BusinessDay 29 Aug 2019 by BusinessDay

Adeduntan: FirstBank is reducing poverty, deepening financial inclusion through its 31,000 agent network Endurance Okafor

ack of accessible financial ser vice points is one of the key factors responsible for Nigeria’s high exclusion rate.

In its quest to deepen financial inclusion, FirstBank is channelling its resources to reach those at the bottom of the pyramid through its agency banking. The tier-one bank has over 31,000 agents spread across Nige-

ria with 9,000 assigned to provide financial services to the highly excluded Northern region.

See interview on Pgs. 20-22

According to Adesola Adeduntan, the MD/CEO of First-

Bank of Nigeria Ltd, the bank took it upon itself as part of their strategic plan to be the bank that can be the right partner to the CBN and the government by helping to achieve the right social impact.

“If there is that bank on ground to help the country to address the seeming geographical gap in terms of financial inclusion, it is FirstBank, because

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businessday market monitor

Foreign Reserve - $43.78bn Biggest Gainer Biggest Loser Cross Rates - GBP-$:1.23 YUANY-N 50.59 MTNN ZENITHBANK Commodities N140.95 0.64pc N18.50 -2.63pc 27,607.02

Cocoa

US$2,243.00

Gold

₦3,614,954.42 -0.04pc

Crude Oil

N300

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 438.00 450.00 €-N 390.00 400.00

$1,551.30 $60.45

news you can trust I **THURSDAY 29 AUGUST 2019 I vol. 19, no 382

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Private Equity firms bet big on Nigeria’s health sector

Inside opaque oil contracts keeping Nigerians hooked on cheap petrol E 5 shortlisted firms have no board or management team

ODINAKA ANUDU, ANTHONIA OBOKOH & GBEMI FAMINU

Firms linked to Buhari’s Director of Logistics, minister of state Mines/steel among those shortlisted

OLUSOLA BELLO & DIPO OLADEHINDE Famous

he decision of Nigerian National Petroleum Corporation (NNPC) to award the Direct Sale, Direct Purchase (DSDP) contracts whereby crude oil is swapped for petroleum products using middlemen has exposed the extent the corporation is going to ensure Nigerians remain hooked on cheap fuel. Under the DSDP contracts introduced by the NNPC in 2015 as a replacement for the controversial SWAP contracts, the corporation exchanges crude oil worth about $26

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international singer and DJ, Florence Ifeoluwa Otedola (aka DJ Cuppy), cheering up children during her visit to victims of conflict at the Save the Children Stabilisation Centre in Maiduguri, Borno State, yesterday.

choVC Partners, a Lagosbased venture capitalist, and Fola Laoye, an angel investor, must have seen enough to know that the gaps in Nigeria’s health sector present life-changing opportunities for interested firms. Around June 2018, they invested $200,000 in Lifebank to enable the start-up expand its blood delivery beyond 9,000 pints and drive revenue

DEALS

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Inside Corruption allegation haunts Buhari’s new defence minister P. 35

Thursday 29 August 2019

BUSINESS DAY

news L-R: President Muhammadu Buhari; Geoffrey Onyeama, minister of foreign affairs; Babagana Zulum, Borno State governor; Babajide Sanwo-Olu, Lagos State governor, and AbdulRahman AbdulRazaq, Kwara State governor, during the opening session of the Seventh Tokyo International Conference on African Development (TICAD7), in Yokohama, Japan, yesterday.

In swift reaction to US visa reciprocity fee, Nigeria reduces visa fee for US citizens …but US may not shift ground soon, experts say EMELIKE OBINNA & IFEOMA OKEKE

he Federal Government on Wednesday approved a reduction in visa charges payable by United States citizens from $180 to $150, but industry experts say the swift reaction by Nigeria may not result in reduction in the reciprocity visa fee imposed by the US on Nigerians, which takes effect from today. Ogbeni Rauf Aregbesola, minister of interior, on Wednesday said Muhammad Babandede, comptrollergeneral of Nigeria Immigration Service, had been directed to implement the decrease in the visa charges with effect from Thursday (today), the day the new US visa reciprocity schedule for Nigerian citizens is expected to take effect.

For industry experts who spoke to BusinessDay, the direction, which may be targeted at making the US government cancel the new visa reciprocity schedule for Nigerian citizens, is coming rather late. They are of the view that the US government may not shift ground soon and would rather engage in bureaucratic game, just as the Nigerian government had done. Following Nigeria’s increase of its fees for certain visa categories for US citizens, the US government said it had since early 2018 engaged the Nigerian government to change the fees, but had met a brick wall, forcing the US government to reciprocate. “After 18 months of review and consultations, the government of Nigeria has not changed its fee structure for

U.S. citizen visa applicants, requiring the U.S. Department of State to enact new reciprocity fees in accordance with our visa laws,” the US Consulate General in Lagos said through a statement by its Public Affairs Section (PAS) on Tuesday. But Mohammed Manga, spokesman for Nigeria’s Ministry of Interior, in a statement announcing the fee reduction, said a committee set up to conduct due diligence in line with the ministry’s extant policy on reciprocity of visa fees had earlier engaged with the US embassy on the issue, adding that the implementation of its recommendations was delayed due to “transition processes in the ministry at the policy level”. “If Nigeria, according to Manga, set up a committee to review and approve the decrease, the US will also

want to set its own committee to consider the reduction as well. There was no need to increase the visa fees for US citizens at first,” an aggrieved business executive said. Charles Emordi, an immigration expert, said that the $30 does not make a difference as US citizens had expected more reduction than mere $30. “So, if the US government wants to react, they may reduce $30 from the reciprocity fee too, which makes no sense for the Nigerian citizens. Both countries should reduce to the original fees charged,” Emordi said. Attempts to reach the Public Affairs Section of the US Consulate General in Lagos to get a reaction did not yield result as the office had closed at the time.

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Oil prices will rise to $72 by year-end -S&P Global Platt’s …IMO 2020 sulphur cap, Iran sanctions, OPEC cuts to drive up prices …as shale competition threaten Nigerian crude grades market share ISAAC ANYAOGU

il prices will rise to $72 per barrel (bbl) by the end of 2019 as current bearish trend driven by trade tariff disputes and weakening demand are temporary sentiments weighing on prices, analysts at S&P Global Platts, a leading oil market intelligence firm has said. “We see Brent crude prices heading towards $72/bbl at the year of the year driven by stock draws and IMO 2020 impact on prices,” said Francesco Di Salvo, associate editorial

director EMEA Oil at the over 100-year-old firm during a presentation at its 9th Lagos Oil & Energy Forum on August 28. The organisation also forecasts that prices will fall back to $60/bbl next year which defies estimates from organisations. The World Bank expects crude oil prices to average $66/bbl in 2019 and $65/bbl in 2020 due to the weaker-than-expected global growth outlook and greater-than-anticipated U.S. production. This aligns with OPEC and International Energy Association (IEA) forecasts of a bearish www.businessday.ng

market following the US/ China trade war. S&P Global Platts forecasts are based on continued OPEC supply cuts which have helped to steady oil markets. It is also counting on Saudi Arabia, to continue in the role of a swing producer to keep prices competitive. It is also in the country’s interest to keep prices within the $70s range to make the Saudi Aramco Initial Public Offer possible. Analysts at S&P Global Platts expect that geopolitical risks will tip the market into bullish territory. Tensions between the United States and Iran are

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expected to linger until the US elections next year so that President Trump could present a tough stance to his base. Other flashpoints such as Venezuela, Nigeria and Libya could also rattle oil markets, the analysts said. The Strait of Hormuz, a narrow waterway that lies between Iran and Oman where dozens of tankers carrying about 20 percent of the world’s oil supply bound for Asia, pass through its 21-mile-wide passage will play an important role in shaping oil prices, analysts say.

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We closed Nigeria-Benin border to stem massive smuggling – Buhari TONY AILEMEN, Abuja

resident Muhammadu Buhari has attributed the partial closure of Nigeria’s border with Benin Republic to the massive smuggling activities, especially of rice, taking place in that corridor. Femi Adesina, special adviser to the president on media and publicity, said Buhari gave the reason during an audience with his Beninois counterpart, Patrice Talon, on the margins of the Seventh Tokyo International Conference for African Development (TICAD7) in Yokohama, Japan, on Wednesday. President Buhari, who expressed great concern over the smuggling of rice, said it threatened the self-sufficiency already attained due to his administration’s agricultural policies. BusinessDay, however, gathered from sources close to rice dealers in Lagos that the price of the commodity has increased by about 25 percent since the partial closure of the border. Before now, the price of rice was between N16,000 and

N18,000, but the prices suddenly increased to N25,000 at the weekend. The Nigerian president, speaking on Wednesday, said the limited closure of the country’s western border was to allow Nigeria’s security forces develop a strategy on how to stem the dangerous trend and its wider ramifications. “Now that our people in the rural areas are going back to their farms, and the country has saved huge sums of money which would otherwise have been expended on importing rice using our scarce foreign reserves, we cannot allow smuggling of the product at such alarming proportions to continue,” Buhari said. Responding to the concerns raised by President Talon on the magnitude of suffering caused by the closure, Buhari said he had taken note and would reconsider reopening in the not-too-distant future. He, however, disclosed that a meeting with his counterparts from Benin Republic and Niger Republic would soon be called to determine strict and comprehensive measures to curtail the level of smuggling across their borders.

Investors embrace CBN’s N208bn auctioned NTB on improved rates HOPE MOSES-ASHIKE

avvy investors on Wednesday swooped on N208.59 billion Nigerian Treasury Bills (NTB) auctioned at the primary market by the Central Bank of Nigeria (CBN). After the auction exercise, the government instrument consisting of 91-day, 182-day and 364-day tenors were oversubscribed following the attractiveness of rates in the secondary market. The summary of the auction result shows that N24.37 billion was offered for 91 days at a stop rate of 11.10 percent, although investors earlier demanded a bid range of between 9.20 percent and 12.49 percent. The allotment date for all the instruments was fixed at August 29, 2019. For the 182-day tenor, the CBN offered a total of N38.75 billion and it was oversubscribed by N46.15 billion. The range of bid rate stood between 11.00 percent and 15.00 percent. However, it was allotted at a stop rate of 11.58 percent. The CBN offered N145.47 billion for 364-day tenor at a stop rate of 12.89 percent, and it was oversubscribed by N272.54 billion, as investors earlier bid at a range of between 11.89 and 14.31

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percent. Ayodeji Ebo, managing director, Afrinvest Securities Limited, explained that the improvement in rates at the Primary Market Auction (PMA) on Wednesday was due to higher rates in the secondary market. The implication, he said, is that the cost of borrowing of the government has increased amid concerns of high debt service to revenue ratio. Consequently, the overnight interbank rate, the rate at which banks borrow and lend from one another, increased to 12.79 percent on Wednesday from 12.30 percent. Th e O p e n Bu y - Ba ck (OBB), which is the money market instrument to raise short-term capital, also increased by 0.43 percentage point to 11.86 percent on Wednesday from 11.43 percent the previous day, data from the FMDQ indicated. Last week, the Treasury Bills at the secondary market sustained its bearish trend, attributed to tight system liquidity (N348.4bn short as at Friday) as well as sustained sell-offs by Foreign Portfolio Investors (FPI) following concerns of weakening global growth.

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Thursday 29 August 2019

BUSINESS DAY

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news Firms’ confidence in economy high at 64.7 index points in September HOPE MOSES-ASHIKE

igerian businesses show greater confidence on the macro economy with 64.7 index points for September 2019, according to the Central Bank of Nigeria’s (CBN) Business Expectations Survey (BES) report released on Tuesday. According to the CBN, the BES wasconductedfromAugust12-21, 2019, with a sample size of 1050 businesses nationwide. A response rate of 95.4 percent was achieved, andthesamplecoveredtheservices, industrial, wholesale/retail trade, and construction sectors. The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses. At 28.6 index points, respondents express optimism on the overall confidence index (CI) on the macro economy in the month of August 2019, compared to 28.1 points in July 2019. The optimism on the macro economyinthecurrentmonthwas driven by the opinion of respondents from services (15.4 points), industrial (10.1 points), wholesale/ retail trade (2.4 points) and construction (0.7 points) sectors. For nextmonth,themajordriversofthe optimismareservices(36.1points), industrial (20.7 points), wholesale/ retail trade (6.0 points) and construction (1.9 points) sectors. The services sector is made up of financial intermediation, hotels

and restaurants, renting and business activities and community and social services. It is noted in the report that the positive outlook by type of business in August 2019 are driven by businesses that are neither importnor export-oriented (21.0 points), both import- and export-oriented (4.3 points), import-oriented (2.9 points), and those that are exportrelated (0.3 points). The analysis of businesses with expansionplansbysectorinthenext monthshowsthattheconstruction services sector indicates higher dispositiontoexpansionwithanindex of(46.7points),followedbyservices sector(30.3points),industrialsector (17.6 points), while respondents in the wholesale/retail trade sector indicat no plans to expand their businesses (-1.8 points). However, respondent firms identifiedinsufficientpowersupply (65.9 points), high interest rate (56.5 points), financial problems (53.7 points), unfavourable economic climate (53.5 points), unclear economiclaws(50.8points),unfavourable political climate (47.0 points), insufficient demand (46.0 points), access to credit (45.6 points) and competition (43.0 points), respectively, as major factors constraining business activity in the current month. Respondents anticipate better economic conditions as their index ofeconomicgrowthroseintheshort run with an index of 35.4, 47.9 and 58.5 points for the current month, nextsixmonthsandnext12months, respectively.

Customs intercepts drugs, smuggled rice worth N85m in Lagos, Ogun AMAKA ANAGOR-EWUZIE

he Federal Operations Unit (FOU), Zone A, Ikeja, of the Nigeria Customs Service (NCS) on Wednesday, said it had in the last three weeks intercepted contraband drugs and smuggled rice worth N85 million. It also intercepted 4,208 bags of smuggled foreign rice worth N55.3 million that were concealed in truck carrying tubers of cassava, animal feed and bottle of alcoholic products. Muhammed Aliyu, Customs area controller of the unit, said the contraband goods were seized while the smugglers were trying to move the goods from Oyo State to Lagos. According to Aliyu, due to the joint security operation at the land borders in the country, Operation Joint Swift, smugglers now find it difficult to smuggle rice into the country, hence, the effort to move the already smuggled ones to Lagos where there is huge market. “We discovered that this rice were stored in villages from where they are being brought out little by little. Now, we also see smugglers concealing contraband with poisonous substances such as

soap, animal feeds and even alcoholic drinks,” he said. He said the unit arrested a truck containing soap but further investigation showed the soap was used for concealing rice. “The truck contained 210 bags of smuggled rice but the soap was just a cover, even as he added that the impounded drugs without NAFDAC numbers were intercepted in the last one week. A breakdown shows that drugs such as 3,888 sachets of bisoprolol Fumarate; 300 bottles of Lactulose; 600 sachets of Atorastattin; 2,000 bottles of mandanol nasal drop and 10,800 sachets of Furossamide were smuggled in. Others include 279 Dihydrocodeine; 744 Kenalog 40mg injection; 300 cartons of Lansoptazol; 560 sachets clopidogre; 1,764 contiflo and 320 sachets meloxicam were also intercepted. He however warned corporate organisations to install trackers on their vehicles to forestall unscrupulous drivers from using branded vehicles for rice smuggling. When asked whether the seized items came in through the land borders despite the joint security operation, the Customs boss said smuggling activities had reduced drastically. www.businessday.ng

L-R: Abhay Thakur, Indian high commissioner to Nigeria; Orimadegun Agboade, chairman, Nigerian Pharma Manufacturers Expo (NPME 2019) committee; Olorunimbe Mamora, minister of State for Health; Mojisola Adeyeye, director-general, National Agency for Food, Drugs Administration and Control (NAFDAC), and Okey Akpa, immediate past chairman PMGMAN, representing Fidelis Ayebae, current chairman of PMGMAN, at the NPME 2019 inauguration ceremony in Lagos, yesterday. Pic by Pius Okeosisi

Mega PMB on the way as shareholders approve Trustbond, First Mortgages merger Chuka Uroko

mega primary mortgage bank (PMB) expected to introduce a major boost in the Nigerian mortgage market emerged Wednesday as the shareholders of Trustbond Mortgage Bank plc approved the merger of the bank with First Mortgages Limited. Both Trustbond and First Mortgages are major players in the Nigerian mortgage market. Trustbond is a first generation primary mortgage bank operating with national licence,

meaning that its capital base is in excess of N5 billion. First Bank Mortgages is also an old generation PMB incorporated in 2003 by the CBN to carry out mortgage business in 2004. This proposed merger of the two banks, which signposts what is to be expected in the struggling mortgage market in the months and years ahead, will be birthing a bigger and stronger primary mortgage bank that may change the narrative in the mortgage industry. The shareholders at a Court-Ordered Meeting in

Lagos on Wednesday approved the merger as proposed by the management of the bank. They also approved the transfer of the assets and liabilities of First Mortgages to Trustbond Mortgages; the change of the name of the bank to First Trust Mortgage Bank, and to put the share capital of Trustbond at four shares to 23 shares of First Mortgages. Though the shareholders welcomed the merger as a good move, they had their concerns regarding what becomes of the staff of their bank and their shareholding.

Etiwe Uwa, chairman of the bank, assured that there would be no job losses, adding that at four shares to 23 of First Mortgages, they were the gainers. Uwa assured further that the merger would come with immense benefits, including value addition/creation, cost efficiency and innovative technology. He explained that the new bank would be repositioned through continuous improvement in advanced cutting edge technology that will enhance access to innovative mortgage bank products.

Edo residents applaud appointment of Odubu NDDC chairman

IDRIS UMAR MOMOH, Benin

do State citizens have applauded President Muhammadu Buhari for appointing the former deputy governor of the state, Pius Odubu, as chairman of the Niger Delta Development Commission (NDDC). President Buhari on Tuesday approved the appointment of a 16-man new board of the NDDC, with Pius Odubu as the chairman. Also appointed are Bernard Okumagba from Delta State, as managing director; Otobong Ndew from Akwa Ibom, executive director, projects, and Maxwell Oko from Bayelsa State,

executive director, finance and administration. Others are Jones Erue, representing Delta State; Victor Ekhator, representing Edo State; Joy Yimebe Nunieh, representing Rivers State; Nwogu Nwogu, representing Abia State; Theodore Allison, representing Bayelsa State; Victor Antai, representing Akwa Ibom Stste; Maurice Effiwatt, representing Cross River State, and Olugbenga Elema, representing Ondo State. Also appointed are Uchegbu Chidiebere Kyrian, representing Imo State, Aisha Murtala Muhammed from Kano State, representing North-West, Ardo Zubairu, from Adamawa State, representing North-East, and Badmus Matalib from Lagos

State, representing South-West. Speaking on the appointment, Gideon Obakhan, former commissioner for education during Adams Oshiomhole administration, described the appointment as well deserved. Obakhan urged Odubu to bring his wealth of experience towards impacting positively the development of the commission. “I wholeheartedly congratulate Dr Pius Odubu on his appointment as chairman of the board of NDDC. It is a position that he deserves and is well qualified to handle. “I wish him all the best and hope that he brings his experience to make positive impact towards the development of

the Niger Delta and Nigeria as a whole,” he said. Also commenting, Abdul Oroh, a former House of Representing member and commissioner during Adams Oshiomhole administration, described the appointment as well deserved. Oroh said as a former House of Representing member for eight years and Edo State deputy governor for the same eight years, he possessed the needed qualification to head the commission. He said his wealth of experience would no doubt bring the much-needed leadership to the commission as well as the development of the oil producing states in the country.

nessDay that the meeting focused on the preparations of the 2020 budget, billed for submission in the last week of September 2019, to the National Assembly. The EMT serves as an advisory body to the Federal Executive Council (FEC), and is expected to review government’s Medium-Term Expenditure

Framework 2019 to 2021, for the approval of the FEC, ahead of its presentation to the National Assembly. According to Akande, “The meeting is part of the preparation for the 2020 budget presentation. Their plans are subject to review and approval of FEC.” The meeting was attended

by the ministers of finance, budget and national planning, Zainab Ahmed; industry, trade and investment, Adeniyi Adebayo; information, Lai Mohammed; works and housing, Babatunde Fashola; budget and national planning (State), Clement Agba, and minister of petroleum (State), Timipre Silva.

