BusinessDay 28 Jan 2020 by BusinessDay

FG, hands off hard-earned pensions Government’s plan to borrow N2trn from pension funds is immoral and irresponsible

h e f e d e ra l g ov e r n ment of Nigeria has no case to justify its move to borrow N2 trillion from the pension funds. We believe it is immoral and irresponsible, even though the

law allows thegovernement to borrow 20 percent of the pension funds. It is a retrograde and unorthodox way to run a modern economy. A woeful past record on project execution and inefficient

FRONT PAGE EDITORIAL use of debt is enough reason to disagree. Another, and even more worryingreason, is that the plan to borrow from the

pension fund comes after previous investments opportunities: Treasury bills and other government securities have been made unattractive. The current administration has shunned repeated calls

for bold reforms in key sectors of the economy to stimulate and encourage private investment. Instead, we the apex bank churnsout unorthodox policies Continues on page 12

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As border closure spikes inflation

LOLADE AKINMURELE & MICHEAL ANI

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CBN does heavy lifting for FG with CRR hike ithout the land border closure which fanned inflation, the Central Bank of Nigeria (CBN) may not have been inclined to tighten credit. But the apex bank has had to do just that, as curtailing excess liquidity has become necessary in taming inflation which has been on the rise since a controversial land border closure triggered a jump in the price of food items. “The CBN is only cleaning up the mess created by the government with their questionable fiscal policies,” a former deputy governor of the Central Bank with knowledge of the matter

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NGUS jan 27 2021 367.48

Government’s strong infrastructure investment to spur demand for cement BALA AUGIE

he proposed infrastructure spending by the Federal Government aimed at propelling economic growth will spur demand for cement and other building materials, Kabiru Rabiu, group executive director of BUA Group, said on Monday. Rabiu, in an interview with BusinessDay, lauded President Muhammadu Buhari for giving incentives such as tax credit to construction companies building highway roads, and he is optimistic that operators will take advantage of the current investment landscape. “Nigeria’s cement consumption is one of the lowest in subSaharan Africa and we are seeContinues on page 34

Inside Bella Disu (r), executive vice chairman, Globacom, receiving the ‘Brand of the Decade’ award plague won by Glo from Hadiza Bala Usman, managing director, Nigerian Ports Authority, at the ThisDay Silver Jubilee award in Lagos. The company’s chairman, Mike Adenuga Jr, also won the ‘Entrepreneur of the Decade’ award at the event.

Coronavirus: Nigeria’s readiness for non-casualty containment in doubt P. 2

Tuesday 28 January 2020

BUSINESS DAY

news Glo takes ‘Brand of the Decade’ at ThisDay Awards, as Adenuga emerges Entrepreneur of the Decade

L-R: John Coumantaros, chairman, FMN plc; Mary Beth Leonard, US Ambassador; Nasir el Rufai, governor, Kaduna State; Godwin Emiefiele, CBN governor, and Mira Mehta, CEO, Tomato Jos, at the groundbreaking ceremony of Tomato Jos Processing Plant in Kaduna, yesterday.

Nigeria’s gas vision blighted by Brass, Olokola LNG projects failure DIPO OLADEHINDE

ore than 17 years after they were initiated, the Brass Liquefied Natural Gas (LNG) project and the Olokola LNG project with a combined worth of approximately $30 billion are yet to commence, reflecting Nigeria’s failure to effectively utilise its gas resources. The $20 billion Brass LNG project in Bayelsa State and the $9.8 billion Olokola LNG project, located on the border town between Ogun and Ondo States, were initiated in 2003 and 2005, respectively. They were expected to create thousands of new jobs, spur domestic gas demand, generate electricity, create an opportunity to diversify revenue of the Nigerian government, strengthen the country’s revenue base and turn the country into a dominant geopolitical player in Africa. The two projects initiated by the President Olusegun

Obasanjo administration were also projected to help the country monetise part of its vast natural gas reserves and meet the growing worldwide demand for clean energy. However, none of the two LNG projects has progressed beyond the drawing board despite billions of dollars already expended on them. The projects have been stalled by lack of Final Investment Decision (FID) as well as delays caused by unnecessary bickering, lack of political will and, above all, uncertainties around the Petroleum Industry Bill (PIB). Development of the Brass LNG has remained elusive as foreign investors in the proposed investment backed out. Energy analysts say the development is robbing the country of over $24 billion in estimated revenue, as well as about 18,000 jobs. Similarly, the Olokola LNG has seen all investors pull out and is currently on the verge of being scrapped. Shareholders, including

the Nigerian National Petroleum Corporation (NNPC), ought to have taken the first FIDs since 2007 and would have recouped their investments in the first five years (2012). However, 17 years after the first project was introduced, there is still nothing tangible to show. “When the Brass LNG project was originally set up in 2004, the initial project cost was pegged at about $3.5 billion. Today, the cost of that same project stands at over $25 billion,” a source close to the project told BusinessDay. “The suppliers are insisting they have to invest heavily in gas development if they are to commit to a Gas Supply Agreement (GSA) for 25 years with Brass LNG. And then the questionable ability of the NNPC to fund its own share of the joint venture cash call for this development still adds to the quagmire,” the source said. Timipre Sylva, minister of state for petroleum resources, said the FID taken on NLNG Train 7 is a significant

milestone that reinforces the government’s commitment to the acceleration of the gas revolution. However, some stakeholders said if the Brass LNG and Olokola LNG project had been up and running, they would have equally enabled the country to produce an additional 10 million metric tonnes of gas yearly as well as secure a brighter future in the international market. “None of the two LNG projects has progressed beyond the drawing board despite the fact that billions of dollars have already been expended on them, which is very sad,” Charles Akinbobola, an energy analyst at Lagos-based Sofidam Capital, said. Other experts insist that the failure of the present and past administrations to act proactively on the Brass LNG project has led to a loss of $3 billion yearly revenue for the past eight years when the first output was expected from the project.

•Continues online at www.businessday.ng

Banks turn laggards as CBN’s CRR policy dampens investor confidence OLUFIKAYO OWOEYE

egative sentiment greeted the Cash Reserve Ratio (CRR) raise by the Central Bank of Nigeria (CBN) as big lender stocks slumped Monday with the sector emerging the day’s worst performing. Apart from Guaranty Trust Bank which traded flat, tierone banks lost bringing the sector’s index 1.19 percent lower in the day, while the broader market dipped 0.26 percent. “The new CRR would affect the performance of banking stocks for now, but as the week progresses, the impact should fade,” said Gbolahan Ologunro, analyst at CSL Securities. Ologunro said the policy would further pressure the earnings of banks, coming at

a time when banks are trying to meet the 65 percent LDR target, minimum liquidity ratio of 30.0 percent and facing shrinking revenue from interest income. Cash Reserve Ratio is the portion of total deposits lenders are expected to keep with the central bank. It serves as a monetary management tool used by the central bank to control volume of money in circulation. Zenith Bank dropped 2.28 percent to end trading at N21.45, United Bank for Africa dropped 2.34 percent to end trading at N8.35, Access Bank ended the day at N10.00 after shedding 2.44 percent, while First Bank Holding traded at N7.00 after losing 4.11 percent. CBN’s Monetary Policy Committee (MPC) had at its first meeting this year which

held last week sprung a hawkish surprise on the market, as nine out of the 11 members of the committee elected to adjust the Cash Reserve Ratio (CRR) upwards by 500bps to 27.5 percent – a move last witnessed in March 2016. Meanwhile, the committee kept all other policy parameters constant – MPR at 13.5 percent; asymmetric corridor around the MPR at +200bps/-500bps, and liquidity ratio at 30.0 percent. Explaining the rationale behind its decision, CBN argued that the primary reason for the CRR hike was to curb possible inflationary pressures that may arise from expected excess liquidity in the near term. On the contrary, raising the CRR further raises the questions about the serious-

ness of the apex bank’s policy actions towards driving credit extension to the private sector. More worrying is the fact that the 500bps hike in the CRR will sterilise between NGN1.00 to NGN1.50 trillion in liquidity from the system. Cordros Securities in a report said the gross earnings growth of banks will be pressured by 6.5 percent on a base case, which implies that without growing asset bases, banks would generate 6.5 percent less income from earnings assets. “Given this, there will be a need to significantly grow their asset bases to generate more income in 2020,” the report said. Ologunro predicts that banks would sell down their holdings in fixed income to get the much-needed liquidity.

hisDay group of newspapers has na m e d G l o b a c o m, Nig e r i a’s digital transformation company, as the Brand of the Decade, People’s Choice. The newspaper gave the award on Monday as part of activities marking its Silver Jubilee anniversary. The colourful award ceremony, held at the prestigious Eko Hotel and Suites, Victoria Island, Lagos, also witnessed the recognition of Globacom’s chairman, Mike Adenuga Jr., as the Entrepreneur of the Decade. According to Nduka Obaigbena, publisher of ThisDay Newspapers, Globacom was voted for the award by poll respondents for its role in growing the Nigerian economy since its emergence over 15 years ago. Obaigbena noted that the telecom company had over the years established itself as an innovation

leader in the telecom sector, introducing a long string of industry-impacting products and services. He also noted that Globacom chairman was recognised for his dogged commitment to growing the economy through relentless investments in key sectors of the Nigerian economy. Bella Disu, Globacom’s executive vice chairman, received the award on behalf of Globacom while Folasade Michael-Adenuga, executive director of Globacom, received the plaque of Entrepreneur of the Decade on behalf of her father. “Being affirmed so strongly by those we serve is indeed the highest honour. I thank all our millions of subscribers for their continued support,” Disu said. The award guests were entertained by two renowned international artistes, Nigerian Asa and American John Legend.

Coronavirus: Nigeria’s readiness for non-casualty containment in doubt

… as WAHO tasks states on active surveil ance, collaboration TEMITAYO AYETOTO & GODSGIFT ONYEDINEFU, Abuja

iven the resounding success with which Nigeria contained what would have resulted in an endemic spread of the Ebola Virus in 2015, there is quite an air of confidence that the national health emergency apparatus can deliver again in case the Coronavirus is imported. However, there are concerns as to whether the apparatus can deliver nocasualty containment. “Should there be an outbreak, the important thing is to locate it and contain it there and I think we have the expertise to be able to do that,” said a source at the Nigerian Institute of Medical Research when asked if Nigeria could aim higher to achieve containment without deaths. “Depending on the time taken to track, people can die actually. If the case is found now, the first thing is to look around the immediate vicinity of any other person that could have been in contact. It’s important to be prepared,” the source said. In the wake of the outbreak of the Coronavirus that is fast sweeping through continents from China, health management agencies including experts in public health have reminded Nigerians of the aggressive control of Ebola, citing it as an example of the country’s readiness to combat the case at hand. This is coming at a time the

West African Health Organisation (WAHO) is calling on all countries to collaborate with each other to take precautionary measures following the detection of a suspected case of Coronavirus in Abidjan, Cote d’Ivoire, saying cases may appear in any country due to international travel. WAHO also tasked countries on active surveillance, early detection, isolation and case management, and contact tracing to prevent further spread of this outbreak. The organisation noted that as at 27 January 2020, about 3,000 cases have already been confirmed across the world, with 2,744 cases and 80 deaths so far in China alone. But, the World Health Organisation (WHO) assesses the risk of the outbreak to be very high in China, and moderate globally including in West Africa. WAHO announced that it is coordinating with member states to share real-time information on the outbreak, enhance communication between countries and strengthen countries’ surveillance capacity, including early detection of suspected cases through thermal camera surveillance at international borders. “One such suspected case arriving Abidjan airport recently was immediately detected and isolated and tests are now being performed to confirm whether this is a case of Coronavirus or not.

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Achieving productivity remains a national challenge STRATEGY & POLICY

MA JOHNSON

f one recalls that at the beginning of the 21st Century to date, we witnessed trade wars bothering on the quality of goods and services in which the winners have been countries and regional groupings that have not only invested in their people and technology but have a common market policy. As we have clearly seen in the last two decades, events in the global arena is a departure from that of the 20th Century where mankind dominated one another by the use and show of force as was demonstrated in World Wars 1 and 2, and perhaps, the Cold War. Since the world is in the fourth industrial revolution, any country that does not make technology the pivot of its national development strategy will likely not stand in this decade and beyond. Such nations will find it extremely difficult to develop. I say this because technology spins wealth permanently as against our much talked-about and celebrated crude oil. If crude oil spins wealth, Nigeria perhaps, would have been the wealthiest country in Africa. This is not so because the sale of crude oil without significant economic diversification only gives an illusion of wealth. Over the years, development experts have seen that dependence only on the sale of crude oil as a major source of revenue without economic

reforms spins poverty. They have seen that countries like Egypt, Rwanda et al in Africa that have embraced economic reforms have strengthened growth, reduced unemployment, increased foreign exchange reserves with public debt on a downward path. If Nigeria is to become prosperous, those in authority must find ways and means to reduce the ranks of the rural and urban poor and not merely develop indigenous technologies that make life more tolerable for them. Reducing the ranks of the poor will entail amongst others crafting policies that create more productive, higher paying jobs outside subsistence agriculture, attracting foreign direct investment and improving the quality of science, technology, engineering and mathematics (STEM) education at the tertiary level. The solution to building capacity to tackle poverty is in having a labour that is shifting from low-productivity subsistence agriculture or casual labour to higher-productivity manufacturing and service sector jobs. Whether we like it or not, technology and quality workforce provide the key to high productivity. Technology which, according to experts, is the practical application of scientific knowledge and ideas to produce results beneficial to humanity. Any country whose people are determined to utilize the value of technology in its development strategy will never be disappointed. The resulting productivity will guarantee wealth, harmony and growth. Technology and the quality of workforce remain the driving force for the development of private and public sectors in this decade and beyond. Particularly important is the fact that knowledge which is often embodied in people in the form of skills, management expertise, general experience and know-how is critical for the development of any society. What then is the

quality of Nigerians needed from the standpoint of modern industrial development? The quality of Nigerians in this context can be defined by professionally qualified youths who are technology savvy with positive attitude to work. Positive attitude of our professionally qualified youths in action, words and feelings is very critical to the survival of firms and the entire society in the world of today. Additionally, one would be looking at Nigerians, who over the years, have learnt to utilize their time fully instead of spending time. Nigerians who work smart not hard. Working hard without the use of efficient machinery and equipment and importantly, the application of intelligence, is equal to no work and may give rise to negative value. If Nigerians decide to work twice as hard as others in the year 2020 and beyond, it is likely not going to improve our productivity; but only our production. The reason is very simple. Power supply is scarce in Nigeria followed by harsh business environment. Productivity which is a measure of efficiency and long-term development is increased if workers produce more for the same or less time, effort or resources. Firms will achieve increased productivity through better ways of working and or the use of more and improved technology. Productivity is an important concept that cannot be discussed in isolation. It is impossible to obtain a sustained high rate of productivity without adequately addressing the motivation of the workforce. Motivation as we all know is a wide and complex subject involving variables such as wages, fringe benefits, recognition, responsibility, job satisfaction, advancement and working conditions amongst others. Wages as a factor in addressing

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If Nigerians decide to work twice as hard as others in the year 2020 and beyond, it is likely not going to improve our productivity; but only our production. The reason is very simple. Power supply is scarce in Nigeria followed by harsh business environment

the issue of productivity is one of the determinants of motivation in both private and public sectors. Though not exactly the main reason for doing a good job, a satisfactory level of earnings and method of wage payment is a basic necessity of a job. And an essential requirement which must be satisfied before other factors could engender the will to work. Wages of workers has generated so much controversy from the colonial era till date. We have seen how difficult it is for some state governments to accept paying a minimum wage of N30, 000 (US$ 83.33) per month to their workers. I sympathize with the governors of those states that cannot pay the minimum wage because the productivity of their workforce in the public sector will be below par. That is the honest truth. As much as motivation of the workforce remains a national problem, the missing link as stated by an expert, is technology and its processes. It is technology that will give our economy the flexibility with which to withstand the inevitable fluctuation in global crude oil price and recessionary cycles. There is therefore, the need for Nigeria to be part of the Fourth Industrial Revolution. Embracing the fourth industrial revolution in coordinating her economic, industrial, personnel and trade policies. This will stimulate competition and thus, enhance productivity by the use of well-motivated and well-paid workforce. Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused efforts at all levels, and in all sectors of the economy be it private or public. It is not knowing what to do, it is doing what you know best. Thank you!

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

Importance of efficient public transport system to Nigeria’s economy

he freedom of movement is a perceived fundamental human right globally, and different cultures interpret this differently. However, no culture has yet to ascribe Public Transport (PT) as a basic human right. Large cities and developed economies with their rapid urbanisation, population growth, modern life styles, and economic conditions demand an effective, accessible and efficient system. PT services are delivered both by private and public organisations, and (regardless of the party that delivers them) require substantial investment and usually attract high operating costs. Any potential PT service supplier has to consider various factors including service productivity and efficiency, while the government has to ensure that supplier meets the regulations for quality, performance, safety and security. But PT is one of the most commonly used transport modes that provides the affordable mobility required in modern day societies and is a key structure for the transformation of any city by governments of any society and must be included as a front burner in the improvement and value addition of the lives of its citizens. Public transportation enables people to move along designated routes at minimum affordable cost and it is also known as public transit or mass transit and helps in the transportation of passengers by group travel system and is available for use by the general public. It is typically managed on a schedule and operates on established routes that charges a certain posted fee for each trip. Some Examples of public transport systems include city buses, trolleybuses, trams (or light rail) and passenger trains, rapid transit (metro/subway/underground, etc.) and ferries. Public transport between cities is dominated

by airlines, coaches, ferries and intercity rail. High-speed rail networks are rapidly expanding across continents worldwide delivering fast, efficient mobility to numerous nations every day: Currently in operation in more than 20 countries such as the UK, France, Germany, Belgium, Spain, Italy, Japan, and China. Although most public transport systems run along fixed routes with planned set of embarkation/disembarkation points, with prearranged timetables and the most frequent services running with programmed and arranged headway, such as every 15, 25 or 30 minutes and it’s not usually scheduled for any specific time of the day. Furthermore, urbanisation, and the increase in economic activity, are amongst factors contributing to the increase in transport demand in Nigeria. Since mobility is an essential part of human life, especially in cities, the government has no option but to ensure that the modern infrastructures are in place, and subsequently must be accountable for the regulation of the industry. The other challenges facing the industry are the availability of very poor standard of public transport infrastructures, very large number of bad and untarred roads, poor and unplanned road networks, use of unsafe and rickety vehicles by road transport operators, lack of professionals and trained specialists in the management of the sector to inject new ideas and innovation to the system and last but not the least is lack of modern day technology system needed to drive greater efficiency and productivity in the sector. According to the Infrastructure Concession Regulatory Commission, Nigeria has about 195,000km of road network out of which about 32,000km are federal roads and 31,000km are state roads. In total, only about 60,000km are paved leaving 135,000km of road untarred and www.businessday.ng

a large proportion of the paved roads are in bad conditions due to poor maintenance. Public-Private Partnership intervention is possible (in theory) since Nigeria’s President Muhammadu Buhari on 25th January, 2019 signed the 10-page Executive Order No.007 known as the Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019. 007 describes Public-Private Partnership intervention to enable the government to leverage private sector participation. To the public, however, the government still needs to be seen setting higher standards and restructuring the way National Union of Road Transport Workers (NURTW) is run. Urgent intervention in the way politicians are seen to be hijacking the purpose of the union for political gangsterism, with NURTW perceived to be a structure of extorting money unjustly from vehicles operators, and furthering costly political ambitions. The NURTW was originally established to be an independent Nigerian trade union, serving the interests of transport workers and operators in the road sector. It calls for social stability for all workers and operators in the transport sector as defined in its constitution. If NURTW is properly restructured, it will help block the revenue leakages currently being experienced in the sector. And help reposition the way public transport services are delivered in the nation. It will help in fast tracking the acquisition of modern-day transport infrastructures; help improve quality of transportation services which is a very fundamental factor in delivering the dividends of democracy to the Nigerian citizens. Access to employment and the product markets necessary for the sustenance of the citizens requires the Nigerian government to create an

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Festus Okotie enabling environment, while demonstrating more commitment towards investing in the planning and development of PT services, amongst all the other basic amenities such as regular power supply, basic education, health care and nutrition. These are all very important factors because 2019 saw life expectancy in Nigeria increase 0.58 percent (from 2018) to 54.49 years. An increase to the liveability standard of our society will make life more comfortable for citizens and will also attract local and foreign players to boost the industry and Nigeria’s economy. Urbanisation coupled with the increase in economic activities among other factors is responsible for the increase transport demand. However, urbanisation coupled with the increase in economic activities among other factors are partly responsible for the increased transport demand in Nigeria The National Union of Road Transport Workers (NURTW) unjustly exhorts money from bus operators and lastly, long waiting time by passengers for buses to load at the park was another problem indentured The National Union of Road Transport Workers (NURTW) unjustly exhorts money from bus operators and lastly, long waiting time by passengers for buses to load at the park was another problem indentured. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Greenberg’s Sandworm & Africa Tech

Rafiq Raji

n January, about three weeks into the New Year, the internet suddenly slowed one beautiful morning across West Africa. It is not an exaggeration. If you were not tech-savvy, patient and rational, you probably entertained the oft-misguided thought that the “village people” were likely at it again. A lot of African problems do not get solved because of this irrationality. True, you probably heard sounds of glee in that part of the wilderness of your brain you reserve for such fables. If your left brain (or “digital brain”) did not come to the rescue on time, then your day was probably ruined before it even started. Most work these days rely on the internet. Thankfully, news filtered in soon enough that our internet troubles were as a result of cuts to the West African submarine cable system. My superstitious kinsmen probably have an explanation for how that happened. I could almost imagine one boisterous type spinning a colourful yarn about the mythic African mermaid “mammy water” being displeased about something. It certainly makes for a good bedtime story. Still, a cable was cut, and the internet slowed. First principles One pleasant Saturday morning in late April 2007, Toomas Hendrik Ilves, then president of Estonia, similarly woke up to a much more serious internet mishap. The internet was down. According to Andy Greenberg in his 2019 book “Sandworm: A new

era of cyberwar and the hunt for the Kremlin’s most dangerous hackers”, a wonderful and instructive read if your life and work, like almost everyone’s today, depends on the internet and technology, Mr Ilves “assumed it must be a problem with the connection at his remote farmhouse, surrounded by acres of rolling hills.” (His mind did not first tilt towards the “people in the village”, at least.) Ironically, the president had been forced to his farmhouse for security reasons due to violence in Tallinn, the Estonian capital city. Clearly, his security services did not think - and probably couldn’t – to protect him from the potential mischief of the internet. Greenberg gives a good account of Ilves’ immediate experience after his likely unconscious yawn in the aftermath of probably little sleep. The president had stuff on his mind. There were “escalating riots” in his capital city and he was ensconced in his farmhouse. “So, the first thing he did upon waking up…was to open his MacBook Pro and visit the website for Estonia’s main newspaper, Postimees, looking for an update on the riots and Russia’s calls for his government’s ouster. But the news site mysteriously failed to load. His browser’s request timed out and left him with an error message.” “Was it his computer’s Wi-Fi card? Or his router? But no, he quickly discovered that the British Financial Times loaded just fine.” The internet was working just fine, I guess. The problem was not his connection. “Somehow a significant fraction of Estonia’s entire domestic web was crippled.” It was a cyber-attack. I do not want to go into detail about how they finally fixed the problem – you’d have to read the book for that pleasure. Suffice to say, they did it the old-fashioned way. They blocked “every web connection from outside Estonia.” Thereafter, they began the

painstaking task of restoring sanity to the domestic web. Some disadvantages are advantages Bear in mind, Estonia is renowned for how it has been able to use technology to improve the lives of its citizens. Estonians can vote with their mobile phones or computers from the comfort of their living rooms or anywhere else they may be. And almost all Estonian public services can be accessed via the internet. And all it took was a cyberattack to bring it all down. For a brief while, at least. You would probably not be surprised if one were forced to wonder about the African scenario. Incidentally, Greenberg gives an account of another incident in which Africa’s still relative technological backwardness – in some respect at least – managed to save the day. In late June 2017, employees at the Copenhagen headquarters of A.P. Moller-Maersk, the world’s largest shipping conglomerate, suddenly found they could not use their computers. Their “computers were irreversibly locked.” A malicious software had infected the company’s entire global network. And all efforts to fix the problem proved abortive. To fix the problem, they resorted to first principles as well and disconnected the entire global network; a task that took “more than two panicky hours.” To bring the network back on line, Maersk needed at least one server, a so-called “domain controller”, which functions “as a detailed map of Maersk’s systems”. But since all the domain controllers had been “wiped simultaneously” – so they thought at least – a recovery was literally impossible. Put simply, in Greenberg’s account of a Maersk IT staffer, if they couldn’t recover the domain controllers, they couldn’t recover anything. Maersk was in for a pleasant

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It is probably needless to belabour how the incidents are likely to occur. What matters is how individuals, firms and governments manage the crisis when it occurs

surprise. Just before the cyber-attack, there was a power failure in its office in Ghana. A domain controller there escaped unscathed. Let us just say, Ghana saved the day. Backup, backup, backup There are many lessons for African firms and governments from these incidents. Do African governments have measures in place in the event of an internet shutdown, for instance? As the foregoing shows, an internet mishap could be because a submarine cable was cut, a malware was put into the system by mischief-makers, and so on. It is probably needless to belabour how the incidents are likely to occur. What matters is how individuals, firms and governments manage the crisis when it occurs. During the West African submarine cable incident, since only one major service provider seemed majorly affected, individuals with multiple internet subscriptions were able to get by. And as the Estonian and Maersk examples show, it would be quite helpful if a firm or government has a standalone and offline backup system analogous to a standby generator for when public power fails. For individuals, keep hard copies of important documents, subscribe to more than one internet service provider, and so on. And if you are active on social media, try your utmost to spread your activity on multiple platforms. For all it takes for you to suddenly be in “analog lala land” is a sudden change in the terms of a service agreement by an internet platform, a cyber-attack on your tech infrastructure (individual, firm or country), or a submarine cable incident. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Garnishee order nisi: The commercial bankers’ nightmare

arnishee order nisi is a Court order served on financial institutions, Banks or any person believed to be in possession of funds of a Judgment Debtor. Its purpose is to compel persons/institutions so served to engage legal representation to inform the Court by disclosing in a document known as the “affidavit to show cause” whether or not the said person/institution (usually commercial Banks) is in possession of funds of the Judgment debtor and the specifics of such funds. Service of this Order on any financial institutions (Banks) also operates to freeze the account of the Judgment debtor in the event that such debtor maintains an account with the Bank. Monies found therein is consequently paid over to the Judgment creditor to the extent of the amount owed as Judgment debt, pursuant to the Garnishee order being made absolute against the specified sum. Primarily, the right to apply for the discharge of the garnishee Banks inures solely in the Judgment creditor’s counsel; his presence in Court is important and his absence fatal. Therefore, there’s a need to check this power and by extension, balance the Interest of the Judgment Creditors against that of the Banks. Misapplication of the law In practice, the law has been applied in a manner contrary to the intendment of the draftsman. The reading of Sections 83 of Sheriffs and Civil Process Act presupposes that Judgment Creditors should be certain before joining any garnishee to the suit, that such garnishee holds or at least had at some point held the funds of the Judgment debtor. However, in practice, this is not so as garnishees in most cases are joined merely in the believe that “they

might’’ be in custody of the funds of the Judgment debtor. Garnishee proceedings are largely a fishing expedition in Nigeria. Effects of garnishee orders on banks and their legal representatives Inordinate delay/time waste Garnishee proceedings sometimes linger in Court for over a year due to the objections that the Court Judgment resulting in the garnishee proceedings was gotten by fraud. This resulted in delay of the proceedings as the Court had to first decide whether the objections of the Judgment debtor had merit. The Banks were largely left with nothing to do other than to perpetually attend proceedings to ensure that their interests were protected in Court. Unjustifiable cost and subjugation Banks incur expenses to provide information on the account status of the Judgment debtor and also engage legal representation. Furthermore, the legal regime for garnishee proceedings more or less subjects’ garnishees (Banks) to the whims and Caprices of the Judgment creditor’s Counsel. His unfettered powers have often been exercised (abused) to assume the role of Alpha and Omega during proceedings. Needless hardship The judgment creditor’s counsel sometimes is absent in Court on the date scheduled for the hearing for sometimes, his own selfish reason. Thus, causing the matter to be further adjourned at the detriment (continuous costs being incurred) of the Banks and their legal representatives. Unreasonable demands by the judgment creditor’s counsel On one occasion, the writer had represented

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a Bank in court where 65 belonging to the judgment debtor was made absolute. The judgment creditor’s counsel insisted that payment be made by draft not minding that raising a draft in that circumstance would cost more. Recommendations Technology It is strange that at this time and age, Judgment Creditors’ Counsel still joins as many as Twenty-Two (22) Banks when applying for the order nisi. An aura of imprecision permeates this fishing method of search. The innovation of BVN which is a central system or link to every bank account a person maintains should have obviated the need to serve different Banks. Thus, a single Bank with the instrumentality of technology should be able to search, find and ascertain with precision, the totality of the available funds of the Judgment debtor and the Banks holding the funds. Designation of judgement debtor’s funds enquiry banks It is recommended that certain Banks be designated “judgment debtor’s funds enquiry” Bank with boards of enquiry which a judgment creditor intending to set a garnishee proceeding in motion can approach at first instance to make the search a more targeted and precise one. These Banks will be solely established for the purposes of; searching out for a fee the financial details and status of persons including the Bank(s) housing their funds. Recovery of the bankers’ cost from the judgment debtor Judgment debtor’s non-compliance with court order to pay the Judgment sum invariably prompts the use of garnishee proceedings. Expenses and its attendant delay would

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FEMI OLUDE have been averted if the Judgment debtor had acted in good faith and paid off the debt which unequivocally remains the bone of contention The Banks should be entitled to some form of relief from the Judgment debtor especially where there was no reason for the Bank to have come to the Court in the first place. Banks in fact, have more legitimate claim to costs of the day(s) than the average unwarranted defendant. Cost It has been observed from the body language of the Court that they are often reluctant to award cost against Judgment Creditors on the premise that the latter are also looking to recover debts due to them. However, there is need to trade with caution and award costs in situations where it is clear that the Judgment Creditor had simply employed the mechanism of the garnishee proceedings on a premise of Judgment gotten fraudulently. In conclusion, justice in garnishee proceedings must be seen as a three-way traffic, Justice to: The Judgment Creditor, Judgment debtor and most importantly, the garnishees (Commercial Banks).

