Businessday 28 jun 2018 by BusinessDay

news you can trust I **THURSDAY 28 JUNE 2018 I vol. 15, no 85 I N300

Bears break correlation between equities, oil prices Emeka Ucheaga & Abdullateef Eniola-Giwa

h e st rong p osit ive correlation between the Nigerian Stock Exchange (NSE) All share Index (ASI) and crude oil prices finally broke this year as investors sentiment turned bearish in the Nigerian stock market despite a rally in oil prices. The divergence began to emerge in early March as volatility hit Emerging Markets as traders worry about trade war tensions between the world’s two biggest economies (USA and China) and a scenario of accelerated tightening by the Federal Reserve. Crude oil prices have rallied this year by around 12 percent off the back of supply disruptions in Libya

See commodities on page 4

Nigeria eyes $2.8bn Eurobond to finance 2018 budget MICHEAL ANI

he Federal Government through the Debt Management Office (DMO) intends to raise up to $2.8 billion (N899bn) in Eurobonds, as part of its plan to finance the 2018 budget, and will explore all options to lower costs, the head of the Debt

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Inside Unified Payment cuts e-transaction settlement time to an hour P. A1

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ON DEMAND: A Language of Non-Capitulation, Non-Appeasement! WOLE SOYINKA

“

LAND GRAB WILL BE REVERSED!” This is the first governance pronouncement, the first pertinent proclamation from the presidency since the herdsmen national affliction began. Catastrophically belated, it has finally emerged from the constricted throat of a government that seemed unaware that its very corporate existence was under strangulation. Many in this nation have had bitter cause to conclude that governance had indeed expired, its elected

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Watch out on Friday

World Cup Result Mohammed Abdullahi Abubakar, governor of Bauchi State (l), with Bashir Hassan Ibrahim, gm Northern operations, BusinessDay Media Limited, during a visit to the governor informing him of his nomination in the forthcoming Pic by Tunde Adeniyi BusinessDay Good Governance award sheduled for July 19, 2018 in Abuja.

South Korea 2 - Germany Mexico 0 - Sweden 0 - Brazil Serbia Switzerland 2 - Costa Rica

0 3 2 2

Again, US urges Buhari to stop incessant killings Tony Ailemen & Innocent Odoh, Abuja

…As President mulls reorganization of security apparatus

ollowing Sunday’s killing of over 100 citizens in Plateau State by suspected herdsmen, the Ambassador of the United States of America to Nigeria, W. Stuart Symington, has called on the Federal Government to stop the increasing killing of innocent people across the country in order to ensure peace and development of the country.

The envoy said this in his address during events lined up to celebrate 242 years of Independence for the United States of America, held at the US Embassy in Abuja on Tuesday night even as he noted that the US government and its agencies are investing with Nigerians in a partnership for people, peace, and prosperity.

“Nigeria’s leaders and citizens have it in their power to make this killing stop now, if you are united across all regions, all occupations, and all faiths. When you act together with sincerity and high purpose and sustained effort, you will end this violence,” he said. The envoy pointed out that the US and Nigeria are work-

ing together to save lives from disease, violence, and hunger. He added that there is no place with more at stake for the future of the World than Nigeria. “Every day, all across this land, we work with good people to save lives and bend upwards the curve of economic growth, so that real opportunity and hope

will outpace need. But, far too often, we see the deaths of innocents whose hopes are stopped forever, by those whose awful acts reflect no good and serve no cause. These innocents must not be forgotten,” he said. He said further that security that lasts depends on strong citizens who support each other and their governments, adding that it is

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BUSINESS DAY

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INSIGHT

Will a cut in MPR reduce bank lending rates? MICHEAL ANI

head of the next Monetary Policy Committee meeting in July, several analysts have agitated for a cut in the monetary policy rate (MPR) since the general price levels as seen from the CPI are increasing at a slow pace at 11.6 percent and gradually getting closer to the central bank target of a single digit. According to some analysts the MPR correlates directly with the lending rates of commercial banks and when it is high (it’s currently at 14%), it results in exorbitant borrowing costs for the banks, and their private business customers. They are of the view that a rate cut will largely help reduce commercial banks’ lending rate and thus, make fixed income yields a little less attractive, and free up more liquidity for banks to lend to the real sector of the economy. However, BusinessDay checks have shown that banks may not tow this path as a rate cut might actu-

ally not reduce commercial banks’ lending rates. Commercial banks charge as high as 30 percent to lend to its customers. A Chief Executive officer (CEO) of one of the leading Nigerian bank, in an interview with BusinessDay disclosed that even if the committee reduces the MPR, lending rate by commercial banks will still remain unchanged. “A rate cut will not necessarily make us reduce the rate at which we lend out but it might be an incentive because the key thing is to reduce the CRR so that the banks that have the liquidity will find a way of deploying it but if you tighten by holding CRR, it will make money even scarcer. “So reducing rate unless you are going to legislate lending which we are no longer in that regime, cannot be sufficient to get banks to just lend but I think the banks should be allowed to make such decisions based on the reality that each bank faces.” Another bank CEO, who craved anonymity because of the sensitivity of the mat-

ter, said rate cuts will still leave bank lending rate unchanged as there is nothing like patriotic lending because of a need to grow the economy. According to him, the banks will not use private money to grow the economy when they still see there are evident risks within the space. It is about the risk environment. “Most of the companies that they would have lent to are struggling in terms of returns on their investment as they have to factor in the cost of power as well as infrastructure and by the time you factor in those things your business is not profitable and you cannot service your loan so the bank will not lend to you. “For instance a lot of banks lent to the power sector during the privatisation exercise but a lot of them got their hands burnt, so no matter how low interest rate comes, that will not translate proportionately to increase lending as long as they continue to see that risks.” Continues on wwwbusinessday online.com

L-R: Bukola Saraki, Senate president; President Muhammadu Buhari, and Yakubu Dogara, speaker, House of Representatives, during a visit of the two leaders of National Assembly to the Presidential Villa Abuja, yesterday. NAN

Police, hospitals, schools top beneficiaries as listed firms spend N11bn on CSR TELIAT SULE

igeria Police Force (NPF), security trust funds of states, grassroot sports development, health institutions and schools have emerged the highest beneficiaries of corporate social responsibility (CSR) projects in 2017, the analysis of the CSR donations and sponsorships of 63 firms by BusinessDay Research and Intelligence Analysis (BRIU) has shown. The combined CSR expenditure of the 63 firms in 2017 amounted to N10.64 billion, representing 35 percent increase over N7.91 billion spent by the same firms in 2016. All the 63 firms are listed on Nigerian Stock Exchange (NSE) except the food and beverages giant, FrieslandCampina WAMCO. Among the highest beneficiary is the Nigeria Police

Force as well as institutions such as the police cooperatives, hospital, Police College and states’ security trust funds. They all received N1.08 billion as CSR donations for boosting their capacity for effective crime control, and that represented 10.17 percent of the total CSR donations by the firms under consideration. CSR projects in the education sector gulped N884.56 million or 8.34 percent of the total CSR budget in 2017, while sports development at the grassroot and supports to health institutions attracted N603.62 million and N602.06 million respectively, representing 5.69 percent and 5.68 percent of the total CSR spend last year. By implication, security, education, sports and healthcare topped CSR projects in 2017. And that corporate institutions are now supporting the security formations in the country may not be uncon-

nected with the rising cases of murders by Boko Haram insurgents and suspected Fulani herdsmen, kidnapping and bank robberies. While this gesture towards the police is for the benefits of all Nigerians, it is also in the interest of the corporate organisations in the country to continue to support the Nigeria Police and other security formations in the country as this has the tendency to raise their brand values. In 2015, CSRHub-Brand Finance, a global leader in evaluating the impact of CSR projects across the world, found that executing projects in areas such as community development, energy and climate change, as well as training, health and safety have the capacity to increase the brand values of corporate organisations. Continues on wwwbusinessday online.com

Thursday 28 June 2018

BUSINESS DAY

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4 BUSINESS DAY NEWS

Banks pay N131.5bn as AMCON charge BALA AUGIE

ssets Management Corporation of Nigeria (AMCON) Charge incurred by Nigerian banks have increased in the last two years although an expected slowdown of growth in total assets could pave the way for another hike by the regulator. Lenders currently pay a charge of 0.5 percent of assets to the fund which is controlled by AMCON and used to help pay down liabilities incurred from acquiring about 12,537 NonPerforming Loans (NPLs) worth N1.7 trillion from 22 financial institutions, following the 2009 banking crisis. The cumulative AMCON levy of 12 largest Nigerian lenders that have released 2017 audited financial statement increased by 12.22 percent to N131.58 billion from N117.25 billion in 2016, this compares with a 2.22 percent increase between the 2015 and 2016 period. Regulatory costs as a percent of total operating expenses for the 12 banks stood at 11.54 percent, according to data compiled by BusinessDay. The banks are Zenith Bank Plc,

Access Bank Plc, Fidelity Bank Plc, First City Monument Bank (FCMB) Plc, Guaranty Trust Bank (GTBank) Plc, Stanbic IBTC Holdings Plc, First Bank Nigeria Holdings Plc, Sterling Bank plc, Wema Bank Plc, and United Bank for Africa (UBA) Plc, Diamond Bank Plc, and Union Bank Plc. “AMCON Charge has been a significant part of bank’s operating expenses. They account for about 8 to 10 percent of Operating expenses,” said Olalekan Olabode, head of research at Vetiva Capital Management “One of the things that supported assets growth was the devaluation of the currency that bolstered assets denominated assets. We are still going to see the commission around for time because there are assets they have not recovered,” said Olabode. Tajudeen Ibrahim, head of research at Chapel Hill Denham said that the market shouldn’t expect growth in assets for the rest of 2018 and early 2019 as loans are expected to wane because banks are not lending even as yields on short term government securities have receded. Continues on wwwbusinessday online.com

FMDQ Close

Everdon Bureau De Change Foreign Exchange Market

Spot $/N

I&E FX Window 360.91 CBN Official Rate 305.75

fgn bonds

Treasury Bills 3M 0.14 12.89

5 Years

10 Years

20 Years

-0.01 13.09

0.10% 13.80%

0.00% 13.57%

0.16% 13.96%

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Thursday 28 June 2018

NNPC JV stake sale to boost NSE by N13trn OLALEKAN IPELE & ABDULLATEEF ENIOLA-GIWA

he possibility of Nigerian National Petroleum Corporation (NNPC) listing its stake in the nine International Oil Companies (IOCs) it currently has Joint Venture arrangements with, could boost total equities market capitalization of the Nigerian stock exchange (NSE) by N13 trillion. According to the 2016 NNPC oil and gas report, the government has Joint Venture arrangements with IOCs that produced 46 percent of total crude oil in the upstream oil and gas sector. They together produced 301 million barrels of crude and at $60 per barrel; total production value for the period amounted to $18.06 billion (N6.5 trillion) If the price to sales (P/S) ratio of equities currently listed on the Nigerian bourse which is 2x is applied to 6.5 trillion naira, we get an additional N13 trillion to total market capitalization which as at the 31st of May this year stood at N13.81 trillion. To elucidate further on the weight and value possible listings

…$3.8bn could be raised by FG could bring to the market, BusinessDay did valuation for four of the nine NNPC JVs with IOCs, a result of which put their cumulative Enterprise Value (EV) at N27 trillion. This was arrived at by multiplying the EV/production multiple of Seplat (30.14x), a listed company operating in the oil and gas upstream to the barrel of oil equivalent per day (BOEPD) of Shell Petroleum Development Company of Nigeria Limited (SPDC), Chevron Nigeria Limited (CNL), Mobil Producing Nigeria Unlimited (MPNU), and for Nigerian Agip Oil Company Limited (NAOC) which was 631,000, 600,000, 207,000 and 109,000 respectively in 2017. It should be noted that the NNPC currently has a 55 percent stake in SPDC, 60 percent in CNL, 60 percent in MPNU, and 60 percent in NAOC. EV/Production Multiple (EV/boepd) is the most commonly used valuation multiple in the oil and gas industry which measures the value of a company as a function of the total number of barrels of oil equivalent, or mcf

equivalent, produced per day. In view of how successive governments have shielded the operations of the NNPC from the public for fear of scrutiny, letting go of its majority stake with IOCs might prove to be an uphill task, but for the sake of diversifying the market and ensuring an equities market with depth, analysts have suggested listing between 5 to 8 percent of its stake. Should the Government decide to list at least 5 percent of its total stake estimated at N27 trillion in just four of the nine IOCs, the market will be significantly boosted with the sale of about N1.35 trillion ($3.78billion) worth of shares. “Before we can even think of listing the JVs, the petroleum industry bill (PIB) needs to come into effect because it is when the bill is signed into law that the NNPC can finally be dissolved and asset management structures will come up,” Moses Ojo, the head of research Pan African Capital, said. Continues on wwwbusinessday online.com

Thursday 28 June 2018

BUSINESS DAY

6 BUSINESS DAY NEWS

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Crime cases increased by 7% in 2017 TCN targets 15GW grid expansion with $1.57bn funding from World Bank, others BUNMI BAILEY

ISAAC ANYAOGU

ransmission Company of Nigeria (TCN), which manages the national grid, says it is expanding grid capacity from the current 6,000mw capacity to 15GW capacity through funding from international financiers. At a workshop in Abuja on Tuesday, Mohammed Gur, TCN managing director, disclosed that this was part of an initial process for the acquisition of Supervisory Control and Data Acquisition System (SCADA) and Energy Management System (EMS) for the national grid under a programme tagged ‘Transmission Rehabilitation and Expansion Program (TREP).’ Gu r s a i d T R E P wa s launched to reposition TCN so it could raise significant funding from the World Bank, Japan International Cooperation Agency (JICA), African Development Bank (AfDB) and other development partners. According to Chuks

Nwani, energy lawyer, the funding is a line of credit that would be advanced to the company to assist the implementation of the eligible customer declaration. The facility will enable customers with capacity to pay connect to the grid and TCN would repay the loan based on collections made. “It is expected to stabilise, expand and provide necessary flexibility and redundancy for a 15GW national grid that meets the needs of all industry operators and their customers,” Babatunde Fashola, minister of power, works and housing, said in an address at the opening of the workshop, where he was represented by Louis Edozien, permanent secretary, Power. Fashola said to achieve this goal, TREP must deliver a functional SCADA and EMS for the use of TCN, as an operator of the national grid, the industry operators as the users of the national grid, the NERC and NEMSA. TCN has been unsuccessful in delivering a functional

SCADA, EMS and telecommunication system due to substations apparatus/control subsystem deficiencies, improper project scoping, unsatisfactory project execution and deficient capacity of the intended users and operators of the system. Due to this situation, it has been difficult to get detailed national grid operational data by managers, operators, regulators, policy makers, customers and observers in a secure, unfiltered manner. “Instructions to distribution companies to increase or decrease off-take at trading points is still done manually using ad-hoc communications, available load is still allocated to generation companies manually using ad-hoc communications without acceptable levels of transparency,” said Fashola. The government is outsourcing the SCADA and EMS system to private companies and now wants to fully optimise use of TCN’s fibre optic telecommunications assets

he number of crime cases that occurred in 2017 increased by 7 percent to 134,663 from the 125,790 cases reported in 2016, according to data from the National Bureau of Statistics (NBS) on Crimes report 2017. “The only lucrative business in Nigeria today is crime,” Aliyu Umar Babangida, CEO, Goldwater and Riversand, a national security solutions and resource consultancy, told BusinessDay in a telephone interview. “Criminology is seen as lucrative in the country and if anybody has any doubt that crime rate are increasing, such a person is not staying in Nigeria or the person is a criminal, as even the political class cannot deny it. “All the integrity and discipline that our president is parading is nonsense because it is not showing as even the service chiefs are criminals. The statistics are just icing on the cake, the real thing is out there, just take a walk on the streets and you will see that crime is the real thing,” Babangida said. The increase in crime rate in the country disputes the peace of the nation, as the country was

ranked very low in the Global Peace Index (GPI) report 2018 by the Institute for Economics and Peace (IEP). It was ranked 148th position out of 163 countries. The GPI ranks different countries according to their level of peacefulness. It is the world’s leading measure of global peacefulness. This report presents the most comprehensive datadriven analysis to date on trends in peace, its economic value, and how to develop peaceful societies. Going by data from the NBS, offence against property has the highest number of crime cases reported with 68,579 of such cases reported. Offence against persons recorded 53,641 cases, while offence against lawful authority recorded the least with 12,443 cases recorded, respectively. In terms of states with the highest number of crime cases, Lagos State has the highest percentage share of total cases reported with 50,975 (37.9 percent) cases recorded, Abia and Delta State followed closely with 12,408(9.2 percent) and 7,150(5.3 percent) cases recorded, respectively.

Thursday 28 June 2018

BYMEDA Project 10+ SME Challenge to create 30,000 jobs by 2020 SAMUEL ESE, Yenagoa

programme of the Bayelsa Microfinance and Enterprise Development Agency (BYMEDA), Project 10+ SME Challenge is expected to create 30,000 jobs by the year 2020, according to the Director-General, Ebiekure Jasper Eradiri. Eradiri made the disclosure on Wednesday at the commemoration of the 2018 World SMEs Day with the theme, Youth Dimension in Yenagoa, which coincided with the Q2 Dialogue Series of the agency. The special guest of honour and Commissioner for Trade, Industry and Investment, Funkazi Koroye-Crooks explained that beneficiaries would receive mentors hip, free shops and equipment as part of the N500 million grants to young entrepreneurs by Governor Henry Seriake Dickson. The Project 10+ SME Challenge is one of four programmes introduced by the agency aimed at promoting small and medium enterprises in the state and improving the local economy.

Disbursement of N231bn power intervention fund not yielding result - Reps, stakeholders KEHINDE AKINTOLA, Abuja

ederal lawmakers, regulatory agencies and other stakeholders on Wednesday expressed concerns over the disbursement of N231 billion to electricitydistributioncompanies, generation companies and gas companies without commensurate results in the power supply to consumers across the country. They expressed the concerns

during the investigative public hearing into ‘Excessive electricity charges being levied on consumers by Discos, chaired by Ajibola Famurewa, and urged the CBN to discontinue disbursement of public funds to pre-qualified business entities who bided for theprivatisationofPowerHolding CompanyLimitedbutchannelled the funds to other priority sectors, especially the medium and small scale enterprises (MSMEs).

L-R: Olusegun Ajamolaya, divisional police officer, Victoria Island; Bankole Bernard, president, National Association of Nigeria Travel Agencies (NANTA); Fela Ibidapo, divisional head, corporate communications, Heritage Bank plc, and Stephen Isokariari, chairman, board of trustees, National Association of Nigeria Travel Agencies (NANTA), during the official launch of Nigeria Travel Practitioners Identification Card (NTPIC), sponsored by Heritage Bank, in Lagos, yesterday.

Plateau killings: PENGASSAN wants security agencies to change strategies OLUSOLA BELLO

etroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has condemned the continued and ruthless killing of innocent Nigerians across the country by armed bandits and marauders, and called on the security agencies to change its strategies of tackling the crisis if the one they are using now is not working. The senior staff trade union also frowned at the statement by a spokesman of Meyatti Allah that the killings were in response

to rustling of about 100 cattle in the area, adding, “This is not an excuse for lawlessness in a country that has government and security apparatus to handle issues.” It urged the Federal Government to rise above just condemning such killings and courageously do all it would take to protect the lives and properties of citizens, which is the whole essence of governance. Speaking on the killing of over 100 innocent people by herdsmen in Plateau State, PENGASSAN in a statement signed by its national public relations

officer, Fortune Obi, expressed condolence to the families of the victims and the people of Plateau State. “We commiserate with the families of the victims, the people and Government of Plateau State, which is the latest of such incidents with the killing of over 100 people last weekend. “ P E N G A S SA N n o t e s that the Security Agencies, especially the police seem helpless in the face of the mindless and unprovocative killing of innocent Nigerians. “We therefore call for more recruitment into all

arms of the Security Agencies, including the Nigerian Security and Civil Defence Corps (NSCDC) and also advise the Security Agencies to review their strategies to put an end to the killing. “ The Security Agencies should improve their relationship with the communities to enable them get necessary information before any attacks.” PENGASSAN implored the government to deploy a special squad of military and other forces permanently to troubled prone areas of Benue, Taraba and Plateau states.

Thursday 28 June 2018

BUSINESS DAY

8 BUSINESS DAY NEWS

Nigeria targets 10% global LNG market - Baru ECOWAS single currency unlikely before 2020 deadline - ECA

… set to become regional gas hub

FRANK UZUEGBUNAM, WASHINGTON DC, OLUSOLA BELLO & HARRISON EDEH, ABUJA

s part of its strategic aspirations to derive maximum value from Nigeria’s abundant natural gas resources, the Federal Government is targeting 10 percent of the world’s market share in traded Liquefied Natural Gas (LNG). Maikanti Baru, group managing director, Nigerian National Petroleum Corporation (NNPC), said this Tuesday while addressing the 27th World Gas Conference (WGC) in Washington DC, United States. Speaking at a session on “The Role of Gas in Power Generation” under the theme “Fuelling the Future,” Baru listed the enormous potentials of Nigeria’s gas resources and their huge contributions to the nation’s economy, explaining also the gas-to-power initiatives as well as the quest for industrialisation. “We are focused on jumpstarting and sustaining gas supply to support a rapid growth in power generation, re-positioning Nigeria as the regional hub for gas-based industries such as fertilizer, petrochemicals, methanol, Liquefied Petroleum Gas (LPG), as well as leveraging our enormous reserves posi-

tion to strengthen our footprints in high value gas export through LNG and regional gas pipelines,” Baru told delegates at the triennial gas gathering. He said with emerging gas markets and the need to generate more power across Africa’s sub-Saharan region, there abound an unprecedented investment opportunity in the gas sector for the country. According to Baru, Nigeria was focused on expanding its existing 22 million metric tons per annum (MTPA) Nigerian LNG plant with additional 8MTPA from its proposed Train 7, a development that will significantly increase global power generation capacity. He said further that towards achieving these gas aspirations, the Federal Government recently approved three-pronged reforms in the gas sector, which included domestic gas supply obligation, gas pricing policy and regulation as well as gas infrastructure blueprint. As of today, Nigeria had completed and commissioned about 600km of new gas pipelines, thereby connecting all existing power plants to permanent gas supply pipelines, he said. “We have also kicked off

the 614km Ajaokuta-KadunaKano (AKK) pipeline project which, on completion, will deliver gas along these areas, thereby generating additional 3,600mw to the national grid,” he stated. On the planned NigeriaMorocco Gas Pipeline Project, he stated that the project would foster regional economic integration, reduce desertification, as well as enable accelerated regional electrification. “It will contribute significantly to the overall economic development of the region through the emergence of a wide range of industrial clusters around petrochemical, manufacturing, agro-business and fertilizers among others,” he said. He observed that currently, government was completing the construction of the strategic Obiafo/Obirikon-Oben (OB 3) (East-West) interconnection pipeline and doubling the capacity of the existing Escravos to Lagos Pipeline (Western Pipeline System). He said the Federal Government had intervened to drastically reduce gas flare from 25 per cent down to 10 percent, even as it had stepped up efforts to stimulate gas utilisation and monetisation.

nited Nations Economic Commission for Africa (ECA) says the attainment of all macroeconomic criteria by ECOWAS states maybe unattainable before the 2020 deadline for the commencement of the region’s single currency agreement. Amadou Diouf, an economist from ECA West Africa, said this on Wednesday in Cotonou, the Benin Republic capital, in a presentation at the 21st Session of the Intergovernmental Committee of Experts (ICE) for West Africa. He spoke based on the report of the ECA titled “Regional Integration in West Africa: Challenges and Prospects.” Diouf said from the Commission’s findings, many of the countries were yet to meet the macroeconomic convergence criteria for a single currency set up by the ECOWAS and the West African Monetary Agency (WAMA). According to the report, the goal is to create a common currency for much of West Africa. For the currency to be implemented, 10 convergence criteria set out by WAMA must be met. The four primary criteria to be achieved by each member country include single-digit inflation rate at the end of each year and fiscal deficit of not more than three per cent of

Edo lauds resilience of small, medium businesses, pledges more institutional support

port of world leaders and development partners. “MSMEs occupy a strategic position in our wealth creation efforts, especially in developing countries as they have continued to pull millions of people out of poverty through job creation and the provision of goods and services to communities, far flung from major cities hosting large-scale companies.” He noted that “the decision to create a separate ministry for Cooperatives, Employment and Wealth Creation in Edo State, was informed by his administration’s conviction that MSMEs need a special government

agency to address their peculiar challenges, such as registration and formalisation, entrepreneurship education, access to finance, location, among others.” The governor said that the goal of his administration is to grow the MSME sector alongside his commitment to attract big-ticket investments, to be sited in the Benin Industrial Park, the Benin River Port project in Gelegele, the car assembly plant and the 1800 housingunit Emotan Garden project among others. He explained, “The several innovation hubs planned for the state will graduate

tech entrepreneurs of the state government’s support to scale up their operations and compete on the global tech space.” The United Nations des c r i b e d M SM E s a s “ t h e backbone of most economies worldwide and play a key role in developing countries.” Using data from the International Council for Small Business (ICSB), the UN said that formal and informal Micro, Small and Mediumsized Enterprises (MSMEs) make up over 90% of all firms and account on average for 60-70% of total employment and 50% of GDP.

onstellation Coaching Group LLC, the NLP licensed international coaching firm, is organising a two-day coaching fundamentals training on June 30 and July 1. The training programme, holding at Waterfront Plaza, Ozumba Mbadiwe, Lagos, is a desirable first step for participants seeking to become an internationally licensed NLP coach. Joke Coker, a licensed master practitioner of NLP, certified coach trainer and CEO of Constellation, says, “People need others to talk to, to help them clarify, focus and execute their goals. To become better is a common yearning. “Would you like to be part of the solution? Join us, learn the right skills, become a coach.” Constellation Coaching Group LLC offers three key products - Coaching (Executive Coaching & Team Coaching) , Counselling and Coach Training. The coach training is for corporate and individuals. Only last month, Coker was at The Lagos Business School where she was a lead discussant in a Mental Wellness Initiative Programme with the theme: “What’s on your mind.”

CBN, NERDC launch financial education curriculum soon

Edo, IITA mull partnership on 50,000ha cassava zone

L-R: Lynda Alphaeus, assistant director (prosecution), Nigeria Copyright Commission, Lagos zonal office; Shigeyo Nishizawa, trade commissioner/managing director, Japan External Trade Organisation (JETRO); Bede Obayi, director, inspectorate and compliance, SON, and Mohammed Babandede, deputy comptroller of customs, at the Nigeria-Japan anti-counterfeit seminar in Lagos, yesterday. Pic by Pius Okeosisi

Constellation holds training for coaches

the GDP. Also a central bank deficit financing of not more than 10 percent of the previous year’s tax revenues and gross external reserves that could cover a country’s import bill for a minimum of three months were proposed. There are also six secondary criteria, which had to be achieved by each member country. They include the prohibition of new domestic default payments and liquidation of existing ones; tax revenue should be equal to or greater than 20 percent of the GDP. Also, wage bill to tax revenue should be equal to or less than 35 percent, public investment to tax revenue equal to or greater than 20 percent and a stable real exchange rate as well as a positive real interest rate. “Less than two years from the attainment of the targeted deadline for the single currency, the pre-requisite conditions to achieve the goals, notably the macroeconomic convergence criteria have only been partially achieved. “Ghana, Niger and Nigeria have been put in charge to advocate for this monetary agenda. An updated road map was adopted in Ghana at the meeting of the presidential task force.

HOPE MOSES-ASHIKE & AGNES IBOROMA

d o St a t e g ov e r n o r, Godwin Obaseki, has lauded the resilience of men and women across the world, who have continued to champion micro, small and medium enterprises despite poor access to finance, entrepreneurship education and other forms of support. Obaseki gave the commendation on the occasion of the International Day for Micro, Small and Mediumsized Enterprises, celebrated on June 27. According to Obaseki, “Micro, Small and Medium Enterprises (MSMES) are major arteries of economic growth that deserve the sup-

Thursday 28 June 2018

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igerian Educational Research and Development Council (NERDC), in collaboration with the Central Bank of Nigeria (CBN), plans to launch the Financial Education Curriculum (FEC) during the next academic session. The pilot testing of the project, which started in 2016, has commenced with a training workshop for teachers on the financial issues infused into the school curricula, to enable them participate effectively in the pilot study. NERDC, in collaboration with the CBN, organised the workshop in Lagos. The aims of the FEC, among others, are to create awareness on the issue of financial management, develop in learners the ability to plan resources, develop entrepreneurial skills among the teeming youth of Nigeria, generally promote the building of the set of skills and knowledge that allows an individual to make informed and effective decisions in matters that relate to finance and financial resources. “I am confident that the completion of this project and implementation of FEC would prepare Nigerian youths for the challenges of contributing towards sustainable economic development of Nigeria,” Yinka Ahmed, acting director, consumer protection department, CBN, said at the workshop.

he Edo State government and the International Institute of Tropical Agriculture (IITA) have agreed to join forces to bring about transformational change in cassava production, with a proposal for development of a 50,000-hectare farm project in the state. Governor Godwin Obaseki revealed his administration’s plan to work with IITA after he gave a speech at the International Conference on WaterEnergy-Food Systems (WEFS) in sub-Saharan Africa, organised by the Pennsylvania State University in collaboration with IITA and the University of Ibadan, in IITA-Ibadan campus. In a meeting with IITA director-general, Nteranya Sanginga, Obaseki said his administration’s vision was to establish a cassava production zone of at least 50,000 hectares where cassava would be produced and processed with the active participation of smallholder farmers and the private sector. Though the focus will be on cassava, the state is looking beyond cassava to other crops in which Edo State has comparative advantage. “We would want IITA to give us a plan that is actionable,” the governor said. Grown by over 3.3 million farmers in Nigeria, cassava has transformed from a food security crop to a cash crop in Nigeria, as most industrial companies are seeking after the root crop as a source of raw material in confectionary, brewery and pharmaceuticals.

Thursday 28 June 2018

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Thursday 28 June 2018

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Is Nigeria currently governed by the illiterates of the 21st century? Thoughts on the plateau carnage

MARTIN IHEMBE Ihembe is a Political Scientist with research interest in political development. He can be reached via 08023688848

ince the attainment of political independence in 1960, the hoi polloi have been at the receiving end as they had to bear series of leadership failures which led to two relapses to military interregnums, aside other abhorrent ills. With another recivilianization in 1999, most Nigerians were pregnant with the expectation that at least things would get better. The mistaken believe was that the political elite, whose “politics of anxiety” (apologies to Claude Ake) and looting of the national treasury with reckless abandonment which in time past was the reason for “military rescue operation” must have learnt enough lesson. Far from it! Nigeria’s elusive search for a durable political order is ongoing with a lot of encumbrances which have stalled the country’s transition from an electoral democracy characterized by what my teacher Adigun Agabje referred to as mere “electoralism”, to a liberal or consolidated democracy where democracy is said to be “the only game in town”. No doubt about it, some gains have been recorded, some of which include the liberalization of the political and media

CATHY IBAL Ibal is vice president, Advertising Sales, CNN International Commercial

hen I started out my career in the media industry twenty years ago, pan-regional data was scarce and based on many assumptions, but we used it the best we could to gain insight into our audience, their behaviour and response to programming and advertising campaigns. Fast forward to 2018 and we are in another world where an ever-growing range of data points help us to understand audience habits, what content they consume, how and where they do so, and how this fits into their lives. Take the smartphone for instance - Google’s 2017 Connected Consumer Survey found that smartphone penetration had grown to 60% across Africa, and we know that users on the continent are very sophisticated in using their phones to make online payments as well as staying connected and consuming news and other media on the move. All the data created through

spaces which afford aggrieved Nigerians the opportunity to air their displeasure against government’s unpopular policies without being hounded, and the existence of vibrant civil society organizations, which effectively play the watchdog role in checking the excesses of the government. However, the situation has not changed for the better as expected. Instead, it has been a case of one step forward and two backwards; with the emergence of carnage, which sadly has become a norm as innocent Nigerians are being brutally murdered on a daily basis without effective response from the state. I will return to this shortly. The extent to which fiscal profligacy, politics of anxiety as seen in the violent nature of our elections, and looting of public treasury have risen is deafening. Arguably, had the Obsanjo government not learned from the experience of the 1983 military coup by ingeniously bringing the military under civil control through his policy of professionalizing and depoliticizing the military, another rescue mission by the military would have long occurred. Apparently, this feat appears to be receding considering the fact that the once revered military seems to be losing this prestige position on account of its inability to put an end to the ensuing carnage in the country. The paramilitary institutions are also culpable in this regard. Nothing captures this more accurately like these institutions inability to nip the macabre display of violence, perpetrated by some luciferous elements still referred as “suspected” Fu-

Federal might has been relaxed in tackling what is becoming a genocide for explicable reasons while same might was deployed in clamping down on a civil protest in the South East. Yet we are told the presidency is committed to ending viciousness. The question is: how; considering the double standard? lani herdsmen who have sent thousands of Nigerians to their creator, in the bud. To prevent the frequent killings, some states have taken the bold step of enacting a law – anti-grazing law – that would protect lives and property being destroyed by the trigger happy and machete wielding Fulani herdsmen. But in a provocative display of clannishness, the Minister of Defence, Mansur Mohammed Dan Ali, defied courtesy, decency, and respect for the deceased and called for the suspension of the anti-grazing Bill enacted. When those terribly affected by this carnage accuse the government of condoning and encouraging the murderers, utterances like Dan Ali’s and the President’s condemnation of the murderous act without matching his words with actions are often cited. With the resumption of the

macabre display of violence in Plateau state over the weekend, by the ever emboldened Fulani herdsmen which left over 100 persons dead, it is about time we asked ourselves whether we are not governed by illiterates of the 21st century. The futurist, Alvin Toffle, it was who said “the illiterates of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn”. While Toffle did not have leadership in mind when he made the forgoing statement, for me,his view as expressed above aptly defines the kind of leaders currently administering the federal Republic of Nigeria. Aside the unimpressive response of the Buhari government in the face of this senseless killings on a daily basis, the fact that the President and his misanthropists service Chiefs have deliberately refused to learn, unlearn, and relearn while this carnage persist effectively makes them illiterates of the 21st century who should have no business whatsoever around the corridors of power. The President and his advisers have learned that the perpetrators of this act of brutality are not Fulani herdsmen. While it is true that not all Fulani herdsmen who go about pasturing their cattle are murderers, the President and his service Chiefs have refused to unlearn their ways of thinking, and perspective, which is likely to prove that the act is perpetrated by this same people they are shielding. Even though they are quick to dismiss it, it remains incontrovertible that their refusal to unlearned is essentially informed by clannish and provincial reasons. If the body language from Aso Rock is

anything to go by, the President’s mind has been made up that the perpetrators of this carnage are not Fulani herdsmen. This is where the problem lies. With such attitude, relearning which would have helped in ending the senseless killings cannot be achieved because loyalty to one’s ethnicity is far more important than loyalty to the country. This may sound too blunt, but that’s just the bitter truth. Federal might has been relaxed in tackling what is becoming a genocide for explicable reasons while same might was deployed in clamping down on a civil protest in the South East. Yet we are told the presidency is committed to ending viciousness. The question is: how; considering the double standard? While it is accepted that this government inherited a country in crisis, it was not elected to worsen it. The attitude of our current leaders in managing the senseless killings has comfortably put Nigeria on the road to Somalia and Sudan (if not already there). As we struggle to weather through this dark and perilous moment in our national history, guided by the Almighty’s direction, may we make the right decisions in electing leaders that will put national interest and our safety first in the 2019 general elections, not leaders that would sit and watch Nigerians being brutally murdered as if live has no value at all. May God in heaven console the bereaved and also grant eternal to the departed souls; amen.

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How data and content is powering marketing innovation in Africa this usage can be used to create insight that can inform all parts of media and marketing decision-making such as distribution strategies, real-time advertising campaign optimisation, and understanding audience behaviour. This all comes with the important caveat that data must be used responsibly in a way that respects the user, their privacy and experience. African brands are very aware of this trend, and at CNN we are increasingly speaking to our clients on the continent about how data is now an integral part the solution we are delivering. Still, it is refreshing that however sophisticated our data strategy is, clients still share our passion for the content itself. In the rush for data, media brands and advertisers must guard against focusing too much on data and losing sight of the value of content. For maximum effect, a balance of the two elements is required. For instance, data can give a clear indication of what type of content will best work for certain audience demographics. Facial

recognition and other technology can be used to test particular campaigns on audience focus groups to judge their responses to particular creative approaches. But, always there is an element of intangibility about why a particular creative approach to editorial and branded content and advertising elicits an emotional response. This intangibility lies in the minds of the brilliant content creators and has many other factors pertinent to the media or advertiser sending the message such as existing brand attributes and affiliation built up over time. The intersection between content and data differs greatly depending on the campaign, its objectives and platform approach. For a highly targeted digital campaign with a need to reach specific segments, data will play a dominant role in development, execution and delivery. Whereas, a big, bold TV-led brand-building campaign designed to raise awareness amongst various audience groups will have a greater focus on the creative over data. The two forces co-exist in both examples, but at varying levels. My team at CNN work across over

100 countries spanning Europe, Middle East and Africa, adapting this data and content approach depending on the client’s needs and objectives. We are genuinely excited to be working with many valued advertising partners in Africa who are embarking on highly innovative campaigns and want to experiment and be bold in their marketing strategies. One good example is Dangote Industries – a long-term partner who this year became the first African brand to be part of Great Big Story, which was launched by CNN and Turner in 2015 to tell amazing stories that appeal to intellectual, curious and connected consumers. In addition, Dangote continued its brand building campaign on CNN TV and briefed our branded content studio to develop a new 360-degress campaign across multiple platforms. By taking this multi-platform approach, Dangote is leveraging the best of both the TV and digital ecosystems and drawing on tangible insight based upon the data of how CNN audiences consumed its content. Data can then be used to help inform Dangote’s own

business and marketing decisions and give greater understanding of core audience groups. This most certainly isn’t an isolated example. Over 70% of the campaigns that we work on with international advertisers are multi-platform – some are predominantly TV, supported by digital, mobile and social, others are digital led but with a TV component. We are continually impressed with how African brands are eager to be at the forefront of experimenting with new techniques being used in media and marketing. But please don’t confuse being ‘impressed’ with being ‘surprised’. In a continent that in large parts is leap-frogging other nations in technology adoption and understanding, my team at CNN is looking forward to collaborating with African brands for yet more fresh thinking and ‘media first’ ideation. The only certainty is that data and content will be the two factors that continue to power this innovation.

