events, such as dinners and concerts with several special guest artists to entertain con-

ferees. A gathering of the legal and business community, the NBA-SBL conferences present an opportunity for lawyers, policy makers, regulators and investors to engage, discuss, network and unwind in a convivial atmosphere. The section on business law is the specialist arm of the Nigerian Bar Association (NBA) which engenders the development of commercial law and specialised commercial law practice in Nigeria. It uses its annual conference to create an environment for business lawyers within and outside Nigeria to engage on issues relevant to their fields as well as to establish a thriving relationship between the business community and government institutions.

of competition test (Section 94 (1)). An otherwise anti-competitive merger may also be approved by the Commission if it is likely to result in any technological efficiency or other pro-competitive gain, and whether such mergers can be justified on public interest grounds (Section 94 (1) (b). A person aggrieved by the Commission’s decision regarding a merger may file an application for review before the Tribunal and where the decision relates to a decision of the Tribunal, to the Court of Appeal (Section 103).

Creation of Specific Offence against Competition and Consumer Rights The Act creates specific offences against competition such as price fixing (Section 107), conspiracy (Section 108), and bid rigging (Section 109). The Act also creates a series of consumer rights examples of such are right to information in plain and understandable language (Section 114), right of consumers to adequate disclosure of price of goods or services (Section 115) and product labelling and trade descriptions (Section 116). These consumers rights are all contained in Part XV and can be enforced by the Commission pursuant to its Section 148 power.

A primer on Nigeria’s federal competition... Continued from page 29

shall be a legal practitioner with not less than 10 years professional experience and 6 other members with at least 10 years in in the following fields; competition and consumer protection law; commerce and industry; public affairs; economics; finance or business administration and management (Section 40). The Tribunal shall have primary jurisdiction to hear appeals from or review any decision of the Commission (Section 47 (1) (a)) or any sector regulator (Section 47 (1) (b)) and all appeals against the decision of the Tribunal shall lie straight to the Court of Appeal (Section 55). Reviewable Business Practices Restrictive Agreements All agreements among undertakings or a decision of an association of undertakings that has the purpose of actual or likely effect of preventing, restricting or distorting competition in any market is unlawful and, subject to section 61 of this Act, void and of no legal effect (Section 59 (1)). The Act in Section 59 (2) gives a non-exhaustive example of some of these agreements as; directly or indirectly fixing a purchase or selling price of goods or services; dividing markets by allocating customers, suppliers, territories or specific types of goods or services; limiting or controlling production or distribution of any goods or services, markets, technical development or investment; engaging in collusive tendering; or making the conclusion of an agreement subject to acceptance by the other

parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such agreement. Where the Commission determines that an agreement or decision contravenes the provisions of this Act, it shall serve an order on the parties concerned stating the reasons for its decision and requiring the parties to cease their anti-competition practices (Section 67 (1)). Abuse of a Dominant Position Generally speaking, any abuse by one or more undertakings of a dominant position in a market is prohibited by the Act (Section 72 (1)). According to the Act, “an undertaking is considered to be in a dominant position if it is able to act without taking account of the reaction of its customers, consumers or competitors” (Section 70 (1)). In Section 72 (2) of the Act, an abuse of dominant position occurs where one or more undertakings in a dominant position; charge an excessive price to the detriment of consumers; refuse to give a competitor access to an essential facility when it is economically feasible to do so; engage in an exclusionary act, other than acts specified below; if the anti-competitive effect of that act outweighs its technological efficiency and other pro-competitive gains; or engage in any of the following exclusionary acts, unless the firm concerned can show technological efficiency and other pro-competitive gains which outweigh the anti-competitive effect of its act (i) requiring or inducing a supplier or customer not to deal

with a competitor, (ii) refusing to supply scarce goods to a competitor when supplying those goods is economically feasible, (iii) selling goods or services on condition that the buyer purchases separate goods or services unrelated to the object of a contract, or forcing a buyer to accept a condition unrelated to object of a contract, (iv) selling goods or services below their marginal or average cost, or (v) buying up a scarce supply of intermediate goods or resources required by a competitor. An undertaking that abuses its position of dominance commits an offence under the Act and is liable to a fine of not less than 10% of its turnover in the preceding year or such higher percentage as the Court of Appeal may determine (Section 73 (3)). An undertaking that fails to cease an abusive practice after receiving an order of the Commission to that effect commits an offence and is liable on conviction to a fine not exceeding 10% of its turnover in the preceding business year or to such higher percentage as the court may determine given the circumstances of the particular case (Section 74 (1)). In addition, the director of such companies is liable to conviction of imprisonment for a term not exceeding three years, or to payment of a fine not exceeding ₦50,000,000.00 or to both the fine and imprisonment (Section 74 (2)). Mergers All mergers occurring in Nigeria are required to be notified for review to the Commission (Section 93 (1)). The standard for assessing mergers applied by the Commission is the substantially lessening

Supremacy of the Act over Competition Provisions of Sector Specific Regulators The Act provides that its provisions shall override the provisions of any other law that relates to matters of competition and consumer protection (Section 104). In so far as this Act applies to an industry or sector of an industry that is subject to the jurisdiction of another regulator under any law, in matters or conducts relating to competition and consumer protection, this Act shall be construed as establishing a concurrent jurisdiction between the Commission and the relevant government agency, and the Commission shall have precedence over and above the relevant government agency (Section 105 (2)). A novel introduction of this Act in this regard is Section 47 (2) which requires that all appeals or request for review of the exercise of the power of any sector specific authority shall first be heard and determined by the Commission before such appeals can lie before or be determined by the Tribunal.

Conclusion Since Nigeria’s incursion into democracy in 1999, Nigerian’s have earnestly yearned for a legislative framework to protect market competition. Now that this framework exists, more work needs to be done in setting out clear procedural rules for both the Commission and the Tribunal on how their work should be conducted and how capacity for this work is expected to be strengthened. Additionally, sensitization of consumers and other stakeholders needs to be whipped up to ensure that the desired objectives of this Act are achieved. Chukwuyere is a Tech Policy Fellow at Mozilla Foundation, Senior Associate at Streamsowers & Köhn and Research Fellow at the African Academy Network on Internet Policy

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United Kingdom moves for competition law reform

n the heels of Nigeria’s bold move towards a progressive competition law regime, it would seem that the United Kingdom is following suit, as the New Chair of the Competition and Markets Authority (“CMA”), Andrew Tyrie has proposed radical changes to the country’s competition law regime. The Chair of the CMA, on Monday, February 25th, 2019, published a response outlining his proposals for radical reform of the UK’s competition law regime. In this brief summary, we outline the key proposals and give some context to these significant reforms. Shortly after Andrew Tyrie took on the role of Chair of the CMA last June, he received a request from the Secretary of State for Business, Energy and Industrial Strategy to propose legislative and institutional reforms to protect consumer rights and improve market confidence. Yesterday, Lord Tyrie published his preliminary advice in response (see here). The proposals sketch out potentially radical changes to the UK competition and consumer protection landscape. Their stated aim is to deal with the challenges of the growth of the digital economy and new forms of consumer detriment, as well as the perceived loss of public confidence in market competition. The CMA considers that the counterpart to consumer detriment is often excess rents and cites a statistic that in the UK, economy wide profit margins have risen from around 1.2 in 1980 to close to 1.7 today. This is part of a contemporary global narrative amongst competition regulators which considers that lack of market intervention has led to increased profits and shareholder returns at the expense of workers and consumers. The key theme throughout these changes is a renewed focus on consumer protection via reform of the markets regime and other material reforms. In brief, the proposals include: Refocusing the CMA from its current statutory duty (the promotion of competition for consumer benefit) to

the protection of consumer interests. This would involve the introduction of a new, overriding “consumer interest” duty on both the CMA and the courts. It would enable the CMA to address consumer detriment that can’t be alleviated by intervention based on competition. The letter gives as an example the use of technology which may have helped business to take advantage of market power by enabling more effective targeting and segmenting of customers according to willingness to pay (which reflects the CMA’s recent action in December to tackle “loyalty penalties” in mortgages and mobile phone contract markets amongst others, and unfair trading practices across a sector or exploitation of consumer vulnerability). The CMA says that it considered changing the substance of competition law prohibitions, for example by introducing a prohibition on exploitation of economic dependence or inequality of bargaining power even in the absence of dominance or, by broadening the prohibition against anti-competitive agreements to extend to spontaneous collusion (e.g. by price matching algorithms or AI even in the absence of a conscious meeting of [human] minds). However, it expects to address many of these concerns through markets tools. The new consumer interest duty would also underpin proposals enabling the CMA to act swiftly using interim measures, for example in the markets regime or in respect of consumer protection breaches. Reforms to the CMA’s markets powers. Following

significant criticism in the context of energy and retail banking of the adequacy of remedies imposed to tackle demand side issues and significant delays, of several years between investigation and action, in tandem with the reforms above, the CMA proposes a power to enable the CMA to impose binding remedies in market investigations (to address consumer detriment) without the need to demonstrate such detriment arose from an adverse effect on competition. It also proposes empowering the CMA to impose fineson companies for failure to comply with such remedies (as opposed to the current regime which requires a court order to enforce remedies). This broadens the scope of the CMA’s power to impose remedies to rectify consumer harm and gives the CMA more teeth from an enforcement perspective. It would also require mandatory merger control filings for transactions above a certain threshold in the UK and imposing a standstill obligation (a fundamental shift from the current voluntary, non-suspensory regime). This proposal is intended to ensure that, post-Brexit, the CMA can work effectively with other competition authorities on large, multi-jurisdictional mergers and ensure companies prioritise a UK filing. Lord Tyrie also considers amendments to the filing fees, potentially imposing a larger fee on big deals that require considerable scrutiny by the CMA. It will be interesting to see whether this influences the proposed longer term reforms to the UK’s foreign investment regime, which is also currently voluntary.

Introducing a statutory requirement on the CMA to conduct investigations as quickly as possible (while respecting the parties’ rights of defence). The CMA considers that it is slowed down by legal challenges, something it has indicated in the past. For example, in response to the Competition Appeal Tribunal (“CAT”) decision in the Pfizer/Flynn appeal, the CMA publicly expressed frustration that several of its active investigations may be severely delayed as a result of the decision. Aligning the CMA’s powers to enforce consumer law with its competition law powers by giving it the power to order companies to stop practices that breach consumer law (instead of having to seek court orders) and to impose civil fines for such breaches. Extending the scope of the CMA’s formal information-gathering powers by introducing a new power to require information to be produced even where there is no formal investigation(currently companies are not obliged to respond to such a request and no sanctions are imposed for incomplete and/or misleading responses). Lord Tyrie suggests this could help the CMA identify and deal with issues arising from fast-moving markets. He gives the example of the information gap between companies and the CMA in the digital economy, in particular, and notes that this could be addressed by requiring firms to help the CMA understand complex data types or asking them to analyse algorithms before a formal investigation has been launched, for example. Extending individual responsibility for compliance with competition and consumer protection law, including personal sanctions for serious competition law breaches (although it is acknowledged this would be a significant step-change and considerable work is needed to assess the merits of such a deterrent). Also extending the scope of the CMA’s director disqualification powers, enabling it to seek disqualification of directors involved in serious consumer law breaches. This builds on the work the CMA is

currently doing in respect of director disqualifications, including issuing revised guidance earlier this month (see our Client Alert on the updated guidance). Changes to the standard of review of the CMA’s Competition Act 1998 decisions, reverting to a more procedural (judicial review or some other specified standard) as opposed to “full-merits” review by the CAT, in order to reduce the duration of proceedings to a level that more closely reflects the original intentions for the CAT. The CMA comments that “the UK is not only one of the best jurisdictions for companies to defend a competition case; it is one of the best jurisdictions to lose one” given that it considers the level of fines imposed by the CMA are often lowered by the CAT on appeal. Changes to corporate governance of public companies in order to improve competition and consumer law compliance, including an obligation to appoint a board director responsible for assessing (and reporting) compliance risks and requiring auditors to report any compliance risks identified during their ordinary course of work. Improving the incentives for whistleblowers by removing the cap on compensation (currently set at £100,000) and taking steps to better ensure their anonymity. According to Lord Tyrie, not all the proposals suggest an increase in the CMA’s powers. In order to ensure the CMA can focus on its new overriding consumer interest duty. He has suggested the transfer of responsibility for: references and appeals of certain decisions made by sector regulators (such as price controls and tariff methodologies) from the CMA to the courts; and cartel prosecutions to another agency, such as the Serious Fraud Office. Tyrie also stated that the proposals only constituted preliminary advice at this stage, and work was still ongoing at the CMA. “Further assessment is needed to assess the merits of many of these changes,” he said, adding that the CMA would expect to see more developed (and possibly fewer) proposals at the formal consultation stage.

Blockchain based smart contracts equal to written documents in Italy

he growth of usage of blockchain based smart contracts in Italy might be boosted by a new law, which deemed them equal to written documents in some cases. What are smart contracts? According to Investopedia, smart contracts are “Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement

mechanism. They render transactions traceable, transparent, and irreversible.“. Therefore, the main features of smart contracts are that: they opeate on the basis of pre-set terms that are written in a code; such code is contained

in a blockchain and are selfexecuting since once some events are registered on the blockchain (e.g. an insurance claim), an action is automatically activated. They are called “smart”, but actually are no meant to be used to complex

contracts. The Italian law on blockchain based smart contracts As part of the so called Simplification Decree, it has now been introduced a definition of blockchain and smart contracts, also providing that “Smart contracts satisfy the requirement of the written form after the electronic identification of the interested parties, through a process having the requirements set by the Agency for Digital Italy with guidelines to be adopted within ninety days from the date of entry into force of the law converting the present decree.“ The consequence of the above is that not all smart contracts meet the requirements of the written form, but only those that meet the requirements to be

set in the coming 90 days; the above law is in place, but cannot be relied on at the moment since the technical requirements are not defined yet. Once it will be possible to rely on the above provisions, it might be a major improvement in a country where one-sided clauses in any type of agreement still require the so called “second written signature” which gives rise to major issues for instance in relation to online contracts, but is relevant in any type of agreement. Courts are trying to adopt a more open minded approach on the topic, but the above provision might represent a major improvement if supported by courts. • Giulio Coraggio, DLA Piper

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B&I features prominently in Chambers & Partners Guide for leading law firms globally ...Recognised in six practice areas Theodora Kio-Lawson

lobal legal directory, Chambers and Partners have ranke d Banwo & Ighodalo (B&I) as a leading firm across six practice areas namely, corporate commercial, Dispute Resolution, Banking & Finance, Projects & Energy and Intellectual Property in its 2019 Chambers Guide, It also recognised eight of the firm’s lawyers for being exemplary and astute in the Nigerian legal space. Founding Partner, Asue Ighodalo was ranked in the Guide as a “top notch” lawyer in Nigeria’s corporate commercial space and described as possessing “a wealth of experience in an array of finance mandates, including project finance.” Ighodalo is also ranked in Band 1 as a leading lawyer in Finance, alongside, Konyinsola Ajayi of Olaniwun Ajayi

LP, Gbolahan Elias of G. Elias & Co., Dan Agbor of Udo Udoma & BeloOsagie and Kofo Dosekun of Aluko & Oyebode. B&I Partner, Stella Duru was recognised for her excellent understanding of the oil and gas industry. Established in 1991, B&I is consistently rated as a first-tier Nigerian corporate law Firm. Known for providing innovative solutions, the firm has five main practice groups, namely, Corporate, Securities & Finance, Litigation, Arbitration & Alternative Dispute Resolution; Intellectual Property & Information Technology; and, Shipping, Aviation

& International Trade. Its Corporate, Securities & Finance practice group continues to be a leading practice in Nigeria, advising on transactions. The firm remains the leading Capital Markets Law firm in Nigeria and has been involved in virtually all of the international capital market transactions by Nigerian corporates in the last year. The first Chambers guide was first published in 1990, covering the UK and the organisation has dedicated the last 29 years to researching and ranking the best lawyers worldwide. It currently produces guides for the USA, UK, Europe, Latin America, Asia-Pacific, Canada, High Net Worth and the Global market.

Stella Duru, Partner

Lawyers, stakeholders engage at NBA-SBL Agric committee Members’ forum

he Agriculture Committee of the NBA-SBL chaired by Soji Awogbade, FEI, Partner, ÆLEX Legal Practitioners and Arbitrators and Chairman of the Agriculture Committee, organised its inaugural meeting and Members’ Forum on February 22nd, 2019 at ÆLEX Law Firm, Ikoyi, Lagos. The Meeting which had about 60 delegates in attendance explored the various opportunities for legal practitioners in the Agriculture industry and how lawyers may bridge the gap with industry actors and become a part of the Agricultural value chain. The discussion was facilitated by key contributions from Industry Actors, John-Bede Anthonio – Architect, Agripreneur and Director of A – Z SME Network; the Vice Chair of the Agric Committee, Adeleke Alex-Adedipe and Ndidi Nwuneli, who was represented at the event by Falaq Tijani and Oseno Osagie of Sahel CP.

L-R: Alex-Adedipe, Awogbade and Adio, SAN

Seni Adio, Chairman, NBA Section on Business Law

Soji Awogbade, Partner, Aelex and Chairman, Agriculture Committee.

A cross section of attendees

Adeleke Alex-Adedipe, Partner, DOA & Vice Chair, Agric Committee

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BUSINESSTRAVEL Aviation sector records 13.5% growth in international operations in 18months - Sirika Stories by IFEOMA OKEKE

adi Sirika, the minister of State, Aviation has said that the aviation sector recorded an average growth of 33 per cent on domestic operations and 13.5 per cent on international operations between January, 2017 to June, 2018, amounting to 18 months period. Sirika said this growth is unprecedented in the country adding that the Buhari’s administration provided the enabling environment for domestic airlines in the country to attain certification in the IATA Operational Safety Audit (IOSA); currently five Nigerian domestic airlines have certification, while some were designated for international operations. Speaking recently to journalists, he said that in the areas of State Safety Programmes, Nigeria has attained Level three out of four levels, thereby moving Nigeria from red to green on the ICAO dashboard. He added that in line with ICAO and World Meteorological Organisation (WMO) standards, in July 2017, the Nigerian Meteorological Agency acquired ISO 9001 2015 certificate, which qualifies it to offer aeronautical meteorological services, making the agency the first in Africa to be so certified in that category. “The Ministry has recorded significant achievements in virtually

all aspects of the sector in the past three years as follows: Growing and Sustaining the domestic aviation industry; re-introduction of zero import duties on aircraft, engine and introduction of same for spare parts; intervention to rescue Arik Air and Aero Contractors from total collapse is another milestone, which would have led to the demise of the two airlines and cause huge loss of jobs by professionals in the sector. The two airlines are today still in operation, under receivership. “Just last December, this government through the approval of President Buhari paid 50 percent of severance and retirement benefits to 5,966 staff of the former national carrier, Nigeria Airways. The beneficiaries

SAHCO inks deal to handle Bayelsa International Airport operations

kyway Aviation Handling Company PLC (SAHCO) has signed a Memorandum of Understanding (MOU) with the Bayelsa State Government to be the official ground handling provider in the Bayelsa International Airport. In a statement sent by Vanessa Uansohia, manager, corporate communications, SAHCO, she stated that the company was chosen to be the only aviation Ground Handling Company to cater for passenger handling services, ramp handling, cargo and warehousing amongst other aviation Ground Handling activities in the new airport because of its safe, speedy and efficient services. “SAHCO has therefore made history as the first aviation Ground Handler to handle airlines in the new International airport which is built to cater for both international and domestic airline operators. “Skyway Aviation Handling Company PLC, a fully indigenous ground

handling company, divested some of its shares to the Nigerian Public in an Initial Public Offer (IPO) concluded on the 9th of January 2019. “With manpower trainings, excellent customer services and investments in state-of-the-art aviation ground handling equipment the company is daily exceeding customer expectations, also with the recent expansion of its operations to Ibadan Airport,” Uansohia said. SAHCO, incorporated as an Aviation Ground Handling Service provider under the Nigerian Companies and Allied Matters Act of 1990, is the reference point to the birth of a successful flight within the Nigerian Aviation Sector, providing services in Passenger Handling, Ramp Handling, Cargo Handling and Warehousing, Aviation Security, Baggage Reconciliation, Crew Bus and Executive Lounge Services and other related Ground Handling Services in all Nigerian commercial airports.

even held a ‘thank you’ rally to appreciate Buhari for walking the talk. “You will recall that the airline was liquidated in 2003 and since its liquidation, several ministers and governments in this country refused to pay them their severance packages, which i think was bad for the system. You don’t treat your citizens bad and expect the younger ones to put in their best into the system, but Buhari ensured that they were paid part of their benefits. I can however assure you that the remaining balance would be paid as promised,” Sirika stated. On the performance of Accident Investigation Bureau (AIB), he said that few hours after the Yemi Osinbajo, the Vice President and 11 others

were involved in a helicopter crash managed by Caverton Helicopter in Kabba, Kogi State, AIB vowed that it would publish the preliminary report in few days and in less than two weeks, AIB came out with the preliminary report on the accident and this singular action received applauds from all stakeholders including Aviation Round Table (ART). “Gone are the days when we would wait endlessly to know what happened in aircraft accidents and incidents; the bureau is adequately funded to investigate any major incident or accident and it recently signed a Memorandum of Understanding (MoU) with the Sao Tome and Principle. It has also gone beyond the shores of Nigeria to investigate major incidents, which happened in other country. “AIB has published 10 final reports on serious incidents out of 28 released since the creation of AIB in 2007. This indicates 36 per cent of total reports released by the bureau since it was established in 2006. It has even Issued 39 safety recommendations out of a total of 121 issued by the agency. Again, this represents 32 per cent of total safety recommendations ever released by the agency. “This administration has also rehabilitated the Emergency Operating Centre and furnished the Resuscitation Centres at Abuja and Lagos Airports, respectively,” the minister added.