Osinbajo, Economic Management Team brainstorm on 2020 budget Tony Ailemen, Abuja

ice President Yemi Osinbajo on Wednesday presided over the first Economic Management Team (EMT) meeting of President Buhari’s second term, Next Level. Spokesman to the Vice President, Laolu Akande, told Busi-

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news

Total plans investment to grow gas output by 300mscf Olusola Bello

igeria’s yearning to increase gas reserve and enhance power generation has received a boost as Total Exploration and Production Nigeria (Total E&P) says it has significantly invested in the development of infrastructure in the petroleum industry to enable it increase domestic gas supply by 300 million standard cubic feet (mscf). This volume of gas is capable of generating about 1,200 megawatts (mw) of electricity. The country has over 12,500mw electricity generating plants installed but the absence of necessary gas network to the plants has left most of them idle. For domestic natural gas utilisation to increase significantly, the International Oil Companies (IOCs) will have to meet their domestic gas supply obligation (DGSO) targets. Mike Sangster, managing director/CEO of Total, who disclosed this during a visit to Mele Kyari, group managing director of the Nigerian National Pe-

troleum Corporation (NNPC), however, bemoaned the fact that local demand for gas had been very much below the invested capacity. He expressed Total’s firm belief in the Nigerian oil and gas industry and its readiness to deploy solutions to the challenges facing the industry. Sangster said, “Total Nigeria will build on recent progress in many areas such as cash-call arrears and our long-standing partnership. In partnership with NNPC, the company has developed the last three Floating Production Storage Offloading Vessel (FPSO) in Nigeria and wants to build on this.” He listed the three deep offshore projects as Akpo, Usan and Egina, completed in 2009, 2012 and 2018, respectively. According to Sangster, the company is currently partnering in a project for the construction of a 100mw solar independent power plant (IPP) in Katsina State and had also embarked on the solarisation of its service stations. Kyari, in his response, said TotalNigeriawasoneofthecorpo-

ration’s most important partners with visible outcomes, adding thatthepartnershipwouldfurther grow national production and reserves going forward. He said, “Total Nigeria in the last five years has very visible outcomes that we have seen and I assure you that we will work together to progress all efforts to grow production and national reserves. “I also want to put on record that your downstream company has been very supportive in the supply of gasoline into our country.” He assured the Total team of more days of very transparent and accountable relationship with frameworks that would be appreciated by all. The Total team, also visiting theMinisterofStateforPetroleum Resources, Timipre Sylva in his officeinAbuja,disclosedthatTotal was currently undertaking some explorationactivitiesaroundexistingoilfieldstoboostitsproduction capacity, while advocating for a partnership with the Federal Government in its quest to boot its crude oil and gas output.

Protects your investment with insurance policy - Rep advises business owners IDRIS UMAR MOMOH, Benin

ude Ise-Idehen, lawmaker representing Egor/Ikpoba Okha Federal Constituency at the National Assembly on Tuesday, urged business owners to embrace insurance policy for the protection of their investment. Ise-Idehen made the call when he paid on-the-spot assessment to the burnt Uwelu Auto Market at Egor Local Government Area, Benin City. Recall that the auto spare parts market was on August 12, 2019, gutted by fire. The inferno said to have started about 11:30pm and lasted till Tuesday morning badly affected Mercedes Benz, Mazda, Ford and Toyota parts lines. The lawmaker, who sympathised with the traders, noted that insurance policy helped

to minimise pains and losses associated with fire outbreak. “My advice is that you all should try to get insurance policy for your shops and businesses that will help to minimise your losses and pains,” he said. While urging the traders to wait for the outcome of the committee set up by the state government to unravel the immediate and remote causes of the fire outbreak, he promised to bring the incident to the notice of his colleagues at the National Assembly as well as the speaker of the House of Representing for urgent assistance. Ise-Idehen, who was accompanied by Osagie IzeIyamu, People’s Democratic Party (PDP) candidate in the 2016 governorship election, Frank Erewele and other chieftains of the party, however,

commended the people of the local government area for their support during the 2019 general election. He promised to give the people good representation by fulfilling his electioneering promises. Also speaking, Ize-Iyamu called on the state government to put in place plans to build a modern auto market in the area. Ize-Iyamu, who noted that the auto market was the largest in the South-South region, also called on the management of National Emergency Management Agency (NEMA) to come to the aid of the affected traders. He urged the state government to establish a functional fire service outfit at the market as well as construction of motor-able road for easy access to the market.

Peak 456 drives learning for parents, children with tech

his summer, Peak 456 Growing Up Milk is committed to make learning for growing up children and their parents more fun and easier. To this effect, the brand has re-launched its website, www.growupsmart.com. ng as a tool to equip parents with the necessary knowledge to support the growth and development of their children into strong and smart members of society. In a recent press release, the firm says, “We know parents are always looking for tips and tricks on parenting as well as activities to keep their children engaged in learning, during school time and holidays. “That’s why Peak 456 Growing Up Milk is always on a mis-

sion to support continuous learning. Now parents and children alike have the necessary support at their fingertips – a website that can be accessed via mobile and at home, anytime and anywhere.” The website is re-designed to offer a user-friendly experience and enhanced with access to information to help parents in raising strong and smart children, ensuring that they are engaged and learning in a fun way. Learning is made fun through the power of audiovisuals. The educational videos on the website show children between the ages of 4-6 years old learning different topics ranging from States and Capitals, Homophones, Good Manners among others. There are also exercises www.businessday.ng

to test the knowledge gained by the children. Parents are not left out, as a rich library of informative blog, posts like Junior “Pecadomo” (milk-based) recipes, frequently asked questions by mothers and competitions await them. This website is sure to keep parents and their children excited this summer and beyond. According to Akon Imoh, senior brand manager, specialised nutrition, “We are excited to unveil the revamped website which particularly caters to parents who are not just looking for information on our products but also to educate themselves on effective ways of raising their children to be strong and smart - particularly in their early formative years. https://www.facebook.com/businessdayng

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news Future Awards Africa calls for nominations, receives UN endorsement

he Future Awards Africa has announced the call for nominations for this year’s edition of the continent’s biggest youth awards scheduled to take place in November. The launch event, which held at the Transcorp Hilton Abuja, saw Amina Mohammed, deputy secretary-general of the United Nations, endorsing the Awards, which had been described as the “Nobel Prize for young Africans.” With the theme ‘Nigeria’s New Tribe,’ The Future Awards Africa seeks to reward excellence and service among youth between the ages of 18 and 31. Over the years, the Awards has built a strong network of youth supporting each other in the leadership space, breaking boundaries to achieve distinction against barriers of tribe, religious differences, economic instability, and government policies. Speaking at the event, Mohammed said: “Even while we all acknowledge our socioeconomic issues and challenges, our hope for the future is bound on the talent, creativity, and determination in every young Nigerian. They represent the much-needed agents of change – a new and perfect direction in giving back power to our youth – so joining the new tribe should be a movement every young person should aspire to be a part of.” According to Bukonla Adebakin, chief operation officer, The Future Project, “We are doubling down on the theme, ‘Nigeria’s New Tribe’ as there’s no better time to identify, acknowledge, and showcase a new set of bright, young Nigerians leading the charge to establish a positive, new narrative for the continent. We therefore urge everyone to nominate outstanding young people in different communities across the country so as to inspire many others who need models of hard work, creativity, impact, and integrity to emulate.” Official media partner of The Future Awards Africa 2019 is Consolidated Media Associate Group, with about 20 categories of awards. Persons eligible for nomination must have made considerable impact within Nigeria and/or globally within the last one year and must have easily accessible documentation of their achievements. The public is encouraged to nominate trailblazers from their communities in categories ranging from social activism, business and professional service to media and entertainment. To nominate, visit award. thefutureafrica.com and follow @tfaafrica to keep up with the latest news on the Awards. Official hashtags for the 2019 edition are #TFAA2019 and #NigeriasNewTribe.

NCC develops framework for pervasive broadband penetration to hinterlands Jumoke Akiyode-Lawanson

onscious of the pivotal role pervasive broadband penetration will play in actualising deployment of Internet of Things (IoT) devices and smart services in any economy, the Nigerian Communications Commission (NCC) has developed a framework to facilitate the deployment of broadband infrastructure in every part of the country.

Umar Garba Danbatta, executive vice chairman (ECV) of the NCC, said this while speaking Wednesday at the opening session of the First Digital Africa Week organised by the International Telecommunication Union (ITU) and hosted by the NCC in Abuja. Danbatta told the gathering of global Information and Communications Technology (ICT) experts that the NCC framework for broadband infrastructure had led to the

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licensing of six infrastructure companies (INFRACOS) for North East, North West, South East, South West, SouthSouth, and Lagos. In a statement signed by Henry Nkemadu, director, public affairs, NCC, the telecoms regulator states that the process for licensing a seventh INFRACO for the North Central including the Federal Capital Territory, Abuja, has been concluded and the licence ready for award very soon.

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The INFRACOS will deploy metro and intercity fibre and broadband point of access with a minimum capacity of 10 gigabits per second (10 Gbps) across the 774 local government areas of Nigeria. “With the development of Smart Cities Key Performance Indicators (KPIs) by the ITU, it is imperative to have a pervasive and ubiquitous broadband infrastructure across all our towns and cities to achieve the objectives of making them

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Smart,” Danbatta said. Danbatta told the experts, “Nigeria has not only achieved but exceeded the 30 percent penetration target set by the National Broadband Plan (NBP) (2013 – 2018) and at the end of July 2019, our broadband penetration stood at 33.72 percent,” adding that the NCC would continue to work hard to ensure that all citizens of Nigeria had access to affordable broadband connection, irrespective of location.

Thursday 29 August 2019

BUSINESS DAY

RESEARCH&INSIGHT

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

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Analysis of domestic and foreign portfolio flows in 2019 using pincers-shaped curve AMAMCHUKWU OKAFOR

very month, the Nigerian Stock Exchange polls trading figures from the market operators on its domestic and foreign portfolio investment flows. Portfolio investment is the purchases of securities and other financial assets by domestic and foreign investors in the domestic economy. Portfolio investments may be held directly by an investor or managed by financial professionals. Equity investments where the owner holds less than 10 per cent of a company’s shares are classified as portfolio investment. As of 31 July 2019, total transactions at the nation’s bourse decreased significantly by 61.82 per cent from N297.25 billion (about $970.1 million) in June 2019 to N113.47 billion (about $370.4 million) in July 2019. The performance of the current month when compared to the performance recorded in corresponding period a year ago (July 2018) revealed that the total transactions also decreased by 22.31 per cent. The foreign portfolio which accounted for 50.9 per cent of the total portfolio flows in July 2019 declined by 40.3 per cent from the previous month and 13.6 per cent year to date; whereas domestic portfolio holdings accounting for 49.1 per cent of the total flows in July declined by 72.2 per cent and increased marginally by 0.8 per cent year to date (YTD). In July 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 2 per cent. This is suggestive of high volatility on the domestic side. The participation ratio between domestic and foreign portfolio to the total portfolio flows year to date shows an interesting pincersshaped curve. The pincers curve reveals a trade-off in the participation rate between the foreign and domestic portfolio: as one is rising, the other is falling in almost the same, albeit, opposite pattern. The graphical illustration in figure 2 shows convergence in participation in March through April; and an increasing

divergence since then with the highest divergence in June. Convergence may be possible beyond July if the pattern continues as we see in the graph. Domestic transactions: retail and institutional Of the total domestic transactions in the month under review, institutional investments accounted for 54.3 per cent, while retail accounted for 45.7 per cent. This implies a N4.81 billion difference between the value of transaction executed by Institutional investors and retail investors—a significant difference from the previous month where retail investments

Table 1: Dissecting domestic and foreign portfolio Date

Domes(c retail

Domes(c ins(tu(onal

Foreign inﬂow

exceeded institutional investments by N109.7 billion. A comparison of domestic transactions in the current and prior months (June 2019) revealed that retail transactions decreased by 83.59 per cent from N155.12 billion in June 2019 to N25.44 billion in July 2019. However, the institutional composition of the domestic market reduced by 33.28 per cent from N45.34 billion in June 2019 to N30.25 billion in July 2019. Foreign transactions: net flow The ratio of inflow and outflow of foreign portfolio in July stood at 49.1 per cent and 51.9 per cent (45.8 per cent and 54.2 per cent in June) respectively. This represents an improvement in the net flow (or moderation in negative inflow). The illustration in graph 3 plots the

graph of the negative net inflows since January 2019. With the highest net outflow in January, the trend shows an improvement in inflow year to date. The highest outflow since the year was in February and June (N51 and N52 billion respectively), and the highest inflow was also in the same months—N43.9 and N44.3 billion respectively. Historical analysis of domestic and foreign transactions A historical review highlights the performance of the market over the last decade. Over a 12-year period, domestic transactions decreased by 66.7 per cent from N3.56 trillion in 2007 to N1.185 trillion in 2018 whilst foreign transactions increased by 97.9 per cent from N616 million to N1.219 trillion over the same period. Since after 2008—which had the highest peak— the next peak over a ten-year period was in 2014 before the recession; the domestic transactions were worth N1.14 trillion while the foreign transactions were worth N1.54 trillion. Total foreign transactions accounted for about 51 per cent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49 per cent of the total transactions in the same period. The actual performance referenced 2019 (2019 Actual) shows that total foreign transactions carried out year till date (YTD) is about N530.56 billion whilst total domestic transactions YTD is about N670.42 billion. Implication for the economy The Nigerian economy barely emerged from 2015/16 recession in the second quarter of 2017, but the political and economic conditions that followed the electioneering from 2018 through 2019 meant moderation in growth impetus. The market has consequently followed a downward trend. The China-US trade war and the pessimistic outlook on the global economy stoke the situation more so for small countries. Policy makers must adopt proactive policies, monetary and fiscal, in order to maintain a stable macroeconomic environment conducive for investment, output and employment. A commitment to price stability, favourable policy rate, and unified, stable exchange rate are key indices that enable prediction and forecasting.

Foreign ou4low

Jan-‐19

29.65

25.58

27.81

39.04

Feb-‐19

41.01

48.13

43.93

55.01

Mar-‐19

27.44

26.58

25.89

30.20

Apr-‐19

29.26

42.73

35.14

41.78

May-‐19

47.23

96.64

37.90

39.35

Jun-‐19

155.12

45.38

44.30

52.44

Jul-‐19

25.44

30.25

28.38

29.40

12734BDN

Source: NSE

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Thursday 29 August 2019

BUSINESS DAY

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So Nigerian businesses, what Is your value proposition?

n 2013, fresh off the plane and drunk on the “Africa Rising” narrative of that time, I came across something I found unusual and exciting in Nigeria’s business scene. It wasn’t so much the fact that there was a local car manufacturer that impressed me, but the fact that the company’s origin story was the closest thing I had ever heard to a “Nigerian dream.” A hustler without a tertiary education trained under a ‘master’ within the famed ‘boyi-boyi’ Igbo apprenticeship system, eventually gaining his freedom and going into the business of importing and distributing plastic products. A few years later, he ventured into importing motorcycles and he figured out that he could out-compete his rivals by bringing the machinery in CKD (completely knocked down). In so doing he could pack more motorcycles into a single container and reduce his shipping costs relative to his peers. When the CKD bikes got to Nnewi, he assembled a team of technicians to put them together for onward distribution. The strategy was a roaring success, and so a couple of decades later, Innocent Chukwuma decided to replicate it with

4-wheeled motor vehicles. It was at this point that I joined the story. Narrative Is useful, up to a point Drunk on optimism fuelled by 7 percent year-on-year GDP growth, a market-friendly administration and dozens of books about China’s industrial miracle, I was convinced that Innoson Vehicle Manufacturing was the canary in the coalmine announcing Nigeria’s impending arrival as a global economic force. I became an unpaid and unsolicited brand evangelist, going as far as opening and managing social media pages for the company and mailing international motoring publications about the unfolding Nigerian miracle in Nnewi. After a sluggish start to its marketing efforts, the company soon caught on and began actively pushing its credentials as a bringer of pride to Nigerians and a vanquisher of “tokunbo” from Nigerian roads. I noticed however, that everytime the issue of its prices came up, IVM became very cagey, with the response often being a generic “send an email to us.” Part of me wondered why a national manufacturing lodestar with ambitions of growing a PanAfrican presence would be cagey about its prices, but I didn’t give too much thought to it. In 2014, IVM announced that it was going to launch a “N1 million vehicle,” which would have caused a sensation in Nigeria’s automotive space. The promise soon morphed into a “N1.5 million vehicle,” but even that would have been spectacular. Then the promised release date came and went with no word about the said game-changing car. Eventually in November 2014, IVM released the IVM Fox and the IVM Umu – for at least double the promised price and without any immediate access to financing.