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Where are the women? OLUWASOROMIDAYO GEORGE George is a member of CSRG Institute.

here is so much happening all over the world. Global development events appear to have taken on a particular type of dynamism or disruption, with changes emerging rapidly on many fronts. It has become pertinent to build scenarios of possible outcomes in anticipation of the kind of dominant governance structures or trade agreements that may soon evolve. The reality shows occurring on the world stage, which include the ‘new relationship’ between North Korea and the USA, South Korea and North Korea (with China in the mix), are entertaining and intriguing. We must not forget Russia and the new love story between the American President and Japan (momentarily?). Last but not the least is the exchange of words that ensued at the G7 meeting

between Trudeau and Trump. Some of us also continue to watch with horror how disruptors are challenging the rule of law in countries traditionally known to uphold the law above all else. There are disruptions taking place in interactions between nationalism and traditional capitalist collective bargaining, with a heightened threat of trade wars amongst the superpowers. Back home in Nigeria, the race for the 2019 elections begins in earnest. Some do not think it’s a race. It is perceived in certain quarters that the polls at the federal level are pretty much cast in stone. In all of this, I am particularly burdened by the quest for us to have better female representation in the next administration since many seem to think we have fizzled into irrelevance in the last couple of years. The predatory and often archaic narratives surrounding women’s involvement in politics and the workplace continue to pervade private discourse and patriarchal mindsets. The 2017 Sustainable Development Goals (SDG) progress report states that “women still face considerable structural disadvantages in escaping poverty”. The

Our development agenda should shape the role of community-building in a gender-inclusive manner. Our aim should be to push beyond the hand-me-down types of projects for women to developing businesses that have the potential to scale up

report highlights many issues which continue to impact negatively on women’s rights. It states that “all over the world, women continue to be largely underrepresented in parliaments and senior management positions, with less than one-third representation in either domain in most regions of the world”. Women are pivotal to the success of the development agenda. It is, therefore, essential that socioeconomic development at all levels, inclusive of the bottom of the pyramid, takes cognizance of the role women play in nation-building and economic development. This role is in no way stereotypical or a pattern of generalization because every woman is an individual who makes choices and

decisions that are suited to them. In an entirely progressive manner, the role which every individual plays within communities is essential. The functions men, children, and women or the elderly play should all be accorded due recognition and dignity that are expected. The narratives for women should, therefore, not be one of indignity and subordination. The massive cry that we heard across the world in the last couple of months, about teenage girls being raped and murdered in India and another put on death row in Sudan for an act of self-defence, is in order as these acts are in themselves medieval and grievous acts of cruelty. Child marriage and rape are acts against humanity which will have devasting effects on our sustainable future. Our development agenda should shape the role of community-building in a gender-inclusive manner. Our aim should be to push beyond the handme-down types of projects for women to developing businesses that have the potential to scale up. This means that we have to recognize the possibilities, understand the objectives and articulate the outcomes that we want to see. Women bring a lot to

the table; they help transform our communities, build active social values and economic advancement to our homes if supported. The practical framework for intervention must, therefore, include bold plans to scale women-led businesses with clear sustainability plans. The intensity of abuse that women experience must stop; it is antithetical to any form of development agenda. We must all, therefore, aggressively and decisively stamp it out. State actors must be a driving force for change with dynamic reorientation carried out within enforcement agencies which are most complicit in not enforcing laws meant to protect the vulnerable in our midst. An initiative like the Lagos State Domestic and Sexual Violence Response Team is a typical example of state-owned machinery which is aggressively trying to right the wrong of many ills meted against women. We need to push beyond old cultural and religious beliefs which draw strength from faulty architectural designs to more humane and equitable interactions between the male and female gender. Send reactions to: comment@businessdayonline.com

Reconnecting to mother earth

NNIMMO BASSEY Nnimmo Bassey is Director of Health of Mother Earth Foundation (HOMEF)

umans are rapidly losing a sense of being, of being human beings, of being just one of the beings among other beings on Planet Earth. Our inventiveness has radically changed our relationship with Nature and we give little thought to actions which severely disrupt the right of Mother Earth to maintain her cycles. This disruption of our intimate relations with nature comes at a price and the cost keeps mounting. The fact that something must be done to correct this has brought us together here. This gathering presents us with an opportunity to remind ourselves of the brutal assault being unleashed on Earth defenders in parts of the world as they struggle to live in harmony with the Earth, defend their territories and resources and to live in dignity. It is hoped that in this gathering we will spare thoughts on the heroic struggles by brothers and sisters against the assault of extractive corporations bent on amputating the Earth through exploitative activities in mining, oil and gas. It is hoped that we will stand

together to denounce corporations assaulting pollinators and soil organisms with agrotoxics and eroding biodiversity through genetic manipulations. As we reflect on the assaults on the Nature and fashion ways to hold those that commit ecocide to account, we should also roundly condemn actions such as fracturing of the bones of the earth in search of shale gas and oil. We have already literally scrapped the bottom of the natural resource pot. It is time to pause and think. This is why we are here. The maxim in today’s global political landscape appears to be that might is right. The rightness of that right may be contested, but the rise of unilateralism has rendered multilateralism almost cosmetic. The rise of prescriptive neo-liberalism couched in terms that suggest the respect of democratic ideals of liberty and fair competition has allowed an upsurge of military humanism in the world. The backdrop of this scenario has been appropriately captured asdisaster capitalism[i] - a situation where disasters are seen as opportunities to impose a pre-planned superstructure that inevitably denies powerless citizens of the world their rights. The whole idea is to hit the people so hard that they are pushed into a state of shock and while in that condition they are unable to react collectively or cogently to the harm being inflicted on them. Such disasters are increasingly man-made, although

even natural disasters are equally exploited to dispossess the weak. The path of current petroleum civilization is strewn with blood and skeletons across the world. The recent situation in Nigeria is a glaring example. Many wars have been fought and nations destroyed over Natures gifts or resources. In 1999, as the first barrels of crude oil were shipped from Sudan, so did the war between government forces and those of the then Sudanese People’s Liberation Army escalate. While the bombs were still being dropped in Libya, oil was being exported. When Iraq was invaded and blown apart, the offices of the Petroleum Ministry were spared. Everywhere there are conflicts and wars today we see the raw situation of war waged for profit and resource appropriation and control.[ii] If this scenario blossoms unchecked, what we experience today will end up being nothing more than a whimper. There are also less openly explosive conflicts going on today in the world. The lack of climate action on the basis of justice and common but differentiated responsibilities show a tendency were more resilient nations care little about vulnerable ones, especially those set to go under the waves if sea levels continue to rise. We see the burden of climate action being placed on Nature rather than being tackled by checking human consumption appetite and polluting actions. Efforts are being made to label forests as carbon sinks and to displace forest dependent communities in order

to secure the carbon stock in the trees or soils or rivers. Market environmentalism elevates ecosystem services as the new and monetized way to see Nature and our environment. We cannot be silent over this posturing that permits business as usual and places the burden for this indulgence on the poor. We should denounce false climate solutions such as plans for seizing the planetary thermostat through geoengineering. We cannot close our eyes to extreme genetic engineering procedures (including gene editing) that are bound to have grave and irreversible intergenerational implications. The commodification of Nature has done humans and other beings much harm. Our alienation from nature keeps us from seeing the intrinsic value of her gifts. The quest to appropriate, transform and accumulate resources has bred all manners of iniquitous social relations, oppressions and outright brigandage be they in the form of petty exploitation or outright neocolonialism and imperialism. We a re h e re o n c o m m o n grounds. We are firm ground. We care about Mother Earth and all beings, knowing that she is constantly fighting for our survival. Time is running out, and we shall not indulge in long talks, but spend time sharing on the way forward on the urgent matters impacting Mother Earth and our lives as individuals and collectives. We cannot afford mindless conflicts and wars that we see

in the world today. It is time to take difficult but essential actions including halting dependence on fossil fuels, stopping polluting activities and reducing consumption levels within planetary boundaries. Conflicts and harms are certain to intensify as the nonrenewable re-sources run out and as habitable environment for the reproduction of renewable resources reduce. Earth Trusteeship demands that we reconnect to our roots, to nature and remind ourselves that the Planet can do without humans and that our future can only be secured if we live in harmony with Mother Earth and in solidarity with one another. This Earth Trusteeship gathering brings much hope. We may not agree on everything; we may not even have the same levels of intimacy with the Earth, but one thing is clear: we are gathered as children of the Earth. We are here on the common ground that we care about Mother Earth and all her children. We all realize that rapacious exploitation of the Planet cannot continue on the current trajectory except some clever guys can invent or have already invented and patented a Planet B. Together we can make a difference and get back on track aligned with Mother Earth. • Text of an address at the Earth Trusteeship Gathering, The Hague, Netherlands, 22.06.2018

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The poverty capital of the world

EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie

hile the presid e n t and his v i c e president have continued to blame everyone and everything else aside th ems elv e s an d the administration they run, the material conditions of Nigerians have continued to worsen with approximately six Nigerians sliding into the extreme poverty gap every minute. This has conferred on the country the unenviable tag of p ov erty capital of the world, a tag previously worn by India. But w h ereas In d ia’s case with its 1.35 billion population understandable, nothing can justify Nigeria’s position with just under 200 million people. In 2016, the National Bureau of Statistics sign a l l e d Ni g e r i a ’s p r e carious situation when it estimated that no fewer than 112 million Nigerians live below the poverty line. But we hushed the bureau up, criticised

Frank Aigbogun

EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

its methodology and said the situation could not be that bad even as our g o v e r n m e nt c o nt i n u e d to blame others for our plight rather than acting with urgency to reverse the ugly trend. Recently however, the Brookings Institution, drawing form data from the World Poverty Clock, affirmed the findings of the NBC even though its estimation falls far short of that of the NB C. According to the data, Nigeria now has over 87 million people living in poverty. Kristofer Hamel, Chief Operating Officer of World Data Lab, captures it better : “According to our projections, Nigeria has already overtaken India as the country with the largest number of extreme poor in early 2018, and the Democratic Republic of the Congo could soon take over the number two. At the end of May 2018, our trajectories suggest that Nigeria had about 87 million p e ople in extreme poverty, compared with India’s 73 million. What is more, extreme poverty

in Nigeria is growing by six people every minute, w h i l e p o v e r t y i n In d i a continues to fall. In fact, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today.” Of course, some of the r ea s o n s w hy Ni g e r i a n s continue to slide into poverty in massive numbers are absence of social and health infrastructure, high unemployment rate, high dependency rate, security challenges and the absence of right economic policies and programmes that will be a catalyst to lifting people out of poverty. While various vital infrastructures are absent and the little available ones have continued to decay due to lack of maintenance and the government has been unable to muster much investment, Ni g e r i a h a s o n e o f t h e highe st unemployment ra te s i n t h e c o nt i n e nt , which sadly has continued to grow over the last years. Meanwhile, Nigeria

Thursday 28 June 2018

has a minimum wage of N18,000, which has remained unchanged since 2 0 1 1 . Th i s h a s l e ft t h e poverty rate increasing at a current 44.2 percent, as compiled from a recent BsuinessDay survey. Il l i te ra c y ra te i n t h e country is also one of the highest among its peers at 34.9 percent. But despite these startling figures, and rather than acting in a coordinate d fashion to b e g in to address the problem, the current government has continued to implement p olicies and programmes that are sending more and more Nigerians do wn th e p o v erty l in e. For instance, the Nigerian government’s highest allocation of N1.4 trillion yearly goes to subsidising importation of petrol for the consumption of its few rich and the middle class. Th i s , t o b e s u r e , i s f a r greater than its combined budg ets for health and education combined. This doesn’t show the government is even aware of the problem not to talk about addressing it.

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

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At African Alliance we are excited about the future - MD

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PZ Cussons least performing FMCG multinational in 5 years EMEKA UCHEAGA AND OGHOGHO EDOSOMWAN

mong stock market listed multinational FMCG companies operating in Nigeria currently, PZ Cussons stands out for the wrong reason. Its shares are down the most, revenue growth was the most sluggish and profits have dropped the most when compared to others like Nestle and Unilever over the last five years. While revenue of Nestle and Unilever grew at an average of 12.9 percent and 8.63 percent respectively over the last five years, average revenue growth in PZ Cussons was only 2.2 percent. During the same period, earnings per share (EPS) in PZ declined at an average of -7.34 percent while EPS of Nestle and Unilever grew at an average of 8.67 percent and 7.33 percent respectively. The financial performance by PZ Cussons caused its shares to decline by 45 percent between December 2013 and December 2017 while Nestle shares rallied 27.2 percent off the back of their stronger financial performance. Although Unilever enjoyed decent growth in profitability,

company shares still fell around 23.75 percent. In a bid to boost profit, manage rising costs and increase efficiency in PZ, the management downsized employee headcount from 1,780 in 2016 to 1,587 in 2017 which helped to bring down personnel expenses from N7.2 billion to N6.5 billion. However, administrative expenses still rose from N5.2 billion in 2016 to 5.6 billion in 2017. Robert Omotunde, head of research at Afrinvest Securities Ltd said that the poor performance financial by PZ is traceable to the foreign exchanges challenges that most manufacturing firms have been experiencing in the last few years. PZ Cussons reported a foreign exchange loss of N8.79 billion in 2017 from N2.88 billion in 2016. Also the net operating cash flow of the company was N2.2 billion while the net investment and financing cash flow was negative and accumulated a loss of about N7 billion. Omotunde said that despite the poor performance of the stock remained the darling of foreign investors as it is one of the few multinationals in Nigeria that are very familiar with as this companies also operate in their own countries. “Notwithstanding the fact

that the company has suffered in terms of market cap, price to earnings ratio of PZ has remained stable around 20-30 times earnings. The company market valuation is simply lower because earnings are lower. We expect to see fundamentals drive the stock performance going forward till after

h e We s t A f r i c a n Power Pool (WAPP) has entered into a landmark strategic relationship with an Israeli company, Gigawatt Global, a solar developer and signed a deal with the 15-member Economic Community of West African States (ECOWAS) to build $1 billion renewable energy projects in the region. A statement issued by the Press Officer of the Embassy of Israel to Nigeria, Zanswat Bowsan, made available to BusinessDay on Tuesday noted that progress has been made following Israel’s deep and long lasting relations with Africa specifically boosted by Prime Minister Benjamin Netanyahu’s initia-

tive to strengthen those ties with the region. Recall that the Israeli’s deep interest in West Africa was highlighted in Monrovia, Liberia, on June 5th 2017, when the Israeli Prime Minister addressed ECOWAS Heads of State and Government Summit. “With that spirit and on the sides of the summit, Ambassador Guy Feldman, Israel Ambassador to Nigeria and ECOWAS, initiated a meeting attended by ECOWAS Energy Commissioner Meba Germain Essohouna, the Head of the West African Chamber of Commerce, Morlaye Bangoura and Josef Abramowitz Gigawatt Global CEO who already exploring solar fields in 10 African countries,” the statement said.

is very high and the foreign exchange challenges have hurt its performance in the last few years. Ejiola further explained that Nestle has done backward integration in some of their operations which has helped to reduce the growth in operating expenses in the firm.

PZ Cussons Nigeria Plc. is part of a multinational consumer goods business, PZ Cussons Plc. The company manufactures and distributes some of the most popular brands in Nigeria such as Imperial Leather, Cussons Baby, Morning Fresh, Thermocool and Robb.

L-R: Ahmed Yakasai, president, Pharmaceutical Society of Nigeria (PSN); Jide Idris, commissioner for health , Lagos State, and Njide Ndili, country director Nigeria , ‎PharmAccess Foundation, at the launch of Pharmacy Framework in Lagos. Pic by Pius Okeosisi

Israel’s Gigawatt Global signs $1bn renewable energy deal with ECOWAS INNOCENT ODOH, Abuja

the general elections next year,” he added. Austin Ejiola, head of Strategic Advisory at Alpha Morgan Capital Limited told BusinessDay by phone that PZ has struggled due to increasing competition from smaller companies in the FMCG space. Also the cost of doing business

Following a series of rigorous meetings with ECOWAS energy commission stakeholders, looking into power supply forecasts, challenges and plans for the ECOWAS region, a letter of intent was signed between Marcel De Souza, former President of the ECOWAS Commission, and the company, to develop an 800 MW of trans-boundary green energy projects across the West African region. The deal will help build the West Africa Power Pool, which is a unit of ECOWAS. It was set up to implement this agreement and create a regional electricity system. The deal builds on an agreement inked by the United States and Israel, December 4th 2017, where the two governments pledged to work together to reduce energy poverty in Africa.

Transcorp appoints Owen Omogiafo as Executive Director

ransnational Corporation of Nigeria Plc (Transcorp), one of Nigeria’s leading conglomerates, has appointed Owen Omogiafo as an executive director with effect from July 1, 2018. She will in her new role support in driving and delivering on Transcorp’s strategic ambitions as the conglomerate continues to fulfill its special mission of lighting homes, schools, and hospitals in Nigeria, powering the country’s industrialisation process, and hosting local and foreign investors in Transcorp hotels across Nigeria. Omogiafo has a BSc in Sociology and Anthropol-

ogy from the University of Benin and an ‎M.Sc. in Human Resource Management from the London School of Economics. She brings on board over 18 years’ corporate experience and is currently Chief Operating Officer of the Tony Elumelu Foundation, Africa’s leading philanthropic organisation. She has held senior leadership positions including Director of Resources, at Heirs Holdings, a family owned investment company with a portfolio spanning the power, oil and gas, financial services, hospitality, real estate and healthcare sectors, operating in twenty-three countries worldwide. She has also

served as HR advisor to the GMD/CEO at leading pan-African financial services Group, United Bank for Africa (UBA), and as an Organisation & Change Management Consultant at Accenture. Commenting on Omogiafo’s appointment, the Chairman, Transcorp Plc, Tony O. Elumelu, stated: “Owen brings on board a unique execution focused mind-set, and an innovative and result oriented discipline. With her strong track record in execution, I remain confident that this well-deserved appointment will further strengthen Transcorp’s core purpose of improving lives across Nigeria”

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Thursday 28 June 2018

COMPANIES & MARKETS

At African Alliance we are excited about the future - MD African Alliance Insurance Plc in the next few weeks will begin unveiling its new corporate identity in line with the changes it has mapped out for itself for new growth phase. Funmi Omo, the managing director, African Alliance Insurance in this interview with Modestus Anaesoronye shares strategic plans on how the company has embraced technology to ease its process and the team’s future plans for the company. Excerpt: Tell us briefly about your background? have always been in the insurance industry. As the Managing Director of African Alliance Insurance Plc, one of the foremost insurance companies in Nigeria, I have spent over 25 years in the insurance industry in different aspects of the business, from underwriting to product development to administration and operations. More importantly, I have been driven by the passion for the industry and the significant value insurance provides to our country and the masses. This has led me to keenly follow trends in the industry while building my career. What are your plans to continue growing insurance policies usage and acceptance? It is a fact that insurance penetration in Nigeria is still remarkably low. There is low awareness of the role insurance plays in minimising everyday risks. Strangely, we are not unaware of these risks. Every day on social media and WhatsApp, people share content depicting gruesome scenarios where families were left suddenly without their breadwinners or family member, and we end those messages with “It is well” without doing anything physical about preventing the aftermath of occurrences that can happen any time. This is where insurance practitioners come in. At African Alliance Insurance Plc, we are aggressively targeting both the insured and uninsured to ensure that they are on a policy that provides the utmost coverage for them and that they overcome the attitude most Nigerians have of procrastinating or just turning a blind eye to the reality of life. One way we plan to increase the adoption and acceptance of life insurance is through the ongoing education of our target audience. Through various channels, we educate people and open

our lines to receive feedback. For those who do not know what insurance can do for them, we give them a broad overview of the role of insurance and we use practical approaches to show them how much better life could be in the long-term if they had life insurance to mitigate life’s risks. How would you assess the investment culture in Nigeria? The investment culture in Nigeria is growing quickly. Nigerians are becoming shrewder about attaining success while in their youth. While the older generation was known for the culture of loyalty – the gratification that at the end of about 35 years of service, one would be rewarded - our youth are by far the opposite. They are actively searching for information on investment and ways to multiply their wealth now, not tomorrow. This wave of high internet usage has done us some good in that area as it has exposed people to the right culture of investments. How is African Alliance committed to the investment culture in Nigeria? We have various plans to meet the different lifestyles and life stages of our customers and beyond. Our plan is to help customers increase wealth in the medium and long term and have the additional life insurance elements. What this means is that during the period of investments, if anything happens to the policyholder, African Alliance Insurance steps in to provide monetary comfort to the loved ones left behind or any other named beneficiary. This way, we give our policyholders peace of mind while they go about their day to day activities, and even when they are gone, we ensure their beneficiaries have the same peace of mind. We are working on building strong channels of communication and marketing using technology to empower our customers to

Funmi Omo

easily make a purchase of any insurance and investment plan online from our portals. We want to ensure that insurance is as easy to purchase and understand as banking is today. We also want to be part of the success stories of our customers. We go beyond the everyday service to provide a listening ear to our customers. African Alliance recently posted a N6b+ profit. What are the plans to further grow profit? We are embarking on a massive project in a few

weeks which we are excited about. This project will unveil our efforts in raising the bar in the insurance industry while positioning African Alliance Insurance as forwardthinking and innovative. We are also channelling more of our resources to research and development to further uncover insight that will show us the specific needs of our customers and even those who do not have an insurance plan yet. More importantly, we want to add value to our country while making profits.

We must move with the times and adapt to the changing business environment. That is the new wave that NAICOM is steering the insurance companies towards – embracing innovative methods of doing things to catch up with the others in the broad financial services industry

What areas of growth and opportunities are there for the financial services industry? There are numerous areas to make a difference. Nigeria, Africa even, may be one of the most populous continents in the world but the market is still a young, growing one with huge potential to scale. Others are looking here for investments because they know they can generate a massive return on their investments due to our population and excitement for new trends despite our low earnings ratio. However, our market still faces challenges, some of which technology can make easier. For example, access to markets, ease of purchase, access to information, trust, and data gathering, among others still remain significant challenges. If we can solve these, the financial services industry will become more formidable. How is African Alliance leading this innovation in technology? In the past few months, we have focused on channel maximisation, ensuring that our channels provide us with direct access to customers, for ease of purchase and to help us understand their needs, trends as well. We believe that if we understand customers’ needs, we will be in the better position to serve them and fill gaping holes in the insurance industry. What would you say is the major challenge of the Insurance industry in Nigeria? I believe that previously we had set ways of doing things, but now, with technology, social media, the internet in general, we cannot continue to rely on the old methods, products and channels. We must move with the times and adapt to the changing business environment. That is the new wave that NAICOM is steering the insurance companies towards – embracing innovative methods of doing things to catch up with the others in the broad

financial services industry. We are supportive of these initiatives and we are working towards championing these trends. How would you address the issue of corporate governance in the insurance industry? We have a lot to do to ensure strict adherence to positive corporate governance standards. We also, in our Company, have received backlash in the past. However, with this new administration and new management of the Company, we are working to clean up the system internally and begin on a fresh note where our shareholders will be confident in their investments. We want to assure our shareholders and other stakeholders that we are committed to them. Hence, we recently appointed Deloitte & Touche, foremost accounting and audit firm, to work with us in achieving this. We have begun an internal awareness campaign to ensure we are aligned with industry regulations and requirement. We have engaged top management companies such as PricewaterhouseCoopers (PWC), Ernst & Young (EY) and Vetiva Capital to provide the necessary strategic guidance needed to take the company to the next level during this period of transition. What are your future plans for African Alliance in the Nigerian market? African Alliance Insurance may be old, but we are young at heart. From our people to our products and our channels, we are repositioning the brand as leading the next trends in life insurance in Nigeria. We have begun putting things in place to achieve this and there are many more things we are yet to roll out. In a few weeks, we will begin unveiling our new corporate identity in line with the changes we have mapped out. We are excited about the future. It looks more promising than ever.

14 Thursday 28 June 2018

C002D5556

BUSINESS DAY

COMPANIES & MARKETS Oyo, BoI supports 200 MSMEs in Development funding Scheme AKINREMI FEYISIPO, Ibadan

yo State Government in strategic partnership with Bank of Industry (BoI) has supported 200 projects under the Micro Small Medium Enterprises (MSME) Development funding Scheme. Under the scheme, the sum of N800 million has so far been disbursed in the state with a total of 5000 direct jobs being generated under the Scheme. The Oyo State Commissioner for Trade, Industry, Investment and Cooperatives, Taibat Adeyemi-Agaba who disclosed this said in strengthening MSME’s scheme, the State is partnering BoI in instituting N1 billion for onlending to manufacturing related MSME in the State at 5 percent annual interest rate. This is coming as the Vice President Yemi Osinbajo said the establishment of MSMEs, were conceived and designed to bring the regulatory agencies whose work affects the

business experience of MSMEs nearer to them. Osinbajo who stated this at the 17th National Micro, Small and Medium Enterprises, MSMEs in Ibadan noted that regulatory agencies must not be obstacles but facilitators of business. The Vice President Osinbajo, who was represented by his Special Assistant on SMEs, Tola Johnson at the launch of MSMEs clinic in Ibadan said with all the agencies in one location at the same time saves MSMEs the travel time and cost of going to different agencies. MSME clinics have also enabled regulatory agencies to gain a better understanding of the difficulties that MSMEs face and caused them to take steps to remedy the situation where required. He pointed out that several agencies have reduced the cost and timelines for service delivery to MSMEs adding that since the launch of the programme last year, it has made it easier for small businesses to access funds, because the

Bank of Industry (BoI), Development Bank of Nigeria, DBN, and NEXIM Bank have used it to expose their products and increase their loans to MSMEs. In his remarks, Governor Abiola Ajimobi of Oyo State, pledged his administration’s support for the sector owing to its significant contribution to the nation’s economy. The MSMEs Clinic is geared towards driving the economy out of recession and placing it on a sound and sustainable path and designed to assist the 36,994,587 micro enterprises recognized by the Nigerian Bureau of Statistics (NBS) and the Small Medium Enterprise Development Agency of Nigeria (SMEDAN) on ease of doing business. The Project is in partnership with various Regulatory Federal Government Agencies whose operations are critical to the activities and survival of MSMEs doing business in the Country with a view to getting feedback for resolving problems militating against the growth and sustainability of MSME space in Nigeria.

Business Event

L-R: Adekune Taiwo,Pastor The Redeemed Christian Church of God Victory Chapel Magodo, Olukayode Pitan, Managing Director, Bank of Industry/Special Guest, and Daniel Adebola, President, LP 21 Redeemers Men’s Fellowship, at the 2018 Men’s Convention in RCCG Victory Chapel, Magodo, Lagos...on Sunday

Star Lager to give out N400m in biggest promo Anthony Nlebem

igerian Breweries Plc, makers of Star Lager Beer, has announced the launch of the Star Lager Millionaires Promo, a national consumer exercise designed to reward football fans and lovers of Nigeria’s premium beer brand. The mega promo, expected to be the company’s biggest ever, is billed to give out over N400 million naira in cash between June 15 and August 15, 2018. Speaking on the Millionaires Promo, which is part of Star Lager’s ‘Nigeria United We Shine’ campaign which commenced a few weeks ago, Olayinka Bakare, portfolio manager National Premium, Nigerian Breweries Plc, declared: “Since 1949 when the first Star bottle was produced, the

brand has always been about celebrating the unity of Nigeria, rewarding and enabling the passion of Nigerians, and supporting the team we love no matter what. It is because of this common desire for success and love for the country that we have launched the Star Lager Millionaires Promo across the entire country.” Thousands of consumers from across the country are expected to win instant airtime, plus whooping cash prizes of N1 million, N2 million, N5 million and the mega dream cash of N10 million naira. These are in addition to millions of free drinks and other items up for grabs. The announcement of Star’s Millionaires Promo also comes on the heels of its launch of spe-

cial edition bottles, which were released in honour of Nigeria’s national football team, the Super Eagles, who are currently in Russia for the World Cup. The promo winners are expected to look under the crown corks and see a winning code that is redeemed via a USSD code of *566*20# which can be dialed on any network from all mobile phones. Since its partnership with the Nigerian Football Federation was unveiled earlier in the year, Star Lager, the official beer of the Super Eagles, has been engaging fans in a number of activations and events, including the Star Fan Parks known for fusing music, party and live viewing experience that were held in multiple cities during the team’s preparations.

L-R: Tope Smart ,group managing director/CEO, NEM Insurance Plc; Fidelis Ayebae, chairman board, and Olajumoke Philip-Akede, company secretary, during the 48th Annual General Meeting of NEM Insurance Plc held at Premier Hotel, Ibadan, Oyo State recently.

L-R: Craig Arnold, president, Dow Sub-Saharan Africa; Karen S. Carter, chief inclusion officer, The Dow Chemical Company; Heinz Haller, president, Dow Europe, Middle East, Africa and India (EMEAI); F. John Bray, united states consul general (Lagos), and Tony Groosman, general manager, Dow Chemical West Africa, at the launch of Dow’s new office in Lagos.

World Bank, ADB to build farm roads to markets in Anambra EMMANUEL NDUKUBA, AWKA

orld Bank, African D e v e l o p m e nt Bank (ADB) in conjunction with Rural Access and Agricultural Marketing Project (RAAMP) of Anambra State has embarked on a work plan to build access roads and markets in rural areas leading to major farmlands. Speaking at a sensitisation programme at ldemili South Council Headquarters, Ojoto the Anambra State Coordinator of RAAMP, Joe Onyejekwe

said that Anambra Government had forwarded the data of all the rural farm roads to World Bank U.S. He said that the work plan was to maximize agricultural production in the state. Onyejekwe said that it was discovered that many food crops were wasting because there were no access roads to farms in the hinterlands. He said that people who manage to get to the farms purchase produce at a high costs, thereby discouraging farmers from further investing or maximizing their farm produce.

Onyejekwe said that it was former President Olusegun Obasanjo that initiated the vision to build farm roads in all the states in the federation. He added that not less than 8.9 billion dollars were lost yearly in the country due to under harnessed farm produce. ``Our working Governor, Willie Obiano saw the project at federal level and decided to appoint me to ensure that Anambra attracted the world Bank and ADB to help to develop our agricultural sector,” Onyejekwe said.

L-R: Maxwell Loko, Managing Director, Nigeria Television Enterprise; Yakubu Ibn Mohammed, director general, Nigerian Television Authority(NTA), and Justin Zhang, chief executive officer, StarTimes Nigeria, at the 4th Forum on China-Africa Media Cooperation in Beijing.

BUSINESS DAY

Thursday 28 June 2018

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Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (14 – 06–18)

38,928.02

N14.102 trillion

2,843.88

1,705.68

949.59

Week close (22 – 06–18)

37,862.53

N13.716 trillion

2,707.98

1,691.04

949.59

Percentage change (WoW) Percentage change (YTD)

-2.74 -1.00

-4.78 5.61

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

907.99

349.68

2,607.69

2,017.37

1,508.07

149.45

903.41

2,553.17

1,956.40

1,481.73

1,746.68

475.44

139.37

1,761.28 1,721.95

490.95

144.33

481.31

-0.86

0.00

-2.23

-1.32

-12.67

-1.42

0.26 3.26

HEANYI NWACHUKWU

-1.96 1.23

under review as additional units of the Vetiva Banking ETF securities were created bringing total yearto-date inflows for the year 2018 to NGN 124.2 Million. To t a l t r a n s a c t i o n v a l u e (TTV) on the ETF board dipped by 31.54percent from April TTV of 15.2 million. Total Volume traded however appreciated by 34.18percent indicative of increased trades on lower priced ETFs. The Exchange remains fully committed to support the issuance of market beneficial ETFs, priced fairly and actively traded in the market thereby increasing portfolio diversification options for investors. Exchange Traded Funds (ETFs) are securities that track the performance of an index or basket of assets. They are listed on an exchange and traded much like stocks. ETFs derive their performance from the index or underlying assets they track. ETFs provide investors with the opportunity to diversify their investments and gain exposure to various investment strategies and asset classes, including; Local Fixed Income, Local Equities, International Markets, Commodities, Currency, and Multi-Asset.

976.10

3.55 7.23

-0.50

-2.09

-3.02

-1.75

-7.45

-0.28

-0.97

7.39

UACN Q1’18 results review: Stiffer competition weighs negatively on outlook – FBNQuest Capital

Griffin 30 ETF, Lotus Halal Equity ETF, Stanbic IBTC ETF 30, Vetiva Banking ETF, Vetiva Consumer Goods ETF, Vetiva Industrial ETF, Vetiva S & P Nigeria Sovereign Bond ETF, and The SIAML Pension ETF40. ETF market statistics as at May 31, 2018 show the Vetiva Banking ETF led the value board in the month of May with N6.1 million in trade values constituting 58.86percent of Total Transaction Value, whilst The Vetiva S & P Nigerian Sovereign Bond ETF and Vetiva Consumer Goods ETF followed with 23.15percent and 10.48percent respectively. The Vetiva Banking ETF also dominated the volume board representing 87.29% of total trade volumes while the Vetiva Consumer Goods ETF, Vetiva Griffin ETF and Vetiva S & P Sovereign Bond ETF trailed behind posting trades representing 8.54percent, 2.87percent and 1.12percent of total trade volumes respectively. The NSE ETF market capitalisation declined by 2.57percent from 7.63 Billion in April to 7.43 Billion in May 2018 whilst maintaining a positive Year-To-Date (YTD) increase of 11.12percent. The ETF Market recorded net inflows in the period

NSE Ind. Goods Index

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

SIAML Pension ETF, Stanbic ETF-30, Lotus Halal outperform other equity-based Exchange Traded Funds nvestors in Exchange Traded Funds (ETFs) such as StanbicIBTC Asset Management Limited (SIAML) Pension ETF-40, Stanbic IBTC ETF30, and Lotus Halal Equity ETF have reaped bountifully this year as their respective returns outperformed other NSE listed equities Exchange Traded Funds. BusinessDay check shows that while the Nigerian Stock Exchange (NSE) listed stocks recorded negative year-to-date (ytd) returns of 0.1 percent as at Friday June 22, these three ETFs yielded positive returns of 27.44percent, 24percent, and 6.72percent respectively as at May 31. SIAML Pension ETF 40 is currently priced at N157.32 per unit from a 52-week low of N125.37 per unit. As at Thursday June 21, 2018, Stanbic IBTC ETF 30 was priced at N115, from a 52-week low of N70; while the price of a unit of Lotus Halal Equity ETF has risen to N12.1 from a 52-week low of N10.08. Exchange Traded Funds are for investors who are looking for benchmark return at a minimal cost; investment professionals seeking efficient access to other markets and asset classes; passive investors who may not have time to actively monitor the market; and investors looking for diversification through a single security. Other ETFs and their year-todate return are: Vetiva Industrial ETF (1.92percent); Vetiva Griffin 30 ETF (1.85percent); Vetiva Banking ETF (-0.21percent); and Vetiva Consumer G oods ETF (-7.39percent). The Nigerian Stock Exchange (NSE) is the leading ETF markets in the West African region in terms of number of listing, turnover value and capitalization. There are currently nine listed ETFs on the NSE; they are NewGold Exchange Traded Fund, Vetiva

NSE Lotus II

NSE Banking Index

NSE 30 Index

utperform rating maintained: Following UAC of Nigeria (UACN) weaker-than-expected firstquarter (Q1) 2018 results, we have cut our 2018-19E earnings per share (EPS) estimates by -65percent on average (this includes new shares from the company’s rights issue). We take into account growing competition within the Animal Nutrition and other Edibles business (consisting of Grand Cereals and Livestock Feeds) which resulted in a -40percent year-on-year (y/y) decline in sales to N9.3bn in this business. This segment now accounts for circa 51percent of group sales versus 64percent a year ago and has completely offset gains delivered over the past five years. Ma n a g e m e n t s t a t e m e n t s indirectly suggest that the coming on-stream of Olam’s animal feeds factory in Q3 2017 has had a more material impact on sales than we previously expected. As such, we are more concerned about UACN’s animal nutrition business prospects this year, forecasting a -30percent y/y decline in sales to circa N40billion. Additionally, we expect that relatively high input (grains) costs will continue to weigh on profitability. Our new price target of N16.2 is down -39percent, mainly because of the increase in outstanding shares following the rights issue which has increased total share count by 960 million to 2.881 billion shares. Additionally, we have halved our 2018E EBIT margin estimate for the logistics business to 10percent to reflect the tougher operating environment. In Q1, PBT for

MDS Logistics, UACN’s logistics business, declined by -13percent y/y to N222million following cost increases not recovered from clients. We expect this trend to persist in H2 as the firm focuses on new client acquisitions following a drop in activity levels from core FMCG clients. Notwithstanding the outlook, w e retain our Outperform rating on the stock due to the valuation gap to our fair value estimate. At current levels, UACN shares are trading on a 2018E P/E multiple of 31.9x for an average EPS growth of 27percent over the 2018-20E period. Q1 2018 PBT and PAT both flattish y/y: Q1 2018 results were primarily hit by weaker sales across key businesses. Group sales of N18.3billion declined -25percent y/y while profit before tax (PBT) and profit after tax (PAT) of N974million and N709million (before discontinued operations) respectively both ca m e i n f l at t i s h y / y . O n a segmental basis, sales for the food & beverage business declined by -29percent y/y to N14billion, driven by lower (down -40percent y/y) revenues within the Animal Nutrition business. A gross margin expansion of +304bps y/y to 19.5percent and a -64percent y/y decline in net finance charges were the primary drivers behind the recovery in profitability. On a sequential basis, sales declined -10percent q/q while PBT was up significantly (+382percent q u a r t e r- o n - q u a r t e r ( q / q ) . Compared with our estimates, sales and PBT both missed by -6percent and -37percent respectively.