Ethiopian Airline to operate all-women flight to Oslo on International Women Day

thiopian Airlines, Africa’s Largest Airline Group and SKYTRAX Certified Four Star Global Airline, has announced that it has finalised all preparations to once again celebrate International Women’s Day by operating an All-Women Functioned Flight this time on Addis Ababa – Stockholm - Oslo route on March 08, 2019. The all-women flight will have as a theme of “All women functioned flight to operate from the continent of African to meet with their counterparts in Europe to show the power of women to the world.” The historical flight will be operated by Ethiopian Airlines women professionals from flight deck all the way to the ground including airport operations, flight dispatch, load control, ramp operation, on-board logistics, safety and security, catering as well as air traffic control, which will be carried out entirely by women. Tewolde GebreMariam Group Chief Executive Officer of Ethiopian Airlines, remarked, “We are immensely honoured that we have women trailblazers in every aspect of our aviation field. Women are an integral part of our success story from the start and with this dedicated flight we honour and celebrate their indispensable contribution to our aviation Group and the broader aviation industry, our country and the continent at large.

South African Airways increases West African connectivity, partners AWA

outh African Airways (SAA) has enhanced connectivity for its customers travelling to, from and beyond the West Africa region following the successful completion of a Memorandum of Understanding (MOU) with Africa World Airlines (AWA), the airline’s Ghanaian partners. Vuyani Jarana and John Quan, the CEOs of SAA and AWA, respectively, officially signed the MOU at the Ghana Ministry of Aviation in Accra, Ghana. Joseph Kofi Adda, the Ghana minister of aviation, officiated at the event. The MOU allows the two airlines to enhance their relationship through synergies that include code sharing, franchising and any other related projects. “As part of our turnaround strategy, we are constantly looking at ways of improving our customers’ travel experiences. This agreement gives our customers seamless connections from Johannesburg into more destinations in Ghana and other West African destinations. “The agreement augments SAA’s popular and successful Ghana operations and offers customers a host of additional travel options in Ghana as well as further afield in the African West Coast region. “As the leading carrier on the continent, our aim is to improve air travel connections on the continent through partnerships and

L-R: Aaron Munetsi, SAA regional general manager for Africa; Luluma Xingwana, South African high commissioner to Ghana;Vuyani Jarana, SAA Group CEO; John Quan, CEO Africa World Airlines; Sean Mendis, chief operating officer: Africa World Airlines; Richard Kyereh, head: commercial - Africa World Airlines.

this agreement with AWA goes a long way towards improving intraAfrican travel,” Vuyani Jarana, SAA CEO said. “This agreement with South African Airways will help consolidate Africa World Airlines’ position as one of the leading airlines in West Africa. We are excited by the potential that this African partnership can deliver, and are confident that it will be a win-win relationship for both sides,” John Quan, AWA CEO said. SAA and Africa World Airlines formed a relationship in 2015, which resulted in the commencement of the Accra to Washington Dulles flights. SAA operates daily flights between Johannesburg and Accra, with four of the flights

continuing onwards to Washington; and the other three flights continue onwards to Abidjan, Cote D’Ivoire. SAA’s relationship with AWA has since grown from the original commercial co-operation into the new interline commercial agreement, which became possible when SAA finalised technology integration with AWA in November. The interline agreement allows the acceptance of each other’s customers and access to each other’s network. SAA customers will fly from Accra on SAA operated flights and then connect to further destinations on flights operated by AWA. Over the coming months the interline agreement will evolve into a code share agreement.

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Thursday 28 February 2019

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Thursday 28 February 2019

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CITYFile

Bizman docked for issuing N8m dud cheque

he Economic and Financial Crime Commission (EFCC) on Tuesday arraigned a 48-year-old man, Emeka Onwunyi at a FCT High Court in Nyanya charged with issuing N8 million dud cheque. Onwunyi, alongside his firm, Postiga Nigeria Limited, are being prosecuted by the EFCC on two-count charge of dud cheque and fraud. The prosecuting counsel, O.O. Adeola, told the court that on August 1, 2016 in Abuja, the defendant, being the managing director of Postiga Nigeria Limited, took a loan from one Umar Bayero. He said that for repayment of the loan, the defendants issued Bayero a post dated Zenith Bank cheque of N8 million which was to be cashed after three months. Adeola said further that when Bayero presented the cheque to the bank, it was found that there was insufficient fund in the defendant’s account. He informed the court that the offence contravened Section 1 (1) (a) of the Dishonoured Cheques Offences Act Cap 102 Laws of the Federation of Nigeria 2007. The prosecutor further alleged that the defendant, also on the pretext that he got a contract to supply 54 units of motor bikes to Skyrana Nigeria Limited, defrauded Umar Bayero of N6 million. The offence, according to him, contravened section 1 (2) of the Advance Fee Fraud and Other Related Offences Act 2006. The defendant pleaded not guilty to the charges against him. The defence counsel, Michael Ede, applied for bail on behalf of his client, but Adeola, the EFCC prosecutor opposed the application. According to the counsel to the anti-graft agency, the ground for opposing the application was because the defendant jumped administrative bail granted him by the EFCC and was arrested after one year. The judge, Peter Kekemeke, however, granted Onwuyin N10 million bail with two sureties in like sum. According to the judge, one of the sureties must be the wife of the defendant who must present to the court an original marriage certificate. Kekemeke then adjourned the matter until April 17 for hearing.

FRSC opens operational unit in Ifo

he Federal Road Safety Corps (FRSC) has opened an operational office at Ifo, Ogun, to check the excesses of motorists plying the AbeokutaIfo-Sango highway. Joshua Ibitomi, Ifo unit commander of the FRSC said that the establishment of the new unit was also to check road crashes in the axis. Ibitomi said the new FRSC office located at the Ifo Local Government Secretariat commenced operations on January 28, and that it would work with other sister agencies to ensure sanity in Ifo and its environs. He also said there was the need to make visible, the presence of the FRSC patrol teams on highways in the area to curb the reckless driving. “We also observed that some motorists in Ifo and its environs always drive against the traffic which had resulted to loss of many innocent lives,” the unit commander said. Ibitomi added that it was necessary to enforce traffic rules and regulations because of the attitude of some commercial drivers who often stop indiscriminately on the highway to pick passengers, thereby obstructing the traffic. He said that such obstructions on the highway had also resulted in several road crashes.

Debris of collapsed three-storey building on East Street, by Park Road, Aba, Abia State. The building caved in on Monday night.

682 die in road accidents in December, 2018 – FRSC

total of 682 persons died, while 3, 953 others were injured in 1, 107 road accidents across the country in December, 2018, the Federal Road Safety Corps (FRSC) has said. The corps released the figures in its monthly Road Traffic Crash (RTC) report signed by Marshal, Boboye Oyeyemi, the corps marshal. The figures showed an increase of 47 per cent and 49 per cent in crashes and fatality cases compared to those of November of the same year. The report also indicated highest number of crashes and fatality in December with 98 cases of accidents which led to 102 deaths. “This was followed by the Federal Capital Territory (FCT) with 89 cases. Ogun, Nasarawa, Ondo and Jigawa also recorded high fatalities with 66, 58, 54 and 50 cases each,” the FRSC said in the report. Analysis based on crash-prone routes

identified Lagos-Ibadan road as the route with the highest occurrence of road crashes in the month with 64 cases. Kaduna-Abuja road followed with 63 cases while AbujaLokoja road recorded 53 cases within the period under review. The report identified Kaduna-Abuja road as the most prevalent crash route in cases of fatality with 67 deaths recorded. This was followed by Lagos-Ibadan road with 24 deaths; Abuja-Lokoja had 22, Kaduna-Zaria, 20, and Gbongan-Ibadan road, 19, deaths. The report further revealed that speed violation accounted for 589 cases representing 53.6 per cent of the total road accidents in the month. It also showed that 59 per cent of the vehicles involved in crashes during the period were commercial vehicles, 40 per cent were private, while government vehicles accounted for one per cent.

“Out of the total of 1, 728 vehicles involved in road crashes in December, cars accounted for 575 representing 33.3 per cent. Motorcycles, mini buses and trucks followed with 377, 286 and 190 representing 21.8, 16.6 and 9 per cent.” The report said the rise in the fatality parameters during the period was as a result of rapid increase in vehicular movement. It also said that the increase in the parameter was with its attendant increase in traffic infractions. “The tendency for drivers to violate traffic rules and regulations was alarmingly high during the period as most drivers involved in over speeding and overloading, among others. “ The agency appealed to the Federal Government to provide adequate funding for the corp’s enlightenment activities to enhance its visibility in line with “FRSC 2019 Corporate Strategic Goals”.

Ogun to de-worm 500,000 children RAZAQ AYINLA, Abeokuta

gun State government says it will soon begin a de-worming exercise for no fewer than 500,000 children between the ages of five and 14 across the state. The commissioner for health, Babatunde Ipaye, who made the disclosure at a public function in Abeokuta on Tuesday, added that the exercise would cover 11 local governments. The event was the agenda for social mobilisation meeting, organised by the ministry of health, in conjunction with Evidence Action. Ipaye, who was represented by the permanent secretary of the ministry, Nafiu Aigoro,

said the programme would commence on March 14. He described worms as parasites that thrive on nutrition from the human intestine, which according to him, leading to anaemia, stomach ache, nausea, vomiting, diarrhoea, loss of appetite and blood in stool. In view of this, he stressed the need for quick intervention through the de-worming exercise, to ensure that the children in the state were healthy. The commissioner noted that the first phase of the exercise taking place in the selected LGAs was due to the high rate of the parasites in such areas. Ipaye hinted that the second phase would commence before the end of the year. He urged

parents and guardians to take advantage of the exercise to de-worm their children and wards. He added that the drugs would be administered to the children free of charge. “Parents are to ensure they bring out their children and wards to benefit in this de-worming exercise. It is for our children’s overall good and well-being. And don’t forget, it is free,” he said. The programme manager, Evidence Action, south-west zone, Femi Adepoju, said the group would assist in the training of teachers and health workers who would partake in the exercise. He enjoined parents to embrace the exercise saying “It is aimed at ensuring a better life for our children.”

Thursday 28 February 2019

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Wike to drag Nigeria Army to International Criminal Court IGNATIUS CHUKWU

N L-R: Opeyemi Okojie, deputy head, strategy and corporate development, FBN Holdings Plc; Theo Adegboye, financial secretary, National Coordinating Committee of Shareholders’ Association; Odiba Dennis, secretary, National Coordinating Committee of Shareholders Association; Emmanuel Ikwue, chairman, National Coordinating Committee of Shareholders Association; Seye Kosoko, company secretary, FBN Holdings Plc; Tolu Oluwole, head, investor relations, FBN Holdings Plc, and Simisola Salami, senior analyst, investor relations, FBNHoldings Plc, during the visit of FBNHoldings to the National Coordinating Committee of Shareholders Association in Lagos recently.

Edo vaccinated 1,745,241 persons against yellow fever in 2018 … community informants help combat Polio in Borno – WHO

do State government says it vaccinated 1,745,241 persons against yellow fever in

2018. The state immunisation officer, Charity Usifo, made this known in Benin City during the State Task Force Committee meeting with the deputy governor, Philip Shaibu. Usifo said 2,256,370 doses of yellow fever vaccine were supplied to the state and 1,903,170 of the vaccine distributed within the period under review. She said 687 vaccination teams were deployed for the exercise across 13 local government areas, with persons from nine to 44 years of age as target. She said the mass immunisation, usually termed Reactive Mass Vaccination (RMV) campaign, was considered the most im-

portant and effective measure of ending yellow fever. Shaibu appreciated all the health agencies for their support in making things work in ensuring that all kinds of diseases were eliminated. He also lauded the team of health experts for being proactive in delivering their jobs. Also, the World Health Organisation (WHO) says the organisation’s engagement of community informants for surveillance of suspected cases of polio in hard-to-reach and crisisridden parts of Borno is yielding positive impact in the state. Matshidiso Moeti, WHO regional director for Africa, said in a statement in Abuja on Wednesday that many local government areas in the state had become accesscompromised following nearly a decade of insur-

gency. Moeti said this had made it difficult for the local population to access basic and quality health services, adding that infants had been one of the main victims to this development. According to Moeti, health workers in some areas have been unable to distribute vaccines or provide needed routine immunisation services and children are particularly at risk of vaccine-preventable diseases such as polio. Moeti said as surveillance officers cannot access certain areas, local residents had been engaged and trained to help support strengthening of disease surveillance in hard-toreach areas. “Following nearly a decade of insurgency, many local government areas in Borno State have become

access-compromised, making it difficult for the local population to access basic health services and quality healthcare. “Infants have been one of the main victims of this situation as health workers in some areas have been unable to distribute vaccines or provide much needed routine immunisation services. “In this context, children are particularly at risk of vaccine-preventable diseases such as polio. This development has made it challenging to carry out effective identification of all Acute Flaccid Paralysis (AFP) cases and thereby fully verify the absence of poliovirus in the area. “As surveillance officers cannot access certain areas, local residents are engaged and trained to help support strengthening of disease surveillance in hard-toreach areas.

Rivers APC finds hope after Buhari victory as Army parades govt officials IGNATIUS CHUKWU

he All Progressives Congress (APC) in Rivers State seems to find fresh hopes that their candidates would return to the ballot on March 9, 2019, now that the greater huddle of winning the presidential election has been overcome. This is as the Army parades top officials of the Rivers State government accused of moving about with huge sums of money and electoral materials on Saturday, February 23, 2019, and offering bribes to soldiers on duty. The Army also accused Governor Nyesom Wike of offering bribe to soldiers dur-

ing a telephone conversation to free those arrested. Addressing newsmen in Port Harcourt, Wednesday, February 27, 2019, Tonye Cole, coordinator, APC Presidential Campaign Council, Rivers State, said: “As we head towards the next set of elections, we urge our party members, supporters and Rivers people to remain calm and peaceful. “We are confident that INEC would now do the right and proper thing by restoring all our candidates, including those for the National Assembly, back on the ballot and the people will have the choice to come out without fear of further violence and vote for the change they truly desire but up until now have

been afraid to express”. The party said it was surprised that the same Independent National Electoral Commission (INEC) that was quick to delist the APC was delaying in relisting them despite stay of execution obtained in two federal appeal courts. The party also wondered how the Peoples Democratic Party (PDP) that was not a party to the internal case in the APC could go to any court and succeeded in getting an order debarring the APC from contesting the elections in the state. Cole commended party members for putting up what he called brave showing in a state that posted over one million votes in 2015 but merely captured 666,585

this time around with all the power of incumbency in the volatile state. “All that is required of anyone desirous of the truth is to compare the 2015 electoral figures where total votes cast was 1,584,768 with APC getting 69,238 while PDP got 1,487,075; to that of 2019 where total votes cast was 666,585 with APC getting 150,710 (even after 72,000 votes in Emohua was unconstitutionally removed) and PDP getting 473,971 and the story would clearly unfold.” The position of the APC indicates more crises ahead as the party said it is going to contest the elections. Many thought Wike has a free ticket back to Government House.

igeria may witness its first local matter to go to the World Court as the Rivers State Governor Nyesom Ezenwo Wike has stated that the state government has written to the International Criminal Court to prosecute the General Officer Commanding (GOC) 6 Division of the Nigerian Army, Major General Jamil Sarhem for crimes against humanity. The Army had paraded government officials said to have been caught with election materials and offering bribe to soldiers. Governor Wike however said instead of running in circles, the GOC should explain to Nigerians the reasons why the 6 Division stormed Collation Centres in Ikwerre, Emohua and Okrika Local Government Areas with INEC Electoral Officers, accusing him of stealing electoral materials and concocting results. The governor stated that the General Officer Commanding 6 Division issuing false statements would not save the GOC from prosecution. Speaking during a media briefing in response to the allegations by the 6 Division that he tried to compromise

soldiers of the 6 Division, Governor Wike described the allegation as false, malicious and diversionary. He said: “We are doing a petition to the International Criminal Court. We are demanding justice for all those killed by the GOC and his lieutenants. We will also send a petition to all the major embassies in the country on the atrocities committed against Rivers people by the GOC and his soldiers. We have also ready sent a petition to the Chief of Army Staff on the criminal actions of the GOC”. Governor Wike stated that he has credible intelligence that the GOC has concluded plans to open fire on his convoy, with the objective of causing a deadly shoot-out. He said Nigerians watched in utter dismay as three Local Government Electoral Officers of the Independent National Electoral Commission (INEC) indicted soldiers of the 6 Division of the Nigerian Army for orchestrating electoral violence, snatching election materials and criminally colluding with APC leaders to concoct results during the Presidential and National Assembly elections. Rather than respond to these allegations, the GOC is making diversionary allegations.

CSCS obtains ISO/IEC 27001: 2013 Re-certification

entral Securities Clearing System (CSCS) plc on Tuesday said it had obtained its recertification under the ISO/IEC 27001:2013. Its managing director/ CEO, Haruna Jalo-Waziri, said this followed the recent audit of its compliance with information security risks controls by the British Standards Institution (BSI), United Kingdom. Receiving the recertification report in Lagos, JaloWaziri said one of CSCS’ paramount areas of focus is protection of commercially sensitive information belonging to the company and its investors. According to Jalo-Waziri, CSCS is committed to upholding the highest standards of security for the processes, people and technology powering our services. “The confidentiality, integrity and availability of information under our custody is held sacrosanct. The audit involved a series of process validation and assurance check of controls with respect to company and client data management.

“The ISO recertification provides assurance to all our customers that we have controls in place to identify and mitigate potential risks to confidential information. “BSI is one of the world’s largest accreditation bodies for ISO certifications. We, also, work hard to ensure that we build trust and credibility in the market so as to inspire confidence among our stakeholders,” he said. Jalo-Waziri said that the recertification serves to test and affirm CSCS’ commitment to information security at all levels of the business and expressed pleasure at beginning the year with this milestone. The managing director expressed his profound appreciation to both the internal and external stakeholders for their commitment and steadfastness in ensuring the success of the recertification audit. The News Agency of Nigeria (NAN) reports that the ISO/IEC 27001:2013 certification was first obtained by CSCS in 2015. It is conducted by the BSI every three years and in between, a yearly surveillance audit is done.

38 BUSINESS DAY NEWS FocusshiftstoBuhari’ssecond-termeconomic... Continued from page 1 initiatives such as TraderMoni,

MarketMoni, FarmerMoni, and National Home Grown School Feeding Programme (NHGSFP), in addition to expected improved executivelegislature synergy. “A victory for President Buhari means consolidation of the progress made on economic growth since the recovery from recession and sharp currency devaluation in 2017,” said research analysts at Lagos-based CardinalStone Partners led by Michael Nwakalor and Jerry Nnebue. “A Buhari second term signals continuity in prevailing monetary policy for the next four years, all else equal. These policies achieve price and exchange rate stability through routine interventions in the foreign exchange market and an elevated yield environment to attract/retain foreign portfolio investors. The incumbent governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has done a satisfactory job in aligning with the administration’s objective,” the research analysts said. The analysts said arising from the above, there is a likelihood to maintain status quo rather than opt to appoint a new CBN governor. “However, there remains the chance that the governor is replaced, as has been the case since 1999 (the

inception of the Fourth Republic). The position has changed hands every five (5) years and has so far rotated across four of six geopolitical zones in the country, with the two remaining zones being North Central and North East. Considering the unofficial rotation policy, we believe there is the possibility of the central bank governor being replaced by an appointee from the Northern region,” they said. The CardinalStone research analysts noted that the equities market had been the preferred destination for foreign portfolio investments (FPIs) in the last five years, accounting for over two-thirds of total FPI inflows. The added that it was only recently that a tilt in favour of money market instruments began. “Given the aforementioned, we foresee renewed interest in Nigerian equities. We expect the rally to begin in the banking sector, owing to its liquidity benefit and spill to other counters on the index, trading at relatively attractive valuations. Both foreign and local investors have already begun taking positions as evidenced by average market breadth of two times witnessed in the past three weeks,” they said. Guy Czatoryski, head of Coronation Research, said Buhari’s second term implies a continuation of government based on firm regulation and security. “However, while Buhari’s first term sailed into the oil price crash of

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2015 and the recession of 2016, economic conditions are different – arguably better – now,” Czatoryski said. “The administration’s policy emphasis during the first term period was on security; the fight against corruption; tax compliance; and tight regulation, which included FX controls. Agriculture (25 percent of GDP) was supported with subsidised fertilizer and soft loans, and never went into recession; and an Economic Recovery and Growth Plan (ERGP) was enacted,” he said. A feature of President Buhari’s first term as President was weak economic growth, 2015-18. GDP developed well below trend and fell into recession in 2016. One key cause was the oil price collapse in late 2014 and 2015 which put pressure on government revenues, the naira exchange rate, the trade account, and Nigeria’s ability to import critical industrial inputs. Low growth has been associated with rising unemployment, which not only took off in 2015 and 2016 as the economy slowed and went into recession, but continued to rise during the weak recovery that followed. “As we argued in ‘Coronation Research: Year Ahead 2019, A Year of Two Halves, January 15’, the naira is within 10 percent of its fair value, so fundamental pressure to revalue it is weak. FX reserves are $42.4 billion, which we calculate is compatible with Naira/$ stability, at close to N363/$1, for the rest of 2019,”

Czatoryski said. On interest rates, he notes that the CBN currently offers a risk-free rate of 587 basis points (bps) above inflation, which keeps foreign investors in naira money markets. “As we argued in January, if inflation trends down mid-year, there may be scope for rate cuts in fourthquarter (Q4), or even third-quarter (Q3),” Czatoryski said. “There was a brief pre-election rally in the equity market, which partly unwound last week. High economic growth rates were not a feature of the last APC administration. That said, the trend in non-oil GDP growth, evident in recent data, suggests that the economy is doing better than earlier thought. As we argued in January, we believe that under such conditions there is upside risk in bank stocks,” he said. Czatoryski argued that after naira devaluations in 2016 and 2017, Nigeria has seen the worst, noting that the APC’s renewed majority in the Senate was significant. “The Senate proved frustrating to Buhari’s agenda in his first term, 2015-19. Expect the budget to be passed quickly this year,” he said. A feature of President Buhari’s first term was conflict between the President and the Senate. Despite the APC having a majority in the Senate, it was a senator with opposition sympathies (he later defected to the PDP) who held the Senate presidency. Friction between the executive

Thursday 28 February 2019

and legislative arms of government was a recurring theme during President Buhari’s first administration, 2015-19. The President depended, more than the previous administration, on executive orders where possible. The most serious example of this conflict came with the six-month delay in the passage of the 2018 budget, which represented the longest ratification cycle for any full-year budget since 2000. The President presented the budget bill on November 7, 2017 and the act was not signed into law until May 16, 2018. The Senate president (2015-19) has now lost his Senate seat. The APC has a simple majority in the Senate which implies that it will be able to elect a Senate president. However, at this stage, with not all the Senate elections declared, it is unclear exactly how strong the APC position in the Senate and House of Representatives will be. On balance, however, it looks as though the President may have an easier relationship with the legislature than during the period 2015-19. On economic growth, although 2018 GDP growth at 1.93 percent year-on-year (y/y) was slow, analysts see are a number of positive items in the data. Non-oil growth is accelerating and reached 2.70 percent y/y in Q4 2018, compared with the overall growth rate of 2.38 percent y/y. Of the six largest sectors in the economy, agriculture, trade, manufacturing and telecoms have all recorded at least two consecutive quarters of growth.