Apparently, not even all the national pride, patriotism and excitement fuelled by marketing could challenge reality. Building a vehicle for that price in an area with a very small population of people with the relevant skills, and using imported parts subject to exchange rate fluctuations made it impossible to deliver on the very optimistic promise. The narrative of Nnewi boy-turned automotive manufacturer disrupting the used car space with cheap brand new cars was a seductive one, but ultimately an unrealistic one. Data and research over marketing A problem that IVM and many other Nigerian businesses face while trying to do something unprecedented in the local market is that rather than surrounding themselves with professional business and as much relevant data as they can manage, they often choose to surround themselves with yes-men and marketing types who rarely tell them “no” when applicable. In the absence of solid strategy based on sound data, such businesses end up doing what footballers call a “hit and hope.” IVM is a case-in-point of a Nigerian business whose actions and very existence are based on a “hit and hope” strategy coupled with the controlling entrepreneur’s sheer determination and willpower. A proper business consultant might have recommended against local vehicle manufacturing in the first place for a number of reasons including skills shortage, key man risk, risk of loss due to exchange rate fluctuations and most importantly, a market that is simply too poor to afford the output from IVM’s sprawling Nnewi facility. The “N1 million vehicles” announced with much fanfare in 2014 today retail at a starting price of N7.6 million. This is simply the reality of

‘

Apparently, not even all the national pride, patriotism and excitement fuelled by marketing could challenge reality

building a car in Nigeria – it is more expensive than building a car in China because the required employee skills are scarce, electricity is expensive and self-generated, and the supply chain is susceptible to rapid price shifts due to a weakening and unstable naira. Assuming the decision was made to assemble cars locally regardless of economic conditions, a business consultant would have recommended putting in fail-safes such as inventory stockpiling to guarantee customer prices. I mentioned in a prior column that the total number of Nigerian consumers who have a monthly income of N200,000 and above is only about 5 million people. In addition, approximately 92.1 percent of Nigerians make less than N60,000 a month. The addressable market is tiny, and even that market is very price sensitive. The number one factor Nigerian consumers respond to is price, evidenced by our embrace of Korean vehicles despite their perceived lower quality. I myself drive a Kia Rio which was bought brand new for N1.5 million in 2010 with airbags as an optional feature. At the time, you could get it for less if you opted out of airbags – and many consumers did exactly that because that is how important price is in this market. There is no amount of “Proudly Nigerian” marketing messages that will convince to spend N7.6 million on a vehicle if I simply do not have N7.6 million to spend on a vehicle. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Ruga: An unadulterated monkey business

here are many definitions of a monkey business but in the “operational definition of terms” for this treatise, it is an issue that raises more questions than answers, a shenanigan or something shrouded in deceit, leading to a the more you look, the less you see scenario. Literary folks usually talk about narratives and how people, consciously or unconsciously, change the narrative. The narrative around the herdsmen has been changed of late. Up till two years ago, it was normal to speak about Fulani herdsmen; but not anymore. Now, they are just herdsmen. These non-Fulani herdsmen invade communities, murder, maim, rape, raze and at times occupy (the original scorched earth model) but we call it farmers-herders clash. How can a farmer with a hoe clash with a deadly armed troop? How many of the herders have been killed in these numerous farmers-herders clash? (And we even put the farmers first so that its farmers-herders; not herders-farmers). Of late we were told that the herdsmen, who are no longer Fulanis and who only clash with farmers, are no longer Nigerians. On May 13, 2016, our dear president declared in faraway London that the murderous and rampaging herdsmen were not Nigerians and he was sure that they were from Libya! He restated this assertion during his bilateral talks with Donald Trump, the author and finisher of ‘trumpocracy’ in Washington on 30 April 2018, absolving Nigerian herdsmen (not Fulani herdsmen) of any criminal capabilities and tendencies. In May 2017, Audu Ogbe “supporting the motion” also informed that the killer-herdsmen were foreigners (I do not know whether he re-

ally believed that). He was speaking at a townhall meeting at Abuja, where he also revealed plans by the government to stop the illegal entry of herdsmen into Nigeria (I don’t know how far they have gone with the plan). In September 2016, the grand Muslim of Nigerian, the Sultan of Sokoto declared with a royal finality that the “so-called Fulani herdsmen moving with guns, causing violence, fighting with farmers are not Nigerians, but foreign terrorists”. This was in his 2016 Eid el-Kabir message to the Nigerian Muslims. The Bible says that a matter can only established by the testimonies of two or three witnesses (Deuteronomy, 19:55 and 2 Cor. 13:1). So, it is proved beyond all reasonable doubt that these herdsmen are not Nigerians. QED, QEF! However, the Nigerian government has been treating these foreign herdsmen with unusual leniency. The presidency asked Nigerians to be accommodative towards them, not to retaliate. And the Minister of Agriculture even planned to import grass from Brazil for these illegal foreign herdsmen and their foreign cattle. Of course, Nigerians after being attacked by these foreign herdsmen cannot react because the security forces come immediately after the attacks to keep the peace and make the “no stone will be left unturned” declaration (That is if there are still any unturned stones remaining at all!) This is a situation in which illegal immigrants have more privileges and receive more compassionate consideration than the sons of the soil. It is worrisome and I don’t know whether it has anything to do PMB being a “namapreneur” i.e. an entrepreneur specialising in nama and related affairs). These stories don’t add up, but longsuffering Nigerians accepted these

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narratives in good faith. However, when this Ruga dimension reared its controversial head, Nigerians sparked! The size of a typical Ruga settlement is said to be about that of an average Nigerian local government. It means the government will just, by fiat, create about 200 plus extra modern Fulani exclusive settlements in Nigeria, with our collective resources. And this is in a country where people are regularly harassed out of the land which they have duly acquired for, commercial and social purposes. Other Matters: Discos; signs and wonders; checkpoints and ease of travelling On 27 June 2019, I narrated how the IBEDC dealt with us at Ijebu Ode and specifically, how our bill for the block of flats rose from N1,500 to N12,000 within three months without any change in the power supply or consumption. Well, for July, I received a bill N3,500 for an apartment which I was billed an average of N500 four months ago! I assure you on my honour that nothing changed in my consumption pattern. In fact, in the month in question, I was “out of stock” for more than half of that period! Anyway, we have strategised and decided to say no to this process of monkey de work... We are searching for prepaid meter, by fire by force. Last week, I narrated how I spent 10 hours on a journey that would have taken 6 hours plus because policemen were searching for Fulani herdsmen inside the boots and documents of vehicles, to the extent that we encountered up to 50 police toll-gates less than 500 meters apart. Well, my return journey revealed another aspect of this police toll-gate business. I travelled from Igbo-Ukwu through Onitsha to Ijebu-Ode within 5 hours; driving at an oldie’s speed.

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When I was going down east, it took 8 to 9 hours. But the main issue is that there was no police checkpoint on the return journey from Onitsha to Ijebu Ode! Even the Customs and FRSC did not bother with those on the OnitshLagos route but they were (and still are) all working over-time on the Lagos-Onitsha route. Does it mean that herdsmen, smugglers and traffic offenders only operate on one side of the road? Well, here’s the simple reason. Those travelling home are still “loaded” and they are in a hurry to get to their destination. They are thus more willing and capable to provide the white chalks for the sacrifices! Those on the return journey have exhausted their resources and the hurry-hurry tendencies are less. Nigerian police, I hail!

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Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Thursday 29 August 2019

BUSINESS DAY

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Turning your lemon into lemonade POSITIVE GROWTH WITH BABS

BABS OLUGBEMI

s one of my life calls, I engage with young people and business owners a lot in my attempts to help individuals and organisations to focus on the right thing and maximise their potential. I have been visiting and interacting with the Youth Corp members during the orientation camps for years. At every opportunity, I have been overwhelmed by excuses of what is not working in Nigeria, how backgrounds have limited people, how a lack of capital has stunned great ideas, among others. My response to people who give a series of reasons why they are not progressing is first to acknowledge the existence of their concerns and ask them to turn their lemons into lemonades. The reasons to fail have been in existence for ages. It will not be a perfect world one day. People who are excuse-makers will not get to their destination on time and might even live life unfulfilled. The essence of life is to make progress despite adversities and challenges. If life doesn’t challenge you, it won’t change you for better. To the youth of this country, I acknowledge your lemons – they are the leadership that is not producing the results for all, the disadvantaged backgrounds and lack of jobs or opportunities after school. The list is endless.

However, I do see some foreigners, especially the “oyinbos” coming to Nigeria in their numbers. I’m sure they are not here to eat our eba, amala and ewedu. They have their version of afang soup and don’t need to travel miles to enjoy life in an unknown land. They are here to prospect for opportunities in our economy. If you are in the middle of the opportunity, you have the advantage if you can stop the excuse game and end the pity parties. You are to concern yourself not with what you cannot change but with what you can change and how to make that better. Lemons are situations or circumstances, creating doubt and preventing you from achieving your life goals. Unfortunately, the conditions are neutral. It is your perspective of any situation that makes it either positive or adverse event. Roger Bannister’s lemon was the widely accepted illusion among the scientists and athletes that no man can run a mile under four minutes. The general belief was that the human heart is not capable of running a mile distance within four minutes and the heart of anyone who attempted it will burst. I’m sure the situation of unemployment in our society is a “heart buster” for the youth and families whose all investments are in the education of their children. Roger Bannister, a medical student and an Olympic runner, broke the fourminute per mile barrier in Oxford on May 6, 1954, turning the colossal lemon into lemonade for others to drink. Bannister set the pace by running 1,609.344 metres under four minutes and created confidence for others to follow. Within two years, the likes of John Landy, John Walker, Steve Scott and a host of others numbering 25 did what Roger’s did to

confirm the new standard that the human heart isn’t incapable of running a mile race in four minutes. The four-minute mile race is still around us. There are real and assumed limitations here and there. Your four-minute limitation might be unemployment, lack of fulfilment on your job, health-related problems, and how to move on in life to be the best of yourself. I agree that things are difficult. However, you must see beyond the limitations to be rewarded in life. Roger did overcome similar obstacles before achieving his objective. He believed he could do it. His study shows there was no evidence to support the limitation and his faith pushed him to set the pace. I’m sure there is no evidence that you can’t overcome your present condition. There is no evidence that Nigeria will not get better with good leadership. Roger Bannister did not achieve his life goal without paying the price to get the prize. He decided what he wanted to do, he was part of a profession and not a busy-body or idle member of the athletics world. And he could see it before he realised it. You cannot win the prize if there is nothing you are working at. There is no divine blessing for hands that are idle and empty. It’s a natural law; you can’t change it! I know you have dreams. I want you to see the limitations as obstacles that must be surpassed in your growth process. You can create lemonades from the lemons if you dare to do what Roger did. First, identify what you really what to do in life. Commit to it and surround yourself with people going on the same mission. Do not be like a dreamer who woke up from his dreams and covered himself with the duvet to sleep again. Wake up and run with your desires. In conclusion, I want to share two

‘

To the youth of this country, I acknowledge your lemons – they are the leadership that is not producing the results for all, the disadvantaged backgrounds and lack of jobs or opportunities after school

real-life experiences to illustrate the possibility of moving forward amid limitations. I met Josephine, who was a casual worker in Lagos. She didn’t attempt to further her education due to lack of finance. My words to her were, “first do your JAMB, get the admission letter into a university and start looking for help with the admission letter”. She followed that advice, did her part of the bargain, and today she is a graduate working in one of the banks in Nigeria. You can turn your lemon into lemonade. Bolanle was confused about what to do with her life. Her job was unfulfilling and very stressful. She hated Monday mornings and always looked forward to Fridays. She was advised to find her latent interest and combined that with her job. She turned her ‘lemonish’ situation into lemonade sweet drinks when she started using her weekends to learn how to sew. Within two years, she became one of the best fashion experts in town. Today, life is kind to her because she is operating in her strength zone. You can make the best out of any situation. Once again, it is not the country that is failing you; it is your inability to lead yourself. The start point is to challenge yourself and draw out what is inside you and not bring in what is outside. You can do it, and I’m sure Nigeria will better if you start the journey leading to the victory party for yourself and others through your impact.

Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

How can we expect change if we don’t change?

recall a recent conversation with a friend. He said that when you ask people what they think we should do to improve our nation, they tend to always jump to the significant issues like unemployment, reduction of poverty, security, etc. However, this is not what should come first. He said that Nigerians first have to change their attitude, improve their integrity and come together as a nation to stand up for the kind of Nigeria we want to see. The question, “how can we expect change if we don’t change?” is very relevant. The first instinct of people is to blame the government for all the problems the nation is facing without realizing that individuals like themselves make up the government. These are individuals with similar attitudes and vices. These individuals in government have a huge role to play in the development of the country, and without changing their behaviour, the goal of achieving economic growth will be a mirage. If all citizens show that they are not ready to tolerate any form of immoral or unfair actions, then things will be different. One thing to note is that those in government have the power to affect lives significantly. They are responsible for coming up with policies, rules and laws that affect the economy and the lives of everyone in the country. So even if we citizens that are not in power change without those in power changing, there will be no overall difference

in the state of the country. If those in power partake in and condone wrong actions, they are encouraging their constituents and the governed to follow their footsteps. Citizens respond to the environment created by those in power. It is natural and essential for our survival as humans to adapt to the situations and environments in which we find ourselves. So, if the status quo set by those in power is such that money buys you anything or can get you out of any situation without any consequence, then this is what the norm will be all around the country. However, if the standard becomes such that the rules apply in every situation, it then gives rise to a more organised and dehumanised system. It will yield a system that does not exempt anyone from the regulations or law; including those in power as well as those that have no administrative authority. In the case of Nigeria, it is not that we lack laws and sound policies, but instead the problem lies in the aspect of the implementation of these laws and policies. This dehumanised bureaucratic system of government is one thing that differentiates developed countries from developing countries. In developed countries, their obligation is first and foremost to uphold the rules and law. In most developing countries the rules are more often than not abandoned in favour of some other incentive. Implementing such a system where the rules come first will be beneficial

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in several aspects to Nigeria. For example, it will positively affect the way our elections are held, enabling elections to be unbiased and based on qualifications instead of connections or nepotism. It will also ensure the extensive search of the background and certifications of those assuming political positions. This background search will give citizens some level of confidence that anyone appointed/elected to a specific office is qualified to handle the responsibility of such office. Also, selecting individuals to the position they are most suited for is beneficial to the economic growth of the country. We as Nigerians can learn something from the French Revolution that began in 1789. The French citizens at that time were tired of the spending habit and economic policies of the then King Louis XVI. So, they decided to rise and challenge the system. The French Revolution, however, brought about a wave of violence and a period of bloodshed in the country. My reason for bringing up the French revolution is not to encourage violence, and it is not to encourage Nigerians to act as the French did in the period when the revolution turned radical. Instead my reason for bringing it up is to show that citizens of a country have the power to shape and change things in their country once they are determined and united. In other words, we Nigerians can change things here in our nation. The government exists to serve the peo-

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ZALUM ONYECHI

ple and ensure that everyone has a good standard of living by promoting economic growth. However, one thing we should always remember is that change first starts with us as individuals. For things to be different in the nation, all of us have to change our character to one that is rule-abiding oriented. Afterward, we will notice a resolution of most of those significant issues/topics about which people always seem to complain. Onyechi, a postgraduate of economics from Louisiana State University, is currently serving as a corper at Securities and Exchange Commissionin Lagos

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Thursday 29 August 2019

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja 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 COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Engaging the real message of the Nuremberg outrage

olitical and c i v i c l ea d e r s are united in condemnation of the atrocity in Nuremberg, Germany on August 17, 2019 when members of the Independent People of Biafra (IPOB) mobbed Ike Ekweremadu, a senator. Their grouse was that he and the political and social leadership of the South East region had not done enough to condemn the killings in the region and have failed the people. Reception of the Nuremberg incident is, however, mixed. We believe that this divergence needs examination and re-direction. Make no mistake about it. BusinessDay believes that the action of the IPOB mob at Nuremberg is unacceptable, outrageous and egregious. Reasons for our condemnation go beyond the Nigerian culture of respect for elders and authority figures. There is also the matter of taking the dirty linen of the country to a foreign land to launder and spread in the sun. Many across Nigeria hail the action. The social media is flush with messages

and images approving of the conduct. They regurgitate pictures of similar measures by citizens of other African countries attacking their leaders, former or current, in foreign lands. News reports, to justify the mob action in Germany, are making rounds. There is alleged remark of returning Minister of Transportation Chibuike Rotimi Amaechi that Nigerian leaders get away with poor service and injustice because citizens are yet to stone them. There is also the statement by Tony Momoh, an APC stalwart, asking voters to stone them if the party failed to deliver. What is clear is that Nigerians are angry with their leaders. They feel helpless and are lashing out in the direction of hurting those they accuse of responsibility for the poor state of the country. The severe socio-economic conditions of the country force many young people out of the country. Large numbers have died while escaping through the desert to Europe. Those who make it find the environment and conditions of their stay disenabling. Worse, a renewed wave of nationalism in the Western

world has led to stringent anti-immigration measures that target non-citizens and immigrants and make living uncomfortable for them. Even those who have become citizens find that their skin colour and their origin count to their disfavour. These have led to much citizen anger. We understand the anger. We appreciate the desperation for change. We believe though that citizens should channel those emotions and concerns positively. They should engage the system as citizens do elsewhere. A major failing of our democracy in the last 20 years has been disengagement of non-political actors. Citizens only serve as electors: they go to the polls every four years or as needed, elect the politicians and then go home. Theoretically and according to the electoral laws, citizens can recall officials who are not living up to their promises. The same law makes the process a mountain too steep. It is worse for the operation of voting out non-performing politicians. It has led to politicians thinking there is no obligation on their part to deliver. This displeasure can be

converted to engagement in the tried and tested democratic traditions. The middle class, represented in professional associations, citizen advocacy groups and civic bodies, should lead the process of getting Nigerians to pay closer attention to their politics. Citizens can participate more actively in several ways. We have to be informed, participate in political discussions, sign letters and petitions (individually or as a group) demanding action in specified directions. We should donate money to a party or candidates and get persons of our choice, attend meetings, lobby for laws and demonstrate through marches, boycotts, sit-ins or other forms of protest. Civil disobedience to unjust laws or actions is also an acceptable tool deployed in the colonial days by our forebears. Ask questions. Demand accountability. Participation through engagement is both a right and a responsibility of citizens to make democracy work. Positive engagement, not a resort to mob action, is what will propel accountability and promote our democracy.

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

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Thursday 29 August 2019

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Traversing the many colleges of Oxford THE PUBLIC SPHERE

CHIDO NWAKANMA

istory walks on all fours at the University of Oxford, more often described as Oxford University. It is one of the oldest higher education institutions in the world and has many accomplishments to showcase. In recent times, the halls of the University of Oxford and its colleges have acquired a contemporary appeal as well thanks to one of the most successful film series in the world, Harry Potter. A trip to Oxford University is a journey into the delights and wonders of education and man’s search for meaning over the centuries. The excursion to Oxford was one of the highlights of leisure time for the team from the School of Media and Communication, Pan Atlantic University. We first detoured to the purpose-built £160m shopping mall at Bicester Village. Bicester Village is devoted to the exclusive display and sales of the world’s top fashion brands. Whatever the brand name, so long as it is on the global A-List, you will find it at Bicester. The Brits are so organised that everything makes for tourism. So, we joined the hordes from all over the UK to tour Bicester. The prices? The less said the better. Suffice to say it is not for those who

shop for bargains! Then to Oxford. The University of Oxford draws more visitors than Shakespeare’s birthplace of Stratford-upon-Avon. The university is the central point of the town of Oxford. Everything revolves around it. The University of Oxford is a vast place teeming with people and suffused in history as the architecture of the buildings proclaim. Oxford is a collegiate research university. Records say teaching commenced therein as early as 1096. It is deemed the oldest university in the Englishspeaking world and the oldest university in continuous operation in the world after the University of Bologna. Historians say its growth hastened when King Henry 11 banned English students from attending the University of Paris. The University of Oxford sprawls over a vast landscape. There are 38 constituent colleges, each of which operates in semi-autonomy. Visitors find themselves engaging in long treks. Dr Mike Okolo loved this aspect of the trip as it offered an opportunity for walking. His tracker showed we covered 10 500 steps. There are too many things to see in Oxford. Once I knew we would visit, I wrote to our Nigerian flagbearer at the institution, Prof Wale Adebanwi, who heads the African Studies Centre. Wale Adebanwi is the Rhodes Professor of Race Relations and the Director of the African Studies Centre, School of Interdisciplinary Area Studies, and Fellow of St Antony’s College. Unfortunately, it was August, and he was heading to Accra a day before our visit. It was also the summer break, so there was not enough time to arrange for other people to conduct us round. Each visitor to Oxford University invariably chooses the places of the

most interest. There are the ancient libraries, the theatres and the various colleges, each of which is akin to a university of its own. Most people love to tour Christchurch, one of the most famous. Our team’s destination was New College. Do not allow the name to mislead you. “New College, founded in 1379, is one of the thirtyeight constituent colleges of the University of Oxford. The College consists of the Warden and 60 Fellows, as well as 600 junior members (undergraduates and graduates) most of whom live in the College Buildings or College houses nearby. The courses of study cover a range of subjects.” William of Wykeham, Bishop of Winchester and Chancellor of England, founded it. They dedicated New College to the Virgin Mary and her statue stands beside the Founder above the Front Gate. “New College, or “the College of St Mary of Winchester in Oxford”, is the second Oxford College named after St Mary Winton, the reason they named it New College. New College was initially established for the education of priests and as a choral foundation. It was the first college for undergraduates and the first in which senior members of the College had tutorial responsibility for undergraduates. New College, Oxford, OX1 3BN says the structure today is like that in 1379 and stays true to its original foundation. It remains an intellectual community first with academic excellence as the only criterion for admission. Students nowadays have private rooms, the majority of which are en-suite, in stark contrast to the provision even fifty years ago. The College began to admit women in 1979.