Thursday 28 June 2018

C002D5556

BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

United Capital investment views

Investor’s Square

Nigerian Equities down 2.7% w/w …amid OPEC meeting concerns

igerianequitiestumbled 2.7percent week-onweek (w/w) in the week that ended 22nd June 2018 triggered by OPEC+ meeting which was scheduled for the last trading day of the week. Jitters aroundtheoutcomeofthemeeting which was expected to end with a new deal drove sell pressure on market bellwethers such as DANGCEM(-5.9percent),SEPLAT (-9.3percent) and GUARANTY (-1.9percent). Accordingly, market capitalisationdecreasedN385.7bn to settle at N13.7trillion while yearto-date (YtD) returned ended the week at -1.0percent. Activity level was downbeat as average volume traded shed 36.9percent w/w to 274.2million units while average value traded diminished 16.2percent to N3.9billion. Sector indicators mirrored the performance of the broader index as all indices trended southwards save the Insurance and Agriculture indices which improved 3.4percent w/w and 3.2percent w/w respectively amid appreciationinNEM(14.3percent) and MANSARD (+5.3percent). Expectedly,the Oil&Gas index led laggards, down 6.1percent following declines in the share prices of SEPLAT (-9.3percent) and FORTE (-7.3percent). The Industrial Goods index (-5.6percent) followed because of depreciation in DANGCEM (-5.9percent) and CCNN (-10percent). The Banking (-2percent) and Consumer Goods (-0.5percent) indices also trended southwards amid sell pressure on UBA (-3.6percent), GUARANTY (-1.9percent), ZENITH (-1.9percent), FLOURMILL (-5.3percent) and NASCON (-5percent). Investors’ sentiment reflected the dull theme in the market as market breadth closed at 0.5x (previously 1.9x); 23 stocks advanced w/w while 44 declined w/w. In the week ahead, we see a market-wide bargain hunting as observedearlierinthemonth.Also, the outcome of OPEC+’s meeting which ended with a deal to reduce compliance from 152percent to the 100percent initially agreed. Our view is that this should have a marginal impact on prices with an overall positive implication for the Nigerian market. Global Equities: Trade tension ignites broad sell-offs Major global equity indices closed bearish in the week that ended 22nd June 2018. Equities remained fixated to fears surrounding eruption of a trade warasthespatbetweentheUSand its trading partners heightened. During the week, US announced additional tariffs on Chinese goods worth c. $250bn, a move that triggered a retaliatory move from China even as the EU also imposed additional vindicatory tariffslatelastweek.Consequently, DJIA, S&P 500 and NASDAQ depreciated 2percent, 0.9percent and 0.7percent w/w respectively. In Europe, volatility arising from trade wars shadowed Bank ofEngland’sdecisiontoholdpolicy rate at 0.5percent and extend its quantitative easing stimulus policy at its June meeting. Hence, Germany’s DAX (-3.3percent), France’s CAC (-2.1percent) and Pan European STOXX

(-1.1percent) declined w/w, while UK’s FTSE scaled through to appreciate 0.6percent w/w. Emerging market indices was however mixed as China’s SCHOMP (-4.4percent) led the losing pack while South Africa’s JALSH (-1.4percent) and Brazil’s IBOV (-0.2percent) trailed along. On the other hand, Russia’s RTSI (+0.7percent) and India’s SENSEX (+0.2percent) appreciated w/w. Nigerian Equities down 2.7% w/w amid OPEC+ meeting concerns Nigerian equities tumbled 2.7percent w/w in the week that ended 22nd June 2018 triggered by OPEC+ meeting which was scheduled for the last trading day of the week. Jitters around the outcome of the meeting which was expected to end with a new deal drove sell pressure on market bellwethers such as DANGCEM(-5.9percent),SEPLAT (-9.3percent) and GUARANTY (-1.9percent). Accordingly, market capitalisation decreased N385.7billion to settle at N13.7trillion while YtD returned ended the week at -1percent. Activity level was downbeat as average volume traded shed

observedearlierinthemonth.Also, the outcome of OPEC+’s meeting which ended with a deal to reduce compliance from 152percent to the 100percent initially agreed. Our view is that this should have a marginal impact on prices with an overall positive implication for the Nigerian market. Money Market: Average MM rates crash 75bps w/w In the week to 22nd of June, 2018 system liquidity was largely robust, as the market was awash with liquidity from retail FX refunds, OMO repayments (N377.6billion) and T-Bills maturities (N66.7billion) which outweighed the total T-Bills and OMO outflow of N40billion and N137.4billion respectively. Against this backdrop, money market rates, Open Buy Back (OBB) and Overnight (OVN) rates, trended southwards, down 84bps and 67bps w/w to end at 2.8percent and 3.6percent respectively. The Apex bank conducted its bi-monthly Nigerian Treasury Bill (NTB) auction, wherein it was only able to re-finance 60% of maturing bills (N40billion). The demand for the issued bills was relatively underwhelming to prior

RSA fund price of PFAs as at June 14, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs. Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions Leadway Pensure PFA SigmaVaughn Pensions AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard FUG Pensions OAK Pensions Investment One Pension Mgrs. IEI Anchor Pension Managers Radix Pension NPF Pensions

36.9percent w/w to 274.2million units while average value traded diminished 16.2percent to N3.9billion. Sector indicators mirrored the performance of the broader index as all indices trended southwards save the Insurance and Agriculture indices which improved 3.4percent w/w and 3.2percent w/w respectively amid appreciationinNEM(14.3percent) and MANSARD (+5.3percent). Expectedly, the Oil & Gas index led laggards, down 6.1percent following declines in the share pricesofSEPLAT(-9.3percent)and FORTE (-7.3percent). The Industrial Goods index (-5.6percent) followed because of depreciation in DANGCEM (-5.9percent) and CCNN (-10percent). The Banking (-2percent) and Consumer Goods (-0.5percent) indices also trended southwards amid sell pressure on UBA (-3.6percent), GUARANTY (-1.9percent), ZENITH (-1.9percent), FLOURMILL (-5.3percent) and NASCON (-5percent). Investors’ sentiment reflected the dull theme in the market as market breadth closed at 0.5x (previously 1.9x); 23 stocks advanced w/w while 44 declined w/w. In the week ahead, we see a market-wide bargain hunting as

CURRENT PRICE 3.9852 3.9371 3.8958 3.7498 3.6114 3.4451 3.4246 3.2820 3.2594 3.1325 3.1280 3.0311 2.8054 2.7307 2.6855 2.6398 2.5608 2.4499 2.3164 2.0125 1.4642

auction, with a bid-to-cover ratio of 0.9x. Notably, the demand for the 364-day instrument stifled (with a bid-cover of 0.9x; 1.0x at the 182-day and 91-day maturities). The auction was carried out at the following stop rates: 91-day (10percent versus 10.2percent at the last auction), 182-day (10.3percent versus 10.5percent at the last auction) and 364-day (11.5percent versus 11.5percent at the last auction). With further OMO maturities (N183.3billion) expected in the week ahead, we expect MM rates to trend higher as the Apex bank mop up the excess liquidity in the system via OMO auction. Fixed Income Market: FI bears rule the roast The week to 22nd June was predominantly bearish as average T-bill yield inched higher by 77bps w/w to close the week at 13.1percent (91-day (up 131bps to 12.5percent), 182day (up 134bps to 13.2percent) and the 364-day (down 33bps to 13.8percent). In a similar theme, average bond yield inched higher by 12bps to end the week at 13.6percent. Looking into the new week, we expect sentiments to be primarily guided by CBN’s stance on system liquidity and fiscal paper supply.

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

OTC Market Review:

Fixed income, currency market turnover up 50.60% year-on-year IHEANYI NWACHUKWU

MD Q O TC Monthly showed that the turnover in the Fixed Income and Currency (FIC) market for the month ended May 31, 2018 was N14.30 trillion, which represented 4.30 percent or N640billion decline month-on-month (MoM). A l s o, t h e r e c o r d F I C turnover for May 2018 represented 50.60 percent or N4.80trillion increase year-on-year (YoY) against the turnover recorded in May 2017. T. b i l l s a c c o u n t e d f o r 39.49percent of the total OTC market turnover in May, representing a 6.36 percentage points (ppts) decline from its contribution in April (45.85percent), while the Money market contributed 17.55percent to the total OTC market turnover; from the 11.17percent recorded in April. H o w e v e r, t o t a l F X turnover declined marginally from 36.60percent in Apr il to 36.42percent in May. The Treasury bills (T.bills), Foreign Exchange (F X) and Mone y Market ((Repos)/Buy-backs and U n s e c u re d P l a c e m e nt s / Takings) segments jointly accounted for 93.47percent of total turnover in the FIC market in May, a marginal decrease from 93.61percent recorded in April. To t a l F X t u r n o v e r i n May was $14.77billion, a 1 0 . 3 1 p e r c e n t ($1.70billion) decline from turnover recorded in April ($16.47billion). Turnover at the Investors & Exporters (I&E) FX Window in May was $6.40bn, representing 43.33percent of the t o t a l F X t u r n ov e r a n d a 34.91percent ($1.65billion) MoM increase on the v a l u e re c o rd e d i n Ap r i l ($4.74billion), bringing the Y TD turnover at the I&E window to $26.35billion. A na l y s i s o f F X t u r n ov e r by trade type showed that the contr ibution of Member-Client trades to total FX turnover declined from 65.70percent in April t o 5 8 . 9 0 p e rc e nt i n May , due to a $2.13billion MoM decline in turnover. However, this represented a 78.40percent ($3.82bn) YoY increase in Member-

Client FX trades turnover. Similarly, Inter-member FX trades turnover declined MoM by 10.37percent ($0.19billion) despite its contribution to the total FX turnover remaining flat at 11.04percent. Conversely, turnover for Member-CBN FX trades increased MoM by 16.14percent ($0.62bn) to $4.44billion in May, increasing its contribution to total FX turnover from 23.25percent in Apr il to 30.06percent in May. Analysis of FX turnover by product type showed that turnover in FX Spot and Derivatives declined MoM in line with the t r e n d i n F X t u r n o v e r, with both declining by 9.74percent and 11.31percent respectively. In May , t h e 2 3 rd Na i ra s e t t l e d O T C F X Fu t u re s contract (NGUS MAY 30, 2018) with a contract size o f $ 5 0 3 . 1 2 m m, m a t u re d and was settled, whilst a new $1billion 12-month contract (NGUS MAY 29, 2019) was offered by the CBN at $/N363.47. In May, the Naira depreciated across all FX windows/markets, losing N0.41 at the I&E FX Window to close at $/ N360.97 from $/N360.51 as at April 30, 2018 and a N2.03 spread to the $/N rate at the parallel market which closed the month at $/N363 (from $/N362 as at April 30, 2018). The CBN Official Spot rate also depreciated, losing N0.25 to close at $/N305.95 (from $/N305.70 as at April 30, 2018). In May, total turnover in the fixed income (FI) market was N6.56trillion, representing a 15.58percent (N1.21trillion) MoM decline driven mainly by a 17.58percent (N1.20trillion) MoM decline in T.bills turnover. However, T.bills remain the most traded securities in the FI market accounting for 86.10percent of the total FI market turnover, albeit 2.08ppts lower than in April. Total T.bills outstanding as at May 31, 2018 stood at N14.01trillion, representing a 3.05percent (N0.41trillion) MoM increase, driven by net new issuances in the month. Conversely, total FG N B o n d s ou t st a n d i ng

de cline d by 2.74percent (N0.23trillion) MoM to close at N7.80trillion. Trading Intensity in the T.bills and FGN Bonds markets declined from 0.51 and 0.12 respectively in April to 0.41 and 0.11 in May respectively, Y TD 2018 Trading Intensity for T.bills and FGN Bonds was 2.19 and 0.56 respectively, compared to 3.07 and 0.67 Y TD Trading Intensity f o r Ja n u a r y - Ma y 2 0 1 7 respectively. T.bills within the 6-12 months maturity were the most actively traded, accounting for 37.46percent of the total FI market turnover Weighted average yields across the short, medium and long-term maturities on the sovereign yield curve increased by 0.78ppts, 0.23ppts and 0.72ppts respectively. Yield spread between the 3-month T.bills and the 10year FGN Bond tightened by 85bps to close at a 129bps spread in May Turnover in the secured Money Market (i.e. Repos/Buy-Backs) closed at N2.44trillion in May, representing a 5 1 . 7 9 p e r c e n t (N0.83trillion) MoM increase on the value recorded in April (N1.60trillion) but a 6.98percent (N0.18trillion) YoY decline. S i m i l a r l y , U n s e c u re d P l a c e m e n t s / Ta k i n g s closed the month with a turnover of N74.25billion, a 1 6 . 5 0 p e r c e n t (N10.52billion) MoM increase on turnover recorded in April (N63.74billion), and a 49.64percent ( N 7 3 . 1 8 b i l l i o n ) Yo Y decline. Av e ra g e O v e r n i g h t ( O / N ) N I B O R i n c re a s e d by 18.89ppts to clos e at 22.77percent in May from 3.88percent reported for April, suggesting reduced liquidity in the inter-bank market To t a l n u m b e r o f executed trades reported on the E-Bond Trading System in May was 19,070, representing a MoM decline of 2,504 in the number of executed trades, as total executed trades in T.bills and FGN bonds declined by 1,612 (8.86percent) and 892 (26.32percent) trades respectively in May 2018.

BUSINESS DAY

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Thursday 28 June 2018

Investor ‘Our reward to shareholders is assured’ Helping you to build wealth & make wise decisions

Peter Folikwe, Managing Director /Chief Executive Officer of Berger Paints Nigeria Plc is among BusinessDay’s Top 25 CEOs in Nigeria. He spoke to select journalists including Iheanyi Nwachukwu. Excerpts.

inancial performance, demand and supply of products as well as market hearsay are among factors that could drive a company’s share price. What effort is Berger Paints making to attract more patronage to its shares on the Nigerian Stock Exchange? We have put in place a number of marketing initiatives that will soon start yielding positive results. It will also create more visibility for our brand. Marketing is not just about advertising. There are other legs of marketing such as Public Relations, Media Management, and Investor Relation, and so on. We are also working round the clock to make our products visible in the market place. Our products are on high demand because of its superior quality and competitive pricing. We really need to make our products available within the reach of our teeming consumers. Berger Paints is a strong brand and we need to ensure that those who represent us at every level of the value chain propagate our brand culture and values. If the reputation of a brand is tainted, it stands the high risk of negative market response, and every business must manage this. Our focus therefore is on the topline and bottom-line figures without taken our eyes of excellent customer service for repeat purchase. At Berger Paints, we have always come up with innovative marketing ideas, new products development and ensuring the we continuously improve on our quality standards. For instance, Berger Colour World has been one of our flagships in the past. WehavedeployedPOSmachines (for customizing paint colour with JIT delivery) and majority of our colour world stores in the trade. We are deploying that to a very large extent to get the market closer to us or get us closer to the market. Equally, our colour charts where you have all the colours schemes are readily available to specifiers - Painters, Architect, Quantity Surveyors and Builders who now have access to our colour charts as at when due. Part of what we are also doing is to make sure that we create visibility about our outlets. For instance, we are installing “the directional signs” along major roads where our stores are located for better visibility and identification of our colour Worlds. These are some of the initiatives in collaborating with our partners to achieve the overall corporate objectives. We value our business partners as they represent us in the trade. We are educating our team in the area of Customer Relationship Management (CRM) so that customer chain is unbroken. What is your advice to the shareholders? For the existing shareholders, they know our track record that we pay dividends annually irrespective of the challenges in the economy. We paid dividend at the height of recession of 2016. As for potential shareholders, they should do their analysis. I am confident that they will appreciate the leadership of the company, its investment in modern equipment and human capital development as keys to growth and profitability. Efficient and effective leadership, as you know, is hinged on integrity. I am not here to blow

our trumpet, but I can say in Nigeria today, Berger Paints can pride itself as one company that operates within the confines of corporate governance. Therefore, when a shareholder invests in our stock, the investment is safe and rewards are assured. Some of your competitors have a policy of annual colour that people look out for every year. Are you thinking along that line? We do not do colour of the year at Berger Paints as we believe that customer preferences keep changing by the day. We only observe colour of the month. This promotes an array of colours annually. For instance, our colour for this month is lemon– yellow. If you are observant you will notice this at the entrance gate! It is also visible on all our online platforms – website, facebook. What is the philosophy behind the introduction of your recent point-of-sale (POS) machines? It is a simple philosophy. This is about demand and supply, and we have come to some understanding that Nigerians are well travelled. They see what is happening in other clines, especially in our business segment. Nigerians love quality with high standards. The POS machines offer the customer the liberty to customize their colour choices in whatever quantity they want it and the delivery process is a lot quicker. These decision makers have limited time and there is a need to take the product close to them. That is the objective of the POS machine. For instance, the POS machine actually addresses the issue of batch production in a pragmatic way. It is a changing trend and as a dynamic organization, we are equally living up to the consumer demand trend. In the past, people don’t really play with colours. Today colours have their personalities and people now express themselves in colours. People are limited by the colours the paint maker makes available in the market. But when you want those customized colours, you can actually have them too in the outlet in whatever quantity you want. We can even dispense as low as one liter, four liters, and twenty-twenty liters in a simple production process. We would be the first Nigerian company to offer such customized colours in volume of twenty liters per production process. Considering that people tend to see Berger Paint’s products as meant for the rich only, is there any strategy being put in place to segment your products without compromising standards? Fundamentally, every one of us understands that there is no way a company can address every market segment. You obviously have to set your goals around your target market. You can’t target everybody. You need to profile your customers and cascade them into segment. People however migrate from one segment to another, depending on the shift in their economic status at any point in time. The segment we focus on is the medium to the upper class of the economic strata. We are not saying that we are beyond the reach of the lower economic groupings. We expect people to improve in their economic status. Obviously, our products are aspirational brands! Everybody out there is interested in our products because of the top class quality.

Peter Folikwe Being that as it may, the way people look at price and value differs. We believe that if you buy value, over time the economics of paying for premium ab-initio pays-off into the future because of durability/quality. There is a saying that “cheap is expensive” A lot of people don’t understand what that means. For instance you buy product today for N100; meanwhile, there is an alternative for N30. If you buy the one hundred Naira brand, it will last you for ten years. Conversely, if you buy the thirty Naira brand it will only last you for two years. If you do your proper arithmetic, the one hundred Naira brand is less expensive in the long run, aside saving time and inconvenience on the replacement of the less durable product. Therefore, on the face value, the one hundred Naira may look initially expensive, but from the perspective of intrinsic value, you actually get more value than the cheaper alternative. That is what makes cheap expensive. Note however that we have our budget brands for aspirational customers at the lower consumer segment. As a frontline operator, what are the major problems affecting manufacturers in Nigeria? The Purchasing Managers Index (PMI) recently shows that some sectors of the economy had recovered from the recession. Recall that Nigeria ran into recession in 2016 and by now, only the agricultural sector and one other sector but certainly not manufacturing has recovered from the recession. There is no gainsaying that the manufacturing sector is the major employer of labour in the country. I praise investors in this sector for their selfless service to humanity. Unfortunately, government seems to be a bit insensitive to their plights. Government promise for forex availability to manufacturers has not been fulfilled as most depend on imputation of raw materials. The

The segment we focus on is the medium to the upper class of the economic strata

official CBN FX rate of N305/$ has remained an illusion. Since 2015 up until now, Berger Paints has never bought dollar at N305 for its LC transactions. I don’t really see it happening for now. Even when you bid through the forex windows, it will take the grace of God to be allocated in a bid. This invariably affects our operations as local suppliers who most buy FX at the parallel market offer the raw material at premium, yet cannot pass the excess cost to the customer. Government is the biggest spender in the economy and there was a time that government was criticized for not patronizing made in Nigeria products. What is the current trend? The trend has not totally changed although the government keeps talking about it. I was privileged to be at a forum of CEO’s with Lagos State’s Governor Akinwunmi Ambode recently and I raised this pertinent issue. I told him that I have taken time to review some of his projects where decorative paints were applied. Virtually all the project paints used have faded within a short period of time. Suffice to note that Berger Paints also quoted for these projects but for whatever reasons, these projects were awarded then to unbranded paint companies. I explained that one of the ways by which government can encourage indigenous companies who fulfill their statutory obligations like Berger Paints is to patronize their products. So long as our products meet with the specifications and standard, we ought to be given preference. This is one way to protect the indigenous companies rather than sacrifice them on the altar of penchant for foreign products that are of less value at times. In fairness to Governor Ambode, he has put in place some processes to address this concerns in Lagos State. I hope other governors and indeed the Federal Government with its mass housing scheme will take a cue. To what extent is the influx of fake products affecting Berger Paint Plc’s bottom line? Most top rated brands often face the heinous challenge of pass-offs on their brand or outright faking of their product brands. Berger Paints is not an exception. We apprehended some of the criminals recently and

handed then over to the police for persecution. On our part, we are doing all we can to direct the unsuspecting customer to our selling points – online (www.berpaintsnig. com) or from our Business Partners represented in major capital cities pan Nigeria. We can also be reached on twitter, Facebook, Instagram and the likes. The Lagos State Government is assisting us in our efforts to apprehend those who are de-marketing us through fake products. When people fake your products, not only are they destroying your brand reputation, they are also taking food off your table. Why do they fake our products? This is unacceptable. We don’t have data to validate the details of the impact of fakers, but we know it impacts our Top and Bottom Line numbers. Just like we have zero tolerance for fraud in our business, we have zero tolerance for fakers. Whether it is internal or external, we have that same attitude towards those who indulge in fake products. We actually go after them. We get law enforcement agents involved to ensure that they are prosecuted. As we speak now, some of them are in Kirikiri prison. How would you advise the government on how to create the much ne e de d enabling environment for the manufacturing sector? My advice to government is to do a rethink of its policies as they affect the manufacturing sector. This is the sector that would actually grow the economy if the potentials within are properlyharnessed.Thegovernment must have clear understanding that it is not the portfolio investors that grow an economy because the government keeps saying, we are trying to encourage investors that grow economies. It is the government’s ability to create enabling environment that can make companies to operate optimally, make profits and ultimately become attractive to both indigenous and foreign investors. The Ghanaian government made a deliberate decision to grow its manufacturing sector in regions by deliberately enacting policies that will achieve that purpose. Nigeria needs to take a cue from them. Government can give land free and grant tax holiday among others in order to encourage investors. The second thing which I think the government should address as a matter of urgency is to evolve a policy that would help create a value chain for crude oil instead of exporting only in its primary state to the developed world who then process and sell back to us as raw materials/petrochemicals. The question is what stops Nigeria from getting there? Even the refining of petrol, diesel has been subjugated for importation. It doesn’t make sense! Thank God for the likes of Aliko Dangote that is coming up with building a private refinery. These are some of the things that government should encourage rather than just selling our solid minerals, in crude state. Government should create an environment where people can actually be engaged as part of the process of translating raw materials to finished products. Yes, it requires a lot investment and knowledge in science and technology, but I tell you we have Nigerian locally and in the diaspora

making greats strides in science and technology. All they need is the enabling environment. Nigeria is blessed with abundant human and material resources that can drive the whole processes, given the government’sunfetteredsupport.We need to act fast if Nigeria should keep pace with the global development in economic transformation. In view of the challenges facing manufacturers in Nigeria, is Berger Paintsconsideringcapitalinjection by leveraging on the opportunities in the Capital Market? For Berger Paints, we are careful about how we source for fund to do business. The cheapest fund is obviously through the Capital Market. We were the first Paints Company to be quoted on The Nigerian Stock Exchange. It shows that we understand the nitty-gritty of the market and quickly took the advantage of the opportunities then. But, it’s increasingly becoming difficult nowadays to get these cheap funds. Investors are more than ever cautiously looking at the market indicators that will encourage them to invest in a company. Considering all the challenges facing the manufacturing sector, many high net worth investors are apprehensive of putting their money where returns will not come quickly in view of the state of economy. As for Berger Paints, what we efficiently manage our working capital to ensure that we minimize our exposure or avoid borrowing as much as possible, except for our capital projects. We however recently took some money for from BOI for purpose of completing our new ultramodern factory project currently at completion stage. This is a project that will transform our operations and reinforce our position as an industry leader. We are mindful of the inherent dangers of borrowing. You don’t take short term borrowing for long term projects. It will be a mismatch. We are capital market friendly and the shareholders are always ready to support our initiatives. Having existed for over fifty nine years, our pedigree and brand positioning are very solid. If you take a critical look at Oba Akran, Ikeja today, only few companies that started at about our time then still exist till today. Our pedigree shows that investors will have confidence in our stocks. Berger Paints is an ecosystem. Whatisyourvisionforthecompany in the next five years? When I was coming to assume duty as the Chief Executive Officer in this company, my decision was to leave Berger Paints someday better that I met it. I will say we are not fully there yet, but a number of initiatives we have executed are aimed at achieving this singular objective. One of the objectives we aim to achieve is to change the route to market dynamics because if you don’t get your route right, your topline will be threatened. As mentioned earlier we are completing our new factory which will offer innovative products of international quality standards. This will no doubt enhance our leadership role in the paints business in Nigeria. Our leadership is not only in terms of numbers but also in product quality, customer service delivery and a host of other performance metrics.

Thursday 28 June 2018

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BUSINESS DAY

Aviation fuel microbial study gets foreign recognition, partnership …as CITA presents findings to IATA, global audience Stories BY IFEOMA OKEKE

pioneering local study on microbial contamination of aviation fuel and its handling system in tropical Africa has gained the buy-in of the international aviation community, with foreign firms set to support further studies. The international support is aimed at further development of local expertise and infrastructure to measure, analyse and create remedial standards for microbial contamination of aviation fuel. CITA Petroleum Nigeria Limited championed the local study and recently unveiled it at the Aviation fuel systems management symposium 2018, held at Miami-Florida, United States. Also at the Bi-annual Conference, Meetings and Exhibitions of International Air Transport Association (IATA) – a meeting of over 175 member airlines and leading jet fuel companies worldwide, held in London, United Kingdom. Microbial are microorganisms like bacteria and fungi that are capable of existing in water where they interface with fuel. These microorganisms use alkanes and additives in

fuel as foodstuff. The most destructive of the microbes that grows in the aircraft fuel environment is the fungus Hormoconis resinae. It is the most common cause of microbial corrosion in aircraft fuel tanks. Contaminated fuel is one of the causes of equipment failure, which is the second leading cause of plane crashes globally – after pilot error. Albert Olayemi, Lead researcher and professor of environmental microbiology, University of Ilorin, Kwara State, said at the MiamiFlorida symposium that the study laid a solid foundation for the microbial database, diversity of the local environment and their possible effects on stored fuels in the tropics. Criticism Olayemi added: “The use of a uniform international standard to determine microbiological quality of fuels is indefensible. Standards based on climatologic differences are suggested to be more realistic. “Again, the use of standard microbiological methods in identifying and quantifying microbes in fuels may be considered more reliable than species-specific methods, which are in current use,” he said. Olasimbo Betiku, chief operating officer, CITA Petroleum Nigeria Limited, at the London forum, added

KLM to launch new economy class service

LM Royal Dutch Airlines will offer a new Economy Class service concept aboard its intercontinental flights. At the start of an intercontinental flight, Economy Class passengers will receive a bottle of water, a refreshing towel and earphones, which means they can immediately get set for their journey. After this welcome service, passengers will be offered an extended choice of meals on flights out of Amsterdam. On intercontinental daytime flights out of Amsterdam, the new meal service will include a choice of warm dishes, a large, well-filled salad, and a dessert. On mediumrange and longer intercontinental flights the selection of snacks will be further extended with ice-creams, sweets and savoury snacks. Passengers will also be welcome to collect these snacks in the galley. The new service will be introduced on the following nine destinations on 1 July 2018: Bonaire (via Aruba), Entebbe (via Kigali), Fortaleza, Osaka, Hong Kong, Vancouver, Seoul, Rio de Janeiro and Houston. From the start of our winter schedule on 28 October, the service will be available on all our intercontinental flights. The flights are subdivided into daytime and night-time flights, but also into three different distance zones, namely: Short-range intercontinental flights; medium-range

intercontinental flights and longrange intercontinental flights. The overall service will be adjusted per zone, so that it best coincides with the biorhythms of passengers. Passengers will, as always, be served a range of alcoholic and non-alcoholic beverages aboard every flight. The new collective labour agreement for our cabin crew includes a clause that one less crewmember will be assigned on many intercontinental flights. Consequently, a more efficient Economy Class service is required. By better utilising the space on meal trays, trolleys can be stocked with more trays, ensuring that passengers are served more quickly. The new service is also more in line with passengers’ wishes, in that the amount of food and drinks served remains the same, while the quality of the service improves. KLM strives to ensure that its inflight catering is as sustainable as possible. On all flights, UTZcertified or Fairtrade chocolate and coffee is served. On all flights out of Amsterdam, KLM exclusively serves chicken and egg products that are certified and have been produced in an animal-friendly manner. For these efforts, KLM has won the Good Egg Award and the Good Chicken Award. Wherever possible, sustainable catering is provided on flights to Amsterdam as well.

that though no case of air incident or accident traceable to microbial contamination of fuel has been recorded in Africa, the peculiarities of the environment and her unique microbial properties are as important. Hence, the need for a sustainable and proactive system in managing fuel and fuel handling systems in the region. Betiku, while unveiling the research titled: ‘Microbial contamina-

tion of aviation fuel and its handling system in tropical Africa: Nigeria as a case study’, said there are standard kits for measuring microbial properties of contaminants in jet fuel presently, but some of them are targeted at some microbes, believing that the microbes affect products in all regions of the world. The COO added that besides identifying the limitations in the

global yardstick of microbial contamination indicators, the study has also addressed the paucity of literature on jet fuel systems that are original to the African continent, especially Nigeria. He said courtesy of the contributions to knowledge, at least two companies will be collaborating with CITA locally, to train local expertise and develop infrastructure in the area of identifying and analysing and creating remedial corrections for any form of microbial contaminations. Thomas Ogungbangbe, Chief Executive Officer of CITA, who led the delegation to U.S. and UK, told reporters that the gaps filled were associated with the present industry practice. Hence, it is a global contribution to general aviation safety. Ogungbangbe said further that: “We are already becoming the reference point on microbial contamination for jet fuel in this part of the world. Also, the international community is recognising the local expertise from Nigeria in this very unique jet fuel management system. “There has not been any form of microbial contamination of fuel in Africa. But this will collectively create a practical approach to managing our system to safeguard such contamination,” he said.

AMCON Divesting Interest in Aero, Says Sanusi

he Chief Executive Officer of Aero Contractors, Ado Sanusi has confirmed that the Asset Management Corporation of Nigeria (AMCON) is divesting its interest in the airline. Sanuis made this known in Accra, Ghana at the just concluded Accra Weizo where he won Balafon award as Aviation Man of the Year (West Africa) in recognition of his rare feat in resuscitating the ailing Aero Contractors and develops its mainte-

nance session, which is now poised to serve West and Central Africa. The Aero CEO said investors have started indicating interest in the airline. “The Asset Management Corporation of Nigeria has a plan to divest their shares in Aero Contractors and I think they have been doing that with more investors and that is what they want and that will be done very soon,” Sanusi said. On national carrier, Sanusi said

L-R: Akwaaba African Travel Market official, Rita Ikechi-Uko, special adviser to the Hon. Minister of Tourism, Arts and Culture, Ghana, Frank Apeasyei, Zimbabwean Ambassador to Ghana, Pavelyn Tenclai Musaka, chief executive officer, Aero Contractors Limited, Capt. Ado Sanusi receiving his Balafon Award for Aviation Man of the Year (West Africa) at the 4th Accra Weizo Tourism and Travel Conference in Ghana.

it is the desire of every country to have a national carrier because it buoys the nation’s aviation industry but warned that Nigeria should learn from what happened to the defunct Nigeria Airways Limited (NAL) so that the same mistakes would not be made in the new one. “You know every country in the world will like to have a national carrier, so I support the national carrier for all the countries that are looking for national airline. But what I want to say is that it should be done with caution. Yes we want to have a national carrier, we want to establish a formidable carrier that will serve our people and the tourism industry, but we must learn from our past mistakes. So, establishing a national carrier will bring more jobs to Aero because definitely they are not establishing a national maintenance facility. So we will definitely have an opportunity as an MRO to serve the national carrier,” Sanusi said. On the recent complaint by Airline Operators of Nigeria (AON), which alleged that the regulatory authority, the Nigeria Civil Aviation Authority (NCAA) may not guarantee equal opportunity for the planned national carrier and other airlines, Sanusi said the apprehension of the airlines may not be misplaced bit noted that NCAA had already allayed such fears.

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

20 BUSINESS DAY Crypto regulation to build trust, unlock investment for Nigeria – Luno FRANK ELEANYA

takeholders may have a lot more to gain than fear from a regulated cryptocurrency environment in Nigeria, according to digital currency provider, Luno. The benefits could include building consumer trust in the space and unlocking investment opportunities for players and government. The Nigerian cryptocurrency market – particularly peer-to-peer transactions - is considered one of the biggest in Africa. In 2017, it was the second largest peer-to-peer bitcoin market in the world after China. Some local exchange operators told BusinessDay recently that the first of 2018 has seen a spike in transactions. On the LocalBitcoins platform volume of transactions has consistently been above 1.2 billion. This is despite recording significant drops in price of the digital currency. As a matter of fact, the cryptocurrency market has recorded a loss of over $17 billion in 24 hours as at June 22,

triggered by the loss of major cryptocurrencies including bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS. In Nigeria, platforms such as Remittano and Luno are seen as controlling the largest share of the unregulated market. The Central Bank of Nigeria (CBN) is at variance with the space, given its selfconfessed little knowledge of how the space works. Hence, it set up a team in 2017 to understudy the market and come up with recommendations for regulations. Although some experts believe regulating the mar-

ket could be near impossible given the anonymous nature of cryptocurrencies, Owenize Odia, countr y manager of Luno said regulation will be a positive development. Most countries see regulation of the space as critical to protect investors fund from scams, prevent antimoney laundering and reduce the increasing number of cyber theft the cryptocurrency market has seen lately. Some experts have noted that before regulation, authorities have to consider that the size of the market is

less than what is projected in the news headlines. This is because there is a danger of seeing the threat of cryptocurrencies as being greater than they actually are which will destroy the benefits. The entire cryptocurrency market is less than 1 percent of global GDP. “At Luno, we are already self-regulating in preparation for when the CBN releases its guidelines for the market. There are checks we have put in place to ensure that our customers’ transactions are protected,” Odia said.

G network, which pretty much is the next big thing in internet connectivity could be unveiled in Africa soon as MTN South Africa and Ericsson work closer to this in a recent demonstration. When deployed, it will offer faster speeds and more reliable connections on smartphones and other devices than ever before. A statement made available to BusinessDay indicated both companies had a “first demonstration of its kind in Africa”, which had a live feed from a car on a skid pan at the Gerotek testing facility in Pretoria, mounting terminals in a vehicle on a live 5G network trial, using 100MHz of spectrum in the 28GHz band, the audience was able to view the driver’s surroundings whilst moving around the track allowing them to experience what the driver was seeing, in real time.

The demonstration was then taken further by fully obscuring the driver’s windscreen, leaving him to navigate the track using the live feed from a 4K video camera to his VR headset. This, the companies say was possible due to a throughput of more than 1.6Gbps and less than ~5ms latency on the connection – a record of mobile 5G performance on the continent. The solution demonstrated, consisted of 3 radio units, baseband equipment, a 5G user equipment (UE) prototype with an external antenna, a vehicle with the UE installed, a 4K video camera and a VR Headset, demonstrating the performance of a low-latency network. The companies say this is just one of the use cases that the partnership has released following the signature of a Memorandum of Understanding (MoU) in November last year. This was followed by the launch of the first 5G trial in Africa in January 2018.