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

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Tuesday 28 January 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

FG, hands off hard-earned pensions Government’s plan to borrow N2trn from pension funds is immoral and irresponsible

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

Continued from front page

which limit investment options of pension fund administrators. Rather than ease doing business in Nigeria, businesses are being stifled. So, rather than make laws to attract the long term private capital needed to build the roads, rails and runways the country sorely needs the Buhari-led government in its wisdom has opted for a smash and grab tactic – smash the available choices for preserving or growing capital in the economy and hide under the law to grab pension funds, to nationalise private capital. This clearly paints a government that is allergic to private capital and such should not be allowed to come near the hard-earned savings of Nigerians irrespective of whatever the Pension Reform Act provides. A rabid distaste for privatisation does not justify unbridled nationalisation. It is like a drunken husband force-

fully taking the savings of his wife. A government that has succeeded in impoverishing millions due to its inability to stimulate the economy and create jobs has no justification to use the little savings its citizens are managing to set aside for an uncertain future. An uncertainty that the same government is fostering and fuelling due to its languid and aloof attitude to the economy. While it’s true that South Africa, Saudi Arabia and Chile use their pension to build infrastructure but it’s a decision based on the return on investment not by compulsion. Argentina twisted the rules in order to nationalise $30 billion of private pensions in 2008. Yet, ten years later, it needed a record $57 billion IMF-bail out; it defaulted on the loan last year. A government with an excessive thirst for debt and an unjustified belief that only it can fix the woes of Nigeria has no right to a kobo, much less two trillion of hard-earned

private capital. All the debt Nigeria has incurred under this government (always to build infrastructure) has raised our debt profile. Yet the infrastructure gap remains, the economy remains sluggish. It has poured N1.7 trillion naira into a blackhole of the power sector yet Nigerians go to bed and wake up in darkness. If the government truly wants to declare a state of emergency in the power sector (transport, security, education and health also need a similar declaration) it has the executive powersand a pliant Senate and House of Assembly to execute directives and pass laws that are investment-friendly. In our opinion, the federal is short of ideas on how to bridge the country’s infrastructure gap despite models for attracting local and foreign capital such as NLNG which declared in January that it has paid over $7 billion in taxes and issued more than $15 billion in dividends to the government since it started

operations. According to a report by PwC, Nigeria holds at least $300 billion or as much as $900 billion worth of dead capital in residential real estate and agricultural land alone. Between $230 billion and $750 billion is locked in the high value real estate market segment, while between $60 billion and $170 billion is trapped the middle market. This is amid a plethora government-owned assets that can be sold, rented, concessioned or securitised. Breathing life into dead capital through structural reforms will convert most of the capital in the informal economy which is currently valued at 65 percent of GDP into the formal economy. By creating trust in the system, increased participation will bring about the capital conversion in this economic class through fiscal receipts into the formal economy. It would also increase capital for infrastructure in the sector and increase economic activity.

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Living dangerously at volcano Taal’s shadow: New geological and weather risks in the horizon

Dan Steinbock

n January 12, my wife and I were walking around Malate, close to Manila Bay. It was a beautiful, warm and sleepy Sunday afternoon. Little did we know about the turmoil that was bursting only 50 kilometers to the south in the proximity of Taal volcano, which is located on Luzon island in the province of Batangas. After two stronger explosions, far worse followed in early evening as a continuous eruption generated a huge 10-15 kilometers high steam-laden tephra column with frequent volcanic lightning that rained wet ashfall as far as Metro Manila. In addition to the danger zone of almost half a million people, 25 million people live within 100 km of the volcano. The Alert Level 4 remains effective in the region, indicating that “a hazardous explosive eruption is possible within hours to days.” Taal may precipitate new kinds of risks. “Geological” and “weather-related” events According to the Global Climate Risk Index 2020, long-term climate risk is relatively highest in Puerto Rico, Myanmar, Haiti and the Philippines, which have been identified as the most affected countries in the past two decades. The ranking is based only on weather-related events – storms, floods

as well as temperature extremes and mass movements (heat and cold waves etc.). It does not include “geological incidents,” like earthquakes, volcanic eruptions or tsunamis, which are not considered “relevant” for the purpose. Intriguingly, in the past month alone, such geological incidents have hit several countries that top the list of weatherrelated events. Earthquakes registering a magnitude of 4.3 to 6.4 have shaken Puerto Rico, Myanmar, Pakistan, Nepal and Dominica, while the Philippines has also coped with Taal’s eruption. Of course, correlation does not mean causation. But what does it mean? Countries that are most affected by climate change are quite familiar with geological events as well. Last December, after 15 years of recovery, the catastrophic Aceh tsunami and earthquake, which affected 14 countries and caused 280,000 lives, marked its 15th anniversary. A day after the Taal eruption, Haiti marked its 10-year anniversary of the 2010 earthquake, which killed 300,000 people. While climate skeptics tend to understate the association between geological and weather-related events, climate alarmists overstate the correlation. The emerging scientific view may prove more nuanced, however. Geosphere and climate change Recently, the number of those who do see “some kind” of correlation between climate change and volcanic activity has been on the rise. One of them is emeritus professor Bill McGuire in geophysical and climate hazards at University of College London (UCL). In 2012, McGuire published Waking the Giant. As its subtitle suggests, he argues that, in the complicated Earth-system, a changing climate may “trigger earthquakes, tsunamis and volcanoes.” A warmer atmosphere may promote greater melting of the polar ice caps,

thereby raising sea levels and increasing the risk of coastal flooding. Similarly, the thin layer of gases that hosts the weather and fosters global warming may interact with the solid Earth – the geosphere — in a way as to make climate change an even bigger threat. Although causal links are challenging to verify, an increasing number of scientists share McGuire’s views about the mechanics of the correlation between geological and weather-related events. In 2009, Chi-Ching Liu at Taipei’s Academia Sinica provided evidence for a link between typhoons barreling across Taiwan and the timing of small earthquakes beneath the island. In their view, storms might act as safety valves, repeatedly short-circuiting the buildup of dangerous levels of strain that otherwise could eventually instigate large, destructive earthquakes. In a 2017 study on Iceland’s eruptions some 5,500-4,500 years ago, Graeme Swindles and his team in the UK University of Leeds found that the number of eruptions dropped significantly as the climate cooled and ice expanded. Since it took a long time to grow ice masses, there was a time lag of 600 years between when glaciers advanced and volcanic activity diminished. Nevertheless, even small changes in ice volume can affect volcanism. And if the temperature is going up fast, it takes less time to melt ice, which may translate to a far shorter time lag. According to the World Meteorological Association, 2019 was the second-warmest year on record. Since the 1980s, each successive decade has been warmer than any preceding decade since 1850. Climate change is contributing to rising probability of more volcanic activity in areas of the world where glaciers and volcanoes interact. And as the climate warms faster, eruptions are likely to get bigger. US withdrawal from Paris Accord amplifying risks Despite rapidly-rising climate risks, the struggle against climate change is about to enter a more dangerous phase. In mid-2017, Countries Most Affected by Long-Term Climate Risk 1. Puerto Rico 2. Myanmar 3. Haiti 4. Philippines 5 Pakistan 6 Vietnam 7 Bangladesh 8 Thailand 9 Nepal 10 Dominica

Recent earthquakes/Volcanic Activity Magnitude Date 6.4 Jan 7 2020 4.3 Jan 14 2020 3.1 Dec 18 2019 4.6 Jan 17 2020 4.8 Jan 18 2020 4.8 Nov 27 2019 4.3 Sep 3 2019 4.5 Nov 29 2019 4.2 Jan 12 2020 3.3 Jan 13 2020

Sources: Long-term climate risk: 1999-2018, Global Climate Risk Index 2020; Recent earthquakes: Earthquake Report.

When visionary leadership matters: The Anambra example

he world is changing rapidly fast and countries are responding to the demands of visionary leadership which creates a paradigm shift for economic prosperity. From Asia to Europe and America, nations whose affairs are superintended by men and women of visionary leadership are harvesting prosperity and advancement in human capital. The progress recorded by some African countries since the turn of the century – Rwanda, Ethiopia, Ghana, and Angola – can be traced to this. At the recently concluded 50th meeting of the World Economic Forum in Davos, Switzerland, the world leaders called for creative approach to dealing with critical global challenges. These include climate change and poor economic development. They also urged nations to invest in their people by identifying new and better approaches towards containing critical developmental challenges. It is said that visionary leaders have the ability of seeing what no one else sees. They find potential and opportunity in unfavourable times to prove they see what is not there, or what is not there yet. Only visionary leaders – individuals who see the potential for how the world should exist and take steps to get there – can successfully lead people to tackle these challenges. This is the case in Anambra. Gov. Willie Obiano is among Nigerian leaders that toe the line of visionary leadership in a practical approach that needs to be emphasised as well as emulated by his peers. In recent times, he has increased the tempo of economic and human development of Anambra in a manner that is difficult to separate from the outcome of visionary leadership. Examples: Gov. Obiano raised the stake in visionary

leadership when he inaugurated the Anambra 50-Year Development Plan Committee late 2019. Chaired by former Governor of the Central Bank of Nigeria, Professor Charles Soludo, the Committee is empanelled to create the historic Anambra Vision 2070 Document – a Strategic Development Plan initiative meant to transform Anambra into a world-class economy and an advanced society. The Soludo-led team is charged with the task of crafting the vision and mission statements for Anambra Vision 2020. The project will identify specific sectors to focus on, fashion out development measurement frameworks, and determine critical milestones and success factors, among others fundamental. Gov. Obiano stressed that Anambra Vision 2070 Plan is for the security, prosperity and happiness of Ndi Anambra. He charged the team to submit a document that details the overall strategy for sustainable development of the state. The committee has an initial period of nine months to conclude and submit its report to the State government. Coming about 40 days to the “funeral” of Nigeria’s ‘dead’ Vision 20:2020, Gov. Obiano has put Anambra on the global map. It could be recalled that the Nigerian government launched the blueprint of the highly-celebrated Vision 20:2020 in 2009. The target was to build the Nigerian economy to join the league of the 20 topmost world economies by the magic year, 2020. Ironically, the long-term plan failed to yield the desired outcome: Nigeria hit January 1, 2020, as the 28th largest economy in the world in 2019, according to data from the International Monetary Fund (IMF). Worse than that, Nigeria became the headquarters of the poorest people on earth. It has the highest number of people

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living in extreme poverty across the world. An estimated 86.9 million people are said to be living on less than N381 a day with the figure increasing every six months, according to The World Poverty Clock. Beside Vision 20:2020, Nigeria had also launched the Vision 2010 – a 230-page report submitted to government in September 1997. Again, it failed. Anambra Vision 2070, therefore, comes at the most opportune time to restore hope and to inculcate the culture of developmental plan which has painfully become ‘alien’ in Nigeria over the years. The pool of crème de la crème of Anambra indigenes who constitute the Soludoled 50-Year Development Plan Committee cut across the professions, vocations, occupations and the youth. Achieving the goals of Anambra Vision 2070 requires an enabling environment. The governor has, therefore, created the enabling environment that attracts high net-worth investors. In recent times, notable individuals and corporate bodies have taken advantage of this to invest in the state. Examples include the recent launch of “Anambra Tea”, a unique brand of indigenous beverage known in the market as “Ijele Hibiscus Tea” and “Ijele Lemon Tea”, produced with local materials by Obinwugo Farms Limited. In a recent letter of appreciation to Governor Obiano, the chief executive of Obinwugo Farms Limited, Emeka Obinwugo, an indigene of Umuoji in Idemmili North Local Government Area of Anambra State, lauded the governor for his support to indigenous entrepreneurship. Another milestone is the commissioning of a multi-million Dollar rice processing mill at Igbariam, Anambra East Local Govern-

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President Trump declared the United States would withdraw from the Paris Agreement (PA), an international accord to address climate change over the 21st century. Last November, the US began the official withdrawal procedure, which would likely take effect on or after November 4, 2020 - interestingly, a day after the 2020 US presidential election. In US foreign policy, such withdrawal is likely to diminish US standing in the world by making the country an international rogue state on climate change, thereby reducing US reliability as a negotiating partner. Unlike Washington, Beijing and Brussels support the Paris Accord and have increased efforts in the global struggle against climate change. In terms of the environment, US withdrawal would undermine international consensus and commitment to reduce greenhouse gas emissions (GHGs) to net zero in the second half of the century. Most Americans and, according to surveys, 80 percent of young people think the federal government should address climate change opposing the impending Trump withdrawal. Many are promoting the proposed “Green New Deal,” a comprehensive legislative package introduced by Rep. Alexandria Ocasio-Cortez, the popular New York Democrat and Socialist.

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

Chris Egbuna ment Area, built by Nigerian business mogul, Cosmas Maduka, an indigene of Anambra. Constructed by Coscharis Farms, a subsidiary of the Coscharis Group which Maduka controls, the $35 million facility was recently inaugurated at a colourful ceremony in Anambra attended by Nigeria’s Central Bank Governor, Godwin Emefiele among other dignitaries. Conscious of the need for adequate security of lives and property, the state government has deployed advanced technology to support its “Think Home” policy and to create confidence among investors. The recent launch of the second phase of Operation Kpochapu (or Operation Wipe Out Crime), saw the deployment of super smart surveillance cameras from Industrial Video and Control in Boston, Massachusetts, USA, under the supervision of indigenous experts. With critical infrastructure being put in place, such as the rehabilitated and upgraded Onitsha inland water port, the proposed export cargo airport, high quality road network, implementation of the 50-Year Development Plan will not only witness a smooth take-off but achieve the objective. As Igwe Sir Kris Onyekwuluje of Umunya in Oyi local government area observed, the vision 2070 will project Anambra the world best tourist attraction. “Obiano is not just a leader, but a visionary leader with lofty ideas to transform the nation. He is planning for tomorrow which success is determined today. By this Vision, he has projected Anambra to the global map.” Egbuna, a developmental economist, lives in Nnewi.

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Tuesday 28 January 2020

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

MARKETS

Foreign inflows to Nigerian stocks fell to year low in December OLUFIKAYO OWOEYE

n December, foreign inflows into Nigerian stocks fell to the lowest for the year, according to the monthly report for December released by the Nigerian Stock Exchange (NSE). The report showed that total foreign inflows into the equities market plummeted from N33.59bn in November to N21.69bn in December, the lowest in the year. Following the Central Bank’s restriction of locals and non-banking corporates from participating in the highyielding OMO auctions, foreign investors shifted their focus from the volatile equities market to high returning OMO bills. During its last MPC meeting the apex bank pulled a rabbit out of the hat with a strong hawkish tilt, by raising the CRR by 500bps to 27.5percent from 22.5percent to curtail liquidity build up in the market and hopefully reduce liquidity induced inflationary pressure. The sale of OMO to FPIs is maintained at a relatively competitive rate as a strategy to preserve the external reserves and keep exchange rates stable. The Cash Reserve Ratio CRR is the share of a

bank’s total deposit that is mandated by the CBN to be maintained with the latter in the form of liquid cash. According to the NSE report, as at 31 December 2019, total transactions at the nation’s bourse decreased by 25.84percent from N172.52 billion in November 20195 to N127.94 billion in December 2019. The performance of the current month when compared to the performance in the same period (December 2018) of the prior year revealed that total transactions increased by 1.65perc e nt. In D e c e mb e r 2019, the total value of

transactions executed by Domestic investors outperformed transactions executed by foreign investors marginally by 2percent. The total domestic transactions decreased by 24.44percent from N85.76 billion in November to N64.80 billion in December 2019. Similarly, total foreign transactions decreased by 27.22percent from N86.76 billion to N63.14 billion between November and December 2019. Total foreign transactions decreased by 27.22percent from N86.76 billion to N63.14 billion between November and December 2019.

L-R: Olabanjo Alimi, corporate development lead, Enyo Retail and Supply; Mayokun Fadeyibi, vice president, consumer business group, Cars45; Fernando Madiera, chief financial officer, Enyo Retail and supply, and John Egwu, vice president, supply chain management, Cars45, at the opening of Ogolonto car centre powered by Enyo and Cars 45 in Lagos. Pic by Olawale Amoo.

The value of domestic transactions executed by institutional investors outperformed retail investors by 24percent. A comparison of domestic transactions in the current and prior month (November 2019) revealed that retail transactions decreased by 24.03percent from N32.21 billion in November 2019 to N24.47 billion in December 2019. Similarly, the institutional composition of the domestic market decreased by 24.71percent from N53.55 billion in November 2019 to N40.32 billion in December 2019. In the last thirteen

years, domestic transactions decreased by 72.30percent from N3.556t in 2007 to N985bn in 2019 while foreign transactions increased by 53.08percent from N616bn to N943bn over the same period. Total domestic transactions accounted for about 51percent of the total transactions carried out in 2019, while foreign transactions accounted for about 49percent of the total transactions in the same period. However, the equities market has regained its mojo since the beginning of trading this year buoyed by the current abysmal rates on

sovereign bonds and government short-term debt instruments often called treasury bills, investors are left with no other option than to seek alternative assets classes to invest their funds, and it appears the equities market is now the logical destination of any discerning investor. As at the close of trading last week, the NSE All share index had gained 10.38percent. Other indices have also returned positive year-to-date with the exemption of the consumer goods index and oil/gas index which was down by 5.87 percent and 3.08percent respectively.

L-R: Adesina Akinwunmi, president, African Development Bank; Vice President Yemi Osinbajo; Joseph Obayemi, national chairman, Redeemer’s Men Fellowship, and Charles Kpandei, pastor in charge, Lagos Province 11, Redeemed Christian Church of God, at the Redeemer’s Men Fellowship Lagos Regions Inspiration Conference 2020 themed ‘Galvanized for Geometric Growth’ in Lagos.

Tuesday 28 January 2020

BUSINESS DAY

COMPANIES&MARKETS

OIL&GAS

Lagos state partners Ibile Oil to deepen availability of gas skid plants DIPO OLADEHINDE

o deepen penetration of Liquified Petroleum Gas (LPG) or cooking gas in the country, Lagos state government has agreed to partner with Ibile Oil and Gas Corporation in making sure the product is available at strategic skid plants. LPG Skid plant is a Modular LPG cylinder refilling plant that only requires that you fill the tank and connect to electrical service and it’s ready for production. Skid type LPG cylinders refilling plants have almost the same features as the stationary type refilling plants. They are ideal solutions when entering and testing new markets or when rebuilding or renovating existing plants. Speaking at a Lagos State executive and stakeholders LPG workshop at Nigeria’s commercial capital, Governor Babajide Sanwo-Olu said efforts are underway to reduce the carbon footprint in the state by improving access to the commodity. Sanwo-Olu, who was represented by the State’s Head of

Service, Hakeem Muri-Okunola noted that a high margin of the state’s population still depends on dirty fuels, adding that his administration seeks to fast-track the adoption of biofuels. According to him, the Ministry of Energy and Mineral Resources and Ibile Oil and Gas Corporation will partner in deepening LPG adoption by making sure that the product is available at the strategic skid plants and at an affordable rate. He cited the recent fire incidents in the State as one of the reasons for increasing awareness on the proper use of the commodity as well as the need to raise standards of LPG activities in the State. The State’s Commissioner for Energy and Mineral Resources, Lere Odusote stated that his ministry is trying to change the narrative about LPG use in order to increase penetration from the present 15 percent to 80 percent by in the next five years. He noted that per capita consumption remains very low at 0.58kg in the country despite its huge gas reserves.

Program manager at National LPG cylinder expansion programme, Dayo Adeshina said, with Lagos State accounting for at least 60 percent of LPG distribution in the country, efforts should be geared towards deploying the product to transportation, power generation and householdsthanthepresentlevel. He also added that ownership of LPG cylinders is expected to change by the third quarter of this year, once the proposed re-certification of the cylinders commences. Adeshina said that the government would also continue to support the LPG industry with fiscal policies and incentives to enable the actualisation of its target of five million metric tonnes of LPG consumption by Nigerians in 2023. He explained that cooking cylinders ought to be recertified periodically, adding that the average life span of a cylinder was 15 years. “Most cylinders in circulation are either old (expired) or substandard; most LPG storage tanks installed are not certified,”

L-R: Oluwagbenga Magbagbeola, MD, ARM Securities; Ahmed Lawal, head, financial advisory, ARM Group; Funmi Ekundayo, MD/CEO, STL Trustees Ltd; Sadiq Mohammed, DMD, ARM Group; Babajide Osunkoya, partner, Abax-OOSA, and Jide Ogundana, partner, Austen Peters and Co, at the signing ceremony of the ARM Fixed Income and Euro Bond Funds held in Lagos recently.

Group head, LPG, Standards Organisation of Nigeria (SON), Nwaoma Olujie, said in his presentation titled “The Role of SON in the LPG Sector.” On the Health Implications of using dirty cooking fuels, Orode Doherty, a doctor, and founder of Ingress Health Partners said indoor and outdoor air pollution from cooking with kerosene, charcoal and firewood causes cardiovascular disease and lung diseases including asthma, bron-

chitis and pneumonia which is the largest disease outcome from air pollution worldwide. Doherty noted that dirty cooking fuels causes cancers of the aero- digestive tracts and other eye diseases such as cataracts and blindness. Speaking on the impact of LPG as a major contributor to emission reduction, Uzo Egbuche from Nigerian Economic Summit Group (NESG) said LPG led low emissions growth can led

to emission trading programs (or carbon markets), harness the power of market forces to reduce GHG emissions and spur investment into innovative technologies. “LPG led low emissions growth can led to funds in excess of $23 trillion which can be accessed however, a National Emission Trading Scheme, a robust MRV system is required to achieve that,” Egbuche told the audience.

Tuesday 28 January 2020

BUSINESS DAY

Media business Agencies to focus on business consolidation, eye new deals in 2020

Quickteller unveils ‘Everything is Possible’ campaign

Daniel Obi

he focus of small and big marketing communication agencies this year is to ensure they consolidate their business relationships but with eagle eye on possible new deals. The agencies may not give opportunity to their clients to begin to search for new partners for consumer engagement as many of the marketing agencies are prepared to show dexterity to sustain their trade relationship by being innovative, creative and surpassing the expectations more than they offered last year. Last year was particularly stressful for businesses in most sectors, but this year, many of the clients are expected to push for more market engagement for their products which will either allow them to leverage the services of the existing agencies or create opportunity for new deals with new agencies. Definitely, this year will open up stiffer competition among players in some key sectors of the economy such as banking, telecoms, and the FMCG sector, a communication expert told BusinessDay and what this means for brand

owners in these sectors is that they will need to do more on consumer engagement. Similar to South African economy, this year in Nigeria will be an epic fight for survival for many businesses as numerous socio-economic factors come into play that will further challenge their efforts, according to findings from a research published in Bizcommunity. This includes the ability to achieve greater levels of customer satisfaction in a bid to retain and grow their customer base and abysmal economic growth figures. This is the takeout from a

wrap up of the South African Customer Satisfaction Index conducted by Consulta during 2018/2019 which polled almost 35,000 consumers across nine different sectors to obtain highly scientific insights into the overall level of satisfaction of their customers – namely airlines, banks, clothing retailers, mobile telcos, medical schemes, municipalities, life insurers and short-term insurers. “These exacerbating socio-economic factors come at a time when businesses and in fact entire industries are grappling with immense dis-

ruption, and how to integrate technology, artificial intelligence and data analytics into existing business processes as enablers towards the ultimate customer experience while achieving crucial operational efficiencies. Many long-established brands are fast realising that new disruptor competitors come with the distinct benefit and agility of a new slate – they simply don’t have the outdated legacy systems, processes and mindsets to integrate into truly customer-centric ways of doing business”, the report said.

Enyo partners Cars45, unveil auto centre for customers Daniel Obi

nyo Retail and Supply, a fuel retailing company has strengthened its partnership with Nigeria’s largest digital vehicle trading platform, Cars45, to launch a world-class auto centre. The site, which is located at Ogolonto, Ikorodu was unveiled last week to provide consumers with superior automobile services and improve the auto service industry in Nigeria. This initiative is part of Enyo and Cars45’s commitment to customer satisfaction and providing efficient services in the Nigerian automotive industry. The unveiling of the auto centre will provide customers with

access to world-class automotive services including vehicle maintenance, servicing, inspection, sales, swap and other value-added services which strengthens Enyo and Cars45 long standing partnership. At the official launch of the centre, guests were excited with an exclusive car auction hosted by Cars45; and enjoyed free car services and diagnostics,

courtesy Vehicon. Commenting on the initiative, Chief Executive Officer, Enyo Retail and Supply, Abayomi Awobokun described the partnership with Cars45 as an extension of Enyo’s efforts to strategically position itself as a brand that not only provides fuel but also creates value for its customers across board. According to Awobokun, “Both organizations involved in this partnership are deeply invested in technology and customer satisfaction and it is only natural that we further our partnership to develop the currently fragmented automobile industry”. Also speaking on the partnership, Chief Executive Officer, Cars45, Etop Ikpe, noted

that the relationship is a strategic one aimed at helping the company to achieve its mission to build an ecosystem that enhances, enables and drives trade within the nation’s automotive sector. On his part, Corporate Development Lead, Enyo Retail and Supply, Olabanjo Alimi, said, “We recognize that there have been changes in the automotive industry in terms of automobile sophistication and parts, which has created a skills gap. We introduced Vehicon to cater to the new advanced mobility world – as customers now have access to excellent products and services for their vehicles. These services will now be available at the autoservice centre”.

BBDO emerges StanbicIBTC’s new creative agency

BDO West Africa has emerged as Stanbic IBTC Holdings Plc, a member of Standard Bank Group new creative agency. A statement said BBDO, whose appointment takes effect from January 2020, emerged as a result of

its performance in a pitch process which involved other creative agencies. Speaking on the selection of BBDO, Bridget OyefesoOdusami, Head, Marketing and Communications, Stanbic IBTC said in the statement “It gives me great pleasure www.businessday.ng

to formally welcome BBDO West Africa to Stanbic IBTC as the Group’s new creative agency. We look forward to a mutually beneficial relationship which will further propel the status of Stanbic IBTC Holdings PLC as the leading end-to-end provider

of financial services subsidiaries. Igbo Amadi-Obi, CEO, BBDO West Africa, said about the agency’s appointment: “We are excited to have emerged from a line-up of some of the biggest and most reputed agencies in Nigeria”.

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Daniel Obi uickteller, foremost consumer payment platform of PanAfrican integrated digital payments company - Interswitch - known for providing payment solutions, has launched a new campaign themed “Everything is Possible”. The campaign demonstrates the ubiquitous nature of the Quickteller platform. The commercials, are in two versions: ‘The Big Idea’ and ‘Possibility’. Both versions are in furtherance of the previous Quickteller campaign - “One less thing to worry about” – and reiterate the ease and universality of the Quickteller platform. The commercials deploy the use of humour and creativity to subtly drive in the point that on Quickteller, a user can pay for almost anything they can imagine. Speaking on the launch of the campaign, Olawale Akanbi, Group Head, Quickteller Marketing, highlighted the importance of transacting on a platform that provides a vast number of services in the digital payment space. He said: “It’s amazing to know that you can pay for almost anything on Quickteller. At Quickteller, we are committed to making all payments possible on our

platform. This is why we are continuously expanding the services available on Quickteller. From just a platform where you could transfer money, customers can now perform more transactions that speak to their lifestyle, businesses, passion and even their careers”. According to Akanbi, “This campaign illustrates the compelling point that Quickteller makes almost anything possible. Both versions of the campaign are a natural flow from the previous campaign and consistent with our messaging that payments are easier and most convenient on the Quickteller platform. It is simply a visual metaphor for everyday payments made easy by Quickteller”. The commercials feature well-known celebrities like Bovi (a leading Comedian), Ini Dima Okojie (Nollywood actress) and Eric Omondi (a Comedian based in Kenya, who is one of the best comedians in Africa).

FairMoney signs comedian, ‘Broda Shaggi’ as brand ambassador Daniel Obi

airMoney, a mobile bank for emerging markets, has signed comedian and actor, Animashaun Samuel Perry, known professionally as Broda Shaggi, as brand ambassador. The deal is for an initial period of one year and will see Broda Shaggi collaborate with FairMoney to reach its grassroots audience. The comedian who is also a singer and voiceover artiste is said in a statement to have over three million followers on Instagram and came into the limelight for his humorous social media skits. Last December, Broda Shaggi featured in FairMoney’s influencer marketing campaign dubbed “The Friends Loan Test.” The reception the brand received from the association signaled that the comedian is a good fit. In the statement, Seun Oratokhai, FairMoney’s Head of Direct Marketing, expressed that both parties were pleased with the terms of the contract. ‘Broda Shaggi was an obvious choice following the interaction with consumers during the “Friends Loan Test” and @Businessdayng

the “No Excuses” campaign which launched last year. Our consumers and target audience also connected with him immensely during our roadshows and activations,’ Oratokhai said. ‘He is the face of our brand not just because he is funny and has a huge fanbase but because he represents the normal Nigerians that are our customers. In addition, like Broda Shaggi, FairMoney is a young brand that is rapidly growing in popularity,’ she concluded. FairMoney offers individuals and small businesses loans from N1,500 to N150,000 through its free mobile app available in the Google Play Store for Android users. FairMoney customers can also use the app to pay for value-added services including airtime and data and pay-TV subscription renewals with no transaction fees.

Tuesday 28 January 2020

BUSINESS DAY

ADVERTISING Financial Inclusion: Capricorn pushes for realisation with customer-tailored digital products At over 45%, the number of financial excluded adult Nigerians is high and this has negative impact on economic growth. However, bank authorities in collaboration with digital payment companies and agent banks such as Capricorn Digital Limited, CDL are pushing with introduction of products to reduce exclusion figure to 20% this year. Daniel Obi writes on the efforts towards achieving higher financial inclusion.

