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Low capital release, utilisation rate, others threaten implementation of N8.92trn 2019 budget P resident Muhammadu Buhari on Monday signed the 2019 Appropriation Bill of N8.92 trillion into law.

The N8.92 trillion 2019 budget is N90.3 billion higher than the N8.83 trillion earlier presented before a joint session of the National Assembly in December last year.

However, there are concerns that the full implementation of the budget may be marred by low capital release, utilisation rate, among other factors. These concerns arise from a historical analysis of the implementation of previous budgets.

Checks by BusinessDay reveal that a large chunk of the budgetary allocation to Minis-

fgn bonds

Treasury bills

NGUS apr 29 2020 362.41

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Insurers’ gross premium written rises 15.79% to N345.16bn on new NAICOM rates BALA AUGIE

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Babatunde Fashola (2nd r), minister of power, works & housing; Mohammed Bukar (r), permanent secretary, works & housing; Tayo Oreweme (m), representative of the minister of youth and sports and director, federations elite athletes department; Clemens Westerhof (2nd l), former head coach and technical adviser of the Super Eagles, and Shehu Dikko, representative of the NFF president, at the presentation of a letter of allocation to Westerhof at the Ministry of Power, Works & Housing Headquarters in Abuja. This is in fulfilment of the Federal Government’s pledge to Westerhof 25 years ago for winning the 1994 African Cup of Nations and guiding the Super Eagles to their first ever World Cup in the USA 1994.

igeria’s largest insurers have managed to grow revenues even as insurance penetration remains low.

Sixteen insurance companies that have released 2018 audited financial statement saw combined gross premium written increase by 15.79 percent to N345.16 billion, from N298.0 billion as at December 2017.

A breakdown of the figure Continues on page 39

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NEWS

SMEs need tech, innovation to become globally competitive – experts … Nigeria can become agric super power – USA JOSEPH MAURICE OGU

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he small and medium enterprises (SMEs) in Nigeria have been urged to be innovative and persistent in leveraging technology to remain sustainable in the global market.

This advice dominated discussions when experts came together to discuss the topic, ‘Sustainability and Innovation: Pathway to business success for SMEs,’ during the African Food and Products Exhibition, organised by the NigerianAmerican Chamber of Commerce in Lagos, recently.

It is important for SMEs to have strong organisational structure and focus on the need for innovative technology, as these constitute a pathway to business success in today’s technologically driven world, Oluwatoyin Akomolafe, national president, Nigerian-American Chamber of Commerce, said.

“I would like to urge our SMEs to take ownership of their own success and future,” Akomolafe advised.

He acknowledged the positive impact oil had made to the Nigerian economy, but was sceptical if Nigeria’s futuristic growth could be sustained with the same source.

Hence, it is important as a nation to diversify to generate revenue for the country.

“This is precisely where SMEs’ sustainability and innovation play their role in

contributing to economic prosperity,” he noted.

Brent Omdahl, commercial counsellor, US Mission to Nigeria, representing John Bray, consul general, Lagos, said Nigeria could become world super power in agriculture if it could shift attention from what it had been known as oil super power to agriculture.

Omdahl said through being innovative, creative and leveraging technology over the coming years, Nigeria could have an agricultural produce in the global market synonymous with Nigerian name.

“I asked myself, in the next 50 years, what product will the Nigerian people give to the world that bears Nigerian signature?” he queried.

On his part, Akomolafe noted that the contribution of SMEs sustainability and innovation to economic prosperity had grown with the shift of the global economy towards a mode of production in which knowledge had become a key input.

In this regard, he advocated for government policies that were based on sound understanding of how new and small firms innovate for sustainability.

“The threat of disruptive technology is real and has come to stay. Innovation with strong corporate structure is the key to unlocking the success from value-adding to value-creation,” he said.

SEC pledges cooperation on Project Light House Iheanyi Nwachukwu

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ecurities and Exchange Commission (SEC) has pledged to cooperate with the Ministry of Finance on Project Light House recently inaugurated by the minister to assist the Committee achieve set objectives.

Project Light House is designed to dwell on data mining and analytics techniques to identify tax defaulters, establish their tax liabilities and send notifications to appropriate authorities for necessary action.

Mary Uduk, acting directorgeneral of SEC, who noted the Commission support for the project, also commended the minister on the initiative.

Uduk emphasised the need for collaboration among relevant agencies to assist the government in its revenue generation, adding that Project Light House was a positive step in that direction.

“It is clear that data and information will certainly aid the generation of more revenue, and in the long run all agencies will be better for it as there will be more resources for government to carry out development “Data gathering and sharing is the way to go especially in this digital age, as when there is available data, information can

be shared and that will increase compliance level as well as improve revenue generation,” she said.

The acting DG said low revenue generation was a source of worry, as when government does not meet its revenue generation targets, it would be difficult to provide critical infrastructure that would encourage investment in the country.

She therefore pledged the full cooperation of the SEC to ensure that relevant data were made available when needed by the committee.

In her address, Zainab Ahmed, minister of finance, said one of the key economic policy objectives of the current administration, as contained in the Economic Recovery and Growth Plan (ERGP), was improving overall Federal Government revenues by targeting and increasing revenues from non-oil revenue sources.

It also aims, among other goals, to increase the tax base by drastically increasing the Company Income Tax and Value Added Tax compliance, bringing additional tax payers into the tax net, and increase Tax to GDP ratio from the current 6 percent to 15 percent by the year 2020, Ahmed said. www.businessday.ng

L-R: Kola Ajimoko, 1st vice president, Risk Management Association of Nigeria (RIMAN); Magnus Nnoka, president, RIMAN; Herbert Wigwe, GMD, Access Bank; Greg Jobome, executive director, Access Bank; Laurine Ubanozie, publicity secretary, RIMAN, and Victor Olannye, executive secretary, RIMAN, during a courtesy visit of RIMAN members to Herbert, GMD, Access Bank in Lagos.

Smooth implementation of AfCFTA takes centre stage at AU summit in Ethiopia

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ome panellists at the Stakeholders Dialogue on Continental Trade and Strengthening Implementation of the African Continental Free Trade Area (AfCFTA) have listed steps necessary for smooth takeoff of the Agreement.

Speaking at the opening session of the dialogue on Monday in Ethiopia, the panellists were in agreement that it was not yet Uhuru for AfCFTA, despite successes already achieved.

The stakeholders meeting was jointly organised by the African Union Commission (AUC) and the Coalition for Dialogue on Africa (CoDA).

The News Agency of Nigeria reports that 22 countries have ratified the AfCFTA agreement, meeting the requirements needed for implementation. Zimbabwe is

ready to ratify the Agreement on Tuesday, to bring the number to 23.

While Nigeria, Benin Republic and Eritrea are yet to sign up to the AfCFTA Agreement, 51 other countries have signed up.

One of the panellists, the ECOWAS Permanent Representative to the African Union, Nelson Magbagbeola, called attention to free movement of persons.

He said there was need to borrow a leaf from the ECOWAS Trade Equalisation Scheme, adding that this was very critical to the efficiency of AfCFTA. Magbagbeola also pointed out that one of the fears of Nigeria, in withholding signing up to the agreement, was that most African countries do produce goods they lay claim to.

“We know for a fact that some

African Institute for Leadership plans corporate leadership prize for outstanding leaders Obinna Emelike

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he African Institute for Leadership Excellence is set to hold this year’s edition of The African Corporate Leadership Excellence Prize on May 31, 2019.

This year’s prize tagged “Reinventing Corporate Leadership Excellence” is aimed at bringing together ideas and strategies for total reinventing of corporate leadership excellence. Over the years, Africa has experienced significant economic growth that has not only put in the spotlight, but has also attracted foreign direct investment like ever before.

The African new growth factor has been attributed to the leadership excellence of some select African corporate organisations that have demonstrated uncommon initiative in the African commercial space, and have made substantial impact in the development of Africa’s economy.

By the foregoing, the Award Prize will spotlight key industry leaders who would further deliver outstanding contributions to the development of the continent, the economic aspirations of its

citizenry, and the transformation of Africa’s image in the global markets, while displaying high standards of good corporate citizenship, social and environmental responsibilities.

This edition will witness the presence of special guest such as Akinwunmi Adesina, president, African Development Bank; MoussaFaki Mahamat, chairman, AU Commission; Ibrahim Mayaki, CEO, NEPAD Agency; Strive Masiyiwa, chairman, Econet; Faure Gnassingbe, president of the Republic of Togo, and a host of others.

At the centre stage of the Prize to be held at Sheraton Hotels and Towers in Lagos, Nigeria by 11am prompt; will be an engaging discourse by leaders across the continent on reinventing and accelerating the culture and practice of corporate leadership in all the economic facets. The highlight of the event will be the presentation of the golden plaques of excellence to the award recipients.

It is also worthy of note that the prize brings together prominent CEOs, business leaders, entrepreneurs, and high ranking government officials from in the continent, and in Diaspora.

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countries do not even have factories producing goods they claim are coming from them. In most cases, what they merely do is to repackage finished goods. There is need for policing.

“There’s also the need to address infrastructure deficit, including power and transportation,” he said.

He said the issue of security across national boundaries was of great importance, and identified the issue of mode of payment, noting that most markets in Africa were informal.

Other panellists included Joe Attah-Mensah of the United Nations Economic Commission for Africa (UNECA) and Frank Matsaert, the CEO of Trade Mark East Africa.

The discussion was moderated

by Rolf Jeker, a Board Member of

CoDA, while chairperson of the AUC, Moussa Faki Mahamat, gave the opening remarks.

A former President of Nigeria, Olusegun Obasanjo, who is the chair of Board of Members, CoDA, gave the opening remarks.

In his remarks, Obasanjo said AfCFTA was arguably one of the most pertinent issues, currently.

“The economic welfare of our people in Africa and the clear benefits of the AfCFTA, when it is fully implemented to this effect, cannot be overemphasised.

“That is why this issue should indeed be a matter of great concern to all who desire a strong, safer, secure and progressive Africa,” he said.

He added that, for CoDA, all areas of African development matter, particularly those, which are part of the continental agenda of the AU.

Chelsea, Arsenal battle for Europa League glory Anthony Nlebem fascinating live sporting action of the Europa League final is in prospect in Baku Olympic Stadium on Wednesday, May 29, 2019.

Chelsea will face London rivals Arsenal on Wednesday night looking to cap off what has been a solid, yet unspectacular season at Stamford Bridge. While Europa League glory would be something of a bonus for the Blues, it’s absolutely crucial to the Gunners who need victory to secure a place in the Champions League next term.

However, this will only provide the Blues with extra incentive to secure victory.

Chelsea look set to be without N’Golo Kante for their crucial Europa League final clash with Arsenal. The France international was on track to return from a calf injury for the showpiece event in Baku, but it’s been reported that the midfielder has suffered a setback in his recovery.

Kanté would become the fourth senior player ruled out of the final, with the other three: Callum Hudson-Odoi, Ruben Loftus-Cheek, and

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Antonio Rudiger are in rehabilitation from long-term injuries.

Arsenal Manager, Unai Emery’s side will be hoping to have the Europa League trophy with them when they return to north London. Victory in Baku for Arsenal will also see them qualify for next season’s Champions League, something their rivals have already done after finishing third in the Premier League.

StarTimes is up to deliver some of the most action-packed football as London rivals, Chelsea and Arsenal battle for continental glory.

StarTimes Nigeria has assured subscribers of live broadcast games of the Europa League final by 8:00pm African Time on its ST World Football Channels 244 and 254 and ST Sport Premium channel 246.

The Blues are the current favourites to triumph but you certainly would not write off the Gunners following some very good wins in the competition over the likes of Napoli and Valencia. The good news for Emery ahead of the game in Azerbaijan is that Danny Welbeck could make his return after breaking his ankle against Sporting Lisbon in November.

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news Pipeline vandalism destroys local communities - Buhari Tony Ailemen, Abuja

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resident Muhammadu Buhari on Monday said the destruction of oil facilities by vandals was hurting the host communities, the majority of the people and the environment The President stated this when he received South-South Monarchs Forum (SSMF) led

by Edmund Daukoru, Mingi XII, Amanyanabo of Nembe Kingdom, at State House, Abuja.

President Buhari appealed to South-South elders to do more to end pipeline vandalism in their communities, more than the Federal Government.

The President told the traditional rulers who came to congratulate him on his re-election and discuss issues of specific relevance to the zone that they were culturally and traditionally positioned to complement government efforts on enhancing security in the Niger Delta.

He, therefore, charged them to educate the youths on the dangers such nefarious activities posed to the environment and the economy.

“You need to educate the people that the destruction of installations is hurting the majority of the people. If pipelines are blown and the waters are

polluted, it affects both the fishermen and farmers. Even the fishes in the sea are affected. ‘‘These people who blow up the installations are hurting the people more than they are hurting the government,’’ the President said.

He also decried the spate of kidnapping in the area, urging the royal fathers not to relent in their support for security agencies to effectively contain the negative trend.

Responding to an inquiry by the group on 10 percent equity participation for host communities in solid minerals and whether the same is applicable to the oil sector, President Buhari said: ‘‘The Constitution is very mindful of the way resources are shared. The 13 percent derivation means that relative to whatever you are producing, 13 percent is given to your states. ‘‘Then, whatever is offshore in the continental shelf belongs to the nation. Again, your states get their own shares. This means your constituencies get two shares, the 13 percent derivation and the balance in the continental shelf, which is shared among the 36 states of the Federation and the Federal Capital Territory.

‘‘If the 13 percent or what is in the continental shelf is not getting to you then I think by now you ought to have known because you have qualitative leaders with great antecedents. ‘‘For example, when I was a junior officer, one of the royal fathers here was Governor of a State. ‘‘Everybody knows him and he has continuously been in the limelight of the politics of the country, and if the Federal Government is cheating you by denying you part of the 13 percent derivation or the balance from the continental shelf, you as the leadership ought to have seen it by now and brought it out.’’

On Niger Delta Development Commission (NDDC), the President told the Forum that his administration was mindful of the core mandate of the commission. ‘‘We are concerned about the leadership of NDDC and we hope that money which is constitutionally allocated to it is properly utilised for infrastructure in the area. ‘‘Be assured that we are very mindful of the conditions in your area and how strategic your geopolitical zone is to the economy and stability of the country,” he said.

AfCTA will go on without Nigeria - Obasanjo

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ormer President Olusegun Obasanjo says the African Free Continental Trade Area (AfCTA) Agreement will not be hindered by Nigeria’s reluctance to sign up to the process.

Obasanjo made the remark Monday in Addis Ababa, Ethiopia, during the opening session of the Stakeholders’ Dialogue on Continental Trade and Strengthening the Implementation of the AfCTA. The dialogue was organised by the African Union Commission (AUC) and the Coalition for Dialogue on Africa (CoDA).

Obasanjo was reacting to concerns raised by one of the discussants at the event, on the need for stakeholders to look into the implications of AfCTA without Nigeria, the continent’s biggest economy.

The News Agency of Nigeria reports that Nigeria, Benin Republic and Eritrea are the only countries yet to sign the AfCTA agreement, as the Agreement has achieved the number of ratification, 22 countries needed for its implementation.

Obasanjo, who recalled that Nigeria took over the processes leading to the AfCTA agreement from Egypt, wondered why it suddenly halted signing and was not even participating at the session.

He also recalled that Nigeria led the way, at ministerial level, with the government ready to be in Kigali, Rwanda, to sign up to the agreement, before the sudden turnabout.

According to Obasanjo, Nigeria

should resolve its domestic intrigues and not bring such to the AU table.

“It is nobody’s fault if your country cannot resolve its domestic problem. If you (Nigeria) is not signing the agreement, it is unfortunate.

AfCTA will go on without Nigeria.

“You will recall that this is the first time, since 1976, that Nigeria is not at the table of a major continental process. Nigeria should settle its problem at home and not bring it to the AU,’’ he said.

Obasanjo, who is the chair of the CoDA Board of Directors, said feelers from the AfCTA remain positive, while teething problems would be addressed in the course of time.

He said the meetings would be extended to other stakeholders, including Africa’s Central Banks, Customs and security agencies, saying removal of trade barriers does not mean removal of other statutory agencies at various national border posts.

He, however, commended the issuance of visas at the point of entry by some African countries, saying the gesture was a positive step in the right direction toward movement of people across the continent.

The African Continental Free Trade Agreement (AfCFTA) is a trade agreement between 49 African Union member states, with the goal of creating a single market followed by free movement and a singlecurrency union.

The AfCFTA was signed in Kigali, Rwanda on March 21, 2018. Rati-

fication by 22 countries is required for the agreement to enter into force and the AfCFTA to become effective.

The agreement will function as an umbrella to which protocols and annexes will be added.

Negotiations continued in 2018 with Phase II, including Competition Policy, Investment and Intellectual Property Rights. A draft shall be submitted for the January 2020 AU Assembly.

Kenya and Ghana were the first countries to deposit the ratification instruments on May 10, 2018, after ratification through their parliaments.

With ratification by the Gambia on 2 April 2019, the threshold of 22 ratifying states for the free trade area to formally exist was reached, though as of 30 April 2019 all the ratifying states submitted their ratification documents to the African Union.

Nigeria has yet to sign the agreement. At over 173 million people, Nigeria is Africa’s most populous country and dwarfs the second most-populous country, Ethiopia, with 100 million people. With a nominal GDP of $376 billion, or around 17% of Africa’s GDP, it is just ahead of South Africa, which makes up the next 16% of Africa’s economy.

Because Nigeria is such a significant country in Africa in terms of its population and its economy, its absence since the initial signing of the agreement until now is particularly conspicuous.

Nigeria progresses in bridging digital divide Daniel Obi

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L-R: Charles Omoera, chief executive, Stanbic IBTC Trustees Limited; Olufunke Amobi, country head, human capital, Stanbic IBTC Holdings plc; Simi Nwogugu, executive director, Junior Achievement Nigeria (JAN); Demola Sogunle, chief executive, Stanbic IBTC Bank plc, and Bridget Oyefeso-Odusami, head, marketing and communications, Stanbic IBTC, during the JAN MoneyBee Competition sponsored by Stanbic IBTC in Lagos, yesterday.

PTAD discovers 4000 ghost police pensioners IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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xecutive secretary, Pension Transitional Arrangement Directorate (PTAD), Sharon Ikeazor, on Monday disclosed that the agency discovered about 4000 ghost pensioners of the Nigeria Police Force.

Ikeazor made the disclosure at the ongoing verification exercise for pensioners that retired from Federal Government agencies and parastatals in Edo and Delta states.

She said out of the 20,000 police pensioners on the pay roll, 16,000 pensioners were verified and biometric data captured.

According to Ikeazor, when

we took on police pension, we had over 20,000 pensioners on our pay roll, by the time we concluded the verification, we got 16,000 pensioners and that is lot of savings for the government, as the genuine pensioners were now being paid.

“The same for civil service pensions. By the time we concluded the verification, we had a lot of savings for government because those who were irregularly put on that pay roll by the last administration have been taken off, and those genuine pensioners who were dropped were replaced so it is the same exercise we are doing now.

“PTAD has four pension departments that it inherited when it was set up, the Police www.businessday.ng

pension, the civil service pension, the Customs, Immigration and Prisons Service and the Parastatals pensions. What we are doing now is the parastatals verification, which is made up of over 260 government agencies,” she said.

The ongoing verification will be the last to be conducted by the agency, as it is going to have a credible secured database for pensioners, she said.

She also disclosed that the verification of pensioners would be decentralised so that pensioners do not suffer going to Abuja for future verification.

The PTAD boss, who assured that the Federal Government would continue to pay pensions regularly, said plans were under-

way to reduce the stress associated with receiving monthly pension by pensioners in the state.

She explained that the agency was working in tandem with the Ministry of Health to ensure pensioners have access to medical care through registration in the National Health Insurance Scheme (NHIS).

She pointed out that verification team was currently on the field going from houses and hospitals to verify sick pensioners.

Some of the pensioners, who spoke with newsmen, commended the PTAD for the exercise, saying the process had been impressive, as all they wanted was to get their pensions as and when due.

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igeria is consistently on the move to bridge digital divide as Swift Networks has keyed into the Federal Government target of achieving this and deepening the broadband penetration with its unique innovation.

The innovation, Red Cheetah Free Wi-Fi App introduced across various locations in Lagos, is assisting Nigerians, especially the youth population access internet, a development that is narrowing the wide gap of internet users in Nigeria. Statistics show that in 2018, Nigeria had 92.3 million internet users, the figure that is projected to grow to 187.8 million in 2023 on account of innovations like that of Swift Networks.

So far, the Android version of the Red Cheetah Free Wi-Fi App has crossed the 100,000 downloads mark and this is excluding the users of the web and Windows versions of this innovative platform.

In addition, the usage of the App has hit an all-time high of 50,000 sessions per day. The app, which provides up to 1 Gigabyte of free Wi-Fi internet access per day per user is available at its dedicated 500 hotspots across Lagos State.

The platform is currently supported by advert revenues from iconic brands like Milo, Nokia, Quickteller, Shoprite, UBA, and many others, who use it to connect to and engage with this important demographic group. This is in ad@Businessdayng

dition to the SMEs who now use Red Cheetah to reach their target prospects relying on its high level of profiling and geo-targeting precision leading to minimal media waste and outstanding return on investment.

Speaking on this milestone achievement, Chukwuma Okoye, chief operating officer of Swift Networks, said in a statement that the accelerating adoption rate for the innovative service was a clear testament that it was meeting a critical need in the life of its users.

“We gave ourselves the tall order to help close the digital gap in the country starting with Lagos state and we are well on our way to achieving this feat. It’s been a challenging undertaking given the complexity of the technology and project management skills required to deliver this service model but the rewards so far outweigh the sacrifices, especially now that users and advertisers are warming up to the platform,” Okoye said.

According to Bolaji Ige, SWIFT’s general manager, SwiftMedia, “My team will not rest on its oars in our quest to reach every nook and cranny of this country with the Red Cheetah Free Wi-Fi service and while continuously improving the user experience.”

Red Cheetah hotspots are currently located across Lagos, especially on tertiary institution campuses, the malls, hotels, restaurants, clubs, hospitals, over 200 BRT buses, among others.

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The Nigerian nightmare: Any hope?

STRATEGY & POLICY

MA JOHNSON

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any Nigerians are currently going through nightmare.

The Nigerian nightmare is due to the country’s ailing economy and insecurity. The level of insecurity has become a subject of concern and a source of debate within the country and diplomatic circles. The level of insecurity is very embarrassing. The incontrovertible fact is that the insecurity is more in the North than any other part of the country today. A report by the Inspector General of Police, Mohammed Adamu, shows that within the first quarter of 2019, 1071 people were killed in crime-related cases with Zamfara recording the highest which is 203.

These figures, do not include all robbery and kidnap cases unreported to the Nigeria Police. Never in Nigeria’s political history has the level insecurity assumed the power and ugliness it displays in the Twenty-first Century. It has become a source of worry for local and foreign direct investors, thus, affecting the economy of the country negatively.

President Buhari inherited an ailing economy and insecurity in 2015.

But the economy hasn’t reacted significantly to policy stimulus within the past 4 years. The Economic Recovery and Growth Plan (ERGP) has not considerably recovered the economy of

our country from its low level. Without prejudice, the poor performance of the ERGP is expected because it is the All Progressives Congress’s (APC’s) economic plan, not a national development strategy. Rather than carryout a thorough assessment of deliverables in the ERGP every quarter in order to achieve set goals, APC politicians celebrated the document as if it had brought about sustainable development to the country. Our outgoing political office holders forgot that they are dealing with social problems involving 200 million people whose wants are insatiable.So with the poor implementation of the ERGP, more Nigerians are falling into joblessness.

While herdsmen-farmers clashes have claimed thousands of lives, thus affecting the country’s stability and unity. When President Buhari’s “Next Level” agenda was unveiled during 2018 campaigns, he declared that the “next 4 years will be tough.”One has seen the sign that the next 4 years may indeed be tough.

With the Gross Domestic Product (GDP) dropping from 2.38 percent (Q4,2018) to 2.01 percent (Q1, 2019), coupled with oil sector’s (Q1, 2019) contraction, these figures show that there is turbulent economic times ahead if they do not improve. The oil sector that gives the country much of the foreign exchange we spend is currently experiencing declining investments due to reduced exploration and absence of clear fiscal policy, according to experts. The situation is such that banks are not willing to lend money to firms in the oil sector because of large volume of non-performing loans on their balance sheets.Although, some Nigerian economists have professed that recession is not imminent, the CBN Governor’s recent salvo that Nigeria may slide to another recession if measures are not taken to tackle

high rate of unemployment, and other economic crisis is to ginger those in the government not to spend money lavishly on governance. Nigeriansdo not want another round of recession.

Regrettably, we have not significantly diversified our economy. It is a shame that we cannot even generate up to 3000 MW of electricity since independence in 1960. So how are we preparing for global uncertainties that will unfortunately, most certainly, lead to another economic crisis? As you read this article, Nigeria’s economy in 2019 is said to be one of Africa’s least buoyant economies and will be below the rate of population growth, which is almost 3 percent.

We are living in a peaceful but dangerous country. The country is dangerous because many Nigerians are unemployed while there is hardly a day without news of crime being committed in one state or the other. If it is not armed robbery, it is banditry. If it is not hostage taking, it is kidnapping or assassination. On a good day, thecountry mayappear peaceful but in a twinkle of an eye, acts of terrorismmay be recorded without any early warning. Security is highly compromised.

When a nation of 200 million people is unsecured, there cannot be any meaningful development. The level of insecurity is directly correlated to the level of unemployment, resulting in weak purchasing power of many Nigerians as several businesses are not doing well. The deplorable state of our economy has disadvantaged many Nigerians and has tempted those with low tolerance to resort to armed robbery, brigandage, abduction, drug peddling, banditry and kidnapping.

The sustained conflict between the state and extremist groups such as Boko Haram and Niger Delta militants has equally exerted pressure on the country’s economy.In fact, mili-

‘

When a nation of 200 million people is unsecured, there cannot be any meaningful development

tancy in the Niger Delta has retarded the flow of investments in the oil sector. We now have a group known as the Network of Niger Delta purportedly threatening to declare a sovereign state of the Niger Delta on 01 June 2019. Why? They claim that the Buhari administration has failed to commission a single project in the Niger Delta in the last four years. The Network of Niger Delta allegedly claims that “the blood of innocent citizens is becoming alarming and it is clear that the government cannot protect the citizens, instead they continue to make unguarded statements without recourse to the safety of the people. It is a common fact that the country is under siege and we cannot allow it to consume us.”This writer strongly believes that the task of combating crimes and improving the economy begins with good governance and should not be left in the hands of the government alone. While Femi Adesina, the Special Assistant Media and Publicity to President Buhari, says that “Buhari’s second term is for legacy building,” no one knows whether the judiciary, members of the 9th Assembly and their counterparts at state level want to build any legacy. As from tomorrow, 29 May 2019, all newly appointed and elected government officials should hit the ground running in all the states and the federal level.

They should remember that what 90 million poor Nigerians need are in the first layer of Abraham Maslow’s hierarchy of needs namely food, shelter and clothing. With the Police Council confirming the appointment of the Inspector General of Police, Mohammed Adamu, one wants to see a different strategy adopted to solve numerous security challenges in the country.

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

Electric vehicles and the future of transportation in Nigerian

Festus Okotie

E

lectric Vehicles have been predicted to be the next disruptive market force in the transportation technology sector in the future. It has the potential to change how energy is used, created and recycled. Its impact has the potential of solving the negative environmental impact of vehicles and has been proven to be very relevant in the sustainability of the environment.

Its emergence has called for an improvement in the overall energy usage and how important it is to find alternate sources of fuel which can positively affect the sustainability of the environment as a whole. Its efficiency at converting potential energy into moving energy is above 75 Percent, while on the other hand, fuel/gas-powered vehicles with internal combustion engines are less than 25 Percent efficiency.

The brake systems of electric vehicles are smoother and it does not function in the same way that fuel/gas powered car brakes performs.

It has regenerative braking system that allows the car to charge the battery while braking. It does not use a brake pad that converts friction

into heat. Rather electric vehicles run on a generator that helps to recover some wasted energy back into the battery.

One of the main reasons for the introduction of electric vehicles into the market is the concern over greenhouse gas emissions and its contribution to global warming. The purpose of creating electric vehicles that reduced or eliminated exhaust emissions was to help combat the issue of negative environmental impact. The greatest impact of reduced carbon emissions is in urban areas where millions of people drive vehicles.

Another beauty of the electric car is that air pollution is decreased due to the elimination of the exhaust pipe, which promotes sustainability and mobility. This, in turn, reduces the negative impact of transportation to the environment and atmosphere. In addition, if all the electricity used in fueling an electric vehicle are reduced using fossil fuels, it will still be less polluting than a fuel/gas car because less energy is needed for electric vehicles to run than normal fuel/ gas vehicles that are popular today, especially as our target is towards 100percent renewable energy in the future and increased innovation in the transportation sector.

Overall, electric cars are significantly cleaner and safer for the environment than traditional fuel and gas vehicles because they don’t require drilling for oil which involves significant processes, procedures and higher costs. Furthermore, the greatest risk to the environment from fuel/ gas powered cars has been air pollution and depletion of the ozone layer from emitted chemicals, not to mention the oil and radiator www.businessday.ng

chemicals that occasionally leak. These chemicals get into the soil and water supply system, thus harming plants, wildlife and eventually human beings.

While the metal parts of electric cars are not completely environmentally friendly and must be disposed in a very conscious way, parts unique to electric cars, like lead or lithium do not promote smog, air pollution and water contamination when in use.

The widespread introduction of electric cars has the potential of improving public health because one of the greatest negative impacts of internal combustion engines is the exhaust emissions. Not only does it smell but it is dirty and filled with harmful gases. Millions of cars over the last century have contributed to air pollution and decreased quality of life for many societies. Electric cars also do not emit as many harmful gases as fuel/ gas vehicles and so do not contribute to the presence of gaseous chemicals in the air. With less air pollution from cars, air quality has an opportunity to improve which in turn will lead to improved health systems.

It has been discovered that pollutants found in car exhausts cause health complications like asthma and bronchitis while the chemicals such as carbon monoxide and benzene block oxygen from entering the body’s vital organs and have been linked to some cancerous illness. Electric vehicles innovations and technology also helps grow the economy. It also helps boost the production of electricity because often times electricity generated to fuel electric cars and homes comes from solar, hydro, nuclear, biofuels ,oil and coal sources. The increased demand for a

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constant and reliable energy source for electric cars also allows for the growth of renewable sources of energy, like solar and wind.

While oil prices fluctuate globally, the price of solar and other renewable sources of energy stay constant. Furthermore, there will not be a shortage of solar power, unlike the oil shortages that plague the world which means that electric vehicles charging stations are more sustainable.

The reduction of fossil fuel emissions through the use of electric vehicles will also help prevent economic damage due to climate change which causes a lot of damage to the global economy such as increased temperatures which causes many natural disasters like droughts and hurricanes responsible for a lot of damages globally. Its impacts are very positive such as fueling of economic growth and also reduction in the damage of severe climate on the economy of societies and nations.

In addition, while electric vehicles have a higher initial costs than fuel/gas vehicles, they are usually more affordable in long-term. Overall, costs of electric vehicles with similar features as gas powered vehicles are a lot more affordable and cheaper. The prices of electric vehicles are also getting a lot cheaper as battery prices are falling which implies that electric vehicles will get even more affordable in the future.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Jobs, jobs, jobs (1)

Rafiq Raji

I

was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) in the week just past (23 May 2019). Titled “Road to Economic Development : Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari.

On the panel afterwards, moderated by Marc Lucassen of AHK and Vladimir Krech of KAS, were Obadiah Mailafia, former deputy governor of the Central Bank of Nigeria (CBN), Onyeche Tifase, chief executive of the Nigerian subsidiary of Siemens, the German industrial conglomerate, Olaf Schmuser, senior representative of the Commerzbank franchise in Nigeria,

and myself.

I started my speech with the one issue that is undoubtedly uppermost on the minds of Nigerians at this time: Jobs!

We have a jobs crisis in Nigeria.

As I recall, during the 2019 election campaigns, when it became quite clear the prosperity messaging of “jobs” by the main opposition People’s Democratic Party (PDP) was resonating with the populace, the ruling All Progressives Congress (APC) changed its broad emphasis on what it likely saw as an array of achievements in fighting corruption and building infrastructure, for instance, to one of how many jobs it had created in the past four years.

How is it possible that we have a jobs crisis with only about a quarter of the labour force not employed, you probably wonder? At 23 percent, the unemployment rate would probably be considered relatively mild; if our challenging circumstances are considered.

There is nothing wrong with the statistics. Because when the underemployment rate of 20 percent is added to the unemployment rate of 23 percent, totalling 43 percent, the statistics reveals what comes close to what you and I probably see and feel on the proverbial “streets”.

43 percent of the labour force is without a full-time job or any job

at all. That is a labour crisis. And to think just about four years ago (Q4 2014), that is, relative to the most recent data of Q3-2018 that I quoted, the unemployment rate was 6 percent; albeit the underemployment rate was still quite high at about 18 percent.

The poor economic growth of recent years is attributed for this sorry state of affairs. In light of the abundant evidence that the Nigerian economy enjoys a boom when oil prices are ascendant, it could also be said that relatively lower crude oil prices are to blame when the economy underperforms.

When the Nigerian economy grew by 6.2 percent in 2014, Brent crude oil prices averaged at $99 per barrel, for instance. In the three preceeding years of 2011, 2012 and 2013, when growth was 5.3 percent, 4.2 percent, and 5.5 percent respectively, oil prices averaged above $100 a barrel.

In 2016, when the economy recorded negative growth of 1.6 percent, oil prices averaged $45 a barrel.

And when oil prices recovered to above $50 in 2017, the economy started growing again; albeit below 1 percent. Incidentally, mediumterm growth expectations of above 2 percent from 2019, are also based on expectations of high oil prices; above $60 a barrel, at least.

‘

…when the underemployment rate of 20 percent is added to the unemployment rate of 23 percent, totalling 43 percent, the statistics reveals what comes close to what you and I probably see and feel on the proverbial “streets”

Still, considering how oil GDP is less than 10 percent of the country’s output, it is highly unlikely that the sector itself is responsible for the growth push when oil prices are high. What is it then?

My theory is viz. Oil prices affect the economy so because government spending is a major catalyst of economic activity in Nigeria. And when oil prices are high, the government has more revenue and thus spends more.

If that is the case, the authorities have to find a way to tax more of the citizenry with little or no upheaval.

A recent testing of the waters on increasing value-added tax (VAT) was met with resistance. I suggest perhaps another way in later sections.

Why not take a direct charge on bank deposits, for instance? The banks do it, why can’t the government?

This is even more pertinent considering how now the government uses 60 percent of its revenue for debt servicing. At 28 percent of GDP, the country’s gross public debt is not alarming. But if the debt of the federal government of 25 percent of GDP takes more than half of its revenue to service, that would be alarming indeed.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Next level: From slogan to reality Chimemelie Awopetu

T

omorrow, President Muhammadu Buhari and Vice President Yemi Osinbajo SAN, would be sworn in for a second term of four years to lead our country into what they have termed the “Next Level”.

But as we transit from “Change” to the “Next Level” it is important to acknowledge what has been done over the last four years by the APC-led Federal Government despite the financial constraints the government has had to deal with. From record investments in infrastructure, attempts at the diversification of the economy through agriculture and solid minerals, establishment of social safety nets, the school feeding programme and N-Power to mention but a few. Despite all these laudable projects and initiatives, a lot more still needs to be done and if we are to be honest, the last four years has been difficult for Nigerians.

While the re-election slogan of the All Progressives Congress (APC) evoked a sense of aspiration for something better than our present reality, I fear that majority of our people might be unwittingly left behind if government continues along the same path which successive administrations (the APC inclusive) have followed in the planning and delivering of services and development to our people.