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A trip to Oxford University is a journey into the delights and wonders of education and man’s search for meaning over the centuries

The Bodleian Libraries were another point of interest, naturally. A visit to an academic institution that excludes the library did not happen. The Bodleian Libraries holds some of the world’s greatest literary and cultural treasures”. It houses the Divinity School, the University’s earliest teaching rooms. A large proportion of its holdings are in under-ground tunnels. The Bodleian network consists of 28 libraries. It holds over 13million printed items and over 80 000 e-journals. It was the location for many scenes in the Harry Potter films and thus a significant draw for young people. Most appealing is how the Library runs a series of exhibitions and tutorials on several aspects of world history and knowledge. The “Talking Maps” exhibition was on as we visited and stays open until the end of September. It tells the story of maps and what they reveal about the places they depict and those who made or commissioned them and drew on the Bodleian’s collection of 1.5million maps. The “Sacred scripts of Ethiopia and Eritrea Activity Day” commenced on Saturday, July 27 until October 13. “Ge’ez is one of the world’s ancient languages and is still used in the churches of Ethiopia and Eritrea. Members of Ethiopian and Eritrean communities living in the UK worked together to curate a selection of vibrant and beautiful books produced by this scholarly and devout African culture.” I could relate and feel at home! Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Gender gap and financial access in Nigeria: Female agents may hold the key

he global pursuit of financial inclusion as a vehicle for economic development have yielded positive impact in Nigeria as the exclusion rate has reduced from 53 percent in 2008 to 36.8 percent in 2018. Despite overall progress, gender gap still remains. In 2008, 57 percent of women were financially excluded as against 49 percent men, according to the EFInA report: Access to Financial Services in Nigeria. In 2018, 41 percent of women are still excluded against 33 percent of men. The gender gap increased from 7 in 2008 to 8 percentage points in 2018, indicating a systemic obstacle to women financial inclusion in Nigeria. Some of the factors driving financial exclusion among women stem from institutional, cultural barriers and socio-economic constraints. In some markets, especially in gender segregated societies, women have limited access to public spaces, identification documents, bank accounts, mobile phones, and economic activities. There is a predisposition that women offer better customer experience and

women are more likely to access financial services from agent of same gender. Studies have shown that female agents create reassuring environment for transactions for both male and female clients. Customers feel that female agents have more patience and are more willing to spend time to address queries or explain the features of a new product. However, there is no or little representation of women in agent banking across markets. More women in agent banking may be the key to close the gender gap in financial access in Nigeria. More intentional action is needed to encourage more participation of women in agent banking. According to a GSMA study, enlisting female agents may be the most effective way to overcome low literacy rates, and build women’s confidence and trust in using financial services. Providers need to consider the following while formulating their agent network strategy for women: • Identify and provide reliable tailored information for female agents as part of the recruitment and on-boarding process

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• Influence male family members to support female agents. Provide reliable information, and encouraging them to motivate female household members to become agents • Address the issues of lack of capital, lower quality training and customer enrolment rate • Providers should invest in better understanding of this segment of their agent network as it will be very crucial for further business expansion • Adopt progressive and innovative agent models tailored to women to enable female agents to succeed • Providers should think of creative ways that are culturally appropriate to integrate women into their networks, if they are to grow their female customers • Engage female field force as part of the agent recruitment and on-boarding team In conclusion, providers need to understand the women segment of their agent network. Data analytics will provide insight into gender performance patterns generating knowledge to support Finan-

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HENRY CHUKWU cial Services Providers (FSPs) in decisions that narrow gender gap in agent banking. As part of EFInA’s efforts to support the widespread deployment of agent networks in Nigeria, EFInA in partnership with SANEF (Shared Agent Network Expansion Facility) with the support of the Central Bank of Nigeria will be holding its second quarterly Financial Services Agent Forum in Abuja on Wednesday, September 4, 2019. The platform is organized to discuss recent happenings in the agent networks space that is impacting their business. All agents and super-agents interested in attending this forum should click on this link to register https://bit.ly/2PfsB7e Chukwu is Specialist, Agents Network, at EFInA

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Thursday 29 August 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

COMPANY

Border bottleneck compounds consumer goods firms’ woes BALA AUGIE

protracted government shut down of the borders is causing menacing pains to consumer goods firms who are unable to ship their products in and out of the country. Trucks belonging to Cadbury Nigeria Plc, Unilever Nigeria Plc, and Dangote Cement have been trapped at the border since last week Tuesday, sources tell BusinessDay. “Travellers are allowed to move but trucks with products cannot move. If we are unable to deliver goods to customers on time, there will be high inventory of goods in the warehouse,” said the source. A statement issued by the office of the ComptrollerGeneral of Customs states as follows: “As part of measures to secure Nigeria’s land and maritime borders, the Nigeria Customs Service (NCS) and the Nigerian Immigration Service (NIS), in collaboration with the Armed Forces of Nigeria (AFN) as well as the Nigeria Police Force (NPF) and other security and intelligence agencies will be conducting a joint border

security exercise, codenamed “EX-SWIFT RESPONSE” Analysts warned that the disruption from a border slowdown will have cascading effects, hammering consumers and threatening margins of companies grappling to breakeven in a harsh and unpredictable macroeconomic environment. The goal of manufacturers, regardless of the industry they work in, is to move from raw materials to finished saleable products in the least amount of time and with a great level of efficiency. However, the border bottlenecks and truck misery could result in deteriorating warehouse operations, further undermining profit of manufacturers. Ayorinde Akinloye, equity analysts at CSL Stock Brokers Limited said such decision underscores systemic failures as companies could see a reduction in revenue due to shortage of stock of finished products. “Perhaps more worrisome is that a lot of companies import the large chunk of raw material to meet production,” said Akinloye. Cadbury exports Tom Tom and butter milt candy across

West Africa countries while it imports hot chocolate, a raw material component in the manufacture of Bournvita. PZ Cussons Nigeria manufacturers and marketers of popular products such as ROBB balm, Imperial Leather, and Morning Fresh imports crude palm oil because local production is not enough to meet consumption as weaker volumes and port issues continue to undermine margins. The border bottleneck will also add to the misery of producers of the sweetener because they import raw material. United States Departments for Agriculture (USAID) forecasts Nigeria’s raw sugar imports in to hit 1.76 million metric tonnes by 2019./2020 marketing year, up over 1 percent from 1.74 million metric

tonnes volume reported in marketing year 2018/19. USAID attributes the uptick to increasing industrial demand, expanding population, and growing middle-class income. “I just hope that these goods are non-perishable goods with expire date. The Federal Government needs to know the implication of what they are doing before making decisions. Companies may lose customers if they are unable to meet the demand,” said Ayodeji Ebo, managing director/ CEO of Afrinvest Securities Limited. Abiola Gbemisola, an analyst at Chapel Hill thinks that Nestle, with a bigger (70:30) market share of the beverage industry, will cannibalize the sales of Cadbury if it is less

susceptible to the risk. “If Nestle doesn’t have the challenge, then it will mob up the sales of Cadbury. And that is a double whammy for the latter,” said Gbemisola. Consumer goods firms are the worst hit from a slowly growing economy; gridlock at the Apapa ports, huge levies, double taxation, low consumer purchasing power, and smuggling are eating deep into profitability. The combined revenue of 10 largest firms quoted on the floor of the bourse dipped by 2.63 percent to N752.014 billion in June 2019 from N772.14 billion the previous year. Nigeria economy has been growing sluggishly as GDP expanded by 2.01 percent in the three months through March from a year earlier; that compares with 2.4 percent expansion in the fourth quarter. While inflation figure for the month of Ju;y fell to 11.08 percent, the figure is below the central bank’s target range of 6 percent and 9 percent. Nigerians unemployment rate is 23.10 percent, one of the highest in the world. Drilling down the figures shows Unilever Nigeria Plc’s revenue fell by 2.15 percent to N23.42 billion in June 2019

from N23.82 billion the previous year; It suffered 18.40 percent in the Homem and Personal business. Dangote Sugar’s revenue fell by 4.15 percent to N80.36 billion in the period under review as smuggling and influx of cheap products continues to undermine earnings. Dangote Flour Mills’ revenue’s sales reduced by 13.95 percent to N48.74 billion in the under review as against N56.35 billion the previous year. Nacon Allied Industries’ suffered the steepest drop at the top lines as sales fell by 49.54 percent to N12.82 billion in the period under review from N25.76 billion the previous year. However, some firms bucked the trend as they recorded growth in sales. Nestle Nigeria’s sales increased by 5.05 percent to N141.91 billion in June 2019. The growth in Revenue has been largely driven by solid growth in the Beverage business as the Milo RTD pack continues to gain widespread acceptance in the marketplace. Cadbury Nigeria revenue increased by 10.96 percent to N19.45 billion in the period under review from N17.55 billion the previous year.

CONSUMER SPENDING

Cinema culture thrives as moviegoers spent N3bn in half-year …N636m in July the biggest monthly gross in 2019 OLUFIKAYO OWOEYE

he emergence of home video business created a negative effect on cinema ventures in the past as many of the notable cinema houses were forced to close down. However, despite the sluggish economic growth and shrinking consumer wallet, there has been a renewed interest in cinema movies by Nigerians a trend which has since become a lifestyle among the rising urban population in major cities across the country. Figures from the Cinema Exhibitors Association of Nigeria (CEAN), an association of cinema owners, operators and managers, show that Nigerian moviegoers spent a total of N3.12bn to watch box office movies at Nigerian cinemas between January and June

this year. Interestingly, the figures have increased to N636m in July making it the highest monthly gross this year. Following the release of Disney’s The Lion King in July, 580,978 people went to watch movies across the 46 movie theatre locations in the country. Released July 19, the movie, The Lion King, was a major hit in attracting 157,437 moviegoers to theatres to watch. And this saw the movie gross over N232m from Nigerian moviegoers. According to CEAN, the year opened with ‘Aquaman’, ‘Chief Daddy’ and ‘Up North’ sitting on the top three of the chart, with estimated combined earnings of N168m. The movies maintained their positions until the fourth week when ‘Glass’ an American psychological superhero thriller film debuted at top of

the chart forcing Aquaman to the second position while ‘Chief Daddy’, and ‘Up North’ took a comfortable third and fourth places respectively. This led to combined earnings of N91.41m which fell to N77.2m as January closed with Kevin Hart’s ‘The Upside’ kicking ‘Chief Daddy’ to fourth

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place. A further dive into the figures showed February earnings remained low at N291.8m, making it the lowest, with top spots alternated between ‘Alita’, ‘Cold Pursuit’, ‘What Men Want’, ‘Escape Room’ and ‘The UpSide’. However, there was an uptick in March as viewership

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increased and the earnings were almost doubled from that of February leading to a total of N434.4m, with a large chunk of the earnings coming from an American superhero movie, Captain Marvel. In the early weeks of April, ‘HellBoy’, ‘Shazam’, ‘Little’ and ‘Us’ enjoyed a top spot with ‘Captain Marvel’ until the release of ‘Avengers: Endgame’. The release of ‘Avengers: Endgame’, ensured that earnings from April surged from N186m in its third week to N342m in its final week. The month closed with total earnings of N734m, the highest in the first half of the year. The fifth month, saw a massive decline in earnings similar to February earnings, with ‘Endgame’, ‘The Intruder’ and ‘Longshot’, it earned a total of N367.49m. Viewership, however, picked up in June with ‘John @Businessdayng

Wick’, ‘Godzilla’ and ‘Aladdin’ leading the numbers. They were supported by ‘Anna’, ‘Men In Black’, ‘Dark Phoenix’ and ‘Bling Lagosians’. June opened with N161m but closed with N100m leading to a total earning of N576m. The patronage is buoyed by an increase in the number of Nollywood movies at cinemas also the Nigerian movie industry has been churning out quality movies worthy of people’s time and money which makes them cinemaworthy. Specifically, Mo Abudu’s ‘Chief Daddy’, Kemi Adetiba’s ‘King of Boys’ and Genevieve Nnaji’s ‘Lion Heart’ are some of the top chart Nollywood movies that have made prominence at cinemas in recent times. Also, Nigerian movie producers have found movie premiering as a means of escaping the snares of movie pirates.

Thursday 29 August 2019

BUSINESS DAY

Retail &

consumer business

COMPANY

Nestle Nigeria generates higher sales from assets than peers BALA AUGIE

estle Nigeria has utilized its assets in generating higher sales more than peer rivals even amid deteriorating industry average, as a torrid macroeconomic environment makes it difficult for companies to breakeven. For every Naira of assets Nestle invests in, generates 16.13 percent or N16, that compares with Dangote Sugar, 0.0611 percent of N0.06; Nascon Allied Industries, 0.037 or N0.037; Nigerian Breweries, 0.034 percent or N0.034; Cadbury, 0.024 percent or N0.024. The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate sales from its assets by comparing net sales with average total assets. The total asset turnover ratio calculates net sales as a percentage of assets to show

how many sales are generated from each dollar of company assets. While Nestle Nigeria generates higher sales and returns on investment than peers, the industry is still ensnarled in an economic downturn. The cumulative average asset turnover of the largest consumer goods firms fell to 0.028 percent or N0.028 in June 2019 from 0.038 percent or N0.038 the previous year. “Companies have not made enough money over the last few years due to economic woes and the sharpest drop in the ratio was in 2016 when a sharp drop in crude oil price that stoked severe dollar scarcity tipped the country in its first recession in 25 years,” said Abiola Gbemisola Investment Research Analyst at Chapel Hill Denham Limited. A fuel price hike and incessant devaluation of the currency combined with inflationary pressures have left consumers gasping for breath as they have

Consumer goods firms’ asset turnover

refused their pulse spring. To add salt to injury, manufacturers are unable to hike the price of product since they had done so in 2017, while lower commodity prices make it easy for smugglers to ship cheap and substandard products into the country. Dangote Sugar, the largest producer of the sweetener, has

repeatedly blamed smuggling for moderation in earnings, but it is optimistic the tide could change if government carry out aggressive fiscal policies. Nigeria economy has been growing sluggishly as GDP expanded by 2.01 percent in the three months through March from a year earlier; that

compares with 2.4 percent expansion in the fourth quarter. While inflation figure for July fell to 11.08 percent, but the figure still falls below the central bank’s target range of 6 percent and 9 percent. Post-recession, growth in real household consumption peaked at 3 percent in the final quarter of 2017, before falling

to 1 percent in the second quarter of (Q2-18). Unemployment is expected to remain above 23 percent, keeping consumer spending in check, according to a recent report by Cordros Capital. However, the implementation of the N30,000 minimum wage by the federal government is expected to spur consumer spending. Analysts say the Buhari led administration should formulate policies that will help alleviate poverty and propel economic growth. Retailers and manufacturers have to beat the odds before them and prepare for the future because the Nigerian consumer landscape is set for a multitude of shifts. “By 2025, 55 percent of Nigerians will live in cities or towns, and the country will experience a 50 percent urban growth—the fastest urban growth, globally,” said Ged Nooy managing director of Nielsen Nigeria.

LUXURY

Champagne no longer pops as Nigeria’s cash-strapped middle class opts for red wine BUNMI BAILEY

etween 2011-2014, Bimpe Ige, an event planner used to get champagne requests frequently from clients on the type of alcoholic beverage drinks to be served at their events. But from 2014 till date, she noticed that those requests have been reducing with her client’s now preferring red wine. Bimpe’s clients are not the only ones reducing their consumption for champagne commonly referred to as “sparkling wine” but a lot of consumers are now opting for red wine due to its affordability. According to BusinessDay conversation with wine dealers, the champagne market used to boom before as Nigerians used to consume more of it. But now, the import

volumes are coming down based on the shrinking consumers’ wallet. “When there was money in the economy, people were using it as far as to bath with it but now that era has gone. Generally, the wine market is growing while the champagne one is shrinking because their prices are different,” a top wine dealer told BusinessDay. “People prefer red wine than the white one because it is cheaper. We can now afford to buy a cartoon of red wine for between N2, 000-N4, 000 as against the cheapest bottle of champagne for like N25,000,” the source added. Nigeria’s consumption of champagne imported from France dropped by 24 percent in the past 5 years since 2014, according to data compiled by Comité Champagne, a trade associationthat tracks the volume and value of exported wines from France. The data showed that

Nigerians swigged 582,243 bottles in 2018, a 24.2 percent fall from the 768,131 bottles it consumed in 2014. “It is quite an expensive choice,’’ Amaka, a sales representative at ShopRite told BusinessDay “ patronage has been low because not everyone can spend so much for a drink” Despite Nigeria’s exit from

recession in mid-2017 from 2016, it has failed to lead to an improvement in the living condition of Nigerians and also their purchasing power. Consumer experts said that due to the nature of the product being a luxury good, consumers have now shy away from it due to its expensive price and now go for cheaper ones. “This simply explains the reality of the Nigerian consumer market. Pressured consumer pockets mean a cut down on consumption of luxury products. As I always say, Nigerians now buy price and not necessarily quality or favourites,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers said to BusinessDay on phone. Data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consump-

tion expenditure of households has been declining at varying pace since it rose by 1.5 percent in 2015 Also, the country’s per capita income declined to $2,049 in 2018 from $3,268 in 2014, according to the International Monetary Fund (IMF). Champagne has always been associated with luxury and has long been the go-to drink to mark any happy occasion. Be it a promotion, a celebration even a wedding. The champagne brands are at the higher end of consumer lifestyle with the prices of its lowest brand averaging around N25, 000, since they are majorly imported from France. While a bottle of red wine can go as low as N500. “With still red wine being by far the biggest category within the wine, and most economy brands found within this category, growth

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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in overall wine was driven by economy brands in 2018. Still, red wine is generally cheaper than white, and many consumers are introduced to wine through the cheap Baron Romero, Don Simon, and Baron de Valls red wine brands,” a Euromonitor report that analysis consumers tread stated. Nigeria usually imports wine from countries like Spain and South Africa. It is not locally produced in the country as the country does not have favourable weather conditions and good soil for its production. According to health magazines and reports, a moderate amount of red wine has been linked to more health benefits than any other alcoholic beverage such as fighting free radicals, reducing the risk of heart disease and stroke, increasing bone density and reducing cancer and risk of type 2 diabetes.