“5G presents an opportunity for operators to improve their existing consumer businesses and address previously untapped value chains in the digitalization of industries,” said Rafiah Ibrahim, head of Ericsson Middle East and Africa. “The collaboration between MTN South Africa and Ericsson has led to an exploration of a variety of use cases and applications for digital transformation of industries. These include the automotive, mining, transportation, agriculture, manufacturing and utilities sectors. We are proud to be demonstrating this use case with MTN” Wanda Matandela, chief enterprise business officer, MTN SA, also said the company is “excited to have demonstrated our IoT (Internet of Things) capabilities, enabled by 5G technology, to our top tier customers today. Using pilots like this, we are not only assessing and preparing our network to roll out 5G in the future, but we

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Bank IT Security Thursday 28 June 2018

MEST stakes over $20m in African startups after 10 years FRANK ELEANYA

hana-based incubator, MEST said it has invested over $20 million in technology startups across Africa since its establishment in 2008, with portfolio companies going on to receive follow-up funding. The company made this known at the MEST Africa Summit which held in Cape Town, South Africa, where it also marked ten years of investing and supporting African Entrepreneurs. In a statement sent to BusinessDay, Aaron Fu, managing director at MEST, described the summit as a meeting ground for Africa’s top ecosystem partners and enthusiasts. He also said it is a forum for “honest discussion about change on the continent which we hope will lead to tangible actions and delivery,” Fu said. One of the major highlights of the summit was the emergence of Accounteer as the winner of $50,000 equity investment from the Meltwater Foundation. Other benefits include space and support in the MEST Incubator, Lagos. Since it was founded in Ghana in 2008, MEST has expanded its footprints into

other African countries such as Nigeria in 2015, Kenya in 2016, and South Africa and Cote d’Ivoire in 2017. The company plans to launch a fully-fledged incubator in Nairobi, Kenya later this year. “When MEST was founded a decade ago, the goal was to find a way to create wealth and jobs here in Africa, by nurturing the massive amount of talent that exists on the continent,” Jorn Lyseggen, founder and CEO fo Meltwater and MEST explained at the summit. “By empowering people to become software entrepreneurs, I believe Africa can take their fair share of the value creation that we know is going to take place in technology and software over the next generation.” MEST statement disclosed that there have been four exits. These include exits from from digital insurance claims company, Claimsync; ecommerce marketing tools, RetailTower; AdGeek and messaging app, Saya. The company have funded over 50 companies with nearly 300 entrepreneurs receiving training. Its interventions in startups through MEST and providing funding support have also led to the creation of over 500 highly skilled jobs.

Nyra: An AI platform’s near accurate prediction for Super Eagles

MTN South Africa, Ericsson demonstrate ‘first in Africa’ 5G capabilities CALEB OJEWALE

Broadband Infrastructure

are also future-proofing our infrastructure to enrich customer experience and take industries to the next level.” “There are great opportunities for both the private and public sectors to join us as we forge ahead, harnessing the power of technology to unlock applications that can optimise enterprise efficiency and improve the delivery of services. This demonstration supports our vision of leading the delivery of a bold, new digital world for our enterprise customers,” said Matandela. Highlights of the demonstration that took place at Gerotek race track can b e v i e w e d o n Tw i t t e r through the handle @MTNBusinessZA and hashtag #5GconnectedCar. With development well underway, 5G networks are expected to launch across the world by 2020, working alongside existing 3G and 4G technology to provide speedier connections that stay online no matter where you are.

ABIMBOLA HASSAN

ast week, Nyra, an artificial intelligence platform predicted Nigeria would defeat Iceland by one goal, but the super eagles did better, winning with two goals. Nyra’s prediction may not have been spot on, but it is perhaps the closest in accuracy of how Nigeria’s team would perform at the ongoing world cup. In the 2014 world cup, Microsoft’s Cortana got to shine somewhat, with 15 out of 16 predictions said to have been accurate, and now, a platform like Nyra hope to replicate similar feats, not just in soccer, but in different aspects of daily living. Nyra, an artificial intelligence chatbot built by KariXchangeo collates data using user experience and installed data made available with the cloud. According to the programme’s developers, it is created to serve as a service and social chatbot. According to Edward Amanambu, chief operating officer of KariXchange, Nyra was initially conceived as a service

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

bot for one of its future applications, and it is an intelligent bot that serves to be better than the likes of Siri and Alexa. Nyra he says, which will be incorporated into an undisclosed project which he claims will storm Nigeria, when released in the next two months. It is believed to operate using artificial intelligence which it configures in providing interactive responses to users. Operations came alive ahead of time to help users enjoy the football season while improving Nyra receptiveness in providing (as accurate as possible) responses which are based on prediction but backed by concrete existing data. Emeka Onyezido, Creative director of Karixchange, also explained that Nyra is built on a linux server with the aid of Microsoft Azure and compiled by sets of code using python programming language, based on Artificial Intelligence Markup Language (AIML). Nyra’s artificial intelligence system works with a set of interconnected agents that forms a neural network which mimics human behaviour.

Thursday 28 June 2018

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BUSINESS DAY

Luxury

Malls

Companies

Deals

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Thursday 28 June 2018

Spending Trends

Power Oil backs Lagos women forum …advocates for regular health check CHINWE AGBEZE

n an unwavering effort to further intensify the advocacy drive for a healthy living and other wellbeing measures especially among women in the society, Power Oil, Nigeria’s healthy cooking oil demonstrated its support during the Lagos women health Forum, a project being put together by Bolanle Ambode, first lady, Lagos state. The programme had notable women in attendance. Some of the prominent women that graced the event include Oluranti Adebule, Lagos State deputy governor; Abimbola Jakande, wife of the first civilian governor of Lagos State; Adejoke Orelope-Adefulire, senior special assistant to the president on Sustainable Development Goals;

Folasade Adesoye, Lagos State head of service among others. Speaking on the theme: ‘Woman… Your Health, Your social Environment,’ Ambode noted that sound health is one of life’s greatest blessings, stressing the need to encourage and educate women to always live in good health for optimal performance in all aspects of life. “Good health is the gateway to everything. To have good health, we need to take care of our body, mind and soul,’’ she said. “When we have good health, we can run around for business and engage in other activities,’’ Ambode added. The first lady also condemned the spate of social vices in the state and urged women to voice out their discontent with domestic violence, child abuse, rape and teenage pregnancy. Idiat Adebule, Lagos State deputy governor who

spoke at the event said the forum provided a platform for women to say “enough” to the challenges they were facing. “We should no longer be stereotyped into silence but become vocal advocates for an improved health delivery system and social justice for women in Lagos State and the country,” said Adebule. Omotayo Azeez-Abiodun, public relations manager, Power Oil expressed the brand’s delight to align with a laudable health awareness and general wellbeing programme, particularly as it regards to the women in the society. According to her, the programme shares similar values with what the brand stands for which is- “Healthy living and general well-being”. ‘‘Because of the multifunctional nature of women, they deserve to be in a healthy state in order to carry out their duties

L-R: Opeyemi Awojobi, National Co-ordinator Power Oil health camp, Bolanle Ambode, wife of Lagos State governor and Convener of Lagos women forum, Omotayo Azeez- Abiodun, public relations manager, Power Oil, during the Lagos Women health and social development forum.

efficiently,’’ said AzeezAbiodun. ‘‘This is one of the reasons we recommend they take advantage of the free health check-up and medical consultation op-

portunity offered by Power Oil health camp.’’ Power Oil health camp is in collaboration with ministry of women affairs and social development in various

states across the country. It also organises annual health awareness initiatives which inspire consumers to stay fit and take good care of their health.

chines which shop owners can use to automate sales and conduct after-hours trading. Delicious insects Coop Switzerland has launched a new range of snacks (paywall) made from mealworms and crickets. The products, developed with Swiss start-up Essento, are combined with peanuts, almonds and cashews, as well as a range of seasonings. Bon appetit. Not the Kiwi way New Zealand based meal provider My Food Bag has received a legal request from Berlin-based Company HelloFresh to refrain from using the phrase “Hello Fresh” in any of its brandings. Puzzled not to be allowed to use a common greeting, the Kiwis answered with a cheeky letter in their own way. Prime locations in Europe German discounter Aldi is reportedly targeting properties in central London, left vacant by the likes of Poundworld and Mothercare. Across the channel, French giant Carrefour has launched its first city outlet in Paris, dedicated to wellbeing and everything that’s ‘good and beautiful’. Turnaround ramifications Creditors have agreed to the dramatic rescue plan of British icon House of Fraser, which will see the closure of 31 stores and potentially 6,000 job cuts. Meanwhile, crisis-

hit Steinhoff is set to sell its Austrian assets valued at EUR 490 million to Rene Benko’s Signa Holding, Getting inside Dutch retailer Albert Heijn is experimenting with a smart door lock, so groceries can be delivered to a customer’s house, even when the shopper isn’t at home. The test is part of the company’s ‘Online Labs’, which wants to improve the supermarket’s service. Store debuts in USA, Africa Texan supermarket chain H-E-B is following the socalled ‘grocerant’ trend with the launch of a taco shop inside a store in San Antonio. A new convenience format was also introduced in South Africa by forecourt chain FreshStop, specifically designed for small towns and rural areas. Winning streak Wa l ma r t ha s b e e n awarded three patents for its blockchain-backed technology in the United States. The retailer has also received the green light from Brazil’s antitrust watchdog to sell its Brazilian operations to buyout firm Advent International. Digital partnership Southeastern Grocers, the parent company of BiLo, Fresco y Más, Harveys and Winn-Dixie, has partnered with technology firm Quotient to launch SEG Media Hub, a platform designed to provide shoppers with more relevant digital ad messages and savings that

drive them into stores. Location to launch Shanghai wants to entice the world’s leading brands to pick the city as their first choice to debut their new products or open their first store in China. The city will develop platforms to debut certain products such as cars, costumes, cosmetics and electronic devices. Pushing ahead Alibaba’s initiative ‘Rural Taobao’ plans to expand its coverage to 1,000 counties and 150,000 villages across China. The Chinese online giant is also increasing its push into the automated store space with the launch of the country’s first unmanned wine outlet in Hangzhou. Optimistic forecasts Australian wholesaler Metcash is confident that its IGA supermarket network will return to growth after it revealed a full-year loss. Across the Tasman, New Zealand-based outdoor retailer Kathmandu expects a big lift in profits after it enjoyed a strong sales performance over the year. Role model discount The UK’s biggest grocery retailers are significantly reducing their product ranges according to new research by Scala. The supply chain and logistics consultancy found that many large retailers are attempting in part to adopt the simpler approach of discounters.

Global retail update Acquisitions in Italy in Europe nilever has agreed to buy a 75 percent stake in Equilibra, an Italian personal care and wellbeing business, which is also a leader in nutritional supplements. Milanheadquartered eyewear giant Luxottica, owner of Ray-Ban, announced the acquisition of Barberini Spa, a specialist in optical sunglass lenses. Streamlining operations Tesco will drop its famous price-matching “brand guarantee” scheme and focus on everyday low prices. The British grocer is also entering another phase of its ‘Project Reset’ in which it will axe relationship with numerous suppliers, putting smaller producers under pressure to lose business. More takeover deals Switzerland’s online food delivery service Foodarena,

owned by Germany’s Delivery Hero, has been bought by Dutch company Takeaway.com. Polish wholesaler Eurocash has filed an application with the antitrust watchdog to acquire Partner, the owner of 26 Lewiatan stores in Poland. Leadership changes Russia’s X5 Retail Group named Sergey Goncharov as boss of its Pyaterochka banner and appointed Lidlveteran Karl-Heinz Holland (in German, paywall) to its Supervisory Board. Competitor Magnit also announced some top changes, amongst them the promotion of Olga Naumova to General Director. Store ideas Despite disappointing Q4 sales, bookseller Barnes & Noble is optimistic and excited to open several smaller and more flexible prototype stores this year. US online start-up Casper, which offers a bed-in-a-

box product, continues to expand into physical retail and launched a pop-up shop in Montreal. Plenty of pressure Kroger, which recently partnered with British etailer Ocado, is set to speed up the search for locations to build warehouse facilities for the latter. In other news, it was revealed that the Cincinnati-based grocer was attacked by two major industry associations for its new 90-day payment policy. Rapid rollout All Amazon Prime members will have access to discounts at Whole Foods Market stores across the United States. The nationwide rollout is regarded as part of the online major’s plan to dominate physical and virtual commerce in America. Members will receive 10% off hundreds of sale items. Conflicting currency in Asia Alibaba’s Ant Financial launched a joint venture in Hong Kong that uses blockchain for a cross-border remittance service with the Philippines. However, founder Jack Ma warned against the technology’s most popular use: Bitcoin. The Chinese billionaire says it could be a bubble. Securing growth Bianli24, a Chinese convenience-store start-up, has closed a funding series and will use the USD 10 million it received for expansion. The company is known for its self-service vending ma-

Compiled by Chinwe Agbeze

Thursday 28 June 2018

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Mouka gets ISO certification …launches quality sleep, smarter kids campaign …rewards distributors with 10 free trucks CHINWE AGBEZE

ouka has received ISO Integrated Management Systems Certification from the Standards Organisation of Nigeria, the representative of the International Organisation for Standardisation in Nigeria. The International Organisation for Standardisation is the most acceptable standard in the world for all organisations and systems with over 200 participating countries. This award affirms that Mouka’s quality management system, environment management system and occupational health and safety management system comply fully with International standard.

‘‘Mouka Limited is the first in the foam sector to be certified on ISO Integrated Management System in Nigeria,’’ said Femi Fapohunda, production director, Mouka Limited. ‘‘This is a confirmation of the company’s strict adherence to International standards and processes and an endorsement of Mouka products quality.’’ Aderonke Osho, marketing director, Mouka Limited, said the company is rolling out a campaign as a result of its passion to ensure that Nigerians of all ages enjoy quality sleep. According to her, the campaign will increase the awareness of Nigerians about the importance of quality sleep. ‘‘At Mouka Limited, developing and manufacturing high quality mattresses and

pillows to give consumers quality sleep and supporting healthy life is our passion. Quality is our heritage and we have remained true to it since 1959,’’ Osho said. The first campaign focuses on children in primary and secondary schools and it’s tagged, ‘‘quality sleep, smarter kids.’’ The company says the campaign will focus on educating children in simple and effective manner about the importance of quality sleep and its impact on their performance. Adefemi Adeoye, consultant physician and specialist in sleep medicine asserts based on scientific finds that shorter sleep duration has been linked to attention problem, deterioration in vigilance, restless or impulsive

BUSINESS DAY

Hotelier calls for development of Osun’s tourist sites to aid hospitality business BOLADALE BAMIGBOLA

behaviour in school-aged children and adolescents. ‘‘Sleep restriction resulted in impaired learning and memory performance in early adolescence and there is a significant association between sleep quality, sleep duration, sleepiness and academic performance,’’ Adeoye stressed. Dimeji Osingunwa, commercial director, Mouka Limited, spoke about the ten free trucks given to distributors who performed very well. ‘‘As part of the company’s strategies to sustain its leadership in the mattress category, Mouka is giving out ten brand new delivery trucks to distributors to increase its distribution network and improve product delivery to customers across the country,’’ said Osingunwa.

oba Oyeleke, a United States based criminologist, has called on the Osun State Government to develop the Kiriji War sites at Igbajo, Imesi Ile, the Olumirin Waterfall and other sites across the state to make them attractive to local and foreign tourists. O yeleke, who is the Chairman of Aloha Hotel and Resort in Osogbo, said this at a press conference to herald the inauguration of the new hotel built, adding that with more tourists coming to the state, hospitality business will witness a boost. Oyeleke said Nigeria was blessed with numerous tourists sites which could be developed to generate revenue in addition to the oil revenues which the nation depended on solely. According to him, standard hotels will spring up with influx of tourists, adding that arts and crafts will also start to enjoy patronage at places close to the various tourist sites. Apart from developing tourist sites, Oyeleke also called on the Federal and state governments to develop roads and other infrastructure all over the country, saying this would further make various sites attractive to people from all over the world. He said, “Osun State is like a diamond in the rubble that needs to be picked up and polished for its beauty to come out. Nigeria is looking

at oil without taking advantage of tourism. Nigeria is probably the only country in Africa that does not explore its tourism potentials. The wildlife is there but we are not taking advantage of it. “Osun State in particular has a great advantage in tourism. Ile Ife is the source of Yoruba people and pilgrims come from Brazil, from Cuba and the United States to see some of the historical sites we have here. The Kiriji War sites are there to be developed; the Erin Ijesa Waterfall and the waterfall in Oke Ila. But these places are not explored. They can give us more money than oil.” Oyeleke stated that money would trickle down to a lot of people if the tourism sector was fully developed. He also called on the government to improve on electricity generation and distribution to ease problems facing hotel owners and other businesses. Oyeleke said while some foreigners referred to Africa as a jungle while many of them were still interested in coming to visit the ‘jungle’ to know what was happening there. Joseph Edime, the project manager, also said development of tourism sites would help in tackling unemployment issue to a large extent, saying youths could be employed as tour guides and in other areas. Dayo Sobowale called on government to address the issue of multiple taxation and rates which according to him, is affecting hotels and other businesses.

Common sense driving safety tips that may save lives BUNMI BAILEY

riving may be seen by some people as one of the most tasking exercises to indulge in, yet it can be very exciting and pleasurable to be on-wheels with the right frame of mind, both mentally, physicaly and psychologically. When you’re behind the wheel of a car whether alone or with passengers, driving safely should always be of uppermost concern. Although the number of road accidents that occurred in the beginning of 2018 reduced year –on-year, there is still need to play safe behind the wheels. According to the National Bureau of Statistics (NBS), the number of road accidents reduced year-on-year by 2.9 percent to 2,482 road accidents in Q1 2018 from

2,556 in Q1 2017, with speed violation accounting for major causes of road accidents. The reduction is not significant enough, hence it is crucial to know the basics of safe driving and practice these rules of driving . Here are some safe driving tips: Focus on driving Keep 100 percent of your attention on driving at all times – no multi-tasking and ensure you practice safety. Don’t use your phone or any other electronic device while driving. Slow down as speeding gives you less time to react and increases the severity of an accident. Drive “defensively”. Be aware of what other drivers around you are doing, and expect the unexpected. Assume other motorists will do something crazy, and always be prepared to avoid it. Keep a gap between you

and the car in front of you, and even keep a further gap if the weather is bad. Make a safe driving plan. Build time into your trip schedule to stop for food, rest breaks, phone calls or other

business. Adjust your seat, mirrors and climate controls before putting the car in gear. Pull over to eat or drink when necessary. This takes only a few minutes.

Secure cargo that may move around while the vehicle is in motion. Don’t attempt to retrieve items that fall to the floor. Have items needed within easy reach – such as toll fees,

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

toll cards and garage passes. Always wear your seat belt and drive sober and drug-free. Other safety tips Don’t allow children to fight or climb around in your car – they should be buckled in their seats at all times. Too much noise can easily distract you from focus on the road. Avoid driving when you’re tired. Be aware that some medications cause drowsiness and make operating a vehicle very dangerous. Learn more about drowsy driving.Always use caution when changing lanes as suddenly jumping into the other motorist lane without trafigating well ahead of time or changing lanes too fast or not using your signals may lead to a road crash that may calim the lives of other occupants both inside your car and the other vehicles(s) including other road users and pedestrians.

BUSINESS DAY

Thursday 28 June 2018

Insight

UN recognition of Olam’s rice outgrower initiative higlights success of VCDP CALEB OJEWALE

igeria’s quest for sufficiency in rice production may not be where millions of the staple food’s consumers will want it to be, but incremental progress by local rice producers is showing that; with a combination of the right strategies and publicprivate sector collaboration, the country’s food security challenges can be met. With over $1 billion spent on rice importation annually- at least before a ban came into effect, there is little doubt why developing local capacity for rice production has become imperative. Local rice producers had to step up to the challenge, as Nigeria became unable to afford the over $5 billion annual food import bill. Among the local rice producers leading the quest for sufficiency is Olam, with a 10,000 hectare fully irrigated paddy farm in Nasarawa State where as at last year when BusinessDay correspondent visited, 4,450 hectares was already under cultivation, with a further 3,000 hectares on target for 2017/18. The farm is expected to yield 10 MT per hectare (over two annual crop cycles), based on four varieties of high-yield rice tested with the West African Rice Development Association. An extensive outgrower network also had to be put in place to support the smooth running of the integrated rice mill. Olam Ngeria’s Rice Outgrower Initiative has now been recognised by the Financing for Sustainable Development Office of the United Nations as one of 3 high impact success stories identified for global recognition by the United Nations Economic & Social Council. On the basis of this recognition, their Outgrower team was invited to participate at the last Sustainable Development Goals Investment (SDGI) Fair which held in New York on April 22nd, 2018, as panelists on one of the thematic panels and parallel working groups that made up the Fair. Sustainable Development Goals Investment aims at combining competitive financial returns with

Olam’s model rice farm in Nasarawa State

positive change for people and the planet, in response to three areas: • Governments in developing countries developing new projects in line with the Sustainable Development Goals with innovative risks mitigating instruments • Growing interest in creating market opportunities for investments with competitive returns that support environmental & social goals • New technologies creating innovative ways to invest in productive capacity including in small and medium sized enterprises The SDGI Fair organized by the United Nations Department of Economic & Social Affairs brought together high level Government officials from emerging markets with the investor community, to explore new opportunities for SDG Investment and discuss specific projects in the pipelines of National Governments. Olam Rice was represented on the International Fund for Agricultural Development (IFAD), Value Chain Development Programme (VCDP), & Olam Farmers Partnership (Nigeria) Panel by Reji George, Vice President, Olam Rice who shared the roundtable on that panel with Mr. Anbua Henkaa James – Commissioner for Agriculture & Rural Development Benue State Nigeria, Mr. Ameh Friday Omoja – National Programme Director, VCDP, and Mr. Odoemena Benjamin Chuks Okey, Country Programme Officer, IFAD. Together they shared key project actions, challenges and policy measures that helped to overcome the challenges to support

Reji Gerge, Vice President, Olam Rice answering questions on the initiative at the UN SDGI Fair in New York.

long term large-scale investments in the partnership. Recognised alongside Olam’s Outgrower Initiative were the Ormat Olkaria III Geothermal Power Plant (Kenya) – the first privately funded and developed Geothermal plant in Africa and The Renewable Energy Market & Pacific Hydro Wind Farms in Brazil. The Value Chain Development Programme (VCDP) is a development initiative of the Federal Government of Nigeria along with IFAD and the private firm Olam. The Programme aims to utilize private investment in the agricultural sector inorder to increase efficiency and alleviate poverty. Olam made key productive capacity investments and agreed to purchase

sought ways to improve productive capacity in rice production in order to become a net exporter in the future. With this in mind, the Value Chain Development Programme (VCDP) was created by the Federal Government of Nigeria and IFAD in 2015. The goal of the 6-year program is to improve cassava and rice value chains for small farmers in the states of Anambra, Benue, Ebonyi, Niger, Ogun and Taraba in Nigeria. In doing this, the programme hopes to reduce rural poverty, increase food security and accelerate economic growth on a sustainable basis. The programme utilizes a market-led approach that hinges on private sector participation to leverage investment

Rice Production and Consumption in Nigeria (1961-2015) Source: CGIAR Research Program on Rice

rice produced by farmers at the prevailing market prices. Olam benefitted from the partnership by gaining access to a consistent and high-quality source of rice. Local farmers benefitted from the infrastructure investment made by the public sector, multi-lateral partners, and the private sector. Due to the substantial success of the project, there are currently ongoing talks to expand the scale and scope of the programme to other regions of Nigeria to include additional agricultural products. Ramping up rice production through VCDP Rice consumption in Nigeria has been increasing over time and much of the increase is supplied by imports. Despite increasing imports, Nigeria has the capacity to be a net exporter of rice. However, rice is not a traditional crop in most of the country so production often fails to even meet domestic demand which is expanding rapidly. The Nigerian Government has

and knowledge to drive improved productivity in rice and cassava cultivation while continuting to promote commercially oriented smallholder farming practices. Olam is a private partner of the VCDP programme, and a leading agri-business that operates in 70 countries and has a track record of establishing commercial relationships with smallholder farmers. Furthermore, Olam also has long history of investing in Nigerian agriculture and estimates that it has invested over 1 billion USD The partnership agreement between VCDP and Olam provides smallholder rice farmers with access to a reliable and profitable market for their produce, and in turn stimulates productive investments at the farm level. The partnership involves commitments from Olam, IFAD, the Nigerian government and the farmers (individually and as a collective). Partner Obligations Olam provides 15% of inputs to

farmers on credit which is repaid with future sales, and is in charge of distributing inputs. Olam commits to purchasing 75% of the rice paddy (leaving the remaining 25% for local consumption) and guarantees payment to farmers upon delivery within 48 hours through direct transfers to farmer bank accounts. Utilizing direct transfers incentivizes the use of the banking system among small-scale farmers. Olam also agreed to construct rice collection depots within a minimum of 25 km of farmers. The Nigerian government acts as a facilitator and coordinator of various interventions funded by the project to facilitate farmers and provide farmer services, and also acts as a supervisor to ensure that funds are utilised for the intended purposes. The Government also provides support through a 50% grant to farmers on all imputs for the first two years of the program, and links farmers with the Nigeria Agric Insurance Company to provide insurance to farmers. IFAD coordinates the commodity alliance forum, a platform for the farmers and Olam to discuss issues related to the partnership including pricing, services and financing. IFAD also provides technical assistance and is responsible for the supervision and implementation of project and infrastructure funding. Farmers agree on a number of product tracking agreements as part of the partnership. Specifically, farmers must meet the quality and quantity standards of the off-taker (Olam). Furthermore, the farmer collective agrees to track the rice paddy movement of their members to prevent side-selling. Lastly, farmers agree to attend the farmer collective meetings and to be part of the pricing committee. Olam’s most important financial contribution to the partnership is to guarantee the prevailing market price for farmers. In addition to this guarantee, Olam also committed to provide physicial infrastructure investments. Outcomes and Key Takeaways The VCDP has shown remarkable growth since its inception. The partnership began in 2015 with only 30 farmers on a pilot basis and expanded to 1,349 participating farmers in 2016 and to 4,976 participating farmers in 2017. Olam has purchased more than 25,200 MT of rice paddy from smallholder farmers and paid $9.8 million USD in exchange. In total 25, 000 people in remote villages benefited from selling their produce to Olam. The partnership also created 3,795 jobs beyond farming, mainly for youth and women in value chain enterprises. Due to the success of the project, there are currently dicussions to expand the programme to additional regions of Nigeria and to different crops. This possible expansion highlights the success of the program, but also its scalability.

Thursday 28 June 2018

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BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

YOUNG BUSINESSLAWYER

Adjustments! Continued from last week

he progress to better always stems from instalmental injection of new challenges and new standards and these “new” may just be a re-energised old. My assumption is that whatever this target is, it is SMART (specific, measurable, achievable, reasonable and time- bound), if they do not match this standard then that may be the cause of the non-achievement. Unlike change, adjustment is a small (emphasis on small) alteration or movement made to achieve a desired fit, appearance, or result. It is change happening in instalments. Sometimes, the mental pigment of change looks so big and difficult to execute and this usually results in the surrender to fate, spiritual assurances and inaction

Nigeria-China currency swap agreement – A aood deal for Nigeria?

IFEOMA OKEKE

he Central Bank of Nigeria (“CBN”), on June 6, 2018, issued the Regulations for Transactions with Authorized Dealers in Renminbi (“Regulations”). The Regulations provide the framework for implementing the Bilateral Currency Swap Agreement (“Currency Swap Agreement/ the Agreement”) which was concluded on April 27, 2018, at a ceremony in Beijing, China, between the Federal Republic of Nigeria (“Nigeria”) and the People’s Republic of China (“China”). The CBN and the People’s Bank of China (“PBoC”) executed the Currency Swap Agreement on behalf of their respective countries.

Continues on page

WHAT IS THE SWAP DEAL ABOUT? The swap deal is an agreement with a three (3) year tenor, which allows both the CBN and PBoC to swap a maximum amount of Fifteen Billion Renminbi/Chinese Yuan (CNY 15 Billion) for Seven Hundred and Twenty Billion Naira (NGN 720 Billion). This amount is equivalent to US$2.5 Billion using an exchange rate of NGN305: 1US$. As provided in the Regulations, the Currency Swap Agreement was purposely executed to: finance trade and investment between China and Nigeria; maintain financial market stability; and facilitate other connected purposes as may be agreed upon by both countries. Essentially, the Currency Swap Agreement seeks to create a platform that provides Naira liquidity

to Chinese firms and investors looking to do business with Nigeria on the one hand; and also provides Chinese Yuan liquidity to Nigerian firms and investors looking to do business with China on the other hand. The Currency Swap Agreement is designed to aid trade transactions between China and Nigeria and remove the need to first source for the “greenback” (US Dollars) before payments for transactions involving the two countries can be made. Accordingly, both the CBN and the PBoC shall (subject to the maximum amount indicated under the Currency Swap Agreement), make available liquidity in their respective currencies for the facilitation and promotion of trade and investments between the two countries through the purchase, sale, and subsequent repurchase

and resale of the Chinese Yuan against the Naira and vice versa. For this purpose, under the Currency Swap Agreement, the CBN may conduct bi-weekly Renminbi bidding sessions. SYNOPSIS OF THE REGULATIONS The Regulations stipulate the terms and conditions guiding the operation of the Currency Swap Agreement and make provisions in respect of: (a) eligibility criteria for Authorized Dealers to participate in the CBN bi-weekly Renminbi bidding sessions; (b) relevant documentation to be provided by the importer in order for an Authorized Dealer to make authorized Renminbi payments; (c) the medium through which the Continues on page 27

NBA elections 2018, Afam Osigwe and the disqualification saga AIKHUNEGBE ANTHONY MALIK, ESQ. Continued from last week

he Committee equally considered Afam Osigwe ineligible to run for national office he seeks because he did not provide satisfactory proof of his relocation to the Nnewi branch. Accordingly, he could not be accommodated within the exception curated by paragraph 4(1) of the Third Schedule to the NBA Constitution. Clearly, the ECNBA must have set an unbelievable standard to be satisfied by anyone wishing to convince it that he/she has relocated or changed his membership from one branch to another. Otherwise it is curious and unimaginable that even though the ECNBA: a. Received from Afam Osigwe a letter of good standing duly issued by the leadership of the Nnewi branch in accordance with the provision of paragraph 4 of the Third Schedule to the NBA Constitution and affirming his membership of the branch;

Abubakar Balarabe Mahmoud, SAN

Mazi Afam Osigwe

b. Received from Afam Osigwe proof of payment of Annual dues for 2018; C. Received from the Nnewi branch, the branch’s voters list with the name of Afam Osigwe as No. 86 thereat; d. Received from him proof of Nnewi being his principal place of residence/practice, etc, the ECNBA still did not find “satisfactory proof” of Afam Osigwe’s relocation! Meanwhile, I had earlier in this write up expressed my astonishment at the reference by the ECN-

BA to an NBA Constitution, 2015 as amended and I have stated that this law is unknown and non-existent. The reference, therefore, to paragraph 4(1) of the Third Schedule of the imaginary amended constitution or of the NBA Constitution, 2015 is of no moment. In sooth, it beggars belief that the ECNBA has not, in the course of its assignment and prior to reaching the unjust and perverse decision which has adversely impaired the legitimate aspiration of Mr. Afam Osigwe, adverted itself to the provisions of section 9(2) of the Constitution

which states unambiguously that the disqualification of any person from participating in the national election of the NBA shall only be in accordance with the provisions of the Second Schedule. At the risk of being pedantic, the provision of the said section 9(2) is (again) reproduced below: “The procedure for the appointment of the members of the Electoral Committee, nomination of candidates for election, withdrawal of nominations and disqualification from election shall be as set out in the Second Schedule.” Be it noted that the Third Schedule to the NBA Constitution, 2015 is only but the uniform bye-law for branches as confirmed by the Head Note to the Schedule thus: “THE NIGERIAN BAR ASSOCIATION UNIFORM BYE LAW FOR BRANCHES”. The schedule contains elaborate provisions in respect of the management and control of the branches of the NBA. It has its own unique provisions for such issues or subjects as membership, good standing, officers

& membership of the executive council, duties of officers, NEC representative, standing committees, general meetings, finance, removal or resignation of officers, elections, eligibility to vote, duties of election committee, procedure at election, amendment, applicability, etc. In virtually all the paragraphs of the schedule, the word “branch” was used. See in particular Paragraph 23 of the said Schedule where it is stated unequivocally that: “The Bye-Law shall apply to the Branch to the exclusion of any other Bye-Law” See also section 13(15) of the Constitution, which provides as follows: “The Uniform Bye-Laws set out in Part I of the Third Schedule to this Constitution shall be applicable to every Branch…The point being made is that it is wrong, unlawful and illegal for the ECNBA to require any member of the Association seeking election into any national office of the Association to Continues on page 28

BUSINESS DAY

RIGHTSWATCH

C002D5556

Thursday 28 June 2018

MORTGAGE,FINANCEAND DEVELOPMENT

Capital Projects Funds: HEDA petitions ICPC, seeks probe of Gbajabiamila

he Human and Environmental Development Agenda (HEDA), which is a is a non-governmental and non-partisan human rights Resource Center, has asked the Independent Corrupt Practices and Other Related Offences Commission (ICPC), to investigate the capital projects allocated to Surulere 1 Federal Constituency as represented by Honourable Femi Gbajabiamila. In a letter forwarded to the antigraft agency and signed by HEDA’s chairman, Mr. Olanrewaju Suraju, the Center said like other concerned members of the society, the organisation have really expressed shock and worries about the recent report of lavish spending of Honourable Femi Gbajabiamila who is the Majority leader of the House of Representatives. The letter reads: “According to Vanguard of May 28th and 29th 2018, Honourable Femi Gbajabiamila has been reported to have surprised his wife, with a gift of Mercedes GWagon, selling for between N75M and 100M in Nigeria. “The gift on the 27th May, 2018 was to commemorate the wife’s 50th birthday. He was also reported to have rocked a N1.2M Gucci suit when giving this gift to his wife. The stylish Gucci Heritage web tape crepe wool jacket that costs $3,450, approximately N1.2M. Though his intention could have been right but in a country where the minimum

wages is N18, 000 with hunger and unemployed youths roaming the streets, his actions were seen as insensitive to Nigerians especially from his Surulere Constituency.” HEDA said Nigerians have kept wondering how it is possible, within the legitimate salaries of the parliamentarian, to lavishly expend such amount of money on luxury items by a public office holder, especially recalling the fact that a total of N1.3B was allocated for constituency Projects in Surulere1 Federal Constituency, represented by Hon. Gbajabiamila, in the year 2017 Appropriation Budget. “HEDA Resource Centre believes that no room must be opened for any person to abuse public trust while in public office. Corrupt practices and misapplication of public funds must be abolished in all fronts by relevant government agencies charge with the responsibilities of investigating allegation or suspicions of corrupt practices. “On this account, HEDA is calling on your good office to open a wide investigation into the utilization of funds for capital projects allocated to Surulere 1 Federal Constituency under Honourable Gbajabiamila to ensure and convince discerning Nigerians that public funds were not used for private family services and benefits by people elected into offices for service,” the letter said.

SERAP asks court to compel Fashola to account for spending on power

ocio-Economic Rights and Accountability Project (SERAP) has sued the Minister of Power, Works and Housing, Babatunde Fashola, SAN over “failure to account for the spending on the privatisation of the electricity sector and the exact amount of post-privatisation spending on generation companies (GENCOS), distribution companies (DISCOS) and Transmission Company of Nigeria to date, and to explain if such spending came from budgetary allocations or other sources.” In the suit number FHC/L/ CS/972/18 filed last week at the Federal High Court, Ikoyi, Lagos, SERAP is seeking “an order for leave to apply for judicial review and an order of mandamus directing and/ or compelling Mr Fashola to provide specific details on the privatization of the electricity sector, the names of all the companies and individuals involved; and to publish widely including on a dedicated website any such information.” The suit followed SERAP’s Freedom of Information request dated 7 May 2018 to Fashola giving him 14 days to provide “information on the status of implementation of the 25-year national energy development plan, and whether the Code of Ethics of the privatization process which bars staff of the Bureau of Public Enterprises (BPE) and members of the National Council on Privatization (NCP) from buying shares in companies being privatized were

deliberately flouted.” The suit filed on behalf of SERAP by its counsel, Bamisope Adeyanju read in part: “Publishing the information requested and making it widely available to the public would serve the public interest and provide insights relevant to the public debate on the ongoing efforts to prevent and combat a culture of mismanagement of public funds, corruption and impunity of perpetrators.” “Enforcing the right to truth would allow Nigerians to gain access to information essential to the fight against corruption and provide a form of reparation to victims of grand corruption in the power sector. The UN Committee on Economic, Social and Cultural Rights in its General Comment 3 has implied that privatization process should not be detrimental to the effective realization of all human rights, including access to regular electricity supply.” “SERAP has the right to request the information under contention on the basis of several provisions of the Freedom of Information (FOI) Act, 2011. By Section (1) of the FoI Act, SERAP is entitled as of right to request for or gain access to information, including information on post-privatization spending by the Federal Government and accounts of spending on the private entities such as GENCOS and DISCOS.” No date has been fixed for the hearing of the suit.