Financial Inclusion n 2012, Nigeria introduced certain policies to fast-track its economy which was growing then at average of 6% against 2.1% today. One of the policies was National Financial Inclusion Strategy launched by CBN in October, 2012. Prior to the policy, it was discovered that about 53.0% of adults were in 2008 excluded from financial services. The exclusion rate was high and its economic impact was negative. Basically, financial inclusion, according to economists “is the provision of a broad range of high quality financial products, such as savings, credit, insurance, payments and pensions, which are relevant, appropriate and affordable for the entire adult population, especially the low income segment” According to analysts, the importance of Financial Inclusion derives from the promise it holds as a tool for economic development, particularly in the areas of Godwin Emefiele, CBN governor poverty reduction, employment generation, wealth creation and among others. improving welfare and general Degbola Abudu, Managing standard of living. Director of Capricorn Digital LimFor instance, many Nigeri- ited, a technology-focused digital ans, 53% save at home and much distribution and payments commoney running into billions of pany explained to BusinessDay Naira circulates through the in- that the CBN Strategy articulated formal sector which has negative the demand-side, supply-side impact on the country’s growth and regulatory barriers to finanand development as the money is cial inclusion, identified areas of not accessed by wider populace for focus, set targets, determined key investment. performance indicators (KPIs) and In a report, Enhancing Financial established the implementation Innovation & Access (EFInA), a structure. financial sector development or“The Strategy defined a set of ganization that promotes financial targets for products, channels and inclusion amongst poor families enablers of financial inclusion. says “If 50.0% of these adults were The KPIs were defined, based on to save N1,000 per month with a the various dimensions of finanbank, then up to N138 billion could cial inclusion, including access, be incorporated into the formal usage, affordability, appropriatefinancial sector every year” which ness, financial literacy, consumer will be accessed as credit by entre- protection and gender”. preneurs for development. To further enhance the prosThe target of the CBN policy pects of financial inclusion in the therefore was to reduce the exclu- years ahead, CBN in 2018 signed sion rate to 20% this year to achieve MoU with the Nigerian Commueconomic growth, wealth creation nications Commission on digital and tackle poverty through access payment systems. to financial service by higher perThere were also collaborative centage of Nigeria’s adult popula- efforts between the CBN and Nition. geria Inter-Bank Settlement SysThe goal was specifically to in- tem (NIBSS) to create a regulatory crease adult Nigerians with access sandbox for innovative financial to payment services from 21.6% in services and there was partner2010 to 70% in 2020, while those ship between the Committee of with access to savings should Bank CEOs and the private sector increase from 24.0% to 60%; and to roll out 500,000-agent networks Credit from 2% to 40%, Insurance nationwide. from1% to 40% and Pensions from Agent Banking 5% to 40%, within the same period. Among the breadth of routes The major tools for driving the to achieve financial inclusion, it Strategy include Agent Banking, appears emphasis has drastically Know-Your-Customer Require- shifted in favour of mobile money / ments, Financial Literacy and Bank Agents in view of the fact that Credit Enhancement Programmes www.businessday.ng

Degbola Abudu, managing director, Capricorn Digital Limited

this brings financial services closer to the people and provides platform for offering simple diversified low cost financial services across the broad spectrum of excluded population in Nigeria, says Omotayo Oyetayo, COO of Capricorn Digital Limited. What makes agent banking where Capricorn as Super-Agent plays interesting and attractive to the low income to drive Financial Inclusion in Nigeria is that all CBN licensed agent banks in remote corners including every CDL Agent and Merchant is effectively a cashpoint that will be able to do the following:- Cash-In: Customers can transfer money to their loved ones, anywhere in the country, by bringing cash to agent locations. They do not need to go to a bank branch anymore. Cash-Out: Customers can collect cash at any agent location as if they were going to collect cash from a bank branch or ATM Account Opening: Customers can open new accounts at agent locations within minutes. Purchase/POS Services: Customers can use devices as a normal POS to sell their goods and services and receive money directly to their accounts. POS Withdrawals: Customers that have bank cards can use the devices to withdraw money at agent locations as they would from an ATM. Capricorn Digital Limited which has been in existence for over 4 years said it is creating a unique and stress free digital payments and distribution platform targeted at the mass market through the Baxi platforms. “As a business, we

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are dedicated to consistently delivering value to our clients through the use of our technology which is a safe, secure and easy way to complete transactions”, says Omotayo. We aim at simplifying the buying experience for the end consumer, providing speed, convenience, and confidence for the users. An important part of our value proposition is our technology platform, which can aggregate and integrate into a wide range of digital products and services and also serves as a means to empower the immediate community to access financial services (Financial Inclusion) As a digital company, the company has also introduced products ranging from Baxibox/POS, BaxiPay, B2B channels, and BaxiRIMS which essentially aligns its objectives and vision which is to have a retail presence on every street and a digital presence in every household in Nigeria. BaxiBox and BaxiPos are multifunctional android based devices, powered by Baxi’s payment solution with one-stop-shop software built with custom capabilities that enables an end-user to pay for a multitude of digital products and services including electronic airtime, data bundles, utility bills, pay-TV bills, money transfers, withdrawals and more. BaxiMpos is a pocket-sized point of sale device that performs the function of a cash register or a point of sale terminal when connected to Baxi’s mobile app. Baxi Pay is online payment platform that is accessible through website or mobile app. BaxiPay @Businessdayng

is one-stop-shop payment portal that enables the customer pay for a multitude of digital products and services including electronic airtime, data bundles, utility bills, pay-TV bills, money transfers and more. Baxi mobile app is technology platform on mobile device, compatible with android and IOS and with the aid of Mpos, customer can carry out ATM card transactions. The mobile App and Mpos work hand in hand. A B2B (Business-2-Business) service where through a relatively simple integration, clients, who have their own distribution channels (be it an agent network, a web portal and/or mobile app), can now distribute CDL’s full bouquet of digital products and services. It is expected that these products will assist to deepen financial inclusion mandate. Baxi Hero Campaign Basking on the successes of the existing Baxi platforms, Capricorn last week introduced the Baxi Hero campaign designed not only to create awareness about Agent Banking and the products in Nigeria but give merchants and customers a state of the art technology in mobile money experience. Oyetayo who said Baxi Hero Campaign will run across Nigeria said the company has created a one-stop-shop payment ecosystem aimed at providing everyday financial access and solutions to its agents and customers while creating core services that directly impact their daily lives. The adoption of a multi-channel distribution approach that includes these devices is tailored to meet the needs of a wide variety of stakeholders including agents, customers and corporate clients. Oyetayo said Capricorn Digital Limited (CDL) is a Super Agent licensed by Central Bank of Nigeria (CBN) and it is a member of the SANEF (Shared Agent Network Expansion Facility) program, a project powered by the CBN, Deposit Money Banks, Nigeria Inter-Bank Settlement Systems, Chartered Institute of Bankers of Nigeria, licensed Mobile Money Operators and Shared Agents with the primary objective of accelerating financial inclusion in Nigeria. Nigeria may not achieve the reduction in financial exclusion to 20% this year as mandated by CBN but it is appreciable that digital payment agents such as Capricorn and agent banks have made significant progress and impact in financial inclusion and creating awareness among the populace. What is important now is sustaining this push for necessary effect in the economy.

Tuesday 28 January 2020

BUSINESS DAY

Laura Baldwin: ‘Most hated employee’ who transformed the business O’Reilly Media boss believes she has created a company that can survive without its founder Patricia Nilsson

he pr int industr y was already in decline when Laura Baldwin became head of technology textbook publisher O’Reilly Media, but that is not why she describes the experience as the most difficult of her career. When Ms Baldwin became president of the company in 2011, she took over day-to-day operations from founder Tim O’Reilly, now 65, an entrepreneur and author who has spent the past 35 years promoting a more collaborative internet. “He is brilliant and iconic,” says Ms Baldwin, who is 56. But in her first months as boss, she learnt that many of the O’Reilly team did not rate her very highly. “Was Tim OK with this?” she would hear, as she set out on her plan to transform the company from a guidebook publisher and conference organiser to an online learning platform. “Does Tim think this is a good idea?” Faced with executives worried about the opinions of the company’s founder — who kept the title of chief executive although he no longer made dayto-day decisions — Ms Baldwin would flip the questions back at them: “Do you see how the market is declining? Do you think this is a good idea?” Print publishing, an industry that has slumped at pace with the internet’s rapid growth, made up about half of O’Reilly’s revenues at the time. Drastic change was necessary, Ms Baldwin explains. Under her watch, the company began investing in video tutorials and online training and “truly started becoming a learning organisation”. “I think it was so hard, because I wasn’t simply taking over and trying to make everybody feel comfortable,” she says, insisting her goal was not to just be different from her predecessor. “I was making massive changes because we had no choice.” O’Reilly had at the turn of the millennium partnered with rival Pearson to set up Safari Books Online, a digital library of textbooks. But until a few years ago, it was still reliant on the diminishing prospect of people buying physical books on the how-to’s of data science and programming. In 2014, Ms Baldwin set out to change that, buying Pearson’s share of their joint digital publishing business. Three years later, O’Reilly’s textbook sales website was closed and resources refocused on build-

I’ll be honest, there were people, even at senior level, whom I couldn’t bring along – Laura Baldwin

ing a subscription-based digital home for digital guides, tutorials and conferences. “That was a difficult decision. We shut down millions of dollars,” Ms Baldwin says. Yet it proved to be a good bet. The digital library that O’Reilly used to own with Pearson made $100m in revenues in 2019, up 35 per cent in four years. It now makes up half of O’Reilly’s sales, while the share from print publishing has dropped to a third. “The success matters,” Ms Baldwin says. “It was hard to go on saying ‘Laura is not doing the right things’ when revenue is growing, profit is growing and we are adding staff.” Allies were important to survive the early years, during which Ms Baldwin at times felt like the company’s “most hated employee”. The head of publishing was well aware of the decline of the business and offered her support, Ms Baldwin says. So did the person in charge of the O’Reilly brand, who recognised that the new president was trying to prevent its erosion. www.businessday.ng

Ms Baldwin could, however, not convince everyone. “I’ll be honest, there were people, even at senior level, whom I couldn’t bring along,” she says. Nevertheless, no executives left, not even “the ones who weren’t 100 per cent onboard for the first couple of years”. Before joining O’Reilly in 2001, Ms Baldwin served as chief financial officer at San Francisco-based publisher Chronicle Books, a title she also held at O’Reilly before her promotion to chief operating officer in 2005. Her background in finance has made Ms Baldwin a “linear thinker” who avoids sharing her opinion until properly researched and backed-up. “Then I put it on paper and let other people react,” she says. I’ll be honest, there were people, even at senior level, whom I couldn’t bring along Laura Baldwin Instead of dictating fully developed points of action, her management technique relies on transparent explaining. Many leaders forget to admit they do not know if their plans are going to work, she argues, and fail to make their staff feel part of the solution. This lack of ego also shows in connection to Mr O’Reilly maintaining the chief executive title. “I don’t really care,” she says. “I have spent my whole career in private management, and so I’m very aware that he is our owner.” That dynamic is, however, something that Ms Baldwin believes will change. “I feel that my job is to build a company that survives Tim,” she says, adding that some sort of “equity event” would open a lot of doors. “We don’t know whether the end

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game is going public or getting new investors, but we are working towards it.” Ms Baldwin compares Mr O’Reilly’s position at the company to that of a management board, although he still attends executive meetings “and I’ll ask him to come to certain strategy meetings, especially around technology.” The benefits of their close relationship includes Ms Baldwin being able to call “a man called the Oracle of Silicon Valley” whenever she has a question. But she did ask the founder to lie low for a while after the transition: “We needed a little bit of a break.” “People talk about Tim being a visionary, but I have other people who think like that too,” Ms Baldwin says, praising her employees. “When I first took over, my biggest fear was Tim O’Reilly being hit by a bus,” she says, explaining the company would be lost without him. “Losing Tim would of course be horrible, but I don’t have that fear any more.” The next few years, Ms Baldwin says, will be “really, really hard as technology is moving at the speed of light”. But she believes she has succeeded in her mission to create a business that can survive without its founder. “If something happens, this is a strong company, with a strong balance sheet, and a strong leadership team that goes well beyond Tim and me.” Three questions for Laura Baldwin Who is your leadership hero? Kathy Franzen was the CFO of Giorgio Beverly Hills while I was the company’s corporate cash manager. This was the mid ’80s, @Businessdayng

and it was definitely still a man’s world. I watched her navigate our all-male senior team with grace and dignity. She never deferred to the male leadership as I had previously seen women do in the workforce. Instead, she challenged them — which made them and everyone around her better. She gave me opportunities because she saw potential in my hard work. She elevated those that earned it. I learnt how to lead and grow talent simply by watching her. It was a gift. If you were not president of a company, what would you be? Much of my volunteer work has been for the benefit of my children’s schools. I truly love running charity and fundraising events that provide the funds schools desperately need to support learning programmes that help children adapt to our ever-sophisticated economy. If not president of O’Reilly I would absolutely dedicate myself to it full time. What was the first leadership lesson you learnt? Your people will only work as hard as you do, and leaders set the example more than they realise. I recall working in banking, and we had a Monday deadline for some contracts we were trying to close. I had a small team, and I left early on the Friday before our deadline. Even though I left instructions, my small team didn’t have the sense of urgency they needed. We missed the deadline and cost the bank a good amount of interest. It was awful at the time, but I’m grateful for having learned that lesson. To this day, I never ask or expect anything from my team that I’m not willing to do myself.

Tuesday 28 January 2020

BUSINESS DAY

Looking ahead: Xavier Duran says Alliance Manchester Business School is receiving more applications from the third sector © Jon Super/FT

The rise of the ‘sustainable’ MBA

Employers and students alike seek a greater focus on teaching responsible business Andrew Jack

avier Duran has noticed a change in the students applying for MBAs at Alliance Manchester Business School in recent years: a growing interest in sustainability and responsible business practices. “In the late 1990s, they came with a totally different set of expectations, when the MBA was a passport to jobs in consultancy, finance or banking,” says the director of MBA programmes. “Now, we find more and more applicants from the third sector who want business and management skills to mobilise in non-governmental groups and international organisations.” These themes are becoming more widespread. Alliance Manchester is one of more than 200 business schools that responded late last year to a call from the Financial Times to find institutions active in responsible business practices. It is one of 20 schools highlighted by a panel of external judges, chosen for its focus on sustainability teaching. Duran says a focus on sustainability reflects demand from students, business school ac-

creditation bodies and employers. “They are looking for slightly different attributes from our graduates. They want them to be more global, versatile, able to navigate uncertainty and trustworthy. Responsible business is good business too.” But there are divergent views over how best to teach responsible business practices and the potential trade-offs caused by their inclusion alongside more traditional skills. Also, should courses be compulsory or optional, integrated or offered standalone? Responsible Business Education At a time when campuses are under pressure to go green, MBA students want jobs with real social purpose. Read our special report. A number of business schools have launched specialised modules and bespoke qualifications. Presidio Graduate School in San Francisco teaches an MBA in Sustainable Solutions. The University of Otago in New Zealand offers a Master of Sustainable Business and Hanze University of Applied Sciences in Groningen in the Netherlands this autumn launches an MBA in www.businessday.ng

Purpose Economy. The University of Wales has an online MBA in Sustainability Leadership. Macquarie Graduate School of Management in Australia, also highlighted by the FT judges, has offered an online global MBA since 2018, including topics on sustainability. Its face-to-face MBA includes 73 hours out of a total of 400 focused on corporate social responsibility, ethics and sustainability. Megan Kashner, director of social impact at Kellogg School of Management at Northwestern University in Illinois, which offers 38 social impact courses to MBA students, points to longerterm pressures for change. A recent survey of incoming students showed nearly a quarter wanted a job focused on social impact after graduating, while nearly half wanted to do so later in their careers. “It’s easy to say millennials are pushing on sustainability because they care,” she says. “I’m not sure it’s so much more than for Generation X and Generation Z, but they are coming into their professional lives at a moment when the needs have never been more stark.”

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Students want purpose. There is a big shift that started for us three years ago and has really gone crazy in the last six months Ilian Mihov, dean, Insead The pattern is not limited to richer countries or to environmental issues alone. The Gordon Institute of Business Science at the University of Pretoria in South Africa offers a core responsible and ethical leadership course on its MBA and requires students to work on an applied business project focused on a social issue. Nicola Kleyn, the dean, says: “Given the levels of social inequality, poverty and structural unemployment in Africa, it’s not an abstract academic concept. It’s something right in our backyard which we have to think about all the time. Business is being asked to contribute to solving social problems.” Even at some prestigious schools which have traditionally focused on mainstream skills, responsible business education is taking hold. Ilian Mihov, dean of Insead in France, also singled out by the FT judges, says: “Students want purpose. There is a big shift that started for us three years ago and has really gone crazy in the last six months.” @Businessdayng

Mihov says that since 2017 the school has added more core offerings on topics such as business and society, public policy and ethics, touching on themes that include inequality, the environment and tax avoidance. “It is better to drive these issues into the curriculum,” he says. “If I create an MBA on sustainability, it will reach a selfselected pool of students which is already converted. That leaves a large group unaware who do not yet have a strong position. “I want to change the mindsets of people who are not yet ready, to get to the people going to McKinsey and Goldman Sachs who will help with that transition,” he adds. With such a wide range of courses and providers, fresh guidance comes from a new Positive Impact Rating, which polls current students. Backed by schools and business education bodies, its findings suggest that schools need to do much more to equip students with the sustainability skills they seek. The best schools embed the issues in their mission statements, governance and public engagement. A few symbolic electives alone will not be sufficient.

Tuesday 28 January 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

‘Key steps to trigger needed reforms in Nigerian education sector’ KELECHI EWUZIE

he Nigerian education over the years has grappled with several debilitating challenges that threaten it very survival. In the last couple of years there have been impressive efforts to improve the education delivery system. However, in spite of these silver linings, the dark clouds of poor quality input, process and output still rage. The pace of the recovery process needs to quicken. Peter Okebukola, Distinguished Professor of Science and Computer Education, Africa Centre of Excellence in Innovative and Transformative STEM Education, Lagos State University, Nigeria in a keynote address titled The Place and State of Education in Nigeria’s Development: Imperative and Urgency of Reform suggests possible way out. Improving performance on access indicators To improve access to basic and higher education, there are a number of possibilities. For basic education especially reduction in the number of out-of-school children by at least 75 percent, we need a combination of efforts with the acronym AIRRS- Awareness, Investment, Relevance, Reward and Sanction. There needs to be heightened awareness among communities where we have the population of out-of-school children especially where they are dense in the northeast geopolitical zone. On whose shoulders should the awareness-raising activity

Omoniyi Osuntuyi, (2nd left) President of Mathematics for Life Foundation; Godwin Chukwu, (middle) CEO Toncia consulting and Olabisi Ugbebor, (right) President, Nigeria Women in Mathematics at the 2020 Annual Mathematics conference and exhibition in Lagos

fall? State and local governments should carry the greater part of the responsibility with complementary efforts by federal agencies such as Radio Nigeria, National Orientation Agency (NOA) and the Universal Basic Education Commission (UBEC). The education offered to the out-of-school children will need to be relevant to encourage their parents and guardians to keep them in school. Relevance to religious sensibilities, cultural values and employment is of core importance to parents and the children. To the parents and guardians, of what value is allowing their children and wards to go to school if school will corrupt their religious beliefs and when the children finish school, are unable to earn money to take the family out of poverty? To ensure relevance, the curriculum should be tweaked to align to community needs and the

delivery offered in a way that knowledge, values and entrepreneurial and employability skills can be developed by the children. Improving access to higher education has a different formula. One component of the plan is to embark on massive upgrading of physical facilities in existing universities to take in at least additional 1,000 students per year. This will involve more classrooms, laboratories, workshops, library and offices. The university can, thereafter, proceed to enrol additional 1000 students during the next admission season. In ten years, a typical university would have added about 10,000 students to its baseline stock. Having added about one million spaces in ten years through the expansion project of existing universities, the second component of the plan is to add 500,000 more spaces through

a gradual increase in the number of universities. It is important to strengthen the National Open University of Nigeria to be able to take in many more eligible students in the region of about one million in ten years. Thus, in ten years, the Nigerian university system would have expanded to almost triple its present enrolment capacity. This will put a smile on the faces of seekers of university admission and bolster the country’s higher education participation rate. There is also the need to implement the recommendation of the 2002 National Summit on Higher Education, approved by the Federal Executive Council on the reintroduction of the Higher School Certificate (HSC). HSC will serve as the holding bay for the teeming products of the senior secondary school and the filter for the academically able students.

Mathematicians make case for evidence-based planning to improve national development

athematicians and key educationists have urged the government at all levels to embrace the culture of evidencebased planning for national development. They observe that any government planning without statistics would fail to deliver on her promises for the improvement of the welfare of the citizenry. Yemi Kale, Statistician General of the Federation says Government needs good statistics because they are part of enabling environment for development and census is of great value and population data are sine qua non for sustainable development. Kale while speaking in Lagos at the Annual Mathemat-

ics Conference and Exhibition 2020 organised by Mathematics for Life Foundation over the weekend said Population census exercises have had a history of enormous challenges in Nigeria which affects the credibility and usefulness of census data for informed decision making process In his presentation on the theme of the conference “The Mathematics of Census (Population, Planning and National Development) said that census should be seen as a planning instrument rather than political weapon and be made a priority in Nigeria in her quest for socioeconomic transformation and development. “A nation without accurate information about the population of its country would www.businessday.ng

always be wobbling in confusion with attendant effects of serious underdevelopment and abject poverty. “African countries are still underdeveloped because of failure to put in place effective system of vital statistics production,” Kale said. Omoniyi Osuntuyi, President of Mathematics for Life Foundation, said that the theme was reflecting on what was happening in Nigeria today in terms of population, planning and development. Osuntuyi said the Mathematics for Life Foundation’s mission is to educate every African, using mathematics as an innovative and unique tool in improving the quality of education at all levels. He opines that United Na-

tions said census population should be done every 10 years in all countries. “We discovered that Nigeria has not counted its people for 14 years now which can really affect our plan for the future. “Government needs to update the population statistics in every area so the country can plan and develop for the future.“Our foundation is really doing great in terms of improving Nigerian students academics, recently one of our students got the best WAEC and JAMB result in Nigeria. “We also developed teachers and give them basic information on how to teach mathematics so that students can be encouraged in learning mathematics in the simplest form,” he said.

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Higher

Human Capital

MOUAU clears Vice-Chancellor of sexual harassment allegation

he management of Michael Okpara University of Agriculture, Umudike (MOUAU), Abia State has cleared Francis Otunta, Vice Chancellor of allegations of sexual harassment levelled against him by a female staff of the institution. It disclosed that the allegation was a product of frustration and vendetta by the said staff because she was disciplined in line with the extant rules of the University. In a statement signed by the Registrar and Secretary to Council, Jacinta N. OgwoAgu, MOUAU declared that Otunta “at no time or place did harass physically or sexually the said Mbah as he has no need to do so”. The University was reacting to allegations of sexual harassment by Patricia Mbah as published in a National Daily, (not BusinessDay). It explained that Mbah alongside more than 100 other staff was recently “properly placed from her previous unmerited position in line with the approval given by the Council at its 21st emergency meeting in 2019 It also disclosed that Mbah’s salary was “suspended after she travelled abroad and absconded from her duties without due authorization. In line with the rules of the University, her immediate superiors reported her absence from duty”. The University wondered

why Mbah should resort to blackmail of sexual harassment simply because she was disciplined and properly placed as authorized by the Governing Council of the institution. The action of the Governing Council was informed by a deluge of petitions against the arbitrary and skewed promotions and appointments carried out by the last administration without regard to extant laws governing same which the Federal Ministry of Education directed the Governing Council to handle as infractions committed by the Hilary Edeoga administration”, the University averred. MOUAU, in the statement maintained that all staff under her employ must obey the rules in the University no matter how highly placed. “Except Mbah is no longer a staff of the University, she must subject herself to the extant rules governing her employment including promotions and discipline”, it submitted. The University however declared that the Vice Chancellor, Otunta is ever ready to defend his innocence “before any lawful and properly constituted body that either the Governing Council of the University or Federal Ministry of Education and our own Ministry of Agriculture may deem fit to set up to investigate the unfounded foundation”.

Ex-UI DVC, Aderinto to Present UI’s 482nd inaugural lecture REMI FEYISIPO, Ibadan.

he immediate Deputy ViceChancellor (academic), University of Ibadan Adeyinka Aderinto is to deliver the 482nd Inaugural Lecture of the Premier University. Aderinto, a Professor who becomes the first Criminologist to present Inaugural lecture from the Department of Sociology will speak on the topic “On the Fringe of Society”. The Lecture which is scheduled for Thursday 30th January at the Trenchard Hall of the Institution will be chaired by the Vice Chancellor, Idowu Olayinka. The renowned criminologist and Social problem expert has rich administrative profile having been subDean and Dean of the Post @Businessdayng

graduate School (now Post graduate College), Deputy Vice Chancellor (academic), one-time acting-Head of Department of Sociology, Lagos State University (LASU) during his sabbatical and currently, Head of Sociology of the Premier University. Aderinto who consults for many International organisations such as UNFPA and UNAIDS is also a Member of Osun State Health Rejuvenation Committee headed by Governor Gboyega Oyetola. The inaugural lecturer whose research interests span deviance, criminology, victimology and social problems is expected to unpack how his researches connect with the title and make policy suggestions that can help government at all levels navigate the stormy climate of rescuing those on the fringe of the Nigerian society.

Tuesday 28 January 2020

BUSINESS DAY

EDUCATION Top five online course platforms to explore in 2020 STEPHEN ONYEKWELU

earning management systems (LMS) that provide users with access to digital classes are leveraging the power of the internet to reach wider audiences. In many ways, these virtual courses are similar to offline classes. Through videos, images, text, audio and portable document format (PDF) and students follow along with the LMS software. Students take notes, perform exercises, and complete examinations to evaluate their mastery of the subject matter. The choice of which online learning platform to choose will depend on the student’s needs and budget. Below are BusinessDay’s top five picks inspired by a report published by Adam Efroy, an edutech expert. Skillshare Skillshare is a large marketplace focused on creative education. Topics include anything from graphic design and music production to fine art and cooking. They also have classes on more technical topics like data science, analytics, and ecommerce. Skillshare has over 24,000 lessons, more than 4 million students, and over $5 million paid to teachers. Each Skillshare class is 2060 minutes broken down into shorter lessons, plus projects

and a community discussion forum to connect with other students. The open discussion is very beneficial for their creative topics, as students can share their progress and get feedback from others. Skillshare also can help premium members with production, course planning, and can even help with online course creation at their studio in New York. Skillshare is free for creating a premium course experience. They pay instructors $10 for paid membership referrals and monthly royalties for each minute of content watched. They have a large user base of creators and entrepreneurs. If you are offering content that would be suited for a creative audience, Skillshare is a great platform to get noticed. Lessons on web design, email marketing, photography, painting, personal branding, and creative topics are the

Opportunities

wiss Government Excellence Scholarships for Foreign Scholars and Artists for the 2020-2021 Academic Year Each year the Swiss Confederation awards Government Excellence Scholarships to promote international exchange and research cooperation between Switzerland and over 180 other countries. Recipients are selected by the awarding body, the Federal Commission for Scholarships for Foreign Students (FCS). The Swiss Government Excellence Scholarships are aimed at young researchers from abroad who have completed a master’s degree or PhD and at foreign artists holding a bachelor’s degree. Types of scholarship The research scholarship is available to post-graduate researchers in any discipline (who hold a master’s degree as a minimum) who are planning to come to Switzerland to pursue research or further studies at doctoral or post-doctoral level.

most popular. Linkedin learning LinkedIn Learning (formerly Lynda) is another online course marketplace tailored to business professionals. With over 1,000 business courses on topics like project management, web development, and digital marketing, they are an excellent platform for working professionals looking to keep their skills upto-date. LinkedIn Learning They also offer certifications that you can add to your LinkedIn profile, showcasing your expertise and improving your online resume. Monthly fees tie to a premium LinkedIn membership, which is $29.99/month or $24.00/month if you pay annually. Udemy Udemy is one of the best online course platform marketplaces with over 24 million students, 35,000 instructors,

and unbelievable 80,000+ courses. The first step to creating a course on Udemy is to sign up to be a premium instructor. Once your account is approved, it is effortless to get started creating your courses. When creating your video content, keep in mind the material has to be at least 30 minutes long and contain five lectures. Another benefit to adding your course on Udemy is that you can easily promote your class inside their platform. You can use their marketing features to be included in sitewide discounts, be placed in their marketing emails, or join their affiliate programme with tiered commission rates. Udemy is free to use. They charge a 3% rev share for sales through instructor coupons, 50% for students who found your course through organic search (SEO), and 75% for

transactions made through paid search marketing efforts. You get access to a large user base. Udemy’s 24,000 users are all potential students who will pay for your course. But just because you’re on their platform, it doesn’t mean you’ll start raking in sales right away. You have to develop a strong marketing and sales strategy, much like a new e-commerce company, author, or real estate agent. It’s all about getting your name out there. They provide a substantial revenue share for tuition fees. Udemy instructors set their course prices and receive revenue at 100% of the tuition fee for new users and 50% for existing users. That’s a substantial commission on sales and a massive benefit to using their platform. Treehouse Treehouse is a relatively new marketplace that believes in the democratisation of education. Their platform is “committed to making education accessible to students of all races, genders, sexual orientations, and socio-economic backgrounds.” They feature 300+ technical courses on coding and development, over 50,000 students, and over 27,545 minutes of video (and counting). Treehouse partners with some big names, including Microsoft, IBM Watson, Amazon Alexa, and Google Developers. Treehouse offers a 7-day free trial. Then you can

choose from three different plans ranging from $25 to $199 per month. Their basic plan features on-demand courses, interactive practice sessions, and access to their online community. The pro plan gives you access to bonuses, beta features, and downloadable content. Coursera Coursera is a professional online course marketplace with virtual classes from some of the world’s best companies and universities like the University of Michigan, Duke, and Stanford. Instructors teach Coursera courses at some of the world’s top universities, take about 4-6 weeks to complete, and include video lectures, peer-reviewed assignments, and community discussion forums. Coursera is free to join, and you must be logged in to see pricing information on individual courses. There are three tiers of class offerings at Coursera. Main courses run on a subscription basis and cost $29-99/month. These take the standard 4-6 weeks to complete, and you receive an electronic course certificate upon completion. Specialisation courses are for mastering a specific career skill and cost between $39-79/ month. In these online courses, you tackle real business challenges with hands-on projects and more rigorous coursework.

Nine professors, 22 others inducted for Shell sabbatical, research positions

Research scholarships are awarded for research or study at all Swiss cantonal universities, universities of applied sciences and the two federal institutes of technology. Only candidates nominated by an academic mentor at one of these higher education institutions will be considered. Art scholarships are open to art students wishing to pursue an initial master’s degree in Switzerland. Ar t s cholarships are awarded for study at any Swiss conservatory or university of the arts. This scholarship is available to students from a limited number of countries only. Selection criteria The FCS assesses scholarship applications according to three criteria: Candidate profile, quality of the research project or artistic work, and synergies and potential for future research cooperation. Awards The FCS will announce its decisions regarding the new scholarship awards by the end of May at the latest. www.businessday.ng

hirty-one Nigerian academics and research interns including nine professors and four senior lecturers were recently inducted for a oneyear sabbatical programme and research internship in Shell companies in Nigeria. Drawn from 10 Nigerian and one British universities, the 31 participants are the highest in the 40-year history of the Shell Nigeria sabbatical programme, and the number represents 40 percent increase over the 22 intake for 2019 who

concluded their programmes last December. Igo Weli, General Manager, External Relations, Shell Nigeria stated that the annual sabbatical and research internship programmes continue to form key aspect of our effort to contribute to the development of higher education in Nigeria. “It is a mutually beneficial relationship in which Shell obtains specialised services from the professors and senior lecturers, while they, in turn, acquire industry experience

and exposure to new technologies that can be ploughed back to the university curriculum,” Weli said The academics and research interns are from the University of Ibadan; University of Benin; University of Port Harcourt; Federal University of Technology, Owerri; Niger Delta University, Wilberforce Island, Bayelsa State; Rivers State University, Port Harcourt; University of Calabar; University of Ilorin; Ladoke Akintola University of Technology, Ogbomosho; Nnamdi

From L-R: Uche Ogbu, head of Corporate Strategy, Greensprings School; Barney Wilson, deputy director of Education, Greensprings School; Lai Koiki, executive director, Greensprings School; Godwin Kienka, Renowned Tennis Instructor; Oluranti Bankole, head of Admissions, Greensprings School; Feyisara Ojugo, head of School, Greensprings School, Lekki campus; Jennifer Sunkami Quassim, principal Wider Curriculum, Greensprings School; Samuel Jesimiel, head of Physical Education, Greensprings School, Lekki campus; at the opening of the International Tennis Academy in Greensprings School, Lekki campus https://www.facebook.com/businessdayng

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Azikiwe University, Awka; and Manchester Metropolitan University in the United Kingdom. According to Weli, “The programme enables professors on sabbatical within the year to conduct researches in identified areas and share their findings with the company for application in the industry, while the research internship programme involves Master’s and Doctoral degree students who are offered one-year placements to acquire work experience in either SPDC or Shell Nigeria’s deep water company, Shell Nigeria Exploration and Production Company (SNEPCo), in addition to undertaking researches leading to the award of post-graduate degrees by their respective institutions. The Shell sabbatical and internship programmes help Nigerian academics and post graduate students to build industry knowledge and understanding in such fields as biodiversity, petroleum engineering, geophysics, environmental impact assessment, community and occupational health, oil spills remediation, social performance, and oil and gas exploration.