Thursday 29 August 2019

BUSINESS DAY

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Thursday 29 August 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Sluggish sales see food makers grow mid-year profit by weakest since recession SEGUN ADAMS

ood makers, in the first half of 2019, grew net income by singledigit for the first time since players’ bottomline saw a decline due to the economic downturn of 2016. With sales growth cooling to its lowest in at least four years, food makers’ woes compound in the six-month period as the rate of increase in combined profit of industry players pared 3.67 times to 8.96 percent. The rate of growth is the least since a 69.51 percent cut four years ago, although 2017 surge was owing to a base effect. Amid a challenging operating environment, consumer goods firms are cracking under the weight of weaker household purchasing power while players in the space jostle to keep their market share and spend significantly on advertising. BusinessDay analysis of Nestle, Cadbury, Unilever and Nascon half-year 2019 results show the sector is still struggling on the heels of a sluggish economic recovery. In mid-year 2019, food

makers recorded combined revenue of N217 billion, the highest in more than five years in absolute term but growth was the weakest since 2016. Revenue in H1 grew by 1.5 percent yearon-year. Among four food makers in BusinessDay analysis, Cadbury noted the big-

gest increase as its revenue jumped 10.82 percent to N19.45 billion in the period. The sector’s cost to sales margin dropped to the lowest in the 5-year period with cost accounting for 60.79 percent of sales. Cost to sales margin dropped 2.79 percentage points in mid-year 2019 which is the most it

has declined in the review period. Among players, Nestle was the most cost-efficient food maker recording a 4.88 percent decline. Analysts at Lagos-based Chapel Hill Denham expect the profitability of Nestle in 2019 to be sustained on improving cost efficiency.

Despite the improvements in cost management, gross profit of industry players grew at 9.26 percent, the weakest in 4 years, at least. Food makers posted a combined profit of N31.88 billion as bottom-line faltered. This brought net margin, a measure of how much companies retain as profit

from sales, to 14.69 percent, the most in the review period. Nestle had the highest margin retaining N18.50 from every N100 sales while Nascon with N11.17 per hundred naira sales was second-best. In the period, food players including Nestle, Cadbury, Nascon and Unilever saw cash margin tank to 10.83 percent in the first six months from 32.56 percent posted last year, as cash realized from operations plunged 65 percent to N21.4 percent. “This reflects the fact that consumer goods firms are not efficient in the way they get revenue,” said Yinka Ademuwagun, an analyst at Lagos-based United Capitals. “The companies spend a lot on advertising, marketing, distribution and logistics,” which burns cash, he added. Operating cash margin is cash generated from operating activities as a percentage of sales revenue in a certain period. A higher figure means that a company was able to convert a higher proportion of its sales to cash and a lower figure implies the converse.

DEALS

Standard Bank invests $4m in South Africa’s Nomanini in financial inclusion drive …targets small traders in Nigeria, Angola, 12 others ISRAEL ODUBOLA

tandard Bank Group Limited, Africa’s biggest lender by assets, has invested $4 million for an undisclosed stake in South Africa-based fintech firm, Nomanini, to boost financial inclusion in Africa’s informal economy with focus on 14 African countries including Nigeria, Angola and South Africa. The deal would see the bank providing credit for small traders and informal sector players that lacks ac-

cess to financial services. Nomanini, which was founded in 2010 by Vahid Monadjem, a former global fellow for emerging market development at McKinsey & Company, connects informal sector merchants with distributors through an electronic-wallet and physical device. Merchants can use the same device to offer basic services to their communities. Both parties plan to extend the service to Nigeria, South Africa, Angola, Malawi, Zimbabwe, Namibia,

Ghana, Kenya, Tanzania, eSwatini, Zambia, Mozambique and Lesotho by 2021. Standard Bank’s investment in Nomanini would see the lender using Nomanini’s platform to collect data on the informal retail economy or even data on pre-paid airtime, which would enable the bank build up financial profile of each retailer. This would also allow the bank offer a mobile application that provides access to new lines of business, credit and savings services for millions of informal traders

across the continent. “ Transactional data analysis via the Nomanini’s platform means that micromerchants’ creditworthiness can be more accurately assessed, and as a result, many will become eligble for working capital loans for the first time,” the fintech firm said. The fintech firm through its chief executive officer Vahid Monadjem, says it is open to partnerships with other banks elsewhere, but its partnership with Standard Bank will keep it busy for a very long time.

Nomanini had previously raised about $1 million in funding over three rounds. In 2014, it raised an undisclosed amount in Series-B funding from Seychellesbased Rockbridge Investments Limited after Netherland-based eVentures Africa Fund and angel Investor Esther Dyson in 2012 invested $600, 000 in the company. Nomanini’s latest investment follows their last funding round in 2015, when it raised an undisclosed sum from US-based Goodwell Investment.

The fintech company provides banks, mobile networks and mobile money operators with merchant tools and management platforms to enable convenient access to cash transfers, bill payments and bank transactions for people in the informal markets. The firm owns an enterprise payment platform that optimises transactions in the informal retail sector across Africa; however it is currently being used in South Africa, Kenya, Zambia, Namibia and Mozambique.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Thursday 29 August 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CONGLOMERATE

UACN in agreement with Imperial logistics, increase stake in MDS DAVID IBIDAPO

n the early hours of Tuesday, manufacturers of food products UAC announced its agreement to Imperial logistics move to increase stakes in MDS logistics limited, owning the importance of the transaction is consistent with its strategy to “empowering bestin-class management teams,” UAC report stated. According to the report, imperial logistics propose to increase its holdings in MDS logistics limited to 57 percent from 49 percent by acquiring additional 8 percent shareholding from UAC which is subject to relevant regulatory approvals. Imperial logistic which is an African and Eurozone

logistics provider listed on the Johannesburg stock exchange is said to transfer selected profitable contracts to MDS and pay $2.4 million in cash based on a $40 million equity value for MDS. MDS is a Nigeria integrated logistics service provider. Johan Truter, Chief executive of African regions for Imperial logistics explained the company’s strategy is driven by the need to expand businesses across Africa through working with strong partners. According to him, “we consider Nigeria to be a strategically important market, hence our continued partnership with UAC to grow MDS and expand its service offerings to clients.” However investors on the Nigerian stock exchange (NSE) market remained unmoved by

UAC’s moved but instead behaviour still influenced by prevailing negative market sentiments and weak fundamentals. UAC’s stock price on Tuesday closed at N5, 2.91 percent from previous level on Monday. This worsened the consumer goods firm’s year to date performance to -48.71 percent with investors losing N13.68 billion in stock holding value during the period. Although UAC released an impressive performance in the first half of the year 2019, growing net income significantly by 101 percent to N2.59 billion against N1.29 billion y/y, however, falling upper middle-class earnings in real terms and downward pressure on private sector wages threatens industry players’ performances.

L-R: General Manager, Consumer Marketing, MTN Nigeria, Oluwole Rawa; Senior Manager, Youth and Teens Segment, MTN Nigeria, Omotayo George; chief marketing officer, Rahul De and chief operating officer, MTN Nigeria, Mazen Mroue during MTN mPulse Summer Event tagged ‹Mpulse Planet› where over 5,000 children were given a glimpse of the future, at the Landmark Event Centre, Lagos, on Friday, August 23rd, 2019.

BANKING

Access Bank deepens financial inclusion efforts with agency banking HOPE MOSES-ASHIKE

ccess Bank Plc’s commitmenttowardsfinancial inclusion is gaining impetus, following its partnership with the agents in rolling out agency banking brand/logo in Access Closa. A banking agent is defined as an authorized third party (a retail or postal outlet) contracted by a financial institution to process clients‘transactions. However the alternate delivery channels are limited in the area of human to human engagements which still commands premium in the mind of customers. The gap shall be bridged by agency banking model which seeks to enable branches to focus more on more complex customer obligations. The bank on Tuesday introduced its omni-channel agency banking application which customers can access via mobile application, web, pos, and USSD. It promises to redefine the way clients have been doing before now. Access Bank has over 6.5 million Mobile Apps, over 7.1 cards, over 600 branches, 3,134 Automated Teller Machines (ATMs), 26,065 Point of Sale

(PoS) terminals. “The conversations we have been having over the last couple of months was how we can truly transform our economy,” Roosevelt Ogbonna, group deputy managing director, said. “Financial inclusion is something we want to champion and drive. We have credible partners across the country who are closer to the market, understand their locality better than any bank would do and these we are calling our partners and relying on to be able to drive financial inclusion conversation,” he said. Speaking at the bank’s agency banking forum in Lagos, Ogbonna said, “Today we start a new face of agency relationship. I think it is the one that is truly embedded in partnership. So this is not about Access bank. It is about our agents, celebrating, appreciating them for the work that they have done. We are now about to take to whole different level and we need you to hold us to account and push us to be better. If the platforms are not working, let us have that conversation”. “We are going to grow our customer base and working

with you to grow the customer base, we grow the economy because there is more conversation around financial inclusion,” Ogbonna added. Michael Ogbaa, head agency banking, said there are only 307,000 PoS terminals in Nigeria as at July 2019 of which only 167,000 are active. There are less than 7,000 ATM, about 6,000 branches all over the county. All these channels are grossly inadequate for a country with 99 million adult population. “This is the reason agency banking has become not only important but inevitable in achieving the Federal Government’s financial inclusion strategy,” he said. He said the challenges of the agents which include charges, settlement and reconciliation issues, restrictive agency banking application and the platform, inadequate PoS terminals and support, delay commission payment, insufficient branding and promotional items are being addressed with the launching of the new App as well as the multi-channel application.

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COMPANY RELEASE

L-R: Ambrose Oruche, director, corporate affairs; Mansur Ahmed, president, and Segun Ajayi-Kadri, director-general, all of Manufacturers Association of Nigeria (MAN), at the press conference to announce the 47th annual general meeting of the association in Lagos. Pic by Olawale Amoo

L-R: Yemi Ogunfeyimi, head internal audit and investigation, Bank of Industry (BOI); Abiodun Bello, head credit risk, Providus Bank; Ezekiel Oseni, chief risk officer, Bank of Industry (BOI); Raji Momoh jimoh, treasurer, UBA Bank; Femi Aribaloye, chief risk officer, Polaris Bank, and Taiye Emagha, treasurer, Bank of Industry (BOI), at the Q3 2019 CROs and Treasurers of Banks Forum in Lagos

Resourcery supports GTbank to achieve uptime institute Tier iii certification IFEOMA OKEKE

TBank’s purposebuilt Data Centre, the first in the African financial services industry, is also the first commercial bank in Nigeria to receive the coveted Uptime Institute Tier III Design Certification. GTBank accomplished this with technical and professional support from West Africa’s foremost information technology company, Resourcery Plc. Resourcery worked with the bank,itsarchitects and structural

engineers to design and implemented the technologies within the stand-alone Data Centre. It also worked with the bank to achieve the Uptime Tier III Certification. The certification is based on set criteria covering mechanical, electrical, structuralandsiteelementsthatensure appropriate maintenance and seamless,continuousoperations. The rigorous certification process included production and presentation of hundreds of design documents in special formats, multiple reviews, amendments andvalidationsthatultimatelyled

to the issuance of the respected Tier III Design Award. Uptime Institute is the global data center authority, the most trusted and adopted standard for design, build and operation of data centers, the backbone of the digital economy. The CBN stipulates that all Data Centre infrastructure and facilities for financial institutions shall satisfy the requirements for Uptime Institute Tier III design and construction.

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L-R: Moses Ogbodo, business manager, NB Plc; Omotunde Adenusi, portfolio manager, mainstream lager, NBPlc; Aminah Jagun, brand manager, “33” Export Lager; Emmanuel Oriakhi, marketing director, NB Plc, and Caroline Mbonu, brand support manager, “33” Export Lager, at the unveiling of the limited edition label to celebrate its 40th anniversary.

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Thursday 29 August 2019

BUSINESS DAY

cityfile Woman charged with swindling fiance of N3m

Ibrahim Abudullahi (m) commander, Nigeria Security and Civil Defence Corps (NSCDC), Borno State Command, displaying items recovered from suspected syndicate specialized in forging of school certificates, statement of results, security documents and customized stamps of banks in Borno on Tuesday. NAN

NSCDC rescues 7 kidnap victims in Nasarawa

igeria Security and Civil Defence Corps (NSCDC) has rescued seven persons abducted along Nasarawa Eggon-Akwanga road. The victims were abducted on August 20. Mohammed Fari, the state commandant of the corps told newsmen in Lafia that his officers rescued the victims from the base of a mountain around Wulko village near Akwanga on Monday night. According to him, the victims, comprising five men and two women, were rescued unhurt. Recall that the abductors, said to be in military uniform, had also attacked the convoy of the Nasarawa State deputy governor, Emmanuel Akabe, along Nasarawa

Eggon-Akwanga road on his way to Abuja. Three policemen attached to the convoy and two other civilians were killed in the operation by the same suspected gang that kidnapped the seven persons. According to Fari, the abductors abandoned their victims when they got wind of the presence of NSCDC officials in the area. Yakubu Gumjere, one of the victims narrated their ordeal in the hands of the kidnappers. Gumjere said that he was on his way to Akwanga when the armed men picked him up at a sharp bend popularly called “Many have gone” along Nasarawa Eggon-Akwanga road. He said six other persons were also abducted

by the armed men, who were in militar y uniforms. “We were taken into the bush and ordered to lie with someone guarding us with a gun while they returned to the road. We later heard gunshots, which lasted for a while before the armed men returned and ordered us to start trekking. “They came back with additional riffles, which they claimed were gotten from the police. We trekked from about 7 p.m until about 2 a.m the next day before we got to their hideout in the mountains. It took us about three hours to climb the mountain,” he said. He added that they were fed with garri and crushed maggi seasoning during our eight days stay with them.

Gumjere said that 11 armed men with large cache of ammunition, adding that the abductors quickly relocated them to the inner part of the rock when they heard the sound of a chopper. He explained that the abductors contacted their families and collected ransom from six of them and pardoned the seventh victim. “They told us that they collected over N1 million each from two of us, and various sums from the others and had to pardon one of us whose family was not forthcoming. “ T h e y w e re b r i n g ing us to the base of the mountain around Wulko village when they got information about the presence of the NSCDC and had to abandon us and fled,” Gumjere said.

he police have arraigned a 29-year-old woman, Patience Chukwuka, at the Surulere Chief Magistrate Court in Lagos, for allegedly swindling her fiance of N3 million in a Chukwuka, whose address was not provided, is facing a three-count of conspiracy, obtaining by false pretence and theft. The prosecution counsel, Anthonia Osayande told the court that the defendant committed the offence between Februar y and July, at No 48 Asosuna Street, Ilogbo Road, Ajangbadi, Lagos. Osayande alleged that Chukwuka and others at large, conspired to

fraudulently obtain N3 million over the period from her fiance, Kingsley Ozonna, to “double” the amount. The offence, he added, contravened the provisions of sections 287 (7), 316 and 411 of the Criminal Law of Lagos State, 2015. The chief magistrate, Oluyemisi Adelaja, admitted the defendant to bail in the sum of N500, 000 with two responsible sureties in like sum. She also ordered that t h e s u re t i e s m u s t b e gainfully employed and show evidence of tax payment to the Lagos State government and adjourned the case to September 16 for substantive trial.

Kidnapped bishop’s wife freed in Imo SABY ELEMBA, Owerri

t was all joy for family and friends of Anuli Maduwuike, wife of the bishop of Anglican Diocese, in Ikeduru local government area of Imo State, who regained her freedom on Monday. Maduwuike was kidnapped on Thursday, August 22, 2019 by unknown gunmen. According to a source close to the Diocesan headquarters in Atta Ikeduru, the bishop’s wife was released at 2:00 am, Monday, Confirming the release of the woman, the Imo state police spokesman, Orlando Ikokwu, said that the kidnapped victim was dropped off by her

abductors at Okpanta in Umunneoche local government area of Abia State on Enugu- Port Harcourt Road, several kilometers away from the spot of her kidnap. According to him, the woman was released unhurt and no detail about whether ransom was paid or not as the family did not make comment to that effect. Following the woman’s kidnapped, motorists and other users of the OkigweOwerri Road, the only federal road linking Okigwe town and Owerri, have been calling on both the federal and state governments to repair the failed part of the road to avert more incidents of abduction and molestation of innocent users of the road.

Police DSP, another arraigned for defiling minor in Ebonyi Lawyers want special courts for defilement cases NKECHINYERE OGINYI,

magistrate court sitting in Abakaliki, Ebonyi State capital has arraigned a 65-old Christopher Idam, a retired Deputy Superintendent of Police (DSP, and Okah Chukwu, 52, for unlawfully having canal knowledge of a 10-year Amarachi Mbe in Amasiri, Afikpo north local government area of Ebonyi State. Idam alongside Chukwu

were accused of defiling Amarachi, a primary school pupil, who was sent to hawk cow skin (kanda) at Amakpu village in Afipko North local government area of the state, on June 17, 2019. It was learnt that the mother of the victim, after waiting for several hours and did not see the girl, went in search of her. The mother was said to have met the minor in the retired police officer’s house. It was further gathered that it was not the first time www.businessday.ng

Idam would be having a carnal knowledge of the little girl, as she confessed that the man had previously lured her with money and defiled her in his room. In a charge sheet signed by the investigative police officer, Maureen Iron said that the two accused faced a two-count charge of unlawful sexual intercourse, an offence punishable under section 34 (2) Ebonyi state Child Right Law and Related Matters 2010.

ome lawyers in Lagos have urged state governments across the country to establish more special courts that to effectively handle increasing cases of defilement of minors. They also urged the governments to introduce confiscation of assets of offenders. The lawyers, who in interviews lamented that despite life imprisonment as punishment for offenders, sexual exploitation of children was still on the increase. They advised that

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setting up special courts would considerably improve speedy disposal of such cases just as the confiscation of assets would tremendously deter offenders. According to Daniel Idibia, a Lagos-based lawyer, defilement cases are on the rise because the criminal procedure for trying offenders had suffered a lot of setbacks. He said that parents should be encouraged to report such cases to human rights’ centres and nongovernmental organisa@Businessdayng

tions when such offences occurred. He, however, advised parents to pay more attention to their girl-child and create a bond between them so that they and their daughters would be free to discuss any issues affecting them. “At present, several perpetrators are still roaming the streets freely and committing the same heinous crime due to poor policing and investigation coupled with poor administration of the criminal justice system.