Making Mortgage accessible to the informal sector (2): Management and repayment

aving considered the basic requirements for mortgage loan in the informal sector, another sets of factors considered important to mortgage lenders and borrowers, as well as the general public, are the management of loan portfolio and repayment process; as prescribed under the Underwriting Standards. Essentially, this article analyses the various rule-based mechanisms for limiting credit risks; structuring workable repayment plans; determining suitability for refinancing; and resolving disputes arising from mortgage loan transactions originated in the informal sector of the Nigerian economy. CREDIT RISKS MANAGEMENT As prescribed in the Underwriting Standards, a mortgage lender is under obligation to minimize risks associated with loan advancement to informal sector borrowers. Accordingly, mortgage origination is expected to be guided by the following measures: Credit Bureau Report In determining the credit worthiness of a borrower and the viability of a loan proposal, a mortgage lender is required to obtain a credit report from two independent credit bureau agencies licensed by the Central Bank of Nigeria (CBN), showing a minimum credit score of “satisfactory”. This, in essence, will strengthen the credit appraisal procedure of the mortgage lender as it will provide accurate and reliable credit information on a borrower with regards to repayment capability. This will reduce the granting of loans to customers with no capacity to repay or those who have contracted debts in excess of their repayment capabilities and/or already having non-performing loans involving other mortgage lenders. Maximum Permissible Ratios of a Borrower’s Payments and Debt to Income Two important credit risks required to be well managed by a mortgage lender are the ratio of a borrower’s total monthly housing expense to income on the one hand, and the ratio of the borrower’s total debt to income on the other hand. Total monthly housing expense comprises of the monthly mortgage repayment together with all other housing-related costs such as real estate taxes and insurance. The ratio of this to income of a borrower is commonly referred to as Payment to Income (PTI)

ratio. Similarly, a borrower’s total debt includes other payment obligations in a month such as car loans and other personal loans. The ratio of this to income of a borrower is termed Debt to Income (DTI) ratio. The prescribed PTI and DTI ratios for borrowers differ from one recognized cash income band to another. Prospective borrowers who approach their chosen mortgage lenders for further information will be counselled on the applicable PTI and DTI ratios. Mortgage Loan Computation – Valuation of Property Another credit risk at the level of mortgage origination is that associated with computation of the Mortgage Loan in relation to the value of the connected property. To limit the risk, the Purchase Price (PP) of the property will be compared to its Fair Market Value/ Open Market Value (OMV). As prescribed in the Underwriting Standards, the lower of the PP and OMV is to be used for computation of the Mortgage Loan. However, in determining these values, Property Valuation shall be carried out by a licensed, independent Valuer who is a member in good standing with the Nigerian Institution of Estate Surveyors & Valuers (NIESV). The Valuer is also required to get a Professional Indemnity Insurance with an Insurance Company licensed and in good standing with the National Insurance Commission (NAICOM). Borrowers’ Cash Flow Another risk factor is the determination of a borrower’s cash flow. Given that income and expense data are not feasible for calculation of income for most operators in the informal sector, mortgage lenders are therefore required to determine the cash flow of affected borrowers through the deposits in their bank accounts prior to applying for mortgage loans. To this effect, borrowers are to provide appropriate and acceptable bank statements for previous twelve (12) months, showing regular deposits with the last deposit not more than thirty (30) days old. The credit inflow into a borrower’s account shall be discounted at 95% for Trade in Fast Moving Consumer Goods (FMCG); 85% for Manufacturing; and 80% for Services. The average of the discounted credit inflow for the previous twelve (12) months shall be the recognized monthly cash inflow for a particular borrower. This shall also be taken to represent the monthly profit of the borrower that can be utilized for loan

repayment, after netting off costs of sales. But where a borrower is a salary earner, the net income will be used. LOAN REPAYMENT The Underwriting Standards make prescriptions as to the mode and structure of mortgage loan repayment for informal sector borrowers as follows: Form of Repayment For seamless repayment process, proceeds of the borrowers’ business shall be domiciled in the obligors account operated with the mortgage lender, from where the regular monthly payments shall be deducted. Repayment can also be done through the use of Direct Debit Mandate drawn on an account with a minimum of three (3) months PITIA in reserves, supported with three (3) months of postdated cheques or through the use of Bank Verification Number (BVN) linked with other bank accounts operated by the borrower. PITIA means the sum of monthly Principal, Interest, Taxes, and Insurance payable under a mortgage loan. Amortization Structure The structure of a mortgage loan is to be planned in such a way that the loan will be fully repaid by the end of the period for which it is written. There shall be no negative amortization, meaning that in no circumstance shall the remaining principal amount owed increase during the time that the loan is outstanding. In essence, a mortgage lender may charge default interest but such shall not be added to the Principal sum. After default payment is made, any other payment shall only be applied to interest. Prepayment Option As stated in the Underwriting Standards, informal sector borrowers may repay outstanding principal balance at any time, subject to payment of a penalty fee as may be charged by the mortgage lenders. However, where a lender’s product line includes a penalty fee, information on all charges shall be made available to the borrower before closing. Furthermore, the applicable charges shall be a nominal fee not designed to achieve yield maintenance. MORTGAGE REFINANCING The Underwriting Standards also make provisions for the refinancing of existing mortgage loans. However, qualified loans shall meet, among others, the folContinues on page 27

Thursday 28 June 2018

C002D5556

THEBAR

BUSINESS DAY

BDLegalBusiness

ICC Africa: Experts explore ways to stop flight of arbitral disputes... Continues on page 25

CBN would provide Renminbi to the market (i.e. bidding sessions or special retail or wholesale sessions); and (d) applicable charges which Authorized Dealers may earn for relevant transactions, among others. Hence, by the Regulations, all Authorized Dealers (Deposit Money Banks and Merchant Banks only) are henceforth required to open Renminbi bank accounts with a corresponding bank (either onshore or offshore China) and provide the CBN with the details; Authorized Dealers shall not open domiciliary accounts denominated in Renminbi for customers; importers that intend to import goods from China shall obtain pro-forma invoice denominated in Renminbi, as part of the documents required for the registration of “Form M”; foreign exchange purchased in the window shall not be used for payments on transactions in which the beneficiaries are not domiciled in China; Authorized Dealers shall utilize funds within 72 hours from the value date or return such funds to the CBN for repurchase at the apex bank’s buying rate; bids shall be settled spot through a multiple-price book bidding process, and will cut-off at a marginal rate (which will be disclosed after the conclusion of a Special Secondary Market Intervention Sales (“SMIS”) process (i.e. retail process); all Renminbi bid requests shall be treated by the CBN by debiting Authorized Dealers’

current account with the Naira equivalents; transactions earlier classified as “Not Valid for Foreign Exchange” by CBN extant Circulars have the same status under the Regulations; and modes of payment under the Currency Swap Agreement shall be in line with Memorandum 9 of the Foreign Exchange “(FX”) Manual. Requirements of Memorandum 9 of the FX Manual In line with Memorandum 9 of the FX Manual, documents submitted by participants at the CBN Renminbi bidding sessions shall comply with the following: Letters of Credit transactions are to be undertaken in such a way that all negotiating documents and/or shipping documents are routed from the beneficiary/ supplier through his/her bank to the issuing bank. Banks are therefore prohibited from endorsing or making payments in respect of documents which are not in compliance with the stipulated routing. Bills for Collection transactions are to be carried out in a way that allows all necessary documents to be routed to the issuing bank either directly from the supplier’s

Adjustments! Continues on page 25

but when assimilation happens in bits, it is easier to adapt and control compliance. So, you may be far off from the target or you may have even forgot you set one. As we move past half time, it is necessary to review and understand why your potential is yet to materialise. Admission that there is a need to fix is the first step to deriving a solution. Panic, which is usually the reflex action cannot solve any problems as it is more emotional than strategic. Secondly, looking inwards to identify the corrections that are needed, especially those involving your routine and habits. Not keeping to your reading schedule, the corrective action would be to read more! “Reading more” does not mean much until you quantify this in terms of time and what and when; 30 minutes a day is clearer than “more” and that is the microresolution. Reducing these various goals into small and very easily achievable actions, adjustments, will move you closer to the mark. Waking up at 6. 30a.m. as against 6.45a.m. may be all you need to get the incremental value you seek. Accountability is one success

aid that is easily trivialised. Imagine a professional organisation without supervision of tasks and appraisal of delivery, it would be chaos, nothing would get done. To get ahead, you need to set barriers to your cravings and your leanings and they have to be intentional. Selfreporting lines are critical and it is important that in implementing your career goals you intentionally construct accountability lines. A boss at work, a colleague, a friend or even a group. They would help keep your feet and mind in tow. Moving on, there is something

bank or through the offshore correspondent of the issuing bank. Transactions “Not Valid for Foreign Exchange” shall be conducted in a way that all supporting documents are routed by the supplier directly to the applicant’s bank that is responsible for validating the underlying “eForm M”. According to the Regulations, the CBN in order to maintain stability in the market may either conduct bi-weekly Renminbi bidding sessions for authorized dealers or choose to offer secondary market sales. The decision on direct sale at the market will depend on whether or not (in the opinion of the CBN) such a sale will produce an effective price for the determination of the NGN/ CNY exchange rate. Where this is not likely to be the case, then the CBN reserves the right to choose to offer another Special SMIS session (retail or wholesale). However, no predetermined spread shall be allowed on FX Spot transactions executed through the CBN intervention but Authorized Dealers may earn charges on a customer’s bid of not more than Fifty Kobo (50K). Furthermore, all Renminbi sales are valid for only trade-

writing and periodic review do that willpower and determination cannot do; they enable focus. Focus is priority for execution. Written goals are clearer than mentally retained assertions. At this point, review and re-write what the next six months will look like. Draw strength from what you have got right but double down on the outstanding. Lastly, just in case you feel there are excuses which justify the circumstances, you may need to take a second look. Excuses appear reasonable when they stand alone or in the moment. When viewed against the goal or possibility, they are grossly ugly. Best wishes as you make these necessary adjustments and strive for more in the second half of the year. OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

backed transactions while applicable levies on imports and exports shall continue to be paid by importers and exporters under the Currency Swap Agreement. Whilst the provisions of the Regulations can be amended by the CBN from time to time as may be deemed necessary, they are to apply alongside all existing Guidelines, Circulars and Directives on the operations of the Nigerian Foreign Exchange Market. CONCLUDING REMARKS The Currency Swap Agreement between Nigeria and China is significant in many respects. The deal will allow trading between the two countries to be done directly in their local currencies without any need for the dollar, and enabling the Renminbi (Yuan) to flow freely within the Nigerian banking system. This development will improve bilateral trade between the two countries and engender foreign investment flows and economic cooperation beneficial to both parties. The significant cut on dollar demand by firms and investors doing business across the two countries will help protect their financial markets and boost their respective foreign

reserves. However, concerns remain as to the potency of the Currency Swap Agreement to fully address the challenge of dollar demand by importers, since imports from China account for only 20 percent of Nigeria’s annual total imports. The current annual import bill of Nigerian enterprises moving goods into the country from China reportedly stands at NGN 1.7 Trillion, meaning that the swap deal amount of NGN 720 Billion can only take care of about 15 percent of Nigeria’s annual total imports from China. The remaining 85 percent will definitely still require dollars (See “NigeriaChina currency swap unlikely to improve value of naira”, BusinessDay, 18 June 2018). In spite of the concerns raised, we believe the Currency Swap Agreement is a step in the right direction. The reduction in dollar demand, expected to be achieved through the swap deal, will complement the CBN’s current intervention via the Investors’ and Exporters’ FX Window in deepening stability in the market, by curbing the incidences of dollar scarcity and exchange rate volatility. Also, we note that the NGN/CNY swap agreement will be particularly favorable to Nigeria’s foreign reserves which have been on a steady rise since some measure of stability returned to the country’s daily crude oil production and the international oil prices began a northward movement. It is therefore our firm belief that the Naira will be positively impacted by the CBN-PBoC collaboration and that the Currency Swap Agreement is a good deal for Nigeria.

Making Mortgage accessible to the informal sector... Continues on page 26

Seasoning & Delinquency Proper “Seasoning” is required for a mortgage loan submitted for refinance to be so qualified. In this regard, the loan shall have existed and run smoothly for at least six (6) months. In addition to this, there must have been at least six (6) consecutive monthly payments on the loan, from the date of origination to the time the application for refinancing is made. Equally important is the need to satisfy the provisions of the Underwriting Standards on “Delinquency”, before a mortgage loan can be qualified for refinance. Accordingly, a mortgage loan submitted for refinance shall be current in monthly repayments and have no record of delinquencies in the last six (6) months prior to the time application for refinancing is made.

aimed at inclusive growth of the mortgage industry and wider distribution of opportunities for affordable home ownership among Nigerian citizens and residents. By bringing mortgage facility closer to the people, the much-needed formalization of the informal sector has also been enhanced. Like all other contractual relationships, there are possibilities of dispute arising between parties to mortgage transactions in the informal sector. It is commendable that the Underwriting Standards puts this into contemplation and prescribes that where this occurs, “Arbitration” or other acceptable Alternative Dispute Resolution (ADR) mechanisms shall be put in place to resolve the issues. The coast is now clear for operators in the informal sector to take advantage of the framework in acquiring their own homes easily and affordably. All that needs to be done is to approach a mortgage institution for proper guidance.

CONCLUDING REMARKS The Uniform Mortgage Underwriting Standards for the Informal Sector is without doubt a major milestone, in the various efforts

Mortgage, Finance & Development is an initiative of the Nigeria Mortgage Refinance Company (NMRC)

lowing two conditions:

BUSINESS DAY

LEGALINSIGHT

Thursday 28 June 2018

C002D5556

BDLegalBusiness

Lawpavilion partners Alegeh Law Foundation to provide resource for young lawyers ...As Ex-NBA president opens new purpose-built office in Ikoyi, Lagos

igeria’s Foremost Legal software solution provider, Lawpavilion has partnered with the Alegeh Law foundation to provide a wide range of software solutions to young lawyers across Nigeria. According to Ope Olugasa, Managing Director of Grace Infotech Limited, owners of Lawpavilion, the Practice Support Scheme by the Alegeh Foundation was created to offer legal support to young lawyers by equipping them with various tools and practice solution for a successful career in law. “We are committed to the core ideals of the Foundation, which is rooted in a belief in the undeniable fact that the foundation for a successful practice of Law begins essentially from the universities and to a considerable extent the Law school,” Olugasa said. The immediate past president of the Nigerian Bar Association (NBA) and Founding Partner, Alegeh & Co, Augustine Alegeh, SAN who also opened his new office in the highbrow environs of Ikoyi, Lagos disclosed that the AlegehLaw Foundation was aimed at designing programmes that would benefit a greater number of the younger ones in the legal profession. He said, “We would embrace and apply available communication platforms and alternative and revolutionary methods to ensure that help gets to the majority. That is our focus. That is our quest. That is our dream. “To the Young Lawyers, the learned silk said, “we believe firmly in your future as successors

Former NBA president, Augustine Alegeh , SAN and Wife Ferishatflanked by their daughters.

of our Noble profession, and that is why we are investing in your future. We hope that the Foundation’s impact would be immeasurable, remarkable and enviable. The growth and development of our Country is dependent on the work that we do as Lawyers. If Lawyers do their work the Country and its people would benefit. Our Country needs a lot of lawyering and our young lawyers must be made ready to fight the battles that we have failed to win. Our support to them is our contribution to the legal Profession and our Country.” Speaking at the event, the Chairman of the Nigerian Bar association Section on Business Law (NBA-SBL), Olumide Akpata,

bemoaned the lack of attention to the re-training and retooling of young lawyers, stating that this was a source of concern to some senior lawyers in the country. “New wigs are thrown into the deep end and are expected to be successful at their craft without the required training and preparation for the challenges of the legal Profession.” He thus congratulated the Alegeh Foundation for this major milestone and addition to the legacy of the former NBA president. He said, “This is not just about Augustine Alegeh. This is about legacy. I share with him that passion for capacity building for young lawyers. The real issues have nothing to do with the num-

ber of lawyers in Nigeria. Rather, it is having too many lawyers do the same thing. And if we are able to continuously build capacity and encourage specialisation, we would find out that even as a profession there is not enough of us to service the large economy of this nation.” In his remarks, former president of the NBA, Okey Wali, SAN described Augustine Alegeh as a passionate legal practitioner whose interest is the issue of the welfare of young lawyers and the need for remuneration for lawyers in pupilage is quite commendable. He however expressed contempt at what he described as uncouth and illmannered the behaviour of

some young lawyers in the profession. The objectives of the Foundation include, the support of Law Faculties in the various tertiary institutions in Nigeria to proffer support to Law undergraduates; providing adequate 1(one) month training programmes for young Lawyers in collaboration with established Law firms; and collaborating with other advisory groups and interested stakeholders, to champion the agitation for the improvement of the standard of young lawyers for the overall sustenance of excellent practice of Law. Other are, identifying and securing the support of leading but willing Law Firms in as well as accredited Law Faculties and the Nigerian Law School in providing necessary but sustainable support for young and aspiring lawyers; collaborating with the National Universities Commission, the Council of Legal Education and Law Faculties to develop appropriate curriculum for the advancement of Law practice and the Legal profession in general, amongst other things The new office of Alegeh & Co. on 35, Cameron Road, Road, Ikoyi – Lagos, was opened last Thursday amidst a small crowd of key members of the legal profession, family, friends, and well wishers amongst whom were the Attorney-General and Commissioner for Justice, Lagos State, Adeniji Kazeem; Ferdinand Orbih, SAN; Oghogho Akpata, Very Rev. Fr. Ethelbert Ukpabi; former governor of Delta State, Onanefe Ibori, Mena Ajakpovi,

NBA elections 2018, Afam Osigwe and the disqualification... Continued from page 25

produce a letter of good standing in order to qualify to contest the election. With profound respect to the Committee, the guidelines formulated by it and which contain this requirement, derogate from the provisions of the Constitution. The guidelines, at best can expound the provisions of the constitution but certainly not expand them. But assuming without conceding that the provision of the said Paragraph 4(1) of the 3rd Schedule even applies, it is submitted that the decision of the ECNBA to the effect that Mr. Afam Osigwe’s nomination could not be accommodated within the priviso to the paragraph flies on the face of logic and law. what does the provision even say? Let us examine the provision which says: “4. GOOD STANDING

A member is in good standing and, if he so desires, shall be entitled to a certificate of that status signed by the Chairman of the Branch if: (1) In addition to his Bar Practicing Fees, he has paid his annual dues and all other financial obligations to the Branch as and when due for at least the immediate preceding three years, unless he was enrolled or had relocated to the State where the Branch is situate within a shorter period which shall then be the threshold point instead of three years” Speaking for myself, I cannot in good conscience and given the peculiar facts of this case, which I have disaggregated earlier, endorse any interpretation which suggests that Afam Osigwe cannot be accommodated within the exception created in Paragraph 4(1) above. But then I am not the ECNBA! At any rate, the reasons stated in

the ECNBA’s letter to Afam Osigwe are mutually exclusive. Why complain of no evidence of payment of annual dues from a contestant who is said not to have satisfactorily proved relocation? Lastly, the third reason given by the ECNBA for disqualifying Mr. Afam Osigwe is that “payment of 2016 and 2017 Branch Annual Dues cannot be verified. Let me state from the very outset that of all three reasons given by the ECNBA, this one gave me so much headache! I struggled in vain to appreciate its true import. But whether the tense “could not” ought to have been employed or “cannot” was rightly used, the critical thing I see here is an archetype of giving a dog a bad name in order to hang him. Methinks it is the responsibility of the ECNBA to verify every claim made by any person who submits nomination for election into a national office.

Or is it now the other way round? If the ECNBA has a challenge doing its work, shouldn’t it report to the NBA President who constituted it in the first place, rather than take it out on a hapless candidate who did all that was required of him, to wit, submission of evidence of payment of the branch dues. In summary and when all things are considered, the decision of the ECNBA disqualifying Mazi Afam Osigwe is wrong, perverse, incorrect, illegal and made in clear violation of the provisions of the NBA Constitution 2015. It should and ought to be reversed without much ado. Anything short of this portend grave danger for the image of the Association. The furore that the decision is generating among NBA members is heart shaking. Many, especially the young lawyers who constitute a conservative 67% of the entire membership of the Association, believe that the decision

to disqualify Osigwe, who is their favoured candidate, is only but a manifestation of the resolve of a powerful cabal which has boasted that the former Chief scribe of the Association will not be allowed to contest in the election. Having dared all the odds and submitted nomination papers, it is feared that with his growing popularity and the sheer population of the young lawyers, it will be unwise to allow Afam Osigwe to run, win election and disrupt the traditional order. But whether the NBA will remain as that one, strong and popular umbrella Association of learned people in the vanguard of the promotion of justice and the rule of law shall be determined by the events of the coming days. Aikhunegbe Anthony Malik, Esq. is an Abuja-based legal practitioner and Notary Public

Thursday 28 June 2018

C002D5556

BUSINESS DAY

INTERVIEW

‘The Nigerian hospitality sector is thriving, but more work needs to be done’ AMAKA NDEKWU is the president and founder of Women in Hospitality Nigeria(WIHN) and has been in the hospitality industry for nine years now, in this interview with MICHEAL ANI, she talks on how the association intends enhancing the need for women participation in the Nigerian hospitality and tourist sector Excerts.

How did Women in Hospitality come in being? omen in hospitality Nigeria (WIHN) started last year may, it has been there for years over the years it has always been there but finally came up in May and we had our first introduction in June at the wheat baker where we invited different women operating in the hospitality and tourism industry for us to talk and see ways to push ourselves forward.

these challenges? Generally as Nigerians, we have a problem of keeping to culture; one of our problems is that we do not know how to maintain service as it takes a lot of work to get there; it takes consistency as our service culture needs more work The tourism sector is thriving a bit but more work needs to be done , we need to diversify, the private , public sector needs to get involved alongside major stake holders too. We need to try not to politicize the tourism industry because if we do, the tourism sector will come crushing. So that’s one problem we have, we are becoming political a bit and that needs to change.

Tell us about the Phyne award that is coming up tomorrow in Lagos. It is an award to celebrate excellence and growth in the tourism and hospitality industry as there are people behind some of these policies, there are people behind the travel agencies, there are people behind tourism, and I believe there is a need to celebrate these people that work hard to make a difference in the society, so they try to work around to make it look good and i think they need an accolade. The award is celebrating hard work both for brands, employees, individuals that have made a mark and are striving. The pine award is going to be an annual event so everyone is going to be looking to see if their hard work for the whole year paid. It’s a way to make people work hard because you know that there are people watching to see what you are doing. The exciting part is the part where we are celebrating the employee behind these services. For instance the managers, the chef, we are celebrating all of them. So we have categories for various department, we have categories for tour, travel agencies. So we have the award for three categories. 1) Brand excellence categories, that involves the brands for example the Protea, RSVP restaurants, 2. Categories for industries, that is where we have categories for employee, general managers of the year, manager of the year housekeeping, manager of the year finance, 3) We have the excellence award which highlights the rising star of the year for tourism, hospitality as there are people that play strictly in hospitality, there are people that play strictly in travel and tour. So you cannot merge. We have rising star for hospitality and rising star for tourism. There people that we should look forward too, and keep an eye on them and see what they are coming up with? We have icon of the year, under the excellence, icon of the year for tourism. We are also celebrating an initiative created to bring out women. So some schools have purpose come out to develop women, to retain and help them grow and that is where we, come sin too. we have training for women, so those that can’t afford to go to school, have to pay a lot of money to get training. So we pay a subsidized rate to do those training.

How have you been able to scale through this? I have been able to create that space for myself not to get involved with politics, get along with everyone, and see everyone as a colleague.

Amaka Ndekwu

Who should we be expecting in this award? A lot of industry stakeholders, a lot of employees, a lot of general managers and expatriate a lot of hotel and restaurant owners, tourism stakeholders, friends of the industry vice president and president of tourism association will be there and also, players from the private sector will also be there. How long has this award been? This is the first time. We are expecting standards, we are leaving a legacy as it has never been done before, we expect to see results where we know that yes, this person really worked hard. There is no bias selection. Who does the selection the selection of nominees for the award? We put together a group of people in the industry, we put together some investigations, we have got people to do the nominations, after some background checks have been done based on customer routine, online routine, viewers and the public. After the initial nominations we now shortlisted based on the criteria are for each category. After the short listing, we got a group of judges about 11 of them, to select winners and we also opened up to the public to vote we got about 10,000 first votes , which was really exciting and we were able to get the winner. So it was more like a properly scrutinized process, so for next year we are going to expand more and involve more parts of the country because we have not been able to cover the whole of Nigeria, so far we have been able to cover Benin, Abuja, Lagos and a bit of Port Harcourt. For this one, everybody is coming down here for it but next year we intend to expand it more, so that we can reach out to more people How do you intend to raise capital for the award? This year is like personal investment as we got support from a couple of friends

that has services that I need for example for the decoration, Signature” one of the best in Nigeria, Nelson jack is the king of stage and he is supporting, Eko hotel supported with the venue and a couple of friends that are working together with me also supported, other expenses are coming from me but it is an initiative that needs to happen, if doesn’t happen then it won’t happen. It’s not a loan, they just supported because they believe in the initiative. What inspired you into the tourism sector, there is the political sectors where there are looking for women to participate actively so Why this? While working in the industry, I saw some kind of negative perception about women working in hotels, like feeling maybe they are there to look for men or maybe they are making themselves available for men to talk to. Women were also never given a chance to take on leadership positions, because they felt maybe women have a lot of drama that comes with them. However, there were few exceptions that were ready to work hard and get to the top. What inspired this was that I wanted women to also become general managers, I wanted to also become head of different departments, I wanted women to boldly say that they can run a travel agency and not be victimized or seen as being indecent working with the industry. I started with a law firm as an accountant coincidentally, the owner owns the Protea hotel, they had some issues with some of their clients that left, the financial controller was also fired, I was asked to go there pending when they get somebody else to that will fit into this place, that gave me a kind of exposure to the hotel. As a key player, considering the Nigerian tourism and hospitality sector, what major challenges have you seen obstructing growth in the sector, and how where you able to scale through

What are the risks involved in Nigerian tourism and hospitality sector when it comes to investment? Amenities frustrates here in Nigeria. For instance, power supply, getting quality commodities, efficient man power. It takes a lot to get the right material and team to be able to cut down on your expenses too, these are their major concern. However, we just have to find a way to cut cost, to get the right people to manage it. If Nigeria develop to a level where we can have constant power supply, income will go into developing and getting more attractions, better facilities, investing in the training of staffs but a situation whereby owners of businesses spend more money on power, is not good. Some others too are like, if they train a staff, they may probably leave for a better opportunity elsewhere so why invest on them, that attitude needs to change. What major reforms do you want to see in the tourism and hospitality sector? There needs to be an agency created to maintain the standard everyone needs to follow, when everyone is aware that there is a standard to regulate activities, everyone will be on their toes. There is supposed to be a regulator, but am really not sure they are even looking into that. There should be some people that come from the tourism commission from each state to do that, but I think that’s not happening. We need to bring together the government and private investors and stakeholders to work together in developing this sector, because without developing them, there will be nothing to show, we have a lot of tourist attraction in Nigeria But if the state government doesn’t maintain it, then there is no essence. These things are actually there but how are we developing it. I give kudos

to Lagos state they are doing a fantastic jobs there. The Lagos state tourism and intergovernmental relations are coming up with different ideas in different platforms but then there are lots of young ones that can offer lots more. The young ones are the next generation because the old people don’t have much to play now; they are just going to play political, godfathers, and the likes. Lastly, put the right persons who have the experience in that space. How many years have you been into this business and what are your achievement? We are just one year old in the business. The achievement we have made We have been able to get jobs for some of our members, conducted two trainings, we recently partnered with “2 cold”, and we have gotten more members than when we started. When we started, we had about 30-40 members now, we are almost 200 and we have even extended to Calabar. We are moving to Abuja in September, so we are getting there. We also partnered with recruitment agency so we were able to get jobs and we are picking up another initiative soon, where we will go to school and talk to students studying hotel management, one is the hospitality business school, and the other is Yaba college of technology. We want to give them a first-hand experience of how reality the industry is, what they should expect, what we expect from them, give them some of our experiences, just to prepare them for future as some people went in there not knowing why, but we will make them realize what they can achieve form this industry, its passion, its happiness, you just have a satisfaction when you share what you have and you see the person practice it. How can one be a member of WIHN You have to register to become a member of WIHN before you can enjoy the benefit that we offer. Some of these benefits include people who are looking for jobs or people who have intentions of changing career to hospitality or tourism, we can put you through as long as you are qualified and can pass the interview then you are definitely going to get it we don’t manipulate. We get request for staff because they know we have a pool of professionals in the industry like people who have experience, people who are excelling and who are doing more for themselves. Some of our members have taken a bold step to become entrepreneur there is one that has started a cleaning company and another that has started an agency where she does logistic. We give you some kind of motivation and strength when you become a member because we know that you are amongst your fellow women who are also thriving to be great.

BUSINESS DAY

Thursday 28 June 2018

GARDEN CITY BUSINESS DIGEST Fireworks in PH: What Niger Delta must do to win back fleeing UK investors! •••High Commissioner, Paul Awkwright says: ·Clean the environment ·Stop kidnapping But Belgian investor says: You’re as secure as you make it IGNATIUS CHUKWU

t was fireworks at a one-day premier of a documentery, ‘Defiant Embers’, in Port Harcourt, Rivers State, last week when the British High Commissioner in Nigeria, Paul Awkwright, bluntly told Niger Delta states pressing for return of foreign investors that except two critical conditions were addressed, UK investors would not venture back to the oil region. The diplomat named cleaning up the polluted oil region and end to kidnapping (violence) as the two most critical factors speaking against the Niger Delta in Britain, probably also in Europe and America. This is because the Consul-General of the United States, E-John Bray, had in April this same year demanded for non-violent elections in 2019 to convince the embassy to lead foreign investors back to the Garden City by opening a business liaison centre in Port Harcourt. This tough conditionality was handed down to the leaders of the region at the presentation of the documentary at the behest of the British Council. The documentary was produced by Chioma Onyenwe. ‘Defiant Embers’ highlights the economical opportunities in the Niger Delta and the challenges in the oil region. The documentary seems to dwell on features identifying and exploring alternate sources of livelihood beyond oil and gas in the Niger Delta. S ome sectors actors present at the event included the Rivers State deputy governor, Ipalibo Harry Banigo, the British

High Commissioner, Paul Awkright, PHCCIMA President, Emi Membre-Otaji; REIF board members led by the president, Ibifiri Bobmanuel, and investors and business leaders. Awkwright stated thus: “The reputation of the Niger Delta in the UK is damaged by two major factors; environment pollution and insecurity especially violence. These are two major things that stop British investors from returning to the Niger Delta. So, clean up the region to restore a thriving fishing industry and investors would want to look in. Also, kidnapping and insecurity drove away British people. If you keep having these two key problems, investors won’t come.” The High commissioner defended his position thus: “I am stating the reality. Five British citizens were kidnapped and one was shot in the presence of the others. This made headlines in the UK. Nothing scares investors more than that.’ He however admitted that systemic problems needed to be addressed as recommended by Edughom Hanson, deputy chief executive at Wider Perspectives Limited, a management consultancy firm in PH. The High Commissioner said those who committed these things were usually community people. “There is the need for stakeholders to work together. Let the people of the region go beyond talk. We will be there to offer support.” As pressure mounted at the Hotel Presidential, venue of the event, the High Commissioner tried to tone down and said; “We recognize your entrepre-

R-L: British High Commissioner, Paul Awkwright, with REIF President, Ibifiri Bobmanul, at the event.

neurial spirit, and British people are willing to support but there are issues.” He called on more attention to the women. He said; “There is need to promote involvement of women in the business sector. The disabled persons also need to be integrated into economic activities in the region.” PHHCIMA boss; A f t e r ap p a re nt l y recovering from the stinging advice, some of the stakeholders tried to deflect the blame. Former health commissioner in the state, multiple investor and president of the Port Harcourt Chamber of Commerce (PHCCIMA), Emi MembreOtaji, took the floor to admit that the narrative in the documentary was true but that the people of the Niger Delta were not lazy. “We are no militants. Something led to it. How did we get it wrong?” He urged the British government to, according to him, continue to partner

with the Niger Delta region. “Even in Iraq and Libya, oil CEOs are still living there. We can work together. The British gave us liberal constitution, we gave ourselves unitary one. CEOs doing business here can approach the presidency and extract concessions for the region. We appeal to the British Council to help change the narrative.’ T h e C E O o f S I AT o f Belgium in his contribution, said insecurity is now worldwide. He went on” You are as secure as you make it.’ He rather focused his appeal on the dangers of importing palm oil, saying if it continued, palm oil industry would crash. He said it should be treated as an urgent matter. Bobmanuel: The president of REIF, Ibifiri Bobmanuel, who served on the discussion panel, said: “The documentary reflects the reality of the Niger Delta ; opportunities in the midst

of challenges. We are an industrious people. There is need for a blue print for the development of the Niger Delta region. Port Harcourt was conceived around commerce and this was driven by a seaport after which the city was named (Port Harcourt). It is a city to drive investment in the south-south. By 1912, the colonial masters had commissioned a seaport. We lost track somewhere; an entrapped seaport with 20 per cent less of its due level of activities. The region’s agric culture was lost. SIAT is an example of the potentials in the agric sector. They have reactivated RISONPALM and now employ over 4,500 persons, heading to 16,000. This is huge. What is needed in the region is technology. It is he answer to drudgery in agriculture”. Deputy govnor, Ipallibo Harry Banigo: Representing Gov Nyesom Wike, the deputy, Ip-

palibo Hary Banigo mentioned the various ways the state government was tackling the problem of insecurity and infrastructural deficit to boost industrialization. “The wealth of this region is rather in agric. This was demonstrated by a National Youth Service Corps (NYSC) member from the middle belt who served in Krakrama area of the state in 2017. She brought seedling from Benue State and planted it in Krakrama and recorded huge harvest. She got a state government award and automatic employment. I copied her and planted rice behind my backyard. Women entrepreneurs are now pursuing this practice. We are now encouraged by various Rivers State policies to pursue various agric programmes.” She said: “Propaganda has made a gas project to be taken away from the Niger Delta to Badagry in Lagos. Neglect of ports, East West road issue, etc, drove investors away. Rivers State under Gov Nyesom Wike has initiated Rivjob data platform to access jobs; massive road infrastructure has opened up Port Harcourt and made it investor-friendly. Rural road projects are opening up agric produce routes. Democratic stability is important to economic growth and progress. So, we urge the Independent National Electoral Commission and the security agencies to ensure free and fair elections to boost this political stability needed for economic growth.” Chioma Onyenwe who made the documentar y said the aim was to tell the story the way it is through the mouth of those who live in the place.

British High Commissioner notes Wike’s commitment to education

Port Harcourt by Boat With IGNATIUS CHUKWU

he British High Commissioner to Nigeria, Paul Awkright, is among top personalities that have commended Gov Nyesom Wike of Rivers State in the area of education investment for investing in girl-child education. He further noted that no country can develop if it fails to educate her girls. Speaking while commissioning Government Girls Secondary School, Rumuokwuta on Saturday, Awkright

called for greater investments in girl-child education. He said: “There is no reason why we should neglect half of our population who can help ensure the prosperity of the country. That is why education is important. That is why girl child-education is important. Without girl-child education, this country cannot thrive”. While thanking the people of Rivers State for their warm reception, he said; ““I am particularly pleased that I am here

for the commissioning of a girl’s school. I have a daughter. I know how important it is to see girls educated; that they receive a minimum of 12 years of quality education. “When they are educated, they marry later. When they marry later, they have fewer children. They can contribute to the economy. They can fulfill themselves”. The joy in the air was described by government spokespersons as contagious as hundreds of students and old girls

of the school celebrated Governor Wike’s golden touch to their institution. Speaking, Wike stated that his administration was committed to quality education. He said he would contract the maintenance of the school to members of the host communities. They will cut the grass and clean the environment of the school. We shall provide security in the school. This is a girl’s school and their security is paramount”.

Governor Wike warned the principal of the school against hiring out facilities of the institution for conferences, noting that boys will no longer be allowed to play football in the institution. In a project description, Rivers State Education Commissioner, Tamunosisi GogoJaja, said the school which was established in 1972 was allowed to decay beyond measures by previous administrations.