Bonds rise, stocks fall as investors rotate... Continued from page 1

6.871 on Wednesday, from 6.998

in the previous day’s trading. Portfolio investors are hitting the market for bonds and treasury bills to take advantage of high yield, as they do not see the possibility of an FX move in the next six months at least. In the day’s trading, yields on benchmark sovereign domestic bonds declined as 5-year bonds fell c0.37bps to 14.13, 10-year declined by c.012cbps, and 20-year by c.31bps to 14.12 percent. At the start of the year, the benchmark sovereign domestic bonds offered much higher yields with the 5-year offering 15.14 percent, 10-year offering 15.57 percent, and 20-year offering 15.54 percent each. Bid to cover ratio on the 91-day paper, 182-day paper and 364-day paper auctioned Wednesday was 1.66x 1.95x and 11.75x, respectively, indicative of aggressive bid especially for the 365-day paper. In the day’s auction, total subscription amounted to N40.55 billion for the 91-day paper which was offered at N24.37 billion. For the 182-day paper, a total subscription of N75.82 billion was made for its N38.75 offering, while for its 364-day paper, N610.98 billion was raised for its offer of N52 billion. Stock market capitalisation on Wednesday dropped to N12.02 trillion, from N12.11 trillion, as the All Share Index (ASI) shed 0.71 percent to 32,244.24 points. After the close of trading, Wednesday, Neimeth was the highest gainer after rising 9.84 percent to settle at 67 kobo. It was trailed by PZ which gained 9.35 percent to close at N13.45. On the other hand, Union Diagnostics and Clinical Services closed at 28 kobo after shedding 9.68 percent to top the losers’ chart, while Oando followed with 9.66 percent loss to close at N6.55. Though Buhari defeated his closest rival in the 2019 election with a margin of 56 percent to 41 percent which is higher than 53.96 percent to 44.96 percent recorded in the 2015 election, the votes in 2015 outnum-

ber those of 2019. In 2015, Buhari secured 53.96 percent of the votes (15.4 million) to defeat the then-incumbent Goodluck Jonathan, who had 44.96 percent (12.85 million) of the votes cast. Announcing the results on Wednesday, Yakubu said the total number of accredited voters for the 2019 Presidential election stood at 29.36 million, total votes cast stood at 28.61 million, valid votes totalled 27.3 million, while rejected votes numbered 1.28 million. Few days to the election, INEC released figures of the collected Permanent Voter Cards (PVCs), which is a requirement for participation in the process. BusinessDay analysis of the figures shows that North-East had the highest collection rate at 93 percent, followed by North-West region with 90 percent collection rate, SouthSouth region and North-Central with 87 percent each, and South-East and South West with 85 percent and 75 percent collection rate, respectively. President Buhari dominated the North, winning in 15 states across the region, as well as four states in the South-West geopolitical zone. On his part, Atiku cleared the 11 states in the South-East and SouthSouth regions, Ondo and Oyo in the South-West, and four states in the North as well as the FCT. Figures from the election also show pronounced voter apathy in the Southern region of the country as against an impressive turn-out of voters in the Northern region. Buhari’s total votes plummeted in the South-West, but the impact was mitigated by a general low turnout in the region. For example, in the nation’s commercial centre, Lagos, with 5.53 million PVCs collected, only 1.1 million valid votes were cast. The total votes recorded by the two main candidates in Abia State stand at 304,756, the lowest recorded among the 36 states of the country and FCT, compared to 381,697 recorded in 2015. This represents a 20 percent decline in the total number of votes cast for the two main candidates. The highest total votes for the two

Mohammed Adamu (l), Ag. Inspector General of Police, with Hassan Bello, director-general, Nigerian Shippers Council, during the latter’s courtesy visit to the Force headquarters in Abuja. NAN

main candidates came from the NorthernstateofKanowith1.85millionvotes. Results from the election also showed some interesting trends. In the 2015 Presidential election, APC’s Buhari won in states such as Ondo and Oyo, but surprisingly, PDP’s Atiku won in these states in 2019, according to results released by INEC. Also, states ravaged by insurgency in the North-East recorded massive turnout, undeterred by a reported attack on Maiduguri, Borno State capital, in the early hours of Saturday.

Figures from the electoral body show that the two main candidates secured a total 908,284 votes in Borno State out of slightly over 2 million eligible voters that collected their PVCs. Adamawa, another state in the North-East battling with insurgency, recorded a total 788,337 votes for the two main candidates, representing a 6 percent surge in the number recorded between the two main candidates in 2015. Yobe State also recorded a total 548,677 votes for the two major

candidates, up 16.29 percent from the 471,791 votes recorded in 2015. Atiku, the main opposition candidate, has vowed to challenge the outcome of the election in the court in a message via his social media handle. Atiku, a businessman and former vice president, cited glaring anomaly and disruption of voting in PDP strongholds in Lagos, Akwa-Ibom, Rivers, and diverse other states, accusing security agencies of doing little or nothing and, in some cases, facilitating these unfortunate situations.

Fertilizer plant skyrockets Dangote’s net...

the most dominant player in Nigeria’s Cement industry serving Nigeria N577 billion Cement industry. Dangote Cement earlier in February, hired Guillaume Moyen as chief financial officer for operations ahead of it’s proposed listing on the London stock exchange later this year. The move was a rekindling of a 2010 plan to sell shares in London which Dangote jettisoned even though a number of International Banks had put in efforts to raise as much as $5bn.

Continued from page 1

into the economy. In recognition of the potential in Dangote’s recent enterprises, Godwin Emefiele, Governor of Nigeria’s Central Bank, earlier in the year announced that the Government had supported the project with N50 billion for the fertilizer plant and N75 billion for the refinery project. Dangote’s shrewd business mind has seen his empire grow amid accusations of extreme capitalism and lobbying of the government.

Dangote Group, the largest conglomerate in West Africa and one of the biggest in Africa includes businesses in the Cement, Sugar, Salt, Steel, Flour and other aspects. It was founded by Aliko Dangote in 1981 and currently employs more than 30,000 people, generating revenue in excess of US$4.1 billion in 2017 with over 18 subsidiaries, operating in ten African countries. His cement business, the biggest subsidiary in the group, is both the Stock Markets most capitalized and

•Continues online at www.businessday.ng

Thursday 28 February 2019

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Armsgate: Dasuki fails 2019 election: Insurers seek peace, to stop trial - EFCC good governance to INNOCENT ODOH, Abuja promote growth ustice Hussein BabaMODESTUS ANAESORONYE

s the 2019 Presidential election that returned President Mohammadu Buhari takes its toll on the economy and public discourse, insurance practitioners have called for peace and good governance. They believe that these are necessary to keep the country on the part of growth and development. Sola Tinubu, president, Nigerian Council of Registered Insurance Brokers (NCRIB), made the call in Lagos during the Council’s February Members Evening hosted by Linkage Assurance plc. Tinubu said the pursuit of peace and good governance for sustainable development should be addressed frontally. “Without this, business environment may continually remain in jeopardy,” he said. While congratulating Nigerians for exercising their right to vote during the elections, he called on the relevant authorities to address the dangers that might work against the success of the remaining part of the elections. “This event provides me an opportunity to join many meaningful Nigerians to congratulate everyone that voted during the last election, this is our civic responsibility as citizens of Nigeria and I hope, that at the end of the day we will all have the desired peace and progress in the country,” he said.

Yusuf of a Federal Capital Territory, FCT High Court, Maitama, has dismissed the application filed by a former National Security Adviser (NSA), Sambo Dasuki, asking the court to adjourn his N28.3 billion fraud trial sine die. This was disclosed in a statement issued on Wednesday by the acting head of media and publicity of the Economic and Financial Crimes Commission (EFCC), Tony Orilade. Dasuki had on January 9, 2019, through a motion filed by his counsel, Ahmed Raji, urged the court to adjourn indefinitely. The intent of the motion was also to compel the Federal Government to comply with the judgment of Justice Ijeoma Ojukwu of a Federal High Court, Abuja, which on July 2, 2018, ordered his unconditional release. At the resumed sitting, Wednesday, Justice BabaYusuf, in dismissing the application, held that “Justice Ojukwu is empowered by law to enforce an order that she gave, therefore, the only court competent to hear the application is the Federal High Court from which the order was given.” Prosecuting counsel, O.A. Atolagbe, then urged the court to give a date for trial to allow the prosecution bring more witnesses, to testify against Dasuki and his co-defendants – Aminu Baba-Kusa, a former General Manager, Nigerian National Petroleum Corporation; Attahiru Bafarawa, a former governor of Sokoto State, and his son, Sagir; Shuaibu Salisu, Director of Finance and Administration.

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L-R: Bola Onigbogi, deputy president, Nigerian Council of Registered Insurance Brokers (NCRIB); Sola Tinubu, president, NCRIB; Daniel Braie, managing director/CEO, Linkage Assurance plc; Joyce Ojemudia, general manager, Marketing, Linkage Assurance, and Okanlawon Adelagun, executive director, Technical, Linkage Assurance, during the February Edition of the Members Evening of the NCRIB held in Lagos. Pic by Pius Okeosisi

Ambode, Tinubu urge support for Buhari … as more Nigerians send congratulatory messages JOSHUA BASSEY

overnor Akinwunmi Ambode of Lagos State, and Bola Ahmed Tinubu, national leader of the ruling All Progressives Congress (APC), on Wednesday urged Nigerians to rally around President Muhammadu Buhari, as he starts a second term of four years from May 29, 2019. The two leaders in separate statements in which they congratulated Buhari and his deputy, Yemi Osinbajo, also restated faith in Nigeria’s democracy, noting that though the election recorded regrettable incidents of violence and killings in some parts of the country, the interest shown by the electorate was, however, a demonstration of their resolve to further deepen democracy in the country. Buhari/Osinbajo, can-

didates of the ruling APC polled a total of 15,191,847 votes to triumph over Abubakar Atiku and his running mate, Peter Obi, candidates of the People’s Democratic Party (PDP) who secured 11,262,978, losing with a margin of 3,928,869 votes. Apart from the figures, President Buhari won in 19 states. These include Bauchi, Borno, Ekiti, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nasarawa, Niger, Ogun, Osun, Sokoto, Yobe and Zamfara. The major opposition candidate, Atiku, on the other hand won in 17 states and the Federal Capital Territory (FCT). The states are Abia, Adamawa, Akwa Ibom, Anambra, Bayelsa, Benue, Cross River, Delta, Ebonyi, Edo, Enugu, Imo, Ondo, Oyo, Plateau, Rivers and Taraba. According to Ambode, “The victory is not just a con-

firmation of the people’s love for Buhari, but an attestation that Nigerians are happy with the progress the Federal Government has made in the last four years. “I join millions across the country to congratulate President Buhari and Vice President Osinbajo for their victory. This is indeed a historic moment because Nigerians have used their votes to show that they are happy with the progress the country has made on several sectors of the polity.” Tinubu on his part said the current leadership owed the youth and all Nigerians to build a political culture of civility, tolerance and equality. “The tasks before us are hard. We dare not underestimate the challenges that await us, but the rewards that beckon are profound. The people of Nigeria are industrious and brave. The ground

beneath us is fecund and it is ours. Our plans are visionary and bold. Our goals are just. And the president you have re-elected is honest and true,” he said. The former governor of Lagos State said he was confident that the positive confluence of leadership, people, resources and ideas was an unwavering but also a glad and comforting thing. “If we put ourselves to it, there is nothing that another nation has done for itself that we cannot achieve for ourselves,” he said. Besides, Governor Rochas Okorocha of Imo State has congratulated President Muhammadu Buhari over the victory. Okorocha, in a congratulatory message on Wednesday in Owerri, also commended Nigerians for voting for the President in the election.

Oando female engineers champion mentorship in 72.79% candidates score credits in English, celebration of International Day of Women in Science Mathematics in NABTEB exams DIPO OLADEHINDE

n commemoration of the 2019 International Day of Women and Girls in Science themed ‘Investment in Women in Science for Inclusive Green Growth,’ Oando plc, led by a delegation of its female engineers, mentored female pupils in one of the Oando Foundation adopted primary schools, Arch Bishop Taylor Primary School, Victoria Island. They mentored the pupils on the role and importance of Science, Technology, Engineering and Mathematics (STEM) in the world, why they are passionate about STEM and proud to have built successful careers in it. The aim of the programme was to provide a platform for the female engineers to engage female pu-

pils towards considering and embracing STEM subjects for a future career in STEM by sharing real life and relatable stories that would inspire the young girls. In order to achieve full and equal access to, and participation in science for women and girls, and to further achieve gender equality and female empowerment, the United Nations General Assembly adopted a resolution declaring February 11 of every year as the International Day of Women and Girls in Science. According to the UN, “A significant gender gap has persisted throughout the years at all levels of STEM disciplines all over the world. Even though women have made tremendous progress towards increasing their participation in higher education, they are still under rep-

resented in these fields.” In a bid to fight the longstanding biases and gender stereotypes steering girls and women away from science related fields, a cross section of Oando’s female engineers spoke to the pupils on a wide range of STEM related topics, such as: Why mathematics and science are important in the real world; Opportunities that exist for girls/women in STEM; as well as games and engaging activities intended to stimulate the pupils’ interest in the sciences. Seun Solanke, principal reservoir engineer, Oando Energy Resources, one of the mentors, advised the girls to be proactive in their research into STEM-related careers, she also spoke extensively on what motivated her to a career in the sciences.

IDRIS UMAR MOMOH & CHURCHILL OKORO

ational Business and Technical Examinations Board (NABTEB) on Wednesday said a total of 29,274 candidates representing 72.79 percent scored five credits and above in English Language and Mathematics in the last November/December 2018 examination. Ifeoma Isiugo-Abanihe, registrar/chief executive of NABTEB, gave the figures during the formal announcement of the results in Benin City, the Edo State capital. Abanihe, who said a total of 40,848 candidates sat for the examinations out of the 45,307 candidates that enrolled nationwide, also disclosed that 36,867 can-

didates representing 91.67 percent scored five credits and above with or without English Language and Mathematics. According to Abanihe, the 2018 results represent an improved performance compared with the 2017 results, where 21,159 candidates representing 52.74 percent obtained five credits and above in English Language and Mathematics. She also said in the 2017 examinations, 31.369 candidates representing 78.19 percent scored five credits and above with or without English Language and Mathematics. The NABTEB boos, however, explained that 625 candidates involved in examination practice, represented 1.40 percent of the total number of

candidates that sat for the examinations. She said the figure was a slight reduction from 1,124, representing 2.54 percent recorded in 2017. She noted that the 45,307 candidates enrolment recorded in 2018 still far below the expectation of the nation’s quest for technological development and the significant role technical and vocational education training in Nigeria. She, however, called on the national and state houses of assembly to legislate on the establishment of more modern and wellequipped technical colleges in all local government areas in the country with a view to achieve sustained increase in technical and vocational education training and NABTEB enrolment.

40 BUSINESS DAY NEWS Obaseki congratulates Buhari on victory, salutes Nigerians’ ballot for uprightness, honesty

do State governor, Godwin Obaseki, has congratulated President Muhammadu Buhari, on his re-election. Obaseki, who issued the congratulatory message in the early hours of Wednesday, shortly after President Buhari was declared winner of the Presidential election held on February 23, said: “On behalf of the government and people of Edo State, I congratulate our Presidentelect, Muhammadu Buhari, Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, on your well-deserved victory.” Obaseki said: “I salute the renewed resolve of Nigerians to cast their ballot for uprightness and honesty, exemplified by your leadership and for endorsing the people-centred programmes of the All Progressives Congress (APC), under your guidance.” He explained that another four years of president Buhari’s leadership “will provide the much-desired impetus for good governance, the ongoing war on corruption, completion of ongoing infrastructural projects and boost our new image in the comity of nations.”

Edo vaccinated 1,745,241 persons against yellow fever in 2018

do State government says it vaccinated 1,745,241 persons against yellow fever

in 2018. The state immunisation officer, Charity Usifo, made this known in Benin City during the State Task Force Committee meeting with the deputy governor, Philip Shaibu. Usifo said 2,256,370 doses of yellow fever vaccine were supplied to the state and 1,903,170 of the vaccine distributed within the period under review. She said 687 vaccination teams were deployed for the exercise across 13 local government areas, with persons from nine to 44 years of age as target. She said the mass immunisation, usually termed Reactive Mass Vaccination (RMV) campaign, was considered the most important and effective measure of ending yellow fever. Shaibu appreciated all the health agencies for their support in making things work in ensuring that all kinds of diseases were eliminated. He also lauded the team of health experts for being proactive in delivering their jobs. Also, the World Health Organisation (WHO) says the organisation’s engagement of community informants.

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Aliko Dangote now 64th richest person in the world

resident of Dangote Group, Aliko Dangote, has significantly moved up in the World Billionaires’ list as he emerged 64th richest person in the world, with an estimated worth of $16.6 billion, as against his previous ranking of 103rd in the world. Dangote, who remains the richest man in Africa for the eighth year running, was the only Nigerian on the list of the top 500 billionaires, as released last week by Bloomberg in its yearly billionaires list. Jeff Bezos remains the richest in the world with $136 billion in his kitty while Bill Gates and Warren Buffett followed as 2nd and 3rd, respectively, with $98.4 billion and $83 billion on the world billionaires chart, which is dominated by North Americans. Dangote’s estimated worth in the latest Bloomberg ranking far outstrips an earlier ranking by Forbes Magazine, another elite publication which placed his fortune at $10.8bn in the 2019 Forbes Africa’s Billionaires’ list released in January,

although he retained the rank as the richest African for the 8th consecutive year in the latter ranking. There are only five Africans on the Bloomberg list of the world’s top 500 billionaires, with Dangote topping the group. The other four Africans included Nicky Oppenheimer of South Africa, who was ranked No. 216 with an estimated worth of $7.05 billion; Johann Rupert of South Africa (ranked No. 225 with an estimated worth of $6.92bn); and Natie Kash of South Africa (ranked No. 263 with an estimated worth of $6.10bn). The fifth and last African on the list of 500 HNW individuals was Naguib Sawiris of Egypt, ranked No. 331 with an estimated fortune of $5.12bn. Africa’s richest man, with his improved worth of $16.6 billion, controls Dangote Industries, a closely held conglomerate. The Lagos, Nigeria-based company owns sub-Saharan Africa’s biggest cement producer, Dangote Cement, which had revenue of N805.6 billion naira ($2.4bn) in 2017.

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Analysts not bullish on FDI inflow, cite uncertain fiscal policies DAVID IBIDAPO

he emergence of the All Progressives Congress (APC), led by Muhammadu Buhari as the president of Nigeria, has been perceived to bring to light the fear of further decline in Foreign Direct Investments (FDIs) following a move of the Federal Government on International Oil Companies (IOCs). Recently, Nigeria ordered IOCs to pay nearly $20 billion in taxes owed to states, which is likely to be followed through as the current administration leads the economy for the next four years. Analysts have termed this move as another template for killing FDIs in and into the economy. This is perceived to be a similar MTN scenario that caused serious panic for investors after the Federal Government’s ordered the telecoms

firm to pay $2 billion tax demand; two weeks after the Central Bank of Nigeria (CBN) directed the telecoms firm to refund $8 billion over alleged illegal repatriation of shareholders’ dividend. While it is expedient for the Federal Government to aim at increasing its tax revenues through increased participation of foreign and local investors in the oil and gas industry, “eliminating fiscal uncertainties and generally improving the ease of doing business in Nigeria is key,” expert at Anderson Tax said. “It is essential that the government does not place undue reliance on the imposition of multiple taxes and levies on companies engaged in oil and gas activities, as the principal way of boosting its internally generated revenues,” Tolulope Adebowale of Anderson Tax said in its publication. In the last four years, Nigeria has recorded low FDI year after year, compared with

the performance in previous years. In 2015, Nigeria earned $3.1 billion from |$4.7 billion in 2014. In 2016, FDI rose to $4.4 billion, but fell to $3.5 billion in the following year. Last year however recorded the lowest so far which, amounted to $2.2 billion, the lowest in the past 13 years. According to a CBN report in 2018, FDI accounted for less than 30 percent of the total foreign inflow while FPI accounted for over 70 percent. “The economy was and is not really viable to encourage foreign investors to invest for a long term,” says Paul Aluko, a Research Analyst at MBC Securities Limited, Lagos. While outlook for Foreign Portfolio Investment into the economy especially in the equities market looks positive with the bullish run experienced in the nation’s bourse for the greater part of this year, FDI a key determinant of economic direction still remains a major concern.