Thursday 29 August 2019

BUSINESS DAY

Thursday 29 August 2019

BUSINESS DAY

ADESOLA ADEDUNTAN

CEOINTERVIEW

MD/CEO of FirstBank of Nigeria Limited

Interview with Private Sector Leaders

‘If there is a bank on ground to help the country address geographical gaps in terms of financial inclusion, it is FirstBank’

Adesola Adeduntan is the Managing Director/Chief Executive Officer of FirstBank of Nigeria Ltd. In this interview with BusinessDay’s Patrick Atuanya & Endurance Okafor, he shares insight on how the commercial bank is driving financial inclusion in Nigeria, especially in the Northern region where exclusion rate is high. With over 31,000 agent network, the lender plans to collaborate with Telcos in providing financial products and services to the 36.6 million excluded Nigerians. Excerpts...

he Central Bank of Nigeria (CBN) is going to license some Telcos to enable them participate in the financial services industry, do you see this disrupting the banking industry and are you looking to partner with any of the Telcos on financial inclusion? The starting point is to highlight that currently, a significant number of citizens are financially excluded in the country. We at FirstBank see this as a challenge broadly from two perspectives; we believe that the financial institution that is able to partner with the Central Bank and the Federal Government to solve this problem would have created significant social impact. We took it upon ourselves as part of our current strategic plan, saying to ourselves that our bank can be the right partner to the CBN and the government of the country by helping them to achieve the right social impact which we all desire. We also see it from a revenue stream; we believe we can exploit that gap (financial exclusion) in a profitable manner. This is possible today because of the advances that have been made in terms of digital technology, with improvement in the payment eco-system. We are of the view that we can exploit this opportunity to promote economic growth. As a bank, we have rolled out our Agent Banking strategy, and I am very happy to inform you today that we have over 31,000 agents spread across the nooks and crannies of this country. Indeed, today we can authoritatively say there is no bank, by any parameter, that comes close to what FirstBank has achieved. Today there is no Local Government Area where you do not have a FirstBank service point; whether it is an ATM, a branch or our agents. Our agents are branded as Firstmonie. What is also very important is: with what we have done, our existing branch infrastructure, spread all over the country are still very operational. Mind you, FirstBank is currently the lender with the largest branch network with over 750 branches. So when you add our over 31,000 agents and 750 branches spread across all the LGAs in Nigeria, FirstBank is indeed a frontrunner at not just providing banking to all Nigerians but importantly improving their respective businesses and developing the Nigerian economy. We also have a very huge ATM network with more than a thousand machines than our closest rival. We are the bank with the largest branch network, and number one in terms of ATM network (depending on how you view it), the same bank has now rolled out 31,000 Agents. No bank comes any distance second! In fact, there is no bank that has up to 10,000; that tells you the gap between us and the next lender. We are in the forefront of assisting the Federal Government and the CBN to achieve their strategic objectives as far as improving financial inclusion is concerned. Recently we celebrated processing over a trillion transac-

tion on our Agent Banking Platform, and it is something we are very proud of. What is also strategic for us is the fact that the product offering of our Agent Banking Network is quite wide. Account opening, transfers, micro pension, payment to government institutions, bill payments are part of the products. What we have done in the last two years which we are extremely proud of is successfully bringing financial services to the door steps of the majority of Nigerians who, hitherto, had been excluded from that space. To link it back to your question on how licensing of Telcos would impact us, and the industry at large, I would say for us we see it from a nationalist perspective. The space is so huge and if the country as a whole would achieve those financial inclusion objectives, there is need for other players to join. The second is that given what we have done, we are the institution to beat in that space. Having said that, because of the kind of capabilities we have amassed over timeand we have been in existence for 125 yearswe are the institution even the Telcos would be excited to partner with. For instance, given our spread all over the country, we are one of the few banks that can offer the end-point services even to the Telcos in terms of cash-in, cash-out, and cash management services and all, because at the end of the day Nigeria is still a largely cash-driven economy. In essence, we see opportunity to collaborate but we are fully equipped to also compete. Like I said, the space is quite big and currently there are a number of on-going conversations for collaboration and that is going to be more of the model this institution would pursue. We like to dimension financial inclusion when we talk about the problem; women are usually more excluded than men and in Nigeria, the northern region suffers exclusion more. How are you tailoring your products to these specific segments of the market so that you address the problems spot-on? The most important point I would make is that by virtue of being FirstBank we are a national bank and a Pan-African Bank operating from a number of African countries. I have mentioned that we are by far the bank with the largest branch network and a significant number of those branches are in the northern part of Nigeria. In fact, if you go through the entire states in the north, a number of our competitors have few branches there. We are the only bank with several branches. The minimum number of branches we have in each of the state is 10. In most of the states we have up to 20, and this speaks volume to what we are doing in the northern part of Nigeria. Currently we have up to 9,000 agents specifically in the northern part of the country and the same thing goes for the statistics of our ATM. If there is that bank on ground to help the country to address the seeming geographical gap in terms of financial inclusion, it is www.businessday.ng

not commit suicide, for example, and that speaks to the significance of the financial inclusion and its importance to us as a nation.

FirstBank because we are already doing a lot. In fact the number of agents we have in the north is higher than what our competitors have there, and we have also seen significant traction. There are only very few Local Government Areas where we are not present in the north and it is on account of security challenges. Having said that, the other important thing we have also done as part of financial inclusion is our USSD platform, *894#. As I speak today, we have about 8 million customers transacting actively on that platform. The *894# is actually the digital banking solution targeted at the bottom of the pyramid, for those without smartphones, and the number of customers actively transacting speaks to customers’ trust with the platform. When you talk about women exclusion, we realized that there is a gap and about 3 years ago we launched FirstGem product line. FirstGem is essentially targeted at women aged 18 years and above. The product suite caters to the needs of women professionals, women into entrepreneurship, it covers a whole lot; whether they are big or small entrepreneurs. On the back of that, because we also real-

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ize part of what needs to happen is equipping the women with a number of tools that are not easily available, included in that product suite, providing advisory services to women, we also do a couple of capacity building which involves tutoring women on how to access finance and the likes. We have done several workshops across the country; we have worked with the Southern Women Forum, Southern States Governors Wives Forum, we have organized workshops in Benue state. We have also created what we called the FirstGem online community to galvanize women to work together. Part of what they learn is how to write a business plan, investment plan, and get coaching on career development, and similar matters. That is what we are doing as far as women are concerned. Again for us, this is at the heart of our financial inclusion program. Profitability is very important but economic growth and development is paramount because we have been part of nation building since 1894. We are doing this not just to make money but for social impact which is around economic growth and development. I, as well as a number of commentators, have mentioned that at the base of some of the social challenges we have as country is social depriva-

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tion. Again, what we have always said as a responsible corporate entity is that corporate institutions like ours who are involved in nation-building must step forward and complement what the government is doing. This is why for us financial inclusion is about giving people access to finance. For instance, an hypothetical farmer can easily take 20,000 profit he or she has made, keep it with a FirstBank and leverage it in a way that can help him or her access more fund for the next farming season. Suddenly farmers start moving from subsistence farming to commercial on the back of finance, because no matter how good an idea is, if there is no access to finance, it would not materialize. That for us is at the heart of this whole thing; how do we reignite the entire working class? By working class, I mean people of working age not just those in paid employment. How do we ensure that everyone contributes to the nation’s Gross Domestic Product? Therein lies our ability as a country to fuel growth, development and address poverty. When we address poverty some of the social issues we face today will go away; a person that sees prospect for prosperity in the future would

What makes you different from other commercial banks in terms of financial inclusion, and as a Pan-African bank are there lessons on financial inclusion from other African nations you are bringing home to your operations in that regard? The first thing that makes First Bank stand out is that we have successfully put financial inclusion as a core part of our business strategy and it goes back to the point earlier made on exploiting the opportunity to create significant social impact in a profitable manner. As earlier mentioned, our Agent Banking network at over 31,000 agent is unparalleled and unrivalled. I mentioned our USSD platform with 8 million subscribers is second to none. I have also mentioned that the volume of transactions we process given our agent network is unparalleled. Today if you speak with both NIBSS and Interswitch they would tell you that the volume of transactions processed through FirstBank easily accounts for 25 percent of the industry volume. The most important thing I also want to highlight is when you look at the key gaps we have mentioned which forms part of our strategy; the geographical gap, the gender gap, FirstBank is leading the pack. This puts us at an edge. It is a known fact that the rate of exclusion is higher in the northern region, but since FirstBank started two years ago, we have put in 9,000 agents and the number of agents in that region is still growing. To address the question on African experience, about a month or two ago we brought banking sector regulators, Telco regulators and other operators in all the markets we operate; to Nigeria where we showcased the successes we have recorded as a country. We also brought speakers from critical payment infrastructure players: NIBSS, UPSL, Interswitch, CBN, everybody was there to share experience. The next level which we are now at is to work with those countries’ regulators to shape policy and their own strategy around how they can replicate what we have done successfully in Nigeria. My message to them at that forum and subsequently has been we now know how it has worked in Nigeria and do not necessarily have to go through the same gestation period to make it happen in the Democratic Republic of Congo (DRC), for example. We have one of the biggest banks in DRC, which is FBNBank DRC. The country is a very interesting one. DRC has a landmass equivalent to two and a half times of Nigeria but with a population of about 80 million people, so the population density is low. The only way they can make progress in a country like that is through financial inclusion but it has to be driven by digital technology. Because we continually reinvent ourselves having moved from an analog bricks and mortar banking institution to a digitally led enterprise we are better positioned to assist DRC in this regard. www.businessday.ng

We have been engaging with DRC, in fact, the President sent one of his Special Advisers to attend that particular forum, and they have been engaging with us on ways to partner on the solutions. That excites us a lot because like I said, FirstBank is part of the critical success story of Africa. There are not that many African organizations that have existed for 125 unbroken years. It gives us joy when we play pivotal role in national development and economic growth. We are quite excited to use the knowledge we acquired in Nigeria to assist other countries, some of which we have on-going conversations about the matter. Just imagine the impact we can have on a country like DRC, it gives me joy. When you then bring the recently signed AfCTA by President Buhari into the conversation you would begin to understand why we as Africans have to work collectively because where we are headed, ultimately, is a borderless continent and if you don’t begin to help countries deal with these issues what you have at the end of the day is the larger population migrating towards better-off countries. From FirstBank’s report as at the first-half of this year, you recorded $490 million through your agent network transactions and obviously there are over 36 million Nigerians still excluded pointing to the huge opportunity in that space. We have also noticed that credit has been an incentive for people to open bank accounts. Do you have a tailored product in your portfolio that gives access to credit to lure more Nigerians to the inclusion net? We currently have 31,000 agents. The products on offer varies from cash deposit to micro lending, to micro pension and the likes. So part of the products we provide at our agent point is microcredit.

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For us, the way we look at it is quite significantly. Imagine a hypothetical woman frying beans cake (Akara), ordinary credit of N50,000 can make a difference. I had earlier on used the example of a farmer. The kind of credit you can avail can be small but are very impactful and we are scaling this up gradually as we build our algorithm. It is important to remember that we are not a social organization and we have to loan out depositors fund in a safe way, so we have an algorithm that determines who we can lend to and how much. What we discover however is that the more we lend the more robust our data base becomes to enable us improve on the predictability of our algorithm. What really has been the challenges in the financial inclusion space? It has been over 7 years since the CBN in partnership with some industry stakeholders launched the National Financial Inclusion Strategy, still we have about 16.8 percent gap on the target. What has been the problem? The biggest challenge was the state of the payment infrastructure, but leveraging digital technology and telecommunication, I think that is being addressed and we have seen significant improvement. Because you see for the financially excluded, a critical consideration is the cost to serve. If to withdraw money alone, the service provider is going to take more than half of the little money the service users have, what then is the incentive? So part of what happened with improvement in technology and telecommunications in the last three to four years is that we are lowering the cost to serve. I use the word deliberately because when you start this kind of thing I have recom-

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>>>

Thursday 29 August 2019

BUSINESS DAY

CEOINTERVIEW Interview with Private Sector Leaders

‘If there is a bank on ground to help the country address geographical... of Kindness including orphanage homes, less privileged homes and IDPs; empowered 500 widows in partnership with NGOs including the International Women Society. More importantly, because we operate from 8 different countries, the CR&S week which has held over the last 3 years has been institutionalized, taking place at the same time across all our locations: DRC, Senegal, Sierra Leone, and so on. This took place simultaneously in different countries which has really been impactful. Our colleagues have been very excited about it and are eager to give back to society. Following the mudslide in Sierra Leone in 2017, the victims were supported with $100,000 from staff and the Bank under the SPARK initiative. We are using the entire might of FirstBank and galvanizing our very large workforce to touch lives and make impact across Africa and that for us is what we stand for. Social impact and economic development are very important.

<<< mended that the pricing should not be regulated because there must be an incentive for people to invest in. I have said it very proudly that we have over 31,000 agents but there is a huge investment behind that network so if you overregulate the pricing of those services you discourage further investment. What typically would happen is that as service providers move into that space, similar to what we experienced with the GSM market, competition begins to reset price. But I believe the pricing should be reasonable otherwise people will shy away from the services offered. You recently concluded your SME week, what finance and other tools have you made available to SMEs to help them run their businesses more efficiently? We have always been the leading bank on SME financing. In fact, when I joined the group about 5 years ago one of the attractions for me was joining a financial institution keen on helping the country grow the small and medium businesses. When you look at industrialization framework generally, you can bring in big factories, but the engine growth of most economies is the SMEs-how well they are growing. As part of our SME week, we gave all our SME customers access to the SME portal. On the portal we have business diagnosis test that assists this business owners assess the health of their business and provide practical solutions in terms of areas they need to improve on. We also made available to them Microsoft productivity tools; we have a partnership with Microsoft that enable our SME customers have access to office solutions. Again, it is about automation of their businesses. We also provided them access to accounting services especially basic book keeping and tax remittances. But one important thing to us at FirstBank is that we expose them to our product suites specially for SMEs around LPO financing, invoice discounting facilities, term loans and so on. If there is any segment of the economy where we are also very engaged, I would say it is the SME space. The SME week based on our post mortem review was a very big success and I am very excited about what we are doing there and the prospect it holds for our institution going forward. What is the role of FirstBank in helping to meet the UN’s 2030 Sustainable Development Goals and how is the Bank looking to partner with the government to push this financial inclusion target across the country? FirstBank’s approach to driving

the SDGs is in two-fold: alignment with Bank’s business strategy and driving internal engagement, as well as externally through sustainable partnerships with our stakeholders. While the Bank works towards promoting all 17 SDGs, the focus is on 5 of the goals because they are material to us. These goals are: End Hunger, Good Health & Wellbeing, Quality Education, Gender Equality and Decent Work and Economic Growth. It goes back to what I said, if you look back to the SDGs, financial inclusion is at the heart of those things. Financial inclusion has a fundamental role to play in achieving the UN Sustainable Development Goals (SDGs) especially the first 10 of 17 SDGs We are actively working with the federal government, state governments and other stakeholders. One of the key focus areas of the SDGs is Quality Education. At FirstBank, we have been quite active in that space. Currently, FirstBank has been providing infrastructure in a number of our universities and secondary and primary schools. We have supported infrastructure projects in over 13 universities across the country and 3 secondary schools. We have a number of professorial Chairs under our Educational Endowment programme. Specifically, with the Endowment programme, we have empowered 10 universities across the 6 geo-political zones in Nigeria. The Fund is worth over 600 million. In addition, we have under Future First – our financial literacy, entrepreneurship and career initiative for secondary schools, we have supported over 40 secondary schools; 80,000 students and our staff have put in over 38,000 staff

volunteering hours as part of driving this initiative. So that is how we are contributing to driving Quality Education which is a key component of the SDGs. We have also spoken about agriculture. Again, one of the development goals is to end hunger and achieve food security. We are a key lender to agriculture today, working with the CBN on the Anchor Borrowers’ program (ABP). But more importantly, over the last 3 years we have taken our promotion of agric to the next level; we hold an annual agric expo where we bring in policy influencers notably; the government and key players, critical in the entire agric value chain to showcase what is possible. The 2019 edition of that agric expo is scheduled to take place this week. Gender equality is another part of the development goals. If you look at us today as part of what we have especially in our area of influence, the number of women working with us today as a proportion of our workforce has improved to 39 percent. We have also, in the last one year, launched our First Women Network which gives us the opportunity to address specific issues relating to the women in a very structured manner. These include; career mentoring, coaching, networking opportunities and the likes. Part of what we have also done around gender equality is the FirstGem product we have already discussed. Our female basketball team has been the champion in that space for a long time and we are a key contributor to the national female basketball team. On collaboration with various

state governments we have been active on that, I mentioned the fact we worked with the Southern Governors wives, and we have been to Benue and Edo. Your bank is the first in the financial services industry to dedicate a week to promoting social impact has been held consecutively for 3 years. What is the basis for this and how impactful has it been? Part of the reason we have existed for 125 years is because of our core focus on nation-building as well as economic growth and development. When you have that kind of dual focus, giving something back to society becomes second nature. The only thing we have done differently since I became Chief Executive Officer of the Bank is that we have made our CR&S to be more focused, structured and we now have a week fully dedicated to CR&S across all our network globally. Our key initiative during the week is called SPARK (Start Performing Acts of Random Kindness). SPARK is an initiative that focuses on creating and reinforcing a consciousness or mindset of showing compassion, empathy; as well as giving to others aimed at inspiring people to make a difference. The theme of the 2019 CR&S week was “Ripples of Kindness, Putting You First” where we touched the lives of many people. We visited over 25 schools and impacted the lives of over 6,000 secondary school students; over 10,000 less privileged. I mentioned the fact that cumulatively we donated close to 40,000 staff volunteering hours and over 50 charities benefitted from our SPARK Ripples

Going forward are there other financial inclusion products you will be rolling out and are there measures you are outing in place to manage challenge in that space? In addition, from your point at the top of the banking space, are there things you would like to see differently either from the regulatory side or any other, to help drive financial inclusion forward? The most important thing to highlight is that we have a CBN governor, Mr. Godwin Emefiele that is focused on development. If you look at the 5-year agenda that the governor unveiled, you would understand the mindset of the governor, who is the leader of the financial sector. The plan is about financial inclusion, economic growth and development and we all need to align public and private resources at the disposal of the country to push that agenda. If we pursue the CBN governor’s agenda aggressively, we are going to have a much better country. In terms of products, we continue to improve on our algorithm. I look forward to the day when micro lending would become a sizable portion of the loan book not just for FirstBank but for the entire industry. If we provide finance to our people, I believe the multiplier effect on the economy would be significant. I also want us to remember we successfully linked it to poverty and helping the country address security challenges. I am fully aligned with the 5-year thrust of the CBN governor which if pursued would result in a much better Nigeria. We need to play our part, as do others in the public and private sector, to give our countrymen hope by doing the right things and placing our country first.

Thursday 29 August 2019

BUSINESS DAY

BUSINESS TRAVEL PrimePort boss reels out modalities to encourage cargo activities in airports Stories by IFEOMA OKEKE

tunba Femi Adewunmi, founder and managing director of PrimePort Logistics, a Port Harcourt based Logistics Company specialising in clearing, forwarding and haulage has called on the federal government to ensure all its awarded contracts at the South-south region be processed at the airports and ports in the region in a bid to encourage traffic and increase cargo activities in the region. Adewunmi who condemned the act of some oil companies who generate cargo in South-South but bring them into Lagos for processing say this is depleting the revenues that should come to the south-South region and at the same time, making the roads bad by moving trucks with heavy commodities all the way to Lagos. According to him, Port Harcourt, Lagos, Abuja, Kano and Maiduguri are supposed to be cargo hubs; sadly only Lagos and Abuja are being fully utilised. He commended Turkish Airline for commencing flight into Port Harcourt and assured that the move

Otunba Femi Adewunmi

will attract a lot of businesses into Port Harcourt and its surrounding States and cities such as Owerri, Enugu, Okwa, Calabar, Abia, Aba, Warri and Bayelsa.