Tuesday 27 January 2020

BUSINESS DAY

FEATURE How Bike Hailing Industry is changing transport landscape in Lagos megacity JOSEPHINE OKOJIE

he advent of new technologies such as ridesharing platforms has revolutionised Nigeria’s transport sector, especially in the Lagos metropolitan. The traffic congestion in Lagos megacity has become a nightmare for commuters as they cannot easily move from one point to another in the state. But since the bike hailing service disrupted the Lagos transportation sector, Lagosians can now easily commune from one point to another. A decade ago, the concept of booking a motorcycle, on or off your phone, for short-distance travel was not a possibility in Nigeria. Today, it has become an everyday activity for working professionals and businessmen and women in Lagos – home to roughly 22 million people which could top to 30 million in the next 10 years, according to estimates by the state government. “The convenient mode of transportation using the bike hailing service has become an inseparable part of our lives,” said Timothy Okafor, a businessman who lives in Ipaja and has a store on the Island. Since the launching of the industry leading players such as MAX, ORide, and Gokada at various times between 2017 and now, the operators have provided a safe and secure alternative transport system in Lagos, allaying the common fears associated with regular motorcyclists known as “Okada.” One key impact is that bikehailing services have created a means for evading traffic congestion, which has increased in a fastgrowing city like Lagos, as commuters are now sure of reaching their destination within a specific time. Since the inception of these bike hailing services, public tales of traffic have subsided, as citizens who in time past would have been stuck with their traffic fate, now have fast and reliable options. Customers who have made use of any of the services have taken to social media in sharing the various ways the service has saved them time spent in traffic. Most of the operators are platform-based bike-hailing: companies that coordinate rides powered by robust technology infrastructures. Despite the differences in business models and the scale of their network, the impact of the operators on everyday Lagos Life is a common denominator. These include safe, secure and a more appealing motorcycle transport network, economic growth through jobs provision and access to key transportation insights through technology that city planners can leverage. For instance, MAXOkada which started bike-hailing with 10 bikes in May 2017, now runs the service with well over 1000 bikes, a testament

of the adoption rate by citizens. According to MAXokada, every trip is monitored with technology, allowing the operator to analyze all key metrics associated with the trip as well as the driver performance. This real-time line of sight into the key data concerning trips, such an as speed of driver, how the driver used his brakes, and complying with traffic signs provides continuous feedback for improvement and action by the operators. Another operator is Gokada. It says it has empowered over 2,000 drivers who were earning averagely N30, 000 monthly as dispatch riders and barely N3, 000 daily as Okada drivers. Now the average Gokada driver earns N10, 000 daily and has raised their standard of living by over 100 per cent. Adetayo Bamiduro, Chief Executive Officer (CEO), MAX.ng, attributed the growth to the ability of technology-enabled transportation hailing providers to offer convenience to consumers, where one can get a ride within five minutes anywhere in town. In the last three years, leading startups within the space have grown rapidly, demonstrating unquestionable adoption by Lagosians, as they provide access to a faster option, to get around the many traffic bottlenecks. In recent developments, the operators have formed an allianceTransportation Hailing Alliance of Nigeria (THAN). This coalition of operators is for those leveraging technology within the motor-taxi industry in Nigeria to ensuring safe, reliable and affordable transportation. The group is presently composed of the nation’s leading motorcycle operator MAX, ORide, and Gokada, with hopes to attract other aligned players in the immediate future. www.businessday.ng

The group’s goal as an industry is to drive public education on the importance of safety, responsibility of citizens, and to align quickly with the Government on an agreeable framework for the transportation needs of citizens in a fast-growing megacity as Lagos. This includes partnering to deploy technology infrastructure that helps the government achieve its broader vision of a smart city. Seun Alley, Director of Partnerships at Oride, a member of THAN, spoke on the reasons for forming an alliance. “There are three core reasons for the formation of the alliance. First, if you look at the proliferation of motorbikes in the city of Lagos, there is a need to challenge Lagosians to begin to demand more from motorcycle riders, such as high quality riders, ensuring that the riders are in the best state of

“

The convenient mode of transportation using the bike hailing service has become an inseparable part of our lives

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mind when they are riding, knowing that they can demand safety tools from riders, and more importantly should be able to make complaints when they are dissatisfied with the service they have gotten. So our first objective is to sensitize Lagosians that safety is their personal responsibility.” “Second, is also to begin to educate drivers that they have a responsibility to be safe and keep their passengers safe always. Sometimes, drivers put themselves under very stressful circumstances just in pursuit of their livelihood, without regard for their own personal safety. While we understand the need to make money, we believe that the drivers themselves need to be educated adequately on the importance of their personal responsibility for safety.” “Lastly, is in the area of collaborating with government to help achieve the status and vision of a smart city that it desires. And we know that technology plays an important role in the development of a smart city, which is the baseline competence of every member of this alliance. So for us, the alliance is about providing a common technology infrastructural support to the government based on insights from our ongoing daily business operations.” “We’re proud to be at the forefront of a sector that is changing exponentially and look forward to being a part of its continued evolution with our vision to empower drivers and improve the quality of life for countless citizens,” she added. Fahim Saleh, Founder and CEO, Gokada, another member of the alliance said that operators have invested and continue to invest huge resources in a technology-driven system of performance rating of drivers, training of drivers before @Businessdayng

they are on boarded on the platform, real time assessment of driver behavior, consistent communication with drivers, and disciplinary measures for erring drivers. In addition, operators also provide adequate safety tools and awareness as well as identity information on drivers that reduces security challenges drastically. More importantly is the use of technology that helps the government get more visibility into the operations of the industry as a whole, and helps with better city planning. THAN said safety is one of its prime concerns. In reinstating its stance in safety, Gokada launched G-medic, a rapid response service. G-medic was launched to help administer first aid to cases of accident and her victims before getting them to the hospitals for proper medical attention. In the same vein, the startup provided the Nigerian Police Force with a good number of bikes (30) to aid their operations. This is to encourage the force and ease their operations in ensuring that the city of Lagos remains safe. “As an alliance, we are also trying to self-regulate and ensure we can develop a unified disciplinary code across the board so that riders can know that whichever platform they jump to, their infractions are going to be treated similarly,” he said. In speaking to how well the group maintains regular interaction with the Lagos State government, Bamiduro said. “From time to time, we are carried along in developments in the transportation sector by the Ministry of transport, as well as areas of improvement the ministry wants us as a whole to improve upon. We have had interfaces individually with Mr. Governor, and at his instance had interface as a group with the Senior Special Adviser on Transportation.” “The reasons for our engagements have always varied, sometimes regulatory, sometimes advisory, and other times we are basically just seeking the Government’s support,” he added. He said the operators in the alliance are diligently tackling trust issues for bike riders and passengers through a feedback mechanism and other measures that enhance trust. He also added that what the alliance requires is partnership with the public sector to ensure the services they provide work for people of all ages, incomes and mobility needs. According to him, there is no one solution to solving transportation woes, adding that a multimodal system is necessary. He said a mixture of multiple transportation modes that allows urban mobility in a city like Lagos to reach its full potential will include motorcycles and other forms of transportation. Therefore, all hands must be on deck to ensuring their safe, secure and reliable operations.

Tuesday 28 January 2020

BUSINESS DAY

property&lifestyle Property investment: What the market holds out for buyers, investors in 2020 CHUKA UROKO

or investors and prospective home buyers, the property market presents a mix of hope and concern in 2020. Clearly, the economy remains a source of concern and its growth in 2020 will depend on fiscal and monetary policies and prudent management of public debt, which currently stands at over N25 trillion. It is expected that disposable income in the new year will be affected by oil prices, difficult but necessary economic decisions taken by the current administration, or a mix of both. In spite of the expected positive impact of the Finance Act on real estate sector, it is feared that the increase in value added tax (VAT) might not be the best solution to generating revenues, but an adjustment in the exchange rate. There are, however, some things for property buyers and investors to take away from the market. Land administration is one. It is key, considering its strategic importance as a factor of production. A recent report by Northcourt Real Estate notes that towards making land administration effective, a number of states have begun implementing the Systematic Land Titling and Registration as part of a broader plan for growing investment. The use of technology in land administration is paying off in states like Edo and

Anambra and other states are considering the adoption of same. More registered titles being issued in shorter time frames means opportunity for long term investment especially in states outside the leading cities of Lagos, Abuja and Port Harcourt. In the residential segment of the market, there is hope for home buyers. Modular construction is contesting to be the future of building construction. The benefits over traditional construction are huge and these include lower costs, accelerated schedules, greater predictability of both time and cost, and improved building quality. In all of these, the buyer gains in terms of low house price. Ayo Ibaru, COO at Northcourt, notes however that the modular supply chain is promising, and benefits of the approach are largest where there is a degree of repetition well beyond individual, large projects. “Industry fragmentation, a one-off approach construction projects, and a ready supply of manual labour kept the need for productivity improvement below that of other industries,” he says. Expectation is high that in the new year, landlords with large room developments (4+) near the city centres will turn to co-living and more flexible payment plans to compensate for the state of the economy and the earning capacity of the individual. “Since 2017, there has been huge demand for real

estate from Nigerians in diaspora and this is expected to increase in 2020,” Ibaru predicts, saying, there will be products designed specially to attract diaspora investment. Locally, financial institutions are launching products that will enable renters make quarterly payments. 2019 was particularly a very difficult year for the real estate sector. It was worse for the commercial segment of the market where over-supply and rising vacancy rate diminished return on investment. Research into Global Real Estate Benchmark Indices as it relates to Nigeria’s commercial real estate market show an average yield of 3.4 percent for foreign direct commercial real estate investment. This falls short of the global benchmark of 5.7 percent. But major market players are optimistic.

“Yes, there is recession in the sector but transactions are still happening; people are buying or renting houses; new businesses are coming up and taking office space; so there is hope for investors,” said Frank Okosun, CEO, Knight Frank Nigeria in an interview. Ibaru explained that the drop in the average yield was because the growth in rental value of the properties was not commensurate with the high capital growth rate of 16.5. Again, the performance of FDI in Nigeria’s commercial real estate sector compared favourably with the global benchmark given a higher 10-year annualised capital growth rate and mean total returns for FDIs. One aspect of the commercial segment where the market holds out hope for investors is the co-working

spaces where supply is rising to meet up with demand and, according to Ibaru, the growing population in the CBDs will accentuate the demand for well-maintained multilevel parking facilities mixed with retail facilities. But, he said, “high vacancy rates are expected for Grade A offices, at least until a firm direction for the economy (and the currency) is determined. Landlords will need to be flexible and accommodating of tenant’s preferences to keep vacancy rates manageable.” Oo for In retail, there is hope also for investors. Having tested the mid-range sized mall concept through such retailers as Blenco and Ebe Ano in Lagos, investors are warming up to this development type, but they need to add strong entertainment features for good measure.

Here’s what experts say government should do to ease real estate business CHUKA UROKO

hough it is often said that government has no business in business, a close look at the business and economy of any country like Nigeria shows that government has a critical role to play, experts have said. A reason frequently cited for low foreign direct investment inflow into Nigeria, especially into its real estate sector, is ease of doing business which, investors say, is grossly lacking in the country. A real estate investor, local or foreign, would like to invest in an economy where he does not have to spend eternity or break the bank in order to perfect title documentation and obtain construction permit which are policy and regulation issues handled only by the government. “As a developer and foreign investor, the first things I look out for before making investment decision in any economy are government

policies, regulations and enforcement because I believe these are the things that will make my business ease and profitable,” said Mustapha Njie, CEO, Taf Africa Homes. Njie spoke at the 5th edition of the International Real Estate Federation (FIABCI) Nigeria’s conference in Lagos last Friday. The conference had as theme, ‘Ease of Doing Business: Real Estate Perspective’. He was very particular about enforcement, explaining that there could be good policies and regulations, but without enforcement, they might not make any meaning. Land remains critical in real estate business and, according to the experts, efficient land administration and exploitation are the main determinants of ease of doing real estate business, noting that real estate is a basic element of economic growth because it incorporates land and labour which are major factors of production. “A country that has successfully traded its land and

labour is said to be a developed economy,” explained Elena Panariti, CEO & Founder, Thought for Action, in her keynote address at the conference. Panariti who is a former World Bank Economist, said that in ease of doing business, it has to be understood that real estate is key, adding that for any reform in the sector to succeed, there should be an element of trust by those the reform addresses. Though Lagos State is a reference point as a state where government has done well in addressing the time and cost of registering property and obtaining construction permit, the experts said there was still room for improvement. “The state says it has reduced cost and time of property registration to 3 percent and 90 days respectively, but you cannot get your registered title in 90 days. It takes longer than that. Again, the state’s survey department does not help matters. They need to do something about that,” said

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Joe Akhigbe, FIABCI Africa region president. Before now, Nigeria lagged behind its African peers including South Africa and Ghana in ease of registering property and obtaining construction permit. The country had also been ranked 171, 62, 140 and 187 out of 189 economies in ease of dealing with construction permit, protecting minority investors, enforcing contracts and getting electricity respectively. But now, there is light in the tunnel. According to Jumoke Oduwole, Special Adviser to the president on ease of doing business, with the on-going reforms being championed by Presidential Enabling Business Environment Council (PEBEC), the country’s business environment has improved significantly. She said the country’s business environment has been improving in the last three years, from 2016 to 2019. “We now have a number of state governments, spear-headed by Lagos State, who are revo-

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lutionizing and decentralizing different procedures using automation and delegation of powers in making sure they deal with property registration and construction permits,” Oduwole said. The special adviser, who spoke at the conference, noted that there was no better time to be in real estate than now. She explained that the new Finance Act of 2019 provides for tax-neutral REITs, thereby taking care of the problem of double taxation that investors complained of. “What is happening in Lagos is being replicated across the country,” she said, citing Kano, Kaduna and Enugu states where efficient land administration was promoting ease of doing real estate business. Continuing, she said, “if you look at the reforms that are taking place, you see automation and reviews in processes and access to information; automation is being used to ensure there is reduction in time and cost of registering property,” she said. @Businessdayng

Cleaning: The challenge for facilities managers

ne of the primary goals of an effective facilities manager is to ensure the buildings and building systems provide a clean and positive environment for occupants and end users. This is one of the building maintenance goals Ensuring a built environment is clean and healthy can be one of a facilities manager’s most challenging tasks. Although many aspects of the work create cleaning challenges, one in particular is that floors, walls, or other surfaces may look clean, but upon further investigation, they may not be clean and healthy at all. Highly experienced cleaning professionals and facilities managers have learned this fact over the years in a variety of ways. For instance, a surface thought to be clean would be swabbed and analyzed to uncover scores of germs and bacteria living on those ‘clean’ surfaces. Another obstacle in their effort to provide a clean and healthy facility for building occupants is the fact that germs and bacteria may be present on unexpected surfaces. In a study conducted in Europe, researchers tested the restroom walls, floors, and counters surrounding or near electric hand dryers and paper towel dispensers. The samples were then analyzed in a laboratory and their findings were that: • Surfaces were most frequently covered with pathogens (a pathogen in the oldest and broadest sense is anything that can cause a disease) found in vast areas surrounding the dryers. • Around the warm air dryers, pathogens were found but in lesser amounts and more limited areas. •Where paper towel dispensers were installed, pathogens were still found but in even smaller numbers and areas closer to the dispenser. There are several points for facilities managers to know about this study. The first one is that the electric hand dryers are not the culprit, the real problem is the fact that many people still do not adequately wash their hands. Pathogens left on the hands after washing become airborne when the electric hand dryers are used. The second point is the importance of knowing not only where pathogens are located, but the scope of the region they may cover including surrounding surfaces. The next step is what facilities managers and cleaning professionals should do with this information. The first thing is they must realize that walls, counters, even floors are considered ‘touchable’ surfaces. It is estimated that building users have many direct and indirect contacts with floors every day and because they can touch these potentially contaminated surfaces and then spread pathogens to other surfaces and other people, proper and effective cleaning is the only answer.

Tuesday 28 January 2020

BUSINESS DAY

property&lifestyle Gravitas commences infrastructure construction on Gracefield Island CHUKA UROKO

ravitas Investment, developers of Gracefield Island, has commenced construction of roads and roads furniture that will interact with one another on the new city’s IT infrastructure platform. The roads and roads furniture will also interact with one another on the city’s utility chambers to accommodate electricity cables, optic fibre for telecoms, pipes for water reticulation, and concealed drainage channels. The interaction will also be on dedicated cycle lane, pedestrian pavement and crossings designed to enable both old and young , able-bodied and ‘differently abled’ to cross roads with ease. Gracefield Island is a new city development that

is benefitting from the new urbanism initiative of the Lagos State government. The city, which is planned to sit on 100 hectares of land reclaimed from the lagoon, is in the league of Eko Atlantic City and Orange Island. Gracefield is a luxury island development, projected to be the first of its kind in Nigeria. It promises opportunities to live in luxury houses, work in ultramodern office complexes, shop in the best shopping malls and play in the most exquisite tourism centres. Located at the end of Chevron Drive in Lekki, just 900 metres off Lekki-Epe Expressway, the island will be connected to Lekki by its own highway and will provide not only a serene atmosphere for residents and a conducive environment for commercial entities, but also fabulous opportunities for investors. It is expected that the new city will be the first of

its kind in Nigeria. It will be self-sustaining for its workers, residents and investors, in addition to the many tourists it will attract due to the harmony of its design with nature. Some of the facilities planned for the island include a fire station, a public library, a police station, parks, a marina, schools, office complexes and shopping malls. Olufemi Babalola, Gravitas CEO, describes the development as a fundamental positive shift in new city development and real estate construction, explaining that Gracefield is designed and being implemented to be eco-friendly, ensuring sustainability in all aspects. “This city is conceived to be delivered as a truly live, work and play environment, offering premium lifestyle to match any other prime development in the world while its residential area is

designed to have premium properties on substantial plots. “There will be varieties of house-types ranging from condominium to terrace houses and single household units, constructed to world class standard, and offered at reasonable prices,” he says. The commercial area will have an upscale shopping area suited to serve the development, just as the business park will offer purposebuilt office environment to generate the vibrancy and orderliness necessary for wealth creation centres. Babalola says there is plan in place to control carbon emission on the island; ensure recycling is an integral part of waste management and that pollution of the lagoon environment is avoided. To further avoid pollution, walking and cycling will be encouraged as means of transportation on the island.

What expats think about living, working in Lagos, 3 other cities CHUKA UROKO

hen InterNations undertook the analysis and ranking of 82 cities around the globe in the Expat City Ranking 2019, it featured four African cities including Nairobi, Johannesburg, Cape Town and Lagos. According to the ranking, Nairobi was ranked 45th out of 82, Johannesburg, 59th, Cape Town, 65th while Lagos, Nigeria, was ranked 79th, landing it in the bottom 10 cities. Lagos was only ahead of Milan, 80th; Rome 81st, and Kuwait City, 82nd. Looking at the five areas of expat life considered which included quality of urban living, getting settled, urban work-life, finance & housing, and local cost of living, it is not difficult to understand why the odds were against Lagos. Despite its large-size economy, the largest and 7th largest in West Africa and the world respectively, Lagos remains a very difficult city to live. The stress level for residents of this most populous city in Africa is legendary. As per the quality of urban living and the urban work life indices, Lagos and its co-travelers made the bottom 20 cities worldwide. But they perform slightly above average in terms of getting settled, finance and housing, as well as the local cost of living.

Expat City Ranking noted that quality of urban living, getting settled, urban work-life, finance & housing, taken together, make up the ranking and also reveals the best and worst cities to move to in 2020. If more expats are not coming to Lagos in 2020, it may be because those already here are unhappy with the local transportation arrangement, for which the city was rated among the worst cities in the world. Congestion and gridlock are major features of Lagos. Bad roads infrastructure clogs movement in the city and motorists residents generally spend quality man-hours commuting to work on daily basis With this, they voted the Nigerian city as the worst city in the quality of urban www.businessday.ng

living index. Aside from the transportation mess, expats also ranked the state low in terms of political stability and safety. “There is no safety,” says a Russian expat, “and no proper public transport is available”. According to the report, more than half of the Lagos’ expat community rated the local economy negatively and 37 percent of them are unhappy with the local career prospects. On the flip side, they also ranked Lagos as one of the top 5 cities worldwide where you can make friends and have a liveable social life. In Nigeria generally, life is miserable and the misery index is high. Misery lives and thrives in many Nigerian homes which explains the protestation, in many quarters, that the recent

ranking of the country as the 6th most miserable country in the world is incorrect because, given the reality on ground, the country ought to have been ranked number 1. Steve Hanke, an economist from John Hopkins University, United States, in the 2018 Misery Index report, ranked Nigeria among the top miserable countries of the world, c i t i ng u n e mp l oy m e nt, poor access to bank loans, among others. Unplanned cities and uncontrolled urbanization are major sources of misery in Africa as a whole and Nigeria in particular. Most cities on the continent are unplanned , leading to uncontrolled developments and emergence of urban slums which are the homestead of misery.

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Mass eviction in slum communities worsens Nigeria’s housing crisis ENDURANCE OKAFOR

igeria’s housing crisis may take a new turn as thousands of slum dwellers in the country which already has a deficit of over 20 million units were left homeless after mass eviction. Several residents of Tarkwa Bay, an island near the Lagos harbor, were left in panic and confusion on Tuesday last week when hundreds of navy personnel pushed into the community ordering them to leave within an hour. The men in uniform chased out the residents, then called in the bulldozers. A community leader, Dauda Musa, said he fled as the men fired guns into the air. “They demolished our homes,” he said, standing in the rubble of what was once home to 3,000 people down the coast from Lagos. Accusing some of the residents of vandalising nearby pipelines to steal crude, Nigeria’s navy said it had moved in to clear an illegal settlement, adding, “this operation was not conducted in secrecy,” naval commanderThomasOtujisaid. The thousands of displaced Nigerians have now added to the huge population who are faced with accommodation challenges. Millions of people who live in Nigerian cities find homes in the slum areas of those cities, whereas in the cities of Abuja, Lagos and Port Harcourt, the number of unoccupied houses in both public and private estates has increased significantly. Despite being blessed with large arable land, rich material resources, good climate and many others, checks by BusinessDay revealed that more than 70 percent of Nigerian citizens live in want and woe because the commonwealth has been plundered by a small predatory few. Housing anywhere else in the world is a basic necessity, which in the order of human needs, ranks third after food and clothing but in Nigeria, the country with the most population in Africa, it is a luxury accessible and affordable by only the rich who constitute less than 10 percent of the country’s over 200 million population. Asides Nigeria’s large population, the nation with the largest economy in Africa has rapid urbanization, growing at about 3 percent per annum. The major cities of the country-Abuja, Lagos and Port Harcourt harbour a combined population that can compare with those of West African countries put together. The millions of slum dwellers are not the top priority for real estate development bordering on unaffordability, poverty, high cost of development, almost zero mortgage facility, and lack of updated policies @Businessdayng

which make homeownership difficult in the cities. “According to the United Nations, about 70 percent of Lagos residents are living in slums. So if this is the case, the government should re-engineer priority on slum dwellers. That should be the focus,” Rasheed Osinowo, Chief Executive Officer, Osinowo & Associates, and Assistant General Secretary, National Institute of Town Planners (NITP), Lagos State Chapter said. Citing an example, Osinowo said there are various housing schemes government is proposing, and some are completed. But on the average, it is unaffordable to the common man even though the government keeps saying they are affordable. “It is not affordable to the middle class, public servants and much more those who don’t have enough,” he said. Out of the 69.54million Nigerians reported by the National Bureau of Statistics (NBS) to have been gainfully employed as at third quarter of 2018, only 5 million of the total number earn a salary of N3 million and above per year, as compiled from data by Graeme Blaque Group, a Lagos-based advisory firm. This data put employed Nigerians who can buy affordable housing at only 7.19 percent, meaning that as much as 64.54 million people who earn less than N3 million cannot afford to own their own homes except of course there is an increase in their income level or support from government. “We found that less than 5 million Nigerians earn up to 3million a year and when we first brought out the data, a lot of people shouted, so when you put that into consideration and look at affordable housing; if I give you a house at zero interest rate for even 50 years, what type of house can you afford?” Zeal Akaraiwe, CEO of Graeme Blaque Group and member, Technical Advisory Committee to the Nigerian Senate queried. Nigeria’s housing challenge borders on insufficient stock that meets the demand of lowincome earners, low ownership level and lack of demand enabler in terms of mortgage or low-rate housing finance. According to the Association of Housing Corporation of Nigeria (AHCN), the underdevelopment of Nigeria mortgage sector in driving homeownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “The biggest problem of mortgage in Nigeria is the high cost of the very limited mortgage that is available. If they can develop a policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a real estate firm said.

Tuesday 28 January 2020

BUSINESS DAY

BDTECH

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‘Nigeria Data Protection Regulation can be used to fight cybercrime’ In the wake of the global celebration of the National Data Privacy Day, Nigerians seem averse to their rights especially with regards the government and industry stakeholders’ obligations on data privacy and protection, the need to avoid data breaches, abuse and misuse. In this interview with BusinessDay, Abimbola Adeseyouju, managing director, a frontline compliance solutions company and licensed Data Protection Compliance Organisation (DPCO) speaks on the unique essence of the data protection and privacy day, its role in helping Nigerians entrench their rights and the unified fight against cybercrime. Excerpts. The day was first celebrated in Europe in 2007. By 2009, the United States Government started recognising the day as National Data Privacy Day. What does this day mean to Nigeria? he day is set aside to raise awareness and promote privacy and data protection best practices. We are now in a digitised, globalised and technologically driven world. The commemoration of the day is to remind all operators and players within the digitalised world about their obligations on data privacy and protection and the need to avoid data breaches, abuse and misuse. The day is particularly quite significant in Nigeria. We are happy that Nigeria has now joined the rest of the developed world in recognising data privacy and protection as part of the fundamental rights of all Nigerians. The importance of having the Nigeria Data Protection Regulation (NDPR) issued by the National Information Technology Development Agency (NITDA) on the 25th of January, 2019 is that every citizen of Nigeria irrespective of wherever they reside all over the world is now guaranteed, data privacy as part of their fundamental human rights and can demand for justice any time this right is breached, abused or misused. So it is quite significant that Nigeria is joining the rest of the civilised world to celebrate the occasion and awaken the sensibilities of all Nigerian on what the Federal Government has done to protect their rights. This is indeed a plus on the part of the government, and it again, calls for a pat on the back. They have done well in this regard.

What is the role of DataPro Limited as a licensed data protection compliance organisation (DPCO)? The National Information Technology Development Agency (NITDA) in 2019 licensed Data Protection Compliance Organisations (DPCOs) of which DataPro Limited is one, to among other deliverables, evaluate the level of compliance to the NDPR by accountable institutions such as data controllers, data processors and some government agencies. The data protection compliance organisations are also expected to render services such as training and

Abimbola Adeseyouju

awareness programs, data protection impact assessment (DPIA), audit exercise, contents drafting and advisory services. In DataPro our core competences include advisory and compliance services on data protection, privacy policy formulation and communication, sensitization, training and capacity building programs, DPIA and annual audit. Could the Nigeria Data Protection Regulation (NDPR) be used to fight cybercrime in Nigeria? Yes. The NDPR (2019) is complimentary to the Nigeria Cybercrime Act of 2015. One sure way of combating crime is by apportioning effective, proportionate, dissuasive and commensurate punishment for offenders and those who go against the provisions of the regulation. The NDPR imposes both civil and administrative sanctions on violators and offenders. According to the NDPR provisions, any person subject to the regulation found to be in breach of the data privacy rights of Nigerians shall be liable in addition to any other criminal liability to: (a) In the case of data controllers/data processors dealing with more than 10,000 data subjects (such as IT companies, payment companies, fintechs, banks, insurance companies, etc) payment of the fine of 2 percent of annual gross

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revenue of the preceding year or payment of the sum of N10m whichever is greater (b) In the case of a data controller/data processor dealing with less than 10,000 data subject payments of the fine of 1 percent of the annual gross revenue of the preceding year or payment of the sum of N2m whichever is greater. According to the NDPR a data controller/processor means a legal entity (companies, organisations, government agencies excluding law enforcement agencies) who either alone, jointly with others or in common with others or as a statutory body determines the purpose to which data is processed or is to be processed. What also constitutes infringement under the regulation includes accidental or unlawful destruction of personal data, loss, alteration, unauthorised disclosure of, or access to, personal data transmitted or stored either manually in paper form or electronically/digitally. NITDA as the enforcer of the regulation also has right to set up administrative– panel to investigate allegation of breaches and can issue administrative orders to protect the privacy rights of all Nigerians. So every Nigerian is free to report any infringement of their personal data protection and privacy rights to NITDA for necessary remediation and action.

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How do you see technology companies evolve on the issue of data privacy and protection? Despite the long agitation for the right to respect of individual personal data, it took the coming of age of the computer revolution and the accompanying digitisation and globalisation of businesses and personal data to drive the awareness and put everything on the front burner. The tipping point seems to be the global Face-Book-Cambridge Analytical data scandal of 2018 when it was revealed that Cambridge Analytical a UK company had harvested the personal data of millions of people’s Facebook profiles without their consent and used it for political advertising purposes in many countries. This has been described by many as the watershed moment in the public understanding of personal data, especially with the clarion call for tighter regulations of technology companies use of personal data. So you are right. The tech companies are at the centre of the data protection and privacy regulation. What the NDPR (2019) has done is to provide clarity and consistency in the roles of data processors such as tech companies. They now have to provide transparent and easily accessible policies regarding notice of collection of personal data, notice of processing of personal data and the level of processing that will be entailed, and respect the rights of the data subject regarding to data retention and deletion. Under the NDPR, data subjects have rights to have access to the data you have on them. They have the right to have inaccuracies corrected, the right to have the information or data you have on them as an IT processing company completely erased from your system. They have the right to prevent you from using their personal data for direct marketing purposes without first seeking their consent, they have the right to prevent you from automated decision making and profiling them without their consent and they have the right to data portability/transferability. The NDPR also protects children and other vulnerable members (i.e the elderly and disabled) of the society. So if you collect information about children under this age of 13, you will need parent/guardian consent to process this data lawfully. So IT companies manag-

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ing personal data and information must focus on meeting the provisions of the regulation and ensure adequate and efficient data storage infrastructure, identify where personal data is located and try and build a consistent architecture to be able to track and monitor what becomes of the data. It becomes expedient that as soon as IT Companies process personal data; they will be held accountable for the use they make out of it. So they are expected to have data breach notification templates. How does the NDPR affect the digital marketing companies? Under the NDPR, digital marketers have to be transparent any time they wish to collect data from the public. It is a violation of the regulation to send unsolicited text messages to people. I need to first give consent if I want to be receiving any form of advertisement messages from an agency or not. This also applies when someone visits your company website and you want to use cookies to collect personal information. There must be provision for consent before you can collect my personal details online. So these are new responsibilities on the part of digital marketing companies in Nigeria and they have to obey the rules and regulations of the land. They now have to communicate very clearly that they want to collect people’s data and explain explicitly how the data is going to be used. They also have to inform Nigerians about their right to refuse or withdraw their consent for you to send them text messages or e-mail even if they initially gave you such consent. In addition, you can only collect data that is necessary for the intended purpose of the collection. For example during your data collection process if its only my name, telephone, photograph (yes pictures are also considered as part of what constitutes personal data) and email address you need for your research or advertising campaign, you do not need to collect my date of birth, sexual orientation etc. if they are not relevant as this conflicts with the provisions of the NDPR under the principle of data minimisation. So digital marketers now have to put the interest of their customer first and this is good news for all Nigerians.