Wednesday 27 June 2018

C002D5556

BUSINESS DAY

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

research@businessdayonline.com

08106395676

Education reforms, investment friendly environment are panacea for high unemployment rates other southwestern states such as Oyo and Ogun with large labour forces reported relatively low unemployment rates. The effects of the high unemployment in Nigeria could be seen in the high crime rates, insecurity, kidnapping, increasing rural-urban migration, terrorism and not to impressive growth in the Gross Domestic Product of the country, just to mention a few. Nigerians are fed up with the increasing unemployment rate in the country. A respondent in Lagos who craved anonymity narrated his ordeal how he is yet to get a job after five years of graduation. “I even had to further my education by obtaining a master’s degree from the University of Lagos. But

ESTHER AFOLABI

igeria is sitting on a keg of gunpowder. This is not the first time we will be hearing or reading this statement. But it seems nothing much is being done to address the unemployment scourge in the country, which has driven some families into destitution. Unemployment is described as a situation where the people who are ready and willing to work are unable to get jobs. The International Labour Organization (ILO) defines the unemployed as the number of the economically active members of the population who are without jobs but are available for and seeking jobs, including people who have lost jobs and those who have voluntarily left work. Between the last quarter of 2016 and the third quarter of 2017, unemployment rates rose from 14.2 percent to 18.8 percent and this rise in the level of unemployment rates worsened the level of poverty in the land. The recession of 2016 which lasted till the end of the first quarter of 2017 did not help matters. The companies which depended largely on foreign raw materials suffered due to shortage of dollars leading to closures of the vulnerable ones, of which the immediate impact was that more were thrown into the labour market and that further aggravated the unemployment scenarios in the country. In 2016, Nigeria’s population was estimated at 186 million individuals based on the World Bank estimate, and assuming an average population growth rate of 2.66 percent based on previous seven year-growth rate average, the 2017 population will be in the region of 191 million individuals. Why are we interested in this projection? It is because out of the total population, about 61 per cent of the population lives on one or less than one United States dollar a day, that is about 117 million people. The excruciating poverty in the country could be felt everywhere in the Nigerian societies. Furthermore, according to the National Bureau of Statistics (NBS), there are 85.08 million people in the nation’s labour force as at the end of the third quarter of 2017. And with the country’s population at about 191 million, the dependency ratio is 124.4 percent. What does this mean? Dependency ratio is number of dependents (persons from age 0 to 14 and above the age 65) relative to the number of labour force (persons from age 15 -64). Also, out of the 85.08 million peo-

ple in the labour force, 51.06 million people are gainfully employed as they work for above 40 hours a week. From the employed Nigerians, only 14.10 million people earn salaries through white collar jobs; 18.85 million are farmers, 15.01 million are self-employed, 231,671 are paid apprentice while 2.41 million are unpaid house workers. Given the number of people that are fully employed, it means out of 191 million people only 51.06 are fully employed including 2.41 million of unpaid house workers. The total unemployment and underemployment rate of youth labour force (15-35 years) was 22.64 million. This means 10.96 million agile youths are unemployed and another 11.68 million youths are underemployed according to the National Bureau of Statistics (NBS). There is a wide disparity between the geopolitical zones in the country. Labour force is more concentrated in the South and Southwest parts of the country, as well as in Kaduna and Kano states in the Northern part of the country. From the nation’s labour force, individuals that work in Lagos, Rivers, Oyo, Kano and Akwa-Ibom constitute 26.27% of the total labour force. Unemployment tends to be higher in the Southern States while underemployment tends to be higher in the Northern States where most of the labour force constituents are farmers. When the Q3 2017 unemployment rates are analyzed by states, Rivers State had the highest unemployment rate (41.82%), followed by Akwa-Ibom (36.58%), Bayelsa state (30.36%), Imo state (29.47%) and Kaduna state (28.96%). The high unemployment rates in Rivers, Akwa-Ibom and Bayelsa may be due to the lack of arable land for farming caused by fuel

exploitations in the area and destruction of ecosystem resulting in reduced agricultural and fishing activities In addition, in Rivers, Lagos, Kaduna, Kano and Akwa-Ibom states , the population of the unemployed and underemployed population as at the third quarter of 2017 stand at 2.64 million, 2.33 million, 1.99 million, 1.90 million and 1.81 million respectively. The five states house 31.14 percent of the total unemployed and underemployed population in Nigeria. Similarly, the high unemployment and underemployed population figure in Lagos has been attributed to rural-urban migration. However,

right now I am still jobless,” he said. Such is the fate of countless numbers of Nigerians without jobs and this is already causing depression in many. Babatunde Ogundipe, an economic analyst, attributed the high unemployment rate in the country especially among the youths to the education system which places emphases on theories, stressing that it has contributed to the high crime rates, rising cases of kidnapping ,and this is capable of chasing potential investors away from the economy, while also damaging the country’s international reputation. “Unemployment rate in the coun-

try has risen astronomically. Don’t forget that during recession a lot of companies shut down, while those that weathered the storm retrenched workers. “The government needs to initiate deliberate policy that would encourage SMEs in the country. There should be avenues where young graduates who want to set up businesses get start-up capital at single digit interest rate. This would reduce the unemployment rate among the youths and even create opportunities in other sectors because these SMEs are employers of labour”, Ogundipe said. A political economist, Emeka Onwuka, berated successive leaders in the country for not having a clear policy that will tackle unemployment rates considering the high number of youths that graduate from the nation’s tertiary institutions every year. He advocated for a reform of the educational systems and a setup of social intervention programs. “Unemployment rate has also been there in the country decades back, don’t forget during the 80’s, it was an issue. But over the years due to the increasing population, we now have more graduates. The educational system has not helped because the kind of knowledge it gives to students is not much relevant to the needs of the industry and once they come out they realize they are unemployable”, Onwuka said. “There is the need for urgent reform of our education system, it should be skill acquisition oriented. The government should create enabling environment for investors and also educate the populace on the danger of overpopulation. There should be social intervention programs for the unemployed; that is the way it is in advance countries. The N-power program of this administration is not working; the bureaucracy of the program is impeding the success of the program. Most of the graduates who applied last year for the programme have not started their training”, Onwuka opined. By and large, governments at all levels should invest in human capital development by reforming the educational system as this will go a long way to reduce unemployment. Moreso, equipping students with skills and training they need to become employers of labour and by providing an enabling environment (security, power, transportation, friendly economic policies just to mention a few) for businesses to strive in the country will help create more jobs and thus reduce unemployment rates in the country.

BUSINESS DAY

Thursday 28 June 2018

C002D5556

33 NEWS

BUSINESS DAY

Nigeria eyes $2.8 bln Eurobond to finance... Continued from page 1

L-R: Babatunde Okeniyi, executive director, marketing, Unified Payments; Chuks Nweke, executive director, UBA plc; Victor Etuokwu, executive director, personal banking division, Access Bank plc/alternate chair of the board of Unified Payments, and Agada Apochi, MD/CEO, Unified Payments, at the launch of the Unified Payments Hourly Pic by Olawale Amoo Settlement Services in Lagos, yesterday.

Again, US urges Buhari to stop incessant... Continued from page 1

as much a product of trust forged by opportunities shared and rules fairly enforced on level playing fields as it is the product of force wisely applied to answer threats. The envoys message follows an earlier one by President Donald Trump at a joint press conference in April in Washington D.C, urging the Muhammadu Buhari led government to tackle the incessant killings of Christians in the country by so called ‘Fulani Herdsmen’. Meanwhile President Muhamamdu Buhari is currently redesigning his security apparatuses to respond effectively to current challenges across the country. It is however not immediately in public knowledge the form and structure such redesigning will take. This is part of the outcome of the President’s meeting with Senate President, Bukola Saraki and Speaker of the House of Representatives, Yakubu Dogara over the unending spate of killings across the country, at his official residence this morning.

The President had used the early morning meeting to brief the National Assembly principal officer before proceeding to preside over the weekly Federal Executive Council :( FEC) meeting at the Council Chambers of the Presidential Villa, Abuja The meeting which held behind closed was said to have been at the instance of the Principal Officers of the National Assembly. Speaking with newsmen after the meeting, Senate President Saraki, said the President briefed the principal officers of his planned response to halt the security challenges. Saraki, while commiserating with the affected all families, said the National Assembly leadership will also pay a visit to Plateau state. “It is our own intention to also go and pay our own condolence visit to the people of Plateau,” Saraki said. “Our general appeal at the end of the day is that we all live together in peace and harmony and we will continue to do our best to see that this kind of thing does not happen again.” Speaker of the House of Rep-

Bears break correlation between equities, ... Continued from page 1

and Venezuela. However, the ASI which initially rallied in early January is now down -0.73 percent year to date. Traditionally, the Brent crude oil price has been a signal for predicting future changes in the stock market performance in Nigeria. This is because rising oil prices leads to strong economic growth in oil dependent Nigeria and oil export earnings contribute the largest chunk to foreign reserves in the country. A larger foreign exchange (FX) reserves position usually boosts investors’ confidence in Nigerian equities and the external reserves provide security for foreign investors who may be worried about the difficulty of exiting the market at will. In 2017 while crude oil prices doubled from its 2016 levels, Nigeria attracted about $3 billion in foreign portfolio investments (more than 100 percent its 2016 level). These huge investments in Nigerian securities enabled the market to return as much as 42 percent, making it the 3rd best performing market in the world in 2017. This trend showing the correlation between crude oil prices and stock market performance can also

be observed in previous years. In August 2014 when oil prices reached a record $114 per barrel, the Nigerian Stock Exchange All Share Index rallied to 43,031 points, its highest level since the market crash of 2008. Coincidentally, both stock prices and crude oil prices collapsed in 2008. Again, when the oil prices fell below $30 per barrel in January 2016, the All Share Index was at 22,456 points which was its lowest in 5 years. However, 2018 appears to be very different from previous years. As oil prices rose from $69 per barrel and hit a year high of $80 per barrel in May 2018, the stock market has had a correction, shedding over 6,300 points or 15 percent since a peak in earlier in the year. It dropped from a peak of 44,460 at the start of February to 38,104 at the end of May. The selloff has been broad based from industrials like Dangote Cement which has given up gains for the year, Financials such as Union Bank down -18 percent, Nigerian Breweries -19 percent and downstream oil and gas firm Forte Oil that has returned -21 percent year to date. If the stock market is already bearish during a crude oil price rally, the market may just get from bad to worse for equity investors if the OPEC

resentatives, Yakubu Dogara, also confirmed that President Buhari is restructuring the security system to deal with the issues. According to him” The president has taken enough steps, these are security issues, not matters that you can discuss but he has told us what he is doing, the reorganization that he plans to put in place to ensure that this doesn’t happen again.” “He has briefed us on what he saw first-hand when he visited Plateau yesterday and measures being put in place to ensure that we do not have a relapse or a recurrence. “These are very sober moments for all of us in a situation where people in hundreds are continued to be killed and we can no longer tolerate this kind of situation as a government. Whatever it is we must not lose the fight against violence because we can’t lose that fight and still keep our civilization. “If you go to the north east you can see the level of devastation caused by Boko Haram everything resembling progress from schools to hospitals to government institutions, everything has been pulled down. And we don’t want a replication of this all over the country.” fails to renew the supply quota agreement that pushed crude oil prices back above the $70 per barrel region. Despite the improved outlook for the overall sector from higher oil prices, challenges remain for firms in the country, according to Moody’s. “Nigerian corporates continue to see electricity followed by high interest rates as the biggest inhibiters to business activity. According to Central Bank Nigeria data, prime lending rates remain very high at 17.78% as of the end of December 2017, while maximum lending rates exceeded 30%. These two considerations will continue to weigh negatively on corporates’,” Moody’s said in May 9 note on the Nigerian economy. Henry Ogbuaku, group head asset management at GDL Asset Management told BusinessDay by phone that the downward trend observed in equity prices this year is as a result of foreign investors exiting the local market due to fears of insecurity and rising political tensions in the country. He explained that the equity investors are currently not responding to the rally in oil prices because they are distracted by the election risk and negative news appearing in the press on civil unrest in the North East and Central Nigeria. Continues on wwwbusinessday online.com

Management Office Patience Oniha (DMO) told Reuters. The DMO said it has sent the request for a proposal to banks for an international bond offering, but it is waiting for the legislative arm of government to give a nod for the new borrowing. “We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” Oniha told Reuters, without giving in depth details. Nigeria’s external debt surged 16 percent from $18.9 billion in full year 2017 to $22 billion as at March 31st 2018. The federal G overnment through the ministry of finance had successfully sold $2.5 billion of Eurobonds to compliment the $3 billion it raised in November last year, as part of its on-going debt restructuring strategy aimed at increasing external debts from 23 percent to 60 percent, and cutting down on domestic debts from 77 percent to 40 percent. It now has around 23 percent of its debt from foreign borrowings, up from 16 percent when it approved the plan. “It is not surprising that Nigeria is making this move to raise another Eurobond as it said earlier that it could tap from the capital markets or concessionary loans from the

World Bank as possible options after the 2018 budget had been approved,” Wale Aokunrinboye, Head of research Sigma pension told BusinessDay on phone. “With this move however, we should expect to see our foreign reserves cross over $50 billion,” he added. Oniha in January said the DMO could tap capital markets or concessionary loans from the World Bank and would consider funding options after the 2018 budget had been approved. According to her “for government to plan execute its plan enunciated by the Economic and Recovery Growth Plan (ERGP), Medium Term Economic Framework (MTEF) and other associated fiscal strategies, it has to spend and borrowing is a mechanism to do that”. President Muhammadu Buhari last week signed a record N9.12 trillion budget for 2018 into law, aimed at fostering growth in Nigeria before elections next February, in which he will seek a second term. The government has laid out plans to borrow abroad even though interest rates are rising in the United States which could see the West African country pay a higher premium on this occasion compared with its most recent debt sale in February. Continues on wwwbusinessday online.com

ON DEMAND: A Language of Non-Capitulation,... Continued from page 1

head in a trance. It is not that long ago when I demanded that this declaration of intent – the reversal of land expropriation through mass murder – be made, and that the triumphalist beneficiaries of such obscene occupation agenda be openly given a deadline to selfevacuate, or be forcefully evicted. However, a commitment is now firmly in hand, but enforcement is all, so is the tempo of enforcement. Statements of outrage, humane sentiment, empathy, even visitations to afflicted areas are natural expectations from government, and perfectly in order. They are essential indications of concern and solidarity, even of admissions of lapses. They offer glimmerings of eventual measures of equity and restitution – of which we must never lose sight - else community sinks into despair, or enters the interminable spiral of reprisals. Visible pragmatic measures additionally assist in bolstering the optimism of victims, enable them to feel that they have not been abandoned. Such are the relocation of security commands to vulnerable zones, deployment of Special Forces and attack helicopters etc. etc. - yes – all these are mandatory measures, it is their absence that constitute unpardonable negligence. Long term propositions, such as establishment of ranches, restriction of cattle movements, cultivation of fast growth grasses and so on – they all indicate far-sighted planning. They deserve approbation, but they are not exclusively remedial. Certain unconscionable events have taken place, and cannot be ignored. Entire communities have been erased from the national landscape. Thousands of family units are in mourning, survivors

scarred and traumatized beyond measure. Famine looms in many areas, even in those lodged in acknowledged bread baskets of the nation. Impunity, gleeful and prideful impunity substitutes for decent self-distancing from once unthinkable crimes – let us not even speak of expressions of remorse and human empathy. The instigators, increasingly fingered as directors of human carnage are strutting around, defiant, justifying the unspeakable, daring a nation – there is no other word for it – daring governments and nation to attempt to reverse their categorization of communities as culpable, sentenced and deserving of some of the most revolting, onslaughts of ethnic cleansing that this nation has ever undergone. Once, when we spoke of internal colonialism, we referred merely to the military seizure of a people’s political will. Today, that phrase has taken on a bruiaing physicality – seizures of a people’s land patrimony and the abrogation of their centuries old resource of material survival. What is the ultimate destination of these new imperators? The answer is unambiguous: Land. The seizure of land either for seasonal grazing, for the lordly passage of cattle, or for permanent settlement. The rights of passage no matter the cost. This is what makes noteworthy this new language of objective appraisal, one that is indicative of remedial action. When President Buhari complains – see today’s media report, June 27 - that it is unjust for the public to accuse him of being silent on the killer herdsmen, that is exactly to what they referred – the erstwhile language of complacency and accommodativeness in the face of unmerited brutalization. Continues on wwwbusinessday online.com

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12TH ANNUAL BUSINESS LAW CONFERENCE UNECA positive intra-Africa trade will enhance economic growth on the continent – Egbuchu …as NBA-SBL conference deepens discussion on AfCFTA CHUKS OLUIGBO

hairman of t h e C o n f e rence Planning Committee of the ong oing 12th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL), Okey Egbuchu, said yesterday that the United Nations Economic Commission for Africa (UNECA) was positive that intra-Africa trade

would substantially enhance economic growth on the continent in the long. This optimism, he said, is based on studies carried out by UNECA. Egbuchu, who spoke at the opening ceremony and dinner of the conference at Transcorp Hilton, Abuja, said it was for this reason that the commission had dedicated a session of the conference to educating the public. He said the conference, which has the theme ‘Bring-

ing Down the Barriers: The Law as a Vehicle for IntraAfrica Trade’, has provided a platform for further discussion on the African Continental Free Trade Agreement (AfCFTA), which was signed by 44 African countries in March. “For decades, Africa, hampered by bad leadership and a lack of cohesion, found itself lagging other continents in virtually all indices of development, notwithstanding its richness in natural resources and a

young energetic population. Perhaps a vestige of colonial heritage, we found ourselves doing more business with other continents than within Africa,” Egbuchu said at the opening ceremony. “We at the Council of NBA Section on Business Law knew that we had to focus our activities inwards, starting from the legal profession, Nigeria, and then Africa. This year, the spotlight is on Africa, hence the theme for the conference, ‘Bringing Down the Barri-

ers: The Law as a Vehicle for Intra-Africa Trade. “Africa had slowly but long been working on enhancing trade within, and this culminated in the African Continental Free Trade Agreement which most African countries endorsed in March 2018 under the controversy caused by the snub of the signing ceremony by the chief promoter of free trade in Africa, Nigeria, under pressure from various interest groups. The Federal Government

decided to consult more with stakeholders and we have provided a platform at this conference for the continuous stakeholder consultation,” he said. Over the years, the annual NBA-SBL conference has continued to be a platform for business lawyers within and outside Nigeria to network and engage on issues relevant to their fields as well as to establish a thriving relationship between the business community and government institutions.

‘The legal profession will derive immense benefit from conference’

L-R: Olumide Akpata, chairman, NBA-SBL; Vice President Yemi Osinbajo, special guest of honour, and Abubakar Mahmoud, chairman, NBA.

L-R: Kunle Ajagbe, Jayanth Krishnan, and Okey Egbuchu, chairman, conference planning committee.

h e o rga n i s e r s of the 12th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) have said that the conference will be of immense benefit to lawyers and law firms. Even though the major discussions at the conference will revolve around intra-Africa trade against the backdrop of the Africa Continental Free Trade Agreement (AfCFTA) recently signed by 44 countries, the organisers say it will also be a platform for lawyers and law firms to ruminate on their role in the event of Africa becoming one trading bloc. Speaking at a press briefing in Lagos ahead of the conference, Okey Egbuchu, chairman, conference planning committee, said that a special plenary session, with the topic ‘Law Practice in the Time of the African Continental Free Trade Area: Reimagining African Lawyers’, would be devoted to examining the opportunities available to lawyers when the AfCFTA takes effect. “This is a law conference, so you will imagine that we must have a session for us as lawyers to examine our position, our prospects and our future under the AfCFTA. How is law practice going to be when this agreement comes into force? What are the barriers that

are going to be left? How will we practice law? What are the new areas of law that will develop around the AfCFTA? And what tools do we need to be able to be prepared to benefit fully from it? There is a whole plenary session on the 29th of June which will deal with that,” Egbuchu said. “Professionally speaking, I think this is going to be the most important session of the conference for us lawyers. We have invited many law societies from across Africa; we have invited the Law Society of England and Wales; we have invited many resource persons from across the world to join us in dissecting the issues,” he said. Egbuchu said David Ofosu-Dorte, senior partner, AB & David, a home-grown international law firm in Africa, would lead the session and would be joined by many other discussants to give perspectives on the issue. Scheduled for June 27-29 at Transcorp Hilton, Abuja, the conference has the theme ‘Bringing Down the Barriers: The Law as a Vehicle for Intra-Africa Trade’. Olumide Akpata, chairman, NBA Section on Business Law, said the conference would provide a platform for lawyers to assess their preparedness for the eventuality of Africa as one trading bloc and for law firms to re-imagine their roles in the new dispensation.

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12TH ANNUAL BUSINESS LAW CONFERENCE Osakwe, Faizel to speak at NBA-SBL conference today ...Osinbajo, Enelamah, others to chair sessions

mbassador Chiedu Osakwe, Nigerian Chief Trade Negotiator/ Director General, Nigerian Office for Trade Negotiations, will be the lead speaker at the first session of the ongoing 12th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) today. The session, with the topic ‘Bringing Down the Barriers: The Law as a Vehicle for Intra-Africa Trade’, will be chaired by Vice President Yemi Osinbajo, while Soji Awogbade, Managing Partner, Aelex, will be the ¬moderator. Also on the list of speakers for today is Ambassador Ishmael Faizel, former South Africa Representative to the World Trade Organisation (WTO), who will speak during the session on ‘AfCFTA and Transformative Industrialisation of Nigeria’. The conference began yesterday with an opening ceremony and dinner which had Vice President Osinbajo as Special Guest of Honour, Hon. Justice Walter Samuel Nkanu Onnoghen, Chief

Justice of Nigeria, as chairman, and Okey Enelamah, Minister for Industry, Trade and Investment, as Special Guest. A statement by the organizers of the conference notes that the first session will examine the raison d’etre for the agreement establishing the African Continental Free Trade Area (AfCFTA) which seeks to progressively eliminate trade restrictions and transform the African economy. The statement further notes that today will witness a total of six sessions. A breakdown of the sessions shows that Session 2A, which has the topic ‘Financing Intra-Africa Trade and Development’, will look at how key stakeholders intend to rise to the demands of financing the expansion of intra-Africa trade; Session 2B, ‘Continental Trade and the Imperative of Unimpeded Movement of Goods, Labour and Services’, will consider the concerns of various stakeholders and the mitigating safeguards since the AFCFTA assumes there will be minimal restrictions on the movement of goods, labour and services

among African countries; while Session 3, ‘AfCFTA and Transformative Industrialisation of Nigeria’, will be headlined by the United Nations Economic Commission for Africa (UNECA) as it seeks to affirm and share the transformative potential of AfCFTA for the industrialization of Africa’s largest economy, Nigeria. Furthermore, Session 4A, with the topic ‘Enhancing Transport Connectivity in Africa’, will adopt a multi-model approach to examining the state of air, road, rail and sea transportation in Africa and how it can be developed to be an indispensable spine for continental trade, while Session 4B, ‘Marching in Lockstep – Building Sub-National Competitiveness for Global Investment’, which is the last session for the day, will lead a conversation on how states, provinces and other sub-national entities can harness their competitive advantages in order to attract global investment. Among the names on the list of session chairs and panellists for the day include Okey Enelamah, Minister for

Abubakar Mahmoud, chairman, NBA, and George Etomi, pioneer chairman, NBA-SBL.

Industry, Trade and Investment; Ambassador Albert M. Muchanga, African Union Commissioner for Trade and Industry; George Etomi, founding chairman, NBASBL, and founding partner, George Etomi & Partners; Haresh Aswani, Managing Director, Tolaram Group, Nigeria; Samallie Kiyingi, Director & General Counsel, African Export-Import Bank, and Kemi Arosanyin,

Director, Africa Trade Expansion Programme, World Trade Centre, Miami, Florida. Others are Ibrahim Dankwambo, Gombe State governor; Dr. Stephen Karingi, Director, Regional Integration and Trade Division, United Nations Economic Commission for Africa; Prof Bola A. Akinterinwa, former Director General, Nigerian Institute of International

Affairs; Segun Awolowo, Executive Secretary, Nigeria Export Promotion Council; Clara Bot-Mang, HR Director, sub-Saharan Africa, GE; Tony Luka Elumelu, Head of Free Movement and Migration Division, ECOWAS Secretariat; Afolabi Imoukhuede, Senior Special Assistant to the President on Job Creation and Youth Employment, Office of the Vice President, among others.

NBA-SBL remains committed to development of young lawyers – Akpata …as Mahmoud lauds Section’s achievements

hairman of the Nigerian Bar Association (NBA), Abubakar Balarabe Mahmoud, has lauded

the NBA Section on Business Law (NBA-SBL) for its dogged commitment towards engendering the continuing professional devel-

opment of Nigerian lawyers in the knowledge and practice of business law. Mahmoud spoke at the opening ceremony and din-

Justice Kayode Ariwoola of the Court of Appeal, representing the CJN, and Olumide Akpata, chairman, NBA-SBL.

ner of the ongoing 12th Annual Business Law Conference of the NBA-SBL yesterday. “Since its establishment in 2004, the NBA-SBL has remained one of the leading specialist sections of the Nigerian Bar Association and has consistently committed over the last 14 years to delivering on its mandate of engendering the continuing professional development of Nigerian lawyers in the knowledge and practice of business law,” Mahmoud said. “The NBA-SBL’s objectives, which focus on the promotion of continuing legal education, legislative advocacy, protection of its members’ common interests and the facilitation of networking and partnership opportunities between the Nigerian Bar and international commercial associations, align with the NBA’s strategic aim

of ensuring that the Nigerian legal profession is suitably prepared to meet and compete with international standards and comply with international best practices for a robust, responsive and independent legal profession,” he said. Olumide Akpata, chairman, NBA-SBL, said the SBL council was proud of the achievements so far recorded by the Section’s committees, adding that details of those achievements would form the core of his report to the Annual General Meeting of the Section at the end of his tenure in August this year. “I will, however, single out for specific mention the establishment of the SBL Club by our Young Lawyers Committee which is an initiative aimed at introducing contemporary commercial law subjects to law undergraduates in Nigerian universities

who are in their final and penultimate years of study,” Akpata said. He further said that chapters of the SBL Club have so far been inaugurated at the University of Lagos, Ahmadu Bello University, Zaria, and Baze University in Abuja, while three more chapters were in the offing for Obafemi Awolowo University, IleIfe, University of Benin, and University of Nigeria, Enugu campus. “The SBL Club is a laudable initiative which will help immensely in building capacity in the next generation of Nigerian lawyers and will encourage specialization in the profession. I must state at this point that our focus on and commitment to young lawyers remains unwavering as they continue to be the ultimate beneficiaries of our programmes and projects,” he said.

of politics seen hampering Not Too June 2018 Young ToThursday Run28law

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South Korea knocks World Cupchampions Result Germany Swedenout1of World - S/Cup Korea 0

ANTHONY NLEBEM, Reporting from St. Petersburg , Russia

Belgium 3

ly dropped in favour of Mesit Ozil. South Korea, who were practically already eliminated after two back-to-back losses, made four changes. It was a drab first half which the Germans dominated in terms of possession, but not chances. Low’s team had 80% of the ball but only managed four shots, the same number as the Koreans did. Die Mannschaft lackedcutting edge and finishing to convert their endeavour into goals. Arguably the best chance of the half come to Son, after a mistake by Manuel Neuer. Ozil had a decent impact, along with Toni Kroos, but his teammates could not convert his incisive passes. South Korea were working hard to frustrate their European opponents. It remained 0-0 at half time with Germany left with everything to do and forced into too many sideways passes.

- Panama efending champions, England 2 been- Tunisia Germany, have

D L-R: Babatunde Fashola, minister of power, works and housing; Sanusi Lamido, Emir of Kano, and Hafizu Abubakar, deputy governor, Kano State, during the flag off of the reconstruction of the Abuja -Kaduna-Zaria-Kano dual carriageway in Chiromawa Toll Plaza, near Kano.

Unified Payment cuts e-transaction settlement time to an hour FRANK ELEANYA

n a move many experts will consider unprecedented in the payment space in Africa, Unified Payment (UP) has announced a new product that enables merchants receive payments from electronic transactions within an hour. The product known as UP Hourly Settlement Service (UP-HSS) ensures that merchants get their monies on an hourly basis with full settlement reports that aid them in reconciling their daily sales. Settlement can be done for any merchant irrespective of the card brand used to initiate the transaction or the processor of the card. This is against the existing next-day settlement after they have parted with goods or services, otherwise known as T+ or Transaction Day + 1. Unified Payment unveiled UP-HSS in Lagos on Wednesday, 27 June, 2018. According to Agada Apochi, managing director of Unified Payment, UP-HSS, which is integrated at an industrial level is a first for the payment space in Africa and was born by the need to encourage retailers and merchants to

adopt electronic payment (epayment). PoS devices are popular among merchants and retailers in Nigeria. Data from Nigeria Bureau of Statistics shows that the value of electronic payment transactions through Point of Sale (PoS) terminals rose by 39 percent, year-on-year, to N297 billion in the first two months of 2018. Month-on-month value of PoS dropped in January and February. The value of transactions declined by 9.5 percent to N152 million from N167.6 million in December 2017 and again by 4.8 percent to N144 billion in February. Apochi noted that Nigeria is only utilising 10 percent of the potential of e-payment with regard to the cashless economy. “A big need for merchants is access to funds,” he noted. Prior to UP-HSS, merchants could only receive settlement from their transaction after 45 days. Unified Payments rallied other stakeholders in the industry to reduce the days to 24 hours. Merchants however still complain that settlement never gets to them on time. Prakesh Keswani, deputy managing director of Artee Group, owners of SPAR fran-

chise in Nigeria, said in reality, settlement could take more than four days, especially when there was a holiday. Victor Etuokwu, executive director at Access Bank, also agreed that a major challenge to the growth of electronic payment in Nigeria is the lack of buy-in by merchants because access to funds is not available at the time they need them. They see little incentive in accepting cards over cash, which is instant. Without a reliable transaction settlement system, merchants heavily leaned towards cash payment from their customers. Apochi predicted that adoption of UPHSS would see a switch from cash to electronic payment to 80 percent in six months. “The greatest incentive to retailers is timely access to their funds,” Apochi said. UP-HSS is collaborating with four Nigerian banks including Access, Diamond, UBA and FCMB. Merchants who are customers of these banks can easily leverage the service. “We actually carried out a test-drive of the product with our merchants,” Chuks Nweke, an executive at United Bank for Africa (UBA) said. “This is a product that works.”

CBN releases exposure draft of risk-based cyber security framework for banks, PSPs HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) on Wednesday released an exposure draft of the risk-based cyber security framework and guidelines for Deposit Money Banks (DMB) and payment service providers (PSPs). This follows recent increase in the number and sophistication of cyber-security threats against banks and PSPs. Consequently, these institutions are mandated to strengthen their cyber defences if they are to remain safe and sound. In a circular signed by Balogun K.O, for director of banking supervision, the released draft guidelines stipulate minimum requirements for enhancing cyber-security. Comments/inputs from

stakeholders are expected to reach the director of banking supervision on or before July 31, while the implementation of the guidelines takes effect August 1, 2018. The minimum controls required for a DMB/PSP to continue to support and provide business services even in the event of an unprecedented cyber –attacks include controls on access right management, secure system configuration, cybersecurity awareness, data loss prevention, system life cycle management, vulnerability management, continuous security monitoring, and enhancing incident response capabilities. The framework provides a risk-based approach to managing cyber-security risk. The document comprises six parts: Cybersecurity Governance and Oversight, Cyber-

security Risk Management System, Cyber Resilience Assessment, Cybersecurity Operational Resilience, Cyber-Threat Intelligence and Metrics, Monitoring & Reporting. Cybersecurity resilience is considered as an organisations ability to maintain normal operations despite all cyber threats and potential risks in its environment. Resilience provides an assurance of sustainability for the organisation using its governance, interconnected networks and culture. DMBs/PSPs are expected to note that for a cybersecurity programme to be successful, it must be fully integrated into their business goals and objectives, and must be an integral part of the overall risk management processes.

Nigeria’s oil production stagnates as US pushes to shut out Iran STEPHEN ONYEKWELU

he United States of America (USA) has demanded all countries stop imports of Iranian oil from November, a State Department official said on Tuesday. This has caused oil prices to rise, but Nigeria’s production stagnates and unlikely to take advantage of these geopolitical manoeuvres. Oil prices rose on Wednesday as a supply disruption in Canada tightened the market and after the US officials told importers to stop buying Iranian crude from November. This is in addition to uncertainty over Libyan exports, which is sending shockwaves through the global oil market. Brent crude futures climbed to approximately $77. US West Texas Intermediate (WTI) crude futures were at $70.88. Keen oil report analyst says Brent sweet oil headed to 100 dollars despite severe price manipulations. Iran exported 2.6 million barrels per day in April, a record since the lifting of international sanctions in January 2016. However, shipping data suggests that Iran’s crude exports have dropped to around 2.5 million bpd in May, a fall of about 100,000bpd from April in response to the sanctions. Nigeria has a different challenge, keeping it from taking advantage of the rising prices in the global oil market. According to data obtained from the Ministry of Petroleum Resources, Nigeria’s production in the month of May stood at 1.8 million barrels per day and this includes condensates. This means while Nigeria has struggled to maintain production lower than output limits imposed by the OPEC it would struggle to add new barrels. Oil markets did not react more strongly to Washington’s pressure as the move was expected. During the last round of sanctions, which ended in 2016, several Asian countries received waivers from Washington allowing them to continue to import from Iran. This time, Washington already hinted when announcing renewed sanctions in May, that it was unwilling to grant waivers.

eliminated from the 2018 World Cup after going down 2-0 to South Korea in stunning fashion. For the first time since 1938, Germany has not progressed past the group stage of the tournament. Goals from Kim Younggwon and Son Heung-min ensured Joachim Low and his side were amazingly heading home, with Mexico and Sweden qualifying for the round of 16. Heading into the game Germany needed to win to ensure its spot in the next round, ahead of Sweden who faced Mexico. They needed the Mexicans to beat their European neighbours. Germany made five changes with Thomas Muller controversial-

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Nigerians heartbroken after Super Eagles World Cup exit REUTERS

upporters of Nigeria’s soccer team described their heartbreak after watching the elimination of the national side from the World Cup on Tuesday following a late Argentina goal. The game determined who progressed from Group D to the knockout stage and dictated whether or not Argentina forward Lionel Messi - considered by some soccer fans to be the world’s best player - would continue to play a role in Russia. Nigeria were minutes from progressing before Argentina defender Marcos Rojo volleyed home a Gabriel Mercado cross in the 86th minute to give the South Americans a 2-1 win and passage into the last 16 where they face France. “Heartbreak... we squandered two great chances that would have put us right above (on top in) the fixture,” said Kelechukwu Mgbeahuruike, who watched the game at an open air screening in the commercial capital, Lagos. “Argentina had the zeal to still come back because they knew that yes they could still do it,” he said, referring to the period in which a Nigeria penalty converted by Victor Moses levelled the match at 1-1 after Messi had opened the scoring. A draw would have been

enough for the West African side to progress to the knockout stage of the tournament. The team representing Africa’s most populous nation, making their sixth World Cup appearance, reached the last 16 when the tournament was held four years ago in Brazil. There had been a widespread hope in Nigeria that the team could progress from Group D, which was widely considered to be one of the toughest in the tournament since it brought together Argentina, Croatia and Iceland alongside Nigeria. Retail assistant Femi Ogundeji expressed anger at the decision not to award Nigeria penalty in the second half. A video assistant referee (VAR) review decided that a possible handball by Rojo did not warrant a penalty. “It is so clear, everyone can see that it was a clear handball and it is supposed to be a penalty,” said Ogundeji. “It is so painful. We could have drawn the match and we could have been in the round 16,” he added. Nigeria were the only one of Africa’s five representatives from the last World Cup to return for the 2018 edition in Russia, which kicked off on June 14. For some, the cause of Nigeria’s woes lay in divine intervention. “We cannot fight God. It is how God wants it,” said Kenneth Uzonwanne, an artist.

Investors jostle for FG’s N60bn bonds as confidence grows ONYINYE NWACHUKWU, Abuja

nvestors jostled for the Nigeria Federal Government’s N60 billion bonds issued on Wednesday, as they continue to show confidenceintherevampingeconomy. The bonds issued by the Debt Management Office (DMO) in three tenors – 5 years, 7 years and 10yearswasoversubscribedasinvestors bid for N66.7 billion compared to the N60 billion offered. This is in spite of the FX Sale

of $210 million by the CBN last Thursday,whichmoppedupover N65 billion from the market. The CBN also mopped up over N200 billion from the system through the sale of OMO Bills on Monday. The FX sale and the OMO auctiontightenedmarketliquidity and pushed up interest rates. To moderate Debt Service Costs, the DMO said it adopted a conservativeapproachbyallotting onlyN31.2billionatratesbetween 13.50% and 13.81%.

Politics & Policy

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Leadership centre urges state governments to review pension laws for ex governors, deputies ANIEFIOK UDONQUAK, Uyo

he African Centre for Leadership, Strate g y and Development, a nongovernmental organisation (NGO) has urged state governments that have made laws granting outrageous pension scheme to former governors and their deputies in the country to drop such pieces of legislation. It has also called on the former governors and deputies who are serving in the National Assembly and receiving their pensions and earning salaries as lawmakers to forgo their pensions. According to the centre, more than 21 serving senators who were either governors or deputy governors are receiving their salary based on the laws passed by their respective state assemblies while also earning wages as lawmakers. Among the states that have passed the pension law for former governors and their deputies are Riv-

Former President Olusegun Obasanjo (R) exchanging pleasantry with former Vice President Atiku Abubakar at the Gusau Institute on ‘A New Era for China-Africa Cooperation’ at the Transcorp Hilton Hotel, Abuja on Wednesday.

ers State, Akwa Ibom State, Lagos State, Gombe State as well as Kano state among others. At a multi-stakeholders meeting in Uyo, the Akwa Ibom State capital attended by lawmakers from state as-

semblies, members of the Nigerian Bar Association, top government functionaries, Civil Society Organisations, the centre frowned at the development in which it described as counterproductive in the country’s

quest for economic growth. Otive Igbuzor, executive director of the centre, noted that the public cannot be well served when government officials such as former governors, deputy governors and government

appointees supplement their emoluments in their current positions with life pensions and emoluments drawn from their states’ meagre resources. Igbuzor said by doing this, they are giving priority to their personal interests over and above the greatest happiness of the majority adding that public office is a public trust. “There is no way the economy can make the desired progress in a situation where the political leadership is arguably more interested in salaries and overheads than in capital expenditure. Funds that naturally should be channelled into infrastructure are now used to service the personal interest of political leaders and appointees of government,’’ he said. While commending the Senate President, Bukola Saraki for writing a memo to the Kwara State government to stop his pension for the period he is in the service at the National Assembly, he called on others to emu-

late him and act in the best interest of the country. He also commended Shehu Sani, a senator representing Kaduna central who “made it possible for Nigerians to have an idea of the emoluments of members of the National Assembly.” In his remarks, Victor Muruako, acting chairman of the fiscal responsibility commission suggested that sums appropriated for a specific purpose should be used or expended solely for the purpose specified while contracts for the execution of annual budget should comply with the rules and guidelines on procurement and award of contract, due process and certification of contract He also suggested that borrowing should be on concessional terms with low interest rate and the proceeds thereof must be applied towards long term capital expenditure and human development The workshop was jointly organised by the Christian Aid with support from DFID.