“Turkish Airline has made a very smart move and I think their move to Port Harcourt is going to be very successful. There has always been a gap in the South-South region. Most

of the current airlines that come to Port Harcourt, such as Air France and Lufthansa, focused on the business market, such as the oil and gas market. So, there is a gap in the lower middle end of the market, such as the people that go on holidays, students and traders. “These people have been neglected, so they tend to travel to Lagos to board an Ethiopian Airlines, Turkish Airlines, Etihad flights, amongst others. This often discourages people, as people who would have travelled frequently will think about the distance of going to Lagos and the additional cost of flights and other logistics. These places are between three to four hours to Port Harcourt. Hopefully, this will draw all the other type of markets, other than oil and gas into Port Harcourt and increase business activities in that area,” he said. The PrimePort MD assured that the operations of Turkish Airline will also bring in some other value airlines, so they can also tap into the opportunities in Port Harcourt. “Once there are more people coming into Port Harcourt, there will be more opportunity and businesses. Everybody in this region will benefit and the cost of logistics and importation will be relatively

cheap because you can ship closer to the place of use, rather than take it to Lagos and start trucking it for 24 hours to other states. It is more environmentally friendly for Port Harcourt to be that hub. “In terms of cargo, it is going to create the demand. There are lots of opportunities in the South-South that are untapped. We in the clearing, forwarding and importation business and we hope that this will start gaining more traction. It will increase options for Port Harcourt. Before, we were restricted to two or three cargo airlines, now we have more. Cargo can be included in the passenger flight,” Adewunmi added. Speaking on PrimePort and how it facilitates exports, he said the company is a service provider, providing services to exporters and importers and ensuring logistics flow and the cost of providing logistics services in such a way that it induces exports. “Fifty percent of our earnings in PrimePort Logistics are in direct inflow. We partner with freight forwarders to provide export services to them. By providing these services to foreign partners, we are been paid in foreign exchange and that money is coming back into Nigeria,” the cargo expert said.

NIS issues 2,194 Visas on Arrival in July at Lagos airport

he Nigerian Immigrations Service (NIS) has issued out 2,194 Visas on Arrival during the month of July 2019 at the Murtala Muhammed International Airport, (MMIA). BusinessDay’s checks show that this figure represents an increase of over 30 percent visas on arrival the service issues out on the average every month. The visa on arrival which is targeted at business people and investors has seen applicants apply online and get responses in less than 48 hours. A source close to the service told BuisnessDay that the service was able to record this huge milestone as a result of the service’s dedication to training and retraining of its staff, robust digital facilities and it low tolerance for corruption. “Abdullahi Musta Usman, the new Comptroller of Immigration, Nigeria Immigration Service, MMIA has a goal to consistently train and retrain its staff which he has actualized by establishing a training room at the e-arrival point at the airport, which accommodates about 20 people at a time. The Comptroller insists that immigration officers be trained and retrained consistently because their

job is dynamic. “We have a SAVICOM centre at the Lagos airport where passengers who have issues come to complain and we help them resolve the issues. Anti-corruption desk has also been inaugurated at the airport in a bid to ensure service delivery and ease of doing business,” the source said. The source hinted that visa on arrival has become very flexible as applicants can sit down in the comfort of their homes and apply and approval will be sent within a time-frame of 48 hours, adding that there is no third party interference in the process. On how the service hope to tackle overstay of visitors, the source said the service do not have control over the stay of visitors in Nigeria but the service issues visitors business visas that last for 30 days and if visitors want to extend their stay over business reasons, they can go to the nearest immigration office and apply for extension. The source also assured that mechanisms have been put in place to avoid human trafficking at the airport and by next year, technology will be upgraded at the Lagos airport to ease travel experience. www.businessday.ng

Ethiopian Airlines launches cargo flights to Bangkok, Hanoi

thiopian Cargo & Logistics Services has commenced once weekly freighter service to Bangkok, Thailand and Hanoi, Vietnam. The airline in a statement said that the new services began on August 16, 2019. With the commencement of the flight, Ethiopian Airlines became the first carrier in Africa to operate cargo flights from Bangkok. Tewolde GabreMariam, the Ethiopian Group Chief Executive Officer (GCEO), while commenting on the new service, said that the carrier’s new cargo service to Bangkok and Hanoi would supplement the daily belly hold cargo capacity on passenger aircraft.

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Besides, he said it would also create better connectivity for cargo transport not just between Ethiopia and Thailand and Vietnam, but also to over 60 destinations the airline serves in Africa. He said: “The commencement of these flights makes Ethiopian the first African carrier to operate cargo flights from Bangkok, and will also create better opportunity for Thai and Vietnamese exporters to have a one-stop access to the 60 plus African destinations Ethiopian serves. The freighter flight will also link Bangkok and Hanoi to Europe, Asia, Middle East and the Americas.” Operating next generation freighters and with Africa’s largest @Businessdayng

trans-shipment terminal, Ethiopian Cargo and Logistics Services facilitates the export of perishables, garments, mining products, and the import of high value industrial products and inputs, pharmaceuticals, among others across its global network. By 2025, Ethiopian Cargo & Logistics Services envisions becoming a full-fledged profit center of Ethiopian Airlines Group with annual revenue of $2 billion, 19 dedicated aircraft, annual tonnage of 820,000, and 57 international destinations. Eight years into the strategic road map of the aviation group, Vision 2025, Ethiopian Cargo has reached 57 international destinations with cargo and logistics services.

Thursday 29 August 2019

BUSINESS DAY

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Thursday 29 August 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (16– 08–19)

31,924.51 26,925.29

N13.121 trillion

2,282.48

Week close (23– 08–19)

27,800.17

N13.524 trillion

2,351.62

Year Open

Percentage change (WoW) Percentage change (YTD)

3.25 -11.55

2,241.37

-1.38 7.13

The NSE-Main Board

1,456.29 1,059.60 1,096.85

3.52 -23.82

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

778.95

1,060.38 1,112.65

304.69

107.11

509.27

218.75

1,706.52

1,074.44

918.83

332.70

105.63

529.47

222.34

1,741.24

1,087.44

951.55

778.95

0.00 -1.87

4.93 -21.49

-1.38 -16.48

9.19 -16.60

3.97 -29.29

1.64 -26.43

2.03 -22.06

1.21

3.56

-12.15

-21.19

NSE renews move to delist Anino, Evans Medical, NigGerman, Roads ….for non-compliance with post listing rules Iheanyi Nwachukwu

he National Council of the Nigerian Stock Exchange (NSE) has approved for the Exchange to proceed with the delisting of four companies for non-compliance with post listing requirements. Already, the NSE has commenced the process to delist the identified companies as noted in a public notice dated August 21. The affected companies are Evans Medical Plc, Anino International Plc, Nigerian German Chemicals Plc, and Roads Nigeria Plc. The NSE said it had engaged Anino International Plc with a view to returning it into full compliance t h e E xcha ng e’s p o st l i st i ng obligations. “When these efforts did not yield results, the Exchange sent out delisting notices to Anino International Plc in 2016,” according to the NSE. It noted that following the said notification, “Anino International Plc engaged the Exchange indicating that it will cure its deficiencies and return to compliance. Thus, the Exchange stayed action in respect of the delisting and placed Anino on its Delisting Watch in order to give it a period of time to cure the deficiencies. However, Anino failed

to cure these deficiencies”. Anino International Plc has now been given one month from the August 21 notice to cure its compliance deficiencies, which was earlier communicated to it, failing which it will be delisted from the Exchange’s daily official list. Anino International Plc is a publicly quoted Nigerian enterprise with interest in the manufacturing of plastic items and ornaments for

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personal or industrial purposes, assembling and sales of automobiles, sales of electrical and electronics, civil engineering contracting and food and beverages. The company share price on the Exchange is 25kobo per share. It was listed on January 2, 1990 according to NSE. Also, Evans Medical Plc, Nigerian German Chemicals Plc and Roads Nigeria Plc were granted three months each to cure their compliance

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deficiencies, failing which the next steps of the delisting process will be activated. The Exchange said it engaged these three companies with a view to return them into full compliance with the post-listing requirements. “When these efforts did not yield results, the Exchange issued final delisting notices to Evans Medical Plc (under receivership) on January 18, 2016, and to Roads Nigeria Plc and

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Nigerian German Chemicals Plc on July 16, 2018. The Exchange notified them of its intention to delist them from the Daily Official List due to their non-compliance with provisions of the post listing rules of the Exchange and granted the companies an additional period of one month to cure their compliance deficiencies failing which they would be delisted from the Daily Official List,” the NSE stated. According to the Exchange, “These entities also did not take appropriate steps to regularize their listing status”. Evans Medical Plc is a Nigeriabased company, which manufactures pharmaceutical products. Its share price is at 50kobo per share. It was listed on July 23, 1979. Nigerian German Chemicals Plc is one of Nigeria’s premier manufacturers and distributors of pharmaceutical, consumer products and Oil & Gas field chemicals. Born out of Hoechst Nigeria, Nigerian German Chemicals Plc has a 40 year pedigree in manufacturing. The company became officially quoted on the stock exchange in 1979. Its share price still stands at N3.62. Meanwhile, Roads Nigeria Plc provides infrastructure construction services. The Company offers civil engineering works and constructs roads, bridges, airfields, and dams. Its share price stood at N6.6kobo as at Monday August 26.

Thursday 29 August 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Cabinet formation gives equity market a boost

n the prior week, the equity market which started on a bearish footing closed the week bullish. This was as investors reacted positively to the President’s portfolio allocation to the newly swornin ministers. As a result, equities jumped 3.2percent week-on-week (w/w), as NSEASI rebounded above the 27,000points support level, to close the week at 27,800.2 points. Als o, year-to-date (YtD) return improved to -11.6percent, with market capitalization adding N403.2billion in value, to close at N13.5trillion. Activity levels improved, as average value and volume traded rose 12percent and 90percent w/w respectively. Performance across the major sectors was bullish, save for the Insurance sector, which closed the week in the green territory. The

CONTINSURE (-10.3percent). In the Telcos space, interest in MTNN (+2.2percent) supported the sector while Airtel Africa remain unchanged (0.0percent) Investors sentiment was above the waters, as market breadth improved to 3.0x (previously 0.5x); with 39 stocks advancing, while 13 stocks declined. This week, more publication of H1-19 earnings by tier 1 banks should drive performance. More specifically, the formation of the cabinet is positive for direction but excitement may fizzle out as time goes on. Money Market : Banks daily borrowings at SLF window at 29 months high The overall money market liquidity level was largely tight in the prior week, amid a sparse inflow of funds as foreign investors continued to stay on the sidelines. At the start of the week, the advent of wholesale FX funding sales by the CBN added further

Banking index (+9.2percent) l e d t h e g a i n e r s c a m p, owing to price appreciation i n E T I ( + 3 3 . 3 p e rc e n t ) , Fidelity Bank (+20percent), Zenith Bank (+12percent), Access Bank (+9.9percent), FBNH (+8.7percent), UBA ( + 8 . 1 p e rc e n t ) , G T B a n k (+7.3percent), and Stanbic (+6.1percent). This was amid the impressive H1-19 financial result posted by GTBank and Zenith Bank with both companies declaring an interim dividend of N0.3/share. The Consumer Goods (+4percent), Oil and Gas (+1.6percent) and Industrial Goods (+1.1percent) indexes followed suit, buoyed by UACN (+18.9percent), OAND O (+20.9percent) and BERGER (+9.5). On the flip side, the Insurance sector (-1.4percent) index stayed bearish on in

pressure on the already tight liquidity level, a move which saw average interbank rates touch its highest since midApril 2019. Additionally, the high rates at the interbank market forced the banks to turn actively to CBN’s Standing Lending Facility (SLF) window for overnight funding. Notably, total daily borrowings by banks at the SLF window spiked to its highest since Apr-17 and stayed above N400billion, totaling N1.8trillion as on Thursday. Also, following OMO maturity of about N92.3bn on Thursday, the CBN floated an OMO auction of N110.0bn which eventually resulted in a “No Sale” as investors craved for higher yields amid tight liquidity. In all, average interbank rates (OBB and O/N) inched higher from 18.3percent to close the week

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Economy & markets

at 18.8percent, comparing unfavourably to SLF rate of 15.5percent. Expectedly, these sentiments reflected on treasury bills yields at the secondary market as average T-bills yields spiked by 129bps w/w to settle at 15.1percent.

Rising number of companies with locked-in shares calls for worries

This was amid reports that market players were rediscounting bills and are perhaps re-positioning for a higher yield environment. This week, we expect to see a bullish sentiment as inflows from OMO (N393.3billion) and Treasury Bills (N208.6billion) maturities as well as retail FX refunds and a probable FAAC payments to States & local government are expected to buoy the overall liquidity conditions in the system. Though the inflows from NTB and retail FX refunds are expected to be mopped up by the CBN, inflows from OMO maturity and probable FAAC payment might also be mopped by the CBN via OMO sales, capping the strength of the bullish sentiments in the secondary market. Bond Market: Poor outing at the Aug-19 bond auction The tight liquidity within the system amid the continued absence of foreign investors also filtered into the long-dated bond market. The DMO’s Aug-19 Bond auction saw a lukewarm outing as demand was underwhelming across tenors. The total subscription (N95.1billion) that turned up at the auction was only 65.6percent of the total N145.0bn the FG sought to raise. A deep dive across tenors showed that the re-opened 5-year bond saw the least demand with a bid-tocover ratio of 0.3x while interest in 10-year and 30-year bonds was marginally higher with bidto-cover ratios of 0.8x and 0.9x respectively. Notably, on average, bid rates demanded by buyers ranged between 13.2percent and 15.7percent across tenors, while the DMO marginal rates averaged 14.4percent across tenors (5-year: 14.3percent, 10year: 14.4percent and 30-year: 14.6percent). This perhaps explains t h e re a s o n b e h i n d t h e paltry allotment outcomes (N15billion) which is just 10percent of the initially offered amount.

he number of listed companies on the Nigerian Stock Exchange (NSE) with shortage of their equities in hands of investing public (free float) has increased from just 15 in August 2018 to 24 as at August 23. This increase, no doubt should be a source of concern to the Nigerian Bourse that requires them to maintain a minimum free float for the set standards under which they are listed. Free float represents the portion of shares of a company that are in the hands of public investors as opposed to lockedin stocks held by the promoters, company officers and controlling-interest investors. In order to ensure that there is an orderly and liquid market for their securities, the free float requirement for companies on the Alternative Securities Market (ASEM) Board is issued and fully paid up shares or the value of its free float is equal to or above N40 billion on the date the Exchange receives the Issuer’s application to list. Currently, these companies are deficient in their free float are Prestige Assurance

Iheanyi Nwachukwu

Oscar Onyema, CEO NSE

Plc (18.95percent), Lafarge Africa Plc (16.13percent), Cement Company of Northern Nigeria Plc (2.97percent), Ellah Lakes Plc (13.83percent), Omoluabi Mortgage Bank Plc (1.96percent), and Skyway Aviation Handling Company Plc (19.39percent). Others are Medview Airline Plc (14.16percent), Notore Chemical Industries Plc (10.02percent), Austin Laz & Company Plc (19.36 percent), Union Dicon Salt Plc (18percent), Aluminium Extrusion Plc (17.99percent), CWG Plc (15.97percent), Global Spectrum Energy Services Plc (7.01percent), and Portland

Paints & Products Nigeria Plc (14.57percent). For now, the maximum compliance time NSE has given to any of them on the list to comply is October 2020 which is for A.G. Leventis Plc. Disappointingly, while some of them have future compliance due dates, others did not meet the dates earlier given to them by the NSE to comply. Though, the Exchange said it doesn’t have answers for some that decided to remain the way they are, it further noted that it is currently engaging them. For other that have their compliance due date expired, the NSE said that some of them have requested for additional extension, “which will be presented to the Council for approval.” The long list free float deficient companies also includes Union Bank of Nigeria Plc (10.39percent), Transcorp Hotels Plc (6percent), The Tourist Company of Nigeria Plc (1.75percent), Infinity Trust Mortgage Plc (3.50percent), eTranzact International Plc (17.77percent), Ekocorp Plc (12.64percent), Champion Breweries Plc (17.17percent), Caverton Offshore Support Group Plc. (17.30percent), Capital Hotel Plc (2.99percent), and A.G. Leventis Plc (11.80percent).

Local investors take shine off foreigners in 7 months equities deals

ut of the record N1.201trillion worth of Nigerian equities exchanged on the Nigerian Bourse in seven months period ended July 31 2019, domestic investors were responsible for N670.45billion or 53.44percent of the total. Out of the total equities trade by domestic investors in the review period, the retail investors accounted for N355.15billion while domestic institutional investors traded stocks value at N315.29billion in the seven months period. The foreign portfolio investors (FPIs) traded just N530.57billion or 46.56percent of the total value of traded equities in the review period. Foreign inflow stood at N243.35billion while outflow was N287.22billion.

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ul purpose.” Robertson-led team went further saying that, “We believe Nigeria

The highlights of performance of the market over the last decade show that over a 12 year period, domestic transactions decreased by 66.68percent from N3.556trillion in 2007 to N1.185trillion in 2018 whilst foreign transactions increased by 97.88percent, from N616million to N1.219trillion over the same period. In 2018, total foreign transactions accounted for about 51percent of the total transactions carried out in that year while domestic transactions accounted for about 49percent of the total transactions in the same period. Recall that in seven months to July 31, 2019, investors traded about N1.201trillion worth of Nigerian equities. This represents a huge decline of about 31percent year-on-year (YoY) when @Businessdayng

compared with N1.743trillion recorded in the corresponding seven months period of 2018. In January 2019, equity traders exchanged stocks valued at N122.08billion, February (N188.08billion), March (N110.11billion), Ap r i l ( N 1 4 8 . 9 1 b i l l i o n ) , May (N221.13billion), June (N297.25billion), and July (N113.47billion). Looking at the monthon-month (MoM) report, it shows that total transactions at the nation’s bourse in July 2019 decreased significantly by 61.82percent, from N297.25billion in June 2019 to N113.47billion in July 2019. The performance in the month of July when compared to the performance in July 2018 revealed that total transactions also decreased by 22.31percent.