Tuesday 28 January 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Nigeria’s era of digital banking and bankers without borders Adebola Balogun

our phone is smart because it can be used for practically anything; from shopping to driving, reading, banking, you name it. It wasn’t always so. Invented for communication in its purest form - making and receiving calls and sending and receiving Short Message Service (SMS), over the years the phone has evolved into something more, something smarter. This advancement in mobile technology has opened the global economy to opportunities. One sector that has been greatly impacted is the banking system, especially in the area of Agency Banking and Fintech, which has seen innovations such as mobile banking used to drive an inclusive financial sector. Nowadays all you need for banking transactions is a smartphone. Or in the case of Agency Banking, a simple feature phone like the MTN Smart. You can now conduct financial services via mobile wallets, payment apps, online lending and agent banking platforms such as the MoMo Agent, a financial services product belonging to MTN Nigeria’s subsidiary, the Y’ello Digital Financial Services (YDFS) Ltd. Judging by the successes recorded from these innovations, the MoMo Agent for example, several financial experts have predicted the demise of banks. Although this is arguable, the mobile and feature phones on the other hand will definitely play a continuous role in this banking evolution. This is possible on the one hand as a result of the advancement in mobile technology that has opened the financial services sector to other players other than the traditional banks, such as the telecommunications companies.

Two, Nigeria’s Central Bank has been supportive in its partnership with the telcos through the industry regulator, the Nigerian Communications Commission (NCC), in leading the financial inclusion drive in the country. In 2012 the CBN adopted the National Financial Inclusion Strategy (NFIS) to reduce the rate of adult Nigerians who are financially excluded from 46.3 percent in 2010 to 20 percent in 2020. Also, in 2013 the apex bank released the Guidelines for Agent Banking and Agent Banking Relationships, followed by the Operating Framework for Super Agent in 2015. Prior to these policies, the CBN had sometime in 2007 crafted the Payment Systems Vision (PSV) 2020, which it revised in 2018 through an MoU with the National Communications

Commission (NCC) that opened banking services to the telecommunications industry. In October 2018, the CBN published a guideline allowing for the establishment of Payment Service Banks (PSB); an offshoot of the PSV initiative and which are expected to leverage on mobile and digital services to provide financial services and enhance inclusion for the financially excluded segment, especially at the rural areas. Through the PSV 2020, the CBN aims to leverage the distribution networks of non-bank entities such as mobile network operators and others, to reach the financially excluded and bridge the inclusion gap. Considering that bank branches in the country were reported by the World Bank in 2016 to be at 5.3629 per 100,000 adults, the

CBN’s Agent Network policy is a laudable initiative. Due to their large subscriber base, telcos are better placed than commercial banks to drive the CBN’s financial inclusion plan. According to the Nigerian Interbank Settlement Scheme, Nigeria has 72 million active bank accounts. You might think this huge, except that as at February 17, 2019, only 37 million of these are linked to a Bank Verification Number (BVN). In contrast, there are over 168 million telecom subscribers. Among the telcos, with its over 61 million active subscribers; 98 percent connectivity across the country; over 23,000km fibre optics backbone that supports 100 plus ISPs; providing connection to over 100,000 ATM’s, POS and other electronic payment services, and driving business transaction

via the use of USSD code on its platform, accounting for N75 trillion worth of transaction in 2018 alone, MTN is a key driver to the CBNs cashless policy, and has the infrastructure to bring financial inclusion to millions of unbanked Nigerians. Fully aware of this, and following the liberalisation of the banking industry, MTN through YDFS, on August 29, 2019 launched the MoMo Agent. The service provides financial access to customers in easily accessible retail outlets across Nigeria. Leveraging the MTN existing network, the MoMo Agent will be accessible through basic mobile services. From Ibadan in Oyo State to Kano and Owerri in Imo State, the reception to the MoMo Agent has been tremendous. The ease and proximity that the service affords the busy traders has worked to the advantage of YDFS. Ideally, several of these traders have their markets where they do business situated far from bank branches, making it difficult to access banking services. However, with MoMo Agents operating from anywhere, including the markets, traders now have access to banking services and can now send and receive money anywhere, and with incredible ease. Although the uptake of the agent banking services is still at its infant stage, as it kicks off fully, a more financially inclusive Nigeria is expected to experience a boost in GDP, and significant amounts of new credit for SMEs. Judging from recent events during the regional launches and sensitisation campaigns across the country, and the reception the MoMo Agent has received and continues to receive, it appears that time might be closer. • Balogun is a tech enthusiast, and contributed this piece from Lagos.

Sanwo-Olu applauds Airtel Touching Lives CSR initiative …Promises reduced right of way charge for the Telco Jumoke Akiyode-Lawanson

abajide Sanwo-Olu, the governor of Lagos State has commended the efforts of Airtel, telecommunications service provider in Nigeria to lift many Nigerians out of abject poverty through its Airtel Touching Lives corporate social responsibility (CSR) initiative, and has therefore promised to give the telco a rebate on right of way (RoW) charges. Right of Way (RoW) as it applies to the telecommunications industry is generally used to denote the land on which telecom companies may lay their telecom infrastructures including connectivity cables. Although the Federal Government through the National

Economic Council (NEC) stipulates N145.00 per linear metre of fibre, Lagos State charges about N500 per liner and was recently listed as one of the states planning to increase its charge. Speaking at the premiere of Airtel Touching Lives season 5, in Lagos at the weekend, SanwoOlu said telecommunications is very important in the security and development of any society and so the state government will do all within its power to ensure ease of doing business for telecom service providers. He called on other business organisations and well meaning Nigerians to emulate the doings of Airtel in helping Nigeria and Nigerians. “It is very heartwarming to know that organisations like www.businessday.ng

Airtel can lend a helping hand, understanding fully that the government cannot do it all alone. I will give Airtel huge discount on right of way (RoW) because it deserves a discount as a form of encouragement to do a lot more in touching the lives of vulnerable and voiceless Nigerian citizens,” Sanwo-Olu said. Segun Ogunsanya, CEO of Airtel Nigeria said that the company made a decision to continuously give to help provide help and relief to the vulnerable and disadvantaged in our various communities and make the world a better place. The company has helped build a new house for the ‘Aina’ family who lost all they had including three of their four children in a

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fire outbreak, provide prosthetic hands to ‘David’, a war victim, paid for full cancer treatment for seven-year-old ‘Pillar’ who later lost her life and and eightyear-old girl who had a hole in her heart, was flown to India and treated successfully. Additionally, Airtel has refurbished health centres in IDP camps in the North-Eastern part of Nigeria and built and rebuilt schools in Imo State, Kaduna State, Kwara State, Lagos State, Cross-river State and Ogun State where it also built an ICT centre. Also speaking at the event, Isa Ali Pantami, minister of communication and digital economy commended Airtel for the laudable initiative, saying that even though CSR is not hard law in @Businessdayng

many nations including Nigeria, the company has decided to come up with such an impactful initiative. “One of the beauties of having wealth is to spend and touch other people’s lives positively. This is the only investment that never fails because no philanthropist that truly helps people can get poor by giving,” Pantami said. Airtel Touching Lives is aimed at promoting the culture of giving amongst Nigerians, seeks to uplift the downtrodden and offer useful support to less privileged people across the country. Since the commencement of the programme in 2015, Airtel has provided practical help for thousands of Nigerians as well as communities and groups.

Tuesday 28 January 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Investment

ADM Energy unveils 2020 investments strategy for Nigeria, West Africa Stories by DIPO OLADEHINDE

ondon-listed ADM Energy, an oil and gas investing company formerly known as MX Oil has unveiled its 2020 investments plans and strategy to expand its portfolio across Nigeria and West Africa. The company’s new primary approach to investments will be to “option” appraisal assets where oil and gas have already been discovered, conduct a detailed evaluation, and then make debt or equity contribution to access future upside. The benefit of this approach is that the company raises equity only after the asset has been secured. “Nigeria represents a compelling value proposition for investors. It is a buyer’s market, with many of the oil majors embarking on significant divestment programmes, this opens up an opportunity for companies that have the local contacts, experience and financing options to acquire assets at very attractive prices,” Osamede Okhomina, CEO of ADM Energy said. ADM believes that international oil companies have divestment programs planned and management estimates that up to 500,000 barrels per day could be sold to independent operators. “Consequently, we are very much looking forward to an exciting 2020 for ADM and hope to have an active deal flow to accelerate our growth,” Okhomina said.

In addition to the IOCs, there are several local companies looking for financing. In this instance, ADM intends to use its local experience and trusted relationships of its leadership team to invest in such companies willing to do part-cash and part-equity deals. It noted that large oil trading firms have become defacto financiers of many asset acquisitions, but said such buyers often struggle to find partners with the necessary credibility. Through its expansion plan, ADM also seeks to gain finan-

cial support with debt financing, and use its equity as transaction currency. Consequently, the company no longer expects to be cash-flow positive and profitable in 2020 as previously anticipated on the current asset portfolio. “For these deals to be financed, they will require local expertise, close relationships and experience of operating in the region,” ADM said. The new initiative is in line significant changes ADM board made

last year, which includes the appointment of Nigerian oil specialist Osamede Okhomina, a specialist in the Nigerian Oil & Gas sector with deep-rooted connections in the country and across West Africa, as its Chief Executive Officer. Okhomina has 18 years’ experience in the upstream oil & gas sector, originating and completing multiple transactions in Nigeria as well as Equatorial Guinea, Libya and Mauritania, including joint ventures with ExxonMobil and Chevron.

As a result, he has extensive industry contacts within Nigeria and with IOCs. He also has considerable familiarity with how the Nigerian government works through his personal business dealings with several federal ministries Additionally, the board appointed Peter Francis as Non-Executive Chairman, who is bringing over 35 years of experience working with major international oil companies including ExxonMobil. Since August 2019, ADM has raised approximately £1.32 million in two fundraises to help strengthen its balance sheet. In doing so, it has brought in new long-term investors which have helped to build up the Company’s supportive shareholder base. The investment company holds 5percent of Aje, one part of the OML 113 licence area, where venture partners had aimed in 2020 to complete debt repayment and become both cash flow positive and profitable. The slippage in the repayment schedule comes amid weaker crude pricing and operational delays in 2019, which reduced output. ADM noted that the Aje-5 well produced 890,203 barrels of oil in 2019, down from 1.2 million in 2018, due to downtime caused by routine maintenance of the floating production facility and also the need to upgrade significant equipment. Production averaged 2,967 bopd, down from 3,100 bopd in 2018, and ADM’s share amounted to 148 barrels per day net.

market

CardinalStone expects oil marketers to face further cost pressures in 2020 ...margins in lubricant sector likely to improve

ardinalStone Partners Limited, an investment banking group has said Nigeria’s oil marketers may have to endure another calendar year of tight margins in 2020 due to the strict regulations surrounding trading of PMS. In its outlook for 2020, CardinalStone stated that despite persistent calls by downstream stakeholders for deregulation of PMS pricing, current signs protrude to no deregulation in sight. “Further to the current undesirable state for the marketers, they may have to suffer thinner margins from the expected increase in associated shipping costs following the new International Maritime Organisation (IMO) shipping fuel rule,” CardinalStone said. The outlook report believe the new regulation may likely stoke additional pressures on landing costs in 2020 compared to the previous price of N150.9 as at 15 November 2019. While Nigeria’s 200 million population requires at least 12,000 megawatts of power daily, the country is barely managing 3,500 megawatts to 4,000 megawatts daily, thanks to infra-

structure deficit in power sector which continue to pose significant challenge for downstream players. The report noted that relying on alternative sources of power has been expensive for downstream players and it appears that the recent 30 percent hike in electricity tariff and planned tilt to cost-reflective tariff in July are likely to increase operating cost pressures on downstream oil and

gas players in 2020. On a positive note, CardinalStone said lubricant businesses are likely to continue to taper the impact of thin margins from PMS on profitability in 2020. “In our view, the size and relevance of domestic lubricants market is also likely to improve in 2020 following the Department of Petroleum Resources (DPR) decision to clamp down on

adulterated lubricants, citing the critical negative effects in form of damages to engines and machineries on local consumers,” CardinalStone said. In the upstream sector, CadinalStone expects Nigeria oil production to increase by 100,000 barrels year on year to 2.1 million barrels which is supported by the expected ramp up in the output from the 200,000 bpd Egina, other oil fields and Organisation of Petroleum Exporting Countries (OPEC) July 2019 decision to increase Nigeria’s output quota to 1.774 million bopd excluding condensate compared to 1.685 million bopd previously. “Our output projection still lags the Federal Government’s target of 2.18 million bopd and Nigeria’s capacity of 2.50 million bopd. In addition, we envisage a higher demand for Nigeria’s low sulphur Bonny light crude oil in 2020 due to the new Annex IV rule that prohibits ships from using fuels containing more than 0.5percent Sulphur from 01 January 2020, compared with erstwhile 3.5percent stipulation,” analysts at Cardinal Stone said. Cardinal Stone admitted that

legacy security concerns in oil producing areas remain the biggest risk to its forecasts despite the strides made by security forces towards neutralizing some threats to oil and gas assets. Latest data from the Nigerian National Petroleum Corporation (NNPC) revealed an 81.0percent drop in vandalized pipeline points to 35 in October 2019. Thanks to the amended Deep Offshore and Inland Basin PSC Act which now reflects adjustments to royalty payable on a field basis, mostly for offshore players, CardinalStone believe the increase in royalties payable for IOCs is logically expected to irk some investors while improved clarity is likely to provide slight reprieve with the Managing Director of ExxonMobil in Nigeria, Paul McGrath, stating that the need of most oil players was mainly policy certainty, which the bill provides for. The new policy effectively reduces royalty payment for offshore players with 200m-500m depth, while increasing that of players exploring greater depths which are largely operated by IOCs.

Tuesday 28 January 2020

BUSINESS DAY

ENERGY INTELLIGENCE Analysis

Can gas save Nigeria’s manufacturing sector? ISAAC ANYAOGU

here is an estimated 7,923 trillion cubic feet (tcf ) of total world proven reserves of natural gas according to the US Energy Information Administration, 2017. Nearly 80 per cent of this amount is located in 10 countries of which Russia tops the list with an estimated 1,680 tcf, about one-fourth of the total. Global gas demand has risen significantly over the past decade led by Asia which contributes about one-third of global demand. China’s gas demand makes up the largest within Asia and is driven by the country’s coal-to-gas substitution policy targeted at addressing environmental concerns arising from carbon emissions. According to the International Energy Agency (IEA), natural gas is expected to overtake coal as the world’s second largest energy source by 2030. Nigeria holds the ninth largest proven gas reserves in the world with reserves estimated at 190 tcf as at December 2018. As at October 2018 C, the Ministry of Petroleum Resources estimated the country’s reserves to production ratio, which measures the remaining amount of a nonrenewable resource expressed in time, for oil at 46 years and 102 years for gas. Nigeria is mostly regarded as “a gas province with some oil”. Gas produced in the country has primarily been for LNG export, reinjection for oil recovery and domestic utilization by power and gas-based industries, with the balance flared. Gas is the fuel of the future as it is abundant, more costeffective than liquid fuels, safer and environmentally friendly (that is, lighter than air, odourless, colourless and contains the least carbon among fossil fuels). This methane-rich fuel has proven to be one of the fastest paths to industrialization and there is evidence of a correlation between GDP growth and gas consumption by productive sectors of the economy. Before the widespread utilization of gas, the only source of energy were liquid fuels (mostly by-products of crude oil), and in Nigeria, predominantly Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO) and Premium Motor Spirit (PMS). For industrial production, AGO and LPFO were the fuels of choice. These fuels however, are plagued by issues such as scarcity, labour strikes, pilferage, port delays, refinery shutdowns and unpredictable product pricing especially for deregulated fuels. Many of these issues are exacerbated by the linkage to crude oil and, very

recently, at the height of the all-time high crude oil prices at over $100 per barrel, prices of liquid fuels were unsustainable and partly responsible for the shutdown of some manufacturing concerns. Then came gas, the cheaper and much cleaner alternative with an entirely domestic value chain. The advent of gas solved the issues associated with liquid fuels including reliability, price predictability and local abundance, and as the manufacturing industry gradually embraced the methane-rich fuel, manufacturers have become more profitable and productive overall. The status of gas as the energy of the future brings massive economic benefits to the manufacturing sector which has been short-changed by liquid fuels. These benefits are that gas is a solution to fuel pilferage, gas is a reliable energy source, gas is a cleaner alternative and gas is the enabler for increased profit. Solution to Fuel Pilferage Compared to liquid fuels, the incidence of fuel theft is relatively non-existent with natural gas. Liquid fuels are mostly transported via trucks and so usually untraceable and difficult to track in the event of theft. With these incidences of theft come spillages that result in the pollution of farmlands and water bodies, and overall environmental degradation as well as the associated costs of clean ups. A second consequence of pilferage is the problem of product adulteration where stolen fuel is mixed with other substances and resold to unsuspecting users. www.businessday.ng

This results in equipment breakdown, threat to human lives and catastrophic failures etc. that more often lead to litigations. The application of natural gas completely solves all of this. Gas is mostly transported via underground pipelines, and so is not easily prone to being stolen. Gas usually must meet a specific quality threshold to be transported via pipeline and thus only pipelinequality gas is transported to last mile users. While pilferage is unlikely, incidental leaks on gas pipelines are relatively easier to detect and can be easily managed by proper ventilation of the facilities since gas is lighter than air after leak is arrested. A Reliable Energy Source As stated earlier, liquid fuels are susceptible to a myriad of issues that make them unreliable. Port delays, labour strikes, the underperformance of refineries etc. make it difficult to predict when products will be available. Also, because these fuels are mostly imported, the lack of foreign exchange currencies impacts availability, and a lack of predictability will usually make it difficult for manufacturers to plan operations and be efficient. With liquid fuels, the issue of end product stockouts is prevalent because manufacturers are not able to effectively manage inventory. This ultimately results in loss of sales, customers and market share. The fact that gas is locally sourced solves these issues. The entire gas value chain – from upstream production to transportation and final delivery to last mile users – is domestic. Save for the few militancy attacks, for many

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years, there were no gas supply interruptions. Natural gas therefore comes to the rescue, making it easier for companies to effectively manage production schedules with minimal interruptions and ultimately run very efficient and predictable operations. A Cleaner Alternative The combustion of liquid fuels typically produces 2-3 times more carbon dioxide, thus polluting the atmosphere and accelerating global warming. In addition, liquid fuels also produce other harmful substances such as soot, SOx and NOx and sometimes deadly carbon-monoxide due to incomplete combustion. All these affect the health and productivity of staff of manufacturing organizations as well as present them in a bad light as contributors to environmental pollution. Consequently, organizations with such record may find it difficult to attract financing from global financiers and staff attrition and absenteeism may also be high leading to unstable operations. The introduction of natural gas as the “saviour” solves most of these issues because it is environmentally friendly, odourless, colourless and produces only water vapour and small amounts of carbon dioxide during combustion. Natural gas equipment also tends to require much less maintenance and last longer thereby reducing overall total cost of ownership. Enabler for Increased Profit The combined effect of pilferage, higher cost of maintenance of liquid fuels equipment, and unreliability, is a higher than normal operating expense for the manu@Businessdayng

facturing industry. However, with natural gas which is generally about 30 to 40 per cent cheaper than diesel and also a panacea to the above short-comings of liquid fuels, the industry has immediately seen an enhanced bottom line from the switch to natural gas. Also, while the initial capex requirements for a gas equipment may be higher, they generally have lower maintenance costs and therefore lower total cost of ownership compared to liquid fuels. Such low costs also stem from the fact that there are no spills, effluents or soot with gas equipment and by implication no costly requirements for cleanup, lower staff medical bills given that employees are not exposed to inhaling dangerous gases and so on. Against this backdrop, analysts say the government must focus its efforts at creating an enabling environment for the development of the gas industry. Natural gas provides a strong base for industrial development and thus developing the sector will position the country for unprecedented growth while creating an alternative source of public revenues. A key enabling factor for the development of the sector is “pricing” and the current pricing template impedes development. For example, the end user gas price of US$3.85/Mscf directive by the minister, Federal Ministry of Petroleum Resources for textile manufacturers based on a distribution tariff of $US1.15 and marketing margin of $US0.50 fails to cover the scope and cost of last mile distribution companies and does not take into account the capital that has been invested to develop the distribution network according to industry experts. They argue that the extension of a special pricing arrangement to any arm of the industry should be preceded by an extensive consultation, in-depth research and a holistic assessment of the consequences of such arrangements for the manufacturing industry to ensure that no element of the value chain is broken in the process. The National Gas Policy 2017 also recognises the importance of relevant stakeholders being carried along in regulatory decision making. For example, the regulated tariff for monopoly infrastructure is to be based on a tariff methodology and model developed by the petroleum regulatory authority with input from industry Therefore, analysts say significant efforts must be directed at promoting a framework that attracts quality private capital. The framework must be such that balances the need to guarantee investors a reasonable return on investment alongside the need to deepen domestic gas utilization.

Tuesday 28 January 2020

BUSINESS DAY

offgrid Business

Investment

Off-grid energy firm Wavelength signs MoU for IPP in 47 community development associations STEPHEN ONYEKWELU

t a landmark event last week, 47 community development associations (CDAs) in the Ibeshe Kingdom, Ikorodu signed a memorandum of understanding (MoU) with Wavelength Limited, providers of integrated power solutions for an independent power plant (IPP). Indep endent p ow er plants in Nigeria are provided by non-public utility companies operating and investing in power generation facilities for the purpose of generation and sale of electricity. Over two million people live in the 47 CDAs, which could best be described as a sleeping rural area with potential for significant economic growth given its proximity to both the Island and Mainland by water. But this development may have been stalling due to limited access to electricity.

This probably explains the residents’ determination to change the narrative by approaching several independent power providers and finally settling for one. The IPP will deploy an initial generating capacity of 7 megawatts (MW), which will be subsequently doubled to 14MW, then 21MW subject to feasibility studies and demand. It costs close to $1 million to generate 1

Insight

How rising electricity costs present opportunity for renewable energy sources STEPHEN ONYEKWELU

iger ia’s recently bungled attempt to increase electricity tariffs aligns with rising electricity bills globally, providing an opportunity for quicker adoption of renewable energy sources. In Nigeria, the electricity system is saddled with a huge gap between the cost of generating electricity and the tariffs it receives. This gap was estimated at $2.4 billion in 2015-17. The tariff gap, says the International Monetary Fund, can be closed by reducing the cost of generating and distributing electricity, and through increasing the tariff by at least 50 percent. Nigeria is not alone, there are other countries already increasing electricity tariffs. The Australian Energy Regulator has approved requests from electricity distributors AusNet Services, CitiPower, Jemena, Powercor and United Energy to push up their charges over the next year to cover increased costs. House-

holds face an increase of up to $50 on their annual electricity bills from January 1, 2020. Retail residential electricity rates in the United States have risen about 15 percent over the last 10 years. In some parts of the United States of America this growth has been more intense, for example in Oregon; rates have increased by about 40 percent over the past 10 years. In the 10 years leading to June 2013, prices for households in Australia increased by 72 percent for electricity and 54 percent for gas. Expectedly, rising prices are forcing consumers to consider cheaper, more renewable energy alternatives. This is sustainable because the once staggeringly high cost of renewables is dropping. With regards to solar, it is dropping so quickly, that it is now cheaper than coal, new analyses show. In comparison to coal, which works out at roughly $102 per megawatthour of electricity, solar now costs just $50.

MW of electricity. “We are tired of paying outrageous amounts of money that come with estimated billing without light. Some homes have only two or three old people living in them but they get electricity bills in thousands of naira,” Oba Richard Abayomi Ogunsanya, the Olubeshe of Ibeshe Kingdom said in an interview. “Anytime the distribution company gives

light for a day or two, next thing they invade the communities for indiscriminate disconnections.” The Oba insisted that the 47 joint CDAs have willingly decided to look elsewhere for reliable electricity supply and signing a memorandum of understanding is a clear demonstration of this resolve. “After three years of due diligence and search, we have settled for

Wavelength Ltd because the company has been successful in deploying IPPs in other states.” Nigeria is endowed with large oil, gas, hydro and solar resources, and has an installed generation of 12,522 MW of electric power from existing plants. But Africa’s largest economy struggles to generate 4, 000 MW daily, with attendant losses due to the inadequate transmission and distribution infrastructure. The IPPs are part of a broader push to deal with this. “This is Ikeja Electricity Distribution Company’s jurisdiction and we approach it from this perspective. We will first ascertain the debt owed IE by the communities and the metering gap, too. The signed MoU gives us an opportunity to discuss with IE; they are still in charge. We are here to complement their efforts, such that when IE does not supply power we will,” Moses Ajayi, chief

technical director at Wavelength Ltd said. The Nigerian Electricity Regulatory Commission issues licenses to independent producers for the purpose of increased power generation in the country. Independent power projects are part of the Federal Government’s strategy to combat power shortage in the country. “We have a track record of deploying mini-grids across Nigeria. We have projects in Abuja (the Federal Capital Territory), Bayelsa, Enugu, and Ogun States,” Oneal Oma Lajuwomi, MD/ CEO Wavelength Ltd said. “When the paper works are ready we can start generating electricity within six months.” The operational and maintenance cost of petrol generators for households, small, and medium businesses could be overcome for underserved communities in Nigeria with IPPs.

150 countries deliberate on energy transformation at renewable energy conference

he International Renewable Energy Agency (IRENA) stated that the global weighted-average cost of electricity declined 26 percent year-on-year for concentrated solar power (CSP), followed by bioenergy (-14%), solar photovoltaic (PV) and onshore wind (both -13%), hydropower (-12%), geothermal and offshore wind (both -1%), the report finds. The huge gap between the tariff and operating costs have meant that Nigeria’s privatisation of the electricity sector has not delivered improvements in the availability of reliable electricity. This is in part because of the electricity distribution companies inherited a derelict infrastructure from the Nigerian government through the National Electric Power Authority, which was unbundled in 2005 and privatised in 2013. This presents a big opportunity for renewable energy sources. Solar-based energy, especially when done on a large scale, can contribute to reducing the cost of generating and distributing electric-

ity in Nigeria. Renewable technologies could also help to develop an electricity market where those producing surplus energy can sell it to those who have a shortfall. Currently, such a market is limited by conventional grid systems. These are designed based on centralised big power plants and a one-way flow of energy from the power plants to the customers. With its $653 million solar park, Egypt is already ahead of the curve in Africa and is taking advantage of the abundant sunshine it receives thanks to its geographic position in Africa’s largest desert while Nigeria continues to complain about desert encroachment and power outages. Kenya, East Africa’s largest economy has launched Africa’s biggest wind power plant, a project aimed at reducing electricity costs and dependence on fossil fuels, nudging the nation to meet an ambitious goal of 100 percent green energy in 2020. The sprawling wind farm of 365 turbines on the shores of Lake Turkana in northern

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

Kenya was designed to boost electricity supply by 13 percent, giving more Kenyans access at a lower cost. The 10th Assembly of the International Renewable Energy Agency (IRENA) got underway this morning, bringing together decision makers from 150 countries. In total, more than 1,500 delegates will participate in the meeting held annually by the world’s lead intergovernmental organisation for the energy transformation. The 10th Assembly represents a curtain-raiser to a decade in which the world must achieve the Sustainable Development Goals (SDGs) established by the United Nations and adopt a climate safe energy path. Renewable energy is recognised as playing a central role in the achievement of several goals including energy access (SDG 7), climate safety (SDG 13), sustainable economic growth (SDG 8) and sustainable cities (SDG 11). A report published yesterday by IRENA found that jobs in renewables could reach 40 million by 2050 under a climate-safe energy

scenario. In opening remarks addressing his first Assembly, IRENA Director-General Francesco La Camera, said: “We have ten years left to fulfil the commitment set out in the 2030 Agenda for Sustainable Development. This period will also be decisive for the ability to hold the line on rising global temperatures. Transitioning to clean energy systems is at the heart of these global agendas. And renewable energy increasingly plays a major role in national development and climate strategies. He continued: “We have renewable energy at our disposal today to make the future more predictable, more prosperous, more inclusive, and more secure. But it is now that we need to make the right decisions, so that the benefits of accelerated deployment can unfold worldwide. We enter the next decade with confidence because of your support and active engagement.” He concluded: “United behind IRENA’s mission, we are setting the stage for success.”

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email: isaac.anyaogu@businessday.ng, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

Tuesday 28 January 2020

BUSINESS DAY

POLITICS & POLICY

LG crisis: We won’t allow breakdown of law and order - Oyo govt Says state will insist on full observance of tenets of 1999 Constitution REMI FEYISIPO, Ibadan

yo State Government, said has said that it would not allow any group of persons to throw the state into crisis as a result of the ongoing debate on the management of local governments in the state. The state also insisted in a statement that it was insisting on the full observance of the 1999 Constitution (as amended) in relation to the ongoing controversy surrounding the dissolution of the 68 illegal local council chairmen in the State. The state warned some individuals who it said have been threatening to derail the peace of the state to desist from such ruinous path or face the full wrath of the law. The government, in a

statement signed by the Chief Press Secretary to Governor Seyi Makinde, Taiwo Adisa, maintained that the government’s position became imperative following the threats of violence by the sacked illegal chairmen and the stay-at-home order issued to all local government workers in the State by the National Union of Local Government Employees (NULGE). The statement maintained that though Government would not begrudge the NULGE for directing its members to stay away from work in response to persistent threats emanating from the sacked chairmen of local councils and LCDA, it urged all workers in the state to reject any act of brigandage by persons or groups seeking to derail the peace and progressive governance in the State. The statement read: “The

Seyi Makinde

attention of the Government of Oyo State has been drawn to a sit-at-home order an-

nounced by the State Chapter of the National Union of Local Government Employ-

lleged fraud: Senator Sani arraigned, gets bail Innocent Odoh, Abuja

ustice I. E. Ekwo of the Federal High Court, Abuja on Monday, January 27, 2020, granted bail to Senator Shehu Sani, who was arraigned by the Economic and Financial Crimes Commission, EFCC, for alleged name-dropping and obtaining a total sum of $25,000 by trick from Alhaji Sani Dauda, (owner of ASD Motors), whom he promised he would stave off a criminal investigations of him by the EFCC. According to a statement issued on Monday by

the Acting Head of Media and Publicity of the EFCC, Tony Orilade, the defendant who represented Kaduna Central District in the immediate past 8th Senate is facing a two-count criminal charge by the Commission. One of the charges reads: “That you Shehu Sani on or about the 29th of November, 2019 within the jurisdiction of this honourable court, with intent to defraud, obtained the sum of USD 10,000.00 (Ten Thousand United States of America Dollars) cash from Alhaji Sani Dauda (ASD) under the false pretence that the money was meant

to bribe the Acting Chairman of the Economic and Financial Crimes Commission (EFCC) lbrahim Magu to ar rest and prosecute one Abubakar Musa, which representation you knew to be false, contrary to and punishable under Section 1(1) and (3) of the Advance Fee Fraud and Other Fraud Related Offences Act, No. 14 of 2006.” He pleaded not guilty to the charges, prompting prosecution counsel, Abba Mohammed to ask the court for a trial date and for the defendant to be remanded in prison custody. The defence counsel,

A .A Ibrahim SAN, however, informed the court that he had filed a bail application on behalf of his client, which the prosecution counsel said he only received “about seven minutes ago,” and was going to study it and “revert.” According to the statement Justice Ekwo stepped down the case till 12 noon to enable prosecution counsel study the application. Upon resumption of proceedings, the defence counsel urged the court to grant his client’s bail application to enable him take care of his family and business.