It is my opinion that the ability of the Federal Government to deliver on its “Next Level” agenda depends largely on two factors; firstly, the projects and initia-

tives selected in realising the objectives of government and secondly the ability of the civil service to articulate and drive the intentions and agenda of Federal Government.

Unfortunately, as a nation we have made a poor job of delivering on the agenda of government. According to statistics provided by the Chartered Institute of Project Management of Nigeria (CIPMN) 56,000 projects valued at about 12 Trillion Naira are lying abandoned across the country. It should be noted that this figure accounts only for infrastructure projects and excludes service-based and technology projects. Furthermore, a 2015 report from the United Nations Industrial Development (UNIDO) found that 60% of Federal Government projects in Nigeria fail. Additionally, a 2012 study by the Project Management Institute (PMI), USA, found out that the delivery of projects by national governments on the African continent has been abysmal with 62% of projects undertaken on the continent failing or are challenged, while 50% of World Bank projects fail and 64% of donor funded projects failing.

The conditions that have led to these high rates of project failure still exist. And until these are addressed, we would be going nowhere fast irrespective of how much is released from the national budget for capital expenditure and government reforms.

While there are several actions that need to been taken to reverse this ugly trend, these two actions in my opinion provide a platform upon which the Federal Government can anchor its “Next Level” agenda if it seeks an increased pace of economic growth and shared prosperity

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for all.

Firstly, all agencies of government must as a matter of urgency begin the process of aligning strategic plans, projects and initiatives in line with the overarching ambitions of the Federal Government. While heads of government agencies are at liberty to initiate programmes and projects, when they fail to compliment or support the overarching ambitions of the Federal Government, they should be defunded.

With the 2019 budget standing at a dismal $28.8 billion for a population of 200 million persons and with 70% of the budget funding recurrent expenditure the need to ensure prudent utilization of the capital vote cannot be overemphasized. To be successful at this, government needs to empower its MDAs with the skills that enables them select projects that align with its own agenda. Let me add that project selection is a skill.

Secondly, and most importantly, the Federal Government should consider a new approach to planning which must trickle down and be adopted by MDA’s. Our problem as a Nation has never been about implementing an initiative or project rather, we have had a major problem with planning. I believe that critical to the realisation of the next level ambitions of the Federal Government is a planning approach that focuses less on deliverables e.g. a new road, a health centre etc., to planning from the point of view of benefits, impacts and results that the deliverables would deliver.

Deliverables are a means to an end, unfortunately in Nigeria we have become accustomed to celebrating deliverables as a sign of development and good governance. In actual fact except for road

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construction where the impact of government investment can be felt immediately, all other sectors of our economy require deliberate action before, during and after the realisation of project deliverables for the impact of government investment to be felt. Over the last 20 years investments have been made by both the Federal and State governments in improving healthcare delivery especially through the construction and renovation of healthcare facilities. Have these facilities improved healthcare delivery in Nigeria? What about the National Stadium Abuja, built for about 54billion Naira, has it impacted on sports development and the economy of the FCT and the National as a whole?

It should be noted that a completed project is not necessarily a successful project. Completed projects are successful when they deliver benefits, results and impacts. Thus, planning from the viewpoint of project impact means government can deliver real, and measurable results faster and on a consistent basis to a greater number of Nigerians.

In conclusion, “Next Level” remains a slogan and making this slogan a reality goes beyond increasing budgetary allocation but entails selecting the right projects and initiatives that align with government intentions and the aspirations of Nigerians, overcoming bias that inhibits rationale decision making and measuring success from the impact, benefits and results that government investments deliver rather than strictly from the viewpoint of money expended and project deliverables.

Awopetu is a strategic project manager and a public impact advocate. He can be reached on c.i.awopetu@rgu. ac.uk

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EDITORIAL Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

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Resolving the battle of engineers and valuers on valuation

W

ith Government Notice 91 of 31 July 2018, the Federal Government issued the COREN-Regulations for Engineering Appraisal/ Evaluation gazette authorising engineers to practise as valuers in engineering-related matters. ”Federal Legislation on Engineering Valuation” established engineers trained explicitly for the purpose as fit and capable to handle engineering valuation.

One year later, however, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) has accused COREN of crossing the professional lines into an area for which others have better competence and claims.

The NIESV allegation raises the issue of professional boundaries, ethical practice and competition for space amongst professions. It should interest all professional practice groups in the country. Resolution may involve legal and regulatory authorities as well as networking among professionals.

COREN was deliberate and purposive in their pursuit of empowerment of engineers to handle what it called engineering valuations. It commenced with a petition by the Nigerian Society of Engineers in March 1989 on the Report of the Consultative Assembly on the Reform of Companies Law. It got an amendment of Section 137 of CAM Decree No 1 of 1990.

The change was CAM Decree No 46 of 1991.

COREN says that Decree No 46 of 1991 “made for the inclusion of engineers in the definition of the valuer in Section 137”. It defines engineering appraisal/ valuation as “an art of entrenching the value of specific properties where professional engineering knowledge and judgement are essential. Such properties include mines, factories, buildings, plant and machinery, industrial plants, public utilities, engineering constructions etc.”

COREN proceeded further to get Babatunde Raji Fashola to sign and gazette three regulations on the subject. They are COREN Regulation for Engineering Appraisal/ Valuation No 98, Vol 105 of 31 July 2018, COREN Regulation for Engineering Economy No 99, Vol 105 of 1 August 2018 and COREN Regulation for Cost Engineering. COREN has sent the government gazettes to MDAs creating awareness and lobbying for briefs for its members.

NIESV then realised the danger. NIESV says the regulations “infringe on already existing law of Estate Surveyors and Valuers Registration Board Nigeria Act, CAP E13 LFN (2007) and gazetted ESVARBON Regulations of 2014 which authorise only registered estate surveyors and valuers to value all properties and assets in Nigeria.” It charges that “The COREN Regulations are an inordinate and crass affront on our profession which shows, unfortunately, the ridiculous limit which the frontiers

of engineering can be extended to in Nigeria; and only in Nigeria. The COREN Regulations, in a most flagrant manner never seen before in the history of this country usurped and conferred on engineers all the functions of valuers provided for under the Estate Surveyors and Valuers Registration Board of Nigeria Decree No 24 of 1975 now CAP E13 LFN 2007 and the gazetted regulations of 2014 made under it.”

NIESV is concerned that the engineers want to take over the jobs of over 10, 000 surveyors and valuers. They assert that both the Board and NIESV belong to the International Valuation Standards Council, which is the only world body responsible for setting valuation standards.

The actions of COREN and the allegations of the valuers over it are grave and significant. They would affect professional practice and represent a puzzle to regulators, project owners and managers.

On the face of it, engineers would seem to have taken advantage of attributes of their profession and similarity in valuation practice to extend the market for themselves. Surveyors and valuers would seem to have slept on their watch as the engineers pushed since the 1990s.

The valuers allege that COREN took advantage of the presence as Minister of Works of Babatunde Fashola, a non-engineer, to get their desire gazetted. They failed with the late Major General Mamman Kontagora, an engineer, as minister of works.

Professions coexist in the social space of work. They establish boundaries and jurisdictional control over a specified area. Various professions establish boundaries through training, codes of professional practice, law, networking and ethical codes. They erect barriers to entry. The contestation over fences is ultimately economical and concerns the right to earn based on accumulated knowledge and perceived limits.

Conflict and cooperation are integral to professional life. Professions seek market monopoly and social closure, establish autonomy and control over work, and exercise influence in politics and civil society. It is essential to observe the boundaries and for the professions to co-exist and co-operate rather than engage in conflictual relations.

It is not unusual to negotiate and construct boundaries among the professions. The world has witnessed hybridisation as the boundaries between professions overlap, particularly in the ICT era and its application to practice. In the UK, revised rules now allow barristers to give legal advice to clients and represent them in Courts, a privilege reserved previously to solicitors.

Both parties should meet and negotiate. Regulators such as those in the Ministry of Works or arbitrators should be engaged.

Otherwise, they should test the matters in court for clarification and deepening the law on professional boundaries.

HEAD, HUMAN RESOURCES Adeola Obisesan

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Do Nigerian leaders read and what’s their development mindset?

Tunji Olaopa

O

ne of the unfortunate dimensions of the Nigerian postcolonial malaise is the terrible statistics concerning adult illiteracy in Nigeria.

The 2018 literacy rate puts adult illiteracy at 38% or about 65million Nigerians. And with the out-of-school figure standing at 11 million children, there is an approximate total of 70 million Nigerians who lack the fundamental ingredients not only to make their lives worthwhile, but to also contribute meaningfully to national development.

Everyone agrees that a state’s development prospect—a state’s capacity to generate infrastructural development—depends essentially on the dynamics of human capital development it is able to facilitate.

Add 38% illiterate Nigerians to the over 60% unemployed and unemployable youths, and we instantly see the enormity of Nigeria’s development challenge.

And the narrative becomes gloomier when we consider the lamented and lamentable diminishing reading culture in Nigeria. In a 2017 survey by the World Culture Score Index that monitors the world reading culture, India tops the list with an average of 10.42 reading hours per week, followed by Thailand with 09.24 hours per week. China came third with 8 hours per week. Only Egypt and South Africa were the two African countries listed, Nigeria is nowhere on the list. Several reasons have been adduced for the low reading culture—low budgetary allocations for the development of functional libraries,

the influence of social media and the new technologies, lack of adequate reading materials, poor or inadequate readership promotion programmes, inept and poorly trained personnel, and even corruption and poverty.

Reading is inextricably tied to intelligence and cognition, and the capacity for analytic and critical reflection and problem solving. Self-conscious awareness, emotional intelligence, mental health, pure reading delight, experiential upliftment, acquisition of social grace, empathy, and so many other skills associated with reading are all significant not only for mental progress but also for socioeconomic development. I suspect that this is the key reason for racial slur that “blacks do not read.” Most of us have heard or read that statement that if you want to hide something important from a black man, the perfect hiding place for such insights and ideas is inside the pages of books. And since the black man does not read, you are guaranteed the safest hiding place! This is a racial reasoning, no doubt, but does it tell us something fundamental about our postcolonial condition?

Let me identify a dimension of the reading culture that I consider very fundamental. This is the capacity or otherwise of the leadership of any state to read books.

At the end of his second term in office, the reading list of President Barack Obama was published. No one would ever believe that the two-terms that were filled with partisan worries and racial troubles would ever leave sufficient space for a black president to develop a reading and play lists. Obama did, and the list spans history, philosophy, memoirs, literary fiction, sociology, current affairs, political science, and many more. Obama devoured authors as popular as James Baldwin, Toni Morrison, Melville Herman, V. S. Naipaul, Chinua Achebe, Nelson Mandela, Ngugiwa Thiong’o, Chimamanda Adichie, Gabriel Garcia Marquez, and many more. He read such incredible books like The Collected Works of Abraham Lincoln, Invisible Man, Sapiens: A Brief History of Mankind, Harry

Porter and the Sorcerer’s Stone, The Soul of Black Folks, How Democracies Die,The New Geography of Jobs, Basketball and Other Things, Shakespeare’s tragedies, and many others.

Now, it has not been established that there is a direct proportional relationship between the quality of a leader’s reading list and the governance quality of a state.

Yet, it is safe to say that a reading leader would likely be a good leader. Reading opens the mind to a variety of human experiences that have the possibility of influencing one’s thoughts, decisions, plans and perceptions. Imagine a leader of a third world state reading about the development experience of Lee Kwan Yew or the turbulent presidency of Barack Obama? Imagine a president in any of the African states reading the bestseller, Why Nations Fail?or Mandela’s A Long Walk to Freedom.

Thus, we can ask: do Nigerian leaders read? This question can be tracked historically. I have never read anywhere the reading list of any Nigerian president.

One could say, with some level of certainty, that former president Olusegun Obasanjo was an intellectual. The same could be said for Nnamdi Azikiwe. Otherwise, what has characterized leadership in the Nigerian political space is an extreme and fixated sense of parochialism colored by ethnicity, religion and selfish impulses of the worst type defined by a clientelist or prebendalelememts. In Nigeria, we care more about the religious and ethnic affiliations of leaders and leaders-to-be rather than their intellectual and development quotients. We elect leaders based on their sense of political correctness or the capacity to distribute largesse. We are not bothered about the kind of mindset a prospective leader is bringing into critical offices in the land.

There are two types of mindsets that have been identified, each with serious implications for national development.

The first is a fixed mindset which is fixated on some specific dynamics or ways of doing things without any desire for a

‘

A fixed mindset is so fixated on limiting and selfish considerations to an extent that it fails to consider the mistakes of the past, historically and intellectually outlined in the pages of many reading lists

reflective change. It takes little reflection to see how such a fixed and fixated mindset could rigidly adapt itself to a rent-seeking context where everything is seen in the light of politics and power play. On the other hand, there is a growth mindset that capitalizes on experience, intelligence and learning as the crucial elements in the dynamics of success and achievement. The growth mindset requires extra effort, extra reflection, and an urgent desire to experiment. Of course, the fixed mindset does not require the extra effort determined by joy of reading and continuous learning.

A fixed mindset is so fixated on limiting and selfish considerations to an extent that it fails to consider the mistakes of the past, historically and intellectually outlined in the pages of many reading lists. In other words, leaders who are not readers will fixatedly continue to do the same things in the same way, continue to attend religiously to tradition, while expecting to see or achieve different and fundamental results and outcomes. A leader fixated on the traditional essentially lacks the experimental sensibility that is transformational rather than transactional. Transaction is the usual administrative style that abides by certain debilitating rules and procedures, transformation is radical because it is experimental and bold. Such experimental leadership sees the historical and sociopolitical and economic consequences of certain policies, say, the inequitable revenue allocation formula, and takes distinct but coherent step to interrogate its essence and utility for a strong and united nation.

Transactional leaders often fail to engage with the leadership experiences of others who have gone ahead or are still right in the stormy saddle of leadership.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Prof. Tunji Olaopa, retired Federal Permanent Secretary & Professor of Public Administration. tolaopa2003@gmail.com, tolaopa@isgpp.com. ng

Organisational vocabulary: You become what you say

Olukunle A. Iyanda

“

P

erformance more often comes down to a cultural challenge, rather than simply a technical one.” -Lara Hogan The Economic Importance of Con-

versations Where do your employees learn the most? The boardroom, seminar room or at training sessions?

Or could it be in the hallways, cafeterias, coffee stands, water dispenser stands or around their desks? Or from phrases used by their executive leaders? Whichever way we look at it, followers are great imitators of their bosses, and their everyday words and phrases set the foundation for the organisation’s culture and how well your organisation will perform. This is equally true for individuals, what you say daily determines what you become.

Lessons from IBM IBM is a world-leading technology company founded by Thomas J. Watson in 1911. It was the pride of America. However, in the late ’80s and early ’90s, everything began to go wrong for the company.

They were mounting losses upon losses. Their share price nose-dived so also did their market share.

Their collapse seemed imminent. “What exactly is wrong with IBM?” everyone asked. IBM did not lack sound strategy, vision, resources or highly skilled

workforce but things seemed to be working against them. In 1993, IBM hired a new CEO, Louis Gerstner from Nabisco (producer of Cookies) to manage the largest and the most complex technology company in the world after tech guys like Apple’s John Sculley, Motorola’s chairman George Fisher, and Bill Gates of Microsoft declined interest in the job.

Louis was hired because of his impressive record of success. When Gerstner started at IBM, he did not know it then, but from interactions, he came to realise that a culture of individualism and unnecessary non-conformism was prevalent at IBM. Everyone put themselves first with the language “I”. IBM was built on this individualistic culture, but changes in customer behaviour required a different approach where silos are broken down, and team spirit was promoted. He knew that the difficult task of ensuring a culture change at IBM was necessary. In his book Who Says Elephants Can’t Dance, he stated that “Culture isn’t just one aspect of the game; it is the game”. He was persuaded that a turnaround success was only possible at IBM if there was a radical transformation of the culture and without which the company was headed for self-destruction.

In the spring of 1994, Louis convened a meeting of 420 top managers of the company. At the meeting he presented two charts to them — one on customer satisfaction and the other on market share. The chart for market share showed a loss of more than half of the market share within 8years. The chart on customer satisfaction portrayed a depressing outlook. He later showed them the photos of CEOs of top competitors, Bill Gates of Microsoft, Scott McNealy of Sun Microsystem and Larry Ellison of Oracle. The pictures represented the faces of the “bad” guys who were slicing their market share.

To drive home his point, he read out the statement credited to Larry Ellison who said “IBM? We don’t

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even think about those guys anymore. They’re not dead, but they’re irrelevant.” If that statement was not painful and depressing, then what could be more painful? Is your culture gradually pushing you toward the precipice of irrelevance? How do you recognise them and what should you do about it?

Why organisations overlook culture IBM was once first among equals (perhaps it will be right to say that at a time IBM had no equal) How did IBM find itself in that haemorrhaging situation despite having the best talents, a great strategy, mission statement, core values, and incredible assets?

IBM became a company without any foreseeable future. In their book, Computer Wars Charles Morris and Charles Ferguson stated: “There is a serious possibility that IBM is finished as a force in the industry… the question for the present is whether IBM can survive. From our analysis thus far, it is clear that we think its prospects are very bleak.” Bill Gates, the founder of Microsoft, was quoted to have said that IBM ‘will fold in seven years.’

When things are going wrong, it is typical for executives to immediately begin to dig around the most natural indicators of organisation problems: corporate strategy, capacity development, performance measurement, sales and so on. Often, culture is overlooked for a variety of reasons: * Past Success Syndrome: statements like – “it is how we do things here; it is what brought us this far and has given us a competitive edge” will hold any organisation down for long. * Change is Difficult: the second reason is the excuse that culture change is usually problematic and difficult to identify and change. * Leaders’ Bias: the third reason is the unwillingness on the part of the leaders. Because most times the culture is a direct reflection of the leaders’ attitude, style and tone. Therefore, except the change

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begins with the leader, every effort for cultural transformation may be an exercise in futility.

Getting the IBM elephant to dance Louis Gerstner recognised that the power of language could become a catalyst for culture change in the organisation. To win the game at IBM, Louis apart from overseeing a cut in the overhead costs, selling assets, he changed the existing tones and the phrases used at IBM and ensured personal business commitments from each employee. He said “I’m a strong believer in the power of language. The way an organisation speaks to its various audiences says a lot about how it sees itself”. So how did he change the language at IBM? He appealed to the emotions of IBMers and used the derogatory words of Larry Ellison to spur them into thinking differently. He was passionate in his speech and its delivery. Going forward, he demanded a complete overhaul of the narratives in IBM (some of the terms in IBM vocabulary are terms as “take it offline,” “hard stop” and “pushback”) Most of the choice of words that found their roots in the founders of the organisation needed to change because they had outlived their usefulness. IBM’s return to profitability took place within 6years, and market capitalisation rose from $29 billion to $168 billion. IBM’s turnaround was reputed to be one of the greatest turnarounds in corporate history.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Iyanda is Strategy and Innovation Advisor and Human-Centric Design Led Innovation Consultant. He is Founder/CEO, BROOT Consulting Nigeria Limited.

Email:iyanda@brootc.com

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Media business A CMO’s view: Involving research before campaigns makes the difference BUA’s O’tega Ogra - Group Head, Corporate Communications shares his 12 years’ experience in marketing communication and hinted that applying research in the work, dedication, hard work and out-learning others are factors that keep marketing communication professionals ahead of the curve. Daniel Obi reports

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or O’tega Ogra, the fundamental of marketing communication is research.

This is because “if you don’t know what you are doing and where you are going to, you cannot create programmes for it.

If you don’t know the people you are talking to, how then do you want to talk to them?” he said while discussing with BusinessDay on a number of marketing communication issues including marketing trends and challenges in the industry.

O’tega who joined BUA Group in 2015 from Wema Bank after also a four year working experience in GTBank believed that the business of marketing communication is not growing the way it should due to under-utilisation of research in the industry.

The BUA Group Head, corporate communication is actually lending credence to experts’ belief that market research which is an important component of business strategy serves as business compass and provides necessary information for innovation and guides organisations on expenditure and areas of focus to maintain competitiveness.

Citing his experience in GTB, O’tega narrated how involvement of research by his team and support from the management by providing enabling environment assisted to grow the bank’s customer base by about 500 percent.

“GTBank provided a fertile ground for me to grow. The management provided an enabling environment for us who were vision- driven.

At the bank we experimented on new things and we assisted the bank move from 390,000 customers in one year to 2.9 million. We came up with a lot of initiatives that worked”.

From GTB, O’tega moved to Wema Bank in 2011, a bank considered to be at the other extreme in terms of brand perception and financials when compared with GTB. O’tega who said he always challenges himself said his move to Wema was among other things to prove that the success achieved in GTBank was not only predicated on the fact that the bank had strong brand identity.

In a bid to push up Wema Bank brand identity, the corporate communication team in 2011 ran a campaign on Wema mobile and in one year, the revenue on that platform grew to over 667 percent with campaign spend of less than a N1m. “ I also managed the rebranding process which was the toughest project in my life. The idea was to push and refresh the brand. We were faced with challenges of either changing the name of the old bank. I am a research based person. We commissioned a research and the results were quite instructive. We found out that some of the things we wanted to change were the things that made the brand thick in people’s head. We therefore decided to retain the name but not overly changing the colour but made it exciting. We started in November 2013 and ended the project May 2015”.

After the rebranding of Wema Bank in May, O’tega joined BUA in June, 2015 after a competitive in-

O’tega Ogra

terview involving about 14 other professionals. At BUA, O’tega has brought his experience to bear on the group, foremost foods and infrastructure conglomerate with interest in real estate, cement and sugar among others.

Today, many communication managers are experiencing budget cuts by their management due to difficult operating environment which has affected firms in Nigeria.

Explaining therefore how many communication managers are carrying out their functions with present budget cuts, he said this depends on how communication managers see their role - as a cost center or as a proper management function with a global view of entire business and

how it operates and how communication manager’s function can facilitate the end goal which is profit.

“I have always seen our role as a management function. We are not just doing communication and branding activities for the sake of it.

It is because every single thing you do, some measurable, some not, contributes to the bottom line at the end of the day. But many of our colleagues don’t see it that way. It is important that when you are given one kobo, to show return on it. It is left to communication managers to convince CEOs to see the value in the work they do”.

To O’tega who sees himself as youngest corporate communication director, data is king and once a

communication manager can break that data into granular levels, he/she can “maximise the marketing spend in a way that people think you are a wizard. But you are just being smart with the data”.

On his activities in BUA, O’tega said who also sees his role as a management function, creating synergy across all departments said with his team’s efforts, he has moved BUA from being number 13 across all FMCG in terms of media exposure to number 2 in 8 months.

O’tega who read public health in the University, worked with German agency for international development, managing projects in the North East related to child and maternal health and girl education before moving away from North east because of the atrocities of Boko Haram to Lagos to join GTB in 2008 said his strength on the job is being stubborn but with capacity to add value. “You must be pushful and this comes from position of knowledge and the ability to sell idea”, he said.

On the challenge of being a communication manager, O’tega believed that a lot of people do not appreciate the value of marketing communication to the business.

“Some people see it is a job anybody can do but not everybody can create campaigns that will affect the bottom-line of the organisation”. On the way forward, he therefore advised that “as professionals, we need to come up with a set of standards to guide our profession in Nigeria as a lot of things are done badly”, he said.

BusinessDay marketing and brands’ editor, Daniel Obi, others bag Brandcom awards

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aniel Obi, BusinessDay’s Marketing and Brands editor has won the Journalist of the Year prize at Brandcom award. He was selected for the award among media, marketing and brands editors in Nigeria for his immense contributions to the growth of Nigeria’s integrated marketing communication industry.

According to Joshua Ajayi, convener of Brandcomfest and publisher of Brand Communicator, Brandcom Awards rewards outstanding brands, agencies and individuals who have played unique roles in lifting Nigeria’s marketing communication industry.

It is recognition of excellence, professionalism, innovations and creativity in the industry “Brandcom Awards is the celebration of the exploits and achievements of brands, agencies and notable players with remarkable impacts in the brand and marketing industry” In addition, the organisers disclosed that all the awardees were

L-R: Ijedi Iyoha, Ag APCON represented by Susan Agbo; Daniel Obi, editor Brand and Marketing, Business Day and the Brand Journalist of the year; and Joshua Ajayi, publisher Brand Communicator and Convener of Brandcom Awards at the Brandcom Awards held at Muscon Centre, Onikan, Lagos at the weekend. www.businessday.ng

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painstakingly assessed by a panel of assessors who worked on the mantra of Prestige, Integrity and Credibility.

Other notable players who received awards include renowned advertising practitioner and Chairman, Troyka Holdings, Biodun Shobanjo who was also honoured at the maiden edition of the Brandcom Awards with a prestigious ‘Hall of Fame’ recognition, the biggest honour at the last weekend award ceremony.

Organisers of the event said Shobanjo has contributed immensely to the integrated marketing communications industry, the business community and the country at large.

Marketing Manager of Hayat Kimya, Roseline Abaraonye emerging as the Marketing Manager of the Year while Brand Manager of Molfix, Chioma Mgbaramuko was awarded the Brand Manager of the Year. The Public Relations Manager of Multichoice Nigeria, Caroline Oghuma, got the Public Relations Manager of the Year. @Businessdayng

In the brand category, GTBank was awarded Commercial Bank Brand of the Year while Access Bank carted away two awards; SME Friendly Bank of the Year and Best Brand in Sustainability. LAPO Microfinance got awarded Microfinance Bank Brand of the Year; Tecno, Mobile Phone Brand of the Year, Haier Thermocool, Home Appliance Brand of the Year, Pepsi, Carbonated Soft Drink of the Year; Dano, Dairy Brand of the Year; Milo, Beverage Drink Brand of the Year; MTN, Telecom Brand of the Year (Voice) and Airtel, Telecom Brand of the Year (Data).

Other awardees are: Maltina, Malt Drink Brand of the Year; Indomie, Noodles Brand of the Year; Oral B, Oral Care Brand of the Year; Sunlight, Detergent Brand of the Year; Maggi, Seasoning Brand of the Year; DSTV, Pay TV Brand of the Year, Domino’s Pizza, Quick Service Restaurant Brand of the Year; ALAT By WEMA and Digital Bank Brand of the Year.

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Branding Upcoming W/Africa’s Baby Fair excites players in baby services, products Stories by Daniel Obi

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arious industry players in baby products and services have commended the thinking behind the upcoming Baby Fair.

At a meeting with the organisers of the fair coming up in August this year in Lagos, Oluwafunke Akinlosotu, the brain behind Tender Hugs Crochet said the fair will service as avenue for visibility for her business and other service providers and manufacturers across West African market.

This baby fair is the first of its kind and according to Oluwafunke it will create a convergence between numerous manufacturers and consumers of baby products. Explaining her business established a year ago, she said crochet is a technique using yarn and hooks to create anything but she carved the niche in baby dresses.

“Mothers always see clothes that were sown but my clothes are unique as they are handmade”.

For Feigne Suinner, The Event Nanny manager said the upcoming Baby Fair will highly be appreciated as it brings all stakeholders in baby industry together. “It will also allow parents to find out new products as one cannot underestimate the amount of care parents need for their children”.

Suinner whose firm relieves mothers of the burden of taking care of their babies at events further said the Baby Fair will also allow parents to find out new products as one cannot underestimate the amount of care parents need for their children. It is an avenue for

baby care manufacturers to exhibit their products and show they care about the future generation.

For Olusola David Elegbede whose firm takes care of baby hairs said the fair is good opportunity to exhibit her services to the public.

Briefing the exhibitors earlier on the importance of the fair to businesses, Jide Benson, a communication expert who is part of the project team said more than 50 exhibitors are expected as the venue. He also said there will be seminar where women will share their experiences how they cope with multi-task jobs of being a wife, career women and taking care of the family.

Also speaking, the project director, Tolupe Olorundero said the fair intends to provide an organised single meeting point for young parents and sellers of kiddies’ items as well as service providers to meet current and potential clients. “We particularly want to encourage SMEs that have grown their businesses using social media. We also intend to expand the scope of the event industry in Nigeria”

as event industry is one of the fastest growing in the world and holds a lot of promise.

“A key part of the Baby Fair is the social impact and philanthropy initiative wherein the general public is encouraged to donate items that they no longer use for their babies and infants. Such items will be distributed among orphanages and other lessprivileged individuals” The fair is expected to bring together many players on baby products across Nigeria and West Africa, including manufacturers, retailers, banks with baby products and services, schools, manufacturers of medication, clothing, diapers, cots, feeding equipment, toys and gadgets for children among other products will converge on Lagos in August this year for supposedly the biggest Baby Fair.

The organisers said the three-day event slated for August 2-4 at Muri Okunola Park on Victoria Island, is expected to feature array of products and services for early-child needs as well as side attractions and crawling competitions for children.

Emirates marks 15 years of doing business in Nigeria

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n commemorating the 15th anniversary of doing business in Nigeria and playing in the Nigerian aviation space, Emirates said it would commence direct daily flights from Abuja, increasing its weekly flights on the Abuja-Lagos route to 21 flights starting 2 June.

Since its first flight, Emirates has flown millions of passengers on the popular Nigerian route and has become the airline of choice for both premium and value-conscious Nigerian travelers. In response to increase traffic on the route, Emirates launched services to Abuja in 2014, 10 years after its inaugural flight to Nigeria.

Emirates now operates a double daily service to Lagos with the Boeing 777-300ER aircraft, which offers eight private suites in First Class, 42 lie-flat seats in Business Class and 310 spacious seats in Economy Class. The airline operates four weekly flights to Abuja, which is set to become daily from 1 June.

Afzal Parambil, the regional manager, West Africa said “Emirates has enjoyed a strong relationship with Nigeria, and remains deeply committed to the market. Over the past 15 years, we have not only

seen our operations grow, but our product develop to cater to the taste and requirements of our Nigerian customers. We constantly strive to provide our passengers with an unforgettable travel experience, and our growth is a testament to the fact that we are on the right track,” said Parambil.

Recently, Emirates launched a pan-African brand advertising campaign that celebrated the talent and achievements of young Africans, taking the message of ‘New Africa’ to the world. Paying tribute to a new generation of African disrupters who are making their mark globally across music, fashion, literature and the arts. The campaign celebrates the cultural renaissance currently taking

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over Africa.

According to Parambil, the short films tell the stories of unique individuals from different parts of the continent who are poised to become cultural ambassadors for Africa to the world; they share a common passion to bring their global exposure and influences to their own local journeys, as they discover what it means to be ‘home’.

The campaign included Nigeria’s Abiola Oke who left New York and a career on Wall Street to return to his hometown Lagos, as the CEO and Publisher of OkayAfrica; a digital media platform at the age of 31 with a business model that is focus and dedicated to African music, film, culture and entertainment.

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Chi’s research shows Hollandia Evap “pere” pack gaining affinity with consumers

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he recent introduction of Hollandia Evaporated Milk’s 120g pack size referred to as “Pere” has been met with commendation from consumers, according to a recent market research conducted by Chi Limited, manufacturer of the product. “The new “Pere” pack is being seen as an irresistible way to deliver wholesome nutritious evaporated milk in a distinctive packaging”, the company said in a statement.

At a N100 price point, it said the Hollandia Evap 120g “Pere” pack has endeared itself to millions of con-

sumers across Nigeria for its unique creamy taste and nourishing value in a convenient pack. It is tailored to fit specific consumer needs with quantity benefits and reasonably connects with an affordable price point.

Among consumers who spoke was Oluseyi Adeniyi, a Brand Consultant with MarketingPlus. He stated that while Hollandia Evap is already a household name in Nigeria for its product quality, affordability and satisfaction, its new 120g “Pere” pack size is a packaging innovation that is making inroads with its convenient portion size.

Caritas Executive Crisis Communication Masterclass debuts in Lagos

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oremost Nigerian strategic communications agency, Caritas communications, is set to hold its first Executive Crisis Communication Masterclass in Lagos. The programme is aimed at adequately preparing and equipping mid to senior level executives with the skills required for effective crisis planning, prevention, response and recovery.

The programme will provide participants with the opportunity to learn how to manage communications crisis, understand various types of crisis at different levels, business continuity, crisis team establishment and the key elements of crisis audit. The training is hosted by Lagos Energy Academy.

Designed to meet the need of the industry, participants will be exposed to local and international case studies.

BD Brand Talk

Use data to understand and empathize with your customers data available to understand and empathise with our customer before we do anything else. We need data and insights because if we act only on gut feel then we will likely only appeal to people just like ourselves.

According to Kantar, insight data alone will not tell you what needs to change. Even with the power of artificial intelligence to identify what is happening someone still needs to identify the big, new growth opportunities. Artificial intelligence may even learn to drive a car on its own but without someone to tell it where to go, all the power of AI is useless. You, the brand owner, must create a vision for what could be, a vision for how your brand can make more money.

Once you have a vision you need to create a plan to get there and implement that plan effectively. And this brings us back to testing and consumer insight. We all have blind spots. If we do not have a system that helps us identify those blind spots we will be in trouble. The biggest blind spot is how consumers will respond to our brand and marketing initiatives. Consumer insight focused on innovation, creative development and pre-testing can help reduce the blind spots before launch but there is still the big unknown: what will the competition do and how will it affect your brand? We cannot be completely sure about this but if our dialogue with data goes right then we should not have much to fear.

Mike Umogun

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hen Aliko Dangote talks business in Africa people listen and listen well because his achievement speaks volume.

The same can be said of Jeff Bezos one of the richest entrepreneurs in the world. Jeff Bezos, the founder of Amazon, has grown one of the most valuable brands in the world and earns more in a minute than most of us earn in a year, so he must be doing something right.

And he is not shy about telling us how he became successful and his recipe for success.

“You, the product or service owner, must understand the customer, have a vision, and love the offering. Then, better testing and research can help you find your blind spots.” Aliko Dangote is also of a similar or related position.

When asked … Alhaji how did you make your billions, his response was short and sharp, understand what people need and provide it and the rest would be history.

That’s why his group of companies produce those essentials Nigerians irrespective of their status would need. Noodles, Sugar, Salt, cement and now refined petroleum products.

The biggest problem we have today is that for all the data we have, we are losing touch with our customers, who they are, what they want, their fears and desires, why they buy our brand or not.

Whether it is big data, neurosciMichael Umogun@kantarmillence or traditional surveys and focus groups, we must use all the wardbrown.com

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BDTECH

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In association with

E-mail: jumoke.akiyode@businessdayonline.com

Cisco moves to build digital workforce across Africa …To train 1million new people in its Networking Academy Stories by Jumoke Akiyode Lawanson

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isco has reinforced its commitment to support the digitisation of Africa’s communities, businesses and governments through several initiatives for skills and talent development, innovation and job creation.

The global IT and networking company is set to launch a new repair centre, train one million new members of Cisco Networking Academy (NetAcad) and introduce Cisco Edge in Nigeria.

Cisco says that by investing in repair centres in Nigeria, it intends to contribute to job creation and skills development. The new repair centre will work as a partner program which aims to work with selected distributors who will repair and restore Cisco hardware and make high quality, refurbished technology accessible, especially for small and medium sized organisations. In addition to repair, Cisco intends for the centers to carry out testing, quality engineering, fulfillment, process management and procurement, as well as inventory control, serving Cisco’s customers in Nigeria.

Commenting on the partner repair program, Olakunle Oloruntimehin, general manager Nigeria and West African countries, Cisco said; “

L R: Tunde Fowler; Executive Chairman Federal Inland revenue Service, Funke Opeke; Chief executive officer Mainone, Babafemi Ojudu; Special Adviser to the President on Political Affairs, representing Yemi Osinbajo; vice president, Umar Garba Danbatta; Executive Vice Chairman Nigerian Communications Commission (NCC), Olabisi Durojaiye; chairman Nigerian Communications Commission, Omobola Johnson; former minister of communications technology and keynote speaker, during the Nigerian Telecom Leadership Summit 2019 held in Lagos on May 23, 2019

we are living in a world that is changing faster than ever imagined. We are inspired by the prospect of an economy with abundant jobs, a place where entrepreneurs can thrive. Our goal is to enable small and medium businesses to accelerate their growth by helping them access our world class technology.”