Thursday 28 February 2019

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NEWS Sustainability is key for business growth – Terragon CEO JUMOKE AKIYODE-LAWANSON

ustainability has been identified as the most important aspect of business growth in Africa. Contrary to belief that lack of fund may be the biggest challenge faced by small and medium size enterprises (SMEs), Elo Umeh, CEO, Terragon Group, a data and marketing technology company, says businesses must take a long-term view when investing and evolve by disrupting within their categories and industries. Umeh, who spoke with BusinessDay at the TechPoint build conference and exhibition in Lagos recently, shared principles for businesses to survive in the digital age. Citing Terragon’s sustained growth, he says the company started at a broad level as a digital media platform but had evolved into a mobile advertising network with its own proprietary programmatic platform. “Today, we are leveraging the data analytics and artificial intelligence to bring more value to our custom-

ers,” Umeh said. “Doing business in Nigeria is extremely difficult. However, the opportunity exists and so, we must have a lot of commitment around people and consider the nuances of the environment – including lack of power, traffic, etc. There are companies in this market that make losses for 10 years and still stay. It is not good for the eco-system that some companies come, try and leave because their business is not sustainable,” he says. Solving for local relevance was also a key principle highlighted. Oftentimes, imported solutions do not take cognisance of cultural nuances and peculiarities, which makes adoption difficult. It is important for businesses to customise solutions to local needs, rather than attempt to customise imported solutions for local problems. This approach immediately guarantees a ready market for such customised solutions. In addressing the issue of funding, Umeh advises businesses to consider equity as a last resort. On debt, he advises caution

due to high interest rates and recommends that businesses explore interest free money such as grants and crowd-sourced lending options with fair interest rates. He reiterates that having a strong financial base give companies better leverage when negotiating for equity in the future. Lastly, he mentions the importance of attracting, retaining and building qualified human resource and partnerships. This, he says, will determine how far businesses go. The Terragon CEO recommends that businesses should embrace the mentorship approach in building talents, which should begin, if possible, at tertiary levels. This way, there is a pool of qualified personnel to onboard into the business. Reacting to the seeming withdrawal of businesses from Nigeria, owing to difficult operating environment, Umeh says both government and the private sector have a role to play. He notes, “The private sector can only thrive as far as the public sector permits it to.”

How Saudi Aramco plans for largest buyer of Nigeria crude could threaten country’s oil revenue DIPO OLADEHINDE

igeria’s crude oil revenue looks set to take a hit, as the country’s largest buyer, India, is about to build the world biggest refinery, thanks to Saudi Arabia. India, one of the world fastest growing currently among the world’s fastest growing economy, has seen its gasoline and gasoil demand climb sharply over the past few years, which has encouraged the country’s refineries, Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL), and Hindustan Petroleum Corp Ltd (HPCL) to buy more Nigerian crude Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami. In a situation that will make Nigeria lose its targeted market, Saudi Arabia, the world’s biggest oil exporter, is looking at making India a regional hub for supply of crude oil and will invest billions of dollars in the country to build storage facilities and strengthen refineries, which will keep pace with growing demand. There are also plans to build a new refinery on the western coast, with a mooted capacity of about 1.2 million bpd, with Saudi Aramco. That would make it the largest single refinery in the world, and put it within touching distance of the Arabian Gulf.

Saudi Foreign Minister Adel bin Ahmed Al-Jubeir, who was part of Saudi Crown Prince Mohammed Bin Salman’s delegation to New Delhi, said his country has looked at India as a rising economic power and was very bullish about its potential to grow further. “We are looking to make India a hub (for crude oil supply) in the region. We are looking to build storage facilities in India, we are looking at refineries and downstream

assets in India,” Al-Jubeir said in New Delhi. The Kingdom is the subcontinent’s fourth-largest trading partner, providing almost 20 percent of its crude oil imports while India is the third-largest consumer of crude in the world after the US and China, using more than four million barrels of crude oil per day (bpd) as Demand is expected to rise in the medium-term to nearly six million bpd, climbing to around 10 million bpd by 2040.

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Making sense of Nigeria’s rising population amidst staggering economic growth

abounds to accentuate this fact. Nigeria is home to the highest out-of-school children in the world – put at about 13 million. In the same vein, Nigeria was ranked 152 out of 157 on the recent World Bank’s Human Capital Index, an abysmal performance in the strictest sense of the word.

of the activities of the Niger Delta militants. GDP growth rate stood at a -1.62 per cent at full year 2016. At this same time, population was growing at 2.62 per cent, indicating the disconnect between economic and population growth rates. Nigeria finally heaved a sigh of relief in second quarter 2017 (Q2’17) when the economy recorded 0.72 per cent growth rate, a feat which finally signalled an exit from the recession. At full year 2017, GDP growth stood at 0.81 per cent compared to the 2.6 per cent rate of population growth. While the economy continued to strengthened, albeit fragile, in 2018 on the back of fiscal and monetary consolidation, relative stability in the oil market, and commendable stability in the foreign exchange market, the population figure continues to grow unabated. At this juncture, a curious mind would want to ask why many observers and analysts

respectively. The IMF predicted in 2018 that Nigerians would see their real income per head fall every year until at least 2023. Second, an increasing population reduces the availability of capital especially given that capital is scarce and its supply is inelastic. A rapidly growing population leads to a progressive decline in the availability of capital per worker. This leads to lower productivity and diminishing returns. Third, a rising population with no adequate socio-economic infrastructural support could lead to massive unemployment. Nigeria’s labour force as at third quarter 2018 (Q3’18) was 90.5 million, data from National Bureau of Statistics (NBS) shows. Of these amount, 20.9 million were jobless which means that the unemployment rate as at Q3’18 stood at a whopping 23.1 per cent relative to 18.8 per cent in the corresponding quarter of

However, the mismatch between the economic and population growth rate is what should scare any right-thinking person. Frankly speaking, the rate of growth of Nigeria’s population should jerk the government into action. Since 2015, there have been noticeable gaps between the population growth rate and the rate of economic growth in Africa’s largest oil producing nation. In 2016, the Nigeria economic slipped into recession underlined by a crash in oil price and concomitant drop in the oil production as a result

are drumming the beat of the negative effect of an increasing population given that a rising population do not only serves as a ready market for goods and services but equally serves as a good source of cheap labour. First, should the rate of increase in population growth be higher than the economic growth rate as is the case with Nigeria since 2016, then the per capita income will decline. Unsurprisingly, data from the World Bank reveals that the per capita income fell from a 2015 high of $2,562.5 to $2,455.9 and $2,412.2 in 2016 and 2017

the previous year. However, it’s not all gloomy for Nigeria as there is something to cheer about. The demographics of Nigeria’s population reveal that majority are youth. This means that the numbers of adult dependents are quite low. However, the level of development is quite low, hence the need for government to take human capital development via heavy investment in social infrastructures such as health and education becomes sacrosanct to check against the debilitating effect of a population explosion.

KELVIN UMWENI

Nigeria’s current projected population figure is put at 198 million people according to the National Population Commission (NPC) and its said to be growing at 3.2 per cent per annum. This means that by the end of 2019, using the aforementioned population growth rate, the number of people in Nigeria would have hit 204 million, roughly about 2.0 – 2.6 per cent of the total world’s population. This trend is what makes the country the most populous black nation on the planet earth. According to the United Nations Population Division, Nigeria will be the third most populous nation in the world with a population projection of over 410 million people by year 2050 behind India and China with 1.66 billion and 1.36 billion people respectively. But some observers have main-

tained that Nigeria’s population may be underestimated. More so, many believe that the 2050 projection may be too conservative especially in the face of increasing child marriage and alarmingly high rate of unwanted pregnancies. In 2018, a global planning family report puts the number of unwanted pregnancy in Nigeria at 1.3 million! While the effect of a large population base on growth in the economic literature is mixed, the level and extent of development of the population is paramount. Although China is the most populous nation in the world, the high level of development of the Chinese has led to an agile, innovative and creative labour force that powers the vast Chinese economy. The reverse is the case for Nigeria where human development is at its low ebb. The statistics

12734BDN

he attempt to create a nexus between population growth and the rate of economic development of a country did not just start today. Of a fact, the renowned eighteenth century economist, Thomas Robert Malthus, made copious discussions on the dangers of explosive, uncontrolled population. Malthus who was an English scholar cum cleric argued that population grew at a geometric progression while food supply grew at an arithmetic progression, with the latter anchored on the law of diminishing returns. Consequently, Malthus posited that a time would come when the population would outstrip the food supply thereby leading to food shortage, all other things being equal. Though the Malthusian theory of population has been criticised and its usefulness watered down in the context of present day realities where technological advancement has boosted food supply, controlled birth rate and slowed death rate, the case of Nigeria’s escalating population numbers somehow finds relevance in Malthus gloom and doom forecast advanced centuries ago. It begs the question, “What happens if Nigeria continues to grow her numbers in such a manner that it surpasses her rate of economic growth?” It is to this we now turn.

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Nigeria’s economic diversification and industrialisation: two peas in a pod OMOBOLA ADU AND ISAAC ESOWE

or someone very conversant with the Nigerian economy, the issue of industrialisation and economic diversification is not a new thing. Economists and policy makers alike have both called for the government to shift its focus from crude oil and diversify the Nigerian economy. In 2016, the Nigerian Economic Society (NES) tagged its conference along the line of economic diversification and industrialisation in a bid to alter the government’s focus. However, evidence from BusinessDay Research & Intelligence Unit (BRIU) analysis shows that not much has changed in the last 10 years in terms of economic diversification. In terms of the efforts to boost industrialisation, the solid mineral sector continues to lag behind others as it barely contributes one percent to industrial output, while the manufacturing sector in the last two years has contributed more to industrial output than crude petroleum. However, it can be argued that the stronger performance of the manufacturing sector in Nigeria over the last two years can be linked to fall in oil prices in 2015 that culminated into declining crude petroleum output and the 2016/2017 economic recession. In the first part of this analysis, BRIU investigates the performance of the industrial sector from 2007 to 2017 and in the second part, we create an index to measure economic diversification in Nigeria based on the data compiled from the Central Bank of Nigeria (CBN). Industrialisation in Nigeria The industrial sector in Nigeria is made up of three major sub-sectors namely: crude petroleum & natural gas; manufacturing, and solid minerals. The performance analysis of these sub-sectors from 2007 to 2017 shows that crude petroleum & natural gas’ output has averaged N7.44 trillion and manufacturing output averaged N4.86 trillion. During the same period, solid minerals’ output averaged just

N69.37 billion. Examining the growth rates of the sub-sectors, the solid mineral sector has performed the best among the rest averaging about 9.5 percent from 2007 to 2017. Manufacturing and crude petroleum & natural gas’ growth rates averaged 8.6 percent and -3.3 percent, respectively during the same period. What this tells us is that there are so many opportunities for harnessing the growth in the solid mineral sector that have not been leveraged upon by the Nigerian government. Lastly, taking a look at the contribution to industrial output from 2007 to 2017 to get a better perspective on the development of the industrial sector in Nigeria, the analysis indicates that unsurprisingly, solid minerals contributes barely one percent to industrial output. The manufacturing sector’s contribution to industrial output has been growing steadily since 2017 averaging 8.09 percent. Most of its growth has been due to improvement in Textile & Footwear; and Food, Beverage& Tobacco. Crude

petroleum & natural gas’ contribution to industrial output has been diminishing from a high of 19.74 percent in 2007 to as low as 8.67 percent in 2017. From these analyses, it can be concluded that Nigeria is still far behind in terms of industrialisation. Although, the efforts geared towards the manufacturing sector in

recent years is commendable such as the implementation of the Economic Growth & Recovery Plan (ERGP). For the process to be complete there has to be an increased attention to the solid mineral sector. Economic diversification in Nigeria Economic diversification is

usually regarded as the process of shifting an economy away from a single income source toward multiple sources from a growing range of sectors and markets.The objective of economic diversification is to improve economic performance for achieving sustainable growth. The Nigerian economy is

categorised into five major sectors based on the CBN. These sectors include: Agriculture, Industry, Construction, Trade and Services. In order to measure the level of economic diversification from 2007 to 2017 in Nigeria, BRIU makes use of the HerfindahlHirschmann (HH) index. The HH index is an index for measuring a country’s absolute specialisation. It is used to determine whether a small number of sectors exhibit high portions of the overall income of the country. The index scores range from zero (good diversification) to ten thousand (high specialisation). Otherwise, it can be expressed between zero and one. The lower the value, the more diversified the economy. Computing the HH index for Nigeria from 2007 to 2017, the index score has averaged 0.270 during the period indicating the presence of a highly specialised or concentrated economy. Furthermore, the index score has grown by about 11 percent from 2007 to 2017 showing that there has not been much real effect on the economic policies geared towards diversifying the Nigerian economy. The question then is, how can Nigeria drive economic diversification? There are a number of ways this can be done. In what follows, we outline three strategies: First, access to finance. Increasing the access to finance helps to boost economic diversification. Small and medium-sized enterprises’ access to finance has been identified as a strong constraint, and many policies and initiatives are being implemented to improve access. Second, structural factors, including a country’s population, human capital and quality of institutions, have a positive impact on economic diversification. Diversification increases with increasing population as local firms have access to a larger market and thus benefit from economies of scale. Third, trade liberalisation by the removal or reduction of barriers to trade between countries) facilitates competition and investment and contributes to creating jobs and increase in income. This can be achieved through the African Continental Free Trade Area (AfCFTA).

Thursday 28 February 2019

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CITYFile

Bizman docked for issuing N8m dud cheque

FRSC opens operational unit in Ifo

Debris of collapsed three-storey building on East Street, by Park Road, Aba, Abia State. The building caved in on Monday night.

682 die in road accidents in December, 2018 – FRSC

Ogun to de-worm 500,000 children RAZAQ AYINLA, Abeokuta

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Trump and Kim kick off Hanoi nuclear summit Two leaders remain far apart on plan for denuclearisation of the Korean peninsula Demetri Sevastopulo and John Reed

onald Trump and Kim Jong Un have begun their two-day summit in Hanoi, as the US president tries to revive efforts to persuade the North Korean leader to follow through on his pledge to abandon his nuclear weapons. Shortly after arriving at the Metropole Hotel, Mr Trump and Mr Kim met in front of a phalanx of American and North Korean flags. The leaders shook hands and smiled as they exchanged greetings. Asked if the two leaders would announce a political declaration to the end of the 1950-1953 Korean war, Mr Trump said: “We’ll see.” He also denied that he had walked back his demand for denuclearisation. Mr Trump and Mr Kim are set to hold meetings on Thursday following their dinner on Wednesday. The two leaders have formed an unusual bond since their first meeting in Singapore. Less than two years since Mr Trump threatened “Rocket man” with “fire and fury”, the US president now refers to Mr Kim as his “friend” and even said that they “fell in love” after he received “beautiful” letters from Mr Kim. While Mr Trump and Mr Kim have strengthened their relationship, US officials have failed during the past eight months to make

any real progress towards the goal of denuclearising the Korean peninsula. Mr Trump has in recent months lowered expectations about the summit by claiming that he has already produced a big win because North Korea has not tested any missiles or nuclear weapons in 15 months. Some critics privately concede that Mr Trump has helped lower tensions on the Korean peninsula but say his comments about there being no urgency reduce the pressure on Mr Kim to take concrete steps. Ahead of the meeting, speculation has mounted that the two sides will agree several measures that could include opening liaison offices in their respective countries. The two leaders may also announce an end to the 1950-1953 Korean war, which concluded with an armistice. Steve Biegun, the main US negotiator, said recently that Mr Kim had signalled he was willing to destroy the plutonium and uranium-enrichment plants housed at Yongbyon nuclear complex in return for “corresponding measures” from the US. But he did not outline what those measures would entail. Richard Fontaine, a Republican foreign policy expert and chief executive of the Center for a New American Security think-tank, said the two sides had still not arrived at a consensus over the meaning

Top Chinese officials plagiarised doctoral dissertations High-ranking party members’ academic ‘arms race’ fuels copying, one observer says Tom Hancock and Nicolle Liu

everal senior Chinese officials have apparently copied portions of their university thesis from other authors without citation, an FT analysis has found, highlighting how an “academic arms race” among the political elite may be fuelling plagiarism. China’s politicians are on paper among the world’s best educated: the elite politburo, composed of the 25 most senior Communist party officials, boasts seven doctoral graduates including Xi Jinping, the president, who obtained a law doctorate from Beijing’s Tsinghua University in 2002. But the doctoral dissertation by Chen Quanguo, a politburo member and head of the Communist party in the northwestern Xinjiang region, features dozens of paragraphs identical to earlier works that are not cited. Theses by other politburo members are not accessible on public academic databases. But an FT review of 10 doctoral theses by other Chinese officials that were available online found three cases in which extended passages were copied without citation. The revelation comes amid a public debate in China about the academic qualifications of wellconnected people. Last week, Beijing Film Academy revoked a doctorate awarded to Zhai Tianlin, one of the country’s best-known actors, after finding that sections of a paper published while he was a graduate

student were copied from other texts without references. “Angry netizens condemned not only the academic fraud, but also the damage done by renowned Chinese universities to fair education opportunities by opening a back door to the rich and powerful,” the state-run Global Times said. Peking University expelled Mr Zhai from a postdoctoral programme following the outcry. It has been common since the 1990s for senior officials in China to acquire postgraduate degrees. “Within the ranks of party officials there was an arms race for credentials,” said Minxin Pei, a Chinese politics expert at Claremont McKenna College in the US. Many officials, including Mr Xi, have obtained doctoral degrees while working in full-time government jobs. Mr Chen was a senior official in Henan province when the dissertation was published. “A government official’s work is really demanding, so how do they have time to write a PhD thesis? It’s a running joke in China,” added Mr Pei. Mr Chen has over the past three years overseen a massive security crackdown in Xinjiang, which has seen an estimated 1m members of the mostly Muslim Uighur minority interned in camps. His thesis entitled “Research on the Correlation between Human Capital Accumulation and Economic Development in Central China” earned him a doctorate in management from the Wuhan University of Technology in 2004.

of denuclearisation. “Months after Singapore . . . there appears to be no shared understanding of what ‘denuclearisation’ means, let alone a mutually-agreeable path to achieve it,” said Mr Fontaine. After an initial short private meeting, Mr Trump and Mr Kim will have dinner with their top aides. Mr Trump will be joined by Mike Pompeo, secretary of state, and Mick Mulvaney, his acting chief of staff. Notably absent, however, is John Bolton, the hawkish national security adviser who before joining the administration had advocated that the US attack North Korea.

Mr Bolton has remained sceptical that North Korea intends to abandon its nuclear programme. According to the White House, Mr Kim will be joined by Kim Yong Chol, his main negotiator, and Ri Yong Ho, the North Korean foreign minister. The arrival of the two leaders in Hanoi has caused periodic traffic gridlock in a city not used to hosting the roughly 3,400 journalists from 39 countries who have come to cover the high-profile event. Nguyen Duc Chung, the top municipal official, told the Financial Times that the city had mobilised more than 10,000 police and other security forces for the event.

Earlier on Wednesday, Mr Trump met Vietnam’s president and communist party chief Nguyen Phu Trong, and the two men presided over a signing ceremony for the purchase of $18bn of planes and engines from Boeing and General Electric by the fast-growing Vietnamese airline VietJet. At the meeting, Mr Trump said Vietnam, with its rapid economic growth, was a “good example of what could happen” if North Korea abandoned its nuclear programme. The North Korean delegation did not provide any information about what Mr Kim did on Wednesday before the summit.

Michael Cohen: Trump is a ‘conman’ and a ‘cheat’ Ex-lawyer to testify that president ‘in his way, was telling me to lie’ over Russia business links Demetri Sevastopulo

ichael Cohen, the longtime lawyer and fixer for Donald Trump, on Wednesday will tell Congress his former boss is a “conman” who indirectly told him to lie about business his real estate empire was seeking in Russia during the presidential race. In an opening statement Mr Cohen will give to the House oversight committee, he will also accuse the former New York property mogul of being a “racist” and a “cheat”. The testimony will come as Mr Trump meets North Korean leader Kim Jong Un in Hanoi for a second summit to discuss denuclearisation on the Korean peninsula. He responded on Twitter, insisting Mr Cohen was “lying in order to reduce his prison time”. Mr Cohen, who pleaded guilty to lying to Congress when he told lawmakers Mr Trump was no longer seeking to build a Trump Tower in Moscow during the 2016 race, will tell the committee that he wanted to correct the record. “The last time I appeared before Congress, I came to protect Mr Trump. Today, I’m here to tell the truth about Mr Trump,” he

said in the statement published ahead of the Capitol Hill hearing, adding that negotiations about the Moscow project continued “for months during the [presidential] campaign”. “Mr Trump did not directly tell me to lie to Congress. That’s not how he operates,” Mr Cohen said. “In conversations we had during the campaign, at the same time I was actively negotiating in Russia for him, he would look me in the eye and tell me there’s no business in Russia and then go out and lie to the American people by saying the same thing. In his way, he was telling me to lie.” Mr Cohen added Mr Trump asked him about the status of the Moscow Tower project six times during the first half of 2016, when the Republican presidential primary was in full swing. “Mr Trump knew of and directed the Trump Moscow negotiations throughout the campaign and lied about it. He lied about it because he never expected to win the election. He also lied about it because he stood to make hundreds of millions of dollars on the Moscow real estate project.” Mr Cohen’s prepared testimony emerged as Mr Trump was starting a series of meetings with the president and prime minister

of Vietnam. He is scheduled to appear on Capitol Hill shortly after Mr Trump has dinner with Mr Kim on Wednesday in Hanoi. Mr Trump responded shortly before the dinner, attempting to undermine Mr Cohen’s credibility as a witness. “Michael Cohen was one of many lawyers who represented me (unfortunately). He had other clients also. He was just disbarred by the State Supreme Court for lying & fraud,” Mr Trump wrote. “He did bad things unrelated to Trump. He is lying in order to reduce his prison time.” Earlier, Sarah Sanders, the White House press secretary, responded to suggestions Mr Cohen would accuse Mr Trump of criminal conduct by saying: “It’s laughable that anyone would take a convicted liar like Cohen at his word, and pathetic to see him given yet another opportunity to spread his lies.” Mr Cohen will begin a threeyear prison sentence in early May after pleading guilty to eight criminal counts. One of those charges related to his involvement in a scheme to pay two women, including adult film actress Stormy Daniels, not to make public claims that Mr Trump had affairs with them after his marriage to his current wife Melania.