Divergent views trail death of Emenike, AA Senatorial candidate in Imo SABY ELEMBA, Owerri

he people of Okigwe senatorial zone, particularly Isiala Mbano local government area in Imo State, have been thrown into deep mourning following the alleged sudden shooting to death of the Emenike Ndubuisi who contested the last 2019 Okigwe senatorial election under the platform of Action Alliance (AA) but lost to the late Senator Benjamin Uwajumogu of the All Progressives Congress, (APC). The late Emenike was also

warming up for the next fresh Senatorial election for Okigwe, a gap created as a result of the death of Senator Uwajumogu . Emenike was said to have been shot at his leg and abdomen, he fell down and when rushed to the Federal Medical Centre (FMC), Owerri, where he gave up his ghost same Saturday, January 24, 2020. Already, the Police Public Relations Officer (PPRO) Orlando Ikokwu has confirmed the death of Emenike. Speaking to BusinessDay, a former Chairman of Imo Police Community Relations www.businessday.ng

Committee (PCRC) said , “the Nigerian security men lack proper training”. He said a trained security man should know how to “handle his gun properly and should know when his gun is on safety “, adding that the Nigerian Security and Civil Defense Corps (NSCDC) officer might have killed Emenike by mistake. “It was unintentional and could not be said that PDP or any other political party must have paid him to kill the deceased “. A police officer at the rank of Superintendent who also pleaded anonymity

serving at the Police Command Headquarters, Owerri, blamed the accused Security Officer. He said that “it was an unintentional shooting.” A lady, who pleaded anonymity, claimed to have known the late Emenike when he was alive. She wondered how a billionaire like Emenike would leave the earth now. She called for a thorough investigation into the death of Emenike. Meanwhile, the death of the AA Senatorial candidate is now a matter of discussion in Imo state as people who gathered in pockets of groups discussing the incident.

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ees (NULGE). “The Government understands that the sit-at-home order was a response to persistent threats emanating from the sacked chairmen of local councils and Local Council Development Areas (LCDAs). “Whereas the administration of Governor Seyi Makinde will not begrudge NULGE for seeking to preserve its members from a perceived Armageddon as promised by the sacked council chairmen, the Government would like to put it on record that it will continue to stand by the dictates of the Constitution of the Federal Republic of Nigeria, 1999, as amended. “As earlier stated in a position by the State’s AttorneyGeneral and Commissioner of Justice, Oyelowo Oyewo,a Professor issues concerning the tussle over local government administration in Oyo

State are before the Court of Appeal and that the two cases are scheduled for hearing on February 19, 2020. “Any lover of peace, progress and democracy would have no problems waiting to hear from the Court on the day stated. “We, however, urge all workers in the state to reject any act of brigandage by any persons or groups who are merely seeking to derail the peace and progressive governance that have been the lot of the State since May 29, 2019”, he said. “We call on the workers and the teeming people of Oyo State to please ignore the threat of violence and brigandage from the sacked chairmen and rest assured that the train of unmatched groundbreaking good governance in Oyo State started by, Governor Seyi Makinde, cannot be stopped,” he further said.

Put aside all differences in politics, ideology, affiliation and join hands to give Kogi best governance - Bello ...As governor begins second term VICTORIA NNAKAIKE, Lokoja

overnor Yahaya Bello has called on the people of kogi State and perceived foes to put aside all differences of politics, ideology or affiliation and join hands with his administration to give the state best of governance in his second term in office. Bello made the call on Monday in Lokoja shortly after taking the oath of office which was administered by the state Chief Judge Justice Nasiru Ajanah glass house in government house as the 4th executive governor of the state . He assured the people that his second term would bring a revitalised energy to bear in delivering refocused governance, as he called on all and sundry to support the government in achieving its laudable programmes for the development of the state. He said: “My primary allegiance as governor will remain to Kogi State and her citizens, not to party or tribe. Every one is my citizen and I owe every one the protections and fidelities inherent in the office. “It is on this note that I en@Businessdayng

join all Kogites to look forward to the next four years with optimism and great expectation. We will do everything in our power as government to make sure that the state is productive , prosperous and peaceful” . On his mission for the state in his second term, Governor Bello promised to sustain focus on agriculture for improved food security, mass employment and increase in Internally Generated Revenue, adding that agricultural revolution which he has kickstarted in the first term would be taken to the next level of development. “Specifically, rice, cassava, cashew, aquaculture and livestock will remain the bed rock of our activities in the agricultural sector. “Outside of agriculture, we are also going to pay greater attention to human capital development by investing more in training our people for enhanced relevance in a technologically evolving future. “We will embark on large scale urban renewal projects that would further transform Lokoja into a resilient capital city with modern utilities attractive to tourists,” he noted.

Tuesday 28 January 2020

BUSINESS DAY

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Tuesday 28 January 2020

BUSINESS DAY

Live @ The exchanges Market Statistics as at Monday 27 January 2020

Top Gainers/Losers as at Monday 27 January 2020 LOSERS

GAINERS Opening

Closing

Change

Opening

Closing

Change

OKOMUOIL

N66

N68

UNILEVER

N17.55

N15.8

-1.75

N52

N54

JBERGER

N21.5

N20.15

-1.35

N5.3

0.3

N21.95

N21.45

-0.5

VOLUME (Numbers)

NAHCO

N2.45

N2.69

0.24

FBNH

N7.3

-0.3

VALUE (N billion)

NPFMCRFBK

N1.13

N1.24

0.11

ETERNA

N3.15

N2.85

-0.3

MARKET CAP (N Trn)

Company

VITAFOAM

Company

ASI (Points)

ZENITHBANK

DEALS (Numbers)

29,552.996 4,306.00 444,037,503.00 3.349

S&P 500 Index 3,242.23USD -53.24-1.62% Generic 1st ‘DM’ Future 28,509.00USD -424.00-1.47%

Deutsche Boerse AG German Stock Index DAX 13,207.48EUR -369.20-2.72% Nikkei 225 23,343.51JPY -483.67-2.03% Shanghai Stock Exchange Composite Index 2,976.53CNY -84.23-2.75%

NSE employees donate to WARIF Foundation

s part of its Employee Give-Back initiative, employees of The movement of CRR is to mop up shedding N1.75 or 9.97percent. Nigeria Plc moved up from Nigerian Stock Julius Berger Nigeria Plc N5 to N5.3, adding 30kobo or excess liquidity in the banking Exchange (NSE) donated funds followed after its share price 6percent. system. to support the initiatives of the In 4,306 deals, equity The All Share Index (ASI) dropped from N21.5 to N20.15, Women at Risk International was down by 0.26 percent while losing N1.35 or 6.28percent; i n v e s t o r s e x c h a n g e d Foundation (WARIF) in Lagos 444,037,503 units valued at the year-to-date (ytd) return while Zenith Bank Plc decreased THEME during the Christmas holidays. from N21.95 to N21.45, losing N3.349billion. moderated to 10.10percent. The Employee Giveback “The domestic bourse Fourteen (14) companies 50kobo or 2.28percent. Also, initiative is one of various gained as against 13 losers. FBN Holdings Plc decreased closed south; largely due to employee engagement The NSEASI depreciated to from N7.3 to N7, losing 30kobo continued profit in the Banking i n i t iat i ve s i n st i tu te d to THE SUMMIT or ACADEMY 4.11percent. UBA Plc sector as most tier-one banking close at 29,552.99 points against THE BY DELOITTE NIGERIA) NIGERIAencourage employees to from N8.55 to N8.35, stocks closedLAGOS, lower. preceding day high(CO-HOSTED of 29,628.84 decreased make THURSDAY 30TH JANUARY 2020 FRIDAY 31ST JANUARY 2020 a positive impact in “We expect a similar trading points while the value of listed losing 20kobo. their communities whilst The share price of Okomu pattern tomorrow (Tuesday) equities decreased from N15.262 providing them with handstrillion to N N15.222trillion, Oil Palm increased, from N66 to in the absence of any positive on experience and learning N68, adding N2 or 3.03percent, catalysts capable of uplifting representing N40billion loss. KEYNOTE SPEAKERS opportunities on issues that Unilever Nigeria Plc led the Nigerian Breweries rallied investor sentiment”, said plague the society. HAJIA ZAINAB AHMED OTUNBA ADEBAYO fromSHAMSUNA N52 to N54, adding N2 Lagos based analysts NIYI at Vetiva losers table after its share price WARIF is a non-profit HONOURABLE MINISTER or 3.85percent, whileOF Vitafoam Securities.HONOURABLE MINISTER OF dropped from N17.55 to N15.8, organization founded in FINANCE, BUDGET AND NATIONAL PLANNING INDUSTRY, TRADE AND INVESTMENT 2016 in response to the high incidence of sexual assault, rape and human trafficking YEWANDE SADIKU EXECUTIVE SECRETARY occurring amongst young girls NIGERIAN INVESTMENT PROMOTION COMMISSION and women across Nigeria. While presenting the donation to WARIF, Olumide THOUGHT LEADERS AND FACULTY Orojimi, Head, Corporate Communications, NSE said, “Giving back by volunteering our time, donating money and other essentials is at the core of our culture at the NSE.

P.K ACA

he Nigerian stock market started last trading week in January with a negative performance following profit taking activities in banking stocks. Investors may have started reacting to the CBN’s Monetary Policy Committee (MPC) decision to increase Cash Reserve Ratio (CRR) by 500 basis points from 22.5 percent to 27.5 percent. The upward

FTSE 100 Index 7,404.74GBP -181.24-2.39%

15.222

Market closes negative amid profit taking in banking stocks Stories by IheanyI nwachukwu

Global market indicators

In addition, we believe that promoting gender equality and diversity is a critical success factor for global economic prosperity. At the Exchange, we champion an organisational culture that promotes diversity and inclusion as well as the wellbeing and development of all employees through the implementation of gender friendly policies”. Prior to this donation, NSE employees participated in the WARIF “No tolerance for rape walk” which was held on Saturday, December 7, 2019, in commemoration of the United Nations ‘16 Days of Activism’ for Gender-Based Violence. The donation to WARIF builds on the longstanding tradition of donating money, food items and volunteering time by NSE employees in their bid to make a positive impact in the society. Over the years, NSE Employees have raised funds for worthy causes. During the 2018 Easter celebrations, NSE employees donated money to fund medical bills for 10 children in SOS Children’s Village, Lagos.

Steve

Nigerian-British Chamber of Commerce hosts first Breakfast Meeting

L-R: Akinola Akintunde, Patron Nigerian-British Chamber of Commerce; Bismarck Rewane, MD/CEO Financial Derivatives Company Limited; Bisi Adeyemi, deputy president Nigerian-British Chamber of Commerce; Dapo Adelegan, Patron Nigerian-British Chamber of Commerce; Harriet Thompson, British deputy high commissioner; David Brown, principal analyst Dbrownconsulting; and Alan Davies, deputy President NigerianBritish Chamber of Commerce at the Chamber’s 2020 Economic Outlook Breakfast Meeting

PARTNERS SEC goes tough on illegal fund managers

he Securities and Exchange Commission (SEC) has restated its determination to go after illegal fund managers and ensure they are made to face the full wrath of the law. Acting Director-General of the SEC, Mary Uduk, who stated this in an interview with journalists in Abuja at the weekend, said what the SEC had done apart from continuing to educate people, is to also go after the promoters of these schemes. She said “we are stepping up our enforcement mechanisms to ensure that they are apprehended and their offices

sealed off. So many of them are investors, rather than from doing is using your money to being prosecuted in courts, we profit earned through legitimate pay someone else and using have secured convictions for sources. Uduk however advised someone’s money to pay you. some, and we have closed down the investing public to be It is important that we do not so many. We verify ownership wary of any investment that is engage in such investments. and return monies collected proposing return levels that are by them to the owners. It’s a unreasonably high and advised www.uubo.org problem around the world and investors to ensure that the fund we can tackle the problem by managers and the products they Udo Udoma & Belo-Osagie uubo-law @uubo_law educating the public, telling are offering are registered @uubolaw with them the right investments to the commission. make and the right places to put She said, “So when people in their money. come to you and say that you Ponzi scheme (also a Ponzi can invest 50,000 naira today game or a Ponzi) is a fraudulent and in 2 hours you will get investment operation where 200,000 naira tomorrow or get the operator, an individual or 50percent in 2 hours know that organisation, pays returns to its is a lie. No legal investment its investors from new capital that pays investment that way. Mary Uduk, acting director general, SEC paid to the operators by new So what they must likely be

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he Nigerian-British Chamber of Commerce (NBCC) recently hosted the business community to its first Breakfast Meeting of the year themed “2020 Economic Outlook”. Speakers at the event which held in Lagos include Bismarck J Rewane, MD/CEO of Financial Derivatives Company Limited, and the British Deputy High Commissioner, Harriet Thompson. Speaking during his Presentation, Keynote Speaker, Rewane, shared his projections on likely economic, social and geopolitical trends for 2020 across the diverse sectors of the economy. One of his projections was that the country will experience tighter monetary policies due to inflation increasing to an average of 11.4percent. Harriet Thompson in her address stated that creating partnerships that attract quality investment to drive growth and create jobs were top priorities of the United Kingdom. “We want to help

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Nigeria get the investment it needs and ensure that our existing investors are joined by new ones,” she said. Harriet also expressed her excitement that Nigeria would be playing a lead role at the upcoming UK-Africa Investment Summit in the UK. It was sponsored by British Air ways, Union Bank of Nigeria Plc, Red Star Express Plc and moderated by David Brown, Principal Analyst at Dbrownconsulting. It ended in an interactive questions and answers session. Speaking on the event, Director of Programmes and Membership at the NigerianBritish Chamber of Commerce, Ayomide Olajide stated that “the Breakfast Meeting aimed at providing an opportunity for key business leaders to engage, foster business relationships and proffer solutions to projected outcomes in the unfolding year”. The next NBCC breakfast meeting holds in February 2020, with the theme “Private-Public Partnerships How to make it work”.

Tuesday 28 January 2020

BUSINESS DAY

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Tuesday 28 January 2020

BUSINESS DAY

news Government’s strong infrastructure investment.... Continued from page 1

Nigerian inflation. Given that the major drivers of inflationary pressures are structural/supply side, the CRR hike is unlikely to significantly mute domestic price pressures, analysts at Lagos-based investment bank, CardinalStone Partners, said in a January 27 note to clients. The CBN’s decision to raise the CRR while leaving other parameters (MPR, liquidity ratio and asymmetric corridor) unchanged stemmed from the need to mop up excess liquidity in the system to contain inflationary pressures, after the financial regulator in October last year restricted non-bank foreign investors from investing in its short-term OMO bills. The ban has made nonbank local investors including Pension Funds Administrators (PFAs) jostle for other instruments, a move that has crashed yields on one-year treasury bills to as low as 5 percent, based on FMDQ data. There are also indications the higher CRR contradicts the CBN’s drive aimed at pushing funds to the real sector of the economy to boost growth and improve domestic production of goods and services.

To boost the growth of the economy, the CBN in the larger part of last year deployed several unorthodox policies in a bid to force banks to lend. Some of such policies include mandating deposits money banks to lend at least 65 percent of what they collect as deposits. This singular decision has made the cost of funds fall, as banks continue to lure customers with cheap funds in order not to fall victim of the CBN’s hammer. By increasing the CRR, analysts fear a squeeze of banks’ liquidity which might reverse the falling cost of borrowed funds and oppose the CBN’s efforts in stimulating the flow of credit to the private sector. The rise in CRR will result in further liquidity squeeze for banks, hindering their ability to create risky assets and in turn meeting the LDR of 65 percent stipulated by the apex bank, according to analysts at Lagos-based stockbroking firm, CSL Stockbrokers. “With this development, we think funding costs may begin to trend higher as banks review their deposit rates to meet their liquidity needs,” CSL said.

ing trajectory in concrete roads. Road tax is giving local operators an opportunity to key into infrastructure,” said Rabiu. Lawmakers in Nigeria had approved a 2020 budget of N10.59 trillion. Works and housing sector got the highest capital expenditure vote of N315.56 billion in addition to its N27.98 billion recurrent expenditure. Last year, President Buhari signed the Executive Order 007, which is also known as Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme. The code allows private companies to construct federal roads across the country and be repaid in the form of tax credits. With the arrangement, companies who agree to share the cost of infrastructural projects with the government will not have to worry about paying half of the cost incurred on road construction and related public goods. Rabiu said the company has the financial strength to take advantage of the country’s huge infrastructure deficit and government’s strong infrastructure drive. “BUA has the highest capacity utilisation in Nigeria. It is also spread across the country, meeting the needs of its customers. There is room to expand capacity,” he said. As stated in the 20182020 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), Nigeria’s total infrastructure stock is currently c.35 percent of GDP, which is well below

Ebola response, putting GPS systems to work for real-time contact tracing and daily mapping of transmission chains. It was also a good time for hand sanitiser companies as many public spaces, from offices to churches, and hospitals were awash with varying products. However, by the time WHO declared Nigeria free of Ebola virus transmission on 20 October, 2014, the number of cases was at 19 and seven of them had resulted in death. After an infected Patrick Sawyer, a Liberian, landed in Lagos, the protocol officer who escorted him died of Ebola. Four of nine infected doctors and nurses died as a result of poor precaution. Again, upon landing in Port-Harcourt, a doctor who treated Sawyer developed symptoms and died. Hopes are indeed high

about the government’s readiness claims to attack the Coronavirus but the same optimism is not wholly shared about the depth of strength, especially for preventing the first responders at the airport and in the hospital from infection. Debo Odulana, a medical doctor and founder of Doctoora, a platform linking health experts to practising equipment, perceives the fear is less about being able to contain it and more about resources allocated to monitoring. “What I think they can do which they have started doing is to do a lot of serious monitoring at the points of entry. The monitoring should heavily focus on tracking where each traveller is coming from. The other thing they can do is to just completely say no, we are not taking flights from

certain places which I’m sure they wouldn’t do,” he said. The Coronavirus which has killed 81 people in China has the potential to spread before symptoms show up, Chinese health authorities said in a monitored report. Coronaviruses are transmitted from animals and people and from person to person, usually after close contact with an infected patient, for example, in a household or health care setting, the NCDC says. Protection As precautionary measures, WAHO strongly advised members of the public to frequently wash their hands with soap and water or clean them using alcohol-based sanitisers. “When coughing or sneezing, cover your mouth and

L-R: Adedayo Ojo, vice president, PRCAN; Chido Nwakanma, former president, PRCAN; Tokunbo George-Taylor, secretary general, PRCAN; Bismarck Rewane, managing director, Financial Derivatives Company Limited/guest speaker; Nnaemeka Maduegbuna, former president, PRCAN, and Israel Jaiye Opayemi, president, PRCAN, during the PRCAN Breakfast Meeting on the 2020 economic outlook and its implications for the marketing communications sector in Nigeria held in Lagos, yesterday.

CBN does heavy lifting for FG with CRR... Continued from page 1

told BusinessDay. “ The inflationary pres-

sures are mainly fiscally-induced and should not be addressed with monetary policies but what do you do as a central bank when there’s a risk to price stability,” the source said on condition of anonymity to speak freely. The implication of fighting fiscal challenges with monetary tools is that it creates a distorted economy, according to five analysts polled in a BusinessDay survey. In particular, the hike in CRR means the banks have less cash with which to lend and that may slow down the pace of their fast growing payday loan spree. The CBN had to increase bank’s cash ratio for first time in four years at its maiden session of 2020, after raising the Cash Reserve Ratio (CRR) for banks by 500bps to 27.5 percent from 22.5 percent. Although effective CRR has long been above 22.5 percent, the move to further raise it contradicts the apex bank’s push for lending to the

real sector. Based on the adverse effect a hike in CRR would have on the economy, analysts say the Central Bank may have picked a wrong tool in fighting higher inflation that is driven mainly by food prices but recognise the CBN’s hands may be tied. Using a monetary tool to solve a challenge that can be largely addressed by fiscal policies hasn’t sat well with economists who say the higher inflation is supplydriven and is as a result of the border closure. Since the decision to stop land border trade, inflation has headed north, jumping by 96 basis points to 11.98 percent in December, and breaking three months of consistent declines as food prices soared. Food inflation rose to 14.67 percent from 11.17 percent before the border was closed, while core inflation rose from 8.68 percent to 9.33 percent. Analysts argued that improvements in the production of domestic substitutes of previously imported food products and overall upgrade of infrastructure are likely to have a more direct impact on

Coronavirus: Nigeria’s readiness for non... Continued from page 2

WAHO has also implemented a regional laboratory network for access to rapid biological diagnostic facilities by member states, and has a standby Regional Rapid Response Team to support countries if required,” it said in a statement. The Nigeria Centre for Disease Control (NCDC) has asked people to stay calm as it is coordinating multiple sectors for assessing and managing the risk of importation. The Port Health Services unit of the Federal Ministry of Health has amplified screening measures at the points of entry including airports and ground transport stations. The centre is equally in close communication with the World

Health Organisation (WHO) monitoring team. Similar to Ebola response, provisions have been made for temperature checks, information notifications, masks to passengers with fever and guiding of symptomatic passengers to health facilities for further tests, the NCDC said. During the emergency response for Ebola, a topnotch virology laboratory affiliated with the Lagos University Teaching Hospital quickly rose to the occasion to promptly diagnose case of Ebola virus disease. Isolation facilities were built in Lagos and Port-Harcourt as designated Ebola treatment facilities. Existing infrastructures for polio eradication were repurposed to support the www.businessday.ng

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70 percent average of peer emerging economies. It is further estimated that at least $3 trillion must be invested in infrastructure over the next 30 years to bridge the said gap. On January 10, BUA displaced Airtel Nigeria as the third most capitalised company in Africa’s largest economy after listing 33.86 billion shares at N35 on the floor of the bourse, valuing it at N1.18 trillion. The cement maker’s share price traded at N37 as of 2:00 pm on Monday in Lagos, valuing it at N1.25 trillion. Last year, BUA had merged two of its subsidiaries, Obu Cement and Cement Company of Northern Nigeria, to become the second largest producer of the building material with a total installed capacity of 10 million metric tonnes. Rabiu said that the company has an excellent energy mix that curbs cost and magnifies margins so that shareholders get value for their money in terms to share appreciation and dividend payment. “We are migrating to coal because it is cheaper,” said Rabiu. Analysts at Cordros Capital expect Nigeria to contribute about 18.1 percent to total sub-Saharan Africa (SSA) cement consumption over 2019E. “We see significant legroom for Nigeria’s share of cement consumption in SSA to improve by 85 bps to 18.1 percent, and thus result in a 7.7 percent year on year (y/y) expansion in Nigeria’s cement demand to 22.3MT in 2019,” said analysts at Cordros. nose with tissue or hand, and throw away the tissue immediately and wash your hands thoroughly. Avoid close contact with anyone who has fever and cough,” WAHO said. “If you have fever, cough or difficulty breathing, seek medical care immediately and inform your health care provider of all your recent travel history. In any areas with high suspicion of Coronavirus, avoid direct unprotected contact with live animals and surfaces in contact with animals when visiting markets,” it said. WAHO also asked individuals to at all times avoid eating raw or undercooked meat. “Raw meat, milk or animal organs should be handled with care to avoid cross-contamination with uncooked foods,” it said.

Tuesday 28 January 2020

BUSINESS DAY

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Global tech leaders to discuss enabling tech, cloud computing at #NerdsUnite2020 FRANK ELEANYA

ver 500 IT professionals from enterprise organisations across West Africa will convene in Lagos on February 21, 2020 for MainOne’s 5th annual gathering of its flagship event, Nerds Unite, themed: ‘Enabling the Digital Economy.’ This year’s event will showcase the launch of its Managed Cloud Services in partnership with Microsoft and Hewlett Packard Enterprise Operated by Selectium. The event will feature presentations and panel discussions on Cloud adoption, Cloud migration and all things Cloud with MainOne and its global partners. Featuring over 10 speakers from global tech firms and West African corporate organisations, #NerdsUnite2020 is designed to facilitate discussions on trending developments in the IT sector to help professionals deliver increased value to their organisations. The event’s keynote addresses will be given by Ernest Sales, CEO, Hewlett Packard Enterprises Operated by Selectium, and Wale Olokodana, Microsoft Business Group

director. Speaking on expectations for this year’s event, Tayo Ashiru, head of marketing MainOne, notes, “For the past four years, Nerds Unite has delivered powerful technology insights and networking opportunities for organisations and tech enthusiasts alike. This year we expect that with our panel of dynamic speakers, partners and launch of our Managed Cloud Services, the energy around Nerds Unite 2020 will be electrifying. These developments will help accelerate the digital transformation across all sectors and the ICT ecosystem in West Africa, supported by technological innovation and world class partners.” With over 3,000 participants since inception, Nerds Unite has showcased leading technology solutions available locally and globally, and has hosted major players in the international and local IT industry. This year’s edition is set to further empower the tech ecosystem with the industry’s latest developments, centring on unique perspectives on Cloud Computing targeted at C-Level executives and IT professionals of blue-chip organisations across West Africa.

NNPC acquires $2.5bn gas pipeline finance Olusola Bello

arties involved in the multi-billion-dollar Ajaokuta-Kaduna and Kano gas pipeline are to sign an agreement with Chinese lenders by second quarter of 2020 to fund the country’s biggest pipeline project. This comes after months of holding talks with China on financing a project seen as being central to expanding gas output in the West African nation. According to Petroleum Economist, on completion of the 614km Ajaokuta-KadunaKano (AKK) natural gas pipeline, new gas-to-power plants will push power generation capacity to more than 10,000mw, in a country of nearly 200 million people that have faced perennial electricity shortage for decades. Africa’s biggest economy struggles with power output, generating less than 7,000mw.

Meanwhile, Nigeria is expected to contribute around 35 percent of Africa’s total planned and announced oil and gas new-build trunk/ transmission pipeline length additions between 2019 and 2023. GlobalData’s report, ‘Global Planned Oil and Gas Pipelines Industry Outlook to 2023 - Capacity and Capital Expenditure Outlook with Details of All Planned Pipelines,’ reveals that Nigeria is expected to provide 6,601.5km of new-build pipeline by 2023. Most of the additions will constitute natural gas, at 6,460km, while crude oil pipelines will account for 142km. Varun Ette, oil and gas analyst at GlobalData, comments: “In Nigeria, 11 newbuild pipelines are expected to start by 2023. Of these, eight are planned projects and the remaining three are from earlystage announced projects.

Trans Saharan Gas is the longest upcoming pipeline with a length of 4,400km. This announced natural gas pipeline is expected to start operations in 2021.” The AKK pipeline is a 614km-long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC). It is set to be laid between Ajaokuta and Kano in Nigeria, and forms phase one of the Trans-Nigeria Gas Pipeline (TNGP) project. The pipeline project is being implemented via a build and transfer (BT) public-private partnership (PPP) model, which involves the contractor providing 100 percent of the funding. The pipeline will cost an estimated $2.8 billion and is currently scheduled for commissioning in 2020. It will feature a diameter of 40 inches and is expected to transport 3,500 million metric standard cubic feet per day

(Mmscfd) of dehydrated wet gas from several gas gathering projects located in Southern Nigeria. The project will result in the establishment of a connecting pipeline network between the Eastern, Western and Northern regions of Nigeria. It also aims to create a steady and guaranteed gas supply network between the Northern and Southern parts of Nigeria by utilising the country’s widely available gas resources. The project will be executed in three phases, with phase one covering the construction of a 200km-long segment between Ajaokuta and Abuja Terminal Gas Station at a cost of $855 million. In addition, the development is expected to reduce the large volume of gas flared annually in Nigeria as well as the subsequent environmental impact.

Youths’ potential, true assets of Nigeria - Sujimoto CEO GBEMI FAMINU

EO of Sujimoto Group, Sijibomi Ogundele, says the true asset of Nigeria is not in crude oil but in the potential of thenation’s‘youngvibrantpeople.’ Ogundele made the comment in a statement he issued on Sunday in Lagos to commend the recent Award of Excellency bestowedonhimandotheryoung Nigerians by the Ooni of Ife, Ojaja II, Oba Adeyeye Ogunwusi. The Ooni recently honoured Ogundele and other young Nigerian entrepreneurs at the Royal African Young Leadership Forum heldinObafemiAwolowoUniversity, Ile Ife, Osun State. Ogundele said the future of Nigeria was dependent on the opportunities given to its youth, saying, “As I sat in a room filled with more than 1000 students and over 99 awardees from fashion, entertainment, technology, manufacturing, business, and other industries, I realised that the Nigerian youth have not even utilized up to 10 per cent of their potential. “Our true asset is not in crude oil but in the potential of young vibrant people of our nation.” The CEO advised Nigerian youths to take advantage of opportunities around them and motivations to exploit them, noting, “From Dubai to Singapore to Shanghai and to Silicon Valley, true leaders are those who seize opportunities and drive change to impact their nation. “The Indians and the Lebanesethatyouseeheretodaydidn’t come here to count the bridges. They came to find opportunities in our nation. “Nigeria is the only country, where an Indian man could come here as a storekeeper and later become a manufacturer; or a Lebanese as a project manager

and later become a contractor. “The Nigerian youth must pull the bull by the horn, and take advantage of the opportunities around us.” Ogundele, commending the award bestowed on him, said it wasnotjustanawardbutasymbol of responsibility – to uphold the “Omoluabi spirit” — the spirit of integrity, the spirit of perseverance, and the spirit of nobility. He also described the award and the “smooth and exciting experience” the awardees had from Nigeria to Accra, Ghana, as a challenge to continue to work hard for greater rewards. “It was a great honour to have received this call to duty and recognition from the most distinguish frontline traditional ruler in Africa – His Imperial Majesty, the Ooni of Ife, Oba Adeyeye Ogunwusi. “This award of excellence is a continuous reminder that he who workshardwillstandbeforeKings. This is because I strongly believe that there is no nobility in poverty. “Itdoesn’tmatterwhetheryou are from Ikorodu or Ikoyi, immediatelyyousubstituterecklessness for diligence, your true potential becomes a reality,” he said. He commended the Ooni of Ife for the platform and opportunity he had given to young enterprisingNigerianstoblossom beyond the shores of Nigeria. “Not only has the Ooni shown other leaders what it means to support young and promising Nigerians,buthehasalsosuccessfully bridged the divide between the present leaders and future entrepreneurs. “The future of Nigeria is dependent on the opportunities we give our youth. The Ooni has set a precedent for us all to follow. I am happy for the opportunity to be part of a block-chain of young entrepreneurs, making a difference. www.businessday.ng

L-R: Idowu Oyetola, director, public private partnership, Lagos State Ministry of Education; Aderemi Adebowale, special adviser to the governor on civic engagement; Bayo Adefuye, representative of the chairman of Lagos State Universal Basic Education Board, and Eniola Obe, educator sector lead, Sterling Bank, during the flag-off of Snacks4Thought Lagos feeding programme in Lagos.