“Our goal is to create value through ‘glocal’ manufacturing and channel models. By glocal, we mean utilizing global manufacturing practices with local execution. We look

forward to a Nigeria where everyone will have access to technology and utilise it for the growth of the economy”, Olakunle Oloruntimehin added.

According to Cisco, the repair centre is part of its vision to have technology enable inclusion and opportunities for people, wherever they live and whatever their condition.

For more than 20 years, Cisco has invested in educating and upskilling students, graduates and unemployed youth through its Networking Academy (NetAcad). NetAcad

provides students hands-on digital skills to prepare them for careers in the digital economy. Since its launch in 1998, close to 700,000 students participated in NetAcad courses throughout the African continent.

This year, the company has set an ambitious goal to train an additional one million students in Africa (including Nigeria) by 2025. The students will be trained during the next three years, followed by reskilling initiatives for active workforce and job seekers, based on content from

Cisco NetAcad. Through NetAcad, Cisco intends to support the creation of Digital Learning Hubs in public libraries, accessible by the local population. The Company also plans to actively engage with employers to identify job opportunities that align to the skills of NetAcad students and alumni.

Cisco continues to help society securely connect and seize tomorrow’s digital opportunity today. In November 2018, Cisco opened the first Cisco EDGE Incubation Center in Pretoria, South Africa. In the coming months, Cisco plans to establish a similar centre in Nigeria. EDGE stands for Experience, Design, GTM (Go to Market) and Earn. The objective is to share business knowledge, help develop small and medium businesses in the digital age, speed up their entry to market and, as a result, create new jobs for the local economy.

EDGE Centres function as incubators: they provide small and medium businesses with state-ofthe-art Cisco communication and collaboration technology, alongside training and enablement programs.

They specialise in topics that are relevant to the local economy, such as smart ports, IoT in agriculture and smart cities. In addition, small and medium businesses are able to connect with global Cisco experts, who can support them with developing business ideas and concepts.

Asseco addresses e-banking fraud at digital finance innovation summit

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ith the increased adoption and popularity of digital innovation in the financial sector, cyber criminals are becoming more tactical and elusive. It is therefore important that businesses and government be abreast of technologies that could help the economy stay ahead of cyber criminals.

Curbing fraud in digital finance was part of the fundamental issues discussed by experts at the maiden edition of the Digital Finance Innovation Summit organised by Asseco Nigeria in Lagos recently.

Asseco Nigeria is a subsidiary of the Asseco Group the 5th largest software company in Europe.

While giving his welcome address at the summit, Simon Melchior, CEO Asseco Nigeria reminded guests of the importance of innovation in finance given increased threat from new entrants.

He also shared insight into the Asseco Group and its activities in Nigeria.

“The Asseco Group has grown rapidly through the past decade and is now in over 50+ countries with 24,000 employees. The company has invested significantly in

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Nigeria, where we have a full team of technical consultants, developers and business managers. We have an extensive client base in Nigeria including a number of the top banks, insurance companies and public sector institutions,” Melchior said.

Adefolu Majekodunmi, managing director of Asseco Nigeria presented the growing trends in digital banking. He highlighted the growth in “neo banks” and “flanker banks” and how these have begun to challenge well established banks around the world.

He set the foundation for the

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rest of the sessions on the digital banking opportunities and associated risks in Nigeria.

Of special attention to the audience were solutions addressing fraud prevention and detection.

Wale Olokodana, enterprise director of Microsoft Nigeria, described the development in machine learning and artificial intelligence in banking. He was followed by a number of international technology leaders that provided demonstrations on digital onboarding solutions using artificial intelligence, risk management solutions to curb the growing menace of electronic banking fraud

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in Nigeria and customer satisfaction 2.0 applications.

Abidemi Asunmo of Sterling Bank, detailed the culture of innovation in the bank and shared insight into the mutually beneficial working relationship with Asseco.

The summit concluded following a brief presentation by Tunde Ogunleye of Oracle on addressing data protection regulations.

Adefolu Majekodunmi said that Asseco Nigeria is focused on supporting financial institutions with cutting edge technology during this period of disruption in the banking sector.

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E-mail: jumoke.akiyode@businessdayonline.com

The huge opportunity for consolidation and cloud in Africa Andrew Sordam, VP for Africa at Oracle

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t is only 100 days since I took up the post of VP for Africa at Oracle, but already it is clear why the continent is such a priority for the company, and why it is considered a land of opportunity in the tech space.

Consolidation of modernisation Africa is seeing huge population growth, and a marked increase in consumer spending, resulting in a big demand for 24/7 service. The much-discussed leapfrogging effect, which we have seen in areas like power and telecommunications, has helped the continent develop at speed, but it has also placed huge demands on modern businesses.

Companies of various shapes and sizes are taking advantage of the newest tech to improve the way they do business, but a major, more recent trend is that many are now looking at the consolidation of this modernisation.

These are companies that are growing very quickly, and they want seamless and complete integration between the front and back office.

This is happening across

the board - major corporates, SMEs, financial services companies, those in retail, in financial services, for example, East and West African banks are beginning to merge, with such mergers requiring new strategies.

Adoption of technology is not just for the commercial sector, however. In the public sector, greater efficiencies are also being sought. Each government department used to have its own IT department, but that is now changing, and we are seeing convergence into one service centre. This is a big trend across the continent. The public sector, like

the private sector, is looking for integrated technologies to help it become more effective and keep up with demand.

Vertical strategies Herein lies the opportunity for a company like Oracle.

We help private, public sector organisations develop and improve processes and more, and more we are looking at complete solutions.

The opportunity is massive in Africa in this regard.

We see the impact of our organisation in every line of business. We are able to give customers choice to either go in with the entire stack -

L-R: Justina Abdulateef; account manager, public sector, Lagos zone, Globacom, Sanya Eniola of Reagan Memorial Baptist Girls’ Secondary School; second runner-up of a quiz competition, Alaere Peterside of Chrisland College, Idimu, winner, Omotoso Aanu Oluwa of Baptist Girls’ Academy; third runner-up, and Oluwakemi Akinyele of training and development unit, Globacom, at the Girls in ICT Day event, organised by e-Business Life and co-sponsored by Globacom, held in Lagos recently.

Fintech players, regulators reaffirm commitment to agency banking Jumoke Akiyode-Lawanson

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he Central Bank of Nigeria’s (CBN) Deputy Governor in charge of Financial Systems Stability, Aishah Ahmad, has reiterated the apex bank’s commitment to the successful implementation of agent banking in Nigeria. She emphasized that the CBN’s commitment is geared towards the reduction of the current financial exclusion rate to 20 percent, and the achievement of the FSS 2020 goal.

Ahmad, who was represented at the recent 7th edition of PoS innovation summit by Sam Okojere, director, payment system management at the CBN, said that initiatives such as the PoS innovation summit provide the opportunity for ideation and development of groundbreaking notions that solve problems in the financial technology industry.

Also speaking, Tunde Ogungbade, managing director of Global Accelerex, said that access to financial services to the underserved and most vulnerable in society will help them step out of poverty and reduce inequality in the society. He reminded del-

from apps, to infrastructure, to vertical solutions or multiple modular journeys to the cloud. In each instance, this is based on business needs and can be either private or public cloud. And that impact is set to be further scaled with our new approach on the continent.

Our CEO Mark Hurd spoke recently about our plans for leveraging our leading Software-as-a-service (SaaS) business to seize business-to-business (B2B) market share. Africa is no different to anywhere else in this regard, though we see a particular opportunity in in-

egates that it is not the obligation of government alone to help bring about financial inclusion, but is also the responsibility of every entrepreneur and business entity, whose participation is critical in creating that desired change in the cashless ecosystem.

The theme of the PoS innovation summit, “agent banking deployment to reach the last mile,” provided the appropriate discussion platform for keynote speakers and the general audience. From several deliberations, it remained obvious to all delegates that collaboration in the sector is a key success factor for the topic above.

During the live demonstration of Accelerex Agent Network Platform (ANP), a product developed for agency banking business by Global Accelerex, Niyi Ajao, the deputy managing director of Nigeria Interbank Settlement System (NIBSS), applauded Global Accelerex for promoting financial inclusion with the innovative platform.

“With the security, flexibility and management features on the platform, Agent Banking business will be easier and more convenient”, Ajao affirmed. www.businessday.ng

Guests were able to make withdrawals and initiate transfers on the platform, while beneficiaries confirmed receipt of such monies, lending credence to some of the unique features of ANP, which are instant transaction notification, instant value and same-day settlement.The high point of the event was the unveiling of Global Accelerex’s new brand identity.

Speaking on the reason for brand restage, Kayode Ariyo, executive director, business development and operations at Global Accelerex, disclosed that the new brand signified a renewed and re-energized company, dedicated to exceeding customers’ payment expectations in Nigeria and across Africa.

At the end of the event, participants concurred that, to sustain the momentum of the financial inclusion drive, important factors such as innovation and creativity will play a pivotal role.

All participants resolved to continue to work together in order to facilitate and deliver convenient, accessible and cost-effective financial services to the underserved and unbanked in Nigeria.

creasing our cloud business here, and will focus on this more and more.

Oracle’s model encourages the adoption of cloud particularly in Sub-Saharan Africa, giving businesses the benefit of flexibility. Because we invest so much in innovation, it is easy for customers to manage, and we embed more optimisation than anyone else. Apps and databases are embedded with artificial intelligence (AI), making our services easy to adopt - a major benefit. Our solutions can basically run your business, saving you money on human capital.

Yet where we truly stand out at Oracle is our cloud autonomous play. We have an advantage here, with the autonomous category being our own invention, and believe customers in Africa will adopt this technology and improve their businesses as a result.

The Oracle Autonomous Database, for example, completely reshapes our customer’s approach to IT, helping them free their budgets and resources to focus on business growth, while reducing risk.

Using machine learning and AI-driven technology, our cloud services can be upgraded, optimised, secured,

patched and tuned automatically, without human intervention. Easy management encourages adoption, which speeds business growth, vital to economic development in emerging economies such as those in Africa.

A full ecosystem For all the exciting trends and opportunities I have spotted in my first 100 days, however, there are also a myriad of challenges.

At the heart of it all are skills. The tech may be there, but you still need the knowledge from within each industry and within each country to maintain a certain level of service. That is why Oracle does not just sell products, but also invests in capacity. The growth of Africa as a business hub - and therefore the success of our business on the continent - depends on building a self-sustaining ecosystem.

That is why we focus on developing digital skills across the continent. Our open platform for developers works with local coding communities to build developer skills, while we also partner with development agencies, NGOs, NPOs, and educational institutions, among others, to address ICT skills shortages.

Smile telecoms appoints Farroukh as new group CEO

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mile Telecoms, a Pan-African telecommunications group with operations in Nigeria, Uganda, Tanzania and the Democratic Republic of the Congo, has announced the appointments of Ahmad Farroukh as group chief executive officer and Irene Charnley as deputy chairman, respectively, effective June 1, 2019.

Ahmad Farroukh, who currently serves as Smile’s group executive director operations, is a seasoned and experienced telecoms executive with a distinguished record of commercial and operational success.

Farroukh’s vast experience extends to executive management positions at Investcom Holdings and the MTN Group (where he served as CEO of MTN Nigeria, MTN South Africa and Group Chief Operating Executive, responsible for 19 countries) and immediately prior to joining Smile, as CEO of Mobily, Saudi Arabia’s second largest telecommunications operator.

Given the extent of the opportunity and the significance to Smile, Ahmad will spend the majority of his executive time in Nigeria.

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Hailed as one of Africa’s most successful business leaders, Smile Telecoms founder, and shareholder, Irene Charnley has led the company’s innovation and pioneering of Africa’s first 4G LTE network infrastructure, using low band spectrum in 800MHz band, thereby revolutionizing the way people in Africa accessed high-speed internet. After 12 years at the helm, Charnley will now serve as deputy chairman for the company and will fulfill a strategic role.

Commenting on the announcement, Mohammed Sharbatly, Smile’s cochairman and group CEO of Smile’s majority shareholder, Al Nahla Group of KSA, said; “The Africa telecoms market is as dynamic as it is challenging, and Ahmad is suited to lead Smile’s next exciting phase of growth, as we have transitioned from a spectrum rich upstart to the fastest, most reliable data gigabyte factory in Sub-Sahara Africa. We are equally delighted that Irene will continue to serve the company she founded as deputy chair, and we look forward to her ongoing strategic direction and guidance.”

“The next phase for Smile will focus on delivering ex@Businessdayng

cellent operational returns, achieving profitability and creating value for all stakeholders, and I believe that Ahmed is best suited to lead the Company forward in this regard,” Irene Charnley said.

According to Farroukh, “Africa is experiencing explosive data growth, and I am honored to have the opportunity to lead the operations of one of the continent’s best 4G LTE networks at this exciting time.

It has also been a revelation after over 20 years in the industry to witness the power and versatility of Smile’s proprietary technology applications platform, which was developed in-house and provides a huge competitive and cost advantage.”

Smile was the first to launch VoLTE on its network and has continued with its innovation, having introduced SmileVoice, which is a free mobile app that enables customers with any Android or Apple iPhone device (including those which are not VoLTE-enabled) to make SuperClear voice calls over Smile’s 4G LTE network.

Smile was also the first to introduce an unlimited offering, which enables SuperFast data and SuperClear voice, all on one bundle.

Tuesday 28 May 2019

BUSINESS DAY

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Tuesday 28 May 2019

BUSINESS DAY

Tuesday 28 May 2019

BUSINESS DAY

INTERVIEW

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‘I will run an open, transparent, accessible government’ Babajide Sanwo-Olu, incoming governor of Lagos State, spoke in this interview with select journalists. Iheanyi Nwachukwu was there and brings excerpts.

It has been 20 years since the progressives have been at the helm of affairs in Lagos.

Would you say this journey has been good so far? honestly want to agree and say to you clearly that it’s been worth it. It’s been worth it for us as progressives but more important is that it’s been worth it for Lagosians. Twenty years ago, if you want to be fair, this is not the Lagos that we had twenty years ago. Lagos was not about the 6th largest economy in Africa. It didn’t have 22 or 23 million people. It didn’t have a lot of the things it has now in terms of infrastructure, health, education; and of course you may also say that Lagos didn’t have these many traffic and refuse. But what you see is that Lagos has grown to be one of the biggest mega cities in that space of time and it has come with its huge opportunities and a lot of challenges. The progressives have held their turf, they have held it very well. They have created wealth for Lagosians, built structures, bridges, all around the city. They have developed people. New schools and hospitals have been built, and the revenue of the state has astronomically been enhanced through quality representation.

When they started in 1999, history shows that it was a little over N600 million that was being generated, but tens of billions are being generated now. The question is, is that also enough for today’s challenges? It is not, and I’ll come to that later. But in terms of growth, we have seen a leap in the amount of growth.

People are coming from different parts of this country to live and stay in Lagos as their choice. And in truth, Lagos has been good for all of them.

The first government that came in then which was Asiwaju Bola Tinubu brought in first-class technocrats, and you can see what has come out of those technocrats. From all of that team, which I will also say to you that for the later part of it I was also very much part of, has brought up people at the highest level of the country. Some have grown to be governors even in different states. So, it means that, if we can look back and look at all of those small things that have come out of this small Lagos that is less than half percentage in terms of size of this country, then we will know that the progressives has earn it. But can we do better?

That is certainly the reason why I am sitting here. We certainly can do a whole lot better, quicker and faster.

What do you intend to achieve in office in the first quarter?

In the next 90 days, we are hoping that we would have a working government. Meaning, all of the cabinet and major appointments that we need to have, we would have them running very quickly. We should begin to see huge solutions in our traffic management scheme.

When I say huge solutions, there would be some I imagine would have been solved and there would be others that we would probably still be working on because we are going into a raining season. So even you want to do some extensions or some lay-by, you know, rain can only allow you so much because when it is raining you cannot pour concrete. And when you pour concrete, sun has to come before it can dry up so you can put the lay-by. So, some of those issues will come up. But in terms of the designs and in terms of identifying those traffic corridor that would need improvement, we would have done all of that.

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In terms of places where we need to improve and increase waste management solutions, we would have done all that. In the first three months, we would have rolled out loads and loads of waste management bags where people would see. Like I mentioned during the campaign, sorting has to start from your kitchen which is where we are going to be looking for various colours of bags that people would need to understand that this is what we need to do. So that when you bring them out and we have a work in progress with the PSPs and I imagine we would have made some capital expense in terms of procurement of new compartment trucks and the rest of it.

But that would take a while for it to come into the country, but we would have made those commitments within that time as well.

Like I have also said on the solution on Apapa gridlock, I am believing that we would have solved it, but sustaining it, if we are not careful, could be the issue. It does not mean that you will not see them again; they will keep coming in and out but on a sustainable basis, it is going to cost us some money to put people there in a sustainable manner.

We would also begin to work around the civil service also within that time. We understand that all of these things that we are talking about, you need professionals who are in the civil service to work with. So in terms of capacity development and skills gap, we need to quickly identify were they are in our public service, so that we can put the right people, develop right competencies, that will take ownership of all of the solutions that we are talking about.

In other areas around health and education, we probably would have rolled out a more detailed plan as to what we need to do right to ensure that growth in our education system is improved, for early education like I said, a strategy would have clearly been crafted out that will show us what we need to do as soon as kids are coming back to school in September of 2019.

On the health side, the collaboration that we need to have with the private sector to ensure that health is accessible. Affordability of it might still be a little challenging in terms of identifying the vulnerable people, but accessibility would be something that we will quickly deal with.

And on the infrastructure side, it is to believed that within that time, we will have enough plan on what new areas or road we need to build or develop as the case may be, because at that time, you will certainly need to plan it for next year but all of those plans we will begin to implement very quickly. And on the power side, I imagine that in 90 days, we should have had a clear-cut policy with all the DISCOs and GENCOs on how we must ensure that Lagos gets powered up very quickly.

What are your plans to encourage MSMEs against the various taxes and levies?

While on campaign train I met quite a number of very young intelligent Nigerians, over 7,000 of them at various forums. And one of the things we have said we would be looking out for are the things that are within our control. There are incubator centres that we need to create for them on the tech hub side.

We will begin to work on that. On the ones that require financing and support, how well do we get Lagos state Educational Trust funds to quickly identify more beneficiaries, and very

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Babajide Sanwo-Olu

much quickly. We would be able to support them with a kind of grants and little loans as much as we have, so that we would be able to increase the numbers very quickly.

For most of them, what I imagine that they would need is to be able to put them in sections,

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On Apapa, I think it is about time we realised that we are all in it together.

What happens to me happens to everybody that has a thing to do with that port

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and ensure you are not doing everything all by yourself.

So there would be incubator centres. There would be clusters that we would need to develop and industrial estates that we need to ensure we bring about, and work with the Central Bank of Nigeria (CBN) as well, because some of the things you used to see are not within our own control. How well will all of the grants and all of the supports the CBN has been talking about, be accessible?

The commercial banks have all mentioned things that they want to support SMEs with. How truly well are they going to be supporting them? So, those conversations must come from that angle. For us, if you are just having a small corner tailoring service in your place, it may be difficult for me to say I am going to provide your own immediate solution. Because your problem could be that you don’t have power in your small shop or there are other challenges, but to put it together and say that we are going to have a tailoring section in Obalende for example; those are the kinds of innovations that we will do. We will look for a place where they can share resources and house 300 tailors all clustered around the place and you can develop a power solution for them as against developing for each one of them and looking for how to meet them.

So on their own part, those kinds of talks must come together. They must identify players in the same industry, and once they come together, then it becomes much easier for government to intervene collectively.

And you will begin to see the impact of that solution.

On infrastructure, what are the major wins we should expect from your first tenure?

Infrastructure is wide. It is road, power housing and the rest. And I have said to you that in the next 90 days,

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we believe that because we are in the raining season, there is just so much of what we can do. But we can do a lot of planning and small measures like fixing the drainage, removing all of the things that can block the manholes which are within your control. We might not be able to fix all of the portholes within the first 90days except we are going to be working overnight, and you don’t know what time the rain is going to come back again so that you don’t waste material and be very smart about it.

But in terms of infrastructure, before the end of the year, you will see our goal plan in terms of which roads, bridges that we need to complete in the next two to three years in our road plan.

And we will be working a lot with the PPP. We will be using private equity and funds to develop some of those competencies in infrastructure.

What are you going to do differently to ensure the Lagos budget is open?

On the budget, I imagine that the state government still publishes its budget on a year-onyear basis. We intend to continue, but beyond that, is also to do what we call a quarterly review of our budget performance, so that people can ask us questions and we can be accountable.

In terms of transparency, you know we have a procurement law and agency, it is for there for people to be able to access them a little bit more.

The ones that need to be published in terms of who gets procurement, we will do it if it is not currently being done. They moment you can let people really know on quarterly basis how you are running your budget, how well you are doing, your run rate, then the issues around transparency reduces. And aside that, at the end of the year, before you get into the second quarter of the second year, we would make sure that we have done our audited account and well published as it’s being expected of you.

Have you been briefed by the outgoing government on the list of uncompleted projects in the state, and will you give them priority when you are sworn in as governor?

Yes, there have been several interactions we have had. We have had steering and transition committee and we have seen some documents in terms of outstanding projects but not in the way and manner that I would have wanted them, that they were presented. Because we wanted a lot more detailed information to how much was it, how much has been paid, how long it has taken, how much is outstanding, what exactly it is. We didn’t get that much detailing. But I cannot continue to explain but from next week, I can now call for these things.

But in terms of completion, oh yes they will certainly form priority because, what doesn’t get completed doesn’t get done. We will ensure that we do that and we do that very well, and there wouldn’t be any problem.

Recently Lagosians reacted to the land use charges by the sitting government. Do you have plans to look into this?

We are certainly going to look at it again, but with a lot of consultations. It has to be collaborative with a lot of stakeholders’ engagement. We are going to look at it with all the players in the industry sitting together to analyse how best to go about it. I have said to people that you really cannot eat an omelette without breaking the egg. So for us to be able to leap-frog all of the questions and initiatives that they are asking of us, revenues have to come from somewhere. So it is for all of us to transparently be able to have that conversation on what we all intend to do transparently. But we will certainly not do things

that will have a negative effect on our people.

We will review it positively and in conjunction with various stakeholders.

What style of government would you run?

I think my style would be to remain humble as I have always been. To be very open and transparent, to be very accessible as much as possible, to be very engaging; let people have a voice, let them have a say. You might not necessarily have your way, but you will always have your say. And once you have your say, be it in form of suggestions, or opinion, we will all put on the table and dimension it right away. And if it is not something that we believe Lagosians will benefit from, I will have the right to explain that to you and give you reasons why it really can’t be. But beyond that it is to ensure that as a Yoruba man that I am, I respect my elders and ensure that we keep the cosmopolitan nature of Lagos going. Respect different set of human beings that are here in Lagos to work, then know that everybody has a role to play; except you don’t have any business here and are constituting a security challenge for us that you will not be my friend.

Other than that, the style will be to remain a friend and governor to everybody.

Do you have an idea on the state of the treasury?

I also don’t know what the numbers are yet, but as a small finance person myself, we just have to be very creative because no matter how it is, monies will never be enough and we cannot continue to always use lack of money as an excuse for non-performance. There are creative ways in which we can finance and leverage all of the things we want to do. For as long as you are sincere and people can see this in you, money would move for you. Globally, that is how it is. Monies would move for the people who need it the most, and what they need to do is just do a risk assessment of your person, the project they need to get into, and of the environment they found themselves in.

Once you are able to reduce and mitigate some

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of those risks, funding will come.

Nigeria as a whole has taken up agriculture as a valid means of diversification. What are your plans for this sector?

We have been a largely mono-product economy, but the federal government has made a few attempts in the last four years or so, and I think those efforts are beginning to yield some results which I must commend the federal government on especially in agriculture.

The current government in Lagos state has also taken a bold step to achieve 32 tons per day Imota rice mill. That have started off, and for me, I feel that that project would be very critical in our agricultural value chain. It is left for us to look for money and complete that project very quickly. I hear that there are still huge tons of containers littered at the port, but we need to quickly be able to fix that.

What that means is that, if we have that mill working up and running by the end of the year or by next year; 32 metric tons, meaning that we actually can produce the amount of rice that not only Lagos would be consuming, but one or two other states in the south-west.

But the feedback of that in the value chain is that we may now need to produce a lot more paddy. We don’t have the agro areas because of our size and the pressure on our land. So what we would do is to collaborate with our sisters in the North, and the South-west and see how we can share boundaries around giving us 20, 30 or 50 hectares for rice production. And we can reduce cost of transportation; bringing them from up north and have paddies all around so that when we begin to do that, we begin to get at least one of our major stable food and we begin to see level of decency in Lagos and in some states I the South-west sufficiently in that. If we do that and do it well, honestly that is a major economy that we are developing.

So we go to the next one which is AquaAgric in poultry, in fishing and all of it. There is an opportunity in CBN and I have read their books. We just need to put people in clusters and let them be able to have strength in their

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numbers, so that they can very quickly access the same kind of single-digit funding from the central bank, and can upscale the capacity, and the population can take whatever it is, be it poultry, fishery, egg production, etc. So, we would be encouraging people, we would be putting resources in that field so that ultimately, we would be able to create an opportunity for some percentage of our population to be reliant on agriculture. And we should be able to support them in that space.

Potholes and floods are a major hurdle in Lagos State. What are your plans to address this?

Like I have mentioned, Lagos is below the sea level. Lagos will always have elements of flooding. You see, communication is critical.

And it is only better when we help ourselves to communicate rightly. Lagos is below the sea level, so fundamentally, there are some things that are natural that nobody has control over. It means it is in a terrain that rain would fall at some point of the year. And we are just entering it. It is heavily from May, through November till December. So it is a season in which there is going to be heavy downpour. It is another conversation around global warming and all of that which says we are going to have more rains.

So, it will rain, and once it rains, because of the volume of water that God in heaven brings down upon us at some point, there would be what we call flash flood. And it happens everywhere in the world. There would be flood that you will see for three, four, or five hours, but the question would be, subsequently what would you do? How do you ensure that floods that would be there for just three hours are not there for three, four, or five days? That is the responsibility that you have called us to do. And to solve it, it is to look at all of the various blockages that happen within the manholes that we have along the roads.

So that blockages are due to our habits like the kind of refuse that we generate and don’t dispose properly. Everybody drinks a can or bottle of water, and they throw them on the streets. So, the communication has to be both ways. You have to help me tell Lagosians that we need to change or attitudes in that regard.

They should dispose refuse properly so they don’t block our drainage channels. Once they block our drainage channels; water is liquid that need to find its level, and if it can’t it will stay there. That needs to happen and we would be solving that with our environmental solutions.

As regard the potholes, the water needs to go down, rain needs to stop before we will be able to work. I know that there are problems around public roads bureau and we would quickly wrap the capacity in that area. And I have mentioned it a few minutes ago, if working overnight is the solution we need to design ways and means for them to go and fix some of those little potholes, we will do it and do it very quickly.

And on Apapa, I think it is about time we realised that we are all in it together. What happens to me happens to everybody that has a thing to do with that port, and those appeals to the conscience of the Federal Government. So it is not out of place that Lagosians have been crying. So people need to move into action.

And I will tell you that I will give that committee all of the support required from day one for Lagosians to be relieved.

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Tuesday 28 May 2019

BUSINESS DAY

property&lifestyle Home Ownership

Where to find houses to buy, invest profitably in Nigerian cities Endurance Okafor

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hether you are interested in investing in residential real estate or aspiring to buy a property for personal use, it helps to know what the cities in Nigeria have in stock for you.

To guide property buyers in making wise decisions, BusinessDay has done an in-depth analysis of some location’s strengths, weaknesses, opportunities and threats (SWOT), revealing that Nigerian cities are mostly segmented into low and high end areas.

According to the National Bureau of Statistics (NBS), Lagos State records the highest amount of real estate activities at 37 percent followed by Abuja state with 22percent and Rivers state with 6 percent. This means that the three cities account for 65 percent of all real estate activities in Nigeria.

Ikoyi, Victoria Island and Lekki, the three island locations in Lagos, constitute the core of high end submarkets in Lagos. Though property, land or built up, are very expensive in these locations, analysts say they offer real value and good returns to investors.

With all the qualities of a residential destination, Ikoyi’s strength is in its excellent location, ease of obtaining approvals for development, high rents

and return on investments (ROI) based on demand to be in a serene environment; internationally recognized and accepted location increases value perception, and offers highest office rents in Nigeria which is second highest in Africa.

The weakness of this location is in its high cost of land and approvals; buildings are restricted to high rise apartment to enable maximisation of land; there is need for an attractive design and layout of the project based on competing developments within the axis; there is lack of storage rooms for individual green areas.

For developers who want to invest in residential properties in this area, opportunities include ease of rental as a large pool of prospective home buyers, both local and Nigerians in Diaspora buyers, would rather buy out right a finished product that meets their immediate needs in Ikoyi; amendment in Lagos planning legislation is expected to make zoning for commercial use easier.

But there are threats too.

These come in as construction challenges leading to delay of delivery; lack of availability of financing for projects or mortgages for prospective buyers; presence of competing developments within the same axis and planning challenges to secure permission for commercial office use.

The qualities of the above location is not far from what

can be obtained from Maitama, one of the major districts of Abuja, which is in the phase 1 development plan of the federal capital territory. It is home to most embassies and high commissions. It is an exclusive and expensive area where the crème de le crème and top politicians live. The high cost of acquiring a property in the area is one of its weaknesses.

The New and Old GRA areas in Port Harcourt also measure up to what is seen in Abuja.

New GRA is an area for the high net worth individuals of Port Harcourt. Here, there is a concentration of government officials and affluent persons.

Properties here are quite pricey and would set a buyer back some hundreds of millions.

The Old GRA on the other hand was the area inhabited by the early European settlers during the colonial time and was then referred to as European Quarters. The area is well planned. No wonder the immediate past first lady, Patience Jonathan, chose this area for her Port Harcourt residence.

Coming back to Lagos, Victoria Island is a good location for a property buyer. The strengths of the area are in its excellent positioning, ease of obtaining approvals for development based on precedent, high rents and return on investments (ROI) based on demand, and a wide mix of support service companies.

The weaknesses include

poor parking, traffic congestion, lack of supporting infrastructure, high cost of land and approvals, building would be restricted to high rise apartment to enable maximisation of land, and available land for residential development within this axis is extremely small.

The opportunities in this location include lack of good quality residential and commercial space and demand for this is high; there is also opportunity for corporate entities and individuals to own

properties close to their offices.

But the development of the Eko Atlantic in the long term is a major threat to the continued prosperity of Victoria Island.

So, potential investors should always bear in mind that this development, which is already evolving with some residential and office development coming up fast, may throw the spanner in the works.

Lekki, one of the most beautiful cities in the centre of excellence which naturally formed a peninsula has a lower

land cost than VI and Ikoy but has lower rents compared to the aforementioned areas which affect profitability. However, the area is set to continue to develop as a commercial hub and hence rents are expected to continue to increase.

The Nigerian cities analysed

by BusinessDay also have some areas that do not have same standards as those mentioned above and these include locations like Wuse, one of the districts in the Abuja city centres comprising seven zones.

Interior Decor

Alaro City in early recognition, wins estate surveyors award

Temitayo Ayetoto

or the developers of Alaro City, the new city’s recognition by a foremost professional body in the Nigerian real estate sector, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) is no mean feat coming to it just a couple of years into its development.

The inclusive new city, being developed in the Lekki Free Zone, was at NIEV’s Honours Night at the weekend, recognized and awarded ‘The Most Notable Development Project’ by the professional body.

A joint venture development by Rendeavour and Lagos State Government, Alaro City is a mixed-use, city-scale development with master-planned areas for offices, logistics and warehousing, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares of parks and open spaces.

Odunayo Ojo, Alaro City’s CEO, described the city’s award as a testament to the hard work and dedication by the whole team at Alaro City. He dedicated it to the team behind the project, noting that the city’s success “is not possible without the cooperation of our partners, the Lagos State government.”

In January, Rendeavour, Africa’s largest new city devel-

Taking care, regaining newness in leather furniture

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urchasing a new set of leather furniture can be exciting, both in the awe of the radiance and the princely feel of comfort stirred by the classy piece of furniture. But the enthusiasm from that sparkling body of leather is often difficult to sustain as many users struggle to refresh the shine after constant use.

Experts in furniture making say leather furniture pieces require routine cleaning exercise at least once in three months.

This is to save the furniture from falling into quicker aging and faster rate of damage.

According to Bedmate Furniture, one of the big players in furniture industry in Nigeria, there are certain tools to get the job done such as a cotton swab, water, alcohol, leather cream, clean cotton cloth and saddle soap – a soap specifically made for leather materials.

Some leather upholstery usually come with a label that specifiesthetypeofmaterialtobe used, some recommend solvent or water-based detergent. Other warningsonfurnituremightstate that neither water nor detergent be applied on the surface except

professional cleaning.

“The truth is, to keep your leather furniture looking radiant for many years, maintenance and prevention should be held in high esteem. If these are not considered, soon there will be cracks and brittles on our beautiful leather pieces.

Well, with careful cleaning and conditioning, leather furniture can be brought back to life,” Bedmate officials said.

The procedure for remaining mild stain such as dust accumulation should start with dampening a cotton cloth in warm soapy water before cleaning the leather furniture carefully. This can be done

once in two weeks.

But for stains that form a permanent dent and are stubborn to soap and water, alcohol and cotton swab are prescribed.

With the cotton swab damp with alcohol, gently wipe the affected area. After wiping, it is important you allow it to dry up the fluid with a clean, dry cloth, before treating it to a conditioner for complete dryness.

The furniture maker also advises that leather cream formulations are good applications to protect and nourish the leather. They prevent discoloration and cracks of leather, providing protection to repel water-based stains so that they

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don’t penetrate the leather.

Leather cream can be applied using a clean cloth to wipe the furniture all through.

However, when stains do not respond to the aforementioned cleaning methods, Bedmate says it’s time to seek the services of a professional upholstery cleaner as continuous scrubbing could cause more harm than good.

Knowing that leather is not a preference for everyone, Lifemate Furniture, another leading manufacturer of furniture in Nigeria, advises that the numerous users of fabric sofas to vacuum them regularly with an upholstery attachment.

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oper, formally launched Alaro City. Situated in the Lekki Free Zone, the city has received fast track investment from Rendeavour due to high demand from the Nigerian market.

The first manufacturing facility,constructedon5.4hectares,is due to be operational by August.

Additionalfacilitiesforsteelfabricationandfast-movingconsumergoodsareunderdevelopment.

The first phase of urban infrastructure,includingthefirstthree kilometres of road, water supply and an independent power plant, is underway and due for completion by December.

“We congratulate Alaro City on receiving this award,” said OlurogbaOrimalade,chairmanof NIESV,LagosStatechapter. “Alaro Cityisprovidinguniquesolutions to rapid urban growth, not just to the Lekki Free Zone, but to Lagos State and Nigeria,” he added.

Theawardsnightfocusedon the theme ‘Promoting Professionalism in the City of Lagos’ andhandedoutawardsinseven categories.WitchtechCompany won the ‘Corporate Building MaterialIndustryDevelopment Award’, Stanbic Capital won the ‘Corporate Real Estate Finance Award and the Lagos Land Bureau won the ‘Outstanding Government Agency Award’.

Tuesday 28 May 2019

BUSINESS DAY

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property&lifestyle Investment

What investors need to do in uncertain market conditions, economic downturn CHUKA UROKO

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ost economies of the world experience cycles when growth slows, market conditions become uncertain and investments totter, eroding return prospects and creating fear and panic in the minds of both existing and intending investors.

It is common knowledge that an average investor tends to panic during an economic downturn, forgetting that all markets have cycles. But it needs to be pointed out that these cycles happen more in emerging markets such as those in Sub-Saharan Africa.