Isiaka condemns Plateau massacre, assures Ogun residents of better partnership with security agencies

‘Miyetti Allah leadership should be questioned over Plateau killings’

boyega Nasir Isiaka, Ogun State governorship aspirant of African Democratic Congress (ADC), in the forthcoming 2019 general election has condemned the gruesome massacre in Plateau last Sunday, where over 100 people including children and women were killed. In a statement by his media assistant, Wale Junaid, the leading governorship aspirant urged the APCled Federal Government to

AKINREMI FEYISIPO, Ibadan

stop politicising the killings rather should find a lasting solution to the herdsmen attacks across north-central states by tracking down the perpetrators and bring them to book. The statement also slams the Miyetti Allah for claiming the killing is a payback for 300 stolen cattle. “It is the basic responsibility of the government to ensure the safety and co-living of all Nigerians irrespective of who they are or where they live without any fear or

favour but with the constants attacks on innocent people; it seems the APC-led Federal Government is failing in its responsibility,” he said. He, therefore, assured Ogun State residents of better collaboration with security agencies and adequately providing necessary crimefighting equipment for security agencies and also setting up community watchmen to secure lives and properties in the entire state if elected governor of the state from 2019.

Convention: Ondo APC accuses Boroffice of isolation YOMI AYELESO, Akure

he Ondo State chapter of the All Progressives Congress (APC) has refuted a statement credited to the senator representing Ondo North, Ajayi Boroffice, that he was denied accreditation tag by leaders of the state’s delegates during last Saturday’s national convention of the party in Abuja. The party described the claim as “disheartening.” A statement by Ondo APC’s Publicity Secretary, Alex Kalejaye, said the Chairman of Senate Committee

on Science and Technology opted to be with delegates from Jigawa State in their pavilion, instead of the people he represents in the Senate. Reports quoted the senator as saying: “I stayed away from the state (Ondo) to avoid likely embarrassment… “I could not even enter with any delegate’s tag because I don’t have one. I was allowed into this venue because I showed my identity card to them at the gate. I decided to sit here among Jigawa delegates to avoid likely embarrassment, if I go to the space provided for

Ondo State delegates.” But the statement wondered why Boroffice, who stayed away from the activities of the state, before and during the event, painted the party’s leadership in such a bad light. It noted that the delegates from Ondo State, including Governor Oluwarotimi Akeredolu, were screened by agents of the Convention Committee before issuing them tags. The statement said: “While the screening lasted, I recall that the name of Ajayi Boroffice was called repeatedly without anyone to claim the tag.

he National Association of Public Affairs Anal y s t s ( N A PA A ) has called on the Federal Government and security agencies to question and investigate activities of the leadership of Miyetti Allah cattle breeders association over the comments made after the attacks on some villages in Plateau State where over 100 people have been reportedly killed. The Chairman, North Central zone of the association, Danladi Ciroma had, while speaking with journalists informed that the killings were in retaliation of about 300 cows that were stolen by the villagers. The group in a statement signed by Seun Adelore (president) and Jare Ajayi, in Ibadan, the Oyo State capital, insisted that the leadership of Miyetti Allah should be questioned by security agencies saying that “It is clear that the organisation knows one or two things about the unwarranted and genocidal killings”.

NAPAA while referring to the reason allegedly given by the spokesman of Miyetti Allah that the Plateau incident was a reprisal for the killings by local farmers, insisted that the government owes it a duty to ensure that criminals are apprehended and tried while innocent people do not suffer in any way as we are not witnessing in the instances cited. The association urged elders of the country and international community and all those who have genuine interest in Nigeria to rise up to the challenges facing the country. According to NAPAA , the association is highly concerned about the incessant killings occurring on a daily basis in parts of the country in a manner that is not only unprecedented but bordering on genocide”. “Burning of villages and settlements, killings of tens and hundreds of people, devastation of economic activities especially farmlands and kidnappings for ransom are some of the challenges capable of lead-

ing to the disintegration of the country if nothing is done to urgently stop them. “What matters here is not the necessarily the number of people died. The important thing requiring the attention of everyone is that there is a killing at all. No life of any Nigeria should be lost extra-judicially unless it is through a natural cause.” It then declared that “the leadership of Miyetti Allah should be questioned by security agencies as it is clear that the organisation knows one or two things about the unwarranted and genocidal killings. It said that “we all know that cattle rearing are like any other business. Nigeria is operating a capitalist system – meaning that individuals engage in businesses that suit them. If government decides to assist a segment of the citizenry in setting up its business, there is need for wide consultation. It should not be a thing to be imposed on the people in order to avoid frictions and clashes”.

Wednesday 27 June 2018

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BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Trump chooses softer option on China investments White House decides against new regime to block Beijing’s acquisition of US technology SHAWN DONNAN

he Trump administration has decided against creating a new regime to review Chinese investment in the US and will instead use an updated version of the existing national security screening process to try to block Beijing’s efforts to acquire sensitive US technologies. In a call with reporters on Wednesday senior administration officials said that President Donald Trump has after months of internal deliberations decided to use the existing inter-agency Committee on Foreign Investment in the US as his main tool to review China’s investments. The president, they said, had decided that bipartisan legislation in Congress to update and broaden Cfius would give him a “strong and effective mechanism” to deal with Beijing’s attempts to buy up US technology companies. “This legislation . . . will enhance our ability to protect the United States from new and evolving threats posed by foreign investment while also sustaining the strong, open investment environment to which our country is committed and which benefits our economy and our people,” Mr Trump said in a statement. Mr Trump said once the bill became law he would direct officials to implement the new statute “promptly and enforce it rigorously, with a view toward addressing the concerns regarding state-directed investment in critical technologies” identified in his administration’s investigation into China’s intellectual property practices. He also said he had ordered officials to conduct a review of the US export controls system as called for in the legislation. The move is the latest in the Trump administration’s escalating trade war with China. The US is set to begin imposing tariffs on $34bn in imports from China on July 6 and Beijing has promised to retaliate in similar fashion. Mr Trump has also threatened to levy tariffs on up to $400bn more in goods from China. The decision to use Cfius is, however, a blow to China hawks in the administration who had publicly called for establishing a new regime to review Chinese investment. Administration

officials insisted on Wednesday that it would not represent any softening in their approach to China. “We believe that we will have a very tough approach,” one senior official said. Steven Mnuchin, the US Treasury secretary and an advocate for both the softer option and a negotiated solution to the current trade stand-off with China, said the decision to use Cfius was not meant to target Chinese investment alone. But he said the new legislation would allow the US to address concerns over Beijing’s use of joint ventures in China which force US companies to transfer important technologies to local partners. “One of the problems of Cfius before was we could block an acquisition but then a company could go form a joint venture and we couldn’t block that,” he told CNBC. “If someone sets up a joint venture on critical technologies that would have been blocked, they will also be prohibited from transferring that technology through a joint venture. That is new and that’s part of the legislation.” Hawks including White House trade adviser Peter Navarro and Robert Lighthizer, the US trade representative, had been pushing for the US to invoke a 1970s statute used to govern sanctions against rogue states such as Iran and North Korea and to declare a national economic emergency. They also had been pushing for the US to extend its scrutiny of investments beyond national security threats to “industrially significant” sectors. Such a move would have given the president potentially broader powers to police inbound investments. According to administration officials and people briefed on the internal discussions the hawks appeared to be winning the debate as recently as late last week with an executive order having been drafted that would have declared a national economic emergency. In a sign of the direction the debate was moving the White House in a May 29 statement declared that the US would “implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology” and announce them by June 30.

General Electric break-up will ‘rejuvenate’ group, says Flannery Chief executive wants smaller, leaner centre while giving more power to divisional heads ED CROOKS

ohn Flannery does not like it when the radical restructuring of General Electric he announced on Tuesday is described as “breaking up” the company. People saying that the company is “selling” or “shedding” businesses also miss the point, he argues. “Actually, it’s just the opposite: we are unleashing several GEs,” he

told the Financial Times. “We’re just putting them in a better place so they can grow and serve their customers.” Whatever words you use for it, there is no denying that Mr Flannery’s plan, including a spin-off of GE’s healthcare division and an “orderly separation” of its 62.5 per cent stake in oilfield services group Baker Hughes, is a radical step. Continues on page A4

US Supreme Court rules against public sector unions Justices say non-members who do not want to pay cannot be charged fees KADHIM SHUBBER

he Supreme Court dealt a major blow to public sector unions on Wednesday, ruling that they cannot charge fees to government employees who do not want to pay. The court split along ideological lines in a 5-4 ruling that found agency fees, which are charged to employees who are not union members but are represented in collective bargaining, violate the First Amendment. “Employees must choose to support the union before anything is taken from them,” wrote Justice Samuel Alito, delivering the majority opinion. President Donald Trump welcomed the court’s decision, calling it a “big loss for the coffers of the Democrats!”. The decision will further weaken unions in the US, which have been in a decades-long decline. Union leaders and Democrats

criticised the court ruling, which came after Mark Janus, a stateemployed child support specialist in Illinois, joined a lawsuit to strike down agency fees brought by the state’s Republican governor. “This case was intended as a political push to eliminate the power of people who work to support their families and the power of their unions,” said Harold Schaitberger, the general president of International Association of Fire Fighters, which represents over 85 per cent of firefighters and paramedics in the US. The Supreme Court overruled its earlier decision in 1977, when it found that public sector unions could require non-members to pay fees, which can be used to fund administrative costs but not political expenditures. Federal unions, as opposed to those operating at a state level, have long been prohibited from collecting agency fees under a 1978 law that requires them to operate as “open shops”,

representing all employees regardless of whether they pay dues. Mr Janus had disagreed with his union’s bargaining efforts, believing they were not in the best interests of Illinois given its financial position. He joined a lawsuit brought by Bruce Rauner, the governor of Illinois, to challenge the state’s agency fees law and later appealed the case to the Supreme Court. Justice Alito wrote in the majority’s 49-page opinion that the agency fees forced employees to subsidise the speech of the union, even if they did not agree with it. He said unions had received a “considerable windfall” since the court’s 1977 ruling. “Those unconstitutional exactions cannot be allowed to continue indefinitely,” he wrote. Mr Rauner, a Republican who unseated the previous Democratic Illinois governor, Pat Quinn, in 2014, said the Supreme Court had “restored government workers’ free speech rights”.

New York primary election shakes Democratic establishment Alexandria Ocasio-Cortez beats 10-term congressman in big political upset DEMETRI SEVASTOPULO

lexandria Ocasio-Cortez, a 28-year-old relative political novice, beat 10-term New York congressman Joe Crowley in a primary on Tuesday, in a huge upset that has sent shockwaves through the US Democratic party establishment. Ms Ocasio-Cortez, who worked for Bernie Sanders during the 2016 presidential race, pitched herself as a young Latina woman who would bring generational change by ousting the 56-year-old Irish-American congressman, who was seen as a possible future party leader. “Women like me weren’t born to run for office,” she proclaimed in a well-received campaign video that went viral in New York and helped her compensate for a big deficit in campaign donations compared with her rival, who serves as the number four Democrat in the House of Representatives.

President Donald Trump welcomed the result. “Wow! Big Trump Hater Congressman Joe Crowley, who many expected was going to take Nancy Pelosi’s place, just LOST his primary . . . That is a big one that nobody saw happening. Perhaps he should have been nicer, and more respectful, to his President!” The result was one of the most stunning defeats for an incumbent since Eric Cantor, the Republican House majority leader, was beaten by Tea party candidate Dave Brat in 2014. In the recent Democratic primary in the same Virginia district, Abigail Spanberger, a former CIA operative, joined the ranks of Democratic women running for Congress when she defeated Dan Ward, a former Marine fighter pilot. Larry Sabato, a University of Virginia politics professor, said the result was a “shocker” that showed the growing push in the Democratic party to mount a more aggressive

challenge towards Mr Trump. “Rebellion has spread to both parties,” he said. “In the GOP, the establishment hasn’t just been defeated, it’s dead. They’ll never come back. In the Democratic party, there is a burning desire in the activist corps to shake things up and go after Trump and his GOP enablers as aggressively as possible. The go-along-to-get-along entrenched officeholders like Crowley are seen as disposable.” Brendan Boyle, a two-term Democratic congressman from Philadelphia, downplayed the idea that the party establishment was under assault, saying the result was more a reflection of the enthusiasm for female candidates ahead of the November midterm elections. “He represented the district well, voted with it, and was in leadership,” Mr Boyle said of Mr Crowley. “But it’s hard to exaggerate how much of a pro-woman bump there is in Democratic primaries this year.”

BUSINESS DAY

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NATIONAL

Goldman Sachs tops $100m in fees from Fox-Disney deal Investment bank makes money from both advice and financing for Murdoch business JAMES FONTANELLA-KHAN Goldman Sachs stands to make about $105m for advising 21st Century Fox in its $71bn asset sale to Walt Disney and for helping Rupert Murdoch finance his new broadcasting group, in one of the most lucrative deals ever for the investment bank.

A regulatory filing by the two media companies shows that Goldman received $58m for advising 21st Century Fox since August last year, when Mr Murdoch and Bob Iger, Disney’s chief executive, first met in Los Angeles to consider a transaction. The fee collected by Goldman

is lower than the $120m brought in by Morgan Stanley for advising Monsanto in its $66bn sale to Germany’s Bayer, which was the highest advisory fee paid to an investment bank, according to Thomson Reuters. Goldman will receive about $47m for providing a bridge loan and permanent financing to the new

entity that will house the remainder of the Murdoch family broadcasting empire, including the Fox broadcast network and Fox News. The big payout for Goldman reflects the close relationship that John Waldron, its co-head of investment banking, has established over the years with Mr Murdoch.

Mr Waldron was the closest adviser to the media tycoon during the demerger of 21st Century Fox and News Corp, its newspaper and publishing focused business, and the Murdochs’ failed attempt to buy Time Warner. Although 21st Century Fox has agreed to sell its marquee assets to Disney, the deal could still be gatecrashed by Comcast, the US cable company led by Brian Roberts, which also bid for the assets put up for sale by Mr Murdoch.

South Sudan warring rivals agree ceasefire in bid to end civil war

General Electric break-up will ‘rejuvenate’ group... Continued from page A3 Including the transport equipment division, which is being merged with Wabtec, the businesses being separated accounted for 33 per cent of GE’s revenues and 30 per cent of its industrial segment profits last year. This radicalism has some clear disadvantages, as Mr Flannery acknowledged. Without the healthcare revenues, the earnings of the remaining GE will be less diversified and more volatile. Once the spin-off of healthcare is completed, and the two companies’ dividends are re-set to be in line with industry peers, the total payout is likely to be smaller. It would be the third time GE has cut its dividend within about a decade, following reductions in 2009 and 2017. Mr Flannery argues, however, that those drawbacks will be outweighed by the benefits to all the companies involved, in terms of increased transparency, flexibility and management accountability. Instead of a break-up, he says, the separations represent a “rejuvenation” of the businesses that GE owns. Because shareholders will be given 80 per cent of the equity in the new independent healthcare company tax-free, Mr Flannery adds, they will easily be able to share in the benefits for these reinvigorated operations. The strategy reflects a sharply different assessment of GE’s strengths and weaknesses compared with his predecessors. Under Jack Welch and Jeff Immelt, the GE corporate centre played a critical role. For Mr Welch it was the base for his implementation of his management techniques, including the “six sigma” process improvement programme that he introduced in 1995. Under Mr Immelt, the personal aura of the chief executive faded somewhat, but he was a strong advocate of the value of GE’s centre in providing services such as software and research, known as “the GE store”. The company used to explain how, for example, medical imaging technology from the healthcare division could be adapted for inspecting oil and gas pipelines as evidence that there were synergies between ostensibly unrelated divisions. Mr Flannery, however, has cast all that aside. For a long time, he said, he has had an “affinity for a more distributed organisation”, with more autonomy for the divisions and businesses that “face into the market”. He wants a smaller, leaner corporate centre that will focus on “strategy, capital allocation, talent and governance”, devolving some functions to the divisions, and wants to give divisional heads more autonomy and accountability. The logical conclusion of that is to devolve the businesses completely, as is happening for healthcare and Baker Hughes.

Wednesday 27 June 2018

Breakthrough comes amid warnings it will be hard to build lasting peace JOHN AGLIONBY

US defence secretary Jim Mattis will deliver a ‘medium tough’ message to China about its military expansionism during his visit to Beijing © AP

Mattis takes aim at China military expansionism US defence secretary to deliver ‘medium tough’ message to Beijing as trade tensions flare KATRINA MANSON

im Mattis will deliver a “mediumtough” message to China this week about its military expansionism during the defence secretary’s first visit to the country, even as the Trump administration seeks Beijing’s help to denuclearise North Korea and tensions flare over trade. Mr Mattis will prioritise future talks with North Korea despite his concerns over China’s militarisation in the South China Sea, according to a senior Pentagon official with knowledge of the three-day visit that is the first by a US defence secretary since 2014. The Trump administration has identified China as a “ strategic competitor” and defence officials are preoccupied by Beijing’s rapid expansion of military capabilities. Earlier this month, Mr Mattis accused the country of “ intimidation and coercion” by placing weapons, including bombers on a string of disputed islands in the South China Sea. Serving and former Pentagon

officials say the US has yet to find a way to cajole China into dismantling or even halting its militarisation of the islands, with few believing a reversal is possible. China, which promised then-president Barack Obama that it would not militarise the islands, claims sovereignty over them and argues the weapons amount to reasonable national defence. Chuck Hagel, the last US defence secretary to visit China, said Mr Mattis would be unlikely to secure any U-turn. He recalled the Chinese had never given him “a very effective or satisfactory answer” about their intentions, despite him delivering what he said a clear message to President Xi Jinping about US objections. “It appears to me that they have got pretty much what they wanted,” he said, adding that the Chinese were “relentless” in their pursuit of long-term strategic objectives. “These islands are like stationary aircraft carriers that allow China to project power 1,000 miles south of the mainland,” said Richard Fon-

taine, president of the Center for a New America. Euan Graham, director of international security at the Lowy Institute in Australia, said Mr Mattis would struggle to find any leverage given America’s reliance on China to maintain sanctions against North Korea and Mr Trump’s trade onslaught against Beijing. “Tactically Mattis is disadvantaged,” he said. “The Trump administration is still leeching credibility as a serious player in Asia.” Pyongyang depends on China for much of its economic lifeline and North Korean leader Kim Jong Un has visited Beijing three times in recent months, in a bid to foster closer relations for the first time under his leadership. Mr Hagel said China was “scripting the playbook” for Mr Kim, adding: “The Chinese objective has always been to get the US and our assets off the Korean peninsula.” But he argued it was still good for Mr Mattis to “work at” the relationship and establish lines of communication.

Trump Organisation’s real estate partner in India accused of fraud Property developer denied initial allegations levelled by hedge funds KIRAN STACEY AND LINDSAY FORTADO

ne of Donald Trump’s business partners in India is at loggerheads with its investors, who accuse the company’s managing director of defrauding them of $1.5bn. Two high-profile hedge funds have accused Lalit Goyal, the managing director of Ireo, one of India’s biggest property developers, of the theft of hundreds of millions of dollars’ worth of land and other assets. Mr Goyal could not be reached for comment. He has previously denied any wrongdoing. Ireo declined to comment. Axon Capital and The Children’s Investment Fund, which is

run by Sir Christopher Hohn, met with other investors in New York this week to outline their allegations and discuss how to stop what Axon founding partner Dinakar Singh said was a “brazen fraud”. Axon and The Children’s Investment Fund Foundation, the charity managed by TCI whose funds were invested in Ireo, have filed a criminal complaint against Mr Goyal and some of his associates in New Delhi, and started arbitration proceedings against the company in Mauritius. Police in India did not respond to a request for comment. Ireo is well known in India not only for its size but also because it was chosen by the Trump Organisation to build a Trump tower in

Gurgaon, near New Delhi. At the time the plan was announced, Donald Trump Jr, the son of the US president, called the company “truly a fantastic group”. In an interview, Mr Singh said Mr Goyal’s alleged actions were “outrageous”. He added that the value of some of the land has more than doubled and could be retrieved for investors. “Some of the money that has gone may be hard to track down, but as raw land, it’s probably worth two, three times [what was paid for it],” Mr Singh said. “The effort is to get it back, and the message to India and Mauritius is, if you want to have foreign investment in and through your countries, this kind of thing simply cannot happen.”

outh Sudan’s warring factions have agreed to a ceasefire and to work towards ending a four-year civil war that has killed tens of thousands in the world’s youngest country. Analysts welcomed the breakthrough, which followed the first meeting in almost two years between President Salva Kiir and his main rival, former vice-president Riek Machar. But they warned the level of distrust between the leaders was so great that it would be hard to build a lasting peace. Mr Kiir, Mr Machar and other opposition political parties agreed to stop fighting in 72 hours, open humanitarian corridors and release prisoners of war and political detainees. African governments have been invited to “deploy the necessary forces to supervise the agreed permanent ceasefire”. In the agreement brokered by Omar al-Bashir, the president of Sudan, the leaders agreed to engage in a “pretransitional period” of 120 days and then share power in a unity government for three years after which elections will be held. The government is to be led by Mr Kiir and include three vice-presidents, the most senior of which is to come from Mr Machar’s faction. Mr Machar said the agreement “is the start of a new phase in the lives of our people”, while Mr Kiir promised: “I will not let you down, the people of South Sudan.” However, the two main factions have made similar promises before and the several ceasefire agreements signed in the last few years have rarely lasted long. Lauren Blanchard, an east Africa analyst at the US Congressional Research Service, said it was “unclear how far the party leaders are willing to compromise on the critical political and security arrangements that need to be made for a final peace deal”. “The parties have repeatedly violated previous ceasefire deals, and there is considerable scepticism that this new commitment will be different,” she said. South Sudan won its independence from Sudan in 2011 after a decades-long armed struggle. But deep-rooted animosities between Mr Kiir and Mr Machar resulted in a peace that lasted little more than two years and fighting broke out in December 2013 again. A rapprochement was reached in April 2016 but that lasted only three months and Mr Machar fled the country in August 2016. In addition to the tens of thousands of deaths, the fighting has forced 4.4m people, almost a third of the country’s population, to flee their homes, according to UN data. Some 2.45m of these are seeking refuge in neighbouring countries. The agreement signed on Wednesday, after two days of talks in Khartoum, allows for Sudan to help rehabilitate South Sudan’s oilfields. Oil production in South Sudan has fallen from 350,000 barrels per day in 2012, to around 145,000 barrels now.

Wednesday 27 June 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Fortis sues Singh brothers’ companies over $60m loans Indian healthcare group says payments were ‘not specifically authorised’ by its board KIRAN STACEY

ne of India’s biggest healthcare groups is suing three smaller companies owned by its founders to recover tens of millions of dollars it says were paid out without proper authorisation. For tis Healthcare has an nounced it is taking legal action over $60m worth of loans made to the three companies while Shivinder and Malvinder Singh were in control. The company is being investigated by Indian authorities over the loans, but the group said on Wednesday that an internal report had prompted it to pursue the smaller companies directly. In a statement to the stock exchange, Fortis said the report had revealed the payments were “not specifically authorised” by its board, and that there was evidence they had been used to repay loans made by companies connected with the Singhs. The Singhs later bought the companies themselves, after which they did not pay back the loans. Fortis added that it was also seeking to reclaim payments from Malvinder Singh, which he received after being appointed head of strategic initiatives — an appointment the company now says was invalid. The group said it had “initiated legal action for recovery” of the outstanding money, as well as submitting the internal report to the stock exchange regulator and to the Serious Fraud Investigation Office in New Delhi. Malvinder Singh said there had been “no mismanagement or misuse of funds and position” adding: “Treasury operations has been a

profitable part of the Fortis business for the past many years. All decisions on ICDs [inter-corporate deposits], which were part of the treasury operations, were collectively taken by the respective decision-making bodies at Fortis after deliberations. “Presently there is a vindictive approach from parties with vested interest towards the former Fortis promoters [founders] in these challenging times.” The Singh brothers have in the past denied the allegations, calling them “baseless”, and adding that the loans were made “during the course of normal treasury operations” — something the company now disputes. The Singh brothers left Fortis earlier this year after being slapped with a Rs35bn ($500m) fine relating to the ill-fated $4.7bn sale of their previous company Ranbaxy to Japan’s Daiichi Sankyo. That deal became controversial when, within months of the takeover, Ranbaxy was hit by US sanctions for violating quality standards. At the time of the Singhs’ departure, Fortis said it had been placed under investigation by Indian authorities over allegations the brothers had siphoned off roughly Rs5bn. Despite denying the allegations, the brothers stepped down from the Fortis board, before forfeiting almost all their shares, which they had pledged to their banks as collateral for loans. That prompted a bidding war for the company, as international investors and healthcare companies sought to take advantage of the problems at Fortis and gain a foothold in India’s fast-growing private healthcare market.

Stocks to watch: Just Eat, Whitbread, IWG, Sainsbury’s ITV’s board changes suggest a transformational strategy, says Citi BRYCE ELDER

ust Eat dropped in mid-afternoon trading on word that management had given an unexpectedly cautious outlook at a capital markets day. The takeaway ordering specialist reiterated 2018 guidance given in March but flagged up that profit may be held back by investment costs remaining elevated next year. JPMorgan Cazenove said: “Key negatives in our view were 1. investment levels to be high beyond 2018, with management not giving specific guidance but commenting that 2018 will not be the bottom for investments; and 2. flat margins in the marketplace business, which we expect will cause some consensus downgrades short term.” Whitbread rallied after the Costa Coffee and Premier Inn owner left full-year guidance unchanged, in spite of a slow start to its fiscal year. Falling occupancy rates in Lon-

don meant Premier Inn’s first-quarter revenue per available room, the lodging industry’s key metric, fell 1.6 per cent compared with a 1.1 per cent decline in the fourth quarter. Costa also worsened, with warm weather and weak high-street footfall meaning like-for-like sales were down 2.9 per cent following a fourth-quarter decline of 1.8 per cent. However, management flagged up “good progress” on the planned Costa demerger, repeated cost-saving targets, and said forward bookings from Premier Inn business customers had been improving. “The share price is more sensitive to any emerging third-party interest in Whitbread’s assets, as an alternative to the proposed demerger of Premier Inn and Costa,” said Panmure Gordon. “Equity upside requires potential suitors to look through weak trading and pay up for international potential in Costa (China) and Premier Inn (Germany).”

Invesco resolves ugly spat with investment trust Truce sees restoration of a deal to cut fees and departure of two trust board members JENNIFER THOMPSON AND KATE BEIOLEY

n acrimonious battle between Invesco Perpetual and one of its investment trusts has reached a speedy and unexpected resolution, resulting in the restoration of a deal to lower fees but also the departure of two of the trust’s board members. The £153m Jersey-registered trust, Invesco Perpetual Enhanced Income, said on Wednesday it had decided to reappoint Invesco Perpetual as its manager on a “revised management fee basis,” the terms being the same as those agreed temporarily earlier this year. “This is a good result for the client. To lose those managers wouldn’t have been positive because they’re both very good managers,” said Mark Dampier, head of research at Hargreaves Lansdown. “But Invesco has managed to heap a lot of poor publicity on themselves as a result of their initial reaction.” The trust’s board had been unhappy over the fees charged by Invesco and in particular about the

performance fee, an increasingly rare feature on such funds. The performance fee element has now been dropped while the management fee will be 80 basis points (0.8 percentage points) on the first £80m in assets, 70 bps on the next £70m and 60 bps thereafter. The arrangement will be backdated to the beginning of the year. The notice period either party can give to the other has also been reduced from 12 to three months. Disagreement over fees had been the catalyst for a row between the trust and Invesco. Although the £108bn UK asset manager had agreed to a new fee structure for the fund, which specialises in corporate and sovereign fixed income, the situation soured and Invesco took the rare step in April of deciding to step down as manager. The trust began looking for a replacement but relations between the two worsened the following month when Invesco, as a shareholder in the trust, called for an extraordinary general meeting to vote on the removal of two board directors, Donald Adamson, chairman of the five-member board,

and Richard Williams, chairman of the management engagement committee. The saga continued when two of the trust’s three managers, Paul Read and Paul Causer, defended their record in an open letter to shareholders and said the decision to resign was not about fees but due to “the breakdown of our relationship . . . with the board and our concerns about board governance”. On the same day, the trust disclosed that the Financial Conduct Authority had requested information over the ruptured relationship. The trust said on Wednesday that Mr Adamson will stand down with immediate effect. Mr Williams has also decided to stand down. Peter Yates, chairman of the audit committee, will lead the board until a replacement chair can be found. Mr Causer and Mr Read said they were pleased an agreement “that is in the best interest of all shareholders” had been reached. “Managing the IPE portfolio has always been important to us and we are proud of the trust’s long term track record,” they said.

Easing of trade worries lift US and European stocks Energy stocks set pace as oil prices jump; no respite for China equities DAVE SHELLOCK

n easing of the Trump administration’s stance on Chinese investments restored some much-needed confidence to US and European equity markets, with energy stocks setting the pace as oil prices jumped. Officials said President Trump would expand the authority of the existing national security screening process to try to block China’s efforts to acquire sensitive US technologies, rather than creating a new regime to review Beijing’s investments in the country. “The markets are viewing this as a relatively positive development on trade as it seems to be a less heavyhanded way to deal with specific trade protection needs,” said Action Economics. “[Treasury secretary Steven] Mnuchin stressed it should have no significant impact on the economy.” The news came too late to help

Chinese markets, however, as the Shanghai Composite index slid further into bear market territory. The renminbi hit a fresh sixmonth low against the dollar as it weakened for a fifth day — the longest losing streak since 2017, noted the FX strategy team at Morgan Stanley. “The rapid sell-off is causing concern that policymakers are less willing to temper the currency’s weakness as China’s economy slows and trade tensions with the US heighten.” Energy stocks were the standout performers on both sides of the Atlantic as Brent oil briefly topped $78 a barrel after news that US crude inventories had fallen sharply last week, The data came hard on the heels of reports that the US was pushing for all countries to halt Iranian oil imports by November 4 or face sanctions. The rise in oil prices came in spite of the dollar index nearing its

highest point of 2018. Sterling was among the day’s biggest fallers against the dollar — coming close to its 2018 intraday low — as the markets continued to react to comments from Jonathan Haskel, who will replace the hawkish Ian McCafferty in the UK Monetary Policy Committee at the end of August. “Mr Haskel fears that there may be more slack in the labour market than thought, and more slack in the labour market would weaken the case for rate rises,” said Antje Praefcke, analyst at Commerzbank. Equities By midday in New York, the S&P 500 was up 0.3 per cent at 2,730, having earlier risen as much as 0.8 per cent, while the Dow Jones Industrial Average was 0.5 per cent higher. Tech stocks underperformed after rising sharply on Tuesday, with the Nasdaq Composite less than 0.1 per cent higher.

A6 BUSINESS DAY Harvard Business Review

Thursday 28 June 2018

Global Business Perspectives CONNEC TING

THE

WORLD

ONE

BUSINESS

TIME

In search of the Real Indo-Pacific AMINA EL ABED

INGAPORE — The 2018 Shangri-La Dialogue in Singapore might as well have been renamed the “Indo-Pacific Dialogue.” In the plenaries and the panels, in the Q-and-As, corridors and coffee breaks, not even the Trump-Kim summit hosted by Singapore could compete with the Indo-Pacific among the attendees. Although the toponym itself is old, its sudden popularity is new, reflecting new geopolitical aspirations for the region. What explains the latest revival of the Indo-Pacific in the international relations of Asia? The dialogue, a summit on Asian security, stimulated thought and discourse about just what IndoPacific means, who it serves and how effective it’s been. It is easy to load the IndoPacific with geopolitical intent. Having accepted the invitation to keynote the dialogue on June 1, Narendra Modi became the first Indian prime minister to speak at Shangri-La since the event’s inception in 2002. Many at the gathering read the prefix Indo- as a geopolitical invitation for India to partner more explicitly with states in an Asia-Pacific region from which it had been relatively absent, and thereby to counterbalance China within an even larger frame. Perhaps aiming to mend relations with China after the Wuhan summit, Modi reintroduced the term. “The IndoPacific,” he said, “is a natural region. ... India does not see [it] as a strategy or as a club of limited members. Nor as a grouping that seeks to dominate. And by no means do we consider it as directed against any country. A geographical

President Donald Trump and Defense Secretary Jim Mattis during a working lunch with heads of Baltic nations in the Cabinet Room of the White House in Washington, April 3, 2018. Pentagon officials have expressed concern about being seen as picking a fight with an ally at a time when the military has plenty of adversaries to contend with. (CREDIT: Doug Mills/The New York Times)

definition, as such, cannot be.” Modi flattened the idea of the Indo-Pacific while widening it to include not only all of the countries located inside “this geography” but “also others beyond who have a stake in it.” Modi thus drained the toponym of controversially distinctive meaning. India’s rival China could hardly object to being included in a vast “natural” zone innocent of economic or political purpose or design. Not so, countered U.S. Secretary of Defense Jim Mattis. Unlike Modi, he explicitly linked ideology to geography by repeatedly invoking a “free and open Indo-Pacific.” Nor did these qualifiers apply only to external relations — a state’s freedom from foreign interference and its freedoms of navigation and overflight under international law. For Mattis, “free and open” implied internal democracy, a state’s accountability to an uncensored society, as well. In Singapore during his Q-and-A period, Mattis acknowledged the “free

and open press” that had thronged to cover the dialogue. In corridor conversations, understandings of the IndoPacific ranged widely, from an inoffensively natural region on the one hand, to a pointedly ideological one on the other. The rise of the Indo-Pacific in American policy discourse amounts to a rejection, a resumption and a desire. Because President Donald Trump cannot abide whatever his predecessor did or said, President Barack Obama’s “rebalance” to the Asia-Pacific could not survive. The IndoPacific conveniently shrinks Obama’s Asia to a hyphen while inflating the stage on which a celebrity president can play. Yet Mattis also, without saying so, reaffirmed the result of Obama’s “pivot” to Asia by assuring his audience that “America is in the Indo-Pacific to stay. This is our priority theater.” The prefix Indo- embodies the hope that India as a major power can help rebalance America’s friends against what Mattis called China’s “intimi-

dation and coercion,” notably in the South China Sea. In Honolulu, en route to the dialogue, Mattis had added the prefix to the U.S. Pacific Command, which is now the IndoPacific Command. But the renamed INDOPACOM’s area of responsibility was not extended west of India to Africa. As for Modi, while recommitting his country to “a democratic and rules-based international order,” both he and Mattis ignored the “Quad” — the off and on again effort to convene the United States, India, Japan and Australia as prospective guardians and agents of the Indo-Pacific idea. The first effort to create the Quad died at the hands of Beijing and Canberra. Quietly in May 2007, on the sidelines of an ASEAN meeting in Manila, Philippines, the four governments met at a subcabinet level, followed that September by an expanded Malabar naval exercise in the Indian Ocean among the four along with Singapore. Early in 2008, however, then-Prime Minister

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Kevin Rudd, bowing to pressure from Beijing, withdrew Australia from the Quad and it collapsed. It took the subsequent upbuilding and arming of land features in the South China Sea by China to re-embolden the quartet. Beijing’s maritime militancy, Trump’s disdain for Obama-style “strategic patience,” the worsening of Japan’s relations with China, and alarm in Australia over signs of Beijing’s “sharp power” operations there all came together to motivate a low-key, low-level meeting of a new Quad on the margins of another ASEAN gathering in Manila in November 2017. The question now is whether the quartet will reconvene in Singapore during the upcoming November ASEAN summitry and if it does, whether the level of representation will be nudged toward cabinet status. Trump’s addiction to bilateralism may be tested in this four-way context. Or his oneon-one real estate developer’s proclivity could cripple the Quad from the start. More grandiose is the idea that the Indo-Pacific could become a rubric for building infrastructure on a scale rivaling China’s “Belt and Road” initiative. That surely is, so to speak, a bridge too far. In short, the temptation to read multilateral diplomatic content into a map of the IndoPacific drawn in Washington should be resisted. Having objected to any reference to “the rules-based international order” in the June G-7 communiqué that he refused to sign, Trump is unlikely to fit the Indo-Pacific into any such frame. Nor is it likely that he would wish to augment a resuscitated Quad by adding China.

BUSINESS DAY

Thursday 28 June 2018

CityFile

NSCDC arrests 12 kidnappers, recovers guns in Sokoto

he Nigerian Security and Civil Defence Corps (NSCDC), Sokoto State command, has arrested 12 suspected kidnappers operating in four local government areas of the state. The state commandant of the agency, Babangida Dutsinma, said the arrested gang members forwarded a letter to six wealthy families in Gidan Walo village in Tureta local government area, demanding N12 million or risk the kidnap of the head of their families if they failed to remit the money. He said the frightened families came up with N2 million and gave it to the kidnappers’ contact person before the officials got the information. According to the Dutsinma, the NSCDC acting on the information, in collaboration with local vigilantes, arrested the suspects through intelligent surveillance. The commandant explained that all the suspects had confessed to the crime along with others perpetrated at various communities in Isa, Sabon-birni, Tureta and Raba local government areas and neighbouring towns in Zamfara. He added that seven locally made guns, various other weapons and charms had been recovered from the gang, as investigation continues.