Salary stoppage threat: Get ready for industrial crisis, ASUU tells FG REMI FEYISIPO, Ibadan

cademic Staff Union of Universities (ASUU) has begun mobilisation of members against the threat by Accountant General of the Federation to stop salaries of lecturers this January for failing to enrol into the Integrated Personnel and Payroll System (IPPIS). To this end, the development may halt academic activities in the nation’s public university as the union has resolved to activate ‘No Pay No Work’ as soon as government stops its members’ salaries. A circular from the office of the Accountant General of the Federation (AGF) was sent to all public universities last week Thursday, with the information to withhold January salary of lecturers who refused to enrol in the IPPIS platform. Deji Omole, chairman, University of Ibadan chapter of ASUU, while reacting to the development on Sunday in Ibadan,

maintains that the Union was ready to pursue its stand on autonomy and infringement on FGN-ASUU agreement, which IPPIS will erode. Omole, a professor, states it is unfortunate that even the President cannot be trusted after assuring the Union to look into the matter and setup committee to harmonised UTAS and IPPIS tabled before him at the last meeting. According to Omole, the Union will not be threatened to allow undemocratic public servant like Accountant General of the Federation to ridicule tertiary education, as the move will throw public varsities into another crisis. He says ASUU rejected IPPIS on point of law, principle and rule of law but has offered an alternative platform that has been named University Transparency and Accountability Solutions (UTAS) , which will take care of university peculiarities.

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NSACC holds breakfast forum in Lagos

igeria-South Africa Chamber of Commerce (NSACC) will hold its January 2020 breakfast forum January 30, at America, Asia & Africa Room, Eko Hotels and Suites in Victoria Island, Lagos, by 7.30am. G u e s t s p e a k e r, Mu hammed Babandede, comptroller general of Nigeria Immigration Service (NIS), will share insights on the topic: ‘The true situation of Immigration Service in Nigeria today and prospects for the future in our ever evolving Society.’ He will also deliberate on entry requirements and Visa on Arrival policy recently initiated by the Federal Government. NSACC executive secretary, Iyke Ejimofor, states that the event is primarily for captain of industries, business owners and top level executives as well as other interested parties, saying the chairman of the Chamber, Foluso Phillips, and other executive directors @Businessdayng

are expected to attend the forum. He further notes that as in previous times, this edition will be educative and also insightful. Ejimofor, on behalf of the Chamber, encourages everyone who wants to grow and strengthen his or her business or gain insights on how to thrive globally to make effort to attend. He expresses that the meeting is a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on.” Since the inauguration of the Nigeria-South Africa Chamber of Commerce in the year 2000, the bilateral relation between both countries has grown tremendously. The Chamber has been a veritable economic tool responsible for the increment in trade between Nigeria and South Africa.

Tuesday 28 January 2020

BUSINESS DAY

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LEKOIL, Otakikpo JV partners complete first crude oil lifting of 2020

EKOIL, an oil and gas exploration and production company with a focus on Nigeria and West Africa, has announced, on behalf of the Otakikpo Joint Venture, made up of Green Energy International Limited (GEIL), the operator and technical partner of LEKOIL Oil and Gas Investments Limited (LOGL), a member of the LEKOIL Limited Group, an operational update on Otakikpo Marginal Field in OML 11. The Otakikpo JV, on January 25, 2020, completed the first crude oil lifting of this year by the nominated offtaker, Shell Western Supply and Trading Limited (SWST) (a member of the Royal Dutch Shell plc group of companies). LOGL expects to receive cash proceeds from this crude oil lifting of c. $7.0 million. The next lifting, of a similar quantity, is expected to occur within the next four to six weeks. For the full year 2019, production from Otakikpo averaged 5,305bopd gross with 2,122bopd net to LOGL (full year 2018: 5,345bopd gross with 2,138bopd net to LOGL). For the first 20 days of this year, production at Otakikpo has averaged 5,860bopd gross with 2,344bopd net to LOGL. “Otakikpo continues to provide steady production

and cashflow for LEKOIL. We are delighted with the collaborative progress being made by all parties towards the development and transformation project planned for Otakikpo, which is aimed at increasing production from the field. We remain fully focused to generate value on this asset for all shareholders,” Lekan Akinyanmi, LEKOIL’s CEO, said. Further to the announcement on July 1, 2019, where the Otakikpo JV executed a memorandum of understanding (MoU) with Schlumberger and a subsidiary of a major international oil company, the parties remain aligned and committed to the expansion project which has the potential, subject to satisfaction of the conditions set as previously announced, to increase production on the field up to 20,000bopd (8,000bopd net to LOGL). The phased development plan for the project consists of drilling between five and seven new wells as well as the expansion of processing infrastructure which will be financed by a project finance debt facility. A further update on the progress of this project will be provided shortly. As at December 31, 2019, LOGL has an outstanding balance (including accrued interest) of interest-bearing term loans of $19.2 million.

ICAN names Ahmed Kumshe Registrar/Chief Executive

overning Council of the Institute of Chartered Accountants of Nigeria (ICAN) has announced the appointment Ahmed Modu Kumshe as new Registrar/Chief Executive. ICAN in a statement made available to BusinessDay says Modu Kumshe replaces John Evbodaghe who retired on December 31, 2019. Kumshe until his app o i n t m e n t a s R e g i s t ra r served as a university don and Chartered Accountant with a robust academic and administrative experience spanning over 19 years. He ser ved the University of Maiduguri and its Department of Accounting in various capacities. According to the statement, “Kumshe pioneered the automation of students’ degree and academic status computations using MS Excel (2005). Kumshe rose to become an Associate Professor and Head of the Department of Accountancy of the University before he moved to ICAN.” Kumshe was a visiting lecturer to Modibbo Adama University of Technology, Yola, and Yobe State University, Damaturu, while he was external examiner to Taraba State University; Adamawa State University, and Ramat Polytechnic, Maiduguri, Borno State. He became a member of

the Governing Council of The Institute of Chartered Accountants of Nigeria in 2017. He served the Institute in various capacities before he was appointed Registrar/ Chief Executive in October 2019. As the Post-Graduate Coordinator, he improved the effectiveness of processes and graduation of Doctoral, Masters and Postgraduate Diploma for Accounting students. As a result of the process upgrades he initiated, over sixty Postgraduate students graduated in the last 4 years (which was more than the total number of graduates since inception of the programmes in 2004) thereby enhancing both the productivity and revenue generation for the Department.

Ahmed Kumshe www.businessday.ng

L-R: Usen Udoh, group chief human resource officer, Dangote Group; Lara Yeku, author, “My HR Story,” her husband Kayode Yeku; Yinka Morgan, director, Laterna Ventures, and Titilayo Akinsanya, vice president, Chartered Institute of Personnel Management (CIPM), at the public presentation of a book “My HR Story” in Lagos. Pic by Olawale Amoo

Banks turn laggards as CBN’s CRR policy takes shine off lenders’ stocks OLUFIKAYO OWOEYE

egative sentiment greeted the Credit Reserve Rate (CRR) raise by the Central Bank of Nigeria (CBN), as big lenders’ stocks slumped Monday with the sector emerging day’s worst performer. Apart from Guaranty Trust Bank, which traded flat, tierone banks lost, bringing the sector’s index 1.19 percent lower in the day, while the broader market dipped 0.26 percent. CBN’s Monetary Policy Committee at its first meeting this year on Friday, January 24, raised the Cash Reserve Ratio

(CRR) upwards by 500bps to 27.5 percent – a move last witnessed in March 2016. The MPC retained all other policy parameters constant – the Monetary Policy Rate at 13.5percent; asymmetric corridor around the MPR at +200bps/-500bps; liquidity ratio at 30 percent. It also maintained the demand for a minimum of 65 percent on loan-to-deposit ratio for the banks. The combination of these ratios, analysts say, will impact negatively impact the operations of banks in the year. “The new CRR would affect the performance of banking stocks for now, but as the week

Nigeria Economic Outlook 2020: Jumia chairwoman, finance minister, others to discuss new Finance Act impact on local businesses Daniel Obi

s the Federal Government of Nigeria sets to commence the implementation of the Finance Act 2019, the chairwoman of Jumia Nigeria, Juliet Anammah, will be joining Hajia Zainab Ahmed, finance minister, and other experts today atEkoHotels,Lagos,todiscussthe implications of the new Finance Act at the Nigeria Economic Outlook 2020 organised by Deloitte. The experts are expected to take a holistic view of the provisions of the Act along the lines of its major components while profferingsolutionsforaneffective administration of the policy. Joining Anammah and the minister are CEO of Chapel Hill Denham, Bolaji Balogun; Yomi Olugbenro, partner and West Africa Tax leader at Deloitte; Dinesh Rathi, managing director/CEO, Lagos Free Trade Zone (Tolaram Group), and Eme Essien Lore, country manager, International Finance Corporation. The panellists will deliberate on the policy as Nigerians brace up for its implementation. Thepanellistswillfocusonkey aspects of the Finance Act 2019, such as digital economy, global

competitivenessandremodelling for full VAT system to grow the Nigerian economy. In addition, they willdiscussissuesaroundhowthe new Act affects the Value Added Tax (VAT), Companies Income Tax Act (CITA), Personal Income Tax Act (PITA), Petroleum Profit Tax Act (PPTA), Capital Gains Tax Act (CGTA), Customs and Excise Management Act (CEMA) and Stamps Duties Act (SDA). It would be recalled that in 2018,theNigeriangovernmentset in motion an amendment to the existingfiscalpolicyinthecountry. A major highlight of the review was the value added tax, which bythe2019Acthasbeenreviewed upwards to 7.5% from 5%. Althoughtheenactmentofthe Act has generated some criticism amongNigerians,thegovernment had maintained that the new Act would serve the country well in terms of its fiscal administration inthelongrun.The2019Financial Act seeks to promote fiscal equity, align domestic laws with global best practices and support Micro, Small and Medium Enterprises (MSMEs). The provisions of the policy will also increase government revenues and stakeholders’ investments in capital and investment market through the introduction of incentives.

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progresses the impact should fade,” Gbolahan Ologunro, an analyst at CSL Securities, said. According to Gbolahan, the policy would further pressure the earnings of banks and comes at a time when banks are trying to meet the 65percent LDR target, a minimum liquidity ratio of 30 percent, and shrinking income from interest income. Zenith Bank dropped 2.28 percent to end trading at N21.45; United Bank for Africa dropped 2.34 percent to N8.35; Access Bank ended at N10.00 after shedding 2.44 percent, while First Bank Holdings traded at N7.00 after losing 4.11 percent.

The CRR is the portion of total deposits that lenders are expected to keep with the central bank. It serves as a monetary management tool used by the central bank to control volume of money in circulation, and attracts no interest payment. Explaining the rationale behind its decision to raise the CRR, the CBN argued that the primary reason for the CRR hike was to curb possible inflationary pressures that may arise from expected excess liquidity in the near term. Inflation at the end of December 2019 rose to 11.98 percent, according to figures released by the National Bureau of Statistics.

Ahead of Enugu airport re-opening, FG upgrades navigational facilities IFEOMA OKEKE

s the build up to the reopening of the Akanu Ibiam International Airport, Enugu, gathers momentum, the Federal Government has made good its promise to upgrade facilities at the airport. To this end, the Nigerian Airspace Management Agency (NAMA) has successfully installed a brand-new CAT 2 Instrument Landing System/ Distance Measuring Equipment (ILS/DME) to replace the old system installed since 2003. A successful site acceptance test on the equipment has been conducted by NAMA engineers in Enugu in preparation for its calibration in the coming days. Meanwhile,inabidtoaddress communication blind spots in the Lagos South East corridor, the agency has also installed a VSAT (Very Small Aperture Terminal) for satellite communication at the airport. This SATCOM (Satellite Communication) node has further been integrated into the national satellite communication network which is linked to the AFISNET (African Indian Ocean SATCOM Network). Also linked to the VSAT is the newly installed Remote Control Air-Ground (RCAG) Very High @Businessdayng

Frequency (VHF) radio communication system, ensuring that Enugu now has an extended VHF coverage on 127.3MHz frequency for Lagos South East sector. Speaking on the gains of this latest installation, Fola Akinkuotu, managing director of NAMA, who noted with delight that radio communication along the Lagos South East sector had ‘improved tremendously,’ said the installationoftheVHFradioinEnuguwas “particularly significant as the city is strategically located to accommodate over six routes, both local and international. “Enugu being on a higher latitudecancoverforManfeentry/ exit reporting point in Cameroun for international flights like Ethiopian, Rwanda Airlines, Kenya Airways, South Africa Airways and the like.” The new installation has provided AFTN (Aeronautical Fixed Telecommunication Network) link that would enhance effective data communication for transmission of flight plans, NOTAMsandAeronauticalCommunicationmessages,justasithas provided effective coordination between Enugu tower and Lagos Area Control Centre through the ATS/DS (Air Traffic Services/ Direct Speech) for departing and arriving traffic ahead of time.

Tuesday 28 January 2020

BUSINESS DAY

news

How ban on ‘Okada,’ ‘Keke’ will impact Lagos commuters … as 600 deaths,10,000 accidents recorded in 4 years JOSHUA BASSEY

ommuters in metropolitan Lagos may be faced with daunting challenges commuting around the metropolis, as the state government restricts the operations of motorcycles (Okada) and tricycles (Keke) from five urbanised local governments and local council development areas. They include Apapa/Apapa Iganmu, Lagos Mainland/Yaba, Surulere, Ikeja/Onigbongbo, Ojodu, Eti-Osa/Ikoyi-Obalende, Iru/Victoria Island, and Lagos Island/Lagos Island East. Motorcycles and tricycles crept into the Lagos’ public transportation space nearly two decades ago, as the population expands, resulting in intractable road congestion, amid inadequate public transportation system to cater to the growing need of the people. Statistics from the Lagos Metropolitan Area Transport Authority (LAMATA) also show that road transportation accounts for over 90 percent of movement in Lagos, as water and rail systems, which ought to serve as alternatives currently bear little or no impact. Thousands of residents of

Nigeria’s commercial city have over the years embraced Okada and Keke to fill observed gaps in the state public transportation. For example, Okada remains an alternative mode to gain access to Apapa, Nigeria’s premier port city, which is daily bedevilled by gridlocks. But this comes at serious to the state, as official figures show that between 2016 and 2019, more than 600 deaths and 10,000 accidents involving Okada and Keke were recorded in the state. Gbenga Omotosho, the commissioner for information and strategy, said on Monday that the decision to bar Okada and Keke was reached at the state security council meeting chaired by Governor Babajide Sanwo-Olu. The Lagos State government finally resolved to begin the enforcement of its extant laws which restrict motorcycle Okada and Keke on some roads. The decision was motivated by scary statistics which show that 600 lives were lost and 10,000 Okada and Keke related accidents recorded in the state between 2016 and 2019. Omotosho told State House correspondents, that the security council took the decision

because the security and safety of lives of Lagosians are paramount. “The figures are scary. From 2016 to 2019, there were over 10,000 accidents recorded at the General Hospitals alone. This number excludes unreported cases and those recorded by other hospitals. The total number of deaths from reported cases is over 600 as at date. The rate of crimes aided by motorcycles and tricycles keeps rising. Therefore, in compliance with the extant Transport Sector Reform Law 2018, the council has decided to commence enforcement of the law which bans the operation of motorcycles and tricycles in the following Local Government Areas (LGAs) and Local Council Development Areas (LCDAs): Apapa LG and Apapa Iganmu LCDA, Lagos Mainland LG and Yaba LCDA, Surulere LG, Ikeja LG, Onigbongbo and Ojodu LCDAs, Eti-Osa LG, Ikoyi-Obalende and Iru/Victoria Island LCDAs, Lagos Island LG and Lagos Island East LCDA. The full enforcement begins on February 1, 2020,” said Omotosho, adding that motorcycles and tricycles are also used as get-away means by criminals.

National Data Privacy Day: Experts identify information security as key element for rapid economic growth Jumoke Akiyode-Lawanson

he Nigeria Data Protection Regulation (NDPR) issued by the National Information Technology Development Agency (NITDA) on January 25, 2019, to guarantee privacy and protection of data belonging to Nigerian citizens all over the world would reduce concerns over cyber security and further drive the creation of a digital economy for rapid development, experts say. Data protection and privacy has become a huge issue around the world. Information privacy is the relationship between the collection and dissemination of data, technology, and the public expectation of privacy, legal and political issues surrounding them. With telecommunication service providers handling data of over 170 million mobile network subscribers, as well as banks and other data collect-

ing government agencies, it is important that Nigeria’s data protection policies are world standard. Today, January 26, 2020, Nigeria is for the first time in history, joining the rest of the civilised world to celebrate the National Data Privacy Day, which was first celebrated in Europe in 2007 and in the United States in 2009. According to Abimbola Adeseyoju, managing director, DataPro Limited, the day is celebrated to awaken the sensibilities of all Nigerians on what the Federal Government has done to protect their rights. “This is indeed a plus on the part of the government, and it again, calls for a pat on the back. They have done well in this regard,” he said. The NDPR (2019) is complementary to the Nigeria Cybercrime Act of 2015. Experts say one sure way of combating crime is by apportioning effective, proportionate, dissuasive and

commensurate punishment for offenders and those who go against the provisions of the regulation. According to the NDPR provisions, any person subject to the regulation found to be in breach of the data privacy rights of Nigerians shall be liable in addition to any other criminal liability to: In the case of data controllers/data processors dealing with more than 10,000 data subjects (such as IT companies, payment companies, fintechs, banks, insurance companies, etc) payment of the fine of 2 percent of annual gross revenue of the preceding year or payment of the sum of N10 million, whichever is greater. Also, in the case of a data controller or data processor dealing with less than 10,000 data subject payments of the fine of 1 percent of the annual gross revenue of the preceding year or payment of the sum of N2 million, whichever is greater.

Obaseki lifts suspension on Egor LGA chair, Ogbemudia

do State governor, Godwin Obaseki, has lifted the suspension on the chairman of Egor Local Government Area, Eghe Ogbemudia. In a statement, special adviser to the governor on media and communication strategy, Crusoe Osagie, said the suspension was lifted after an investigative panel cleared Ogbemudia of the accusations that led to her suspension. Ogbemudia was suspended

after several petitions were written against her by officials of the council, alleging financial misappropriation and abuse of power. “The cases brought against her have been reviewed and she has been cleared of the allegations, thus her reinstatement. She is to resume office immediately,” Osagie said. He said the reinstatement would provide Ogbemudia the opportunity to continue in www.businessday.ng

repositioning the local council area in line with the vision of the Obaseki-led administration of efficient management of the councils on the principles of probity and people-driven development. Recall that a number of local council chairmen have been suspended, with some of those who were found culpable of financial misdeeds replaced since their assumption of office more than a year ago. https://www.facebook.com/businessdayng

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Tuesday 28 January 2020

BUSINESS DAY

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‘Nigeria needs $110bn investment annually to lift citizens out of poverty’ Daniel Obi

igeria needs to invest a minimum of $110 billion annually to be able to lift 10 million people out of poverty each year, Bismarck Rewane, a member of the Nigeria’s Economic Advisory Council, has said. President Muhammadu Buhari announced last June that Nigeria would over the next 10 years lift 100 million Nigerians out of absolute poverty, which translates into lifting an average of10million Nigerians every year. Rewane spoke on ‘The Nigerian Economy in 2020: Implications for the Marketing Communications Sector’ in Lagos Monday, and noted that the investment component of Nigeria’s GDP currently is about N$66 billion. To double it, Nigeria needs to practically improve Ease of doing Business, infrastructure especially electricity, discipline and investment openness, he said. Other approaches by Rewane who is also the CEO of Financial Derivatives Limited to achieve the reduction in poverty include reduction in income inequality and poverty; increase in national savings, domestic output and productivity. Nigeria in 2018 became the

world poverty capital, overtaking India as the country with the largest number of extremely poor people. Rewane also suggested a reverse in monetary policy direction to curb inflation and build external reserves, reforming of the forex market, and using the incorporated joint venture, IJVs of the upstream sector as a catalyst. The economist who spoke at Public Relations Consultants Association of Nigeria, PRCAN forum, said that to transform people’s lives, Nigeria needs 8% GDP growth rate from the present 2.1% and massive electricity improvement which he described as the driver of economic production. According to him, Nigeria needs a proactive instead of reactive approaches and policies to move the economy forward. On the outlook for 2020, he said that unorthodox monetary policy had led to negative rates of return. Looking at 91-day T/bills at 2.95% and inflation at 11.98%, he said there will likely be reduction in the propensity to save in 2020. He said there would be pressure on the external sector and trade balance surplus and current account deficit would likely continue in 2020. “After inflow following elections portfolio flows have declined,” he noted.

Sahara Group’s Asharami Energy says Tomato Jos flags off processing plant in ongoing talent recruitment to aid Kaduna, targets 10% of Nigeria’s demand landmark oil production goal for local consumption,” said CALEB OJEWALE

SEGUN ADAMS

sharami Energy Limited, a subsidiary of Sahara Group Upstream, has commenced a recruitment exercise targeted at young professionals as part of its plans to ramp up oil production in five years, the company has said. The talent sourcing is to complement investments in technology to attain a milestone oil production of 100,000bpd announced last year amid plans to boost its exploration activities across Nigeria, Ghana and Core d’Ivoire. “Asharami Energy is excited about the programme and looking forward to welcoming exceptional talent that will add impetus to our drive towards achieving oil production of 100,000 barrels per day over the next five years,” said Olajumoke Ajayi, managing director, Asharami Energy, the Sahara Graduate Upstream. She said the Sahara Graduate Upstream Trainee Programme had been designed

to give brilliant professionals a solid foundation for a promising career in the upstream sector. Asharami Energy is one of Africa’s leading independent E&P players with a diverse portfolio of 9 oil and gas assets in prolific basins across Africa. The on-going recruitment programme is expected to give successful candidates exposure to challenging real-life upstream business scenarios in today’s rapidly evolving business environment, mentorship opportunities to shadow seasoned leaders and experts as well as world-class training in practical upstream activities that are tailored to their career aspirations, Ajayi said. Highlights of the programme include formal classroom and practical training for one year, career progression opportunities with clear paths and growth plans, crossfunction exposure to several aspects of the sector and indepth training on the soft skills needed to thrive in a structured business environment.

fter operating in Nigeria for over five years in primary production of tomato and a few other crops, the construction of a tomato processing facility has been initiated by Tomato Jos Farming and Processing Limited. The company, a whollyowned subsidiary of Tomato Jos Incorporated, Monday had a ground-breaking ceremony of its tomato processing facility that would be situated on 500 hectares of land, under lease from the Kaduna State government, with a potential tomato cultivation area of 400 hectares. The ground-breaking formalities were performed by Nasir el-Rufai, governor of Kaduna State, Godwin Emiefiele, governor of the Central Bank Nigeria (CBN), John Coumantaros, chairman, Flour Mills of Nigeria plc, Mary Beth Leonard, US Ambassador to Nigeria, and Mira Mehta, CEO, Tomato Jos. “The Tomato Jos vision is very simple, local production

Our new strategy to tackle Apapa gridlock - Presidential Task Team JOSHUA BASSSEY

he Presidential Task Team on Apapa gridlock says it now allows only 10 trucks released from Lilypond Container Terminal at a time, as part of new strategies to tackle congestion on the road/bridge in-bound Apapa, Nigeria’s premier port city. Gridlocks around Apapa have remained a recurring decimal and a source of frustration for businesses and residents, who continue to lament their losses occasioned by daily congestion in and around Apapa. The enforcement arm of the task team is coordinated by Bayo Sulaiman, an Assistant Commissioner of Police (ACP), who worked with Hakeem Odumosu, who headed the enforcement arm of the team, until his recent appointment as Commissioner of Police (CP) in charge of the Lagos Command. Sulaiman, who was cornered by our reporter within Apapa, and promptly invited to give BusinessDay some insights into how the task team was tackling the gridlocks, said there was serious restriction on the number of tankers that must leave at a time. “We now allow trucks to move out of Lilypond in batches of 10 at a time,” said Sulaiman, adding that pe-

troleum tankers and containerised trucks were also no longer allowed to make their way to Apapa in the early hours of the day until 10am. “The idea is to reduce the number of trucks on the bridge and ensure that those on the bridge are not stationary. Too many trucks could result in them staying stationary on the bridge and causing heavy gridlock. “We don’t also allow them to begin driving into Apapa until it is 10am. This is to make sure that the road is free for people going into Apapa. From 10am to 4pm, we stop them in order to allow people closing from their offices to exit Apapa. That’s the strategy we have adopted,” Sulaiman explained. He explained that the difficulty currently being experienced by motorists and commuters exiting Apapa, resulting in the hiccups at Mobil Road/Marine Beach junction, was due to the closure of the out-bound lane of Apapa-Ijora Bridge for repair works, describing it as temporary. “Once the contractors are done with the repair works and the bridge reopened, the bottleneck at Mobil Road/Marine Beach will ease off because motorists would have started using the bridge to exit Apapa,” Sulaiman said, who assured of deploying more men to assist in managing the situation at Marine Beach. www.businessday.ng

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Mehta, CEO, Tomato Jos, noting, “And our goal is very clear, we want to create a middle class in rural Nigeria through the industrialisation of agriculture. This ground-breaking ceremony is just the beginning.” It focuses on year-round crop cultivation of tomatoes, maize, soya, wheat, and other crops, as well as food processing and value addition for the Nigerian and West African markets, the company said in a statement. “The launch of this proud Nigerian brand will deliver superior quality tomato paste at competitive prices to consumers across the country,” it said. Emefiele commended the company’s role in ensuring “Nigeria produces enough to feed Nigerians.” The flag off for the tomato processing facility, according to him, marks a key milestone in the CBN’s intervention in the agricultural sector. “It is a manifestation that the multifaceted commodity approach which we are adopting in the CBN is yielding positive outcomes,” he said.

Tuesday 28 January 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper Kadhim Shubber

group of influential US lawyers has urged Congress to toughen insider trading laws by making insiders liable even when they do not benefit from giving nonpublic information to traders. A task force led by Preet Bharara, the former Manhattan US attorney who led a crackdown on insider trading after the financial crisis, issued a report on Monday calling on legislators to eliminate the so-called “personal benefit” test in US insider trading law. “If you have a broad personal benefit requirement, it lets off the hook a rich insider who steals information from his company and benefits a crony or a family member to the tunes of tens of millions of dollars,” Mr Bharara told the Financial Times. “That’s classic unfairness and it has to be clear that such a thing violates the law.” The report from eight former enforcement officials, judges and professors comes after the House of Representatives last month passed a ban on insider trading with overwhelming bipartisan support. The bill has yet to pass the Senate but, if adopted, this would mark the first time the US has passed specific legislation criminalising insider trading. While many countries have specific statutes that outlaw insider trading, in the US decades of law have been built upon a more general 1934 law regulating American markets. US courts have rejected the fairness standard used in European insider trading law, instead basing the crime on the idea that insiders owe a duty not to share insider information. Republicans in the House backed the bill, called the Insider Trading Prohibition Act, after it was amended to retain the personal benefit requirement that has evolved over the years in the US courts. At the time, Patrick McHenry, the ranking Republican on

Lawyers push to toughen new US insider trading law Preet Bharara’s task force wants culprits held liable even if they do not personally benefit

the House financial services committee, said the test would help protect “good-faith traders”. The test is founded on a 1983 decision by the Supreme Court in Dirks v SEC, where the justices cleared a securities analyst because he had not been motivated by a personal benefit when he discussed information obtained from a whistleblower with his clients. “Absent an improper purpose, there is no breach of duty to stockholders. And absent a breach by the insider, there is no derivative breach,” the court ruled. As US attorney from 2009 to 2017, Mr Bharara embarked on an aggressive crackdown on insider trading including the high-profile prosecutions

of Rajat Gupta, Raj Rajaratnam, and SAC Capital. The spree was derailed in 2014 when the 2nd Circuit Court of Appeals found in two other cases involving traders that the government had not proven a personal benefit received by the original insiders. The Supreme Court declined to review that decision, but in a separate case later clarified that if insiders are giving tips to close friends and families, they personally benefit because the action is legally the same as trading on their own account, and gifting the profits instead. More recently, the 2nd Circuit last month said prosecutors using certain statutes did not have to prove a personal benefit. “The personal benefit require-

ment [that] has grown up over time has been very confusing to people,” said Mr Bharara. “There are times when you can provide a very impressive material non-public tip to somebody and the question about whatever the benefit is is unclear.” The group led by Mr Bharara included Joon Kim, a partner at Cleary Gottlieb Steen & Hamilton, who was the acting Manhattan US attorney after Mr Bharara, and Jed Rakoff, the Manhattan federal judge who pushed for tougher accountability against big banks after the 2008 crash. The others members of “The Bharara Task Force on Insider Trading” were Katherine Goldstein, a partner at Millbank, Melinda Haag,

a partner at Orrick, Joan McKown, a partner at Jones Day, John Coffee, the Columbia Law School professor, and Joseph Grundfest, the Stanford Law School professor. The absence of a specific ban on insider trading has not necessarily hindered US prosecutors, who have led the way in charging even global insider trading rings. Most recently, prosecutors in the US attorney’s office for the Southern District of New York broke up a scheme involving a Switzerland-based trader and bankers in London. “The insider trading laws in other parts of the world are actually specific to insider trading. In that way, US laws have fallen behind. It’s just the US is the only authority that actually enforces it in a meaningful way,” said Mr Kim. The task force’s recommendations aligned in parts with the seven-page bill passed last year by the House, which largely codified existing practice while expanding the law to cover insider trading that involves hacking. However, the group called for a clearer distinction between the standards for civil and criminal cases and pushed for the elimination of the personal benefit test. “It has generated a disproportionate share of confusion and uncertainty,” the report said, arguing that questions about the closeness of a person’s relationship with the recipient of a tip had “the potential to produce inconsistent and arbitrary results”. “One person’s best friend may be someone else’s distant acquaintance, and should that really matter for purposes of policing the integrity of the markets?” the report said.