Investment analysts and advisors, however, have words of advice and encouragement. In times of market uncertainty, they say, the most important quality an investor needs is the ability to “stay focused and confident”.

Warren Buffet is known globally as a trusted investment guru with many investment successes. He believes that one of the easiest ways to gain confidence is to have accurate information, which emerging investors can develop by watching how tried and tested investors approach different market cycles.

Until the first quarter of 2019, real estate sector in Nigeria had been in a long-drawn recession during which the property market became frustrating

and most investors counted losses or, at best, had slowdown in their activities. Even at that, it is still early days to determine whether the heat is over.

Buffet says times such as these are not when to bulk-in but to “be recession-proof and befriend the market”,meaning that an investor should look at market fluctuations as his friend rather than enemy and profit from folly rather than participate in it.

Udo Okonjo, CEO, Fine and Country West Africa, also advises that when market conditions become uncertain, instead of worrying, investors should look for opportunities to create value for their portfolio and profit while others are frozen into inaction or making wrong moves, stressing that market conditions are irrelevant if an investment strategy is right.

“Understand the market, know what the cycles represent, understand the opportunity in your particular target real estate segment, become an expert in a particular area, understand what needs to be done, and do it without second guessing yourself. Stay focused. Stay strong. Keep an eye on your facts and figures, not on anecdotes,” Okonjo emphasized.

Another vital thing investors need to do in an economic downturn is to learn to walk away, bearing in mind that desperation is not a good investment strategy. Buffet provides a guide in this connection, saying, “we will reject interest-

CHUKA UROKO

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ing opportunities rather than over-leverage our balance.”

An astute investor needs to understand that not every great deal is great for him.

There will be times that his best investment is the one he decides not to make and, according to Okonjo, “it takes discipline to stay balanced; like some say, great estate deals are like buses, there’s always one coming up”.

“While I don’t necessarily agree that all great deals can be easily replicated, I do believe that there will be times to

pass up on a great deal rather than implode your existing portfolio. Always stay in control of your investments by knowing your numbers. Know clearly how far you can and cannot go, especially if using leverage”, she added.

Essentially, an investor should understand his personal risk appetite and should also know that undue stress leads to health challenges and defeats the purpose of investing.

Another great advice from Buffet is the need for investors to understand that real estate is

about return on investment, not ego, pointing out that the most important quality for an investor istemperament,notintellect,because the investor needs a temperament that neither derives great pleasure from being with the crowd or against the crowd.

Okonjo affirms, adding, “never swim with the masses; the masses are always wrong.

Learn from astute investors who have track records of making real profit through investing in real estate. Investment is not a game. You have no point to prove,” she noted.

Construction

Operators in construction industry set agenda for Buhari’s second term Israel Odubola

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espite huge prospects in job creation and value addition, the construction industry in Africa’s biggest economy during President Muhammadu Buhari’s first tenure underperformed and failed to meet the expectations of industry players.

The construction industry ought to be a major contributor to gross domestic product (GDP); however, that is not the case in Nigeria. Growth in

the sector was weak between 2015 and first quarter of 2019, with negligible impact on the broader economy.

According to data from the National Bureau of Statistics (NBS), the construction industry grew less than 5 percent during Buhari’s first term and accounted for 4 percent share in total output.

Comparing these figures to the country’s peers in Africa is disappointing. Construction activities in South Africa accounted for about 15 percent of GDP; Kenya, 10.5 percent

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Buyers get special offer on Propertymart’s The Fairmont residential scheme …take possession of property on 30% down payment

and Ghana, 7.6 percent, according to World Bank data.

Players in the industry blame the poor performance on government’s preference for foreign contractors over indigenous ones, saying it does little for the economy.

“Local contractors are not happy seeing a lot of contracts, which is about 95 percent, going to foreign firms. This portrays low confidence in us. Though local ones have their limitations, we should not be sidelined from the real business” said Olumide Akinyemi, Project Manager at

Josh Global Limited.

“Buhari should give this a thought in the next term.

We hope to see better participation of local firms in the industry,” he said, appealing to the Federal Government to invoke the Local Content Act in the industry to elevate the activity of local players.

This then begs the question why foreign firms are favorites of government and large corporate. BusinessDay gathered that dearth of competent and reliable local personnel to handle complex projects triggers the search for expatriates.

Najeeb Adeyemi, Head of Valuation at Mustapha & Ewenla Partners, cited an example from East Africa where, he said, “contractors were once time forced to import over 10, 000 workers from China to assist the locals to build a standard railway gauge, which they couldn’t construct.

“This beckons on professional bodies and regulatory agenciestotrainandretraintheir workforce to save the industry fromforeigncontrol,”headvised.

Players also decried the prevalence of corrupt practices in the sector, saying development projectsofvariouskindsandsizes

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have suffered a lot of setbacks in the hands of corrupt officials.

“It has become a norm that funds allocated to major projects are embezzled for personal use by the contractor or shared among the parties involved, which is one of the reasons for abandoned projects,” said Adeniyi Adewale, Project Engineer at Pivot GIS. “This has thrown the industry into disrepute. Buhari as an anti-corruption crusader should set up a regulatory committee to monitor how funds are disbursed and expended. EFCC has a role to play here too,” he noted.

Inadequate funding is another worry for contractors, particularly indigenous ones.

Construction is largely capital intensive. Equipment alone cost millions of naira, and this creates pressure to raise funds to execute projects.

According to NBS, credit to the construction sector averaged 4.5 percent between 2015 and 2018, showing banks’ unwillingness to support the sector with funds. “Banks are not helping in terms of funding, especially if the contractor is not yet a big player in the industry,” noted Adewale. @Businessdayng

leading developer in the Nigeria’s crowded real estate sector, Propertymart Real Estate Investment Limited, has made a special offer to property buyers, requiring them to pay just 30 percent of the price of a property they want to buy and take possession of the property.

This offer applies to buyers from the company’s The Fairmont residential scheme where it is offering plots of land for sale. The Fairmont is a serviced schemelocatedvariouslyinArepo, Lekki-Ajah and Alagbado.

The plots on offer are not only affordable, but also give clients opportunity to live in safe and beautiful environments.

Payment plan for the plots is flexible and allows subscribers to spread the balance of outright price across six months after the initial deposit as a way of making home ownership pocket-friendly.

Available in 500, 400 and 324 square metres which offers interested investors flexible choices, prospective homeowners can get value on land through instant physical allocation upon payment of 30 percent initial deposits, especially those who subscribe for the Alagbado and Lekki-Ajah schemes while Arepo subscribers will get instant paper allocation.

Investors in the Alagbado scheme can start their way to owning plots of land with as low as N1.1 million which represents the initial 30 percent deposit for a plot of land and get physical allocation.

While Fairmont Arepo is within the already developed and inhabited upscale Citiview Estate also owned by Propertymart, Fairmont Alagbado and Ajah are currently in their development phases with infrastructure work on-going.

TheobjectiveofTheFairmont scheme is to create luxury private communities in fast-growing locationswherequalityisupheld; it is a perfect blend of urban and country living, and clients have several reasons to buy the plots,” saidDejiFasunwo, Propertymart ‘s managing director.

“We have deliberately created a low entry opportunity of 30 percent down payment on outright purchase on each of The Fairmont locations. It is alsoanopportunityforfirst-time homeowners to have a place in a secure, beautiful living environment. Opportunity to own plots is also available for those who want longer payment plan.

What is more, there is an ease of transfer of ownership while a global certificate of occupancy covers the plots at the three locations,” he informed.

24

Tuesday 28 May 2019

BUSINESS DAY

When the manager is a millennial What happens when young bosses are in charge of older colleagues?

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erri Rogan manages a 16-strong, predominantly male team.

Many of its members are in their 40s and 50s and have a high level of technical expertise.

Ms Rogan, head of reliability improvement for London Underground, is just 30.

Some, she says, may have been threatened by her youth and gender, but she adds that by showing people she is “here to help, [she] quickly gets rid of the threat”.

“You need to build personal relationships,” says Ms Rogan, who adds that her role is not to “challenge and counter their technical knowledge”, but to “bring pace and energy and seek [their] counsel”. Young managers can struggle to establish credibility and get more experienced colleagues on side.

According to Peter Cappelli, professor of management at Pennsylvania university’s Wharton business school and coauthor of Managing the Older Worker: How to prepare for the new organisational order, a younger supervisor must engage older workers as partners. “[They] need to recognise that their older subordinates have a great deal of expertise,” he says, “and understand that their job [as a manager] is not executing tasks, but setting direction.”

Prof Cappelli cites the US military as a successful example.

In his book, he highlights how the US Marine Corps recognised a problem during the Vietnam war, with young officers failing to listen to older, more experienced troops.

They were put into partnerships with older sergeants to improve relations. “The older subordinate is your strategic partner,” Prof. Capelli says, “and you seek their advice when making a decision.”

One of Ms Rogan’s biggest challenges, she says, has been to understand how her subordinates may have to juggle work with caring responsibilities. At times she has put in long hours, but now recognises that not everyone can do that.

“I am at a time when I can indulge in my career,” she says, but she adds that for others, work is not their only priority. “I have learnt to be respectful of that.”

Chris Baitup, a senior analysis manager at London Underground, is 41 and reports to Ms Rogan. Was he sceptical at first?

“Sceptical yes, cynical no,” Mr

Baitup says, adding that Ms Rogan won the trust of her team because she was open and upfront about what she did not know.

“She listened to the experts . . . asked intelligent questions and then encouraged and challenged people to find a better way.”

Tara Shirvani, a transport specialist at the World Bank in Washington, has found herself managing groups of contracted consultants on large infrastructure projects. Many are not only older than her, but were also once full-time managers at her organisation.

A 41-year-old colleague who reports to Ms Rogan, above, says: ‘She listened to the experts . . . asked intelligent questions and then encouraged and challenged people to find a better way’ Ms Shirvani says younger managers must make sure they are not a pushover.

“Make sure everyone is very clear on what you are doing,” she says.

When she took over the management of an infrastructure project in Sub-Saharan Africa recently, her inherited team of engineers and consultants were used to working with autonomy.

Knowledge workers such as www.businessday.ng

engineers have more respect for people with similar technical skills, according to Ms Shirvani.

“They generally do not appreciate being told what to do,” she says, “especially not by anyone they perceive as less knowledgeable and skilled, which can in some people’s minds be directly correlated to age and years of experience.”

At first she adopted the casual leadership style of her male predecessor, but soon realised it could send a signal that she was not experienced enough to be taken seriously.

Once she realised that results were falling short, she changed course.

“I had to adapt my style to suit the situation,” Ms Shirvani says.

“It was key to stand my ground in a respectful manner, while being open to input and being able to recognise good ideas.”

She held a brainstorming session where everyone was invited to suggest ideas on how to best deliver in a short time, while making it clear to her senior consultants that if they continued to fail she would replace them.

One challenge for Ms Shirvani was older workers who were technology-averse.

She organised lunches, workshops and training seminars to

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help them. “It is vital to provide the opportunities for continual updating of skills,” she says, “so staff remain relevant in the workplace.”

Prof Cappelli says younger supervisors are often afraid to hire older people, but for Rashid Ajami, 26-year-old chief executive and co-founder of Campus Society, an online student network, an older worker’s knowledge and experience was essential for him to grow his business.

Without a background in computer science, he lacked technical expertise.

“As my business is founded on a tech-based platform, I needed someone with experience to help bring my vision to reality,” Mr Ajami says.

So he hired a chief technology officer two decades older than him who had previously founded his own start-up and taken it on to a successful sale.

Mr Ajami says his CTO brought invaluable practical experience and helped him understand the realistic timeline required to build a product.

“He knew first-hand the time, effort and technology needed in development,” he says.

“He knew how to w ork with the latest tech developments . . . to ensure our platform @Businessdayng

was the best it could be and had the foundations it needed”.

“It’s about showing you respect them,” he says. In turn, expectations of a start-up’s young team can be too high, Mr Ajami says, so while the vision and excitement is important, “more experienced staff have helped set more realistic targets.”

Managing the age gap: tips for young managers Ensure you take the time to build personal relationships.

“Get to know people and find out what makes them tick,” says Kerri Rogan, head of reliability improvement for London Underground. Engage older workers as partners and seek their advice when making a decision.

Recognise older subordinates have a great deal of expertise and that you are not there to challenge their knowledge. Be upfront about what you do not know. Use them as a mentor.

Do not be afraid to stand your ground. Have a meeting with older employees about what you expect from them and what they expect from you. Provide opportunities for the continual updating of tech skills, especially for those who may feel intimidated by technology, so they remain relevant in the workplace.

Tuesday 28 May 2019

BUSINESS DAY

25

Business schools taking teaching into prisons MBA teachers and students are helping current and former inmates learn business skills

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ike many business school students, Devaughan Bell is doggedly working through classes on improved financial analysis and clearer communication, and hopes to start his own company in the future.

But he has a less conventional past than most of his peers. “I was on the streets from age 13, convicted of my first felony at 18 and spent 40 per cent of my adult life incarcerated,” he says.

“When I was locked up for the third time in 2015, I told myself that no matter what happened I never wanted to be in that situation again.”

He is a participant in Pivot, a programme launched this year by the McDonough School of Business at Georgetown in Washington DC — part of a growing trend to train people who are in prison or have been recently released with specific business skills to help them find work or create their own companies.

Marc Howard, who co-directs Pivot, says the idea came when teaching part-time in prisons while lecturing in the university’s government and law departments.

“I noticed that people could

really advance while acquiring education when incarcerated, but when they were released that would come to an abrupt end in almost all cases.”

He saw a need to offer applied business skills to supplement more typical programmes providing general education; to help reintegration into society; and to focus on entrepreneurship.

“The stigma when you get released in the US is so strong that in a strange way, it’s easier to start a business than to be hired by one,” he says.

“It’s so easy to disqualify someone if they have a criminal record.”

Pivot recruits people who have been recently released from prison and offers them a mixture of remedial academic skills such as writing and interviewing, business fundamentals from strategy to marketing, and internships with local employers so they can develop experience and references to apply their knowledge and pursue their ambitions.

The programme builds on pioneering efforts by others, notably Darden School of Business at the University of Virginia.

Gregory Fairchild, an associate professor, says he decided to launch the Resilience Education www.businessday.ng

project in 2011, after his dean showed him a typewritten letter sent by a prisoner who was soon to be released.

“He acknowledged that he had made mistakes in his life and really wanted to make a change and not return,” he recalls.

“He said he had faced two challenges: an ability to manage his money, and a lack of understanding of how to manage a business of his own.

He had read that Darden had a great business school, so wrote in to apply to study.” Soon after, Mr Fairchild held talks with senior Virginia state officials and politicians, and the following year piloted business training on financial literacy and entrepreneurship in a local prison, deploying his own MBA students as teachers.

This year, his 9-month course has grown to involve 28 students and 100 inmates at two facilities.

Many students are now also involved in a new “re-entry programme”, acting as mentors to former inmates and helping them write CVs and prepare for interviews.

Mr Fairchild hopes that as they progress in their careers, some of these mentors may provide funding for the programme and hire former inmates.

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“If I ran the same programme in the school of social work, the students might not be in the same position,” Mr Fairchild says.

“But if you can change the minds of the wealthy, you may be able to change the world in a different way.”

Using students as tutors has also been a feature of the ReEntry Acceleration Programme at Columbia Business School’s Tamer Center for Social Enterprise.

“It reminds me of how privileged we are,” says Francine Lee, who is studying for her MBA and was inspired partly by her own experience of having a relative incarcerated.

“Instead of giving back later, we can contribute now. It’s incredibly rewarding for us.”

For the inmates themselves, participation can build selfconfidence. “I was out of touch financially and technically,” says Leah Faria, a participant at Columbia’s programme who spent 21 years in jail.

“It had been years since I had a bank account or a credit card.

It allowed me to get back into the swing of things, and develop my pitch and help me negotiate.

For the two hours of classes, I could feel I wasn’t in prison.” @Businessdayng

Alongside learning business skills, Mr Howard at Georgetown stresses the broader lessons for former prisoners: “A big challenge is telling their story of incarceration in a matter of fact, truthful way while focusing on the person they have become.”

Mr Fairchild adds that the style of teaching can also help ease inmates out of their dehumanising experience. “Our courses are discussion-based,” he says.

“That allows people who have felt not listened to, with their opinions not appreciated, to not just be a number but a person. ” He points out that many prisoners have substantial entrepreneurial skills to contribute to classes, whether through illegal experiences such as the drugs trade or from legal employment — sometimes at a professional level.

“We had a mortgage broker who embezzled, who took over during our financial literacy course, a human resources head who explained compensation, and a former attorney,” Mr Fairchild says.

Darden’s programme can already point to some promising results, with recidivism of just 7 per cent compared with an average of 30 per cent across the state.

But he concedes that this may partly reflect the selection of unusually motivated prisoners as participants, and sees the need for more detailed evaluations over a longer period.

Alyssa Lovegrove, Pivot’s other co-director at Georgetown, says that once released, prisoners still struggle to find jobs or — if they chose to start their own business — to borrow from banks.

They also need to cope with personal stresses — from difficulties with housing and financial instability to volatile family circumstances.

“There is a lot of stuff going on,” she says. As for Mr Bell, he is determined to make a better future for himself and is building a catering business.

“Pivot has opened up so many avenues I thought were closed.

I stopped hanging around with certain people in certain places.

Now with the network surrounding me, I have a new mindset.”

26

Tuesday 28 May 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Stakeholders seek collaboration to tackle challenges of reading culture …Laterna ventures host reading sessions KELECHI EWUZIE

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ducation sector operators have called for a strategic collaboration between the private and public sectors to achieve any meaningful impact when it comes to addressing the issue of reading culture among Nigerian children.

They argue that there is the need to drive the required investment in a pivotal sector like education if the next generations of leaders are to be globally competitive.

Nnaji Ugbaja, Head of corporate affairs unit, Laterna Ventures Limited, a leading book sales and distribution company says it is the responsibility of both stakeholders in private and public sectors to ensure that children have the right means of information and education so that at the end of the day, they become better future leaders.

Ugbaja while speaking at a two day book reading sessions organised by the company to mark the 2019 children’s day celebration said the International children’s day is a global event that the company uses as an opportunity to encourage the culture of book reading among children.

According to him, “We celebrate this special day because we see it as an opportunity to encourage children to do the needful, one of which is to ensure that they read books as often as possible”.

“Unlike their classroom regular reading activity where they are restricted by marks, this book reading is different from that because they read in an ambience of fun, meeting other children they have never met before”.

He further said that parents need to do

Nnaji Ugbaja, Head corporate affairs unit, Laterna Ventures Limited, Deji Balogun, reading facilitator and pupils from selected schools in Lagos at the 2019 book reading session organised by Laterna to celebrate Children’s Day in Lagos.

more to encourage their children to develop healthy reading habits, adding that books afford the children the opportunity to be exposed to global trends without having to actually travel.

“Reading shouldn’t be restricted to school work but also other books that could help develop their creativity”, he said.

Deji Balogun, director, Courteville preparatory school, Lagos urged government to invest in the training of teachers especially in the public schools on how to deliver their

Systems approach needed to enhance learning in our schools – Experts

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chool owners and administrators have been tasked to invest in improving teaching and learning using systems approach to advance the overall development of their students.

Experts stated this at the maiden edition of the Academic City, Ghana’s Educational Conference in Lagos as they discuss the importance of systems approach in teaching.

Fred McBogonluri, the President/Provost Academic city Ghana while speaking at the event said the vision of the university is to offer quality tertiary education designed to nurture and develop the intellectual capital on the African continent, adding that curricula deployment as well as its design should be human centred.

“When deploying curricula, you need to understand that you’re teaching humans not donkeys. It is important to focus on not just the smart kids but the ones who are struggling too. What we at Atlantic City have been trying to do in the past few years is that we are trying to create an ecosystem where we are changing the narrative on how education is offered as a whole on our continent”, he said.

According to McBogonluri, “Teachers should be able to put themselves in their students’ shoes and ask if their teaching

methods would help these students understand better.There is a need to make learning realistic. Managing the classroom environment means making it realistic and being able to simplify things”.

He also said that schools should be able to incorporate system thinking into their curricula and contextualise learning for their kids. “Until the kids really understand what exactly it is that this mathematics we teach is solving, we are just creating robots. Even robots are beginning to think right now so we need to understand phenomenon.”

Pradeep Pahalwani, managing director, Securisk insurance brokers Limited opines that effective communication is important to keep businesses afloat. Speaking to school owners, Pahalwani said “Life is totally about communication. One reason why businesses fail is the inability to communicate properly.

Businesses are supposed to be customer centric and improper communication can hinder that”.

There is a need to hire for attitude while training for skills when recruiting members of staff for schools and the human capital of the school could go a long way in determining the success or failure of the schools in the long run.

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lessons in an experiential way to the children to make learning exciting.

“I will advise that in all school settings adopt fun learning even when teaching serious subjects like Mathematics. There should be ways where teachers can bring fun into their learning for the child. Ultimately, it is not about just theoretical knowledge, its more about experiential knowledge”, he added.

Ugbaja further reiterated that schools need to do more to improve the way they impact

children. “There is a need for educators to keep learning as the sector constantly evolves in order to keep up with the trends so as to help the children compete favourably in the global space”.

Amara Makua, a parent who works in the financial sector said the reading session organised by Laterna Ventures is a fantastic initiative which has helped her children a lot.

“In the past, part of the reasons I decided to bring them here is that they struggle, they don’t like to read story books. Bringing them here has helped them tremendously because children learn by seeing and they see other children here.”

Makua insists that parents need to be more attentive to their children and be able to teach their children family values which would go a long way in guiding them.

Albert Biachi, a banker and a parent at the event said that having attended several editions of the programmes, there has been an improvement in the reading and comprehension abilities of his children.

“I believe if you introduce your children to fora as these very early enough, their ability to read as they grow older would be greatly improved. It is a forum to help them very early to adopt those techniques that would enable you to read properly.”

Biachi commended Laterna for this initiative saying it has challenged him to get more books for his children.

He urged parents to be careful so as not to lose track of these children and be able to create a balance between their work life and the upbringing of the children and called on schools to get their curriculum right and measure themselves up to international standard.

UNN to spend N1.3B to complete ten new projects Regis Anukwuoji/Enugu.

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he management of University of Nigeria Nsukka says it will use N1.3 Billon University Tetfund money to complete ten projects before the end of June 2019.

The outgoing vice chancellor of the institution Benjamin Ozumba promised to complete all the projects he started before his tenure empires.

Ozumba who was briefing the press on his stewardship as the 14th Vice Chancellor of the University of Nigeria Nsukka said he would complete ten new projects he started in the campuses of the university before handling over to a new Vice Chancellor.

Some of the new projects include: Block of office at the university teaching hospital ItukuOzalla, Roads Science Pack, Central university laboratory, Diagnostic center in Nsukka and also Ziks Flats which he said would be done under PPP arrangement among others.

Ozumba who emphatically said he was not going to leave any project he started in his five years as the head of the first Nigerian university abandoned, pointed out he had equally initiated some projects that would generate revenue for the university.

Some of the revenue generating projects according to him are the University of Nigeria Business School, Agricultural package where

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the school is now producing Ginger at a commercial quantity and ready for export and that the university is already in contact with some foreign companies for export among others.

The professor of gynaecology said that among his numerous achievements, restoring peace and tranquility within the campuses and the initiative of converting waste to power, which now generates power in the Nsukka campus are very great achievements Other areas include creation of two new faculties. The faculty of vocational and Technical Education and the Faculty of Basic Medical Science, restoring professor emeritus status, introduction of CCTV cameras Nsukka campus to improve security in the campus, ensure provision of water in all the campuses, reinvigorated, institutionalized, and still maintain a good rapport with the students union.

He further said that most inherited uncompleted projects at the Nsukka, UNEC and Ituku-Ozalla campuses of the university were completed while some are about 98 percent stages of completion. Students hostels were upgraded, road constructions and drainages on the campuses were part of his achievements among others.

Other new institutions created within the period in review are Resource and Environmental policy Research Center and African center for excellence for sustainable power and Energy development. Distance and eLearning programmes were established and duly accredited by NUC.

@Businessdayng

Tuesday 28 May 2019

BUSINESS DAY

27

EDUCATION ‘Private sector investment will strengthen competiveness of next generation youths’ …As Oando Foundation Commissions facilities in Plateau State Stories by KELECHI EWUZIE

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ndustry experts insist that continuous investment by private sector in educational development is the best solution for Nigeria if she hopes to grow the next generation of globally competitive youth population.

Tonia Uduimoh, programme manager for Oando Foundation, says private sector involvement in education is to complement the efforts of the government in providing necessary educational infrastructure to boost learning.

Uduimoh while speaking at the commissioning of various infrastructure and sanitation projects in its adopted school – BunghaGida Primary School, Mangu Local Government Area, Plateau State reiterated the Foundation’s commitment to improved learning environments across adopted schools in Nigeria.

“We understand that the immediate environment where learning takes place is crucial to the overall learning outcomes of pupils, hence the reason why we have heavily invested in ensuring our students in adopted schools learn under the right environment that will further enhance their learning capabilities.

Uduimoh observe that Infrastructure development is a key driver for progress across the African continent and a critical enabler for productivity and sustainable economic growth. It contributes significantly to human development, poverty reduction, and the attainment of the Sustainable Development Goals (SDGs).

Our intervention in Plateau State, similar to other States where we operate, is holistic, ensuring the needs of the teachers and learners are adequately met for better learning

outcomes” she said.

Speaking during the event, Sonni Tyoden, deputy Governor of Plateau State, commended the results of the Foundation’s work in the education sector within the state.

He said “Today, I have the singular honor and opportunity to carry-out this important assignment of the commissioning of these projects to help drive efficiency and effectiveness in the process of teaching and learning. I therefore implore pupils who will be the users of this classrooms and facilities who are the teachers and learners as well as members of the community to device all manners of caution in handling them, so they can last for a longer time”.

“Let me use this opportunity to appeal to

the traditional rulers across the state to take interest in the management of public primary schools in their domain. They can assist in the monitoring and supervision of teaching, learning activities and report any unwholesome situation(s) to the relevant authorities for necessary action”, he said.

The event was jointly organised by the Plateau State Government and the State Universal Basic Education Board in collaboration with Oando Foundation. The completed projects will impact the lives of over 4,200 beneficiaries; bridging the existing education infrastructure gaps in public primary schools, and creating conducive learning environment for students to grow and thrive.

The programme is to support the Nigerian

Government in achieving the Sustainable Development Goal 4 (Basic Education) through its Adopt-A-School Initiative (AASI), aimed at holistic improvement of public primary schools. The condition, location and nature of school infrastructure has direct impact on access, quality of education, and also influences learning outcomes.

Infrastructure intervention supports adopted schools with facilities required to meet learners’ needs (classrooms, furniture, boreholes, toilets, and wash bays), utilizing the Community Based Renovation Approach (CBRA) which is aimed at increasing community participation and ownership, empowering local artisans, and optimizing project costs.

In Plateau State, Oando Foundation has adopted 6 public primary schools, working in close collaboration with key stakeholders at the state and local levels, for effective education planning and delivery to improve overall learning outcomes for pupils in the state.

Key interventions provided include 3 blocks of 9 classrooms, school perimeter fence, 4 solar-powered ICT Centers, 9 units of integrated child-friendly toilets, 6 motorized boreholes kitted with power generating sets, water storage facilities and wash bays; we also strengthened the capacity of 297 teachers in modern pedagogy and subject knowledge, trained 93 School Based Management Committee (SBMC) members in effective school improvement; and 16 quality assurance officers to support education delivery.

The Foundation also established 4 Walkin-Centers to support 2,668 newly enrolled out-of-school children in the schools, awarded scholarships to 32 pupils to support their secondary education and over 2,000 learning and instructional materials distributed across 6 schools.

Dufil Prima advances learning for 100,000 pupils as Nigeria marks Children’s Day

Loral international schools names Adewale Akinwunmi as Administrator

hildren are undoubtedly the future of every nation and in a bid to ensure their childhood is filled with fun memories, Dufil Prima Foods Plc, organised a fun-filled children’s party for over 100,000 school children across the nation, as part of activities to mark the 2019 Children’s Day celebration.

At the venue of one of this year’s week long programmes, held at the Apapa Amusement Park, Dufil hosted over 10,000 children from different schools within Lagos to fanfare and celebration. The celebration was aimed at nurturing children by showing them love and giving them the attention they deserve, especially as they mark Children’s Day. Indomie treated the kids and their guardians to various fun activities which included bumper car, carousel, the rockets, the pirates’ ship, the spinner, the tea cup, disco ride, and the air bicycle, all in a bid to strengthen the out of home social interactions of Nigerian children.

Wife of the Governor of Lagos State, Bolanle Ambode, who was represented at the occasion

by Oyindamola Ogunsanwo, commended Dufil Prima Foods Plc for their efforts in always making the Children’s Day celebration a memorable one for children, especially by making it a week

oral International schools, an educational conglomerate comprising nurseries, primaries and secondary schools and which also offer University Foundation and Cambridge Advanced Level programmes has announced the appointment of Adewale Akinwunmi as its School Administrator to direct and coordinate the affairs of her group of schools.

Akinwunmi until this appointment was with Corona Schools Trust Council where he served the organisation meritoriously at various levels and in various capacities for more than two decades.

Akinwunmi brings to the table his experience in curriculum review and development, leadership education, robust and studentcentered instructional delivery styles as well as strategies in using various forms of civic engagement, co-curricular activities; service Learning and community service to drive learning beyond the classroom.

His community service initiatives had attracted local and international awards, the recent being the International Service Award for Outstanding Community Service Initiative where his student-led project was shortlisted for an International Schools Award in London as

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long programme so that children from far and near can attend. “Your organisation has been such an exemplary corporate citizen, playing a great role in lifting the society and reducing unemployment among our youth. Thank you for your patriotic spirit.” She said.

According to the Lagos First Lady, Children’s Day is a day set aside for children to merry, enjoy and also for adults to appreciate the value and joy children bring to our world.

Speaking at the event, the Group Public Relations and Events Manager, Dufil Prima Foods Plc, Tope Ashiwaju, explained that the celebration which is replicated across various parts of Nigeria has been decentralized to make it accessible to more children nationwide. He stated that the Indomie Children’s Day celebrations is an annual activity which the company has consistently celebrated for over a decade as one of its avenues to celebrate with the Nigerian child especially in the face of challenges faced by families in the country.

According to him, “One of the reasons for this fun-filled event is because some of these kids may not have had the privilege to come to such fun places to celebrate children’s day, as some of their parents may not have the time or resources to do.

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Adewale Akinwunmi

one of the best five projects out of over 250 entries received from other international schools around the world.

A happily married man with children, Adewale Akinwunmi is widely travelled and had attended local and international training in university of Lapland, Rovaniemi, Finland, and University of Harvard, Massachusetts, USA. He was a Faculty Advisor to Abu Dhabi in the United Arab Emirates on Global Issues and the Model African Union conference organised by the African Leadership Academy in South Africa.

@Businessdayng

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Tuesday 28 May 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

Market Insight Companies Commodity Tracker Policy

POWER

French oil major Total considering drillship for Nigeria’s OML 30 DIPO OLADEHINDE

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rench oil major Total is watching out for a deepwater drillship for a 2020 drilling campaign in the OML 130 block offshore Nigeria with drilling activity scheduled to begin during the third quarter of 2020, an Oslo-based media firm Upstream has reported Documents shared on the Nigerian Petroleum Exchange (NIPEX) showed Total Upstream Nigeria Limited has invited interested offshore drilling contractors to apply for a consideration to tender for the supply of a drillship for OML 130 project offshore Nigeria.

OML 130 is located in the deepwater Niger Delta adjacent to the Nigeria Sao-Tome Joint Development Zone. The block contains the onstream Akpo gas-condensate field of 180,000 barrels per day, Egina’s with 200,000bpd which is under development, and the undeveloped Preowei field with 70,000 boepd.

Initially discovered in 2003, the Egina field is the second development in production on OML 130 following the Akpo field, which started-up in 2009. The Preowei field is another large discovery

made on this prolific block for which an investment decision is scheduled for 2019.

The tender documentation noted that the drilling campaign is scheduled to start in the third quarter of 2020. The initial contract duration would be for one year, with the possibility to extend by up to three periods of one year each.

Norwegian media firm intelligence report gathered Total is looking for a DP3 class, minimum 5th Generation Dual Derrick Drillship, with ability to drill both derricks and efficiently perform the full dual activity. The rig will be used to perform drilling, completion, workover and intervention operations OML130 block in water depths from 1100m – 1700m and drilling depth up to 6500m.

A pre-qualification exercise has begun, and responses must be submitted to Total Upstream Nigeria offices by 7 June. Prequalification documentation did not identify exactly why the rig is needed, but Total wants the unit to start work in the third quarter of 2020 under a one-year contract, with Total’s CEO Patrick Pouyanne earlier this month paid a visit to Nigeria where he restated the firms’ commitment to the long term

development of Nigeria’s oil and gas industry and the improvement of the lives of Nigerians through the provision of clean, affordable energy.

While reviewing the Total Group’s over 60 year presence in Nigeria, Pouyanne expressed delight at the recent launch of the Egina field which at peak will add 200,000 barrels of oil per day to

Nigeria’s production. In addition, the Egina Project is a Nigerian content landmark which has become a game changer in Nigeria’s oil and gas industry.

The CEO further stated that “Nigeria is important to the Total Group as the country now represents about 10percent of the Group’s global production. Nigeria has a lot of prolific oil fields and

Total would gladly carry out exploration activities if the government grants the licence”.

Total E&P Nigeria Limited (“TEPNG”), an affiliate of TOTAL has operated in the upstream sector of the Nigerian hydrocarbon industry for more than 50 years and has added over 3 billion barrels of oil equivalent to Nigeria’s production to date.

Nigeria content Act misses 4 reviews as experts, operators seek clarity STEPHEN ONYEKWELU

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igerian Oil and Gas Industry Content Development Act has missed its recommended bi-annual review four times the first of which was due in 2012 and experts say there is urgent need to re-align provisions of the law with current realities.

At a roundtable recently organised by Ernst & Young, a global leader in assurance, tax, transactions and advisory services to address the situation, Tunde Adelana, director Monitoring and Evaluation at the Nigerian Content Development and Monitoring Board (NCDMB) said there is provision for the NOGICD Act to be reviewed bi-annually but this has not happened since it came into force on April 22, 2010. “The Act is subject to bi-annual review and our role as a board is to make easy for people to comply.” Adelana said.

According the a 10‐year Transformation Roadmap developed by the NCDMB (2017 – 2027), the Board seeks to be a catalyst for industrialisation of the Nigerian oil and gas industry and its linkage sectors through technical capacity development, compliance and enforcement, enabling business environment,

A cross-section of participants at the Roundtable event on the Nigerian Content Development Act organised by EY Nigeria in Lagos.

organisational capability and sectorial and regional market linkage.

Twenty-eighteen local content level was 30 percent. The Board targets 70 percent by 2027.

The philosophy of Nigerian content was borne out of necessity.

This arose because of the fact that there were some gaps. “These were gaps in terms of skills, capacity and infrastructure in the industry. Gaps with regards to what we can do incountry against what was obtainable in the industry”, Adelana said. “You cannot effectively enforce compliwww.businessday.ng

ance when these gaps still exist. The focus is more on development now.”

Interpretation of some sections the law has posed challenges. Adelana claims that some people tend to interpret the Nigerian content law in ways that suit them. They want to continuously look out for loopholes or gaps in the law to take advantage of. Yet there are templates that provide guidelines, procedures and processes meant to help industry players comply.

But companies and operators who play in the oil and gas sector are

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seeking more clarity in the definition of some terms and sections of the Act. Particularly in the light of the fact that the Act was “enacted before government started talking about ease of doing business” Linus Okeke, partner and leader, Forensic and Integrity Services at Ernst & Young, Nigeria said.