Govt decries HIV/AIDS prevalence rate of 4.1% in Edo IDRIS UMAR MOMOH, Benin

do State government has expressed worry over the HIV/AIDS prevalence rate of 4.1 percent against the 3.4 percent national rate. Florence Oyakhilome-Edemode, the executive director of Edo State Agency for the Control of AIDS (SACA), stated this in an interview with newsmen in Benin. “As at 2012, when we came on board the prevalence rate of HIV/AIDS in Edo State was 5.3 percent but with the implementation of intervention programmes put in place by the state government such as empowerment of about 20 organisations with grants, by 2014 survey, the rate has dropped significantly to 4.1 percent of the state’s population. “That is still worrisome because it is still higher than the national prevalence rate of over 3 percent. That is why we are worry, but all hands are on deck to ensure that we get to zero percent”, she said. BusinessDay recalls that the minister of health, Isaac Adewole had on August, 2017 disclosed that a total of 173,600 persons were living with HIV/AIDs virus in Edo State. The minister, who referred to the 2016 statistics during a visit to the state governor, Godwin Obaseki in Government House also disclosed that 25,730 persons living with the virus were on anti-retroviral treatment. Edemode, said plans have been concluded by the agency to embark on aggressive sensitisation enlightenment in rural communities across the three senatorial districts in the state on safe sexual relationship especially the youths and using unsafe sharp objects. She added that with the constitution of the board for the agency by the state governor, the right structure and enabling environment put in place the state is moving towards attaining zero percent.

Remains of an articulated vehicle carrying food stuff which was burnt by the attackers during the recent killings in Riyom, Barkin Ladi and Jos South Local Government Areas of Plateau. NAN

Ogun partners NDLEA on ban of narcotics, alcohol on road sides, motor parks RAZAQ AYINLA, Abeokuta

s part of strategies to check the menace of narcotic drugs and alcoholic consumption in Ogun, the state government in partnership with National Drug Law Enforcement Agency (NDLEA) has banned the sale of such commodities in motor parks and public places across the state. The state government explained that the action became necessary after it was discovered that narcotics and alcohol consumption had reached an alarming level in Ogun. Babatunde Ipaye, the state commissioner for health, who addressed newsmen

Customs arrest 8, seizes N51m contrabands in Oyo, Osun AKINREMI FEYISIPO, Ibadan

igeria Customs Service (NCS) has arrested eight persons in connection with smuggling activities in both Oyo and Osun states in the last three months. The area comptroller in charge of the Oyo/Osun command, Christopher Odibu, said the suspects were arrested along with seized goods. Addressing journalists in Ibadan on the activities of the command, the NCS boss stated that some of the suspects have been released on bail but that prosecutions were ongoing in court. Odibu disclosed that the command seized contrabands with duty paid value of N50. 63 million, while investigation was still on-going with regard to some suspects arrested. The seizures command comprised of fairly used cars, trucks and busses used to convey rice, vegetable oil and other contraband goods using yams and firewood as camouflage. The items seized were 13 used cars with duty paid valued at N21. 1 million; 1,669 (50kg) bags of parboiled rice valued at N14. 7 million.

at an event organised by Ogun State Drug Control Committee (OGSDCC) to mark the 2018 United Nations Anti-Drug Day, added that government was already working on a law that will give the ban a legal effect. The anti-drug day is observed globally on June 26 of every year. Ipaye, was represented by Olufemi Fafiolu, director, pharmaceutical services and chairman, OGSDCC, disclosed that the impending was aimed at putting a total stop to the sale of alcohol and narcotics in motor parks and roadsides as currently being experienced in cities and towns within Ogun State. The law, he added, would be followed by strict enforced against erring

peddlers of such dangerous drugs. “We have been looking at what to do especially in our parks and garages and that was why we met with the National Union of Road Transport Workers (NURTW). We’re still going to meet with them on the need to clear all garages of hawkers selling ‘paraga’. The law prohibiting the sale of alcohol in any of our garages will soon be enacted.” Also speaking, Bala Faggae, Ogun State commander of NDLEA, appreciated the state government for the courage and pledged the agency’s resolve to collaborate with the state government to rid Ogun of the menace of illicit drugs.

Waste disposal: Edo intensifies campaign in markets

do State Waste Management Board is intensifying the campaign against indiscriminate disposal of waste in the state with mega rallies across major markets and roads within Benin, the state capital. The rallies, according to the waste management board, are meant to raise awareness among residents on the need to desist from indiscriminate dumping into water channels and drainages as well as to mobilise support for the ‘Keep Edo Clean Project’ of the Governor Godwin Obaseki-led administration. The general manager of the board, Charles Imariagbe, who addressed traders at the Oba Market in Benin, appealed to them to shun the habit of disposing waste around the market. He explained that the sensitisation rallies became necessary in order to promote a new culture among residents. He said the Obaseki administration was in a hurry to transform Edo into one of the cleanest states in the country, and urged the traders to key into the initiative. “Edo State Waste Management Board is carrying out these rallies in collaboration with local government officials and members of the civil society as well as International Federation of Women

Lawyers. “We want people to report defaulters to the board so that legal actions will be taken against them to serve as deterrent to would-be offenders,” Imariagbe said. He disclosed that a sanitation task force has been created to prosecute offenders, urging the traders and road users to be law abiding. The sensitisation team went through King Square, Oba Market, Uselu-Lagos Road, Edaiken Market, New Benin Market and Aduwawa Market in the state capital. The GM also called on members of the public to report waste managers who fail in their duties to the board. Deputy coordinator general of Edo Civil Society Organisation, Annie Umoru, commended the initiative and urged all stakeholders to support the ‘Edo Clean Project.’ “We are adding our voice to that of the Edo State Waste Management Board to discourage indiscriminate waste disposal in markets, roads, walk ways and motor parks,” he said. Traders at the various markets visited, appealed to the waste management board to ensure speedy evacuation of waste generated in the markets and apprehend people who dump refuse in markets.

BUSINESS DAY

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Live @ The Stock Exchange Nervous investors still afraid to accumulate stocks Stories by Iheanyi Nwachukwu

any investors at the Lagos Bourse are still afraid to buy more stocks, even as Nigeria’s mucky political climate causes equities prices to downtrend. While market watchers expected the Nigerian Stock Exchange (NSE) to sustain early week’s (Monday) gain, it rather extended loss line on Wednesday as evident in the position of the Bourse’s benchmark index. Amid this scenario, analysts still expect investors to take advantage of existing attractive entry prices in fundamentally sound stocks despite that most stocks in their watch-list for the month of June have fallen off price targets. As increased sell-off on Customs Street pushed equities value down on Wednesday, the market’s year-to-date (ytd) returns furthered negative and

closed at -0.73percent. Many asset managers are repositioning their portfolios ahead of the expected second-quarter (Q2)/first half (H1) 2018 results from listed companies. At the close of trading on Wednesday June 27, 2018 only 12 equities gained as against 35 losers. The NSE All Share Index (ASI) depreciated by -0.06percent to close at 37,963.93 points as against 37,988.54 points recorded the preceding trading day. The value of listed equities which stood at N13.752trillion represented a loss of N9billion from preceding trading day’s level of N13.761trillion. Okomu Oil Palm Plc recorded the highest loss on Wednesday as its share depleted by N1.7 or 1.80percent, from N94.2 to N92.5. Cement Company of Northern Nigeria Plc followed after a record N1.2 or 4.86percent decline, from N24.7 to N23.5. Seplat Petroleum Development Company Plc lost N1 or 0.15percent,

from N651 to N650; Mobil Oil Nigeria Plc joined the top losers league after a record N1 or 0.55percent dip, from N182 to N181; while Zenith Bank Plc declined by 50kobo or 1.96percent, from N25.5 to N25. In 3,800 deals, stock traders exchanged 372,239,859 units valued at N3.179billion against 539,665,335 units exchanged valued at N4.711billion exchanged Tuesday in 4,202 deals. Sterling Bank Plc, Zenith Bank Plc, Transcorp Plc, United Capital and UBA Plc were actively traded stocks. Total Nigeria Plc recorded biggest gain of N7.2 or 3.72percent, from N193.3 to N200.5. Stanbic IBTC Holdings Plc followed with N1 or 2.04percent gain, from N49 to N50. Lafarge Africa Plc advanced from N39.05 to N40, up by 95kobo or 2.43percent; Union Bank of Nigeria Plc rose from N5.9 to N6.15, up by 25kobo or 4.24percent; while Africa Prudential Plc gained 15kobo or 3.90percent, from N3.85 to N4.

S&P affirms Access Bank ratings, says outlook stable

&P Global Ratings affirmed its long and shortterm issuer credit ratings on Access Bank Plc at ‘B/B’, saying the bank’s outlook is stable. At the same time, S&P Global Ratings affirmed its Nigeria national scale ratings on Access Bank at ‘ngBBB/ngA-2’. The affirmation of its ratings on Access Bank reflects the rating agency’s view that the bank will continue to report good asset quality and profitability indicators as the Nigerian economy slowly recovers. S&P said its ratings on Access Bank are supported by the bank’s good competitive position as one of the topfive banks in Nigeria by market share in total assets, backed by its wellestablished corporate franchise, growing retail franchise, and robust risk management framework and risk culture compared with Nigerian peers. The stable outlook on Access Bank reflects S&P Global Ratings expectation that its financial and risk profile will remain broadly unchanged over the next 12 months.

“We also expect our risk-adjusted capital (RAC) ratio before adjustment for diversification to decline, ranging 4.4percent-4.8percent over the next 12-18 months, following the initial implementation and application of International Financial Reporting Standards (IFRS 9), which had affected retained earnings by N78.3 billion at as of March31, 2018”, S&P Global Ratings stated. “However, when adjusted for regulatory risk reserves, the net impact on retained earnings is N49.5 billion at the same date. On December 31, 2017, the group’s RAC ratio before adjustment for diversification was unchanged at 5percent

(5.1percent at year-end 2016)”, the rating agency stated. “Our view of capital and earnings remains neutral to the ratings. In addition, we expect Access Bank’s capital adequacy ratio to remain above the minimum regulatory requirement of 15percent, supported by good earnings generation and measured asset growth. According to S&P Global Ratings, “The bank’s loan-loss experience compares favorably with the Nigerian banking sector average. Access Bank started reducing risk on its balance sheet before the first naira devaluation in November 2014 by cutting foreign currency lending.

Thursday 28 June 2018

BUSINESS DAY

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NEWS YOU CAN TRUST I THURSDAY 28 JUNE 2018

Opinion

Buhari needs to take a hard look at himself CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

ow much more unfortunate can a people be. Nigerians voted for a man they thought, based on his antecedents, would run the most competent, organised and clean administration in Nigeria’s history. But what did they get? A most lethargic, chaotic, incompetent, deceitful, corrupt, clannish, arrogant and wicked government that is not only wrought with infighting, confusion, and a shocking lack of grasps of the fundamental of governance and administration, but one which is as corrupt as any we’ve had in the past but cleverly disguises it as patriotism and one quite adept at exploiting the fault lines of the country to promote ethnic and regional interests. Much more nauseating however, is the hypocrisy of the president. The other day, at the conclusion of Ramadan, the president issued a post-Ramadan message through his media

FELTED THOUGHTS

OLUGBENGA A. OLUFEAGBA Senior Consultant, Markets Practice, Kainos Edge Consulting Limited. gbengaolufeagba@kainosedge.com

ne of the oldest and simplest justifications for government i s a s a p ro t e c t o r. T h e government is meant to protect its citizens from violence. In his seminal text, Leviathan, the philosopher Thomas Hobbes offers what was then seen as a novel conception of the origins of civil g o v e r n m e n t . H o b b e s’

aide, Garba Shehu, congratulating Muslims on the conclusion of the Ramadan fast and calling on ordinary Nigerians to stop the practice of celebrating corrupt people in the country but rather treat them with dishonour. Quoting directly from the statement, the president was said to have urged “ordinary Nigerians to stop glorifying thieves by treating them with disdain for bringing hardships to others”. Ordinarily, that will be good advice coming from the president of a country that is particularly notorious for the discontinuity between state and society which is quite tolerable of corruption. This discontinuity clearly prioritises primordial ties over national ones and so long as the subject is a loyal ‘son (daughter) of the soil’, s/ he must be defended and shielded from justice as much as is possible. But it was the same Buhari who was advising Nigerians against glorifying thieves that had been glorifying the late kleptocratic dictator, Sani Abacha, at every opportune moment. At the remembrance prayers marking the tenth anniversary of the death of Abacha in Kano in June 2008, Buhari had shocked the country by declaring that Abachi “did not loot the national treasury contrary to the general impression”. Also on Tuesday, May 22, the

President, while receiving members of the Buhari Support Organisation led by the Comptroller-General of the Nigeria Custom, praised the late General Abacha to high heavens for the marvellous work he did for Nigeria. “No matter what opinion you have about (late Gen. Sani) Abacha, I agreed to work with him and the PF T. We constructed road from here (Abuja) to Port Harcourt, to Onitsha, to Benin and so on. This was in addition to other things in education, medical care and so on,” Buhari was quoted as saying. This is the same Abacha that was ranked, in 2004, as the fourth most corrupt leader in history estimated to have siphoned between $2 - $5 billion of Nigeria’s money and stashed them abroad. Since 1999, successive Nigerian governments have been making attempts to repatriate the stolen funds. Indeed, various sums of money in foreign currencies have been successfully repatriated, especially from Switzerland. What is more, on April 27, 2016, president Buhari himself tweeted that “Nigeria is awaiting receipt from Swiss govt. of $320 million, identified as illegally taken from Nigeria under Abacha”. Even though a nuanced reading of the tweet showed that Buhari was cleverly trying to imply that the money was only stolen under Aba-

cha but not necessarily by him. Like Wole Soyinka recently reminded the president, we may understand his official loyalty to Abacha who rehabilitated him after he was jailed by Babangida and appointed him Executive Chairman of the defunct Petroleum Trust Fund (PTF), where he was given unlimited powers to spend billions of Naira between 1996 and 1998. But his loyalty should not and cannot take pre-eminence over national interest and the truth. Besides, as the respected BusinessDay columnists, Olu Fasan, recently argues, by glorifying Abacha and insisting that he doesn’t care about Nigerians’ views on Abacha, “President Buhari gratuitously insulted this country and hurt the sensibilities of its people.” He also “does irreparable damage to his anti-graft reputation.” I have always maintained that Buhari’s antigraft reputation was a ruse. From his first coming, he has demonstrated he is temperamentally and morally unfit to fight corruption due to his excessive provinciality and clannishness. Olu Fasan captures this brilliantly: “A leader who is seriously fighting corruption would not spare even his own family, but Buhari has a long history of double standards, bias and selectivity, in his anti-corruption crusade. He often

sees no evil, hears no evil and speaks no evil when corruption is detected in his camp, but huffs and puffs, threatening fire and brimstone, when corruption is suspected in the camp of the opponents.” In the last three years, there have been weighty corruption allegations against prominent members of his kitchen cabinet such as Abdulrahaman Danbazau, minister of Interior, Tukur Burutai, Chief of Army Staff, Abba Kyari, the President’s chief of staff, and Babachir Lawal, former Secretary to the government of the federation. Unsurprisingly, the president expeditiously and without investigation absolved all of them of the allegations. It was a thoroughly embarrassed president that eventually ordered the suspension of the secretary to the government of the federation for the same allegations for which he was previously absolved by the president. But even after his removal, the former SSG is yet to be investigated and tried and boastfully came out recently to mock his traducers that he still has unrestricted access to the president. Equally, sometime last year, the Minister of state for petroleum, Ibe Kachikwu, sounded the alarm over the illegal award of over $25 billion dollars contracts by the NNPC who hid under the name of a president who was convalescensing in the

United Kingdom. Nothing has been heard of the allegations ever since Kachikwu was hushed up. How does one make s e n s e o f t h e c o n st a nt butchering of the people of the north central by the president kinsmen – Fulani militants- and the refusal of the president to prevent the attacks or even order the arrest of the perpetrators of the violence even after they have openly come out to crime? How does one rationalise the fact that the military and other security agencies are always conveniently unaware when the killer herdsmen go on a rampage but spring up to prevent reprisal attacks and disarm the locals the moment they recover and begin to mobilise for self defence? How come, despite all the killings and violence that is threatening to turn tear the country at the seams, the president has continued to keep faith with his security chiefs – all of them from his part of the country – and has been unable to sanction any of them even after it was established that one of them has clearly disobeyed presidential orders? If all these could be happening even when the president is seeking re-election, just close your eyes and imagine what will happen when he’s elected into office for the second time with no need for re-election.

The Nigerian state is failing her citizens position on the ideals of a commonwealth is predicated upon his views of human nature and the state of mankind without government. First Hobbes writes of the natural inclination of human beings, which he believes is inherently troublesome; the state of nature that exists without a government, which to Hobbes is terrifyingly chaotic; and then the laws of nature that he says can, but do not always guide human behavior towards selfpreservation. Hobbes posits that “in the nature of man we find three principal causes of quarrel: first, competition; secondly, diffidence, thirdly, glory,” and then list’s man’s primary

aims to be gain, safety and reputation. So when left to our own devices, in the course of trying to attain our primary aims, there is abs olutely no chance for sanity. The insanity in Nigeria has gotten to a level that one would expect in a society without a government. This is not surprising, given that after each and every atrocity committed by its favoured citizens, the government of the day only releases a press statement condemning the act while suing for peace, then goes to sleep. The wanton killing by terrorists in the garb of herdsmen deserves more than a press statement, it deserves decisive action by the government

of Nigeria. Instead, what we get is a minister of interior affairs turning into the spokesman of terrorists, giving unreasonable excuses for why the killings persist. How does a sane person rationalize killings as a response to grazing laws enacted by some state governments? At this point, it’s almost impossible to absolve the government of complicity in the herdsmen menace. Isn’t it curious that each and every time villagers defend themselves, killing herdsmen in the process, the perpetrators are swiftly brought to justice? Yet the known architects of the coordinated herdsmen massacres are granting press interviews and given free passes? If a government that

is coming to the polls in about eight months to seek the renewal of its mandate can be so conspicuously biased a n d i n e p t at s e c u r i n g the lives and property of the citizens it swore to protect, I shudder in trepidation at what will happen if and when the mandate is renewed. May we remind the government that the right to life is not a favour, but one of our fundamental rights as human beings? In the absence of a responsive and responsible government that guarantees this right, we lay the foundation for despotic and fanatic warring bands. In failing to judiciously perform its role as a protector, any other policy initiatives by this gov-

ernment is automatically rendered meaningless. You need to be alive to enjoy any supposed dividend of democracy. The government needs to start living up to its responsibility as an unbiased umpire in the issues related to the herdsmen and farmers. For starters, the government can begin by proscribing and disarming people without the right to bear arms. This should be a relatively low hanging fruit as I’m not sure there is any other group of people allowed to move around freely with assault rifles all in the name of protecting herds of cattle, farms or villages. The lives of Nigerians shouldn’t be a collateral damage for the madness of a few.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

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X-RAYING TOP TEAM EARNERS AT 2018 FIFA WORLD CUP VAR, THE REVELATION OF 2018 FIFA WORLD CUP MIGRANTS USING WORLD CUP FAN IDS TO ENTER EUROPEAN BOARDER

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ANALYSIS

X-RAYING TOP TEAM EARNERS AT 2018 FIFA WORLD CUP Stories by Anthony Nlebem

o doubt Portuguese Cristiano Ronaldo, Argentine Lionel Messi and Brazilian Neymar are the big names of soccer’s biggest stars and are the biggest earners at the 2018 FIFA World Cup in Russia. Here we do a breakdown of top teams likely to earn more at the 2018 World Cup The Federation of International Football Association, FIFA will award $400 million to the 32 teams competing for honour at the World Cup over the next month in Russia, according to the Associated Press. By the end of the tournament on July 15, one champion will take home a whopping prize of $38 million. The second and third-place teams will receive still-impressive cash of $28 million and $24 million, respectively. Those are impressive figures, but the players are not necessarily splitting the prize pots evenly. As USA Today reported back in 2014, awards are given to winning teams’ national federations, which are then allowed to decide how to pay each athlete at their discretion. That means the payoff for playing in the World Cup varies by country. The German Football Association said in December that each of its players will get a bonus of about $400,000, if they win this summer’s World Cup. The sums are staggered depending on how far the team makes it in

the competition. If they get to the semi-finals, each player will pocket $145,000; if they only survive to the quarter finals, each player will get $87,000. There is no bonus for only making it past the first round. The breakdown is different in Brazil, where each person will get roughly $930,000, if they emerge victorious from the World Cup, according to Reuters. Spain’s players are in the best position. If their team wins the title, each athlete will get an equivalent of more than $950,000. You can definitely consider the bonuses a score: These payments come on top of the players’ regular-season professional salaries, which in Ronaldo’s case exceeds $60 million a year, according to Forbes. Each team also gets

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$1.5 million before the World Cup so they can prepare for the contest. In 2014, disagreements over pay posed serious problems for a handful of African countries. Cameroon’s team initially refused to board their flight to the World Cup four years ago because players believed their £61,000 bonuses were too low. The Nigerian squad boycotted a training session because they were afraid they wouldn’t get paid. Ghana threatened to skip a game unless they got paid ahead of time in cash — a stunt that forced the government to put $3 million on a plane to Brazil. This time around, neither Ghana nor Cameroon are in the World Cup. But FIFA did give Nigeria and four other nations $2 million advances so they could get any money disputes out of the way before the competition actually began. Winning the World Cup isn’t all about money. German Football Association President Reinhard Grindel told reporters in 2017 that though the financial bonuses were admittedly attractive, “The sporting challenge is the main focus and not the economic aspect.” Then again, try telling that to Sepp Blatter, the former FIFA president who was accused of skirting the law after he gave himself a $12 million bonus for the 2014 World Cup.

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orld Cup fans are drinking all of the beer in Moscow, and it is causing a minor beer shortage in Russia. Russia was clearly not prepared for FIFA’s 2018 World Cup fans and athletes, as they are practically drinking Moscow dry. Thirty-two soccer teams from around the world and their beer-drinking fans have practically sapped Moscow’s bars and restaurants of their beer according to multiple outlets, and it is taking longer than usual for more supplies to arrive. “We just didn’t think they would only want beer,” Reuters reports one waiter at an upscale central Moscow restaurant saying — who clearly doesn’t know soccer fans. The waiter told Reuters that the restaurant ran out of draft lager and that it’s taking at least 24 hours for new deliveries from suppliers, whose stocks are also running low. According to the New York Daily News, the shortage could be related to existing consumer patterns in Russia, as beer sales have fallen by nearly a third in the past 10 years due to regulations on duties and advertising. However, some fans have not felt the effects of the shortage. “There is beer everywhere,” one Croatian fan declared to Reuters reporters. “Some places yes, some places no. You just have to know where to find it!” Russia has always been part of Europe’s “Vodka Belt,” in which distilled spirits make up a larger proportion of alcohol consumed, so bars aren’t used to an influx of fans from “Beer Belt” countries like Germany and England. If you’re watching the games, learn more about how each country imbibes by indulging in the signature drink of every country in the World Cup.

NEWS “Accordingly, fans are asked not to choose only Sparrow Hills to watch the games,” it said. “It is possible to watch matches on additional screens which have been set up in the city. They are also being shown in many hotels, cafes and restaurants.” A FIFA spokesman said: “Due to the increasing interest by fans and the limited space, Moscow’s authorities have made a new safety assessment in order to make sure that all vis-

he enthusiasm at the 2018 FIFA World Cup is on the increase as soccer fans planning to watch World Cup games on giant outdoor screens in Moscow are considering avoiding the official FIFA fan zone due to potential overcrowding, according to a statement from local officials. Russia’s surprise success at the World Cup, going through to the knock out rounds for the first time since the collapse of the Soviet Union, has energized thousands of home fans and Russia is due to take on Uruguay in the city of Samara on Monday. Moscow’s official FIFA fan zone, located on the Sparrow Hills campus of Moscow State University, has become a magnet for Russian fans that can’t get to the matches but want to watch them on giant outdoor TV screens. That has forced organizers to limit the number of people allowed into the fan zone, which has a maximum capacity of 25,000, drawing criticism from Moscow who say authorities in a city of around 12 million people should have been prepared for much larger crowds. “For the last match we couldn’t get in,” said Moscow resident Yelena Shelapova. “There were a lot of people, the fan zone was closed. We didn’t get in. We went home to watch.” The Moscow mayor’s office said on Saturday that entrance into the fan zone would be restricted for the “most popular matches, which will decide the outcome of the tournament” because of the risk of overcrowding. “The last few days in Moscow have been an unprecedented sporting celebration: the city has not seen such an influx of fans in decades,” it said in a statement.

itors continue enjoying their visits to the FIFA Fan Fest.” Nikolai Gulyaev, head of Moscow’s sport and tourism department, said fans in the Russian capital would have more luck watching Monday’s game in their local bar. “In this case, you will not have to think about arriving two to three hours before the game,” the Interfax news agency quoted him as saying. “There will be no queues for drinks and food, and the atmosphere of unity and intense football passion is just as good as in open-air fan zones.”

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... Nigerians, Moroccans, Pakistanis, Chinese caught in the act riving in Russia with a World Cup Fan ID. In another case on the same day, a Nigerian with a fake Brazilian passport tried to cross the Finnish border. He had earlier arrived in Russia with a Nigerian passport and a Fan ID. On Sunday, three Moroccan citizens with Fan IDs managed to cross the border illegally before being apprehended by border guards. Saareks stressed that World Cup Fan IDs are not travel documents to the EU. All five men have applied for asylum and the Finnish Border Guard has transferred their cases to the migration authorities. Estonian border guards have thwarted attempts of four foreign nationals to get into the country from Russia using their Fan IDs since the Russia-hosted FIFA World Cup kicked off on June 14, the chief of the border and migration control service of the Ida-Viru County, Andreas Kliimant, said on Friday. Estonia’s Postimees newspaper quoted him as saying that all four were Nigerian tourists. Three of them tried to get to Estonia by car, and another one - by train. One of the Nigerian tourists asked Estonia for asylum, while

ome migrants are using the FIFA Fan IDs, a Russia’s World Cup ticketing system that allows visa-free travel for foreign fans to try to enter the European Union illegally, with neighboring Belarus and Finland reporting cases. Moscow has implemented a Fan ID system that exempts visiting fans from Russia’s strict visa system and allows them to move freely between host cities for the tournament between June 15 and July 15. Belarus, which signed an agreement with Russia allowing Fan ID holders to transit the country without a visa, said it had stopped four Moroccans and an unspecified number of Pakistanis as they tried to enter the European Union illegally across borders with Lithuania and Poland. “More ‘illegals’ have entered Belarus under the guise of football fans,” Andrey Sytenkov, an investigator with Belarus’s State Border Committee, said at a press conference in Minsk on Wednesday. The Moroccans are currently in temporary detention centers and face fines, deportation and a five-year ban on entering Belarus, he added. There was no word on the whereabouts of the Pakistani nationals. Sytenkov said the Belarusian border guard service “has information on groups of pseudo-fans” on the country’s Western borders. “We are ready for the fact that Europe will not accept them and will be sending them back,” he said. Similar cases have also been reported in Finland, an EU member that also shares a border

with Russia. Finnish Border Guard official Marko Saareks told AFP there have been three cases of people crossing the Russian-Finnish border and applying for asylum in Finland after arriving in Russia with Fan IDs. “There is a threat of this kind of phenomenon,” he said, adding “these kinds of illegal crossings may go on until the end” of the World Cup. “They will not be deported to Russia immediately” since they asked for asylum in Finland, he added. Recently, a Chinese citizen flew to Helsinki from Russia and applied for asylum after ar-

the rest were sent back to Russia. Andreas Kliimant added that all the fans had tried to leave Russia without attending any of the World Cup’s matches. The Fan ID system, introduced at this World Cup, also serves as an additional security measure, with Russian police conducting background checks with the help of their foreign counterparts. Nearly 500 people were denied Fan IDs ahead of the tournament which is taking place in 11 cities across Russia, ending with the final in Moscow on July 15.

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NEWS

Anthony Nlebem, reporting from St. Petersburg/Russia

side from watching biggest football showpiece, the World Cup games on TV screens, its more exciting and fulfilling watching the games live at the stadium and having a real-time experience with the players, fans, coaches and the atmospheric beauty of the stadium that makes you part of the game. Seven Nigerian Teenagers had a lifetime football experience when the leading premium soft drink giant, Coca Cola Nigeria took them to Kaliningrad a population of 450, 000 comprising of ten regions and of the 11 cities hosting for the 2018 FIFA World Cup games. The highpoint of their visit was when the

teenagers did a match out as flagbearers in the Nigeria vs. Croatia game played on June 16th, at the Kaliningrad stadium with one of the teenage boys tossing the coin that started off the Match. The teenagers had lots of fun time as they were taken on an excursion round the beautifulcity of Kaliningrad. The places visited includes; The Cathedral which houses one of the most expensive music organ in the world, worth 2.5 million euros, the Submarine, the Museum of the World Ocean, and an exquisite restaurant at the Hotel Nesselbeck. “Entering the submarine for me is the most memorable adventure I had here; It was a great experience to take a tour inside a submarine for the first time and also to see such a beautifully decorated restaurant as Hotel Nesselbeck ; I love the lights and the armor inside

, the city was an awesome experience for me, “said Taiwo Oluwatosin. Alabi Obaloluwa, a 14 years old boy added that the experience was beyond what he could imagine.” The trip was fantastic, great and special thanks to Coca Cola for affording me the opportunity to visit Russia. “I can never forget the Submarine experience; I just like the way it was built and decorated. Kaliningrad is a very beautiful city, the people very hospitable and kind to us. I never taught I would be here but Coca Cola has given me a lifetime World Cup experience that I will never forget said Eleshin Timileyin . As a loyal fan of Nigeria, Obaloluwa is very optimistic Nigeria will make a positive impact at this year’s World Cup. “Because of the quality players like Alex Iwobi, Kelechi Iheanacho and the rest we have in the squad, my expectation is for the Super Eagle will make it to the semifinals or even the final. Anna Shcherbina, the Project Manager for Coca Cola Youth Program for the 2018 FIFA World Cup Russia who was on hand to receive the youths at Kaliningrad pointed out that the event was aimed to host youth from Nigeria that will bring the Nigeria flags on the World Cup games in Kaliningrad, the first game in Kaliningrad stadium. “It’s a Coca Cola project and as a big sponsor of the FIFA World Cup, the motive is to give teenagers a life time World Cup experience. It is a wonderful exposure for these teenagers to be Nigeria’s flag bearers and a great opportunity every youth will be happy to take part in.” “We had a similar program in 2017 at St. Petersburg during the Confederation Cup but only with Russian youths, but this year, we targeted to have international youths. Anna further stated the idea is not for Coca Cola to host youths from Nigeria alone but youths across other countries and continent.” We have different youths visiting from other countries in different cities hosting the World Cup games fully sponsored by The Coca-Cola Company”. for example in St. Petersburg; we have youths from Egypt and other parts of the country.” “It’s actually a very memorable experience for the teenagers who love football and the Super Eagles,” said Mrs Soji Omoigui, Senior Brand Manager, Coca Cola Nigeria Limited. “It is about giving these youths, an opportunity to join in the excitement of the games and show their love for the Super Eagles live in Russia. “We had a promotion where we put up a post on social media saying: “Will you want to get a life time chance to carry the flag of the Nigeria team during the FIFA World Cup, answer some questions? Teenagers between 13 and 17 years old participated on the promo that was mentioned on the radio and social media and the first person to answer the question made the list of the seven children. No doubt Kaliningrad experience will forever live in the memories of these teenagers especially when the FIFA World Cup is mentioned.

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NEWS

ranit Xhaka and Xherdan Shaqiri could receive a two-match ban over their display of an Albanian nationalist symbol. Both the Swiss and the Serbian football federations may also face disciplinary action from FIFA. The football thriller in Kaliningrad between Switzerland and Serbia will be reviewed by FIFA for its political messages and may end in disciplinary action against two Swiss players, FIFA said on Saturday. Granit Xhaka and Xherdan Shaqiri celebrated their goals against Serbia by displaying the Albania national double-headed eagle symbol with their hands.

All political messages or symbols in stadiums are banned by FIFA. If the soccer governing body concludes that Xhaka and Shaqiri violated the rule, both could be banned for up to two games. Though they hold Swiss nationality, the two players trace their roots to Kosovo, a former province of Serbia that declared independence in 2008, a move that Belgrade does not yet recognize. Thousands of Kosovo Albanians fled rising ethnic tensions in the 1990s that culminated in a bloody 1998-99 war of independence between ethnic Albanians and Serb forces. Shaqiri was born in Kosovo and his parents were among those who fled, settling in Switzerland. Xhaka was born in Switzerland to Albanian parents and his brother, Taulant Xhaka, is also a footballer who plays for Albania’s national team. In a post-match interview, Shaquiri did not shy away from his controversial goal celebration. “The victory was for my family, which I always support,” the football player said to Swiss broadcaster SRF. “The celebration was not a message to the opponent,” he added. The player’s message was well received in both Kosovo and Albania. Kosovar President Hashim Thaci wrote on Twitter: “Congratulations to goalscorers Xhaka, Shaqiri and entire #Switzerland on a well deserved win! Proud of you.” He finished his tweet: “Kosova ju don!” — an Albanian phrase meaning “Kosovo loves you!” Albanian Prime Minister Edi Rama posted on his Facebook page photos of Shaqiri and Xhaka with their hands crossed in the two-headed eagle symbol and wrote: “Photo of the day.”

The contentious match drew the ire of the Serbian coach Mladen Krstajic, not just because of the Kosovo-related celebration, but also due to a ruling that he felt should have concluded with a penalty kick for Serbia after being reviewed. But in his criticism, the coach dove in with political rhetoric. On German referee Felix Brych’s performance, Krstajic said “I would not give him a yellow or a red card. I would send him to The Hague so that he can be judged as they do to us.” The comment was in reference to the International Criminal Tribunal for the former Yugoslavia trials of Serbians who took part in the Yugoslav wars. The statement will now be reviewed by FIFA as part of the disciplinary investigation into the match. FIFA has also opened disciplinary proceedings against the Serbian Football Association for crowd disturbance and display of political and offensive messages by Serbian fans during the game. The Swiss and Serbian football organizations are not the only ones under the eye of FIFA’s disciplinary board. The Polish Football Association was fined 10,000 Swiss francs ($10,100, €8,671) and given a warning by FIFA on Saturday for a banner that was deemed political and offensive, displayed during its game against Senegal on Tuesday in Moscow. Argentina and Croatia also face disciplinary proceedings for crowd disturbances during their game on Thursday in Nizhny Novgorod. FIFA is also considering disciplinary action against Mexico for fans using an anti-gay slur during Sunday game against Germany.

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egardless of what happens between now and the end of the 2018 FIFA World Cup, the most significant discovery of the tournament is the Video Assistant Referee (VAR). The VAR has done to world football a great deal. It has changed life forever. The only question that remains is how you were operating before. The future is here. Of course, it will take long before the technology gains widespread use in poor countries. After the Nigeria vs. Iceland match, 12 penalties have been awarded in Russia in a tournament that has just started and with some teams, like favourites Brazil and Germany,

having played just one match so far. During the third day of the contest alone, the referee pointed to the spot an almost maddening five times. Contrast this with what happened in the last World Cup in 2014. A paltry 13 penalties were awarded during the whole tournament! All penalties in Russia so far had initially been denied and the referees only changed their minds after reviewing videos of the incidents. What this means is that before the introduction of VAR, referees have always chosen to err on the side of caution - and with good reason. A penalty in football is nearly always a game changer. It could restore a dead team back to life and win a match for it. It is also the ultimate decider: when a winner must be found because a draw won’t do,

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FIFA’s rules of the game prescribe a penalty shoot-out. Five are awarded to each side and if there is still a tie, the competition goes into sudden death where each side is allowed one shot at goal and the one that fluffs its chance loses. This situation has resulted in some teams that dominated the largest slices of play sometimes ending up with the short end of the stick. Penalty shoot-outs have often been described as lotteries because of their unpredictability. They have also been likened to democracy as the least worst of all the options available. It is understandable, therefore, that before

making a penalty call, and referees have always made a point of being double sure. But as the tournament in Russia has already proven, this has left quite a bit of injustice in its wake. Legitimate penalties have been denied because of official reticence. And this is not the only area where injustices have occurred. The VAR is coming 52 years later than when it was first seriously needed. In the 1966 World Cup final held in London’s Wembley Stadium, England’s Geoff Hurst fired a shot that bounced off the cross bar into the ground and back into play to score his country’s second goal against the then West Germany. The Germans said the ball never crossed the line. But the goal stood and to this day, the mystery has never been resolved. England went on to win the match and the

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World Cup, defeating their infinitely more successful rivals 4-2. In the 2010 World Cup in South Africa, the fortunes were reversed. England’s Frank Lampard crashed the bar on the crossbar and beyond the goal line before ricocheting back into play. This time, advanced television replay left no one in any doubt that it was a goal. But the referee played safe and denied it. At that time, Germany were leading 2-1 and an England equalizer might have changed the outcome of the game. Germany proceeded to win 4-1. For them, justice had finally been done after a 44year wait. That was the incident that finally convinced the conservative FIFA to have a re-think. Evolving changes in the game, not least the speed at which games were now taking place, made it mandatory to innovate. From the outset, FIFA has made it clear that the referee was not up for replacement. Whatever the outcome of their experiments, technology was only going to assist the referee and not to supplant him. This has been achieved completely. The VAR is used only in match changing situations such as awarding of goals, penalty decisions, sendoffs and cases of mistaken identity. In allowing the introduction of technology in the game, Blatter had decreed: “Other than the goal-line technology, football must preserve its human face.” This is as it should be. What is certain is that up to and including the final of World Cup 2018, we are going to see action like we have never seen before. There will be a record number of penalties and disputes about disallowed goals because the referee couldn’t be sure about the ball crossing the line are now history. Those deserving red cards will now also get their just deserts. This is a whole new ball game. Though not all the time, World Cups throw in something new every once in a while. The 1954 event was the first to be televised, the 1966 was the first to be commercially marketed complete with an official mascot and the 1970 one saw the introduction of yellow and red cards.