UK and EU set for clash on fish and financial services Dublin suggests City risks losing access to Europe if bloc’s boats are barred from UK waters

George Parker, Laura Hughes and Arthur Beesley

eo Varadkar, Ireland’s prime minister, on Monday set up a “fish for finance” Brexit clash between Britain and Brussels by suggesting that the City of London could lose access to European markets unless the UK opens up its coastal waters to EU boats. Britain has long suspected that Brussels would this year demand continued EU access to the UK’s fish-rich waters as a condition of a future trade deal, with an explicit link being drawn to an agreement on financial services. Mr Varadkar, speaking to the BBC, said on Monday: “The UK has a lot of waters and a lot of fish is taken out of your waters by boats from other countries. But bear in mind that 70 per cent of the fish you sell, you sell into Europe. “That’s an area where you are in a strong position. An area where you’re in a very weak position is one of the most valuable parts of

the British economy — financial services. “You may have to make concessions in areas like fishing in order to get concessions from us in areas like financial services. That’s why things tend to be all in the one package.” The collision on fish and finance issues was set up in last year’s political declaration between Britain and the EU on future relations, which stated that agreements on both areas were a priority and should be settled by July. Downing Street said on Monday it stood by the declaration but insisted the precise timetable for negotiations was still to be agreed between the two sides. The UK hopes to stop Brussels using the sequencing of trade talks to the EU’s advantage. Boris Johnson’s spokesman said that after Brexit the UK would take control of its coastal waters, but did not exclude the prospect that EU fishermen could continue to operate in them as part of a future agreement. www.businessday.ng

“It will be for the UK to determine who fishes in our waters,” added the spokesman. Britain’s financial services industry hopes to maintain a close relationship with the EU, but it will not enjoy the same level of access as under the bloc’s single market, which includes a so-called passporting regime. This allows banks and other financial companies authorised in one EU member state to trade freely in another. The UK and EU are expected to forge post-Brexit market access arrangements for the industry based on the concept of “equivalence”. This would give Britain the opportunity to develop a discrete regulatory regime for financial services, and the ability to diverge from EU rules, although Brussels warned in December that UK access would depend on it “not starting to engage in some kind of deregulation”. Britain has meanwhile refused to offer Brussels any promises on access to UK coastal waters, where more than 700,000 tonnes of fish

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and shellfish are caught each year by EU boats. After December 2020, Britain will withdraw from the EU’s common fisheries policy — which has dictated where UK boats can operate and how much they can catch — for decades. British officials believe the adoption of a Norway-style model, which would involve annual negotiations with the EU on quota rights and access, would allow the UK to “take back control” of its coastal waters. Britain would also seek a larger quota compared with under the common fisheries policy. However, the EU is likely to oppose the uncertainty for the bloc’s fishermen each year and is expected to call for preservation of the status quo. Britain could refuse to strike an agreement and go its own way, but such a scenario would probably lead to the imposition of EU tariffs. It could also lead to the UK being forced to patrol and defend its coastal waters against EU boats. After talks in Dublin on Mon@Businessdayng

day with Mr Varadkar, EU chief Brexit negotiator Michel Barnier said he would next Monday circulate a draft negotiating mandate to European capitals for the trade talks with the UK. “Let me recall that the UK is leaving 600 international agreements,” he said. “We have to rebuild everything in our common interest.” Mr Varadkar said Ireland would be a “friend to the UK” after Brexit, but would be on “team EU” in the trade talks. He added: “If you see this as a contest the EU is in a very strong position . . . But I don’t think we have to see it as a contest. There is a possibility for us to work together with the UK over the next few months and come to a future relationship and a trade agreement that’s mutually beneficial.” Mr Varadkar called for “realism” in the trade talks, saying time was very short and that achieving a deal by Mr Johnson’s deadline of December 2020 will be “very challenging”.

Tuesday 28 January 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Coronavirus fears rattle shares and oil market

Travel, luxury and mining sectors hit by concerns over impact on Chinese economy Hudson Lockett, Joe Rennison and Philip Georgiadis

lobal equity markets fell heavily and oil prices slumped after China warned the spread of the deadly coronavirus would accelerate, highlighting growing concern about the disease’s potential impact on the global economy. Investors and China’s leaders are braced for a blow to first-quarter domestic growth as the virus weighs on consumer spending and travel during the lunar new year holiday and threatens to hit manufacturing. Beijing confirmed on Monday that 80 people had died while 2,744 were infected. The mayor of Wuhan has said the number of coronavirus cases in the city could rise by another 1,000. The escalating public health crisis prompted the government to extend the lunar new year holiday until next week in an effort to contain the outbreak. Lee Hardman, a currency analyst at Japanese bank MUFG, said the virus marked “a setback for the global economy and manufacturing sector, which had been showing tentative signs of improvement in recent months”. The virus continues to spread around the world. The US has confirmed cases in Washington state, Chicago, California and Arizona while Australia has reported five cases, South Korea four and Hong Kong five. Taiwan, Thailand, Vietnam, Singapore, Malaysia, Nepal and Canada have also announced cases. Major bourses across Europe posted broad declines with the composite Stoxx 600 index falling 1.8 per cent and shares in the travel, luxury goods and mining sectors

tumbled. London’s FTSE 100 slid 2.2 per cent, while Germany’s Dax was 2.1 per cent lower. US shares were set to open sharply lower on Wall Street, with S&P 500 futures indicating a fall of around 1.3 per cent. International banks, which have been expanding aggressively into China in recent years, have been keeping potentially exposed employees at a distance. Credit Suisse has sent its staff in Hong Kong a memo instructing them to stay away from its regional headquarters if they have visited mainland China in the last 14 days. Affected employees will be required to remain at home for at least two weeks. Shanghai, China’s financial capital, has ordered companies not

to reopen until February 9, while the manufacturing hub of Suzhou has postponed the return to work of millions of migrant labourers for up to a week. Suzhou is home to factories owned by companies such as iPhone contractor Foxconn, Johnson & Johnson and Samsung Electronics. Underscoring concern among policymakers over the economic fallout from the outbreak, China’s banking and insurance regulator announced moves to help businesses affected by the crisis. The China Banking Regulatory Commission said companies would receive support “through measures such as encouraging appropriate lowering of loan interest rates [and] improving arrangements for loan renewal policies”.

Andrew Milligan, head of global strategy at Aberdeen Standard Investments, said: “Even on the assumption that the authorities do get on top of this outbreak there will be some short-term economic shock”. But he added: “That is a long way from saying the outlook for global markets will be materially different. It’s still early days.” The coronavirus outbreak comes as China’s economy is already growing at its lowest rate in nearly 30 years. In 2019, the economy grew just 6.1 per cent. As the US-China trade war has hit exports, consumption — which is now threatened by the outbreak — has become a far more important source of growth. “Everything depends on how rapidly it spreads and how serious

it gets, but in principle this could have a serious impact on consumption,” said Michael Pettis, a finance professor at Peking University and senior fellow at Carnegie-Tsinghua Center. “People are not going out to restaurants and bars.” In European equity markets, British Airways owner IAG led declines in the airlines sector. Highend British fashion label Burberry, which is heavily exposed to the Chinese market, was one of the biggest luxury victims, slipping 5.5 per cent. Japan’s Topix, one of the only major regional stock indices trading on Monday, fell 1.6 per cent. Markets in China and Hong Kong were shut for the lunar new year. Brent crude, the international benchmark, fell 2.2 per cent to $59.35 a barrel, having earlier fallen more than 3 per cent to its lowest level in almost three months. Investors piled into haven assets, with gold rising 0.8 per cent to $1,578 an ounce. The benchmark 10-year US Treasury yield, which moves in the opposite direction to prices, fell 6 basis points to 1.62 per cent, its lowest level since October. Iron ore futures, which are tied closely to expectations of China’s economic growth, fell as much as 6.6 per cent to $85 a tonne, while copper fell 1 per cent. Shares in miners also suffered, with Anglo American the worst-performer in Europe with a 4.7 per cent decline. The drop in oil prices came despite reports that the US embassy in Iraq had been struck by a rocket attack at the weekend. Stephen Innes, chief Asia market strategist at broker Axicorp, said worries over the outbreak’s impact on travel — an important source of demand for crude — were outweighing geopolitical tensions in the Middle East.

Japan’s would-be croupiers take a gamble on casino schools Academies charging high training fees look riskier as public opinion sours on betting Leo Lewis

n the heart of the retail hive of Shibuya, Tokyo, wedged between the Apple and Ray Ban stores, is a shopfront proclaiming the birth of a new industry. Even more excitingly, it announces: “You are the STAR!!” Inside — clacking with activity — is a small but perfectly-formed casino comprising one each of roulette, blackjack and baccarat tables. The tableau is familiar: croupiers “croup”; lady luck variously smiles and frowns; chips and cards slide to and fro across green felt. Everything looks normal, but there is a twist: the biggest gamblers here are the dealers, who are paying thousands of dollars to be at these tables as trainees. Japan’s relationship with betting is a volatile one. Even more so since the December arrest of one of the key ruling party politicians behind liberalisation, Tsukasa

Akimoto, on suspicion that he took bribes from a Chinese online sports lottery operator. Japan allows various lotteries, wagers can legally be made on horse, bicycle and speedboat races, and the vertical pinball game pachinko enables de facto gaming on a legally vague and historically huge scale. But for more than a century, casinos have been strictly outlawed. For the past five years, Prime Minister Shinzo Abe has moved Japan towards opening its first “integrated resort” casinos — more, it often seems, in a flexing of political muscle than a genuine belief that the country will be a big winner. At no time in the process has a majority of Japanese been in favour of the idea, and, since Mr Akimoto’s arrest, support is tumbling fast. In 2016, Mr Abe rammed legislation through parliament giving Japan the go-ahead for casinos in principle and a rough timeline for when the first one will

open — sometime, it seemed until recently, around 2025. The great and grizzly of the global casino industry are ready to vie for the three licences that will be up for grabs — a competition rendered white-hot by estimates that Japan’s casinos could rapidly become a $20bn-a-year industry. On Wednesday, Yokohama will host the country’s first integrated resort trade show, where emissaries of Las Vegas, Macau and other gaming hubs will try to convince the Japanese public that they are wrong to be so stubbornly resistant to a proposition where the house always wins. There are a number of critical stages to go before a single card is dealt: the government must still decide on certification standards and how bidders will be accredited; a casino management board is yet to be established; the government has to select which cities will be given a licence to even choose

an operator. But Mr Abe still seems keen, so the assumption is that all this will happen. This is where the grandlynamed Japan Casino Academy in Shibuya comes in. It aims to teach wave after wave of Japanese how to rise in a still non-existent industry, at a cost of Y1.5m ($14,000) for the premium course. Despite the current lack of casinos, the directors of the JCA have made their calculations. Japan, they reckon, will eventually require 10,000 trained croupiers — a tall order in a country where the indigenous population is shrinking at a rate of one person per minute and where “staff shortage” was one of 2019’s fastest-rising causes of company failure. But the potential pay-off for hundreds of JCA graduates is enticing. A job in a convenience store or restaurant pays Y1,000 per hour. Casinos, says the school’s director Masaki Shiraishi, will pay dealers

hourly rates of as much as Y3,000. The course, which includes units on management, will also help graduates secure early promotion. The promise has resonated. At the Shibuya school, 57 per cent of applicants are women; at its sister branches elsewhere in Japan the share is in the high 80s. Until a few weeks ago, the fees seemed hefty but nonetheless a good investment: a bet, in effect, on Mr Abe’s ability to smuggle an unpopular idea past a disapproving public. But Mr Akimoto’s arrest has turned that investment into a far less tempting wager. In the past week, a succession of polls have shown plunging public support for casinos and demands for the pending decisions to be delayed. The most striking reversal has been among natural supporters of the prime minister. Japan’s casino roulette table is covered in ready bets, but, for now at least, the ball has rolled off under the table.

Tuesday 28 January 2020

BUSINESS DAY

ANALYSIS

Goldman Sachs: will Solomon’s consumer gamble pay off? Once seen as Wall Street’s most prestigious operation, the bank is betting a shift in focus will pay off in the long run Laura Noonan

oldman Sachs spent most of its first 130 years shrouded in the secrecy of a partnership structure. It jealously guarded that mystique for its first two decades as a listed company. But on Wednesday, David Solomon, who became chief executive in October 2018, will stand before a crush of shareholders, analysts and journalists at the bank’s first-ever investor day. It is effectively a coming-out party for a group that has spent the past two years planning a radical overhaul of its operations as it moves from its trading and investment banking roots to an institution offering everything from current accounts to money management and credit cards for the masses. For peers on Wall Street such events are routine. Mr Solomon’s decision to pull back the veil and explain Goldman’s strategy is anything but. It is one of the many breaks with tradition the investment banker has made since taking control at Wall Street’s most storied bank. Rivals such as JPMorgan Chase and Bank of America have blossomed in recent years as their big retail banks and cash management divisions — which help companies make and receive payments and manage their excess money — protected them from a 50 per cent fall in trading revenues in the decade after 2009. Even Morgan Stanley, which like Goldman lacks a retail bank, has weathered the storm better after restructuring its fixed income trading unit in 2015. It left Goldman as the only US bank overly dependent on a bond and stock trading business characterised by plummeting margins, higher capital charges and fierce competition from hedge funds and other rivals. In June 2016, the bank’s valuation fell to its lowest level in four years. “Lloyd [Blankfein] did a great job during his tenure [as chief executive] . . . but that was a time of tremendous incursion with Dodd-Frank [regulations], a lot of congressional intervention,” says Bill George, who was a Goldman Sachs board member from 2002 to 2019. “David came in really as the person to put the focus on growth,” he adds, citing the “critical” need to expand into new businesses. After years of subpar returns, and amid criticism from shareholders, analysts and his own colleagues, Mr Solomon began a sweeping review of how Goldman makes its money and what it needs to do to make more of it. Some measures were cosmetic — mandatory formal dress was ditched in favour of a millennial-friendly “come as you like, express yourself” policy. The bank’s top leadership team — most of them appointed by Mr Solomon — are swapping their suites on the 41st floor of Goldman’s New York headquarters for the 12th, so they can be closer to the main businesses. Other changes are more fundamen-

tal. Thousands of technology specialists have decamped from a central division into business lines, to have a more direct impact on products. Goldman bought a mass-market wealth management arm, United Capital, for $750m so it can sell its services to the merely wealthy as well as the enormously rich. It has launched a credit card with Apple, an addition to its mass market consumer business. In parallel, Goldman has also cut back less profitable parts of its enormous trading business, diverted investment bankers to pursuing smaller clients and promised a “One Goldman” approach to serving clients — an admission that the bank has not always been collaborative in its approach to winning business. A year in, and despite missing earnings forecasts for the past two quarters, Mr Solomon has claimed an early victory. But there is friction within the ranks. The changes threaten a culture clash between the traders and bankers who powered the Goldman of old, and the retail bankers, cash management experts and engineers who seem to hold the key to future growth. Outside the company some ask whether it has lost its cachet. “We used to all want to be Goldman Sachs. Now Goldman Sachs seems to want to be Citigroup or JPMorgan,” says a senior rival investment banker. The investor day is Mr Solomon’s chance to answer some of these questions, and to convince money managers, pension funds and private shareholders that the Goldman of the future will be able to end the poor returns of the recent past. In a comment that would have been unimaginable a decade ago, one senior executive says: “Investor day will be about explaining our reason for being.” Marcus, Goldman’s consumer bank, is the epicentre for the company that Mr Solomon and his team are trying to build — a place where innovation and customer experience matter more than the prestige that the bank once prized. The online venture was conceived in 2014, during the era of Mr Blankfein, the charismatic bond trader who ran Goldman for 12 years before Mr Solomon. The idea was to attract deposits that offered a cheaper source of funding than Goldman pays in the wholesale market. A US

loans and deposits platform followed in 2016, and then a UK savings account two years later. One recruit, who joined Marcus as the project picked up steam, says he saw an “opportunity to take a 150-year-old company and turn it several degrees”. Mr Solomon turbocharged that effort, most notably through acquiring United Capital and striking the agreement with Apple, which he has repeatedly described as the “most successful credit card deal in history” — without providing evidence for the claim. At its quarterly earnings announcement in January, Mr Solomon gave a glowing account of the consumer division’s progress, including a 67 per cent rise in deposits to $60bn in less than a year. Lower reserves on Marcus’ consumer loan losses also helped calm analyst fears about Goldman’s inexperience in underwriting consumer credit. Yet some inside the consumer division are more critical of its evolution. One former employee says Goldman underestimated how long it would take to build the technology and products, then lost patience and abandoned them in favour of acquisitions, leading to wasted resources. He offers personal finance management as one example — Goldman first asked its technologists to develop a platform but then bought Clarity Money in 2018. In mass-market wealth management, Goldman was already working on its own platform before the United Capital deal in 2019. “The veneer wore off and the patience wasn’t there to see a whole lot of it through,” he says. A former colleague echoes this sentiment but others dispute it. “Unlike a start-up or a fintech, we can’t just work on a product for a couple of weeks and launch it into the marketplace,” says a senior figure at Marcus. “We have to release something that [matches] up to the standards of Goldman Sachs.” The Apple Card is Goldman’s most high-profile consumer play. Infamous among Goldman’s tech team for gobbling up resources from other projects, the card quickly served up a swift lesson in how not to do business. When it was launched in August, male customers took to Twitter to complain

that they were given higher credit limits — in some cases allegedly 20 times higher — than their wives. That inspired an investigation by New York’s financial services department which has yet to report its findings. “That was not helpful for us,” says a senior executive from one of Goldman’s traditional businesses. “It could have been better handled.” Some Goldman executives already feel the consumer division — which accounted for just 2.3 per cent of total revenues last year — is getting a disproportionate amount of attention from Mr Solomon and other senior managers. They want the investor day to focus more on places where Goldman actually makes money, say people familiar with the discussions. “It’ll be 2030 before you really see a shift in business,” says one, adding that people should invest in Goldman “for the here and now”. The investor day — which will showcase some of the bank’s new technology — is expected to outline plans for its new cash management division. Mr Solomon will further explain how he plans to attract more client money into the merchant banking division and improve growth and returns at its traditional trading and investment banking units. The internal tensions highlight why changing the culture of Goldman is such a long-term project. Company veterans describe a tradition of ruthless competition, where colleagues compete against each other for the same deals. Goldman has, at various times, tried to encourage people to think beyond their own profit and loss account, but those efforts largely failed because pay packages were based on the old metric of how much money individuals brought in. Ed Schein, an organisational structure specialist and professor emeritus at MIT, says it usually takes “five or 10 years” to change the culture of big organisations. “If the new way requires more collaboration between employees and they’ve been trained for 100 years to be individually competitive . . . it might take a long time,” he adds. He suggests some “super individually competitive people” might “have to be Continues on page 42

Tuesday 28 January 2020

BUSINESS DAY

NATIONAL NEWS

Recep Tayyip Erdogan’s assertive foreign policy shakes international order Military interventions in Libya and Syria have reset Turkey’s relationships Laura Pitel

resh from a summit marking the 70th anniversary of Nato, Turkey’s president Recep Tayyip Erdogan had a clear message about Ankara’s resolve to be seen as an autonomous global power. “Today, Turkey can launch an operation to protect its national security without seeking permission from anyone,” he told members of Britain’s Turkish community in London last month. The statement was typical of the assertive, often unilateral foreign policy Mr Erdogan has pursued in recent years. In October, Turkey defied western allies, sending troops into northeastern Syria against the wishes of Nato. Two months later the Turkish leader was vowing to deploy personnel to Libya even as the United Nations called on the world to respect an arms embargo. Turkey’s desire to gain greater influence in its neighbourhood is not new. But the increasingly bold pursuit of its goals has riled European and Arab leaders alike. “Turkey seems to be growing more and more aggressive,” said one European diplomat. “The issues have been piling up.” Turkish activism in the Middle East and north Africa grew after the start of the Arab uprisings that shook the region in 2011. Betting that a new Islamist order was in the ascendant, Turkey funnelled support to rebel groups battling president Bashar al-Assad in Syria and rallied behind the Egyptian Muslim Brotherhood leader Mohamed Morsi. Ankara hoped the interven-

tions would help restore its influence in parts of the former Ottoman Empire, but the gamble failed. Russia came to the rescue of the Damascus regime and Mr Morsi was toppled in a popularly backed coup that brought to power Abdel-Fattah el-Sisi, who was supported by the UAE and Saudi Arabia. A new approach favouring direct military action emerged, analysts say, after the failed coup against Mr Erdogan in 2016 weakened the autonomy of the army and enabled the Turkish president to bolster his own power. Since then, Turke y has launched three separate military incursions into northern Syria, including October’s controversial assault on Kurdish militias that had fought for the US against Isis. Elsewhere, Ankara has taken sides in an Arab Gulf dispute, supporting Doha when Abu Dhabi and Riyadh led a regional embargo of Qatar; dispatched warships to block European oil companies from drilling for gas in the eastern Mediterranean; and defied the wishes of Nato allies by buying an air defence system from Moscow. Mr Erdogan — who on Sunday began a visit to Algeria, Gambia and Senegal — has also sought to expand Turkey’s footprint in Africa. The Turkish president’s most surprising move yet was the decision last month to wade deeper into the Libyan conflict by sending military advisers — and Turkish-backed Syrian mercenaries — to support the besieged UN-backed government in Tripoli, once again putting Ankara on the opposing side to the UAE and Egypt. The intervention secured

Turkish president Recep Tayyip Erdogan has pursued an assertive, often unilateral foreign policy in recent years © Adem Altan/AFP/Getty

Turkey’s wish for a seat at the top table in talks on the future of the war-torn country but triggered stern rebukes from Washington and European capitals. It has also antagonised Gulf powers. “Saudi Arabia and the UAE have the view of Turkey that it is becoming an enemy of sorts, a destabilising force,” said Abdulkhaleq Abdulla, an Emirati commentator. Sinan Ulgen, a former Turkish diplomat who chairs the Istanbul-based think-tank Edam, said it was “inevitable” that any leader at Turkey’s helm in recent years would have wanted to reassess the nation’s place in a changing world. He said that western nations were partly to blame for the acrimonious nature of the shift, with the “collapse” of Ankara’s relationship with the US and the “total ineffectiveness” of the EU as an alternative security partner for Ankara. “As a result, Turkey

felt it had to be more active in trying to address its own security concerns,” he said. Mr Ulgen said that Turkey also shared responsibility for the friction caused by its foreign policy readjustment because of the erosion of fundamental freedoms in the country over the past decade, which had alarmed EU and US officials. That domestic backdrop had made it “much more difficult” for Turkey to smoothly navigate changes in its international relations, he said. Foreign policy has also become increasingly intertwined with domestic politics, as Mr Erdogan has often sought to antagonise western nations to buttress public support. Having once courted EU membership, many Turkish officials now view Europe with contempt and doubt if Brussels was ever serious about admitting Turkey to the bloc. Railing against EU statements that

Turkish efforts to drill for gas in waters near Cyprus were illegal, one senior official asked: “Why do they get the right to decide?” But even if that stance resonates widely in Turkey, Mr Erdogan is constrained by his country’s continued reliance on the west as a trade partner and source of foreign investment. That was vividly illustrated in 2018 when the country was plunged into a currency crisis after US president Donald Trump imposed economic sanctions to force the resolution of a diplomatic dispute. “Turkey is diversifying its partners in security and defence but not in economy,” said Ilke Toygur, an analyst at the Elcano Royal Institute, a Madrid-based think-tank. “So if it damages its relationship [with the west] because of its security interests or unilateral moves, it also risks becoming economically vulnerable.”

Goldman’s own capital. “It’s always been a merchant bank but Blackstone and all the private equity firms have crushed them,” says the investor. “The PE firms are the new Goldman Sachs . . . [while] Goldman Sachs is trying to be JPMorgan.” Although dismissed as simplistic by some at the bank, such an assessment begs the question: What makes Goldman, Goldman? Its partnership structure — where 415 of its most valuable staff earn $1m salaries and gain investment opportunities — sets it apart from other US banks. Executives insist the structure will remain even as Goldman evolves. But it is dominated by the traditional units: there are just three partners based in the consumer business.

The consumer business does not “need that many [partners]”, says one, adding that in investment banking “they make their revenue through the sweat and tears of people”, while in consumer banking “if someone is sitting in a call centre they’re not contributing in the same way”. Internal Goldman statistics show that average partner tenure held steady at seven years but more than 30 partners left in 2019, including a string of high-profile departures in the final quarter. “I don’t think many people feel like Goldman in its heyday and Goldman now are the same firm,” says a partner who left in 2018. “There was a lot of prestige to being a part of Goldman in the 1990s and in the 2000s, now with this consumer push [there isn’t].”

Goldman Sachs: will Solomon’s consumer... Continued from page 41 invited out of the system”. Goldman has already seen a lot of churn at the top of the business. Trading chiefs Pablo Salame and Isabelle Ealet left shortly before Mr Solomon took over, followed by technology boss Elisha Wiesel, former chief financial officer Marty Chavez and co-head of securities engineering Konstantin Shakhnovich. “There was a massive regime change,” says one former partner. “We went from a 12-year run with Lloyd Blankfein who was a trader at heart . . . Even in tough times they didn’t want to de-emphasise that business, that was always viewed to be core to the firm.” In investment banking, while senior managers insist everyone

is on board with a push to pursue smaller clients — defined as those with an enterprise value of less than $2bn — some grumble about doing less prestigious deals. Mr Solomon has made gender diversity a focal point, increasing women’s representation with the partners and managing directors appointed in 2018 and 2019 respectively. But not all investors are convinced by his efforts. Mark Conrad, who invests in American financial stocks for fund manager Algebris, says he owns Morgan Stanley stock rather than Goldman because “GS is to some extent grasping at straws strategically”. He adds: “We believe Solomon is correctly branching out from an over-reliance on these traditional businesses, www.businessday.ng

but we aren’t convinced that the choice to grow in consumer lending will prove successful.” An investor at a large fund says he will not buy Goldman while it carries the “headline risk” of the 1MDB bribery and money-laundering scandal. Goldman is close to a $2bn deal with the US Department of Justice over its role in the alleged fraud and is negotiating with Malaysian authorities, which are seeking compensation after $4.5bn that was raised for them by Goldman was allegedly stolen. Others are sceptical about Mr Solomon’s drive to turn Goldman’s old investing business into a private equity powerhouse like Blackstone by raising more funds from clients instead of being skewed towards investing

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Oladipo Idowu-Agida: Canvasing for an all-inclusive innovation to tackle increasing housing deficit MICHAEL ANI

igeria has a huge h ou s i ng c r i s i s that has left some millions of its citizens without a quality and affordable home to live in. Recent statistical data shows Nigeria has 20 million housing deficits, with the numbers estimated to increase more with the country’s increasing population. Nigeria’s housing problems ranges from a variety of factors including a weak disposable income among consumers which continues to undermine the demand for housing, high interest rates which makes mortgage financing unattractive, and the dearth of incentives for wide scale housing supply by the private sector. These structural issues have continued to bedevil investors and real estate players from providing housing services, and despite billions of investment and funding’s going into the sector, the industry has remained largely untapped. However, while investors and real-estate developers are being sceptical of investing in the sector due to the huge structural issues faced in the sector, some have taken a bold step in innovating various products and services that would provide affordable housing for the homeless Nigerian which would in turn boost economic growth. One of such investors is Oladipo Idowu- Agida, chief executive officer of Dradrock Real Estate, a relatively young property investment, development and advisory firm with core operations in Lagos. With over a decade years of experience in the real estate sector value chain, Idowu- Agida has overtime advocated an allinclusive innovation in tackling the housing deficits in the country. According to him, the deployment of cutting edge innovation and technology would go a long a in accelerating quality service delivery through end-to-end seamless customer experience solutions in a way to achieve robust real estate sector. In a paper titled: ‘Future of the Nigerian Real Estate Sector, Harnessing New Innovations,’ Idowu–Agida outlined several

Idowu-Agida

challenges in the sector and recommended ways by which the country can solve its housing deficit and attract investment into the sector. What Nigeria should be looking out is to have a system where, if you can have a regular source of income, you should have access to good accommodation that you will be paying for gradually and for this to happen, we will have to inject funds both locally and internationally into housing. The Pension fund administrators are there to invest in real estate, but there are a lot of policies by the government that can be made and this will assist the developers in creating solutions. To do this, he said the country will need some regulations in the industry, have a structure where there are some level of accountability and a good mortgage system. A good interest rate for people who work, who can have access to owning their own houses and pay within a specific period of time, is also a positive way forward according to Idowu. There have been various initiatives by the Federal Government to bridge Nigeria’s huge housing deficit however, unfor-

tunately, most of these initiatives have not yielded their desired results. In 1956, the Federal government established the Federal Mortgage Bank of Nigeria (FMBN), (originally known as the Nigerian Building Society), with the strategic intent of supplying the mortgage and housing markets with sustainable liquidity in order to support the advancement of home ownership amongst Nigerians. More so, over 60 years down the line, the FMBN is yet to deliver affordable and modern houses to majority of Nigerians, despite the obvious untapped opportunities in the housing market. Within a four year period, 2015 through 2019, the Federal government has spent over N124 billion to provide mass and affordable housing in a bid to reduce the deficits however, this has not been enough to move the needle. In order to fulfil the mandate of FMBN, the bank was restructured into a Federal Government-Sponsored Enterprise under the reform of the housing sector based on 2002/2006 National Policy on Housing and

Urban Development. This exercise birthed National Housing Fund (NHF)-a fund established with the objective of mobilising long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance loans at soft interest rates to its contributors. Under the NHF, all workers are to contribute 2.5 percent of their monthly salaries and loans are advanced to eligible workers at an interest rate of 6 percent per annum. The FMBN has the primary responsibility of managing and administering the Fund. According to the FMBN, Nigeria’s housing gap is estimated to be in the region of 17 million units while home ownership is estimated at a low 25 percent. According to Idowu–Agida, “the challenges working against the development of the housing sector can be attributed to a plethora of factors ranging from low access to mortgage financing amid high cost of finance (22 percent -25 percent), rising costs of constructing houses attributable not only to the cost of factors of production but also regulatory costs of building or owning houses (Surveying fees,

Certificate of occupancy, land settlement costs), shrinking disposable income particularly among the middle income earners.” He said. Given that private sector participation in the low-end of the housing construction market has been limited, “I believe that a more aggressive intervention by the government in subsiding mortgage financing and increased investment in housing development will go a long way in bridging the housing deficit and help realise the improvement in home ownership that it desires,” Said Idowu. He further explained that many of the commercial banks have a low appetite to lend to the sector because they do not understand how the sector works. Another reason for the low appetite from bank is because of the buying power, since the banks know that there is no mortgage facility that is readily acceptable to people hence when they support, you have to pay them through the purchasers. Meet Oladipupo-Agida Oladipo Idowu–Agida had his MBA at the prestigious Lagos Business School, Pan-Atlantic University Nigeria and IESE Business School, Barcelona, Spain. He also holds a Masters in Managerial Psychology (MMP) from the University of Lagos and a BEd. Guidance and Counselling/Political science from the University of Ibadan, Nigeria. Prior to joining Dradrock in April, 2017, Oladipo Idowu– Agida was a sales manager at Grenadines Homes Limited, Lagos (a member of the Paltonmorgarn Holdings), where he lead a team responsible for the business development and prelaunch sales of the $300million Atlantic Resort project. Before his coming into Grenadines Homes, he had worked for other subsidiary of Paltonmorgarn Holdings, such as Paltonloitte & Associates, Propertymart Real Estate Investment Ltd, and PM Oil Marketing & Sales Solutions respectively. Over the course of his career, he acquired over 10 years of diverse expertise in various aspects of Real Estate including business development, sales & marketing, strategy operations, client relationship management, construction and project management, across Lagos and Abuja Nigeria.

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