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NATIONAL NEWS

FT Key shareholder voices support for BarrickNewmont deal

Pakistan says it has shot down 2 Indian air force jets

Flossbach von Storch backs a ‘seamless and not too hostile’ combination of gold miners

Military says 2 Indian pilots are being held as tensions escalate

Henry Sanderson and Neil Hume

Amy Kazmin and Farhan Bokhari

ne of the biggest shareholders in Barrick Gold and Newmont Mining has thrown its support behind the merger of the two long-term rivals but only if they can come to an amicable agreement. Flossbach von Storch, the biggest active shareholder in both gold miners, with holdings worth more than $1bn, said the idea of combining the best gold mining assets in the world was attractive if they could be integrated seamlessly. “We like the approach and the optionality that comes with the Barrick merger proposal but — and this is the important thing — it has to be seamless and not too hostile,” said Simon Jäger, portfolio manager at Flossbach von Storch. “Both parties need to want this deal.” He added that the German fund manager with €40bn under management had yet to make a final decision on the deal. On Monday Toronto-based Barrick stunned the gold industry when it unveiled a hostile $18bn bid for its closest rival Newmont, just over a month after it acquired London-listed rival Randgold. A deal would create a group with an enterprise value of over $40bn producing more than 10m ounces of gold annually, making it the world’s biggest gold miner by a large margin. The success of the bid will depend on a handful of shareholders who own both companies, including Flossbach von Storch and BlackRock, the world’s largest asset manager. They have to decide whether the deal makes more sense than Newmont’s planned $10bn acquisition of Vancouver-based Goldcorp, which was announced last month. The Goldcorp deal is set to close in the second quarter after a shareholder vote and has been criticised by some investors because it will generate just $165m of annual synergies. In contrast, Barrick estimates annual pre-tax synergies from its deal of $750m. “We don’t understand paying a 17 per cent premium for Goldcorp,” Mr Jäger said. Mark Bristow, the South African chief executive of Barrick, has said his deal for Newmont is better for shareholders as both miners have large operations in Nevada, which can be combined to reduce costs. Mr Bristow has also vowed to reduce head office staff at Newmont. Last week, Barrick bought 1,000 shares of Newmont and proposed a motion to reduce the percentage required to call a shareholder vote to 15 per cent of shareholders from 25 per cent. BlackRock owns 14.9 per cent of Newmont, making it the largest shareholder in the miner, according to the latest available data. The investor group, which has $6.3tn in assets under management, also has a 6.1 per cent stake in Barrick, making it the company’s second-largest shareholder. While most of the shares are owned by BlackRock’s iShares exchange traded funds business, a portion are held by the London-based BlackRock World Mining Trust, which is managed by Evy Hambro and Olivia Markham.

Thursday 28 February 2019

Muhammadu Buhari wins second term as president of Nigeria Opposition objects to result but challenge ‘unlikely’ to succeed Neil Munshi

resident Muhammadu Buhari has been re-elected after an acrimonious campaign in Nigeria, securing a second term as head of Africa’s most populous nation and its largest economy even though his main opponent’s party said it would not accept the results. According to the electoral commission, which declared Mr Buhari the winner, he beat former vice-president Atiku Abubakar by almost 4m votes, 56 per cent to 41 per cent, in what many thought had been a close race. Turnout was low at the polls after a campaign that had been marred by long delays and sporadic violence. Mr Abubakar’s backers alleged huge vote rigging and demanded that polls in some states be rerun because of alleged manipulation. Mr Abubakar’s party called the results “incorrect and unacceptable” but Mr Buhari’s party accused it of trying to discredit the results of Saturday’s election. Amaka Anku, Africa head for the Eurasia Group, said in a note that a legal challenge by Mr Abubakar was unlikely to succeed. “He would need to prove beyond a reasonable doubt that electoral malpractice occurred,” she wrote. “That is a tough standard to meet and makes an overturn of the election result unlikely.”

An international observer in Nigeria said that, while there were irregularities perpetrated by both big parties, it was “not enough” to have affected the outcome of the election. Mr Buhari secured the most votes, and more than a quarter of votes, in two-thirds of Nigeria’s 36 states and the Federal Capital Territory, thereby avoiding the possibility of a runoff. With his victory in 2015, Mr Buhari became the first opposition candidate to win since democracy returned to Nigeria in 1999. He had previously ruled briefly as a military dictator in the 1980s, when he was known as a disciplinarian and anticorruption crusader. He campaigned on that reputation in presidential runs in 2003, 2007 and 2011, in elections that many Nigerians, and analysts, believe were blatantly rigged against him. In 2015, he won amid outrage over multibillion-dollar government graft scandals and a promise to defeat the Boko Haram insurgency, which was terrorising large parts of northern Nigeria and had bombed the capital. Mr Buhari is credited with beating back Boko Haram. It is now largely isolated to a single state, although it still slaughters soldiers and civilians. However, a series of security crises in other parts of the coun-

try have also boiled over on his watch. He is still viewed as a clean politician, although many of his associates have been accused of graft, and his anti-corruption drive has been criticised as partisan. His economic record has been decidedly mixed. Even critics agree that he was dealt a bad hand, taking office just as an economy dependent on oil was hit by a crash in prices. But many economists argue that his policies exacerbated both the recession that followed and the sluggishness of the recovery. Mr Buhari is likely to preside over a government full of men vying to be his successor, including his vice-president, Yemi Osinbajo, a Christian pastor and lawyer. Mr Osinbajo has repeatedly served as acting president during Mr Buhari’s first term, when an undisclosed illness brought the president to London for months at a time. In his new term, Mr Buhari is expected to continue his focus on state-led growth and infrastructure spending, on expanding the agricultural sector and on empowering small businesses. Lagos-based executives have become weary of Mr Buhari’s statist approach, however, and many had hoped for a victory by Mr Abubakar. A wealthy businessman, he had pitched himself as being in favour of the private sector.

Arm warns delaying 5G in Europe would hit GDP

British chipmaker speaks out as debate rages over Chinese supplier Huawei Nic Fildes

ny delay to the launch of 5G mobile internet in Europe would have a “detrimental” effect on the economy, said the chief executive of British chip designer Arm, as countries weigh up whether to let the Chinese company Huawei build their networks. Simon Segars said there is a strong correlation between the arrival of “bleeding edge” mobile technology and gross domestic product growth, and that it would be “detrimental to Europe’s GDP growth” to fall further behind China and other countries in 5G. He spoke at Mobile World Congress, a telecoms trade show in Barcelona, where US officials have been strongly lobbying companies

to drop Huawei as a supplier on security grounds. Telecoms operators have argued that dropping Huawei from their 5G plans, and stripping out existing Huawei equipment from their 4G networks before they are upgraded to the next standard, would cause significant delays. Arm, which is based in Cambridge but owned by Japan’s SoftBank, works closely with Huawei which uses its chip designs for semiconductors used in servers for data centres. China has historically struggled to compete in the semiconductor sector but Mr Segars said Huawei’s chip designs have become “very sophisticated” and that its design team has emerged as a strong player. “The silicon team at Huawei are world

class,” he said. Arm was historically seen as a proxy for the smartphone market as its chip designs were a critical component for the world’s handsets. Mr Segars argued that its future is more pinned to the huge growth in connected devices and that the company is working on integrating mobile sim cards into the chips of such devices. It signed a partnership with Vodafone, which has targeted internet of things networks as a growth area, in Barcelona to develop “integrated SIMs”. “Fifteen years ago, you would buy the latest handset from Nokia and that morphed into the smartphone market. But now the trend is around networks and not how many humans have a smartphone,” said Mr Segar.

akistan said it has shot down two Indian air force planes and bombed several locations along the line of control dividing the disputed Kashmir region as hostilities between the nuclear-armed neighbours escalated sharply. In a tweet on Wednesday morning, Pakistani military spokesman Major General Asif Ghafoor said that its planes had downed two Indian air force jets that had crossed the line of control and entered into Pakistani-controlled airspace. Maj Gen Ghafoor added at a press conference on Wednesday afternoon that two Indian pilots were captured by Pakistani forces, one of whom was injured and hospitalised. Indian authorities confirmed that an aircraft had crashed in Budgam in Kashmir, apparently killing both pilots on board. But local media reported that the crash was unrelated to the events along the line of control. The escalation of hostilities comes a day after India said it had carried out a “pre-emptive strike” on a terrorist training camp run by the militant group Jaish-e-Mohammad in Pakistan’s Balakot region, saying it had killed “a large number” of prospective jihadis, their trainers and commanders. Islamabad had denounced the strike and vowed to retaliate, even as it downplayed the extent of the damage. On Wednesday morning, Islamabad issued a statement declaring that it had bombed targets along the line of line of control from within Pakistani airspace, though it said it has struck at “non-military targets” and avoided loss of life. It added that the strike was “not a reaction to continued Indian belligerence” but to “demonstrate our will, our right, our capacity for self-defence. We have no intention of escalation but are fully prepared to do so if forced into that paradigm.” Amid the sharp rise in tensions, India has sealed off several of its northern airports in areas close to the border — including and Jammu, Srinagar and Amritsar — to civilian air traffic, while Pakistan has also closed several of its airports. Hostilities between India and Pakistan have escalated sharply since a terror attack killed 40 paramilitary police in India’s Kashmir region on February 14, an attack claimed by the Pakistan-based militant Islamist group Jaish-eMohammad. On Tuesday, India said that Mirage warplanes carried out a successful overnight “pre-emptive strike” that destroyed a JeM terror training camp in Balakot, after receiving “credible intelligence” that the group was planning fresh attacks in various parts of India. Pakistan’s military said the Indian bombs had fallen into a wooded area where they did little damage and caused no casualties. A Pakistani foreign ministry spokesman told the Financial Times that the country had little choice but to act in the wake of Tuesday’s provocation despite US Defence Secretary Mike Pompeo urging both countries to show restraint.

Thursday 28 February 2019

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Ineos invests £1bn in UK in boost for oil industry Company run by Britain’s richest man will extend life of key North Sea pipeline Mure Dickie

neos, the privately owned energy and chemicals group run by Jim Ratcliffe, Britain’s richest man, is to invest £1bn in the UK — half of it to extend the life of the nation’s most important oil pipeline. Ineos said it would invest £500m in the Forties Pipeline System, which transports 40 per cent of the UK’s North Sea oil and gas, in an overhaul that would extend its life at least two decades into the 2040s. The group, founded by billionaire Sir Jim, will also invest £350m in a new energy plant at Grangemouth, Scotland’s most important industrial complex. It will spend £150m in a new plant in Hull that will make vinyl acetate monomer, which is used in products such as adhesives, paints and textiles. “This £1bn investment underlines our confidence in our business in the UK,” said Sir Jim, who has been a vocal supporter of Brexit. “At an uncertain moment for the country, Ineos . . . is committed to continue investing in manufacturing and high skilled jobs in the UK,” he said in a statement. Earlier in February, the Sunday Times newspaper reported that Sir Jim was in discussions with accountants PwC about a tax avoidance plan that could save up to £4bn in tax, after moving his tax residence to Monaco. Ineos declined to comment

but the report prompted John McDonnell, Labour’s shadow chancellor, to warn that such a move would jeopardise future government backing for his chemicals company. Ineos acquired the 44-year-old Forties pipeline in 2017 as part of a strategic bet on the future of ageing North Sea oilfields. The pipeline can transport up to 600,000 barrels of North Sea oil a day for refining onshore. Just a few months after the acquisition, global oil markets were roiled by a three-week shutdown of the pipeline that was caused by the discovery of a crack in an online section near Aberdeen. The £500m investment would include technical upgrades and modernising of its environmental systems, Ineos said on Wednesday. “North Sea oil and gas producers are telling us that they want to be in the North Sea well into the 2040s so we are making this commitment to be there with them,” it said. The group said that its £350m investment in the new steam and power plant at Grangemouth would improve its energy efficiency and long-term reliability. Ineos had announced it would close its Grangemouth operations during a dispute with the Unite union in 2013, only reprieving it after workers accepted changes to pensions and other conditions. The group has since invested heavily in the petrochemical complex, which now relies in part on imports of US shale gas.

WPP hires Walmart executive as head of talent management Jacqui Canney will join as global chief people officer Matthew Garrahan

PP has hired a top Walmart executive as its global chief people officer to integrate talent management across the advertising and media buying companies that make up the marketing and communications group. Jacqui Canney will leave her post as chief people officer at Walmart, where she has been responsible for attracting, retaining and developing talent at one of the world’s largest private employers. The appointment comes in the midst of a streamlining push by WPP, which is trying to simplify its structure of multiple individual companies in order to better serve the global brands that are its biggest advertising clients. The group, which owns com-

panies such as Ogilvy & Mather and GroupM, was built through acquisition by its former chief executive Martin Sorrell. It consists of dozens of companies specialising in media buying and planning, data analytics and creative advertising work for clients. Mark Read, who was appointed WPP chief executive last September, said: “To do the best work for our clients we need to continue to attract the very best people.” He added Ms Canney would “play a central role as we create a strong new culture throughout WPP”. WPP has been hit by a slowdown in spending by the largest consumer packaged goods companies. It has been trying to simplify its structure for clients for several months, merging some of its agencies, such as J Walter Thompson and Wunderman, and reducing headcount.

Italian banks stock up on government debt Lure of the carry trade outweighs concerns about the bank-sovereign doom loop Kate Allen

talian banks started 2019 by stocking up on the largest amount of domestic government debt since the height of the sell-off that hit the country’s bond market last year, newly released data showed. Financial institutions in Italy bought a net €10.7bn of government bonds in January, according to the figures from the European Central Bank — the largest increase since last June. It was a sharp turnround from the previous month, when they closed 2018 by shedding a net €17bn of their holdings. The shift coincides with a revival in the popularity of relatively high-yielding sovereign debt such as that of the eurozone periphery nations, as the prospect of tighter monetary policy in the US and Europe abates. Italy has become a popular carry trade — a trade where in-

vestors borrow money at cheap interest rates to invest elsewhere in a higher-yielding asset, such as Italian debt — in recent weeks, with a succession of its debt sales attracting record order books. However Wednesday’s ECB data will revive concerns about the ‘doom loop’ between Italy’s sovereign bond yields and its banks’ balance sheets. The Bank of Italy warned last year that the volatility of the price of government debt was a threat to banks’ and insurers’ stability. As Italian bond yields rose sharply last year when the formation of a populist coalition government spooked foreign investors, Italian banks piled into the market, purchasing a net €27bn of bonds in May 2018 and a further €14bn the following month. Despite the strong level of demand for its debt, Italy faces a challenging funding programme this year with at least €225bn of

medium- and long-term debt needing to be raised. “The road to complete its yearly funding goals is still long, but so far, primary-market activity has been met with good demand,” said Chiara Cremonesi, a fixed-income strategist at UniCredit. On Wednesday Italy is set to sell up to €7.25bn of fresh debt across five, seven and 10-year maturities. The sale is likely to be well-supported by this week’s redemption of €24bn of outstanding bonds. Another supportive factor is the recent halt in the country’s credit rating slide. Last year the major rating agencies all become more gloomy about Italy’s prospects. But last week Fitch resisted a further downgrade, instead choosing to affirm Italy at BBB with a negative outlook, two steps above the bottom of the investmentgrade ladder. Moody’s and S&P are not due to update their views for several weeks.

Don’t let the UK’s economic doldrums get you down Short-term data overload can spook investors — look to the long term Ken Fisher

hen is quarterly growth in gross domestic product bad news? Apparently, when it’s paired with monthly data showing a contraction in the most recent month, rekindling downturn fears. That was Britain’s GDP for the last three months of 2018. The quarter was fine. But December GDP dropped, souring sentiment. My advice? Don’t sweat about December’s dip. GDP isn’t a perfect picture of economic health. Think like markets and recognise GDP’s limitations. You’ll see reality isn’t nearly as bad as feared. At first December’s 0.4 per cent drop in GDP looks ominous. Services, production and construction all slipped — the first simultaneous drop since September 2012. The service sector is 80 per cent of GDP, so its decline caught the most eyeballs. I’m sympathetic to anyone arguing that December’s data are more meaningful than results across the fourth quarter. Quarterly data sets are inherently more backward-looking than monthly.

Yet both are old news to forwardlooking stocks, which have already moved on. The key for investors is to move on too. What matters isn’t if December fell, but whether weakness sticks. The two main culprits were wholesale and retail trade. Falling oil prices affected the former. On the latter, researchers at the Office for National Statistics reckon Black Friday promotions pulled retail spending into November — a seasonal quirk, not a red flag. January retail sales bounced hugely, underscoring consumers’ health. There is an endless tug of war between the desire for more and more fresh data and the need to tune out noise and think longer term. Monthly GDP scratches the timely information itch, but is it helpful? The ONS has published GDP monthly for only six months, with the data set backtested to January 1997. More data aren’t inherently bad, but shorter-term data sets inevitably wiggle more. It’s human nature to get hung up on volatility — especially downward volatility

— so more monthly data begets a greater temptation to tinker with investments. The backtested monthly data show British GDP often fluctuates. According to the ONS, almost one in every four months since 1997 showed negative GDP growth. Yet GDP has contracted in only seven quarters since then, with only one recession, which ran from the second quarter of 2008 to the second quarter of 2009. Apply the same exercise to the current economic expansion. Since the third quarter of 2009, UK GDP increased in 36 out of 38 quarters. Even in those positive quarters, 20 months still registered GDP declines. Before last summer, the public had no reason to fret about monthly GDP figures — because there weren’t any. They could guess at monthly growth by cobbling together the monthly services, industrial production and construction indices. But that exercise is imperfect and unofficial. Now, with the official information, investors have one more thing to fear.

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Thursday 28 February 2019

ANALYSIS

House votes to block Trump’s border emergency Resolution to prevent spending on wall moves to Senate as prospects of veto rise Courtney Weaver

Chinese consumers: your country needs you Consumption now accounts for over half of the size of the economy, but fears are rising that growth will slow as spending decreases Tom Hancock

iang Rong has always been firmly in charge of her family’s household finances. But in recent years the 44-year-old teacher admits her disciplined attitude to spending has slipped. “I spent unthinkingly,” says Ms Jiang, recalling extravagant purchases of Japanese cosmetics and South Korean shampoo. “Money would flow away like water.” Chinese consumers spent $4.1tn in 2017 on everything from pet care to cinema tickets and cars, according to the National Bureau of Statistics, up from $3.2tn in 2012. But there are indications that consumers, like Ms Jiang, are now reining in their spending just at a time when China — and a subdued global economy — need that spending more than ever. Close to their 80 sq m apartment in Wuhu, a city until recently largely ignored by multinational companies, a shopping mall is bustling with outlets run by Adidas, H&M and Uniqlo. Starbucks has opened four stores in the city of 1.6m people, which sits 300km west of Shanghai. “We have most of the brands you could see in Shanghai,” says Zhang Jing, Ms Jiang’s husband, strolling past a cavernous Nike outlet. Increased spending by Chinese consumers is not new. Consumption levels have risen since the 1970s as the economy expanded. But the spending by the Zhang family, and tens of millions of others like them, has produced a historic shift over the past five years, with the share of consumption in China’s gross domestic product increasing to 54 per cent in 2017 — from less than half in 2011. Consumption growth has outpaced exports and investment for the first time since the 1980s, with consumption of goods and services accounting for 76 per cent of new economic activity in China last year, up from 47 per cent in 2013. The Chinese consumer is the “single most important thing in the world economy”, says Jim O’Neill, a former Goldman Sachs chief economist. “The next 40 years of global growth might be about the Chinese consumer. It is very unlikely that any other country could step in to drive global consumption.” With its housing and industrial sectors mired by overcapacity, greater production of consumer goods and services should provide a more sustainable basis for economic growth in Chi na. But with investment in new production the cornerstone of the country’s development, economists expect a more consumption-driven economy to be a slower growing one. Indeed, the shift has coincided with a slowdown in Chinese growth, which last year fell to its lowest rate, 6.6 per cent, since 1990. Beijing faces a tricky balancing

act, therefore, as it tries to avoid a “hard landing” for the economy: investment remains critical to growth and slowing it too rapidly could deflate consumption. But if consumption remains at its current level — still low by international standards — then wasted investment and lack of demand will drag down the economy anyway. “Investment is still driving demand, that’s what creates jobs,” says Keyu Jin, a professor at the London School of Economics. “You can see clearly that as soon as investment slows down the economy slows down.” As a recent rattling of global stocks on fears of a slowdown in China showed, the challenge reverberates beyond the country to the fortunes of consumer goods groups from carmakers to technology and pharmaceutical companies. But Beijing could tolerate a short-term slowdown for the sake of longer-term growth, analysts say. “Changing China’s growth model, or ‘economic rebalancing’ for short, was never aimed at boosting GDP growth, but at making growth more sustainable,” says Pieter Bottelier of the Carnegie Endowment’s international economics programme. Ms Jiang’s annual household income of about Rmb90,000 ($13,443) is a reminder that most Chinese consumers remain poor by developed world standards. It puts the family above the median Chinese income of Rmb68,000, according to the China Household Finance Survey, but at $23,000 in purchasing power parity terms the figure is well below the US median of $31,000. However, Chinese household income has grown at a much faster pace than in the developed world in recent years. Median individual disposable income grew more than 9 per cent annually between 2011 and 2017, according to CHFS data. This growth was aided by the accumulation of capital and technology which has made workers more productive. But the rise in household income has outpaced growth over the same period. Underlying this are the changing employment dynamics, which saw the share of labour compensation as a percentage of GDP rise from 46 per cent in 2007 to more than 60 per cent in 2016. By then China’s labour pool had begun to decline, while labourintensive service industries became the main source of economic output, pushing up wages. Ms Jiang and her husband, also a teacher, do not work in the private sector, which accounts for most of the country’s jobs. But schools have increased pay and benefits such as healthcare in recent years and Beijing hopes Mr Zhang and consumers like him pick up the baton of growth. With global growth tepid and political resistance to trade imbal-

ances growing, China cannot look overseas for demand as it did before the financial crisis so has to look for it at home. Investment, which surged in property and heavy industry sectors such as steel production after the financial crisis, is becoming less efficient. “China needs to start making higher-return investments . . . those that successfully anticipate or create demand from the growing middle and upper classes,” according to analysts at Gavekal Dragonomics, a consultancy. The current level of rebalancing has already helped that process: services accounted for more than half of fixed asset investment last year, a record. And as the rise of Chinese consumer goods companies — especially telecoms groups such as Huawei and Xiaomi — has shown, Chinese companies are capable of reaching a high-level of productivity based on domestic demand. China consumer spending People are saving more “China doesn’t need to rely on international trade to the extent its east Asian neighbours did,” says Nicholas Lardy, a fellow at the Peterson Institute for International Economics in Washington. “Its domestic market is big enough that all the economies of scale can be gained through domestic sales.” But just as China needs them most, consumers are growing cautious. Vehicle sales in the world’s largest car market fell for the first time since the 1990s last year, retail sales growth slipped to 8 per cent in 2018 — a 15-year low — and the smartphone market is shrinking. With the US-China trade war creating uncertainty, despite more emollient noises from the White House, and a tightening of credit growth which has led to a curbing of corporate investment and increasing bankruptcies, consumers appear to be cutting back on large discretionary purchases such as cars. In Wuhu, the largest employers — carmaker Chery and Anhui Conch Cement — are both trimming investment. Government infrastructure projects, such as the construction of a series of six bridges in the city, are also slowing. Yet closer analysis suggests fears about falling consumption are exaggerated. The reasons behind the drop in car sales are often sector-specific factors, such as tax cuts being reversed. Likewise, retail sales offer an imperfect picture of household spending. The figures include corporate and government purchases, while as Chinese households become more affluent, more of their spending goes on services than goods. Mr Zhang, for instance, says 15 per cent of the family’s household income is spent on tourism. Their daughter’s education is another big expense.