Non-review of the law has generated some level of confusion. A company that provides aviation services to offshore oil rigs has found itself in a situation where the implementation of provisions of @Businessdayng

sector 104; sub-section 2 is making it pay more for aviation fuel and less competitive. The sub-section of 104 states: (2) The sum of one per cent of contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity or transaction in the upstream sector of the Nigeria.

“When you have a law and there is no review of the law sometimes it leads to issues. For example, since April 22, 2010 there have been major changes and we expect the law should reflect this” Temitope Samagbeyi, partner Tax Services at Ernst & Young said. “We will have more dialogue with the regulator which we hope will get to the legislators for amendments. With regular updates the document passes the test of time.”

In the nine years that the Nigerian content law has existed, the NCDMB have attained some milestones. “A clear example is that we have been able to integrate a 250, 000 barrels per day floating production storage offloading (FPSO) in-country”, Adelana said. “Today we have six globally competitive pipe-coating plants. We have two standard pipe mills in-country. These are clear indications of development.”

Tuesday 28 May 2019

BUSINESS DAY

29

ENERGY INTELLIGENCE How Nigeria can unlock international financing for energy, infrastructure projects - Velusami ARUN VELUSAMI is a partner in Hogan Lovells’ infrastructure, Energy, Resources and Projects team. Arun has advised governments, developers and lenders in a variety of energy projects with a particular focus on power projects in Africa. These include renewable energy projects (solar, wind, biomass, geothermal), thermal projects (fuel oil, gas and coal) and hydro-power projects. He also has experience of cross border power trading arrangements and captive power generation projects. He shared insights on how Nigeria can unlock international capital for energy projects in this interview with BusinessDay’s ISAAC ANYAOGU.

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lease give us an insight into what prepared you for these current roles?

I suppose it is a combination of factors but one of the things that prepared me for working in the energy sector is the lack of power growing up which had an impact on my life. I was born in India and I grew up in a rural area in India for a part of my childhood and I remember several days can pass without power supply.

So when I moved from India to the UK, there, power was available 24/7 on demand. It really struck a chord with me. By sheer coincidence later on when I started my legal career and I had the opportunity to work in Africa, I was particularly focusing on the energy sector. I saw that many of the things that I grew up with, people were still experiencing it here and I really do appreciate the opportunity to help.

I have also spent time living in an emerging economy, one that has grown significantly and many African countries are in a similar state. They have so much potential, so much human capital and if I can play a small part in helping to develop the power sector here, it is something that has always been amazing to me.

There are over 600m people without energy access in Sub Saharan Africa, how can we unlock energy access for these people? What barriers need to come down?

There are three aspects to any power supply. First, is there enough power being generated in the country and it is the most obvious questions. Equally important is how do

Arun Velusami

you get that power to people either in cities or rural areas. In cities, they generally have grids, it may not be perfect but most houses are connected to the national grid. When you get outside of the big cities and go to the rural areas then you may not have those grids, then it becomes a question of how do you get power to those people?

Do you build further transmission and distribution infrastructure or do you decide you want to focus on small scale rural electrification and have small scale solar plants or rooftop solar? There are a number of ways to do this and there are no simple solutions. I think you have to approach it from providing power and getting that power to major centres and also finding a

way to get power to people in more rural economies.

The challenge has sometimes been what strategies to deplore to improve energy access to these people. What are your thoughts on this?

It’s really a question of how will this infrastructure be funded. First, there is an infrastructure gap.

There’s not enough generating capacity, there is not enough transmission capacity and there is not enough distribution capacity, so how do you attract the capital to fund these projects?

Traditionally, a lot of finance has been available for power generation and for new large scale power plants, increasingly small scale

rural solar projects are attracting investments. Traditionally, transmission lines in most countries have always been state-owned, so they tend not to attract as much investments. So often, investments in transmission lines have been grant funded. It is incumbent for governments within Africa to make sure that transmission is a priority because without the transmission there is no point in having the generation.

Equally with distribution, there have been privatisations in the sector. In Uganda, the distribution service has been privatised, the same is true in Nigeria but I don’t think the distribution companies in Nigeria, for a variety of reasons, have been able to access international capital to invest in adequately improving their networks. So this is what governments in these countries should look at - how to unlock investments in the distribution companies.

Why has it been difficult to get private equity firms to invest in infrastructure especially in Sub Saharan Africa?

I think it’s a question of ensuring that the business, and legal environment within the countries are stable, recognizing the rule of law, those are the key ingredients for promoting private investments.

There are always people willing to invest in well structured projects where there is certainty and stability. To achieve this, governments must be willing to work with international development institutions such as the World Bank. If you have the World Bank supporting your project, providing credit support, political risk insurance, that greatly

enhances the attractiveness of your project and will massively increase the pool of international capital and investors to that project.

The Azura-Edo IPP, which I understand you worked on, was completed on schedule and on budget, what factors accounted for the project’s success? How can it be replicated elswhere?

All of these ingredients mentioned in the answer to the last question were there. You had the World Bank supporting that project through credit support from IDA and political risk insurance through MIGA. You had a government that was strongly supportive of the project and one of the key things government did was to issue a Put/Call agreement which is essentially the government standing behind the project. If anything goes wrong investors and lenders need to know that the government is standing behind the project. So you had political support, you had a tariff that was reflective of the cost of generation and ultimately you had the international lending community who wanted to see this major project succeed. It took a number of years to close, but it has been very successful.

We know the ingredients that were there that allowed that project to close, its just a question of, is there the political will now? Is it a policy priority to provide more government support? The World Bank has also proposed a variety of reforms to be implemented in Nigeria’s power sector, so it is a political decision as to whether the government wants to implement those reforms which will potentially increase Nigeria’s power.

Yinson FPSO explains reason for contract extension with Addax petroleum …interim contract to expire 16 June DIPO OLADEHINDE

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alaysia’s Yinson Holdings Berhad, a floating, production, storage, and offloading (FPSO) service provider has received a short contract extension for its Floating Production, Storage and Offloading Vessel (FPSO) between Addax Petroleum Development (Nigeria) Limited and Adoon Pte. Ltd stationed at the Antan field off Nigeria.

Yinson’s 100 percent owned

Knock Adoon has a capacity to process 60,000 barrels of oil per day with a storage capacity of 1.7 million barrels.

Although negotiations still ongoing, Yinson had extended the current contract via an addendum, extending the contract by one months as it discusses a longer term deals with Addax.

“In view that negotiation are still ongoing as to a substantive extension of the tenure of the Contract, Addax has via an Addendum with www.businessday.ng

effective date of 17 May 2019 further extended the Contract on an interim basis from 17 May 2019 to 16 June 2019 upon the existing terms and conditions,” Yinson Holdings said.

The announcement noted that the extension of the Contract on an interim basis is expected to contribute positively to the revenue and earnings of Yinson Group for the financial year ending 31 January 2020.

“The Company will make appropriate announcement(s) to Bursa Malaysia Securities Berhad in rela-

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tion to any material developments concerning the aforesaid extension,” Yinson Holdings said.

The 1985-built vessel, moored at the Antan field offshore Nigeria, won its first contract with Addax in October 2006.

After the original contract expired on October 16, 2014, it was extended for another year.

After that, the contract was extended for another three years to October 16, 2018. Upon the October 2018 expiration, Addax extended the @Businessdayng

charter until January 2019, and then until April 16.

The contract extension kept the vessel busy in Nigeria until May 16, which necessitated the reason for another contract negotiations set to expire June 16 2019.

The two companies have been in talks over a potential longer-term contract, with information on Yinson’s website showing Addax has options to extend the contract until 2022. The FPSO has a storage capacity of 1.7 million barrels.

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Tuesday 28 May 2019

BUSINESS DAY

OFFGRID BUSINESS Investment

EM-ONE to build solar micro grid at Ministry of Power, Works, & Housing ISAAC ANYAOGU

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M-ONE Energy Solutions has signed a contract with Nigeria’s Federal Ministry of Power, Works and Housing to design and install a 1.52 MW solar plant with a battery storage capacity of 2.26 MWh at the Federal Ministry of Power, Works and Housing.

The solar power plant will be mounted on carport & rooftop canopies and will generate 2.45 GWh of energy annually; reducing the Ministry’s energy dependence on non-renewable power source by 71% and reducing CO2 generation by 2,600 tonnes. The company says the solution it is providing is a fully integrated and scalable solution which can be increased in capacity as demand increases.

“EM-ONE will also complete an electrical retrofit on four of-

fice buildings within the Ministry of Power, Works and Housing headquarters for energy efficiency upgrades. The retrofit will replace old electrical appliances and connections with energy efficient ones – reducing the complex’s consumption by 40%,” the company said in a release.

It further said the system will use

a combination of tier-1 technologies who have partnered with EM-ONE to work closely on this flagship projects’ delivery. The advanced microgrid and energy storage system (ESS) for this project is provided by US firm Tesla, while the energy efficiency components are provided

by Schneider Electric.

“The project will be the first of

Nigeria’s Federal Government office complexes to use renewable energy as their primary power source. Once completed, the system will save millions of naira every year on a cleaner and more reliable power supply.

This forms part of the federal government’s commitment to renewable energy and mini grid policy,” Babatunde Raji Fashola, minister of Power, Works and Housing said.

Mir Islam, EM-ONE’s CEO said, “This is an exciting project for EMONE, we have a vision of making Nigeria an energy surplus country by developing self-sustaining energy producers that not only generate electricity for their own consumption but also export additional energy to the national grid. We are looking forward to working with the Federal Ministry and our valued technology partners on this pioneer-

ing project” EM-ONE has been operating in Africa’s power sector for over 20 years and successfully delivered a portfolio of 20+ MW solar microgrid and containerized solutions across Nigeria that provide uninterrupted power to hospitals, universities, clinics and day schools to multiple state facilities.

Some of the company’s projects include the turnkey EPC of 3 proprietary standard solar micro grids at three General Hospitals across Borno State and design consultancy, project management, test and commissioning services for 213 offgrid solar systems with integrated backup battery banks and remote monitoring systems installed at 11 Primary Health Centres and 175 secondary schools across 10 Local Government Areas.

We’ve seen rural-rural migration into communities our projects are sited - Odunaiye HAVENHILL SYNERGY Ltd is a clean-tech utility company that uses renewable (solar) energy to generate clean, safe, cost-effective and sustainable electricity in urban and rural areas in Nigeria. OLUSEGUN ODUNAIYE, tells BusinessDay’s ISAAC ANYAOGU the company’s strategy in a competitive market.

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hat are the significant milestones you have met so

far?

We started out 2010 as a power backup system. We installed inverters and batteries for homes and from there we gradually started doing small solar systems, rooftops, 1kw, 2kw around 2015.

Now we have additional 2 mini grids under construction; a 445 kilowatts and 100 kilowatts. The first two was 20kw and 30 kw and now we have a pipeline of 129 mini grids that we intend to develop in the next three years. We Off-grid businesses in Nigeria thrive on account of grants and concessional debt finance, what has been your experience?

We got $100,000 from USADF as seed capital which helped finance the first mini-grid.So Our first mini grid is still functioning till today and we have even ramped up the operation. We are increasing gradually and we are putting the revenue we generate back into the community to do appliance finance because essentially rural people have never

Olusegun Odunaiye

used electricity before. So you put a mini grid but how do you expect them to buy the TV, Fan, Refrigerators and begin to use?

Even if you give it to them and you do not increase their earning capacity, they will still not be able to pay for the electricity. So we started learning those lessons, documenting it: what makes a mini grid work, what determines a viable mini grid, the commitment, the ability and willingness to pay.

While we were still on that, USDAF came back to Nigeria, saw the project and gave additional funding for expansion

of the work. So we were able to transfer lessons gotten from the first project into practice and then we raised debt from outside Nigeria because what USDAF gave as additional funding couldn’t complete the second project.

So people we started business for some with N60,000 freezer and 20 thousand capital and today they are able to cater for their households. We have seen rural-rural migration into the communities where we have our electricity projects situated.

Give us an insight into the strategy that has served you well?

We don’t play in the mini grid space alone but we also play in the C&I space. In fact we have C&I projects that are operational and we also have a pipeline of almost 2 megawatts that we are currently fundraising for because at the end of the day you want to balance your business model.

The rural dwellers do not have much spending power for us currently we cannot run our business on that especially with 2-4 mini grids when you add 50-100

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

you make N500,000 or N1 million and you make it in a number of places, you would see significant numbers but for us we run our company and pay salaries from our commercial projects. We don’t touch the revenue from our mini grids, we only use it to do the operation from our mini grid and save to service our loans but we believe that as we scale up we would see much improvement.

What about tariffs, how do you structure yours?

The bottom-line is the cheaper your capital expenditure, the cheaper your tariff. If you build expensively, your tariff will be high and there is no way the community will pay. Here we don’t charge for construction in our company so the cost of our engineers we don’t put it on our projects especially when we have an obligation to an investor, our goal is to first of all, meet that obligation and then we can make profit afterward.

In Nigeria today you would find that tariff ranges N120 to N180 per kilowatt hour that’s where you find almost all developers but our own tarrif is be-

tween N120 and N140. We have never exceeded N140.

What are your thoughts on regulation in the sector?

I do not understand the way we think in Nigeria because if you go to other countries you would see that they have completely removed duty on the importation of solar products.

We can’t have a country that is producing 4,000-6,000 megawatt of power for 180 million people and then you have South Africa which produces 40,000-45,000 megawatts for 55 million people which is 15 times what Nigeria is producing and for a quarter of Nigeria’s population and then the government is discouraging people are trying to gear power through other source while claiming to be supporting local production.

People need to go to the rural area to appreciate the work being done in those areas. If you stay in the urban area and put 10 percent duty on panel, you would make your money because urban residents are making a killing in that sense. We won’t be deterred however by the failure of regulations.

Feedback: 07037817378, 08137433034, 08135447789

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

Tuesday 28 May 2019

BUSINESS DAY

31

Markets + Finance

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

Wapic Insurance Plc: Efficient underwriting capacity underpins profit BALA AUGIE

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t isn’t easy for insurers to break even in an environment fraught by a deluge of challenges such as apathy towards taking up a policy, low consumer purchasing power, poor regulations, high cost of doing business and poor regulations.

High cost of doing business is bloating the expenses of insurers- who spend more on diesel to run expenses because electricity from the nation grid is unreliable- whilst a low rate environment means they are left with a very slim margins.

The unpredictable and volatile macroeconomic environment is increasingly undermining growth, which is why insurers are playing catch up game with peers in Sub Saharan African.

Nigerian economy has been growing sluggishly, even after the country exited its first recession in 25 years, as first According to a recent data from the National bureau of Statistics (NBS), GDP growth slowed to 2.01 percent year on year (yoy) in the period from 2.38 percent year on year yoy in the fourth quarter of 2018, below loomberg consensus estimate of 2.54 percent.

To further exacerbate the already anemic position on operators in the insurance industry is that over 50 percent of a poplation of 180 people live below $1.98 a day, making it practically difficult for them to take up a cover.

Amid these myriad of challenges, Wapic Insurance Plc has been thriving as underwriting capacity improved, which means the company has spending less on operating and claims expenses in generating each unit of premium, as improved efficiency ratios conrinue to bolster profit.

For the first three months through March 2019, Wapic Insurance’s combined ratios fell to 75.92 percent from 117.28 percent the previous year.

The combined ratio measures costs and claims as a percentage of premiums, so the further it is below 100 the more profitable underwriting has been.

The Nigerian insurer has been growing underwriting profit at a blistering pace in the last three years, thanks to consistent growth in revenue and

Aigboje Aig-Imoukhuede - chairman, Wapic Insurance Plc

an appropriate mix of claims and underwriting expenses.

Underwriting profit increased by 61.79 percent to N1.25 billion in the period under review from N772.60 million the previous year.

Real underwriting profit stood at N676.64 million in March 2019, from a loss of N271.02 million posted the previous year.

Wapic Insurance’s claims or loss ratio reduced to 33.35 percent in March 2019 from 44.04 percent the previous year.

The Nigerian insurer’s operating or management expenses ratio fell to 41.97 percent in March 2019, from 73.24 percent; this means the company’s spending less in running operations in generating each unit of premium income.

Total operating expenses were up a mere 3.50 percent in the period under review, lower than the 11.37 percent April inflation figure.

Despite a low penetration environment, Wapic insurance has been growing revenue, thanks to the introduction of market penetrating products and excellent marketing strategy.

Gross premium written (GPW) increased by 58.85 percent to N4.02 billion in the period under review from N2.53 billion the previous year.

A breakdown of gross premium written shows revenue from Group Life stood at N1.16 billion as at March 2019 while premium from oil and gas remained flat at N1.38 billion.

Premium income from

general accident was up 7.84 percent to N743.12 million in the period under review from N689.71 million as at March 2018.Motor increased by 73.96 percent to N502.02 billion as a against N288.58 million the previous year.

As part of the efforts to boost insurance confidence, Wapic Insurance established an ombudsman desk where displeased policyholders can lodge their complaints.

The Managing Director/ Chief Executive Officer of the company, Mrs Yinka Adekoya, said the ombudsman would ensure fair hearing from both parties, and settle every dispute amicably to improve customer experience.

Wapic Insurance’s profit after tax surged by 100.07 percent tp N490.48 million as at March 2019, from N233.41 recorded the previous year.

While Wapic recorded a double digit growth in revenue, profit, and margins, the insurance industry contribution to the economy remains abyamally poor.

Nigeria, with a population

of 180 million people, has a penetration rate of 0.3 percent.

That compares with South Africa (14.7 percent), Kenya (2.8 percent), Angola (0.8%) and Egypt (0.6%). Similarly, the sector’s insurance density (a measure of industry gross premium per capita) is still one of the lowest when compared to peers – South Africa ($762.5), Egypt ($22.8), Kenya ($40.5) Angola ($30.5) and Nigeria ($6.2).About Wapic Insurance Wapic Insurance Plcis a leading West African full line insurance company offering a diverse range of products and services covering life, general and special risk businesses. We were founded in 1958 and licensed to underwrite all classes of insurance, such as fire and special perils, goods-in-transit, all risk insurance etc.

Over the last half century, Wapic has garnered experience across Nigeria in risk management and underwriting, and assisting corporate entities and individuals with various classes of cover. Wapic operates two business lines; Wapic Life Assurance Limited which operates in Nigeria, and; a regional footprint in Ghana, Wapic Insurance (Ghana) Limited.

In order to bolster the company’s ongoing repositioning and restructuring initiatives, Wapic merged with Intercontinental Properties Limited; a development which has significantly enhanced Wapic’s underwriting capacity and placed it amongst the top five insurance companies in Nigeria.

Wapic seeks to be a truly diversified financial services institution that provides protection against all forms of insurable risks to all customer segments and become one of the top twenty financial services institutions in Nigeria by 2017.

Wapic has been listed on the Nigerian Stock Exchange since 1990.

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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@Businessdayng

32

Tuesday 28 May 2019

BUSINESS DAY

FEATURE

Lagos Bus Services: New face of Smart City Transportation in Nigeria MIKE OCHONMA, Transport Editor

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ublic transportation system in Lagos is poised to assume a revolutionary phase with the coming of Lagos Bus Services Limited (LBSL), a Lagos sate government company.

Launched on April 24, 2019, by President Muhammad Buhari, the buses are a key component of the Lagos Bus Reform Project (LBRP) initiative of the sate government. The Bus Reform is to redefine the public transportation system in Lagos, with the injection of modern buses and terminals targeted to transform the way residents commute within the state.

To actualize this, LBSL was incorporated in August 2016 as a transport asset acquisition, operations, and advisory services company, and is the brain behind the new, medium and high capacity buses steadily making an appearance across the Lagos metropolis.

To ease the daily movement of millions of Lagos commuters, 800 of the expected 5000 buses have been delivered to the state; 50 of these buses have already been deployed on 5 routes across Lagos as part of a pilot phase.

The introduction of the new buses by LBS is designed not only to address the inadequacies of the existing unreliable transportation system in Lagos, but also to raise the bar on superior customer experience in tune with today’s modern and innovative demands.

Also, the LBSL is mandated to address the menace of unregulated yellow mini buses, loosely regulated transport services like the ride-hailing taxis, and regulated mass transit bus services like BRT. To make this goal a reality, LBS will be introducing electronic ticketing to ensure prompt boarding of passengers and revenue protection, to reduce waiting time at boarding points. In the same vein, drivers and attendants are to be trained and certified to work in a respectable and courteous manner, properly kitted uniforms and official identity badges for easy identification to the entire public.

According to the managing director, Idowu Oguntona, the company’s mission is to provide smart and sustainable bus transportation solutions to meet the needs of the modern city of Lagos. ‘’To achieve this lofty vision of being the dominant service provider within the mass transit sector in Nigeria, we have created a competitive space where urban mobility guarantees a market for mass transit operators, with whom we would make available the means to move Lagos residents in comfort, with

adequate capacity and affordable pricing”. He stated.

Procured with government funds, the Brazilian-built Marcopolo buses are indeed wonder on wheels and equipped with amenities that enable commuting for the average passenger an incredibly comforting, safe and secure.

With priority seating for the physically challenged, the elderly, and pregnant women, LBS takes inclusion for public transportation to a different level. That is not all. Each bus has six emergency exits and a first aid kit, free WiFi, television, and CCTV cameras linked to a control centre to monitor everything going on in the buses and every seat has a dedicated USB port for charging phones.

The initial 800 buses would be leased to reputable private Bus Operators through an operating lease model which will put into consideration all stakeholders in the transport sector.

The operators will use 3 bus depots located at Ilupeju, Anthony, and Yaba to ensure that the buses are deployed, sustained and maintained properly.

Bus routes will be allocated to the operators for effective implementation of the LBRP. Operating companies are certified professional public transport service providers who will operate the assets according to the approved Service Level Agreement.

The vehicles which are of uniform specification, will be expected to run on predictable schedules, and ply routes supported by appropriate infrastructure for efficient and effective mass transit.

Operations will be driven by technology, service delivery, creative, engaging, and www.businessday.ng

exciting rider experience.

An Intelligent Transport System (ITS) under which the new buses will operate will be deployed. This includes an electronic information system which provides real time passenger information to commuters; such as estimates of bus arrival and departure times as well as information about the nature and causes of service delays.

Infrastructure provided for smooth operations include bus shelters, laybys, bus flags, terminals, and depots at various strategic points along the routes.

To achieve the goal of seamless passenger movement as envisioned by the LBRP, the State has been divided into five Strategic Transport Zones.

The transport zones shall identify transport and traffic dynamics and the efficient implementation of the project.

These strategic zones are Ikeja, Lagos Island, Oshodi, Abule Egba, and strategic linkages (other routes).

The five zones are the major transport hubs in Lagos. Each hub is characterized by major transport activities and also serve as prominent key destinations of commuters. Each of the zones also contain transport sub-hubs which are major trip destinations from other parts of the State.

With these various measures, LBS has positioned itself as an enabler and facilitator of pleasurable and relaxing commutes across the Lagos metropolis.

The company is a friendly ally in moving Lagos in comfort, whether for work or leisure. A customer-focused entity with proficient leadership, LBS is one service provider which captures and expresses

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Idowu Oguntona, Managing Director/CEO, Lagos Bus Services Limited

the bustling energy of Lagos State.

The CEO is confident that the new Lagos Buses would boost the confidence of Lagos residents in the use of public transportation facilities. “Perhaps we are not too far off from a time when commuters will park their cars and use the new Lagos Buses for their daily commute. Imagine the possibilities of commuting with ease and stress free within Lagos”, he added.

Oguntona quipped that that the intention of LBS is to develop a strong emotional connection with the average commuter. It aims to do so by building a clear competitive advantage in brand, service, pricing, availability, and customer service.

“That is why the new Lagos Buses are presented in an image which differentiates them from alternative transport systems, and communicates in a clear, consistent, and attractive manner; the company’s commitment to provide decent, efficient, modern public transportation.

@Businessdayng

Tuesday 28 May 2019

BUSINESS DAY

COMPANIES & MARKETS

33

COMPANY NEWS ANALYSIS INSIGHT

INSURANCE

Custodian, NEM, six others declare N4.41bn dividend to shareholders ISRAEL ODUBOLA & SEGUN ADAMS

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igeria’s largest insurer by shareholders fund, Custodian Investment, along with seven other insurance firms declared dividend amounting to N4.41 billion to owners in full-year 2018.

Dividend is a monetary reward given by a company to its shareholders as compensation for risk in committing their capital to the business. At the end of a financial year, quoted companies issue part of its profit to owners of shares as a form of reward.

Custodian Plc declared 35 kobo per share to shareholders, the highest in the industry, followed by NEM (13 kobo per share), Axa Mansard and AIICO (6 kobo per share), Prestige, Regalins, (3 kobo per share), Consolidated Hallmark and Law, Union & Rock (2 kobo per share).

Four insurers were able to elevate dividend pay-out to shareholders in the review year despite rising operating expenses, tough economic conditions and low patronage for insurance products.

AIICO insurance raised payout to 6 kobo per share in 2018, from 5 kobo per share in the preceding year. Custodian Plc also raised its pay-out to 35 kobo

per share from 32 kobo it had paid the year before while Axa Mansard increased its dividend reward by 1 kobo per share to 6 kobo per share. NEM improved its dividend pay-out to 13 kobo per share in 2018, from 10 kobo per share in 2017 to 13 kobo per share in 2018.

Consequently, the improve-

ment in pay-out for shareholders of AIICO in 2018 rose by N69 million or 20 percent over the value delivered in 2017. Custodian Investment grew dividend by N180 million, from N1.89 trillion in the preceding year to N 2.07 trillion in full-year 2018.

Axa Mansard plc was able to deliver N105 million extra as

dividend from N630 million paid in 2017. NEM upped its total pay-out by N150 million to N680 million in the review period.

In 2018, Prestige Assurance was able to surmount headwinds, by proposing N159 million-its first dividend declared in the last five financial years.

The insurance sector is cur-

rently down by 8 percent so far in 2019, underperforming the equities market which has lost 3.9 percent in the same period.

However, the sector returned fewer losses to investors compared to other sectors, Industrial goods (-11.7%), Banking (-11.9%), Oil & Gas (-15.3%) and Consumer goods (-16.2%).

BANKING

Access Bank rewards 1,016 customers with N59m in DiamondXtra Savings Scheme HOPE MOSES-ASHIKE

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ccess Bank Plc on Wednesday rewarded about 1,016 with more than N59 million in its DiamondXtra season 11 quarterly draw prize presentation held at the bank’s headquarters in Lagos.

Nnenna Chukwu was the star prize winner, winning N100, 000 per month for 20 years in the salary for life category. Others included Nwoko Chibuikem, Aliyu Umar and Adewale Adekoya among others.

Chukwu who could not hide her excitement explained that she had opened DiamondXtra account a long time and was not expecting to win in the savings scheme.

She commended Access Bank for providing the opportunity for her to save and win at the same time, noting that the savings campaign would help to foster savings culture among Nigerians.

Victor Etuokwu, executive director, retail banking, Access Bank Plc, said the

DiamondXtra initiative was the bank’s little way of creating and adding value and meeting the needs of its customers.

He said the bank is committed to rewarding its shareholders for their patronage adding that DiamondXtra is the best banking product in the country at the moment.

“This is the 11th edition and the product has been rewarding Nigerians. It is something that we think it is important as every little thing you do help. There is no way a bank can add value to the economy if it does not do things like this, so the products of a bank must add value and DiamondXtra adds value,” Etuokwu said.

According to him, over the 10 years, more than N5 billion has been given out as the bank continues to soar on the goodwill of its customers and their patronage.

“We want every Nigerians to move to the DiamondXtra initiative so that they can partake in the goodies which the product brings. The only way companies remain profitable is by creating value so as long

as we keep doing this, our customer base will increase and this initiative will not affect our bottom-line,” Etuokwu said.

In his remarks, head, product insights and capability, Access Bank Plc, Rob Giles, said that DiamondXtra has positively impacted the bank’s depositor base as customers are more comfortable with having a DiamondXtra account rather than the normal savings account.

“Our business is all about customers and our success is also the success of our customers. As our customers grow, we grow as well and so we have helped millions of people to save with DiamondXtra in the last 10 years and we are still doing that as regards this year which is the 11th edition and in addition to helping people save, they have been winning salary for life, education allowances for five years and senior citizen prizes aimed at helping some of our most senior citizens get additional value among others. So we have been creating magic

moments for people and by doing that, it helps Access Bank because people want to continue to save with us and patronize Access Bank,” Giles said.

DiamondXtra is an interest yielding hybrid account, which allows deposit

of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The reward scheme which was launched in 2008 and has been running every year since inception, rewarded over 5,000 customers in

2018, and over N5billion has been given away in cash and gift items in the past 10 years.

To be one of the winning customers in the monthly and quarterly draws, simply walk into any access bank close to you and open a Diamondxtra account.

L-R: Uche Iwuajoku, executive director of Quits Hospitality Limited;. Peter Idoko, general manager, Legend Hotel Lagos Airport; Funmi Philip-Adewunmi, sales manager, Legend Hotel Lagos Airport; managing director, W Hospitality Group,. Trevor Ward and chairman, Entertainment Foundation of Nigeria, Tee Mac Omatshola , at the celebration of Hilton’s 100 years of hospitality and existence by Legend Hotel Lagos Airport, Curio Collection by Hilton

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

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Tuesday 28 May 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

AVIATION

NAHCO, Turkish Airline strengthen partnership for efficient cargo imports, exports IFEOMA OKEKE

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he Nigerian Aviation Handling Company Plc. (nahco aviance) has solidified its partnership with Turkish Airlines to ensure seamless importation and exportation of cargoes.

This partnership is coming at a time when NAHCO is driving a five-year transformation plan with a focus to be more customer focus.

Speaking during an event in Lagos to solidify the partnership between the two companies, Olatokunbo Adenike Fagbemi, the group managing director/chief Executive Officer said the partnership is about ensuring NAHCO does things in such a way that it is easy for Turkish airlines to service the clients and the shippers better and it is easy for the shipper to understand the activities of Turkish airline.

Fagbemi explained that with this partnership, imports and exports of cargoes will be seamless with NAHCO being the go-between of

the exporters, shippers and freight forwarders.

She explained that NAHCO has been in business with Turkish Airline since 2006 but the solidification of this enterprise is because Turkish Airline is getting into some automation in its new terminal and NAHCO is looking to transform its business in the next five years, so the need to reflect this transformation with regards cargo imports and exports is paramount.

On what NAHCO is doing to ensure export of cargo meet European Union standard, she said since the beginning of the year the company has consistently engaged all its stakeholders and clients on processes goods must go through to meet EU’s standard.

“We sometimes call the airlines and the shippers for us to change this process to be in line with the EU. The airlines and the shippers listen to each other. In Nigeria, there are lots of opportunities for exports that are not yet tapped. If

an airline is coming with freighters, how much of the freighter’s space is being filled? The people that are in the room for this event are some of the people that will influence it to be filled. So, it is nice to have these engagements so we can benefit as a country. We are looking at how the country can benefit.

“We have a lot of agricultural products that can be exported but a lot of the produce is being destroyed and that is because the exporters don’t understand some of the things that they need to do. So this engagement is just the beginning of several more so that at the end of the day, the full benefits of export cargo can be tapped.”

Fagbemi disclosed that imports and exports of cargoes in the first half of 2019, has materially increased, adding that there is a market for agricultural produce in Nigeria but there are restrictions, that is why it is important that shippers understand these restrictions and manage them so that we don’t have their goods returned.

L-R - Uche Unigwe, sales director NB Plc., first vice president of the Nigeria Football Federation (NFF), Seyi Akinwunmi, president of Nigeria Women Football League, Aisha Falode, Nigerian actress and model, Linda Ejiofor, Nigerian actress, and Philanthropist, Tonto Dikeh, Human Resource Director, NB Plc., Grace OmoLamai, and marketing director NB Plc., Emmanuel Oriakhi at the Amstel Malta “We’ve Got Balls” campaign launch.

L-R: Babatunde Aribido, public relations manager, DStv; Caroline Oghuma, executive head; corporate affairs, MultiChoice Nigeria; recieving Pay TV Brand of the Year Award won by DStv from Jimi Awosika, executive vice chairman of Troyka Holdings, Akaoma Onyeonoru, CSR Executive; MultiChoice Nigeria, Joshua Ajayi; publisher, brand communicator and Timothy Okwu, PR specialist, corporate affairs, MultiChoice Nigeria during the Brandcomawards held at Muson Center, Lagos.

SMEs

EDF, Sterling Bank offer growth incentives for Abuja SMEs in culinary arts KELECHI EWUZIE

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igeria’s premier food and drink festival, E at D r i n k Fe s t i va l (EDF) as part of its drive to expand its geographical footprint with support from Sterling Bank has announced plans to hold the 6th edition of the festival in Abuja the nation’s capital.

Founded in 2015, EatDrinkFestival is a one of a kind annual social event which connects tens of thousands of food lovers, chefs, cooks, mixologists, local and international press to an amazing lifestyle experience.

Folayemi Agusto, cofounder / Festival director of EatDrinkFestival while speaking at a press conference in Lagos announcing the event scheduled for the 8th of June, 2019 said EatDrinkAbuja will bring together an eclectic and carefully curated selection of Abuja’s talented food and drink vendors.

According to her, “Our festivals are all about promoting local talent in the culinary arts in a dynamic way. We are excited to bring the festival to the nation’s

capital, and eagerly anticipate a great day”.Agusto said the festival will bring hidden gems and new culinary experiences from all over Abuja to Harrow Park for one massive day of feasting.

Daphne Akatugba, marketing manager, Sterling Bank said the bank’s support for the festival is in line with its commitment to support Small and Medium Enterprises (SMEs) in Nigeria.

Akatugba opines that beyond giving Abuja residents an opportunity to experience a curation of the best food and drinks, EatDrinkAbuja offers small and medium businesses within the region an opportunity to expand their customer base and scale their business.

“We are eager to witness the partnerships that will be borne from the festival as has been the case with Lagos and we are excited to be part of their success story,” Akatugba said.

The Abuja edition is also supported by MAGGI, who will play host to a series of culinary attractions at the festival. From live cooking demonstrations to cooking challenges amongst others. www.businessday.ng

On her part, Nwando Ajene, Category Manager MAGGI, Nestlé Nigeria said, “We are excited to be part of Eat Drink Abuja as it gives us another opportunity to connect with food lovers seeking new food experiences.

At Nestlé, we believe that healthy living and nutrition is important, so MAGGI continues to share knowledge with foodies across Nigeria, encouraging good eating habits through fun, quick nutritious recipes to help them cook the difference. We believe that this will ultimately help improve the overall health of individuals and families in our communities. #EatDrinkAbuja is a technology driven event as the festival will introduce a reloadable wristband system powered by RFID technology for guests to use to complete payments at the festival seamlessly.

The innovative payment system which has been previously implemented at the EatDrinkFestival in Lagos to mitigate transaction failure, will allow guests, on arrival or online before the event, purchase a wristband and load it up with funds to make payments at the event.

L-R: Council Member, Nigerian-British Chambers of Commerce, Ray Atelly; President, Nigerian-British Chambers of Commerce, Akin Olawore and Director General, Nigerian-British Chambers of Commerce, Bunmi Afolabi at the Chamber’s media briefing to announce its Outward Trade Mission to the United Kingdom in Lagos.

L-R: Akaoma Onyeonoru , CSR specialist, MultiChoice Nigeria ; Babatunde Aribido , public relations manager, DStv Nigeria; executive head, corporate affairs, multichoice nigeria, caroline oghuma and pr specialist, multichoice Nigeria, Timothy Okwu at the just concluded Brandcomfest Awards where DStv was awarded Pay TV Brand Of The Year.

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Tuesday 28 May 2019

BUSINESS DAY

news Education reform: Edo Polytechnic holds maiden inaugural lecture after 17 years

Solid Minerals business

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… as School of Health matriculates 304

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n line with Governor Godwin Obaseki’s charge to state’s tertiaryinstitutions to take the lead in proffering solutions to societal challenges,theEdoStatePolytechnic, Usen, is set to hold its maiden inaugural lecture to unveil attainmentsinresearchattheinstitution.