he House of Representatives has voted to block Donald Trump’s declaration of a national emergency on the US southern border, raising the possibility that the president may have to use his veto to build his proposed border wall. The resolution of disapproval passed the House 245-182, with 13 Republicans joining with Democrats, who have the majority in the chamber, on Tuesday to oppose Mr Trump. The measure will next be taken up in the Senate, where three Republicans — Thom Tillis of North Carolina, Susan Collins of Maine and Lisa Murkowski of Alaska — have said they will join with Democrats in seeking to overturn Mr Trump’s declaration. For the resolution to pass the Senate, Democrats would only

However, he said he had “grave concerns” about what Mr Trump’s move would mean for the separation of powers under the US constitution, which gives Congress responsibility for appropriations. He said it was hypocritical for members of his party to criticise over-reach by Barack Obama but not by his Republican successor. “There is no intellectual honesty in now turning around and arguing that there’s an imaginary asterisk attached to executive over-reach — that it’s acceptable for my party but not thy party,” Mr Tillis said. Other Republican senators including Cory Gardner of Colorado, Mitt Romney of Utah, Pat Toomey of Pennsylvania, Jim Inhofe of Oklahoma, and Roy Blunt of Missouri, have said they are undecided on the resolution of disapproval. Mitch McConnell, the Republican senate leader, has said the upper chamber would vote on

US Speaker of the House Nancy Pelosi and congresswoman Sheila Jackson Lee rush to the House vote on blocking the national emergency, setting up a showdown in the Senate © AFP

need to peel off a total of four Republican votes if all 47 members of their caucus vote in favour of it. The White House notified Congress on Tuesday that Mr Trump’s advisers would urge the president to veto the resolution were it to pass both chambers and move ahead with the emergency declaration. Overriding such a veto would require a two-thirds vote of both houses of Congress, which is unlikely. “The current situation at the southern border presents a humanitarian and security crisis that threatens core national security interests and constitutes a national emergency,” the White House said in a statement. While Ms Collins and Ms Murkowski are both Republican moderates and have voted alongside Democrats in key votes in the past, Mr Tillis is a reliable conservative, who tends to vote along party lines, making his defection more notable. In an opinion piece published in The Washington Post, Mr Tillis said the president had “few bigger allies” when it came to “supporting his vision of 21st century border security” and the president was right to be “frustrated with Congress’s inaction”.

the resolution in the coming days. While Mr McConnell supports Mr Trump’s declaration, he has acknowledged that different lawyers have offered competing accounts of the legality of such a move. Asked explicitly by a reporter on Tuesday whether Mr Trump’s declaration was legal, Mr McConnell, replied: “We’re in the process of weighing that.” Mr Trump declared a national emergency this month as a means to bypass Congress and secure funds for his border wall. However, he already faces legal challenges in the courts, with more than a dozen US states filing a lawsuit to block the president’s measure, which they allege is unconstitutional. While Democrats have been especially critical of the measure, Mr Trump has encountered surprising blowback from Republicans as well. “The national emergency that this president declared on our southern border, I don’t believe is the national emergency of our time,” Dean Heller, the former Republican senator from Nevada, told a conference in Las Vegas. “That is not the national emergency of our time. The national emergency of our time is $22tn of debt. That is a national emergency.”

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Thursday 28 February 2019

Agbakoba flays voting pattern in presidential election …Advises PDP, Atiku against legal actions Zebulon Agomuo

lisa Agbakoba, a senior advocate of Nigeria (SAN), has noted that the voting pattern for the just concluded 2019 presidential election “shows ethnicity played a significant role.” He also advised the People’s Democratic Party (PDP) and its presidential candidate, Abubakar, against legal options. According to Agbakoba, “President Muhammadu Buhari kept his base in the North, while former Vice President, Atiku Abubakar largely held his base in the South. Both All Progressives Congress (APC) and People’s Democratic Party (PDP) benefited from primordial voting. The excepted zone is the South-west where voting

Olisa Agbakoba

occurred on the basis of issues.” Lamenting the dire implication of the development, the Maritime lawyer said: “The significance and

consequence of the 2019 presidential election is huge unless we are able to reverse it. 2023 will follow the pattern of 2019 unless we do

Group commends INEC over conduct of Presidential, NASS polls

pro-democracy organisation and INEC accredited observers, Gender and Mandate Protection (GMP) has described the last Presidential and National Assembly elections as most peaceful, free, fair and credible in the history of Nigeria. The GMD President, Angela Finidi, who addressed newsmen in Port Harcourt, said despite incidents of violence in some few areas in the country, series of reports from its members who took part in the election as observers across the country, confirmed that the electoral umpire performed excellently. “We want to commend the INEC on the near-perfect conduct of the last Presidential and Parliamentary election that held on Saturday. We have received series of reports from our members who took part in the election as observers across the country. And so far, it has been very satisfactory, heart-warming and praise-worthy,” the group submitted.

Though GMB was not unaware of crises here and there across the nation, it however described that as, “disregard-able incident of violence in a few areas of the country,” expressing delight that, “in recorded history of Nigeria, it shows that this election is the most peaceful and well organised since 1999 to date.” “We call on all Nigerians that this time we should all exhibit optimum level of patriotism, the country needs all our support at this moment and all other time we must be determined and resolute in standing with INEC. The result eventually announced by the INEC should be accepted as the most authentic and acceptable to Nigerians,” the group appealed. Finidi, while expressing confidence and support ahead of the next poll in March, promised that her organisation with other wellmeaning groups would continue to do its best in the best interest of Nigeria. She however, dissociated her group from “those making them-

selves available as willing tools in the hand of the reactionary politicians,” maintaining that the will of the people had been expressed through the ballot last Saturday and no force could upturn it with any fabrications and concocted figures and unsubstantiated data.” Nigerians, according to her, are way beyond any type of primitive politics and ventures, because the country must continue to work. Nigerians, she maintained, have demonstrated that they have risen above any type of reactionary machinations. “We and all the election observers that meant well for the people of this country will continue to objectively inform Nigerians the right and the true reports as we proceed. We encourage INEC, the security agents and all the institutions and apparatus of government that is involved in the last election to remain focus and resolute. Nigerians have taken a resolve to stand by INEC and all of the institutions,” Finidi declared.

something about it.” Advising the PDP and its candidate against challenging the outcome, he said: “I understand the PDP is aggrieved about the outcome of the election and alleged massive irregularities. But I urge former Vice President, Atiku Abubakar not to approach the Election Petition Tribunal. “He might have moved backwards by his loss but he should not lose sight of the legacy and greatness that lies in front of him. Former Vice President, Atiku Abubakar is in a strong position to take up the mantle of a statesman. He can build a new Nigeria movement from the motley of small parties, third force actors, change actors and millions who are desperate for a strong, united Nigeria. “There is also a lot of work to be done in both political and electoral reforms. I request former

Vice President, Atiku Abubakar to step into the shoes. This is not to say I do not recognise the massive irregularities in the 2019 presidential election. I can see how tempting it is to take the option of the Election Petition Tribunal but that in my view is not the right decision. We look forward to a new Nigeria, strong and united; a new Nigeria that will not vote on the basis of ethnic and primordial sentiments. “As I said, I was shocked at the strength of the two parties in holding their respective bases. But the problem was that the basis was simply primordial and not driven by issues. Nigerian politics must appeal to issues and not ethnic or primordial consideration. This is the biggest danger in the 2019 presidential election and we as Nigerians must stand up to redress it.”

Foreign observers decry alleged intimidation of voters during presidential, NASS elections oreign and domestic observers that monitored the Presidential and National Assembly elections have decried the “high level of intimidation by security forces backed by politicians” during during the exercise last Saturday. The observers, at a joint media briefing in Uyo, Awa Ibom State alleged that 25 persons lost their lives during the exercise, saying the number was more than the 12 that died in previous elections held in 2015. The Publicity Secretary, Pan African Women Project, Republic of South Africa, Mphoentle Keitseng and Stafford Bisong of International Leadership Initiative, who spoke at the conference alleged that late arrival of material, ballot box snatching and others marred the elections. “These we consider as saddening and alarming in a contest supposedly civil and democratic. It seems to us that Nigeria is transiting

backwards to the dark ages of a near anarchy situation. “We observed that in Uyo Local Government Area materials arrived in many units very late. Materials just arrived now at 1104 in ward 006 004 but accreditation has not started. “There was lots of ballot box snatching in lots of polling units at polling unit 2, ward 5 Ikono South and at ward eight unit one in Itu Local Government. There were also absence of materials in Ibesikpo Asutan and other places. “We observed that there were insufficient security personnel at some polling units of this election,’’ Keitseng said. Bisong said: “The just concluded Presidential and National Assembly elections in Nigeria was characterised by planned and deliberate intimidation, assault, hoarding, snatching and destruction of ballot papers and boxes in southern parts of Nigeria, evidently in Lagos, Rivers, Akwa Ibom and some parts of Cross River.”

addition, congratulated Francis Waive, member-elect representing Udu, Ughelli North, Ughelli South Udu Federal Constituency; Efe Afe, member-elect, Sapele, Okpe, Uvwie Federal Constituency and Ben Ibakpa, member-elect, Ethiope Federal Consituency on their election to the green chamber of the National Assembly. The UPU PG urged Omo-Agege, Waive, Afe and Ibakpa to use their positions to bring more developments to Urhobo land. He said the

UPU looked forward to forming a formidable partnership with them to fast track development of Urhoboland. Taiga also used the opportunity to implore all Urhobo sons and daughters who are dissatisfied with the outcome of the elections to follow due process. “The electoral act clearly states actions they should take. The fragile peace that has been prevailing in Urhobo land since after the election should be maintained, Taiga advised.

ANIEFIOK UDONQUAK, Uyo

UPU congratulates Buhari, Omo-Agege on re-election

he Urhobo Progress Union (UPU), the umbrella body of all Urhobos, has congratulated President Muhammadu Buhari, on his reelection as the president of Nigeria. In a message signed by Olorogun Moses Taiga, the president-general of UPU, the group prayed that Buhari’s second term will bring a fresh breath of air to national life and the economy of Nigeria. Taiga urged the president to work towards the unity of Nigeria

which was fragmented by the election. “The election is over and you are now president and father of all,” Taiga added. Taiga also used the opportunity to inform President Buhari that he has not fulfilled the promises he made when the UPU and Urhobo traditional rulers visited him in 2018. Buhari had promised to look into the complaints that the military was selling the land given to it by Urhobo Communities in Uvwie and Okpe for private

purposes. Taiga had requested that the unused lands be returned to the host communities. He also requested for increased funding for the Federal University of Petroleum among other demands during the 2018 visit to the president. Also, the UPU has congratulated the senator representing the Urhobo nation, Senator Ovie Omo-Agege, on his re-election to the red chambers of the National Assembly. The UPU, in

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Sanwo-Olu congratulates Buhari, urges Nigerians to live in harmony

overnorship candidate of the All Progressives Congress (APC) in Lagos State, Babajide Sanwo-Olu has congratulated President Muhammadu Buhari on his victory in the just-concluded presidential election. In a statement by his media and communication team on Wednesday, Sanwo-O lu described Buhari’s success at the poll as “not only well-deserving, but a valid testimony to the fact that Nigerians acknowledge and are appreciative of his reformative initiatives designed to bring forth a better Nigeria”. ‘’Your Excellency, I heartily congratulate you on your success at the recent presidential election held across Nigeria last weekend. Your landslide victory is a validation and appreciation of your hard work and commitment to the fight against corruption, revamping the economy and ensuring security of lives and property. With this deserved victory, your selflessness and dedication to the services of our motherland has become a new leader-

Babajide Sanwo-Olu

ship model in Nigeria. “Expectedly, the reward for

good work is more work. So, your victory in the nationwide

ADP, CISLAC, others react to Buhari’s re-election, way forward Innocent Odoh, Abuja

he Action Democratic Party (ADP) has welcomed the re-election of President Muhammadu Buhari and urged the President to embark on policies that will unite Nigerians, create jobs and end the endemic corruption ravaging Nigeria. Speaking to BusinessDay on Wednesday in Abuja, the Presidential candidate of the ADP in the just concluded presidential election, Yusuf Yabagi Sani said that the task ahead is enormous, saying: “I concur with our leaders who said that we have no other country than Nigeria and that history will forgive you for taking a wrong decision, but history will

not forgive you for not taking a decision at all.” In this context, I congratulate President Buhari, the winner of the 2019 presidential election. God bless Nigeria” Also speaking to BusinessDay, Executive Director, Civil Society Legislative Advocacy center (CISLAC) Auwal Ibrahim Musa Rafsanjani, noted that the elections have come and gone, urging Nigerians to work together for a common purpose of developing the country. He also urged the President to as matter of fact embark on policy reforms that will restore hope and confidence in terms of electoral reforms that will guarantee electoral transparency. “We also want him to ensure that issues of security, criminal-

ity and respect for human rights and compliance to due process are also at the centre of what his government should do. We also want the government to focus on the issues of fiscal regime talking about economic reforms and looking at taxation, trade liberalisation and reforms in the oil and gas sector, which is our main income,” he said. Also reacting to the outcome of the election, public intellectual, Katch Ononuju decried what he considered as a massive rigging of the election by Buhari and the ruling All Progressives Congress (APC). He said: “This is madness, the rigging is massive and this is the worst affront on Nigerian democracy in the last 20 years and it is unacceptable.”

free and fair election, which is a validation of how your leadership has rekindled hope in millions of Nigerians at home and abroad, has provided yet another valuable opportunity for better Nigeria since democracy has found a permanent place in our country,’’ Sanwo-Olu said. Sanwo-O lu, who also described President Buhari as the perfect man for the job of taking Nigeria out of the inherited socio-economic quagmire, noted that the evident giant strides of the President in the areas of infrastructure, agriculture, security and economic stability should be sustained. “I am sure that Your Excellency will use this victory and your second term of four years in office to complete all the great projects you embarked upon. You are the perfect candidate for the job of re-ordering the nation and setting her on the path to greatness. The zeal to do something more sustainable for the masses of the country has made your electoral victory reality. All your hard work to achieve an economically viable and one indivisible Nigeria has

paid off.’’ The APC flagbearer however called on Nigerians to live in peace and harmony, saying that there is a lot more to benefit from ‘‘what unites us than what divides us.’’ He advised Nigerians to see elections as a means to an end and not the end itself. Making specific reference to Lagos, the APC standard bearer urged non-indigenous Lagosians to ignore the rumoured fracas or intimidation of Igbo by some elements in the state. He said nothing of such will happen in Lagos. “Many ethnic nationalities have settled in Lagos and have made this place a home. We cannot allow a four-year election cycle to divide us. I therefore, urge all our Igbo and Hausa brothers and sisters to continue to live in peace as we have lived together over the years. Everyone is safe in Lagos,’’ Sanwo-Olu stated. Sanwo-Olu, who has resumed campaign activities, urged Lagosians to believe in the All Progressives Congress-led government to continue to deliver the goods for the citizens.

Buba Galadima regains freedom OWEDE AGBAJILEKE, Abuja

pokesperson of the People’s Democratic P[arty (PDP) Presidential Campaign Council, Buba Galadima, has regained his freedom, three days

Galadima

after his arrest and detention. He was seen by our correspondent at the Shehu Yar’Adua Centre, Abuja - venue of the world press conference by the PDP Presidential candidate, Atiku Abubakar. The ‘factional APC National Chairman’ who appeared at Shehu Yar’Adua Centre was decked in a brown sleeveless agbada and a red fez cap. On his arrival to the venue, he was ushered to the front row seat of the main hall. Party members, including former Kano State Governor, Rabiu Kwankwaso, immediately gathered around him in obvious solidarity with him. Galadima, a fierce critic of the Muhammadu Buhari administration, was reported to have been arrested and detained by masked operatives of the Department of State Services in Abuja last Sunday.

Buhari’s victory will bring more economic development - Ondo APC YOMI AYELESO, Akure

hairman of the All Progressives Congress (APC), in Ondo State, Ade Adetimehin, has described the re-election of President Muhammadu Buhari, as “a robust victory for economic and infra-

structural development” in Nigeria. Adetimehin said the election of the President for a second term, against all odds, affirms the acceptance of the APC, and acknowledgment of the performance of President Buhari. He further viewed the combination of President Buhari and

Professor Yemi Osinbajo as divine arrangement for the emancipation of a country once invaded by political holocaust. According to a statement by the state publicity secretary, Alex Kalejaye, he commended Nigerians for voting for integrity, sincerity and development, rather than “falling

for orchestrated propaganda and massive deceit.” “I have no doubts that with the re-election, Nigeria would be taken to the next level of economic prosperity, infrastructural development, and political stability,” he emphasised. The party boss also appreciated

the good people of Ondo State for standing by the party, urging them to vote for the party in the State House of Assembly election. Adetimehin admitted that the state chapter did not firm-up some loose ends ahead of the elections, and promised that those steps would be corrected soonest.

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Thursday 28 February 2019

MADE in aba Aba leather industry enjoys boom as made-in-Nigeria campaign resonates GODFREY OFURUM

he Aba finished leather sector (FLS) is enjoying a boom because of the sudden interest and campaign for made-in-Nigeria goods by Abia State Government, Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), observed. “What we now need is to mechanise our production p ro c e s s by b r i n g i n g i n modern equipment. Once we get the right equipment, then we can produce to meet demand of our patrons,” Anyanwu said. Nigeria has embarked on a campaign for patronage of locally-produced goods. Aba leather industry has been a beneficiary, with notable Nigerians and foreign firms patronising its products. Apart from Olusegun Obasanjo, the military have bought booths from Aba shoemakers. The Aba leather industry comprises shoe, belt and bag makers. It has 14 clusters, situated at the Ariaria

business corridor of Aba, the commercial hub of Abia State. Anyanwu appealed to the Federal Government to include capacity-building for ar tisans in the real sector policy, as well as the mechanisation of their operations. He also called for reintroduction of the Export Expansion Grant (EEG) to encourage non-oil export in the country, especially Aba. Abia State Government has attracted about N1.6 billion direct sales from shoes and garments through its campaign on Made-in-Aba goods. This includes 50,000 pairs of military boots, ordered by the Nigerian Army, the cost of which is estimated at N300 million, order from the Nigerian Navy, the National Youth Service Corps (NYSC), the police and Civil Defence. Governor Okezie Ikpeazu, who revealed this in an exclusive interview with BUISNESSDAY in Umuahia, the State capital, explained that the vision of the state was to be globally competitive. To make that happen, he said the state government was creating an enabling

Okezie Ikpeazu, governor, Abia State

environment for business to t h r i ve, st a r t i ng w i t h the establishment of Abia

Investment House, known as the One-Stop-Shop. The essence of the one-

stop-shop, according to the governor, was to remove bottlenecks in the registration

of businesses and processing of documents to improve on the ease of doing business. Ikpeazu also explained that his administration had secured 9,000 hectares of land in Ukwa for the establishment of Enyimba Industrial Zone, seeking recognition as an export free trade zone. “It is the best location for a free trade zone in the country. It is 30 minutes away from Onne Port, in Rivers State, 30 minutes away from the Port Harcourt Airport and about 40 minutes away from Owerri Airport.” “It has a rail line from Rivers State that crosses 13 stations in Abia, to Enugu and to the Northern part of Nigeria. And it has gas for energy. There is no other location anywhere in Nigeria that can compare with what we have, in terms of economic strategy. “And we went to China with this story and seven days after our visit to China, 11 companies came and we are talking with them, including the shoe manufacturing firm that is coming with $1.5 billion investment.”