The lecture is to be delivered

by Obokhai Kess Asikhia at the school’s complex in Usen near Benin City, on May 30 and is titled ‘Users’ Experience: Designing for theExtremestoAccommodatethe Mainstream.’

Rector, Edo State Polytechnic, Abiodun Falodun, in an interview with journalists, said the maiden lecture was being organised as part of efforts to reposition the institutionasaworld-classsolution centre,notingthatthiswouldbethe first of such lectures in the institution17yearsafteritwasestablished.

He said, “Asikhia will use the occasionoftheinaugurallectureto engage the society on his research work in the field of manufacturing

engineering, where he is pioneering work on user experience and applyingtheminreallifesituations.

“Hehasworkedwithanumber ofequipmentfabricatorsandother partners, including the Market Development in the Niger Delta (MADE) II programme funded by theUnitedKingdom’sDepartment for International Development (DFID).Heisworkingwithfabricators on perfecting designs of userfriendly fish kiln for industrial use.”

According to the Rector, “We are excited to be hosting this lecture. So much has gone into planning the inaugural lecture and we want to showcase some of the ongoingresearchatthePolytechnicto the world. The lecture will among other things, proffer solutions to the problems of design and use of machines in the industrial sector.”

On the theme of the lecture, he said, “Asikhia will use the opportunity to showcase his research on how to improve users’ experience

in handling industrial machines.

The scope of the lecture will cut across engineering, psychology, communication and optometry.

“We expect industrialists to benefit from the lecture, which adds to the existing body of knowledge in these disciplines. It also makes recommendations on how to strengthen partnerships between Polytechnics and industries.”

Meanwhile, the state commissioner for health, David Osifo, assures that the state government is building capacity in health science and technology to groom personnel for its newly revamped primary healthcare centres under the Edo Healthcare Improvement Programme (Edo-HIP).

The commissioner said this at the 23rd matriculation of the Edo State School of Health Technology, Benin City, during which 304 students were matriculated for the 2018/2019 academic session.

NECA sets 2nd term agenda for Buhari ahead swearing in JOSHUA BASSEY

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igeria Employers’ Consultative Association (NECA) says President MuhammaduBuhariwillneedtoprioritise policies directed at strengthening theproductivesectoroftheeconomywhereliesthepotentialtocreate jobs and reduce the country’s frightening unemployment rate.

Buhari is to take oath of office on Wednesday, May 29, 2019, for a second term of four years that will elapse on May 29, 2023. His first four years has seen Nigeria struggling with compounding economic woes.

Figures from the National Bureau of Statistics (NBS) show that youth unemployment rate averaged 23.63 percent from 2014 until 2018, reaching an all-time high of 38 percent in the second quarterof2018,withmillionsofthe citizenscontinuingtofallbelowthe poverty line.

Timothy Olawale, director-

general of NECA, in a document titled “NECA’s Agenda for Government,”madeavailabletoBusinessDayonMonday,saidtherealsector in the last four years had struggled againstburdensometaxation,poor accesstofunding,regulatoryinsensitivity,evenasinterventionsbythe Central Bank of Nigeria (CBN) did little to strengthen to the sector.

He said “among the urgent support needed by the real sector is access to single digit capital, a business-friendly exchange rate regime, policy to ensure the patronageofmade-in-Nigeriagoods, concerted efforts at curbing smugglingandassociatedactivities,bailouts and corporate tax incentives that will enable the expansion of local businesses, enforcement of harmonised taxes and levies by the Joint Tax Board at all levels of government.”

The employers’ body also pointed to the need for the governmentinitssecondtermtobuild infrastructure as critical enabler of development. It called on the

government to take urgent steps towards the completion of the Apapa Ports road, the Agbara Industrial Estate road and other strategic roads across the country, including rail networks to fasttracked easy movement of goods.

Necessary support should be given to the players in the Power Sector in the interest of the nation.

NECA decried the roles of some of the regulatory agencies of the government in the last four years, which tended to stifle businesses rather than encourage and promote entrepreneurship, saying this had be checked, as the President was set to begin another term of four years.

Itarguedthatthesuccessofany regulatory agency should not be measured by how much income it generated or how many organisations it was able to sanction, but how many businesses it facilitated and supported to thrive, stressing that“thereisneedtoencouragethe growth of the real sector through a friendly regulatory environment.”

NSACC holds breakfast forum in Lagos

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he Nigeria-South Africa Chamber of Commerce (NSACC) will hold its May 2019 Breakfast Forum scheduled for Thursday, May 30, at the Iris Hall, Eko Hotel and Suites in Victoria Island, Lagos by 7.30am.

Mordecai Ladan, director, Department of Petroleum Resources, will be the guest speaker for this month’s edition.

Ladan is a Petro-chemist by profession, who joined DPR on November23,1987,asasenioranalyticalchemist,andwasdeployed to the safety and environment branch under the then Technical Services Division. The company noted that Ladan rose through the ranks to occupy various key positions within the organisation, including Zonal Operations Controller, DPR Kaduna.

Having attained the rank of deputy director, he was appointed head, Downstream Monitoring and Regulation Division October 2005 – June 2013. “Thereafter, he

was appointed head, Gas Monitoring and Regulation Division June 2013 – May 2014. And then Head, Safety, Health & Environment Division May 2014 and now Director,DepartmentofPetroleum Resources.

Ladan is highly accomplished both professionally and academically; he is an environmental and regulatory policy/public affairs specialist.

Hewillshareinsightsonthetopical issue: “Gas Utilisation in Nigeria, Challenges, Opportunities and Outlook‘’inoureverevolvingsociety.

The event is primarily for captain of industries, business owners and top-level executives as well as other interested parties, executive secretary, Iyke Ejimofor, said.

He added that the chairman of the Chamber, Foluso Phillips and other executive directors were expected to attend the forum. He further noted that as in previous times,thiseditionwouldbeeducative and also insightful. www.businessday.ng

Ejimofor, on behalf of the Chamber encourages everyone whowantstogrowandstrengthen his or her business or gain insights on how to thrive globally should makeefforttoattend.Heexpressed that the meeting is a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on.

Since the inauguration of the Nigeria-South Africa Chamber of Commerceintheyear2000,thebilateralrelationbetweenbothcountrieshasgrowntremendously.The Chamber has been a veritable economic tool responsible for the increment in trade between Nigeria and South Africa.

Through the Chamber activities,manySouthAfricanfirmshave indicated interest in joint partnership with Nigerian firms and other forms of economic co-operations with several business establishments in Nigeria.

L-R: Seun Olatunji, president, Association of Metals Exporters of Nigeria (AMEN); Davies Olapade, special assistant to minister of state, Ministry of Mines and Steel Development; Babatunde Paul Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI), and Babatunde Alatise, chairman, Mining, Solid & Allied Services Group of LCCI, at the Nigeria Mining Business Investment Summit, Ikeja, Lagos.

LCCI proposes ways to de-risk Nigerian mining, trade and exports …advocates agricultural-sector model for mining industry JOSEPH MAURICE OGU

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he Lagos Chamber of Commerce and Industry (LCCI) has come up with series of solutions to the age-long challenges facing the mining industry in Nigeria.

These include replication of what the Central Bank of Nigeria has done to agriculture through its agent, the Nigeria IncentiveBased Risk Assets Sharing System for Agricultural Lending (NIRSAL), and elimination of multiple taxation and inspection in the industry. Babatunde Alatise, chairman, mining and solid minerals group of the Chamber, gave the proposed solutions, while addressing stakeholders in Lagos, recently.

Alatise noted that investors shy away from investing in mining industry because it is considered to be too risky, noting that the same notion was previously held of agriculture and agribusiness, but today through the activities of the Central Bank of Nigeria (CBN) set NIRSAL, that perception is gradually being re-written as agricultural practices have been substantially de-risked.

“Since such mechanisms and structures have been put in place in a manner that attracts technology and finance into agricultural sector, it can also work in mining sector,” Alatise said.

On this ground, Alatise called on the Ministry of Mines & Steel Development (MMSD) to work closely with the CBN to possibly expand the mandate of NIRSAL to include mining, minerals, and metals trading or have the CBN set up similar structures for the solid mineral industry.

He noted that the expansion in the export of agricultural products has been achieved more by working on the production side of the industry through simplifying the export process in order to make the sector attractive to investors.

“It is important to draw

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inference from agriculture because solid minerals and agriculture have been attracting multi-billion naira investments from within and abroad,” he said.

Also, one of the factors that discourage investors from investing in the sector was identified as the losses previously incurred by traders and bankers in the sector.

According to Alatise, to restore investors’ confidence, MMSD should consider revisiting some of the transactions especially those with the banks with a view to granting some form of forbearance to the loans, as was done in the capital market.

Also, to make solid mineral sector vibrant, he argued that industrial sector players should be consulted by the government whenever any policy in the industry is to be made, otherwise, the sector will experience further setbacks. “The solid minerals sector stands to suffer huge losses of interest if any strange policy is instituted without the input and review of the active private sector,” Alatise noted.

LCCI also proposed that relevant stakeholders including MMSD, Nigerian Custom Service, CBN, Nigerian Export Promotion Council, the Securities and Exchange Commission, the Ministry of Finance, and the organised private sector to revamp the Nigerian Commodities Exchange (NCX) with a focus on solid minerals.

In the alternative, they should create the Nigerian Minerals Exchange, where trading on metals & minerals would be done with a focus on ‘ease of doing business.’

On the collection and monitoring of royalties, Alatise calld on government to strengthen the Federal Mines Officers to monitor and collect royalties at the weigh bridges of the respective mines’ sites.

Consequently, the officers @Businessdayng

should be able to issue royalty payment validation documents that enable potential exporters to travel with their solid minerals to any export processing zones within the country.

According to Alatise, government should focus on attracting the big miners and investors to the country so that activities in the sector would be increased.

But he cautioned that smallscale mining leases should remain the exclusive reserve of Nigerians while foreign investors should pursue mining leases, beneficiation and smelting plants. They could also provide support by a way of equipment leasing and sales.

“This is the area that needs much more attention,” he emphasised. For this reason, Alatise said, the MMSD should as a matter of urgency set up mechanisms for the implementation of Executive Order 5 (EO 5) as it relates to the industry by ensuring that illegal foreigners operating in the sector were flushed out.

Also, he argued that Nigeria must begin to pursue investments in value addition in the areas of beneficiation and smelting for registered cooperative artisanal miners, as it would greatly improve the quality of mineral exports and raise the sector’s contributions to the nation’s GDP. To improve security in and around the mines, Alatise said the defunct Mines Police used decades ago could be reintroduced. In addition, he opined that Nigerian Customs (NCS) and Aviation Security (AVSEC) Officers needed reorientation training in solid minerals and metals identification and stricter compliance monitoring and sanctions as well.

Finally, Alatise said state governments should create publicprivate partnership (PPP) with credible technical partners to further create internally generated revenue and reduce unemployment, rather than frustrating potential investors with multiple layers of taxation.

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Tuesday 28 May 2019

BUSINESS DAY

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BUSINESS DAY

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38

Tuesday 28 May 2019

BUSINESS DAY

news MTNN stock down 7% as demand moderates on NSE Iheanyi Nwachukwu

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he shares of MTN Nigeria Communication plc (MTNN) fell by N10 or 7.14 percent to N130 per share as at the close of trading on Monday as demand continues to wane compared with supply.

Analysts say investors who took earlier position in the stock which was listed by introduction on the Nigerian bourse may have started taking profit (selling) on recent capital appreciation.

MTNN listed its 20.35 billion shares at N90 per share.

The stock’s new low of N130.05 per share on the Nigerian Stock Exchange (NSE), fromprecedingdayhighofN140, came barely three days after the Telco’sofficeraidbyofficialsofthe EconomicandFinancialCrimes Commission (EFCC).

In a notice at the NSE, the management of MTN Nigeria

gave reasons why operatives of the EFCC raided its Lagos office on Friday.

In the statement signed

by Uto Ukpanah, company secretary, MTNN said the EFCC wrote the Telco on May 23, 2019, requesting information and documentation in connection with the shares recently listed by MTN Nigeria at the Nigerian Stock Exchange.

“MTN has not been accused of any wrongdoing,” the statement read.

It added that MTN received all regulatory approvals from the NSE and the Securities and Exchange Commission (SEC) in connection with the listed shares.

“As lawabiding and responsible corporate citizens, we are cooperating fully with the authorities. We are committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria,” Ukpanah said in the statement.

Apapa: Sanity returns on roads, bridges as security agencies give way …presidential taskforce achieving success in clearing gridlock CHUKA UROKO & AMAKA ANAGOR-EWUZIE

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anity is gradually creeping back onto roads and bridges leading to Apapa, erstwhile headquarters of gridlock and congestion in Nigeria, due largely to the dismantling of checkpoints manned by security agencies as well as voluntary withdrawal of trucks from those routes by their owners.

This development is a major fallout of a presidential taskforce set up last week Wednesday by President Muhammadu Buhari, chaired by Vice President Yemi Osinbajo.

It is also a result of the 72-hour ultimatum given to the trucks to vacate all the roads and bridges in Apapa.

The new presidential taskforce is the second in less than 12 months. The first was set up

by Vice President Osinbajo in August 2018 when Apapa was shut down with spill-over effects on the entire Lagos, killing businesses and shutting out residents from their environment.

The Osinbajo taskforce was an abysmal failure. It was characterised by compromises and corruption. The taskforce erected multiple checkpoints manned by officers of the Nigeria Customs Service (NCS), Nigerian Navy, Nigerian Police Force (NPF), Nigerian Army and other security operatives along the roads leading to Apapa and Tin-Can Island ports.

These checkpoints served as clearing houses for the trucks as members of the taskforce left the task of controlling traffic and went after their selfish interest, collecting ‘tolls’ from the truck owners.

However, the new taskforce is already achieving results. Kayode Opeifa, former commissioner for transport in Lagos State and the vice chairman of the taskforce, told journalists on Sunday that the gridlock had been cleared up to 50 percent, hoping to take it further by Monday (yesterday).

When BusinessDay drove through the Apapa-Oshodi Expressway yesterday, it was noticed that all the way from Cele Bus Terminal to Mile 2 Bridge, the road was free of the usual heavy trucks, allowing other road users unfettered access to the expressway.

Similarly, on Ijora-Wharf Road on Monday, few container-carrying trucks (going to Lilypond Terminal) were sighted queuing on one lane of the road from Ijora Bridge, while another one-lane queue was seen from Marine Beach side of the road to Leventis Bus-stop where they were being released in batches to the ports, thereby maintaining orderliness on the port roads.

This arrangement also gave motorists and other port users easy entry to and exit from the port city.

Opeifa assured that Apapa roads, especially the only one leading to the port, would be

Continues on page 39 www.businessday.ng

L-R: Ayuli Jemide, vice chairman, Nigerian Bar Association-Section on Business Law (NBA-SBL); Babajide Sanwo-Olu, governor-elect, Lagos State; Seni Adio, chairman, NBA-SBL, and Adeoye Adefulu, chairman, conference planning committee for the 13th annual business law conference, during a courtesy call on the incoming governor to officially inform him of the forthcoming conference in Lagos.

Contractors fret over huge government debts ahead Buhari’s second term DIPO OLADEHINDE

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here is a lot of uncertainty in the minds of contractors in the construction sector over the future of their relationship with government.

The contractors, who are being owed huge debts by governments both at state and federal levels for executed contracts, are in doubt as regards payment of the debts and are, therefore, treading cautiously with government.

Even though many of the contractors contacted by BusinessDay were unwilling to speak for fear of victimisation, the few who spoke on condition of anonymity expressed concern over the huge debts and the impact they have on the industry.

The huge debts are stunting the operations of the construction industry, a catalyst

needed to drive the nation’s infrastructural growth, leading to limited capacity and avoidable job losses in the sector, one of the contractors said.

“Currently due to the huge government debts, there is lack of confidence in the economy which is affecting developmental projects in the construction sector,” a Lagos-based contractor working with government told BusinessDay. BusinessDay analysis shows majority of the construction companies are not listed on the Nigerian Stock Exchange. However, a check on Julius Berger’s financial statement showed amount due from trade and other receivable stood at N101.4 billion in 2018 compared to N48 billion in 2017.

“Trade receivable exposures are typically with the federal and state governments

which are major customers of the group and credit risks are generally minimised through forward funding where achievable,” Julius Berger said in its 2018 financials.

Further analysis of other receivables from construction firms showed Dangote Cement recorded a trade and other payables of N230 billion while CCNN recorded N8.8 billion in 2018.

Ramzi Chidiac, CEO of IBT Nigeria Limited, said government should give better opportunities and incentives that will attract private investment in Nigeria and not put stringent conditions to discourage investors.

In an emerging market like Nigeria, the construction sector should play a very crucial role.

Governments at various levels have continued to restate their commitments toward

bridging the infrastructural gap bedevilling the nation.

Despite the huge amount the government claims to have spent on capital expenditure via construction, however, growth in the sector has not been impressive.

The Federal Government allocated a capital expenditure of N2 trillion in the 2019 budget, representing 22.4 percent of the total budget of N8.92 trillion, while in 2018 N2.37 trillion was allocated representing 31.5 percent of the nation’s total budget to capital expenditure, 22 percent higher than N2.36 trillion allocated in 2017.

Also in 2016, a total of N1.58 trillion was allocated for capital expenditure, while in 2015, it was a paltry N557 billion.

Adeniyi Adewale, a project engineer at a construction and engineering firm Pivot

Continues on page 39

Nigerians want Buhari to tackle security, economy, jobs ...as president’s second term begins Wednesday JAMES KWEN, Abuja

S

ecurity of lives and property, boost in the economy and job/wealth creation are the key among what Nigerians expect from President Muhammadu Buhari as he takes oath of office for a second term on Wednesday, May 29.

Other expectations are in the areas of renewed fight against corruption, improvement in agricultural production, education, infrastructure, roads, rail system and power.

Buhari, who is going for his second and last term in office, still has the chance to galvanise both the successes and

failures of his first tenure and provide purposeful leadership that could lead Nigeria out of the present socio-economic doldrums and place it on the path of sustainable development, according to analysts.

“As President Muhammadu Buhari gets sworn in for a second and final term on May 29, my expectation is that he ends up bequeathing a strong, stable and prosperous country which he promised. I expect that he focuses on creation of value-added economy that is driven by real and sustainable jobs in manufacturing and agricultural sectors,” said Christian Okeke, lecturer at Nnamdi Azikiwe University, Awka.

Okeke expressed sadness

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that Nigeria was beleaguered by incidences of hunger, poverty, unemployment, economic sabotage, kidnapping and other acts of vagabondage.

“Our global poverty ranking shows no sign of improvement even as millions still go to bed daily on empty stomach. In fact, lack of jobs and other pecuniary incentives continue to supply oxygen that sustains multiform varieties of national catastrophes.

While insecurity and underdevelopment besetting the country show organic linkage with economic factors, conditions of human life in the country continue to grow worse,” he said.

“In order to make the @Businessdayng

desired impact in the next administration, therefore, President Buhari must have an immense focus on job creation across various initiatives. If our country is indeed to become economically sustainable, it clearly needs jobs. This will drive other development index and launch the country into becoming a strong economy,” he added.

Okeke said efforts must be made in the next four years to ensure that project choices are fundamentally pro-poor and capable of contributing to progressive and qualitative self-improvement of residents.

•Continues online at www.businessday.ng

Tuesday 28 May 2019

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39

news Low capital release, utilisation rate...

Continued from page 1

tries, Departments, and

Agencies (MDAs) of the Federal Government were not released in the past, while a small percentage of the released funds was eventually utilised by the MDAs. Buhari, while speaking at the signing ceremony in Abuja on Monday, expressed his displeasure on the reduction in budgetary allocations by the National Assembly. He noted that this would make it difficult to implement projects targeted at diversifying the economy.

In the signed budget, N2.094 trillion was allocated to capital expenditure, recurrent expenditure got N4.055 trillion, statutory transfers N502 billion, the fiscal deficit was raised to N1.908 trillion, and special intervention fund

N500 billion.

The budget was also calculated using an estimated crude oil price of $65 per barrel with 2.3 million barrels per day as the production volume.

Despite the increasing budgetary figures, previous budgets have been marred by poor implementation while the government continues to miss its revenue target.

The 2018 third quarter budget implementation report by the Budget Office attributed the poor implementation of the budget to the poor revenue outturn as oil production and exports remained below the budget estimates while the performance of the economy, though now improving, continues to impact negatively on non-oil revenue.

In the report, gross oil rev-

enue of N4.08 trillion was realised representing a 28.59 percent drop in the target for the period and N1.2 trillion or 42.75 percent above the N2.85 trillion realised in the corresponding period in 2017.

While the gross non-oil revenue of N2.4 trillion was received in the first three quarters of 2018, this represents a shortfall of N918.27 billion or 27.63 percent below the estimate of N3.3 trillion.

Also apart from revenue shortfall, late release of funds to MDAs caused by bureaucratic bottlenecks has also hampered the implementation of previous budgets.

The negative effect of late release of budgetary funds will, like the previous budget cycles, manifest in sub-optimal implementation of the capital component of the budget.

For instance, out of N1.56 trillion released to MDAs for

various capital projects and programmes in the 2017 fiscal year, only N1.44 trillion was utilised by the MDAs as of June 12, 2018 when the implementation of the budget ended.

Specifically, a total sum of N553.71 billion was allocated to the Ministry of Works, Power and Housing in 2017.

Only N336.58 was released to the ministry to execute its projects for the year, while just N269.58 billion was eventually used. This represents 80 percent utilisation rate of the total amount received.

A similar trend of using a lower proportion of released capital budget was also observed in 34 other MDAs. However, only five MDAs including Federal Capital Territory Abuja, Communication Technology, National Salary and Wages, Code of Conduct Tribunal, and the Police Ser-

vice Commission had 100 percent utilisation of their respective cash-backed funds.

Unlike the 2017 budget, the utilisation of funds released to MDAs in the 2018 budget was worse. Over N682 billion was allocated for the Ministry of Works, Power and Housing in 2018. Out of this amount, N122 billion was released as at the third quarter of the 2018 fiscal year and only N45 billion was spent, indicating 36.9 percent utilisation of the funds received.

Similarly, only N38 billion out of N603 billion assigned for the Transport Ministry in the budget was released. Of the amount, the ministry utilised N2.2 billion within the first nine months of 2018, making it achieve 5.8 percent utilisation of its released funds.

The Ministry of Agriculture recorded 33 percent utilisation rate; Education, 3.32

Insurers’ gross premium written rises...

Continued from page 1

shows life insurance spiked

by 32.07 percent to N139.48 billion as at December 2018, from N105.60 billion a year ago, while non-life insurance was up 48.41 percent to N161.24 billion from N139.48 billion a year ago.

The boost from life segment is propelled by regulator intervention in the sector, according to Owolabi Salami, executive director, Allianze Insurance plc.

“NAICOM had in January 2018 mandated life insurers to comply with the Group life rate at 6 percent per mill, which was 300 percent higher than market rate. This means for every N1,000 of the sum insured the person will be charged N6,” said Owolabi.

“Also, infrastructure spends by the federal government created a lot of business opportunities for operators in the industry. For instance, the Second Niger Bridge and railway projects paved the way for premium income. We experienced an uptick in income from retail business with regards to motor vehicle,” he said.

Mostcompanieswerestruggling to survive before the new guideline because the rates they

charged were not commensurate with the liabilities therein.

A breakdown of non-life insurancefiguresshowsthesefirms raked in N114.40 billion from fire business, representing 66.06 percent increase from N8.67 billion recorded the previous year.

Motor segment surged by 154.96 percent to N15.40 billion from N6.04 billion recorded the previous year.

Combined oil and gas business surged by 604.89 percent to N17.30 billion in the period under review as against N2.86 billion the previous year.

Despite the improvement in revenue, Nigeria’s insurance sector is still one of the most underdeveloped compared to peers in most African countries.

Nigeria, with a population of 180 million people, has a penetrationrateofabout0.3percent.

That compares with South Africa (14.7 percent), Kenya (2.8 percent), Angola (0.8 percent) and Egypt (0.6 percent).

Similarly, the sector’s insurance density (a measure of industry gross premium per capita) is still one of the lowest when compared to peers – South Africa ($762.5), Egypt ($22.8), Kenya ($40.5) Angola ($30.5) and Nigeria ($6.2).

Because firms do not have

Contractors fret over huge government...

Continued from page 38

Gis Limited, said there is a lot of corruption in the sector which is not only affecting cash flows of operations but also increasing the cost of construction.

“Sometimes when you enter MOU with banks and government concerning a

specific project and due to the peculiarity of Nigeria some unforeseen cost arises which was not provided for, both parties will stop honouring agreement which will lead to high receivables from government in our books,” Adewale told BusinessDay. Unlike other countries

Apapa: Sanity returns on roads, bridges...

Continued from page 38

cleared. He pointed out that because of the nature of the vehicles on the roads and their large number, the trucks could still be found on the roads, but efforts were being made to move as many of them as

possible off the road.

“We are using a combination of stakeholder engagement, traffic management direction and enforcement to clear up to port road inside Apapa. This is also backed up by a manual call-up system by the Nigerian Ports Authority www.businessday.ng

percent; Health, 7.36 percent; Science and Technology, 9.36 percent; while the Ministry of Niger Delta utilised nothing out of N5.81 billion capital release it received.

The Presidency spent N7.66 billion, representing 54.38 percent of the total N14.08 billion released to it, while interior ministry utilised N2.55 billion, implying 16.1 percent of N15.85 billion it got as at the third quarter of the 2018 fiscal year.

“Only the Public Complaints Commission had 100 percent utilisation of its cashbacked funds,” the Budget Office said in its budget performance report for the period.

Other MDAs which recorded more than 50 percent utilisation rate for the review period are Defence, Budget and National Planning and Office of the National Security Adviser.

President Muhammadu Buhari (m) signing the 2019 budget into law at the Presidential Villa in Abuja, yesterday, with him are Ita Enang (l), senior special assistant to the president on National Assembly Matters (Senate), and Umar El-Yakub, senior special assistant to the president on National Assembly Matters (House of Representatives). NAN

the financial strength (compared to banks) to invest in fixed income securities like treasury bills or debt instrument or real estate to underpin revenue, they have continued to record slim margins.

Unlike their peers in the banking industry that have been taking advantage of Central bank’s monetary policy to deliver a higher returns to shareholders, insurers’ investment returns have been weak.

In Europe, United States, and Asia, insurers are so liquid

that they own banks; they also own skyscraper buildings they earn rent from.

Moronfola Monsuru, actuarial analyst at Wapic Insurance plc, said that insurers should do more of retail business because it is more profitable and reduces risk.

“You tend to retain more when you do retail because you cede less,” Monsuru said.

The regulator has announced the recapitalisation of the insurance and reinsurance companies so that they can

take on more risk and become competitive on a global arena.

The minimum capital base for reinsurance companies has been increased from N10 billion (USD $27.7 million) to N20 billion ($55.5 million), and from N3 billion ($8.3 million) to N10 billion ($27.7 million) for general insurance.

Additionally, the minimum capital base for life insurance companies has been raised from N2 billion ($5.5 million) to N8 billion ($22.2 million), and for composite insurance

from N5 billion ($13.9 million) to N18 billion ($49.9 million).

“The recapitalisation directive affects all insurance and reinsurance companies other than takaful operators and micro insurance companies,” said Salami Rasaaq, head of the Commissioners Directorate for NAICOM. “The new minimum paidup share capital requirement shall take effect from the commencement date of the circular for new applications which is May 20, 2019,” said Rasaaq.

where construction contributes more than 15 percent to GDP, data from National Bureau of Statistics (NBS) showed the construction sector grew by 3.18 percent in Q1 2019. In full year 2018, the construction sector grew by 2.33 percent from 1.0 percent in 2017 and -5.95 percent in 2016 compared to growth of 4.4 percent re-

corded in 2015.

Folusho Adewale, an engineer and a project manager in one of the construction firms based in Lagos, said the lack of political will of various governments has led to the unimpressive growth in the sector.

“We have seen cases where only a small amount is eventually released for capital expenditure in a year despite

huge projections in the budget,” Adewale said.

The lacklustre performance in the construction sector has also impacted negatively on the bottom-line of some construction companies and industrial goods companies listed on the NSE. “If there will ever be any significant growth in the construction sector, the govern-

ment must at all levels ensure early passage of budget, simplify bottlenecks in the award of projects, and funds meant for these projects are quickly disbursed to the contractors handling such projects. The only way to jump-start an economy is to spend,” he noted.

(NPA), which has started using the newly deployed empty container return yard at Lilypond Terminal,” Opeifa, who represented Osinbajo at a meeting in Lagos on Sunday, said.

Truck owners, port operators and other stakeholders were, on Monday, excited by these developments, especially the removal of the security

agencies from the roads. For once, port users, particularly licensed customs agents and importers, worked in an environment devoid of these security agencies who became part of the Apapa problem.

Tony Anakebe, managing director, Gold-Link Investment Limited, noted in a telephone interview with BusinessDay

that the exit of military and naval personnel from Apapa road would help reduce the cost of transportation because the money spent by truckers to bribe these officers would no longer be charged on cargoes.

BusinessDay findings showed that these officers usually had civilian boys that went after trucks to collect money

for them. This was one of the reasons it became very costly to transport goods out of the port as truck drivers charged importers as high as N700,000 to N800,000 to move a 40-foot container from Apapa to warehouses within Lagos.

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Tuesday 28 May 2019

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Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 27 May 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 206,162.31 5.80 -0.86 230 20,280,874 UNITED BANK FOR AFRICA PLC 194,936.70 5.70 -0.87 340 20,063,511 ZENITH BANK PLC 602,812.68 19.20 1.05 309 8,731,234 879 49,075,619 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 251,267.05 7.00 -0.71 167 7,136,228 167 7,136,228 1,046 56,211,847 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,646,086.70 130.00 -7.14 523 10,217,526 523 10,217,526 523 10,217,526

BUILDING MATERIALS DANGOTE CEMENT PLC 3,271,777.42 192.00 -4.00 41 61,440 LAFARGE AFRICA PLC. 161,077.95 10.00 - 67 1,155,656 108 1,217,096 108 1,217,096 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 305,991.17 520.00 - 22 9,267 22 9,267 22 9,267 1,699 67,655,736 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 70,589.34 74.00 - 29 156,309 PRESCO PLC 58,000.00 58.00 - 4 130 33 156,439 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,620.00 0.54 - 21 527,959 21 527,959 54 684,398 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 3 2,812 JOHN HOLT PLC. 182.90 0.47 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 1 10 TRANSNATIONAL CORPORATION OF NIGERIA PLC 45,932.23 1.13 -0.88 71 4,652,391 U A C N PLC. 18,296.23 6.35 -1.55 59 1,551,563 134 6,206,776 134 6,206,776 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 30,360.00 23.00 - 30 439,062 ROADS NIG PLC. 165.00 6.60 - 0 0 30 439,062 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,897.59 1.50 - 6 21,756 6 21,756 36 460,818 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 8,612.45 1.10 - 6 38,600 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 110,614.33 50.50 - 24 66,221 INTERNATIONAL BREWERIES PLC. 171,917.24 20.00 - 8 11,480 NIGERIAN BREW. PLC. 463,820.32 58.00 - 52 95,936 90 212,237 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 83,000.00 16.60 3.11 50 402,003 DANGOTE SUGAR REFINERY PLC 160,200.00 13.35 0.37 76 1,940,269 FLOUR MILLS NIG. PLC. 56,380.22 13.75 -0.36 72 719,074 HONEYWELL FLOUR MILL PLC 8,643.92 1.09 - 14 222,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 30 NASCON ALLIED INDUSTRIES PLC 45,040.45 17.00 - 30 180,936 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 243 3,464,312 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 16 92,291 NESTLE NIGERIA PLC. 1,109,718.75 1,400.00 - 32 7,738 48 100,029 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 11 115,300 11 115,300 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 33,749.05 8.50 - 20 159,856 UNILEVER NIGERIA PLC. 193,606.68 33.70 8.71 30 161,027 50 320,883 442 4,212,761 BANKING ECOBANK TRANSNATIONAL INCORPORATED 201,845.06 11.00 9.45 34 876,031 FIDELITY BANK PLC 51,864.89 1.79 -1.10 139 28,277,576 GUARANTY TRUST BANK PLC. 921,195.91 31.30 0.64 146 1,521,992 JAIZ BANK PLC 13,848.20 0.47 -4.08 29 6,094,261 SKYE BANK PLC 10,687.83 0.77 - 0 0 59,596.17 2.07 - 27 2,170,781 STERLING BANK PLC. UNION BANK NIG.PLC. 200,933.19 6.90 -1.43 93 2,056,388 8,299.43 0.71 9.23 19 310,870 UNITY BANK PLC WEMA BANK PLC. 23,916.17 0.62 5.08 20 877,400 507 42,185,299 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 200 4,712.54 0.68 -1.45 13 789,730 AIICO INSURANCE PLC. AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 1 100 CONSOLIDATED HALLMARK INSURANCE PLC 1,869.90 0.23 - 5 19,568 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 7 42,974 909.99 0.20 - 3 40 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.23 9 373,900 LAW UNION AND ROCK INS. PLC. 1,890.39 0.44 - 0 0 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 4 1,301 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 2 60,100 NEM INSURANCE PLC 12,461.99 2.36 - 12 21,339 NIGER INSURANCE PLC 1,547.90 0.20 - 4 10,852 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 8 1,971,167 REGENCY ASSURANCE PLC 1,333.75 0.20 - 7 883,381 SOVEREIGN TRUST INSURANCE PLC 2,085.21 0.25 8.70 12 119,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 2,582.21 0.20 - 1 40,000 STANDARD ALLIANCE INSURANCE PLC. SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 2,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 -4.76 3 207,000 WAPIC INSURANCE PLC 5,219.27 0.39 -2.56 19 1,252,636 112 5,795,288

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,086.96 1.35 0.75 13 174,851 13 174,851 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,200.00 3.60 -2.70 82 2,238,418 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 4 6,250 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 32,080.39 1.62 1.25 43 1,784,536 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 6 16,783 STANBIC IBTC HOLDINGS PLC 430,615.25 42.05 - 22 175,051 UNITED CAPITAL PLC 13,500.00 2.25 0.45 83 2,599,347 240 6,820,385 872 54,975,823 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 3 407,000 3 407,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 9.09 3 1,000,500 3 1,000,500 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 7 17,180 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,164.95 8.50 - 9 4,037 MAY & BAKER NIGERIA PLC. 3,933.54 2.28 -3.80 13 436,138 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 9.80 4 102,500 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 5 1,190 38 561,045 44 1,968,545 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 -4.55 18 444,855 18 444,855 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 8 280 NCR (NIGERIA) PLC. 648.00 6.00 - 2 120 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 10 400 PROCESSING SYSTEMS CHAMS PLC 1,549.70 0.33 3.03 26 5,869,060 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 26 5,869,060 54 6,314,315 BUILDING MATERIALS BERGER PAINTS PLC 2,130.20 7.35 - 6 8,095 CAP PLC 21,770.00 31.10 - 9 26,642 CEMENT CO. OF NORTH.NIG. PLC 184,009.01 14.00 - 6 7,217 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 3 2,110 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 1 10 25 44,074 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,906.18 1.65 2.42 13 737,220 13 737,220 PACKAGING/CONTAINERS BETA GLASS PLC. 37,497.90 75.00 - 6 758 GREIF NIGERIA PLC 388.02 9.10 - 1 10 7 768 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 45 782,062 CHEMICALS B.O.C. GASES PLC. 1,731.58 4.16 - 1 3,500 1 3,500 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 88.00 0.40 - 2 58,660 2 58,660 3 62,160 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,753.56 0.28 7.69 11 2,371,000 11 2,371,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 53,455.07 4.30 -2.27 71 1,214,007 71 1,214,007 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 - 13 9,413 CONOIL PLC 14,954.67 21.55 - 17 27,577 ETERNA PLC. 5,216.58 4.00 - 11 16,000 FORTE OIL PLC. 35,753.11 27.45 -1.26 41 457,721 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 55,002.54 162.00 - 27 29,713 109 540,424 191 4,125,431 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 50 1 50 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 -9.37 2 259,220 2 259,220 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 3 4,100 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 3 204 6 4,304 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 4 46,020 4 46,020 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,014.25 1.45 - 3 59,817 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 4 4,182 7 63,999 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 3 11,020 3 11,020 PRINTING/PUBLISHING ACADEMY PRESS PLC. 151.20 0.25 - 3 105,155 LEARN AFRICA PLC 941.17 1.22 - 10 28,178 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. UNIVERSITY PRESS PLC. 776.54 1.80 - 1 30,000 14 163,333 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 464.16 0.28 - 9 17,170 9 17,170

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BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 27 May 2019

Top Gainers/Losers as at Monday 27 May 2019 LOSERS

GAINERS Company

Opening

Closing

Change

Symbols

Last Close

Current

Change

N31

N33.7

2.7

N10.05

N11

0.95

N16.1

N16.6

0.5

N19

N19.2

0.2

UNILEVER ETI DANGFLOUR ZENITHBANK

Company

ASI (Points)

Opening

Closing

Change

MTNN

N140

N130

-10

DANGCEM

N200

N192

-8

FO

N27.8

N27.45

-0.35

AFRIPRUD

N3.7

N3.6

-0.1

VALUE (N billion)

OANDO

N4.4

N4.3

-0.1

MARKET CAP (N Trn)

DEALS (Numbers) VOLUME (Numbers)

30,194.71 3,654.00 148,213,300.00 2.217

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he Nigerian stock market opened this week on a negative note. Investors lost approximately N303billion at the close of trading on Monday May 27, 2019.