Nigerians’ preference: Aba or foreign? Gbemi Faminu

ba remains the major manufacturer of shoes, bags and leather products. However, some Nigerians prefer foreign products because they believe imported goods have better qualit y and durabilit y. Speaking to some Nigerians on their preference for either Aba-made or foreign products, here is what they have to say. Olorogun Tope I always buy Aba-made products. With the reputation of made-in-Nigeria products, Aba manufacturers actually produce good, quality and affordable products. With a little help and training, I expect Aba-made products to become sought-after globally. Lucas Olusegun I always take my time when buying things for myself and I do not mind the cost as long as I am able to get value for my money. I prefer foreign products, not necessarily top designers. As long as I am sure of its durability and quality, I

will buy. I do not trust most Nigerian-made products as they do not give value for money. Therefore, I prefer foreign goods every time. Isaac loveth I am a true Nigerian. Whatever the case is, Aba made products will be my choice. They are always up to the task when we talk of

durability, affordability and quality. Even some foreign products are not as good as our indigenous products here, from the travel bags to shoes to handbags. Aba products are the best. Lasisi Peter I use both Aba-made and foreign products. What I am after is quality and value. As

long as I see that the shoe or bag is of good quality, I am less concerned about where it was produced. Let it just serve its purpose. Wunmi Alabi I prefer foreign products b e c au s e I b e l i e v e t h e y have better quality and I will not waste my money. Furthermore, foreign

prove better designs and innovations that always make the products loveable. Most Aba products that I know have mediocre designs and unpalatable colours. I prefer Aba-made products. Tobi Joseph I love Aba-made products all the time. Most of my shoes are Aba-made and

t h e y hav e s e r v e d t h e i r purpose well. Some of the products manufactured in Aba are exported abroad and rebranded and sent back into the market at high prices, which most Nigerians will scrimp and save to have. Mo s t Ni g e r i a n s d o n o t appreciate our home-made products, which is wrong. Nigerians need to appreciate Aba made products. This will encourage more products from the industry with all the specifications of foreign products. Oshinowo Taiwo I prefer Aba-made products. Most Aba products are easy to get and can also be very beautiful. I even prefer them to foreign products. Some believe that Aba- made products are inferior, but we also have foreign products that are sub-standard. It revolves around what you can afford. The major point is to get value for your money. Onyeka Iheoma Aba products have good standards. Even if you do not have much money, they will produce shoes or bags or trunk boxes that fit the amount you have. That is flexibility.

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understanding the economy of nigeria’s 36 states

he purpose of this series is to present evidencebased picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative. Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument. The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the

context of its geopolitical zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward? Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile). Today’s edition covers an overview of Gombe State and Taraba State in the North East region.

Gombe Gombe State Summary • Economy Gombe’s GSP was 0.6 percent of Nigeria’s GDP in 2017, 4th in the North-East, 16th in the North, and 30th in the country. Services was 56 percent of the GSP, Agriculture, 37 percent and Non-Oil Industry, 7 percent. • Endowments Land Area of Gombe State is 1.8 percent of Nigeria’s land mass, the smallest in the North-East, 19th in the North and 22nd in the country. The State has neither a coastline nor a boarder but is landlocked by the other five States from its region. • Wellbeing Gombe’s population is 1.68 percent of national population, the 4th most populated State in the North-East, 16th in the North and 31st in the country. The State is 26th most densely populated, 30th most literate and 29th life expectancy of 47 years in the country. Gombe’s Per Capita GSP is 2nd in the North-East, 13th in the North and 24th in the country.

Manufacturing (majorly Food, Beverage and Tobacco) was 94 percent of the State’s non-oil output. * N398.9 billion Service output in Gombe State was 0.6 percent of Nigeria’s Service output, 4th in the North-East, 16th in the North, and 31st in the country. Inter-State Comparisons With a Gross State Product (GSP) of N713.9 billion or 0.6 percent of Nigeria’s GDP in 2017, the 4th in the North-East, 16th in the North, and 30th in Nigeria. Gombe State’s 3.4million Population is 1.6 percent of national population, 4th in the North-East, 16th in the North and 31st in the country. The State’s Land Area of 17,100/km2 is 1.8 percent of Nigeria’s land mass, the smallest in the NorthEast, 19th in the North and 22nd in the country. Gombe’s Revenue of N58.8 billion is 1.9 percent of all States’ total revenue, the 2nd in the North-East, 8th in the North, and 19th among the 36 States and the FCT.

• Budget Gombe retained 1.9 percent of States’ revenue in 2017, the 19th in the country; expended 2.7 percent of States’ outlays, 14th in the country; incurred an overall deficit, and held 1.3 percent to total debt, 32nd in the country.

1. Economy Structure Gombe’s estimated Gross State Product (GSP) in 2017 was N713.9 billion or 0.6 percent of Nigeria’s GDP in 2017, the 4th in the North-East, 16th in the North, and 30th in the country. Services was 56 percent of the GSP, Agriculture, 37 percent and Non-Oil Industry, 7 percent.

2. Endowments Gombe State was carved out of Bauchi State in 1996. The State has neither a coastline nor a boarder and shares boundaries with five States, Bauchi to the west, Yobe to the northeast, Borno to the east, Adamawa to the southeast, and Taraba to the south. Land area of 17,100/km2 in Gombe State is 1.8 percent of Nigeria’s land mass, the smallest in the North-East, 19th in the North and 22nd in the country. Major towns and cities are; Akko, Kwami, Gombe, Balanga, Funakaye, Kaltungo, Dukku, Nafada, Shongom, Yamaltu.

* N267.6 billion Agricultural output in the State was 1.1 percent of all agricultural output in Nigeria, 2nd in the North-East, 12th in the North and the country. • N158.3 billion in crops was 59 percent of the State’s agricultural output, • N109.1 billion in livestock was 41 percent and • N0.2 billion in fishery was 0 per cent/negligible, • Forestry is Nil. * The State’s N47.4 billion 2017 Non-Oil Industrial 0.3 percent of the gross Non-Oil Industrial output in Nigeria, the largest in the North-East, 11th in the North and 23rd among the 36 States and the FCT.

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understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue Gombe State’s 2017 actual total revenue of N58.8 billion was 1.9 percent of all States’ actual total revenue, 2nd in the North-East, 8th in Northern Nigeria and 19th among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N26.7 billion was 1.8 percent of the total allocations to all States and FCT, the least in the North-East, 18th in the North and 31st in the country. • Internally Generated Revenue of N17.2 billion was 2.25 percent of total, the largest in the North-East, 4th in the North and 12th in the country. • Value Added Tax of N9.1 billion was 1.9 percent of States’ total, the smallest in the North-East, 19th in the North, and 34th in the country. 4.1.2.2 Spending Gombe State’s actual total expenditure of N101.2 billion in 2017 was 2.7 percent of actual total spending by all States, 3rd in the North-East, 8th in the North 14th in the country. The spending components in 2017 were: • Recurrent Spending of N82.2 billion was 3.1 percent of the recurrent outlays of all the States and the FCT, 2nd in the North-East, 6th in the North, and 12th in the country. • Capital Spending of N19.0 billion in the State was 1.8 per cent of States and FCT’s total capital outlays, 4th in the North-East, 12th in the North and 21st in Nigeria. 4.1.2.3 Deficits Gombe State is one of the only 25 States and the FCT in Nigeria that had deficits in 2017. The State made an overall deficit of N42.4 billion, 2nd in the North-East, 7th among the 17 States that had deficits in the North and 10th among the States that had deficits in the country. 4.1.2.4 Debt Total outstanding debt of N53.9 billion in the State was 1.3 percent of the States and FCT’s total debts, the 5th in the North-East, 19th in the North and 32nd in the country. • Domestic Debt of N41.9 billion in December 2017 was 1.3 percent of States and FCT’s domestic debts, the 5th in the North-East States, 13th in the North and 29th in the country. • Foreign Debt of N11.9 billion in December 2017 was 1.0 percent of the total foreign debts of the States and FCT, 3rd in the North-East, 11th in the North and 28th in the country. 4.1.3 2013-2017 Trends Total Revenue: Gombe’s Total Revenue declined from N70 billion in 2014 to N58.8 billion in 2017. The decrease in revenue came from gross statutory allocations (GSA) and internally generated revenue, while value added tax proved resilient.

Gombe State’s population of 3.4 million is 1.68 percent of national population, the 4th most populated State in the North-East, 16th in the North and 31st in the country. With a land area of 17,100/km2, Gombe has a density of 196 people per km2 compared to the country average of 219/km2, the most densely populated State in the North-East, 6th in the North and 22nd among the 36 States and the FCT. Gombe’s literacy is the 3rd in the North-East, 13th in Northern Nigeria and 30th in the country. Life expectancy of 47 years in the State is the 2nd in North-East, 12th in the North and 29th in the country. Female life expectancy of 49 years is 4th in the North-East, 15th in the North and 31st in Nigeria. Male life expectancy of 45 years in the State ranks 3rd in the North-East, 12th in the North and 28th in Nigeria. The State’s N212thousand Per Capita GSP is 2nd in the North-East, 13th in the North and 24th in the country.

4. Budget

Total Spending: Despite the decline in revenue, total spending increased from N69.8 billion in 2014 to N101.2 billion in 2017; recurrent spending rose nearly twofold from N43.9 billion in 2014 to N82.2 billion in 2017; while capital spending fell from N25.9 billion in 2014 to N19 billion in 2017.

4.1. Fiscal Realities of Gombe State 4.1.1 2018 Aspirations Gombe’s 2018 budget of N114 billion is 1.2 percent of the gross 2018 budget by all States and FCT, 4th in the North-East, 17th in the North and 32nd in the country. 4.1.2 2017 Realities

Revenue Use: Gombe maintained current surpluses to fund all or part of its capital outlays from 2014 to 2016 but posted a current deficit in 2017 and borrowed to partially fund recurrent headings and the full capital budget. Financing: • Revenue financing: overall surplus of 0.4 percent of total revenue in 2014 gave way to an overall deficit of 40.5 percent of total revenue in 2015 and 72.1 percent in 2017. • Spending finance: overall surplus of 0.4 percent of total spending in 2014 gave way to an overall deficit of 48.3 percent of total spending in 2015, and 41.9 percent in 2017. • Capital budget finance: overall surplus of 1.1 percent of capital budget in 2014 gave way to an overall deficit of 223.1 percent of capital budget in 2017. Gombe’s Debt • Foreign debt stock had only grown from N5.2 billion in 2013 to N11.9 billion in 2017; from 8.9 and 20.3 percent of revenue in 2013 to 2017 respectively. • Domestic debt stock has grown almost fourfold from N27.9 billion in 2013 to N41.9 billion in 2017, from 44.7 percent of revenue in 2013 to 71.3 percent in 2017. • Total debt stock rose from 53.2 percent of revenue in 2013 to 91.7 percent in 2017.

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understanding the economy of nigeria’s 36 states

Taraba Taraba State Summary • Economy Taraba’s GSP was 0.36 percent of Nigeria’s GDP in 2017, the smallest in the North-East, North, and in Nigeria. Services was 76 percent of the State’s GSP, agriculture, 17 percent, and non-oil industry, 7 percent. • Endowments Taraba State’s is 6.2 percent of Nigeria’s land mass, 2nd in the North-East, 3rd in the North and the country. The State has no coastline but shares a boarder with Cameroon and is bounded by six States; three from its region (Gombe, Bauchi and Adamawa), three from the North-Central (Benue, Nasarawa and Plateau).

in the North-East. Manufacturing (majorly Food, Beverage and Tobacco) made up 66 percent of the State’s non-oil output and Construction was 32 percent. * N315.9 billion Service output in Taraba State was 0.5 percent of Nigeria’s Service output, 5th in the North-East, 18th in the North and 35th in the country. Inter-State Comparisons With a Gross State Product (GSP) of N414.06 billion or 0.36 percent of Nigeria’s GDP in 2017, the smallest in the North-East, North, and in Nigeria. Taraba’s 3.3million Population is 1.6 percent of national population, the least populated State North-East, 18th in the North and 33rd in the country. Land Area 56,300/km2 in the State is 6.2 percent of Nigeria’s land mass, 2nd in the North-East, 3rd in the North and the country. The State’s N48billion Revenue is 1.6 percent of all States’ total revenue, the 5th in the North-East, 18th in the North, and 33rd among the 36 States and the FCT.

• Wellbeing Taraba’s population is 1.6 percent of the national population, the least populated State in the North-East, 18th in the North and 33rd in the country. The State is Nigeria’s most sparsely populated, 26th in literacy, 27th in life expectancy, with a Per Capita GSP that is 5th in the North-East, 19th in the North and 36th among the States and the FCT. • Budget Taraba retained 1.6 percent to States’ revenue in 2017, 33rd in the country; expended 1.48 percent of all States and FCT’s outlays, 29th in the country; incurred an overall deficit and held 1.9 percent of total debt, 26th in the country.

1. Economy Structure Taraba’s estimated Gross State Product (GSP) in 2017 was N414.06 billion or 0.36 percent of Nigeria’s GDP, the smallest economy in the North-East, North, and in Nigeria. Services were 76 percent of the State’s GSP, agriculture, 17 percent, and non-oil industry, 7 percent.

2. Endowments Taraba State was carved out of the then Gongola State in 1991, and the remaining portion was renamed Adamawa State. Taraba has no coastline but boarders with Cameroon to the east and the south and shares boundaries with six States, Bauchi and Gombe to its North, Adamawa to its North-East, Plateau to its North-West, Benue and Nasarawa to its West. Taraba State’s 56,300/km2 land area is 6.2 percent of Nigeria’s land mass, 2nd in the North-East, 3rd in the North and the country. Major towns and cities are; Ardo Kola, Bali, Donga, Gashaka, Gassol, Ibi, Jalingo, Karim Lamido, Kurmi.

* Taraba State’s N70.9 billion Agricultural output was 0.3 percent of all agricultural output in Nigeria, 6th in the North-East, 18th in the North 31st in the country. • N31.8 billion in crops was 45 percent of the State’s agricultural output, • N26.6 billion in livestock was 38 percent and • N12.4 billion in fishery was 17 percent, • Forestry is Nil. * The State’s N27.3 billion Non-Oil Industrial output was 0.2 percent of the gross Non-Oil Industrial output in Nigeria, 33rd among the 36 States and the FCT, 16th in the North and the 4th

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understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue Taraba State’s 2017 actual total revenue of N48 billion was 1.6 percent of all States’ actual total revenue, 5th in the North-East, 18th in the North and 33rd among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N27.3 billion was 1.87 percent of the total allocations to all States and FCT, 5th in the North-East, 17th in the North and 30th in the country. • Internally Generated Revenue of N6.0 billion was 0.78 percent of total, the 3rd in the North-East, 11th in the North and 26th in the country. • Value Added Tax of N9.1 billion was 1.92 percent of States’ total, the 5th in the North-East, 17th in the North, and 32nd in the country. 4.1.2.2 Spending Taraba State’s actual total expenditure of N54.7 billion in 2017 was 1.48 percent of actual total spending by all States, 6th in the North-East, 16th in the North and 29th in the country. The spending components in 2017 were: • Recurrent Spending of N34.4 billion was 1.3 percent of the recurrent outlays of all the States and FCT, and the least in the North-East, 19th in the North and 32nd in the country. • Capital Spending of N20.3 billion in the State was 1.9 percent of States and FCT’s total capital outlays, the 3rd in the North-East, 8th in the North and 16th in Nigeria. 4.1.2.3 Deficits Taraba State is one of the only 25 States and FCT in Nigeria that had deficits in 2017. The State made an overall deficit of N6.6 billion, 5th in the North-East, 12th among the 17 States that had deficits in the North and 19th among the States that had deficits in the country. 4.1.2.4 Debt Total outstanding debt of N68.9 billion in the State was 1.9 percent of the States and FCT’s total debts, 3rd in the North-East, 11th in the North and 26th in the country. • Domestic Debt of N60.8 billion in December 2017 was 1.8 percent of States and FCT’s domestic debts, the 3rd among the North-East States, 11th in the North and 23rd in the country. • Foreign Debt of N8.1 billion in December 2017 was 0.6 percent of the total foreign debts of the States and FCT, 2nd in the North-East, 19th in the North and 35th in the country. 4.1.3 2013-2017 Trends Taraba’s Total Revenue: Total Revenue declined from N63 billion in 2014 to N48 billion in 2017. This resulted from the declines in both Gross statutory allocations (GSA) and internally generated revenue; while value added tax proved resilient.

Taraba State’s population of 3.3 million is 1.6 percent of national population, the least populated State in the North-East, 18th in the North and 33rd in the country. With a land area of 56,300/ km2, Taraba State has a density of 58 people per km2 compared to the country average of 219/ km2, the most sparsely populate State in the North-East, the North and in the country. Literacy in Taraba State is the 2nd in the North-East, 9th in the North and 26th in the country. The State’s life expectancy of 48 years is the highest in the North-East, 11th in the North, and 27th in the country. Female life expectancy of 52 years is the highest in the North-East, 7th in the North and 19th in Nigeria. Taraba’s male life expectancy of 47 years is the highest in the North-East, 8th in the North and 22nd in the country. The State’s Per Capita GSP of N126 thousand is 5th in the North-East, 19th in the North and 36th among the States and FCT.

4. Budget

Taraba’s Total Spending: While Total Spending remained at about N54 billion in 2014 and 2017, Recurrent spending increased from N28.1 billion in 2014 to N34.4 billion in 2017, while capital spending fell from N25.9 billion in 2014 to N20.3 billion in 2017.

4.1. Fiscal Realities of Taraba State 4.1.1 2018 Aspirations Taraba State’s 2018 budget of N104.3 billion is 1.1 percent of the gross 2018 budget by all States and FCT, 5th in the North-East, 18th in the North 33rd in the country. 4.1.2 2017 Realities

Revenue Use: Taraba always kept something out from its revenue to fund capital projects, but a sharp decline in current surplus in 2015 which continued till 2017 had the State borrowing to partially fund its capital outlays in 2016 and 2017. Financing: • Revenue financing: overall surplus of 9 percent of total revenue in 2014 gave way to an overall deficit of 35.9 percent of total revenue in 2015 and 13.7 percent in 2017. • Spending finance: overall surplus of 10 percent total spending in 2014 gave way to an overall deficit of 25 percent of total spending in 2015 and 12 percent in 2017. • Capital budget finance: overall surplus of 20.8 percent of the capital budget in 2014 gave way to an overall deficit of 49.2 percent of the capital budget in 2015 and 32.5 percent in 2017. Taraba’s Debt • Foreign debt stock rose from about N3.7 billion in 2013 to N8.1 billion in 2017, from 5.8 percent of revenue in 2013 to 16.9 percent in 2017. • Domestic debt stock rose from N13.8 billion in 2013 to a peak of N60.8 billion in 2017; from 22 percent of revenue in 2013 to 126.7 percent in 2017. • Total debt stock rose from 27.8 percent of revenue in 2013 to 143.7 percent in 2017.

For enquiries, please call Teliat 08098710024, Chuks 08116759816 or teliat.sule@businessday.ng

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Live @ the Stock exchange Prices for Securities Traded as of Wednesday 27 February 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 173,567.83 6.00 -4.00 345 33,050,873 UNITED BANK FOR AFRICA PLC 266,755.49 7.80 -2.50 262 20,890,889 781,772.70 24.90 -3.49 462 9,755,604 ZENITH BANK PLC 1,069 63,697,366 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 279,983.28 7.80 -2.50 249 18,026,527 249 18,026,527 1,318 81,723,893 BUILDING MATERIALS DANGOTE CEMENT PLC 3,280,297.68 192.50 -0.26 85 1,037,939 112,320.90 12.95 -0.38 56 521,008 LAFARGE AFRICA PLC. 141 1,558,947 141 1,558,947 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 364,247.18 619.00 - 17 6,583 17 6,583 17 6,583 1,476 83,289,423 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 15,876.20 5.95 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 -0.06 17 245,970 OKOMU OIL PALM PLC. PRESCO PLC 75,000.00 75.00 - 5 2,547 22 248,517 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 1 50 1 50 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 16 265,164 16 265,164 39 513,731 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 900.08 0.34 - 3 2,897 202.36 0.52 8.33 28 4,733,548 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 0 0 54,468.31 1.34 -6.29 216 23,509,497 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,067.28 8.70 -1.14 62 1,380,695 U A C N PLC. 309 29,626,637 309 29,626,637 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 3.77 14 5,582,288 ROADS NIG PLC. 165.00 6.60 - 0 0 14 5,582,288 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,729.08 1.82 - 15 283,930 15 283,930 29 5,866,218 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,683.78 1.62 - 1 1,054 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 2 10,000 GUINNESS NIG PLC 147,084.21 67.15 - 17 36,335 INTERNATIONAL BREWERIES PLC. 225,641.38 26.25 - 12 39,494 NIGERIAN BREW. PLC. 665,342.25 83.20 - 38 48,799 70 135,682 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 59,750.00 11.95 -0.83 174 6,713,341 DANGOTE SUGAR REFINERY PLC 180,000.00 15.00 -2.60 35 696,422 FLOUR MILLS NIG. PLC. 82,007.59 20.00 - 32 230,990 HONEYWELL FLOUR MILL PLC 10,943.67 1.38 -0.72 36 1,875,068 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 50,869.22 19.20 1.59 12 118,023 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 289 9,633,844 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,533.30 10.40 - 18 316,125 NESTLE NIGERIA PLC. 1,188,984.38 1,500.00 -0.66 95 136,504 113 452,629 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,003.38 4.00 - 19 128,289 19 128,289 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,402.92 13.45 9.35 37 383,688 UNILEVER NIGERIA PLC. 235,545.22 41.00 -4.65 31 1,466,679 68 1,850,367 559 12,200,811 BANKING DIAMOND BANK PLC 56,742.95 2.45 -2.00 135 187,429,032 ECOBANK TRANSNATIONAL INCORPORATED 260,563.63 14.20 -0.35 60 1,517,378 FIDELITY BANK PLC 68,090.77 2.35 -2.08 174 45,066,370 GUARANTY TRUST BANK PLC. 1,116,913.25 37.95 -0.52 168 6,392,466 JAIZ BANK PLC 18,857.12 0.64 4.92 15 647,148 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 71,976.05 2.50 -3.20 1,062 13,374,118 202,389.23 6.95 4.51 69 3,216,159 UNION BANK NIG.PLC. UNITY BANK PLC 11,689.34 1.00 - 8 183,212 WEMA BANK PLC. 30,088.08 0.78 -8.24 75 4,700,507 1,766 262,526,390 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,336.26 0.77 -1.28 36 2,202,547 AXAMANSARD INSURANCE PLC 23,100.00 2.20 - 3 1,727 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 - 1 10,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,387.79 0.23 4.55 4 411,500 GOLDLINK INSURANCE PLC 2,183.97 0.48 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,416.73 0.33 -3.03 6 639,100 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 - 2 9,000 LINKAGE ASSURANCE PLC 5,040.00 0.63 - 1 4,500 MUTUAL BENEFITS ASSURANCE PLC. 2,320.00 0.29 - 8 265,660 NEM INSURANCE PLC 13,201.26 2.50 - 3 104,100 NIGER INSURANCE PLC 1,857.48 0.24 - 1 50,000 PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 1 15,922 REGENCY ASSURANCE PLC 1,800.56 0.27 3.85 1 100,000 SOVEREIGN TRUST INSURANCE PLC 2,168.61 0.26 -3.70 5 1,309,851 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 5.00 9 2,003,245 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 -8.00 4 1,060,000 WAPIC INSURANCE PLC 5,754.58 0.43 - 8 153,733 93 8,340,885 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,704.35 1.62 8.72 7 150,000

7 150,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 1 1,100 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 1,100 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,680.00 4.84 0.62 217 12,152,410 35,585.28 6.05 -0.82 35 1,038,146 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 44,556.10 2.25 -0.44 183 19,187,192 2,006.69 0.39 - 13 390,200 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 496,666.82 48.50 - 24 55,399 18,900.00 3.15 -5.97 113 6,072,484 UNITED CAPITAL PLC 585 38,895,831 2,452 309,914,206 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 994.88 0.28 -9.68 15 2,197,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 15 2,197,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 10 164,523 10 164,523 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 3 2,554 13,931.96 11.65 -1.27 23 152,231 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,140.56 2.40 - 11 112,500 1,272.44 0.67 9.84 8 171,389 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 45 438,674 70 2,800,197 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 2 200,000 2 200,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 0 0 12,306.00 2.93 - 0 0 E-TRANZACT INTERNATIONAL PLC 0 0 2 200,000 BUILDING MATERIALS BERGER PAINTS PLC 2,391.04 8.25 - 2 1,150 23,800.00 34.00 - 7 21,631 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 262,870.02 20.00 - 67 1,282,382 612.00 0.29 - 0 0 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 286.87 0.54 - 1 1,837 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 0 0 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 77 1,307,000 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,610.71 2.05 - 24 256,088 24 256,088 PACKAGING/CONTAINERS BETA GLASS PLC. 39,497.79 79.00 - 14 11,678 GREIF NIGERIA PLC 388.02 9.10 - 0 0 14 11,678 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 20 664 20 664 135 1,575,430 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,503.05 0.24 -4.00 25 3,195,518 25 3,195,518 INTEGRATED OIL AND GAS SERVICES OANDO PLC 81,425.75 6.55 -9.66 137 3,772,527 137 3,772,527 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,907.15 180.00 - 7 10,958 CONOIL PLC 15,960.90 23.00 - 24 81,326 ETERNA PLC. 5,738.24 4.40 -7.37 33 1,007,171 FORTE OIL PLC. 36,469.47 28.00 - 22 64,530 6,354.80 20.85 - 14 37,560 MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC. 64,509.15 190.00 - 9 4,325 109 1,205,870 271 8,173,915 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 16,576.10 1.70 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 10 225,020 TRANS-NATIONWIDE EXPRESS PLC. 304.75 0.65 - 0 0 10 225,020 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,427.84 2.13 - 1 600 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 2 3,181 3 3,781 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 241.92 0.40 - 0 0 LEARN AFRICA PLC 1,157.18 1.50 - 3 29,554 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 992.24 2.30 - 3 29,689 6 59,243 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 895.16 0.54 - 0 0 0 0

BUSINESS DAY

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Thursday 28 February 2019

Live @ The Exchanges Top Gainers/Losers as at Wednesday 27 February 2019

GAINERS Company

Market Statistics as at Wednesday 27 February 2019

LOSERS Opening

Closing

Change

N12.3

N13.45

1.15

JBERGER

N26.5

N27.5

UBN

N6.65

N6.95

0.3

NASCON

N18.9

N19.2

0.3

NPFMCRFBK

N1.49

N1.62

0.13

Company

Opening

Closing

Change

N1510

N1500

-10

N43

N41

-2

ZENITHBANK

N25.8

N24.9

-0.9

OANDO

N7.25

N6.55

-0.7

DANGSUGAR

N15.4

N15

-0.4

NESTLE UNILEVER

ASI (Points) ASI (Points)

32,244.24 30,821.80

DEALS (Numbers) DEALS (Numbers)

5,416.00 3,319.00

VOLUME (Numbers) VOLUME (Numbers) VALUE (N billion) VALUE (N billion)

456,070,513.00 359,091,422.00 2.679 4.828

MARKET CAP (N Trn MARKET CAP (N Trn

12.024 11.493

Investors book N86bn loss as large cap stocks lead laggards Stories by Iheanyi Nwachukwu

nvestors at the Nigerian Stock Exchange (NSE) booked loss of approximately N86billion on Wednesday February 27, 2019 as many largely capitalised companies occupied the list of 30 laggards as against 10 advancers. The results for last weekend’s presidential and national assembly elections have been announced. President Muhammadu Buhari emerged victorious and has received his certificate of return from INEC. At the sound of closing gong on the Nigerian Bourse, the All Share Index (ASI) decreased by 0.71 percent to 32,244.24 points, from preceding day high of 32,473.82 points while

Market Capitalisation decreased from N12.110 trillion to N12.024trillion, implying value loss of about N86billion. The Year-toDate (YtD) returns from listed stocks currently stand at +2.59percent. Nestle Nigeria Plc recorded the biggest loss after its share price decreased from N1, 510 to close at N1, 500, implying a loss of N10 or 0.66percent. Unilever Nigeria Plc was another big loser after its share price dropped by N2 or 4.65percent, from N43 to N41. Zenith Bank Plc also made the tope losers list, from N25.8 to N24.9, down by 90kobo or 3.49percent. Oando Plc declined from N7.25 to N6.55, losing 70kobo or 9.66percent. Dangote Sugar Refinery Plc lost 40kobo, from N15.4 to N15, representing 2.60percent decline.

In 5,416 deals, stock traders exchanged 456.071million units valued at N2.679billion. The

…eyes N5bn corporate bond in Q2’19, NSE listing in 2022

to PLC, VFD Group has appointed African Prudential Plc as its official registrar. “We have also commenced plans to list our shared on the NASD OTC Plc to ensure the enhanced marketability of the said instrument. At VFD Group, working with our subsidiaries and our 130 shareholders, our focus remains to contribute significantly across diverse sectors in Nigeria”, Okpala said VFD Group Plc operates through its subsidiaries to provide innovative financial services –alternative funding and investment channels – that are accessible to individuals and small businesses. VFD Group was incorporated with the Corporate Affairs Commission (CAC) on July 7, 2009 and commenced business operations effectively on January 1, 2011. VFD Group subsidiaries are Anchoria Asset Management, Dynasty Real Estate, Everdon Bureau de Change (EBDC), Germaine Automobile Centre (GAC), VFD Bridge, and VFD Microfinance Bank. They provide the follow-

preceding day level of 322.181 million, while the total value of stock traded

L-R: Azubike Emodi, group commercial director; Nonso Okpala, GMD/CEO and Gbenga Omolokun, chief operating officer (COO), all of VFD Group Plc at a media briefing on the conversion of the Group from a private limited company to a public limited company in Lagos recently.

VFD Group converts to Public Limited Company FD Group has been converted from a Private Limited Company to a Public Limited Company, effective February 2019. VFD Group’s conversion to a PLC is in line with its goal to establish a presence in every key sector of the financial services industry, including banking. “This is an exciting milestone for VFD Group Plc, our shareholders, board and staff across our subsidiaries, who have been instrumental to our success till date. By converting, we are ensuring that our corporate identity reflects our long-term strategy which includes a planned listing in 2022 and the issuance of a N5billion corporate bond in the second quarter (Q2) of 2019,” said Nonso Okpala, MD/ CEO of VFD Group Plc. The conversion to a PLC was necessitated after VFD Group increased its shareholders base from 50 people to over a 130 people as well as its successful capital raise of about N2.9billion. In line with its conversion

volume of stocks traded represents an increase of about 41.56percent from

ing services: financial advisory, asset management, currency exchange, real estate, debt services, international remittance/ settlement, and provide private funds management – providing prospective and existing investors with shortand medium-term fixed debt investment opportunities that provide attractive returns. VFD Group Plc had in December 2018 successfully completed capital raise exercise, gathering N2.9billion from rights issuance and private placements against the original N2billion target. The group had planned to raise N1billion from existing shareholders via rights and the other N1billion via private placement from new shareholders. The offer had opened on December 3, 2018, with Kairos Capital Limited acting as the financial adviser, and closed on December 31, 2018. Despite the short timelines, the capital raise was successful, as it was oversubscribed by 39percent on both counts.

increased by 10.07percent from N2.434 billion recorded the preceding trading day. Diamond Bank Plc, Fidelity Bank Plc, Access Bank Plc, Transcorp Plc and UBA Plc were actively traded stocks on the Nigerian Stock Exchange (NSE). PZ Cussons Nigeria Plc stock price increased most by N1.15 or 9.35percent, from N12.3 to N13.45. It was followed by that of Julius Berger Nigeria Plc which advanced by N1 or 3.77percent, from N26.5 to N27.5. The stock price of Union Bank of Nigeria Plc increased by 30kobo or 4.51percent; from an open price of N6.65 to close at N6.95. NASCON Plc advanced from N18.9 to N19.2, up by 30kobo or 1.59percent; while NPF Microfinance Bank Plc increased from N1.49 to N1.62, adding 13kobo or 8.72percent.

Dangote Cement maintains market dominance, exports 0.8 metric tonnes of cement …proposes N16 dividend amid combined revenue of N901.21bn

frica’s largest cement producer, Dangote Cement, has maintained its dominance of the Nigerian market, accounting for 65 percent of the total volume sold in the domestic cement sector in 2018. The company also exported 800,000 metric tonnes (MT) of cement to West African countries, strengthening Nigeria’s position as a cement exporting country, creating jobs in the economy, and earning foreign exchange. The audited results of Dangote Cement Plc for the year ended December 31, 2018 showed it sold a total of 23.54 MT of cement across Africa indicating an increase of 7.4 per cent over 21.92 MT sold in 2017. Nigerian operations accounted for 14.18 MT representing an increase of 11.4 per cent over the volume of 12.72 metric tonnes sold during the preceding year. The increase in the Nigerian volume is attributable to higher building

activities as the economy recovered from recession. Across Africa, the cement Group posted a combined revenue of N901.21billion, with Nigerian operations doing N618.30billion, representing an increase of 11.9 percent over N552.36billion in 2017. The Nigerian economy was earlier projected to have grown by 1.9 per cent in 2017, meaning that Dangote Cement outperformed the domestic economy. Pan-African operations recorded revenues of N263.26 billion, an increase of 9.6 percent over N258.44 billion posted in the corresponding period in 2017. Profit after tax surged stood at N390.32 billion in contrast to N204.25billion while earnings per share rose from N11.65 to N22.83. The company directors are proposing a dividend of N16 per share. The sales volume in Nigeria is quite significant

given the turbulent market situation as the election period approached and people usually hedge in the construction industry during such periods. Joe Makoju, Group Chief Executive Officer, Dangote Cement Plc in his remarks said: “This is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election. Although Pan-African volumes were unchanged in 2018, I am confident that we will see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Now that we have gas turbines operating in Tanzania we will also see increased profitability in the Pan-Africa region and this will help to improve overall Group margins.” Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa.

Thursday 28 February 2019

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Opinion

No to apartheid in Lagos The Public Sphere

CHIDO NWAKANMA

esperation produced despicable actions on February 23, 2019, as thugs acting in the name of the All Progressives Congress stopped Igbo voters in various parts of Lagos. Where they could not stop them, they snatched and burnt ballot boxes so that the votes of these persons in Okota, Isolo, Oshodi and Mafoluku could not count. As force attracts countervailing force, the victims overpowered one of the thugs and almost sent him to the beyond. Even then, their humanity stirred, and they took him to a hospital. It was a great relief to all but the vendors of hatred and worshippers at the altar of crass power. The recourse to atavistic ethnic politics in Nigeria’s foremost city-state is appalling. All lovers of democracy, a better Lagos and the positives of Nigeria should join in condemning it. It should not be allowed to grow in any form. Of course, citizens and analysts have pointed to the obnoxious Bola Tinubu Doctrine as the witch that cried the night before the death of the child. The leader of the APC practised the pastime of the APC in their engagement with the Igbo of the South East. Rather than present facts and persuasion, APC tries to wrestle the Igbo with intimidation, blackmail

and antagonism. The Tinubu Doctrine was classic blackmail. The APC held a meeting with representatives of the Igbo on Wednesday, February 20, 2019, ahead of the election of February 23. Note that no such meeting held before the rescheduled February 16 date. As published by The Punch newspaper, quoting the News Agency of Nigeria the next day, Tinubu deployed blackmail and threats. “We appeal to our Igbo brothers from the East: this is the state where you conduct your businesses, your children are in our schools. We don’t discriminate against them in our WAEC fees.We don’t discriminate against them for NECO fees. We don’t discriminate against them for JAMB fees. Even in our universities, they take the benefit of our tuition and allowances and all that. “Now, this time, we say, help us. We say vote for us and our candidates,” Tinubu said. He reminded them of the time the popular ASPAMDA market and other markets dominated by the Igbo faced threats of demolition, recalling that he took necessary steps to save the markets, thereby protected the interests of the traders who were mainly from the South East. He warned that the party would monitor election results in Igbo-dominated areas such as Amuwo-Odofin, Ojo, Ajeromi-Ifelodun, and Surulere in anticipation of votes for APC. The thugs of the APC implemented the last part of the Tinubu Doctrine on presidential election day as it was a call to them to ensure that Igbo voters should not have the right to choose. Implied in the Tinubu Doctrine is the notion of apartheid or Sabo in Lagos. He states a desire to impose unfair charges for services in Lagos for non-indigenes. It is as well that others have reminded him that he is not an indigene of Lagos as

Ordinary elections…we no fit! ik MUO

e have always been advised to ‘chew’ our words so that these words do not become an embarrassing judgment against us in future. Compare the statements of PMB as an APC candidate in 2015 and as President in 2019. In both instances, INEC had postponed elections, in the first case, 6 days to the election, in the other, few hours to the election. ‘There are 14 LGAs where there is (security) problem…and there are 774 LGAs in Nigeria. Should we postpone the election because of 14 LGAs? “Afghanistan, Pakistan, Syria were fighting wars and they conducted elections, what is Boko Haram?” It is clear that INEC… has had to bow to pressure. Thus, the independence of INEC has been gravely compromised’, concluding that it was a ploy by GEJ to buy more time to plot how to rig the elections (Buhari, 2015) ‘I am deeply disappointed… that the INEC postponed the elections within hours of its commencement… INEC had given assurances, almost hour after hour that they are in complete readiness for the elections. We and all our citizens believed them…We now urge INEC to ensure that everything is done to avoid the lapses that resulted in this unfortunate postponement, and ensure a free and fair election on the rescheduled dates. (Buhari, 2019). There is nothing to add! By 4a-m on 16/2/19, the food for 900 party agents (who had been quartered

and mobilized) had been cooked, packed and awaiting ‘shipment’ to the electoral zone. The emergency restaurateur who prepared the meals sent me a picture of the consignment, asking ‘what do we do with these now? I don’t know how it all went but a candidate has been financially messed up. I did not see my tailor (he is not yet risen to the status of a designer) for three days. On Monday ( 18/2/19) he showed up, depressed, and informed me that he had travelled home to vote. Three days wasted, business abandoned, fresh businesses lost and transportation costs borne. I could not travel for the elections but several of my brethren did so. Some decided to wait it out (at least, one week) while others decided to do a return match. Those who stayed back have locked down their affairs for one week while those who travelled twice spent at least N30000 on road transportation. A friend had rescheduled the daughter’s wedding from 16/2/19 to 23/2/19 before INEC took over the date. He has been at loss how to settle issues with event planners and vendors, some of whom he had paid upfront and fixing another date is something else. The funeral of one of our in-laws scheduled for 23/2/19 had to be hurriedly rescheduled for 22/2/19 I have decided to tell the stories of real people, and how INEC threw their lives and businesses out of balance. INEC had serially assured that the election would hold and that those thinking of postponement should perish the thought. National confidence was at a high level and even the stock market responded positively, something that had not happened before. And then, suddenly, like a thief in the night, INEC announced the postponement of the election at 3am, when all well-meaning citizens were asleep. INEC informed that the shocking cancellation was not due to funding, security challenges or political machinations; that it was due to logistics, legal tangles and bad weather. Did these take place by 2am on that day? Even after the mysterious fire

well. The first elections western-style in Nigeria happened in Lagos in 1923. Since then, the city that does not tolerate nonsense has grown as a harmonious enclave and a place for all Nigerians. It is staking a claim as a global city and the preferred destination for all West Africans. It is shocking therefore to confront this retrogression from a very unlikely quarter. Lagos is chinaware. No bulls should step into such a shop, either in words or actions. The city-state requires the careful, considerate and mature handling that has ensured its growth and prosperity over the years. I commend APC gubernatorial candidate Babajide Sanwo-Olu who moved to calm the situation. He stated, “Many ethnic nationalities have settled in Lagos and have made this place home. We cannot allow a four-year election cycle to divide us. I, therefore, urge all our Igbo and Hausa brothers and sisters to continue to live in peace as we have lived together over the years. Everyone is safe in Lagos.” Lagos is like London. Both cities are commercial capitals and thus attract diverse citizenship. The two largest cities in the UK, London and Birmingham, are run by mayors who came from outside the indigene stock. Sadiq Khan, in London, traces his origins to India and Pakistan while Randal L Woodfin is a black. Both men were born in the cities over which they preside. Global cities would replicate this trend in the years ahead. This column predicted that the Igbo would play a central role in General Elections 2019. “The Igbo wars on politics and culture” stated that the matter of the choice and direction of the Igbo in Nigerian politics is a top burner item. It is now playing out nationwide and not only in the Igbo homeland. The Igbo will not succumb to threats, blackmail and other forms of intimidation. No

‘

I am monitoring what happens to the thug-inchief, Demola, who went beyond snatching ballot boxes, to set the ballots on fire at Okota

‘

Lagos is chinaware. No bulls should step into such a shop, either in words or actions

that targeted only the card readers at Awka, INEC quickly restocked and assured us that there was no-shaking. It was unbelievable, not because it was not possible or that it had not happened before, but because of their iron-cast assurances, which they had been feeding us with since they released the timetable on 10/1/18. Shocked, embarrassed, scandalized and frustrated Nigerians saw the development as unfortunate, and monumentally disappointment with awesome reputational damage to INEC and Nigeria. It also cast aspersion on the competence and integrity of INEC. All money requested by INEC was approved and all aspects of the election was conducted on their terms and the terms of their masters in Government. By the time the elections were postponed, materials had moved, officials had moved, observers had moved, security operatives had people had moved and even some voters were on their way to the polling booths. Did INEC not undertake scenario building? What was their option B? When exactly did they know that they could not go on, when they had assured told us no shaking a few hours earlier? There were some strange angles to the unfortunate postponement. One, that some political party representatives were commending the INEC chairman for the postponement! Secondly, the Buharo Campaign Organisation blamed the PDP for the postponement; PDP was in power and took the heat for 2015 postponement and now PDP is out of power and still has to take the heat of 2019 postponement! Thirdly, some argued that the 2015 postponement was requested by government while that of 2019 was requested by INEC as if there is any difference between INEC and the government. Fourth, I am still analyzing the performance of Adams Oshiomhole while INEC was announcing the postponement. I believe that Nollywood has lost one of the best actors in town. Anyway, the key matter arising from the postponement is its economic conse-

would they surrender to apartheid in any part of Nigeria. The Igbo are part of Nigeria and have embraced the nation with as much passion after the war as in the pre-independence days. Nigeria must embrace its Igbo with as much love and enthusiasm. No other route would suffice or satisfy. I end with a recall of our discourse in 2015. “Ndigbo say ire oma ka eju ji a gan’ogwu. This is the time to understand where we stand, appreciate the sensibilities of other demographic groups, and tread surefootedly but sensibly. Rather than the traditional “they hate us” response, we must now understand what it is that we need to do to remain good neighbours without losing momentum. There will be unprovoked attacks sometimes. The Jews in America are illustrative. They have soft power, but do not bother with seeking the Presidency. It may come someday, but in reality they have as much power as any demographic without titular power in that open manner. “What the Igbo need is space within which to unleash their enterprise and passion. Ubiquity has made the Igbo the favourite object of anger directed at the other. Nevertheless, rather than allow it degenerate into xenophobia, we should become the unity glue of Nigeria. We should work with every one, haters as well as admirers, to ensure that the unfortunate outburst of the Oba of Lagos turns into a positive rather than a negative for everyone in Lagos but more so for the demographic represented by the Igbo.”

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

quences which some have conservatively estimated at $6bn. INEC has not told us the cost of the aborted operations and even how the fund was sourced because their budgetary request, which was granted 100%, did not include a costly test-run operation. And then, who is responsible for this monumental failure. Somebody must be punished for making a fool of the nation, for imposing this level of economic cost on Nigeria and for betraying the trust of Nigerians on the commission. *The above title was crafted immediately after the postponement of 2019 elections and it is unfortunate that even after the elections were subsequently held there is not much to warrant a change or even modification, in the title. Yes, even ordinary elections, the giant of Africa no fit Other matters: Snatch ballot boxes and die! In 2015, some of us approached the court about the militarization of elections in Nigeria by President Jonathan. The court ruled that the army has no role in elections. In 2019, some of those who secured the court judgement against militarization, not only raised the tempo of militarization, but also gave to Buratai et al lawful directive that anybody who snatches ballot boxes should pay with his life. Some of us who condemned electoral miltarisation in 2015 supported the extreme militarization of 2019. That is how things usually are in Nigeria. But there would have been no need to snatch ballot boxes if PMB had assented to the electoral amendment act which proposed an electronic transmission of results. Meanwhile, I am monitoring what happens to the thug-in-chief, Demola, who went beyond snatching ballot boxes, to set the ballots on fire at Okota, after physically assaulting the voters and electoral officials

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.