The value of listed stocks decreased to N13.299 trillion from a preceding day high of N13.602 trillion.

The All Share Index (ASI) also declined by 2.21percent from 30,881.29 points to 30,194.71 points.

Year-to-date (ytd), the stock market is down by 3.92percent.

MTNN led the losers table after its share price decreased from N140 to N130, losing N10 or 7.14percent. Dangote Cement Plc followed after a record dip from N200 to N192, losing N8 or 4percent. Forte Oil Plc was down from N27.8 to N27.45, losing 35kobo or 1.26percent.

On the gainers table, Unilever Nigeria Plc led the pack after its share price went up, from N31 to N33.7, up N2.7 or 8.71percent. ETI Plc

advanced from N10.05 to N11, up by 95kobo or 9.45percent.

Dangote Flourmills Plc was up from N16.1 to N16.6, adding 50kobo or 3.11percent.

Following a bullish performance last week, market analysts at Afrinvest expect sell-pressures this week “as investors look to take profit on stocks that have recorded strong gains.”

In 3,654 deals, stock dealers exchanged 148,213,300 units valued at N2.217billion. Fidelity Bank Plc, Access Bank Plc, UBA Plc, MTN Nige-

ria Communications Plc, and Zenith Bank Plc were actively traded stocks on the Nigerian Bourse.

Amid this trades, Vetiva research analysts in their May 27 note expect activity to improve on Tuesday, they do not see activity returning to levels observed last week.

“Though market sentiment is still skewed negative, current prices provide a good entry point for medium to long-term investors. We believe DANGCEM & MTNN will also play major roles in tomorrow’s performance”, the analysts said.

L-R: Nelson Nweke, Independent non-executive director, Berger Paints Nigeria Plc; Anjan Sircar, managing director; Abi Ayida, chairman; Ayokunle Ayoko, company secretary/Legal Adviser, and Adekunle Olowokande, non-executive Director, during the annual general meeting of Berger Paints in Lagos.

SEC warns market operators against unethical conduct

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he Securities and Exchange Commission (SEC) has warned some Operators in the Capital market to desist from unethical practices that could lead to strict regulatory actions in accordance with the rules and regulations of the Commission The Commission in a statement on Monday said its attention has been drawn to an emerging trend of unethical conduct

by Brokers, Issuing Houses/Book Runners and other Receiving Agents in primary and secondary market transactions.

The SEC said the concerned operators carry out their activities by inducing investment through the sharing of brokerage fees or receiving agents commission with private banking officers, asset/fund managers, PFA’s and other institutional investor classes www.businessday.ng

who are not duly registered or recognised by the Commission as being eligible to be paid commission.

According to the SEC, only capital market operators duly registered by the Commission are eligible to be paid brokerage fee/ receiving agents’ commission “and such Operators shall not pay or offer a percentage of the commission earned from services provided in a transaction as an

incentive for investment”.

“Any capital market operator found to engage in this practice or similar acts shall be subject to strict regulatory actions in accordance with the rules and regulations of the Commission”, SEC said.

The SEC therefore enjoins the public to utilise the Commission’s whistle blowing mechanism to provide information on any known or suspected case for necessary action.

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FTSE 100 Index 7,277.73GBP +46.69+0.65% S&P 500 Index 2,826.06USD +3.82+0.14% Generic 1st ‘DM’ Future 25,636.00USD +16.00+0.06

13.299

Stock investors at NSE lose over N300bn Stories by Iheanyi Nwachukwu

Global market indicators Deutsche Boerse AG German Stock Index DAX 12,071.18EUR +60.14+0.50% Nikkei 225 21,182.58JPY +65.36+0.31% Shanghai Stock Exchange Composite Index 2,892.38CNY +39.38+1.38%

Berger Paints restructures for global competitiveness ...Appoints new CEO

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leading manufacturer in paints and allied coating products, Berger Paints Nigeria Plc has embarked on transformation initiatives to enhance its market dominance for the next 60 years.

The transformative initiatives which cover the company’s structure, people, processes and digital operations have been endorsed by the company’s Board of Directors.

Besides, the shareholders have approved the sum of N188.385million to be paid as dividend which translates into 65 kobo per share.

By the company’s financial statement, its revenue grew by 12 percent to N3.377 billion in 2018 as against N3.013 billion in the previous year while profit before tax stood at N454. 3 million, representing growth of 33.8 percent over N339.5 million recorded in the corresponding year.

Addressing the elated shareholders at the company’s Annual General Meeting (AGM) in Lagos yesterday, the Chairman, Abi Ayida, explained that on assumption of office, and after due consultation with the vari-

ous units of the company and meetings with the relevant stakeholders, it was imperative for the company to re-position for global competitiveness and sustainable increase on return on investment (ROI).

“On assumption of office, I solicited views on how this required journey could be made, and attained unvarnished narrative of what we as employees, partners, stakeholders and leaders were doing well and what not so well .The outcome of these valuable sessions, after Board review and consideration, confirmed that there was significant headroom for improvement in our people, processes and organisational structure” said Ayida.

Ayida stated that in order to put the company on the path of sustained profitability, the Board had created the office of Chief Operating Officer to drive the operations and technical aspects of the business while Anjar Sircar has been appointed the new Managing Director to take charge of strategic business development decisions and marketing function of the company.

PZ Cussons says well positioned to deliver improved value to shareholders

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Z Cussons Nigeria Plc has assured its shareholders and other stakeholders that it will further deliver better value in the years ahead.

This is even as the company restates its confidence in the Nigerian economy after 120 years in operations.

Christos Giannopoulos, Chief Executive Officer, PZ Cussons Nigeria Plc said that having been in Nigeria for 120 years and 48 years as a quoted company on the Nigerian Stock Exchange (NSE), the company is very well positioned to deliver better value in the years ahead.

He spoke last week at the Closing Gong ceremony on the floor of the NSE in Lagos to mark the company’s 120th anniversary. Giannopoulos said the company is still very proud to operate in Nigeria. @Businessdayng

“We are very proud to be here today. Contrary to reports some months back, I want to reiterate that PZ Cussons is here to stay. We are not going anywhere.

We are confident of in our shares; we have confidence in our company.

“We have about 76,000 shareholders, they expect returns and they are getting returns through continued dividend payment over the years of being a listed company. The future is bright,” he said.

According to him, the prospects are bright because Nigeria has a population of about 190 million and is the biggest economy in Africa.

He explained that the company would continue to invest in order to expand capacity and upgrade to make sure it has the latest and best its equipment manufacture ultimate quality products.

Tuesday 28 May 2019

BUSINESS DAY

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45

46

Tuesday 28 May 2019

BUSINESS DAY

POLITICS & POLICY

INEC withdraws 65 C-of-R as Zamfara PDP governor-elect, NASS members collect certificates James Kwen, Abuja

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he Independent National Electoral Commission, INEC has withdrawn total of 64 certificates of return and issued to winners declared by courts orders.

INEC is studying nine more judgments it has been served in the last one week in which primary elections conducted by different political parties have been upturned by the courts.

Mahmood Yakubu, INEC Chairman made this known Tuesday in Abuja at the presentation of certificates of return to the Zamfara Governor-elect, Deputy Governor-elect and National Assembly Members-elect on the platform of the Peoples Democratic Party, PDP declared by the Supreme Court last Friday.

In compliance with the judgement of the Supreme Court, INEC presented 12 certificates of return to; the Governor-elect, Mohammed Matawalle, Deputy Gov-

ernor-elect, Mahdi AliyuGusau, three Senators-elect; Yau Sahabi (Zamfara North), Mohammed Hassan (Zamfara Central), Lawali HassanAnka (Zamfara West) and the seven Members of the House of Representativeselect.

They include; Umar Dan-Galadima (Kauran Namoda/ Birnin Magaji), Bello Shinkafi (Shinkafi/ Zurmi), Kabiru Amadu (Gusau Tsafe), Kabiru Yahaya (Anka/Talata Mafara) Shehu Mohammed (Bungudu/ Maru), Ahmed Bakura (Bakura/Maradum) and Sulaiman Gummi (Gummi/ Bukkuyum).

The INEC Chairman in his remarks said the presentation of certificates of return to winners of any election conducted by INEC is a statutory responsibility required of the Commission under Section 75 of the Electoral Act 2010 (as amended).

Yakubu while harping on the need for internal democracy among political parties said, “I want to reiterate the importance of conducting

Mahmood Yakubu

proper primaries before elections in order to reduce the spate of litigation associated with them.

“At the moment, there are 809 pre-election cases pending in various courts across the country challenging the conduct of primaries by political parties for the

I will declare my assets before inauguration - Buhari Tony Ailemen, Abuja

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resident Buhari on Monday, promis ed to declare his assets before he takes his oath of office for the second term on Wednesday, May 29th.

The President stated this when he received officials of the Code of Conduct Bureau who presented his assets declaration forms to him and Vice President Yemi Osinbajo at the Presidential Villa, Abuja.

The team was led by the Chairman, Mohammed Isa, and other board members, Murtala Kankia and Emmanuel Attah.

The President, while thanking them for accepting to serve in the institution , assured that he will complete and return the form before the Wednesday’s inauguration “I thank you very much for serving me my forms which I must fill constitutionally before my second term of office.

“I think we cannot over emphasise the importance of your office because Nigerians are notorious for cutting shortcut in serv-

ing and account public responsibilities and we are trying to impress our nation and the world that this administration based on accountability.

“It is the only institutions like yours that will bail us out from the efforts that we have been making to make sure that people in public office do not abuse that public office and that those who come in and those that are leaving in certain positions make sure that they hold the integrity of the office and of the country generally.

“I am very pleased that you are here, I assure you I will quickly fill this form and dispatched it back to you so that at the end of 2023, I believe there are a lot of people that will like to take it back on me.

Buhari appealed to CCB to keep the “forms safe” , as according to him, “there are people who believed they shouldn’t be questioned when they are being questioned and some of them are already in trouble.

“I expect them to fight back and this is one of the instruments. So I hope you will keep it when I finished. www.businessday.ng

Chairman of the Code of Conduct Bureau Mohammed Isa, while presenting the Assets Declaration Form to Buhari, Osinbajo, said assets declaration was a Constitutional requirement which they must complete “Mr. President, as part of the constitutional requirements, there is need for every public officer President, Vice, Minister, members of the National Assembly to swear in his assets declaration and liabilities in compliance with paragraph 11 sub 1 of the part 1 of fifth schedule to the constitution.

“Mr. President it is in view of this we found it pertinence to present ourselves and also present to forms to Mr. President and the Vice President for end of tenure and beginning of new tenure in office. The forms are readily here with us for presentation.”

The event was witnessed by the Minister of Justice and attorney-general of the federation, Abubakar Malami, Chief of Staff to the President, Abba Kyari, Femi Adesina, Special Adviser to the President on media and publicity.

2019 general elections. This is clearly more than the total number of petitions currently before the various election petition tribunals nationwide challenging the outcome of the main elections.

“In our last update, the Commission reported that

25 certificates of return had been withdrawn and issued to persons declared winners by courts of law. Since then, three more certificates have been withdrawn by court order. With the Zamfara case, the figure has now risen to 64. In addition, the Commission is studying nine more judgements we were served in the last one week in which primary elections conducted by different political parties were upturned by the courts”.

According to him, “the Zamfara example is not the first pre-election case determined by the Supreme Court arising from the recent party primaries. Earlier, the apex court had determined the case of Lere Federal Constituency in Kaduna State which the Commission had already complied with and issued the certificate of return to the winner.

“It is therefore important to continue to emphasise to our political parties their obligation to conduct credible primaries for the nomination of candidates. Our democracy in particular and

electoral process in general can never be virile unless political parties rise to the challenge of internal party democracy.

“It is in this context that the latest judgments of the Supreme Court are crucial steps in strengthening our electoral jurisprudence. Going forward, we will not accept the submission of names of candidates by political parties under Sec. 31of the Electoral Act 2010 (as amended) unless there is evidence, monitored by the Commission, of compliance with the provision of Sec. 87 of the Act. “Party members interested in contesting elections start as aspirants before they emerge as candidates through the democratic process of direct or indirect primaries enshrined in Sec. 87 of the Electoral Act. It is only after they comply with this requirement of the law can their names be submitted to INEC under Sec. 31. We shall continue to work with the political parties to ensure strict compliance”.

‘Ibom Assembly Crsis: PDP Floors APC over defected members ANIEFIOK UDONQUAK, Uyo

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he Peoples Democratic Party, (PDP) in Akwa Ibom State has floored the All Progressives Congress (APC) in a court case involving the defection of its five members to the opposition party last year.

This followed a judgment of a Federal High Court sitting in Uyo and presided over by Justice Fatun Riman which declared the seat of Nse Ntuen, of Essien Udim state constituency vacant thus bringing to an end the case involving the sacked lawmakers.

The State House of Assembly last year declared the seats of lawmakers representing Essien Udim, Mkpat Enin, Itu, Ikono and Etim Ekpo/Ika vacant following their defection to the APC. The five lawmakers later dragged the Speaker to court challenging the declaration of their seats vacant.

During the crisis, one of the five lawmakers, Nse Ntuen was elected the speaker while all other members were suspended.

The court had earlier declared the seats of the other

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four lawmakers vacant except that of Essien Udim State constituency whose judgment was not different from others.

Reacting to the judgment of the Federal High Court therefore, the PDP at a press conference in Uyo applauded the court for causing justice to be done in the case of the defected assembly members.

Ini Ememobong, the party’s publicity secretary stated that the seats of the lawmakers were declared vacant by reason of their defection from the PDP without lawful justification.

“All five cases instituted by these sacked lawmakers were premised on several falsehood ranging from the claim that the coalition entered into by the PDP with other parties was a merger, to the fact that the sacked lawmakers, were summarily expelled from the party”.

The party recalled the drama and “shame brought upon the state when the sacked lawmakers Invaded the state House of Assembly “and claimed to have impeached the Speaker of the House of Assembly, Onofiok Luke and declared one Nse Ntuen as the speaker.

“These same lawmak@Businessdayng

? ers, with the active backing of their Warsaw general and party, created a house of comedy, wherein they claimed to have impeached the legitimate Speaker of the House of Assembly.

“If there is any, their reaction should be to unreservedly apologise to Akwa Ibom people and the entire world for the needless show of shame that they brazenly brought upon us and the unnecessary strain cum pressure on the polity.

“But by experience and observation, no reasonable person is expectant of such courtesy from the band of unprincipled fellows who currently lead the broom wielding movement.

“One by one, the court resolved all the issues in the substantive suits, against the lawmakers and held that their seats were vacant by reason of their defection from the PDP without lawful justification,” it said.

Recalling what it described as ‘the many lies of the Akwa Ibom APC’, the PDP accused its opponent of preserving a long thread of transparent lies “disingenuously sewn and shamelessly hawked by his agents.

Tuesday 28 May 2019

FT

BUSINESS DAY

47

FINANCIAL TIMES

World Business Newspaper

GUY CHAZAN, VICTOR MALLET AND BEN HALL

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urope’s political leaders began manoeuvring to secure the EU’s top jobs after this weekend’s European Parliament elections with a clash looming over the candidacy of Manfred Weber whose centre-right emerged as the biggest group.

The centrist party of French president Emmanuel Macron on Monday called for “a European Commission President candidate that can build a robust majority way beyond the partisan lines” — suggesting it wanted an alternative to the Bavarian MEP. Pascal Canfin, the number two on Mr Macron’s party list, said Mr Weber was “totally disqualified today”.

But Annegret Kramp-Karrenbauer, the head of Germany’s centre-right Christian Democratic Union, said Sunday’s election had strengthened Mr Weber’s claim to the post.

Mr Macron has invited Pedro Sánchez, Spain’s Socialist prime minister, to dinner at the Elysée Palace in Paris on Monday night as negotiations accelerate over who to back for president of the European Commission. Mr Macron will also meet other European leaders over lunch in Brussels on Tuesday before an informal EU summit in the evening, the Elysée said.

Mr Macron’s La République en Marche was narrowly beaten into second place by the far-right National Rally (RN) of Marine Le Pen, but it enters the European Parliament for the first time with more than 20 seats and expects to be at the forefront of a liberal grouping that will shape the choices to head the agenda-setting commission, the European Council of heads of state, the European Central Bank and the parliament itself.

ALDE, the pan-European liberal group with which Mr Macron is aligned, is aiming to play a kingmak-

Paris and Berlin manoeuvre to secure EU top jobs in wake of polls Emmanuel Macron seeks alternative to German-backed commission candidate Manfred Weber

French president Emmanuel Macron and German chancellor Angela Merkel earlier this month © Reuters

er role after the centre-left socialists and Mr Weber’s European People’s party lost their combined majority in parliament. The liberals do not agree with Mr Weber’s argument that as the leader of the biggest group he has first claim on the job.

In a joint statement, Mr Macron’s party and ALDE said: “At this hour, no candidate for the presidency of the Commission has secured a majority in the European Parliament. We would be extremely vigilant about any attempt to bypass the necessary negotiations between the democratically elected stakeholders, as it

ECB chief economist hits out at Trump’s ‘worrisome’ rhetoric Globalisation backlash derails investment, says Praet as he prepares to leave office

CLAIRE JONES

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he European Central Bank’s outgoing chief economist, who played a key role in the institution’s response to the eurozone crisis, has hit out at the ‘America First’ rhetoric of US president Donald Trump.

The backlash against globalisation is derailing investment across the world, Peter Praet told the Financial Times, arguing that clarity on trade rules was “absolutely essential”.

While the global trade war has so far centred on Beijing and Washington, Mr Trump has threatened to impose tariffs on $11bn-worth of European products and ratchet up barriers on European motor manufacturers.

The ECB views geopolitical risk as the main threat to the eurozone’s economy. The uncertain global environment also explains why the export-dependent region’s growth has slowed since the second half of 2018.

“Industrial organisation is very complex and a few frictions, even something relatively simple like tariff restrictions or delays, can

have big consequences in an era of just-in-time delivery systems,” Mr Praet said. “Stalling on investments, stalling on reorganising your firm, this waiting mode that companies are in can be very damaging, especially for manufacturers.”

Mr Praet will depart from the ECB at the end of May after an eventful eight-year term on its executive board, serving for most of that time as the central bank’s chief economist. He worked closely with its president Mario Draghi on the policies that are widely credited with cushioning the eurozone from crisis.

“While president Draghi rightly gets credit for steering the eurozone through a very difficult period, Peter Praet and his team have been instrumental in finding innovative ways for the ECB to deliver on its mandate,” said Mahmood Pradhan, the IMF’s euro area mission chief.

Those innovations included auctions of cheap central bank cash, negative interest rates and a €2.6tn stimulus programme that began in March 2015 and only stopped expanding at the end of last year. www.businessday.ng

would be extremely harmful to the transparency and accountability of the European democratic process.”

“The new balance of power in the European Parliament calls for a Commission President candidate that can build a robust majority way beyond the partisan lines. Our new group will be open to consider all candidates that can gather the support of the political families that will compose the future governing majority.”

Ms Kramp-Karrenbauer said her party’s goal in the election was to be the strongest German contingent

and to give Mr Weber a “tailwind” from Berlin “so it’s clear that he’s our lead candidate and he is our man for European Commission president.

And we have achieved this goal.”

Ms Kramp-Karrenbauer said the CDU had backed the Spitzenkandidat system, whereby the lead candidate from the winning group becomes parliament’s choice for commission president, from the start.

“And if the results confirm that the EPP is the strongest group in the European Parliament, then that should reinforce Manfred Weber’s claim to leadership of the European

Commission,” she said.

She added that the CDU would not hesitate to back the German government in “supporting Manfred Weber in Brussels”.

But if the CDU party leader has given Mr Weber her full backing, Chancellor Angela Merkel has not commented on his candidacy since Sunday night’s elections results.

Mr Macron has already met Mark Rutte, the Dutch prime minister and another liberal, and António Costa, Portugal’s centre-left leader, in Paris in recent weeks. He called Ms Merkel on Sunday night and will meet prime ministers from the Visegrad group — Poland, Hungary, Slovakia and the Czech Republic — on Tuesday.

Catherine de Vries, professor of politics at the Free University Amsterdam and a leading expert on the European parliament, said the liberals and their allies would try to put their own interpretation on the treaty requirement for EU leaders to “take into account” the elections when choosing the next commission president. While the EPP came first, it lost considerable ground while Mr Weber’s CDU/CSU party in Germany achieved its worst score in 70 years. The liberals and greens, meanwhile, made big gains across the EU. Matteo Salvini, Italian deputy prime minister and leader of the hard-right League which won the electionsin Italy with 34 per cent of the vote, said he was now eyeing a senior post for an Italian in the commission.

US trade hawk hunts bigger fish in Trump’s China battles Nazak Nikakhtar has moved to frontline of Washington’s stand-off with Beijing JAMES POLITI

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efore joining Donald Trump’s administration, one of Nazak Nikakhtar’s main jobs was to represent US catfish farmers seeking punitive duties against Vietnamese importers.

The 45-year-old Iranian-born trade lawyer and economist has since moved from the relatively small pool of the transpacific seafood business to the rougher waters of the US president’s trade war with China — a little-known hardliner playing a big role in implementing the administration’s combustible international economic agenda.

Ms Nikakhtar is the acting head of the commerce department’s bureau of industry and security — and awaiting confirmation to be its permanent chief — at a time when the unit is in the spotlight because of Mr Trump’s moves to expand export controls in the stand-off with Beijing.

This month, Mr Trump placed Huawei, the Chinese telecommunications network company, on a special export blacklist preventing American companies from selling to it without a licence, with more Chinese technol-

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ogy companies expected to suffer a similar fate.

Although the decision was made by the US president, Ms Nikakhtar is overseeing the crackdown. People familiar with her views say she has not shied away from warning American businesses of the danger of extensive economic relationships with China.

And they say she is more in favour of disentangling the two economies rather than fostering closer ties.

“There’s no question she’s hawkish.

She believes that far too much of the supply chain has moved to China and that whether pursuing self-interest or not, companies have prioritised the short term over the national interest,” said one person familiar with her views.

To some, this approach has placed Ms Nikakhtar squarely in the camp of Peter Navarro, the White House manufacturing policy chief and author of a book called Death by China. Others say that her lawyerly expertise aligns her more with Robert Lighthizer, the US trade representative leading the negotiations with Beijing — who is known for his rigour and attention to detail, in addition to a worldview that is @Businessdayng

deeply sceptical of globalisation.

Either way, Ms Nikakhtar’s rapid rise to a key position in the US administration worries some lobbyists and export control experts, who are looking for flexibility and pragmatism to prevent a backlash against US companies.

“I think there will be growing concern in the business community about her,” said one former senior commerce department official.

Not only are US technology companies wary of stringent export controls because they could lose billions of sales to the Chinese market, but they are also worried such controls could hamper US innovation in the long run by cutting off their access to research and development in China.

A commerce department official said Ms Nikakhtar was “concerned about China’s damaging behaviour and any other country that poses a significant threat to US national security”.

She had also “repeatedly explained to US industry that our technological leadership is synonymous with national security”. As recently as last week, Ms Nikakhtar “actively” engaged with US business on “relevant issues” including Huawei, the official said.

48

Tuesday 28 May 2019

BUSINESS DAY

FT

NATIONAL NEWS

Lawsuit filed against Bolloré Group over Cameroon plantations French industrialist’s family holding company has stake in African palm oil group HARRIET AGNEW

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group of NGOs and unions led by Paris-based Sherpa have filed a civil lawsuit against French industrialist Vincent Bolloré’s family holding company, urging the group to improve working conditions on its palm oil plantations in Cameroon.

“Our civil lawsuit aims to ask the French judge to force the Bolloré Group to comply with the commitments it made in 2013 to the local communities and plantation workers of Socapalm, a Cameroonian palm oil company directly linked to the group,” 10 associations and unions of France, Cameroon, Switzerland and Belgium said in a statement on Monday.

Bolloré Group owns 38.75 per cent of Socfin Group, a Luxembourg holding company, which itself owns, through two other companies, a stake in Socapalm.

According to its website, Socfin Group has a portfolio focused on the exploitation of more than 192,000 hectares of tropical oil palm and rubber plantations located in Africa and South-East Asia.

“Palm oil industry has a devastating impact throughout the world on health, pollution, deforestation, and workers’ rights, but no action seems to have succeeded so far in shaking up the practices of agribusiness giants,” said Sandra Cosset, director of Sherpa, which was set up in 2001 to advocate for victims of econom-

ic crimes. “Thus, our organisations are asking the courts to enforce these fundamental human rights.”

The lawsuit comes ahead of shareholder meetings for Socfin and the Bolloré Group, which are scheduled for Tuesday and Wednesday. A spokesperson for Bolloré Group did not respond to a request for comment.

According to Sherpa’s statement, in 2010 it filed a complaint with the OECD, and after several months of mediation the Bolloré Group and Sherpa agreed to put in place an action plan in Cameroon to improve the living and working conditions of the affected communities. Sherpa says that the Bolloré Group dropped this plan in December 2014.

“This action should be an important step in increasing the accountability of economic actors, who cannot unilaterally withdraw from their commitments, nor take them for the sole purpose of buying social peace or an ethical image,” Marie-Laure Guislain, head of litigation at Sherpa, said in a statement. “Law should not remain a tool for the powerful of the world.”

Bolloré Group’s activities are concentrated across three business lines: transportation and logistics, communication, and electricity storage and solutions.

In recorded €23bn revenues in 2018. Bolloré Group is also the largest shareholder in global media conglomerate Vivendi, which owns assets including Universal Music Group and Canal Plus.

Fiat Chrysler proposes €33bn merger with Renault Combined entity would become the world’s third-largest carmaker PETER CAMPBELL, ARASH MASSOUDI AND DAVID KEOHANE

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iat Chrysler Automobiles has proposed a €32.6bn all-share merger with Renault, a deal that would reshape the global automotive industry and add new life to the French carmaker’s alliance with Japan’s Nissan.

The proposal for a “transformative merger” would see FCA and Renault each own 50 per cent of the business, which would have combined sales of 8.7m vehicles a year — larger than General Motors and third globally behind Volkswagen and Toyota.

The combined group would have nearly €170bn in annual revenue on operating profit of more than €10bn, and net profit exceeding €8bn, FCA said. It would have a large presence in North America as well as Europe and Latin America, and expertise stretching from small electric vehicles to pick-up trucks.

The proposed tie-up comes despite the departure over the past year of the dominant executives at the two companies who long advocated consolidation: FCA’s Sergio Marchionne and Renault’s Carlos Ghosn. Marchionne died in July, while Mr Ghosn was arrested in Tokyo in November on charges of financial misconduct. Mr Ghosn has maintained his innocence.

A combination would also bring together Italy’s Agnelli family, which owns 29 per cent of FCA, and the French government, which owns 15 per cent of Renault, as the dominant shareholders in the merged company.

Both have commanded voting rights beyond their respective shareholdings, but that would fall away through the deal. Their respective shareholdings would also be halved in the new entity.

The top leadership positions were not disclosed in Monday’s proposal.

However, John Elkann, who steers Exor, the Agnelli family investment vehicle, is expected to become chairman at the merged group, while Renault chair Jean-Dominique Senard would be named chief executive, multiple people close to the talks said. Englishman Mike Manley, chief executive of FCA, is expected to be named chief operating officer.

A board of 11 representatives would include four representatives each from FCA and Renault and one nominee from Nissan.

Shares in Renault, which began Monday with a market value of almost €15bn, surged 13.8 per cent in early Paris trading. FCA, which started the day worth less than €18bn, climbed 10.6 per cent.

Because of the differences in market value at the start of the day, FCA shareholders would receive a dividend of €2.5bn before the deal closes. The value of the transaction will fluctuate with the share prices.

Although not included in the proposal, the deal would also involve Renault shelving plans to merge with alliance partner Nissan in the short term, according to people briefed on the discussions. Nissan holds a 15 per cent stake in the French group with no voting rights. www.businessday.ng

Olaf Storbeck and Stephen Morris and David Crow

Child hunger must be a priority for African states Economic growth has been impressive, but it has had little impact on child nutrition GRACA MACHEL

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unger is the most acute problem facing Africa’s children.

As you read this, around 60m children across the continent suffer from it. Not the mildly uncomfortable hunger that comes from skipping the odd meal, but permanent, relentless malnourishment, stunting and wasting.

It is utterly unacceptable that lack of decent food is still killing African children on such a vast scale in the 21st century. Nine out of ten African children do not eat the minimum amount of calories with the desired degree of frequency. One in three is stunted. Two out of five do not get regular meals. Hunger is in decline worldwide, but in some parts of Africa it is getting worse. Between 2014 and 2017, 44m more people went hungry, most of them children.

This creates a huge economic impact. Stunting alone is estimated to have reduced Africa’s present gross domestic product by 10 per cent.

In Ethiopia, for example, economic losses linked to children being undernourished and facing diminished lifetime earnings equal about 16.5 per cent of GDP. The resulting impact on cognitive and physical development has stunted the development of African societies.

It doesn’t have to be like this. As African governments decide where

to spend their money, they must remember that here is a powerful economic argument for reducing child hunger. For every dollar invested in reducing stunting, there is a return of about $22 in Chad, $21 in Senegal and $17 in Niger and Uganda. The benefits are even higher if the investment is made early in a child’s life, ranging from $85 in Nigeria to $60 in Kenya. Halving rates of child stunting by 2025 could, according to the UN Food and Agriculture Organization, lead to average annual savings ranging from $3m in Swaziland to $376m in Ethiopia.

Africa’s economic growth over the past two decades has been impressive, but it has had little impact on child hunger. Despite average 2 per cent annual GDP growth in Kenya, stunting increased by 2.5 per cent. And in Nigeria, 4 per cent average annual growth did not lead to any reduction in stunting at all.

Child hunger is fundamentally a political problem, the offspring of an unholy alliance of political indifference, unaccountable governance and economic mismanagement. It is driven by poverty and wealth and gender inequality — children from poor and rural backgrounds suffer most from hunger and women and girls are disproportionately affected.

In some places, stunting rates are twice as high among rural children as among their urban counterparts.

In addition, the continent’s food system is broken. Increased food production has not resulted in better diets. Supply chains are unfit for serving rapidly expanding urban populations and the rural poor. Agricultural economic growth targets encourage the production of major cereal crops — often for export — instead of more nutritious foods like pulses, fruit and vegetables.

A policy conference in Addis Ababa last week sought to find ways out of Africa’s child hunger problems by holding governments to account. We urged politicians to adopt national economic and budgetary policies which put children first. They should invest in pro-poor policies, especially in rural areas; commit at least 10 per cent of annual public expenditure to agriculture development; establish safety net programmes; commit to universal access to a minimum diet and school-feeding programmes; and increase investment in data collection and analysis.

By 2050, if current population trends continue, Africa will be home to 40 per cent of the world’s children and young people. That’s 1bn angry, underfed, undereducated and underemployed people. Ensuring children have enough good food is the best investment Africa can make to build its human capital and assure its economic future.

Child hunger must be a priority for African states Economic growth has been impressive, but it has had little impact on child nutrition GRACA MACHEL

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unger is the most acute problem facing Africa’s children. As you read this, around 60m children across the continent suffer from it. Not the mildly uncomfortable hunger that comes from skipping the odd meal, but permanent, relentless malnourishment, stunting and wasting.

It is utterly unacceptable that lack of decent food is still killing African children on such a vast scale in the 21st century. Nine out of ten African children do not eat the minimum amount of calories with the desired degree of frequency. One in three is stunted. Two out of five do not get regular meals. Hunger is in decline worldwide, but in some parts of Africa it is getting worse. Between 2014 and 2017, 44m more people went hungry, most of them children.

This creates a huge economic impact. Stunting alone is estimated to have reduced Africa’s present gross domestic product by 10 per cent. In

https://www.facebook.com/businessdayng

Ethiopia, for example, economic losses linked to children being undernourished and facing diminished lifetime earnings equal about 16.5 per cent of GDP. The resulting impact on cognitive and physical development has stunted the development of African societies.

It doesn’t have to be like this. As African governments decide where to spend their money, they must remember that here is a powerful economic argument for reducing child hunger.

For every dollar invested in reducing stunting, there is a return of about $22 in Chad, $21 in Senegal and $17 in Niger and Uganda. The benefits are even higher if the investment is made early in a child’s life, ranging from $85 in Nigeria to $60 in Kenya. Halving rates of child stunting by 2025 could, according to the UN Food and Agriculture Organization, lead to average annual savings ranging from $3m in Swaziland to $376m in Ethiopia.

Africa’s economic growth over the past two decades has been impressive, but it has had little impact on child hunger. Despite average 2 per cent @Businessdayng

annual GDP growth in Kenya, stunting increased by 2.5 per cent. And in Nigeria, 4 per cent average annual growth did not lead to any reduction in stunting at all.

Child hunger is fundamentally a political problem, the offspring of an unholy alliance of political indifference, unaccountable governance and economic mismanagement. It is driven by poverty and wealth and gender inequality — children from poor and rural backgrounds suffer most from hunger and women and girls are disproportionately affected. In some places, stunting rates are twice as high among rural children as among their urban counterparts.

In addition, the continent’s food system is broken. Increased food production has not resulted in better diets.

Supply chains are unfit for serving rapidly expanding urban populations and the rural poor. Agricultural economic growth targets encourage the production of major cereal crops — often for export — instead of more nutritious foods like pulses, fruit and vegetables.

Tuesday 28 May 2019

BUSINESS DAY

49

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

NY pension fund boss DiNapoli vows to fight on against Exxon US oil company ‘has to change’ if it wants to stay in business in the long-term JENNIFER THOMPSON

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he head of one of America’s biggest pension funds has vowed not to back down in his fight to force ExxonMobil to do more to combat climate change.

“We’re going to keep the pressure on Exxon,” said Thomas DiNapoli, the New York state comptroller who is responsible for the $210bn New York State Common Retirement Fund. He told FTfm: “If they want to stay in business long-term they need to change how they’re doing things.”

In April the Securities and Exchange Commission, the US regulator, upheld Exxon’s request that a proposition — that it should set targets for cutting greenhouse gas emissions — be kept off the ballot at its annual meeting on Wednesday.

Exxon, the country’s largest listed oil group, said it was already cutting emissions. It said the proposal backed by the New York fund and the Church Commissioners for England was an attempt to “micromanage the company”.

Mr DiNapoli said Exxon’s resistance was “very disheartening” but he added: “It doesn’t discourage us.

We will keep coming back.”

The state of New York and the Church of England are backing renewed efforts to persuade the company to appoint an independent chairman, which they see as an alternative way to make the company do more about climate change.

They plan to oppose the appointment of the company’s board and have urged other shareholders to take “a strong voting stance”, which could include rejecting directors.

The proposal calling on Exxon to make the board chair an independent member was filed by the Kestrel Foundation.

Darren Woods is Exxon’s chief executive and chairman. Combining the roles is common in the US but separating them is regarded as better corporate governance.

Exxon’s “inadequate responses to climate change . . . reflect in significant part a board that is not functioning effectively in the absence of an independent chairman,” the church and New York pension fund said in a filing to the SEC. The 2015 Paris agreement on climate change, which aims to keep the increase in global average temperature to below 2C when compared with pre-industrial levels, has galvanised investors to push investees to tackle climate change.

Royal Dutch Shell this year agreed to set carbon emissions targets and link these to executive pay after pressure from shareholders including the Church of England and Robeco, the Dutch asset manager.

BP has agreed to disclose how its spending plans, emissions policies and broader business strategy align with the Paris agreement.

US President Donald Trump has consistently shown scepticism about man-made climate change and has said he would pull the country out of the Paris agreement. His administration has focused on cutting environmental protection rules and exploring ways to revive the coal industry.

Mr DiNapoli, who praised Shell’s decision to link climate change action to executive pay, said the world was changing.

“Trump may give a sense of comfort. To me that’s not the reality,” he said. “The global economy is moving towards complying with Paris. We can’t be left out of that.”

He added: “The European energy companies get it. [Exxon] need to look to their peers.”

European bourses climb on elections relief MYLES MCCORMICK AND DANIEL SHANE

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uropean stocks edged up on Monday as investors were broadly relieved by initial results from parliamentary elections that suggested pro-EU parties had held their ground.

While early results from the weekend’s European elections indicated some gains for far-right and nationalist parties, these were a far cry from the surge some had feared.

By mid-afternoon in London, Europe’s Stoxx 600 was up 0.2 per cent; Germany’s Xetra Dax 30 rose 0.5 per cent; in France the Cac 40 climbed 0.3 per cent; while Italy’s FTSE Mib gained 0.3 per cent and Spain’s Ibex 35 advanced 0.6 per cent.

Trading in the euro against the dollar was little changed, while the pound traded down 0.3 per cent against the dollar amid persisting Brexit uncertainty, with Nigel Farage’s Brexit Party performing well in the elections.

In Greece, prime minister Alexis Tsipras’s decision to call a snap

general election prompted bond prices to rally on hopes of a more market-friendly government.

Auto stocks across Europe posted strong gains after Fiat Chrysler confirmed it had proposed a €33bn all-share merger with Renault, in a deal slated to transform the global car industry. Renault and FCA were the top performers on the Stoxx 600, rising 16 and 12 per cent respectively. The index tracking Europe’s automotive industry was up 2.2 per cent, meanwhile, as Volkswagen, Daimler and BMW all posted gains.

Trading in Asian shares was mixed on Monday, as investors waited for any new developments in the trade war between the United States and China.

Japan’s Topix gained 0.4 per cent.

China’s CSI 300, an index of major shares listed in Shanghai and Shenzhen, was up 1.2 per cent, while Hong Kong’s Hang Seng slipped 0.2 per cent.

Brent crude, the international oil marker, was up 0.4 per cent at $68.96 per barrel, having pared gains of about 0.7 per cent earlier in the session. www.businessday.ng

ExxonMobil, which operates the West Qurna-1 oilfield in Iraq, said the proposal was an attempt to ‘micromanage the company’ (Essam Al-Sudan/Reuters)

Bitcoin spikes again as analysts declare end of ‘crypto winter’ Recent gains across many other digital assets reminiscent of the boom of late 2017 LAURENCE FLETCHER AND HUDSON LOCKETT

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ryptocurrencies, the asset class written off by most investors after enormous price falls last year, are back.

Bitcoin, the world’s largest digital asset by market capitalisation, jumped as much as 10 per cent to $8,942.58 on Monday, its highest level in a year, according to Bloomberg data. That takes its gains this year to about 140 per cent, including a near-70 per cent rise this month.

Among other digital assets, Litecoin’s rise of about 13 per cent on Monday has taken gains this year to more than 290 per cent. Ethereum, the second-largest cryptocurrency, was up almost 8 per cent on Monday and is up nearly 110 per cent this year.

The gains are reminiscent of some of the huge price rises seen during the cryptocurrency boom of late 2017. They make bitcoin and other cryptocurrencies some of the biggest beneficiaries of this year’s rally in riskier assets, which has been fuelled by signs of yet more loose monetary policy from the Federal Reserve and European Central Bank.

The surprise revival comes after a painful 2018 in which bitcoin slumped by almost three-quarters, while many hedge funds investing in cryptocurrencies posted huge losses and some shut up shop.

“A lot of people thought that crypto has gone, that’s it,” said Manuel Ernesto De Luque Muntaner, founder and chief executive of Luxembourg-based Block Asset Management, which invests in blockchain and cryptocurrency funds.

“The crypto winter is gone,” he added, saying that demand from institutional buyers and venture capital funds had helped fuel the rebound in prices this year.

Website 99bitcoins, which collects quotes from commentators predicting the demise of the digital currency, recorded 93 bitcoin “obituaries” last year, and a total of 359 since December 2010.

But this year there are signs of growing interest in cryptocurrencies and blockchain technologies among institutional investors and big corporations. Facebook, for instance, is looking to create a new digital currency, while JPMorgan Chase has unveiled plans to allow corporate clients to transfer “JPM

Coins” between accounts over a blockchain.

This year’s rally has taken the total market capitalisation of cryptocurrencies to nearly $270bn, according to website Coinmarketcap. com, of which bitcoin accounts for 57 per cent.

“When demand starts to pick up, there is no offsetting rise in supply that can dampen the price rise,” said Caitlin Long, a former Morgan Stanley banker who is now part of the Wyoming Blockchain Task Force.

“There isn’t a central bank to expand or contract its balance sheet as the price moves.”

The total number of crypto accounts registered by Blockchain, a wallet provider, has been rising at a fairly steady pace in recent years, including even during last year’s sell-off. However, growing interest has seen that rise at a slightly faster pace over the past month to more than 38m, according to the company.

Even so, there is still some way to go before cryptocurrencies are back near peak prices. Bitcoin, for instance, remains 53 per cent down from its record high of almost $20,000 in December 2017.

Greek debt rallies sharply with country headed for snap elections Benchmark bond yield tumbles to historic low on hope of more market-friendly government ADAM SAMSON AND MYLES MCCORMICK

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reece’s government bond prices roared higher after prime minister Alexis Tsipras said he would call a general election following his Syriza party’s poor showing in European elections.

The general election will probably take place either in June or July, said Andrew Kenningham, chief Europe economist at Capital Economics.

“Opinion polls suggest that New Democracy, which is more business-friendly and pro-European than Syriza, will win,” he said.

The benchmark 10-year bond yield dropped 32.6 basis points (0.326 percentage points) to 3.036 per cent, the lowest level on records stretching back to 2000, according to Bloomberg data. It

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marked the biggest fall in yield since December 2017.

Greek stocks also rallied, with the FTSE index of the country’s biggest companies up 4.7 per cent in morning trade.

The current state of play stands in sharp contrast to eight years ago when yields climbed above 40 per cent as the country looked to be edging towards a default and it became the focal point of the eurozone debt crisis.

Greece subsequently went through a deep recession and a trio of International Monetary Fund bailouts, the last of which it exited last summer. It has now emerged from the worst of its troubles, however, triggering a rally in bond prices and sending yields persistently lower.

Only a small share of Greek government debt is traded regularly on public markets, something @Businessdayng

that can make daily swings particularly abrupt.

In March, it successfully tapped the international fixed income market, selling its first 10-year bond in nine years. It raised €2.5bn of paper priced at a yield of 3.9 per cent. Order books topped €11.8bn.

Investors have also been encouraged by the country’s fiscal reforms. Between 2009 and 2017, the primary fiscal balance improved by more than 14 per cent of GDP, despite the recession, as the country underwent a gruelling austerity programme.

The IMF said in March this year that Greece had “entered a period of economic growth that puts it among the top performers in the eurozone”. The fund expects the Greek economy to expand by around 2.5 per cent this year, up from 2 per cent last year, having returned to growth in 2017.

50

Tuesday 28 May 2019

BUSINESS DAY

ANALYSIS FT European elections have created a more fragmented legislature Far-right and nationalists make gains but pro-Europe centre has held ground BEN HALL

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urope’s far-right and nationalist parties made some significant gains in this weekend’s European Parliament elections. But it was hardly the surge that some of its supporters had promised or its opponents had feared. The pro-Europe centre has held, except this time the Greens and the Liberals have muscled their way in.

The elections have created a more diverse and fragmented legislature. The centre-left and centre-right have lost their combined majority for the first time in 40 years. This will inevitably give the smaller parties more leverage and the effects may be

with about 30 per cent of the vote, remarkable given that a year ago it was on 17 per cent. In the previous European election five years ago, it won only 6 per cent. The result, coupled with third place for his Five Star coalition partner, seals his political ascendance.

In France, Marine Le Pen won her rematch with Emmanuel Macron. She has turned the page on her disastrous performance in the second round of the presidential election. She inflicted a personal blow on a president who had invested himself in a duel with the far-right leader.

But it was hardly a catastrophe, given the battering Mr Macron took only six months ago from the gilets jaunes protesters. It is unlikely to push him off course.

Marine Le Pen and Matteo Salvini made breakthroughs in the European elections © Giuseppe Cacace/AFP

pronounced on environmental rules, trade liberalisation and tech regulation. But it will not be a revolution.

The faultlines on the really important issues, such as strengthening the eurozone with more risksharing between its members, run through each of the mainstream parties. They are unlikely to shift.

On most issues, parliament already works through shifting coalitions. The onus will now be on the pro-Europe parties to organise themselves and work together in a disciplined fashion. Whether they can unite behind one candidate to be the next European Commission president will be an early test.

It may prove too much, too soon.

Europe’s nationalist forces will, by definition, find it even harder to forge a united front.

The scandal that brought down Austria’s far-right leader last week highlighted the deep divisions among nationalist forces over links with Russia.

They are divided, too, over fiscal policy, free-market economics and what exactly the EU should do on migration. An electoral wave would have allowed them to surf over these obstacles but it did not materialise.

Together, rightwing Eurosceptic parties have about 23 per cent of the seats in parliament.

There were some notable breakthroughs.

Matteo Salvini’s hard-right League lept into first place in Italy

Nigel Farage’s new Brexit party triumphed in the UK, crushing the Conservatives. But his presence may be temporary and, in any case, his Eurosceptic allies have found that talk of exit is electorally damaging.

Viktor Orban won comfortably in Hungary but does not quite have the leverage over the mainstream centre-right European People’s party he had hoped. It remains the biggest party with or without his Fidesz MEPs. His dream of a centre-right alliance with the nationalist right is fading fast. Mainstream parties in France and Spain that had warmed to it did badly.

The ultraconservative Law and Justice held on to its lead in Poland, but opposition parties there have a spring in their step.

The far-right Danish People’s party took a drubbing. Spain’s Vox won some seats for the first time but has lost a lot of speed since last month’s general election disappointment.

One lesson from the elections, where turnout was the highest in 20 years, is that pro-Europe voters were ready to switch parties to make their voice heard.

The Green waves in Germany and France will reverberate. And in the UK, the combined vote share of pro-Europe parties was significantly ahead of the hardcore Brexiters. European politics is in tumult, but it is not all moving in the nationalists’ favour. www.businessday.ng

Beijing’s relentless march to eliminate poverty

Xi Jinping is ploughing billions into resettling rural residents. Will it work?

LUCY HORNBY

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ike many adults in rural China, Li Xiuying has tried migrating for work. She toiled at a sock-making factory elsewhere in Yunnan province, but was too anxious to stay for long.

“I wasn’t used to it. I missed my mother every day,” says Ms Li, who is in her mid-40s. After two years worrying whether her mother was well fed and cared for, she returned home to her village of elaborate wooden houses perched on a steep forest slope, where neighbours cook over wood fires, tend walnut trees and raise black pigs.

The outside world has not been kind to Ms Li. She dropped out of school after third grade because she had ulcers. Her ID card reads “February daughter” because a careless bureaucrat recorded her nickname rather than her real name. After she returned from the sock factory, she could not afford to buy medicine for her invalid husband, so she sent her sons off to work instead.

Ms Li’s next encounter with the outside world will be irreversible.

Her village in the Nujiang valley near Myanmar will soon be torn down to fulfil China’s latest, most ambitious campaign: the complete elimination of absolute poverty.

Fewer than 1 per cent of people in China live on less than $1 a day, Beijing’s definition of “absolute poverty”.

Many belong to ethnic groups that differ in language, religion or appearance from the dominant Han Chinese.

Ms Li, for instance, is one of the 1.4mstrong Lisu people, a “hill tribe” native to the mountains of India, Myanmar, Thailand and southwestern China.

Most, like her, are caught between the need for money and the tug of family and habit.

Beijing’s solution is to move them all. Ms Li, her invalid husband, her elderly mother and her neighbours will be swept up in a radical experiment. Remote counties are frantically building roads, apartment blocks and vocational training centres to consolidate people in nearby towns at a cost of $18.7bn this year alone. The goal is to cut the number of people living in absolute poverty from 30m in 2017, to zero in 2020.

“China wants to be an example to the world,” says Li Haishu, standing member of the Nujiang prefecture Communist party committee. “You can only do this in China. I’ve never heard of another country in history doing this.”

Even as Beijing faces the implications of a slowdown in growth, eliminating absolute poverty is President Xi Jinping’s signature domestic policy, a project that ranks among the grandiose plans of China’s past in its scale and ambition for the complete transformation of society. Plans hatched in Beijing include rewards

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for local officials who exceed their targets, resulting in a single-minded mobilisation of resources with little regard for the cost.

China is already admired for transforming itself in just 40 years from one of the poorest countries in the world to the second-largest economy, with market reforms and massive doses of foreign investment that allowed about 700m Chinese to work their way out of poverty. But that transformation is far from complete.

Anti-poverty plans focus on “three regions and three prefectures”, engulfing 18m people on the Tibetan plateau and in Xinjiang province, on the central Asian frontier, as well as in Linxia, a Hui Muslim area in Gansu province, and in Liangshan, home to the Yi or Lolo people in Sichuan province. Nujiang, a river valley in Yunnan, has fewer people but absolute poverty is “deeper”, afflicting a third of the population.

Nujiang is no stranger to grand plans. In the 1950s, Mao Zedong moved millions of Chinese people to border regions to secure his new republic. State-owned logging companies built big towns in the Nujiang valley. After the forests were gone, they traded timber from Myanmar.

A decade ago, a dam was planned for the Nu River, which becomes the Salween after it crosses the border.

Environmentalists managed to block it, after a national appeal.

Now Nujiang is going all out on Mr Xi’s “poverty alleviation” drive. It is spending Rmb10bn ($1.5bn) to move 100,000 people from rural villages to the outskirts of towns by year-end.

Their vacated land will be leased by government-run agribusinesses to grow cash crops like pepper or medicinal plants.

“Moving people to cure poverty is a national policy,” says Na Yunde, prefecture party secretary. “To develop these places we must move people.”

In April, the Financial Times joined a three-day, governmentorganised tour of poverty alleviation efforts in the valley. “Rushing into a socialist society from the last phases of primitive society, Nujiang has leapt thousands of years in one step,” exclaims a promotional video.

Not everyone welcomes this great leap, however. Villagers worry about losing their chickens and pigs and, most of all, their land. In one village, residents appeared to be barricaded in a courtyard as the convoy of journalists passed. Locals contacted independently of the tour say opinions are split: young people like the idea of modern housing, but the older generation is deeply reluctant.

The Lisu show “a strong disinclination” to leave their hills and settle in the lowlands, wrote Danish ethnomusicologist Hans Peter Larsen in 1984.

When they do, “they normally are assimilated in less than one generation.”

He Qingniu, 70, spends most of her @Businessdayng

day gathering wood and tending pigs.

Her youngest son’s phone number is scrawled on to the cooler next to her four-poster bed. She is innumerate, as well as illiterate, and the number is there in case a neighbour needs to use it in an emergency. Ms He thinks moving to a new settlement will be good for future generations — her grandchildren already go to boarding school down in the valley — but she is not sure that it will suit her.

To counter concerns that resettlement will wipe out Lisu culture, the government says it will organise dancing every night. Ms He, who will not be able to join in the dancing because of her bad knees, has not seen the settlement where she will be placed in October, but her son went to check it out. “He told me not to worry so much,” she says.

Down in the valley, the sun beats hot on new yellow apartment blocks rising alongside the Nu River. The sixstorey buildings do not have lifts but they do have slogans, painted in big red characters: “listen to the party, follow the party”; “move out of the mountains to hasten prosperity”; “industriously build a new home”.

Shop assistant Mi Chunmei, 22, thinks her new apartment is “amazing!” She dropped out of high school because the fees were too expensive.

But her earnings at an eastern textile factory were enough to get her younger brother into college. Ms Mi and her brother hope to open their own shop, so their father, an illiterate plasterer, can retire.

“We want our parents to live better,” she says. Her father is proud of the new apartment but her grandmother, like many in the older generation, is unhappy about the move.

Ms Mi and her brother “want to get out of poverty but we don’t want to leave our culture behind,” she adds.

She treasures the long baishi, traditional ballads that her mother and aunt sing, but she has not had the chance to learn them herself.

Next door, whitewash has been slapped on bare concrete walls. “It’s nice here, the Communist party is nice,” says Li Changxin, beaming in the glow of pink curtains. “Our first feeling was excitement. We didn’t have to pay a cent and we got such a pretty home.” His children, ages 7 and 9, are homesick. Their school is 20 minutes away from the settlement, but they only come home twice a month.

Boarding schools are an essential part of the leap “from primitive society to socialism”, officials insist, when asked why a $1.5bn resettlement budget does not stretch to school buses.

“These kids can’t learn anything from their parents, their quality is too low,” says Liu Dehua, a Nujiang prefecture official. “Actually being all together at school is good. It trains them to live in a collective environment and leaves more time for the parents to go out to work.”

Tuesday 28 May 2019

BUSINESS DAY

51

NEWS 2019 Africa Day echoes demand for fossil-free continent

… climate change effects, environmental degradation put Africa at risk, activists say CALEB OJEWALE

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frica is at the receiving end of recent climate impacts with cyclones causing devastating destruction in places like Malawi, Mozambique and Zimbabwe, killing morethan1000people.Environmental degradation also remains rife as exploration for fossil fuels, especially crude oil, continues to leave many producingcommunitiesinbadshape.

As the Africa Day was observed this past weekend, thousands of participantsgatheringinmorethan20 countriesonthecontinentindifferent eventstomarkthedayaresaidtohave shown support for the continual fight against fossil fuels and advocate for climate justice.

Since its origin, Africa Day has been a symbol of aspiration for selfdeterminationagainsttheexploitation of natural resources that has seen the continent in perpetual conflict and on the brink of a devastating climate crisis, read a statement by 350 Africa, which coordinated events across sev-

eralAfricancountriestomarktheday.

Landry Ninteretse, regional team leaderfor350Africa.org,saidinastatement: “In the last few months, we’ve seen the climate impacts of Cyclone Idai and Kenneth in Mozambique, Malawi, Tanzania and Zimbabwe, droughtsandfloodsinKwaZulu-Natal andEastern Cape. With the exception ofSouthAfrica,Africancountrieshave done relatively little to contribute to climate change yet are being severely impacted and have little to no resources to cope with the aftermath.

“Less developed African countries are a natural disaster away from sinking into a negative loop of poverty and lack of access to social and economic opportunities, exacerbated by climate change.”

Saturday, participants from all walks of life took part in various activities to send a strong message that Africa does not have to rely on fossil fuels to satisfy its energy demand, but rather lead the world in the just energytransitionpoweredbylow-cost renewable resources.

“Fossil fuels have been identified asoneoftheprimarydriversofclimate change,”saidMichaelDavidTerungwa from GISEP, in Nigeria, saying, “The people who mobilised for AfrikaVuka today are demanding a rapid phaseout of fossil fuel energy.”

Terungwa further said despite overwhelming evidence that continuedfossilfuelusewaskillingtheplanet and many of us with it, investors appeardeadsetonenrichingthemselves at the expenses of billions of people.

“Those in power are doing nothing to stop this madness, and are instead adding to it, claiming that more coal-fired power stations in Lamu, an official UNESCO Heritage site, and oil exploration in the DRC’s Virunga National Park, a biodiversity hotspot, to name a few, are going to be good for development. We ask them ‘Whose development, exactly?’ There is a path for a just development that puts people, their safety and the resilience of the environment we all rely on at the centre,” he said.

LCCI commends Buhari’s first term, outlines mistakes, solutions Gbemi Faminu

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irector-general, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, has outlined various reasons responsible for major failures of Buhari’s first term and as well as commended the tenure for its activities in boosting the economy and the business environment.

In a statement, Yusuf stated that lack of viable economic plan, poor debt management, unfavourable forex policy, among other issues, were responsible for the economic woes and failures of President Buhari’s first term in office.

Speaking on major sectors of the economy, he stated that there was lack of investors in the country because the business environment as well as the country’s economy lacked viable and visible plans to foster investors’ confidence or attract foreign direct investment into the country, especially with the unfavourable forex policies that

stood as a determinant for successful businesses.

Speaking on the manufacturing sector, he said, “The manufacturing sector experienced some major challenges during the past four years. The factors were both external and domestic. The main external factor was the collapse of oil price, which affected forex availability and triggered sharp exchange rate depreciation.

“The high deficit in infrastructure, the gridlock at the Lagos ports, high interest rate and unfair competition from imported products were contributory factors that constrained the growth of the industrial sector during the review period as high energy cost continued to impede the competitiveness of the sector.”

On issues of the oil sector, he said the sector was being controlled by different problems both in the upstream and downstream segments ranging from excessive regulation to dominance of the state-owned oil company NNPC, slow policy reforms, among many others.

The country’s debt profile increased by 93 percent in three years from N12.6 trillion to N24.3 trillion, which according to Yusuf, was due to poor debt management that constrained the financial roles of the banking industry and therefore caused harm to the country’s wealth creation operation and employment generation intention.

He also commended the President for his feats in various sectors, which include substantial backward integration capabilities in the manufacturing sector, significant government support in the agricultural sector that improved productivity, and the central bank’s efforts in reducing access of the banking sector to investments in government debt instruments. This he explained caused a decline in banking credits to the private sector.

He advised that there was need for urgent economic diversification in the country across various sectors in order to achieve improved productivity and economic development.

Children Day: Foundation calls for innovation in primary healthcare delivery Josephine Okojie

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ounder/chairman of Obijackson Foundation, Ernest Azudialu-Obiejesi, has calledontheFederalGovernment and key stakeholders to seek innovative ways of providing quality primary healthcare delivery to Nigerians.

Azudialu-Obiejesi made this call at a funfair event held Monday in Okija, Anambra State, to celebrate with children born at the Obijacckson Women’s and Children’s Hospital in the state.

In recognition that children are the future of any country, he lamented that millions of Nigerian children die from avoidable ailment due to inefficiency of primary healthcare centres.

He noted that this was one of

thereasonstheObijacksonWomen and Children Hospital was set up to provide quality healthcare services for children in Anambra and beyond, regardless of the economic status of their parent.

The chairman of the foundation presented gifts to the children who engaged in a number of fun activities to mark this year’s Children Day celebration.

The Obijackson Women and Children Hospital is a paediatric health care institution, first of its kind in the eastern part of Nigeria, providing specialised care including surgeries for children.

Facilities in d hospital include a neonatal intensive clinic which is equipped with the world most advanced incubators, ventilators and other types of equipment.

White Ebony exhibition reflects inward struggles of Albinos

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MO Contemporary Art says its set for the exhibition of 20 thought-provokingphotographs collection of social activist photographer Yetunde Ayeni-Babaeko, tagged ‘White Ebony’, which captures the complexity of life that persons with Albinism (PWAs) face daily.

White Ebony will be showcased

by Temple Muse for the next two monthstosupporttherecognitionand protection of persons with albinism in commemoration of the InternationalAlbinismAwarenessDay,which comes up June 13, every year.

White Ebony challenges preconceived notions on albinism with powerful images, which reflect a renaissance beauty through sensitive lighting, composition, and layered stylistic interpretations. White Ebony takes the viewer on an emotional journey that is filled with nuance as well as controversial in its stark positioning and challenging suggestions.

Each work reflects both internal struggles while working through layers of identity and self-actualisation, and points to the urgent need to stop the stigmatisation of persons with albinism.

“As in her previous exhibitions, which have tackled issues such as the challenges survivors of breast cancer face, or photographing dancers performing within slums to highlight the

needs of populations living in shantytowns, Ayeni-Babaeko’s amazing artistry is heightened by her commitment to social change and supporting marginalised communities,” said Sandra MbanefoObiago,theexhibitioncurator and expert in development communications, who has worked on three previousshowswiththephotographer.

According to Sandra, Ayeni-Babaeko, worked closely with members of The Albino Foundation in Lagos, and after in-depth interviews and insightful group discussions, began interpreting their reality through photographs, which explore both the alienation and struggles experienced by persons with albinism, as well as celebrates their lives and achievements.

Yetunde Ayeni Babaeko

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L-R: Dotun Ifebogun, head, retail, Wema Bank; Edun Oluwajomiloju and mother, winner of the Wema Bank 2019 Royal Kiddies Creative Contest on Children’s Day

Civil society declares second national day of mourning JOSEPH MAURICE OGU & DESMOND OKON

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n Tuesday, May 28, after the children who have survived violence would have been celebrated, Nigerians all over the country will gather at strategic locations to reflect on the throes of insecurity and injustice.

Lives of many Nigerians have been lost to insecurity, notably in police brutality, and the violent attacks that persist unabated in the North.

As a result, the Joint Nigeria Civil Society Action, a group of civil organisations championing human rights in Nigeria, has declared a national day of mourning to remember all victims of violent killings across Nigeria.

In a document jointly signed by Chidi Anselm Odinkalu, human rights lawyer, Abiodun Baiyewu, executive director‎ of Global Rights, and other members,

the group said the aim of the exercise was to call on the government to stand up to its primary responsibility of protecting human lives and properties.

It also described the event as a citizens-led initiative to express solidarity, and demand accountability for the security and welfare of all Nigerians, The event will hold across the nation simultaneously as a way to awaken the consciousness of Nigerians to stand up and unite against injustice.

Recalling the ongoing violent killings in Kaduna and Zamfara states, the group said, it is rapidly spiralling into a national catastrophe and are threatening the very fibre of Nigeria’s nationhood.

“Our call comes at a time when virtually all states of our country have been beset by violent killings with impunity,” the group said.

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Yeshua High School excursion to Lifemate

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ifemate Nigeria Limited, a leader in manufacturing and marketing of furniture products, welcomed Yeshua High School students in Lagos to their Furniture factory in Mowe, Ogun State, recently.

The excursion, organised by the producers of Acadatainment Production and Educational Entertainment Firm, was part of the school’s educational curriculum and also acquisition of vocational skills in order to tackle unemployment after gaining required educational degree.

The tour took off from the company’s factory at Mowe where all products are manufactured, and the students were taught the basic knowledge of the different manufacturing processes and procedures of the furniture products from start to finish.

They were taken round the factory by the company’s PRO, Ejiemhen Orebayo, to see the five categories of the @Businessdayng

production section (sofa session, outdoor session, mattress session, solid wood and kitchen cabinet session) and their processes including the different machines used for production as the managers of each sections explained the different stages of the manufacturing process in details to the students.

To cap the good experience acquired, Guo Hongyue addressed the students, director of production who patiently attended to all the questions raised by the students and assured them that there was vacancy for any student interested carpentry as vocational study.

He also stated, “There are a lot of opportunities in manufacturing that require skilled trades people in furniture production. These students are our future workforce. We need to introduce them to the world of skilled manufacturing and show them what employment opportunities are available in Nigeria.”

leaderSHIP

BUSINESS DAY Tuesday 28 May 2019 www.businessday.ng

Mauricio Alarcon: Leading Nestle through a tumultuous economy, yet shoring up revenue soaring, with Nestle posting a Profit After Tax (PAT) of N33.7 billion in 2017, followed by N43 billion in 2018. So far, the company has reported a PAT of N12.8 billion in the first quarter of 2019.

CALEB OJEWALE

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eing the Chief Executive of the company with the highest share price in Nigeria is no small feat.

More importantly, ensuring that the company stays at the top and attractive to investors is, perhaps, an even harder feat.

At the close of trading yesterday, Nestle’s share price was N1,400.

A little over two and half years ago, on October 1, 2016, Mauricio Alarcon stepped into a demanding role as CEO of Nestle Nigeria Plc, and even more nerve racking considering it was at a point Nigeria’s economy slid into recession. For a Fast-Moving Consumer Goods (FMCG) company, this was a big deal, as it would imply reduced consumer spending. However, Nestle not only weathered the storm (like Nigeria appears to have also done), but also the company continued to increase its revenue even through the turbulent times.

In 2017, Alarcon told BusinessDay, in an exclusive interview, that despite the challenging environment, Nestle remained committed to Nigeria. In the interview, which was conducted before Nigeria exited recession in 2017, he told BusinessDay; to stay competitive in this environment, we have stayed focused on our commitment to provide good quality nutrition solutions to our consumers. Our result is due to the continued confidence of our consumers in our brands, the hard work of our people, and our distribution network.

“We have also continuously improved our efficiency while focusing on local sourcing of raw materials. Everywhere in the world, the Nestlé name represents a promise to the consumer that the product is safe and of high standard,” he said.

Nestle Nigeria Plc. manufactures, markets and distributes food products throughout Nigeria. The company also manufactures Hydrolysed plant protein mix and other food products based on its local agricultural raw materials under its backward integration program. The company manufactures and markets a range of brands including Nestle Pure Life, Golden Morn, Milo, Kitkat, Maggi, Nescafé and Cerelac.

In the Nigerian capital market, the Nestle stock has over the years earned for itself a reputation of giving investors some degree of assurance that their investments will likely continue to appreciate and yield dividends.

The Journey to becoming Nestle Nigeria’s CEO A Mexican citizen, Mauricio Alarcon, who was born in 1973, is an alumnus of the Manchester University in the United Kingdom where he studied Engineering, Manufacturing and Management between 1992 and 1997.

Between 2014 and 2015, he also participated in the Executive Development programme at IMD Business School, Lausanne, Switzerland.

An engineer by training, Alarcon is also a Member of the Nigerian Institute of Management.

Alarcon joined Nestle Mexico in 1999.

Alarcon

Following a number of Sales and Marketing assignments in the Ice Cream business, including Marketing Advisor at the Ice Cream Strategic Business Unit, he was appointed as the Marketing Manager for the Ice Cream business in Australia.

In 2010, he joined Nestle Egypt as Business Executive Manager, Ice Cream where his dynamism played a key role in transforming the business. Under his leadership, the Ice Cream business turnover in Nestle Egypt more than doubled and the profitability improved in a challenging environment. He was the Managing Director of Nestle Cote d’Ivoire from 2014 to September 2016, overseeing Nestlé’s operations in Senegal, Guinea Conakry, Guinea Bissau, Gambia, Mauritania and Cape Verde until his move to Nigeria. On October 1, 2016 he became Managing Director/Chief Executive of Nestle Nigeria.

“I’m honoured to take up this new challenge to lead Nestlé’s business in one of the largest economies in Africa. Despite the current challenges the country is facing, Nestlé Nigeria is committed to still offer nutritious and tastier food and beverages that meet the needs of people,’’ said Alarcon when he assumed his role as CEO in Nigeria. “I look forward to working with my team and all our stakeholders as we continue to pursue our vision of enhancing the quality of life of people in Nigeria’’, he added.

Nestle Nigeria’s performance under his watch Nestlé Nigeria is the biggest food company in West Africa and in Nigeria, it employs around 2,400 people across what has been described as three world-class factories.

Nestlé has been present in Nigeria for more than 50 years. The company has invested in

three production sites in Agbara, Shagamu, and in Abaji; supporting the local sourcing of raw materials and the investments in rural communities.

Revenue has been good at Nestle, with some measure of Year-on-Year growth since 2014, but with the recession when Alarcon took over as CEO, this was perhaps the major test of his leadership and management skills.

Weathering this storm according to Alarcon

was possible due to several factors, including what he described as “the trust of our consumers in our brands.” According to him, the lower base in the corresponding period of 2016 and the impact of the price increases implemented also played a part. Another factor is the internal cost saving and operating efficiency initiatives, which were put in place. These results, according to him were to be sustainable in subsequent quarters if the operating environment improved.

Another challenge Alarcon met on assumption, was an observation BusinessDay made at the time, that 2016 had the lowest Return on Assets since 2007; in essence the lowest in Ten years.

Asked, at the time, why the company faced this challenged, Alarcon attributed it to two things; the loss of pioneer status, and the revaluation of the company’s loans in foreign currency.

He did not go into explicit details of how the trend will be reversed, only saying “We have put plans in place to mitigate both factors.

Therefore, we are cautiously optimistic that our profitability will improve in 2017.”

True to Alarcon’s statement, Nestle’s profitability improved by the end of 2017, recording a revenue of N244.1 billion, a 34 per cent increment from N181.9 billion in 2016. The revenue growth was consolidated even further in 2018, with the company recording a revenue of N266.3 billion.

Apart from revenue, even profits have been

Betting on the local ecosystem Nestlé has continuously expressed its commitment to the local sourcing of raw materials for its production, and for the past 7 years, reaching about 80 per cent local sourcing of raw and packaging materials so far. The five major locally sourced products (average volume per item) are: 1. Corn: 10,000 metric tonnes 2. Sorghum: 6,500 metric tonnes 3. Soya Beans: 5,000 metric tonnes 4. Cassava Starch: 4,000 metric tonnes 5. Cocoa: 5,000 metric tonnes Alarcon noted in an interview that in 2016, Nestle engaged 41,600 farmers to supply maize, soybean, sorghum and millet to its factories.

100 percent of the maize used in cereal brands – Cerelac and Golden Morn is sourced locally through the Nestlé Cereals Plan.

A recent BusinessDay report noted that Nestlé Cereals Plan project has over 30,000 farmers who supply 100 percent of the grain requirement for Golden Morn Maize (alone). Through its Sorghum and Millet in the Sahel (SMS) project, now called Nestlé Nigeria & IFDC / 2Scale Project Sorghum & Millet, the food and beverage giant has engaged up to 10,671 farmers.

“The Industry has huge needs and we must help farmers improve their yields to meet them.

To achieve real success with connecting farmers to industry, a 360 degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” says Alarcon.

Nestle, according to Alarcon, is committed

to expanding its investments in Nigeria, and increasing production capacity at its different facilities. Not just this, but the company has consistently stepped up its impact program, which creates a win-win for communities where it operates, as well as Nestle as a business entity.

Called Creating Shared Value (CSV), Nestlé Nigeria says it touches the lives of millions of people, from the farmers who grow its ingredients to the families who enjoy its products, to the communities where the company operates, and the rural environment upon which it depends.

“Nestlé Nigeria is enabling healthier and happier lives for individuals and families, sourcing raw materials locally, investing in capacity building for farmers and in rural development,” he said.

Sustaining the local supply chain For Nestle, Alarcon says local sourcing is a long-term goal. The company has partnered with institutes like the IITA, IFDC and USAID to promote sustainable farming practices while increasing yield and quality.

“With our partners, we have worked with farmers, teaching them simple methods for maintaining good agricultural and storage practices, how to manage grain quality and safety. These efforts ensure that we have the right quality of raw materials to attain our local sourcing targets,” he said.

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