Thursday 29 August 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Analysis

NASD OTC market: Increased awareness yields results …unlisted securities trading platform cost drops remarkably Iheanyi Nwachukwu

he stakeholders in Nigeria’s Over-TheCounter (OTC) market for Unlisted Securities remain optimistic that its increased awareness and support of the Securities and Exchange Commission (SEC) will in no distant time yield the much awaited results. Olutola Mobolurin, Chairman, Board of Directors of NASD Plc who presided the 6th Annual General Meeting of the Company last month noted that the SEC is supporting the market by providing the regulatory framework required to grow the fledgling OTC space. The NASD Plc optimism over a brighter future comes despite that the year 2019 is seen holding its own challenges not just for the capital market but the country. The company has started the 2019 financial year with strong momentum and clarity on what its needs to achieve. In the capital markets, capital outflows in first-quarter (Q1) through to third-quarter (Q3) 2018 rocked the equities market, due to rising U.S yields and uncertainty regarding the elections. However, strong domestic participation in the OTC market ensured a 22.45percent return of the NASD in 2018, he noted further. NASD had embarked on the reconfiguration of its proprietary Bilateral Interdealer Trading System (BITS) platform. Following the BITS platform which went live in April 2018, the transition has resulted in a significant reduction of the Company’s trading platform cost from N63million in 2017 to N1.4 million in 2018. NASD formally launched its information repository, the NASD Enterprise Portal (NASDeP) in April 2018 at an event which was well attended by various stakeholders including representatives of the Securities and Exchange Commission and has received significant interest till date. In November 2018, NASD obtained the approval of the Securities and Exchange Commission of its Trade Guarantee Fund Rules and Penalties for Breaches of the Rules and Regulations of the OTC Market. It is expected that these Rules will further strengthen the Market and increase investors’ confidence. “In many ways, 2018 was a watershed year for your company”, Bola Ajomale, Chief Executive

Bola Ajomale, CEO, NASD Plc

Officer/Managing Director, NASD Plc told shareholders, adding that “By increasing our deployment of locally developed technology, we have also been able to significantly reduce our foreign exchange fluctuation risk while supporting the inevitable growth of Nigeria’s FinTech industry.” He noted that activity in the review year was dominated by another driver – FinTech. “NASD embarked on a deliberate strategy of deploying a very focused investment in technology to achieve disproportionate fiscal and service delivery returns”. “NASD OTC market currently only trades public securities that are registered with the Securities and Exchange Commission (SEC). We note however that some public securities are not registered at the SEC and therefore cannot trade on the OTC market. We shall continue to work with Corporate Affairs Commission (CAC) in identifying such Public companies and fully support the efforts of the Securities and Exchange Commission in ensuring all issuers of such securities comply with the law”, the CEO further said. At the start of 2018 NASD successfully migrated its trading platform from the leased Nasdaq OMX platform to its proprietary Bilateral Inter-dealer Trading System (BITS). “This fit for scale (and purpose) www.businessday.ng

platform provided your company with increased ability to meet client demands and data integrity. Being a fully clouded system, we have empowered traders with access the OTC market from any smart device without geographical restriction. We released a second version of BITS later in 2018 that included enhancements and fixes requested by Participants”, Ajomale stated. “The trading platform also gave NASD full determination over price making and market admin-

“

By increasing our deployment of locally developed technology, we have also been able to significantly reduce our foreign exchange fluctuation risk while supporting the inevitable growth of Nigeria’s FinTech industry

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istration. For example; we expeditiously improved price discovery by changing from a last trade closing price mechanism to a more appropriate Value Weighted Average Pricing [VWAP] module. As NASD continues to evolve to a more accessible and liquid market, we will continue deploying relevant and focused technology to meet ever evolving market demands,” he added. At the meeting, the shareholders received and adopted the Annual Report and Financial Statements for the year ended December 31, 2018. Financial Performance The company earned N134.4 million as trading commission in the year under review in comparison to N23.1 million achieved in the preceding year, representing 481.82percent increase over the preceding year’s performance. This was due to increase in activities carried out by the respective Participating Institutions. From membership fees, the company earned N24.9 million and N57.7 million from interest on investments representing 1.6percent increase and 19percent decrease respectively over the previous year’s revenue of N24.5million and N71.2 million. The marginal increase in membership fees for 2018 was largely due to nonrenewal of registration by some Participating Institutions and non-listing of new companies, while the decrease in interest income was due to the general fall of interest for a significant period of the year. NASD direct trading expenses in the year under review stood at N1.4 million in comparison with N63 million in the preceding year, representing a decrease of 97.8percent. This was as a result of the company’s transition from the trading platform leased from the Nigerian Stock Exchange to an alternative trading platform which has enabled the NASD align trading costs with the growth of activities in the market as promised last year. Trade Activity review Trading activity during the review year increased as the number of trades executed on the NASD OTC Market increased by 5.17percent over the preceding period. The Market witnessed only a 5.40percent increased the number of admitted securities, 7.5percent increase in Authorised Traders and 1.55percent increase in Participating Institutions (PIs). NASD admitted 2 new securities; to close @Businessdayng

with 39 securities and traded bonds worth N57.87 billion. The volume of shares traded during the year increased by 1867percent, while the value traded increased by 604.53percent compared to the previous year. As at December 31, 2018 the value of transactions executed on the market was N30.72 billion. Overall market activity The overall Unlisted Securities Index (USI) appreciated 19.7percent between January 2018 and December 2018 while Market Capitalisation rose by 21.8percent from N402.51billion in January 2018 to N514.77billion as at December 31, 2018. Although NASD had more trades in general, activity is still not evenly spread across all brokers. Of the total of 129 Participating Institutions (PIs), 98 were active in 2018 and the 15 most active Institutions accounted for more than 90percent of deals and value traded. The Company believes that as more information is disseminated about the market, more Participating Institutions will become active for their investing clients. Market development initiatives The NASD data portal was the second portal deployed to enhance the visibility and transparency of the OTC market. “Observers of the market can visit www.Dataex.nasdotc.ng to view market activity in real time for any of the traded securities once available. The portal also holds trading history dating back to market opening in 2013. On top of the trading platform and data portal we enabled SMS trade alerts and data feed API’s for data vendors. This has allowed us commence discussions with S&P and Refinitiv (formerly Thompson Reuters) to create a tradable index based on the best performing securities on the OTC market,” Ajomale stated. He said a third technologyenabled initiative was to launch the NASD enterprise Portal (NASDeP). The portal opens up the capital market to a new group of pre-IPO companies who are seeking to interact with a limited number of single (non-bank) financiers such as PE Firms and Asset Managers. It also widens the NASD OTC Securities Exchange community as other capital market professionals are able to register and advise on this portal. “Through NASDeP we will give growth companies the needed capital market support that may ensure their long-term sustainability and will ultimately increase the level of listings in the sub- Saharan region,” the CEO said.

Thursday 29 August 2019

BUSINESS DAY

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Thursday 29 August 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Female lawyers propose amendment to RPC to curb sexual harassment in the legal community …Call on NBA President to commit to change

emale lawyers at a showcase session on Tuesday, during the 59th Annual General Conference (AGC) of the Nigerian Bar Association (NBA), have condemned the spate of sexual harassment of female lawyers by their male senior colleagues, urging that the Rules of Professional Conduct (RPC) of the profession must be urgently reviewed and amended to address the issue of sexual assault and bullying in their work places. Speaking at the conference, which took place at the Eko Hotel and Suites in Lagos on the theme, “Bullying and Sexual Harassment in the Legal Community”, Senior Advocate of

INSIDE Sasegbon DSC publication launches judicial dictionary

President of the International Bar Association (IBA), Horacio Bernardes Neto, launching the Report on Bullying and Sexual Harassment in the Legal profession, titled, “US TOO.”

Nigeria and Chairman of the Nigerian Bar Association Section

on Legal Practice (NBA-SLP), Mia Essien, condemned the

sad development, stating that while the RPC talks about ethical

Rewriting the Basis of Corporate Expenses in Nigeria: FRCN revokes Rule 4 31

Continues on page 30

Should Nigeria Settle With P&ID Over $9 billion Arbitration Award?

conduct for legal practitioners, it says nothing about sexual harassment or bullying of lawyers. She said, “Several juniors, particularly the female lawyers have found themselves in situations where they have to travel out of station with their male bosses with no hotel reservations made for such females. In such cases, these juniors end up in the rooms of their principals, who take advantage of their position as seniors, to sexually exploit them. “I urge the NBA to not only consider a review of our Rules of Professional Conduct but to also ensure that any amendments must address all the relevant issues,” Essien said. She further stated that legal professionals more than any other profession ought to understand the implication of bullying and sexually harassing

rocess and Industrial Development (P&ID) Limited has disclosed through its leadership that the company is opened to amicable settlement of its dispute with the Federal Government of Nigeria, despite pending application for enforcement. It expressed its willingness to settle with Nigeria on a reasonable basis. Background P&ID signed a contract with the Ministry of Petroleum Resources in January 2010; an agency of the Federal government of Nigeria, under President Umaru Musa Yar’Adua’s administration. The contract was motivated by the administration’s initiative to develop the nation’s energy infrastructure to tackle the power problems in Nigeria, through auwww.businessday.ng

Abubakar Malami, AGF

thorised partnerships with private companies. Brief Contract Details

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Under the contract which was to last for a period of 20 years, P&ID had agreed to build facili@Businessdayng

ties, necessary to refine Nigeria’s Associated Natural Gas (wet gas) into Non-associated Natural Gas (lean gas), which would be used to power the electric grid in the country to generate electricity. The contract provided that in refining wet gas into lean gas, wet gas would be stripped of heavy hydrocarbons known as Natural Gas Liquids (NGLs), which makes wet gas unsuitable for electricity generation; and that, P&ID would not be paid. However, P&ID was permitted to retain the stripped NGLs as its compensation and income from the project. According to P&ID, it was also agreed that while it built the facilities, Nigeria would supply it with 400 million standard cubic feet of wet gas per day over a period of Continues on page 31

Thursday 29 August 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Sasegbon DSC publication launches judicial dictionary

SC publication owned by the late lawyer cum author and publisher, Deji Sasegbon, SAN, has launched a new set of books titled ‘Sasegbon’s Judicial Dictionary of Nigerian Law’. Sasegbon’s Judicial Dictionary of Nigeria is a comprehensive compilation of legal words and phrases, embodying a complete statement of the entire body of Nigerian legal definitions as rendered in the language of the Courts, based on the authority of cases of Superior Courts. With a repertoire of over 150, 000 terms, it is said to be the most authoritative, comprehensive law dictionary ever published in Nigeria, with many describing it as the definitive encyclopedia of legal definitions of Nigerian law. Sasegbon who passed on December 10, 2016, was renowned for such landmark publications like the Nigerian Supreme Court Cases (NSCC) in 38 volumes, Legal Desk Book, Nigerian Companies and Allied Matters Law and Practice in 6 volumes and Sasegbon’s Laws of Nigeria in 30 volumes. His latest work ‘Sasegbon’s Judicial Dictionary of Nigerian Law’(also known by its acronym, SJD),published in seven volumes, and about to be released, posthumously, are a fitting epitaph to his illustrious memory, a further assurance of his immortality and a valuable addition to legal jurisprudence. Acclaimed as a tour de force,

DEJI SASEGBON ESQ, SAN. 1953 - 201

this latest publication from the illustrious stable of Sasegbon’s DSC Publications was not only conceived by him, but he was committed to its completion before his untimely passing in 2016. The completion of his work was however actualised by his widow, Oge Sasegbon, who is also a seasoned lawyer, along with the Deputy Editor-inChief, Ehi Esoimeme alongside an excellent team of scholars and editors which Deji Sasegbon had put together at DSC Publications before his demise. The publication also comprises of historical and modern Nigerian cases up to 2018, as well as primar y and subsidiar y legislation. Dripping with erudition

in the inimitable Sasegbon tradition of profound and prodigious work, this latest offering draws definite distinctions between key words and phrases – as opposed to just stating definitions word for word – thereby enabling the reader to gain a full, holistic and contextual understanding of definitions. In most parts of the publication, the comparative approach is utilized as definitions are drawn from Federal and State Laws across the country. In addition to drawing distinctions between key words and phrases, the Dictionary also examines the effect of certain issues in the legal field. A totally unique and addi-

tional scope to the Dictionary is the publication’s examination and application of ‘the effect’ of certain key definitions when applied in practice. This is contained in Volume 3 and represents a completely new creation within the purview of providing legal definitions. T h e ha l l ma rk o f Sa s e g bon’s Judicial Dictionary of Nigerian Law is Volume 7, which comprises of definitions of terms and phrases of Nigerian jurisprudence from the mind of the learned silk, Deji Sasegbon, SAN, himself. There are no cases or statutory references in this volume. Rather, it complements Volumes 1-6 with simple and lucid definitions, which give further understanding to the more formal language of the o t h e r v o l u m e s. Vo l u m e 7 also contains illustrations of the actual application of the definitions to local real-life situations. Its contents are

straightforward, easily comprehensible, and they give additional clarification to the legal and judicial definitions contained in the earlier Volumes (1-6). An additional and equally unique feature of this publication is the provision of a Comprehensive Index, not just of the words and phrases that are defined therein, but also the Case Law and Statutes referred to throughout the publication. Also, of great value is the cross-referencing, particularly between Volumes 1-6 and Volume 7. Viewed critically, ‘Sasegbon’s Judicial Dictionary of Nigerian Law’, along with its earlier sister publication, Sasegbon’s Laws of Nigeria (also referred to as the Encyclopedia of Nigerian Law), arguably, form the most comprehensive research tool available to lawyers and legal scholars in Nigeria today.

Female lawyers propose amendment to RPC to curb... Continued from page 29

their juniors and female counterparts, which she emphasized as condemnable and punishable under the law. The Chair of the NBA Section on Legal Practice (SLP) however noted the difference between bullying and correction of a junior colleague, which she described as a key element of legal practice. “It is important to be courteous as a lawyer; courtesy demands that you offer your seat to a senior colleague who is standing up in court, and also to speak with respect to seniors. Also speaking at this session, another panelist, Ogaga

Emoghwaren, described sexual harassment as an unsolicited, unwelcomed, and unexpected sexual advance to elicit unwanted sexual relationship while he described bullying as the act of intimidating a weaker person to make him to do something against his will. According to Ogaga, although sexual harassment of lawyers by their seniors in courtrooms was not common, there existed sexual harassment in law firms. “I encountered a situation where a young female lawyer ran out of her principal’s office crying; when I interrogated her, she described her principal as a beast who just raped her, while www.businessday.ng

another young female lawyer who was allegedly raped, refused to formally complain for fear of sack. Ogaga who observed that the silence of many victims of sexual harassment has further enabled the abusers and harassers, blamed the situation on poor enforcement of laws against sexual abuse. “Although there is a law criminalising the offence of rape; more proactive measures must be put in place to tackle the menace,” he said. Another panelist in the session, Anulika Osuigwe, said that sexual molestation in workplaces had been going on unnoticed

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due to poor reportage. She advised that females should report acts such as slapping of their buttocks by men. On bullying at the workplace, she claimed that it was mostly done against females, most of whom were not afforded opportunities like their male counterparts. She described it as gender discrimination. Osuigwe who described the also the act as gender bias, called for a change of attitude by employees and superiors. In his remarks, the NBA President, Paul Usoro, gave the assurance that in the next year, his administration would take steps to adequately address the issues. @Businessdayng

He advised lawyers to make complaints about sexual harassment for measures to be taken. At the end of this session, the President of the International Bar Association, Horacio Bernardes Neto launched a Report on Bullying and Sexual Harassment in the Legal profession, tagged “US TOO?” Nigeria is the latest stop on the IBA global campaign trail to bring attention to the startling rates of bullying and sexual harassment in the legal profession and the drive to stop the menace. The 2019 conference of the Nigerian Bar Association (NBA) closes today with an Annual General Meeting (AGM).

Thursday 29 August 2019

BUSINESS DAY

BD LegalBusiness LEGAL INSIGHT Rewriting the Basis of Corporate Expenses in Nigeria: FRCN revokes Rule 4

ith effect from Thursday, July 11, 2019, Rule 4 of the Financial Reporting Council of Nigeria (“FRCN”) Rules became no longer applicable. This is by virtue of a Public Notice issued by the FRCN, captioned: “Revocation of Rule 4”. In this brief, we examine the implications of Rule 4, the controversies that surrounded it, and the new vista occasioned by its revocation. Rule 4, NOTAP and Controversies on Corporate Expenditure: Summarily, Rule 4 which was captioned: “Transactions Requiring Registration from Statutory Bodies such as the National Office for Technology Acquisition and Promotion” had stipulated that where statutorilyrequired registrations or approvals from statutory bodies were not obtained for registrable and approvable contracts, the expenditures in respect of those contracts should not be recognised as such by the reporting accountant and or auditors in the financial statements of the company. Some tax authorities, external auditors, reporting and tax accountants, took the position that the effect of Rule 4 was to disallow expenses that required, but did not receive statutory approval; the more prominent case in point being contracts that require the approval of and registration by the National Office for Technology Acquisition and Promotion (“NOTAP”).

in Beecham Group Limited v. Esdee Food Products Nigeria Limited [1985] 3 NWLR (Pt. 11) 112 at 116 (the “Beecham Case”) The CoA had decided in the Beecham Case that the penalty for non-registration under the NOTAP Decree No. 70 of 1979 (which is same as the NOTAP Act) was that foreign exchange will officially not be released for a transaction, the underlying contract of which was not approved by NOTAP. According to the CoA, non-registration does not make the transaction or the underlying contract invalid or unenforceable.

The position being bandied was that in the absence of NOTAP approval and registration of a relevant contract, all relevant transactions arising from such contract could not be reported in a company’s financial statements and accordingly would not be allowed for corporate income tax purposes. This was despite the legal opinions of some commercial law firms, such as ours, that consistently advised that the absence of NOTAP registration and or approval could not be the basis of disallowing an expense that was wholly, reasonably, exclusively and necessarily incurred in the generation of the relevant corporate profits. This advice is in line with express statutory tax

laws, unlike that of a regulator’s pronouncement such as Rule 4. Rule 4 was made by the FRCN following the December 14, 2015 decision of the Federal High Court of Nigeria (the “FHC”) in Suit No. FHC/L/CS/1596/2015: Stanbic IBTC Holdings Plc. v. FRCN and NOTAP (“Stanbic v. FRCN”). The FHC had held that failure to obtain approval on a registrable contract from NOTAP renders the registrable contract illegal and estops the company from making any payments or remittances in respect of the unapproved contracts. The FHC’s decision was a sore one, particularly in the circumstance that the Court did not consider and hold itself bound by the 1985 decision of the Court of Appeal (“CoA”)

The CoA has however corrected the FHC decision in the recently decided Suit No. CA/L/208/2018: Stanbic IBTC Holdings Plc. v. FRCN and NOTAP where the CoA relied on Section 7 of the NOTAP Act to hold that the failure to register a registrable contract with NOTAP could not render such contract invalid, illegal, null or void. The CoA affirmed the position of the NOTAP Act to the effect that non-registration of a registrable contract only prevented the company from making payments under the unregistered contract through the Ministry of Finance, Central Bank of Nigeria or a licensed bank in Nigeria. Put simply, the company cannot access foreign exchange at the official rate or market for remittances outside of Nigeria under the unregistered contract. Our Thoughts: The revocation of Rule 4 appears to be based on the CoA’s

reversal of the FHC’s decision in Stanbic v. FRCN. The FHC decision and the subsequent creation of Rule 4 had generated a turbulent ripple through the Nigerian corporate space, especially in the recognition of legitimate expenses, which for practical commercial considerations were not subjected to nonmandatory regulatory approval. Commerce will often consider only that which is expressly prohibited as illegal and whatever is statutorily permissible, often because it is not prohibited, will mostly be adjudged on the altar of practicality; time and money most especially. The macabre dance occasioned by the FHC’s decision in Stanbic v. FRCN and the creation of Rule 4 was a time-consuming distraction in the progress of commerce. Legislations must be read and interpreted for what they are. Unnecessary regulatory incursions, particularly when unsupported by clear and unambiguous statutory provisions must be jettisoned. The demands of a growing market economy could not be more. Clearly the decision of the FRCN to revoke Rule 4 removes the basis of sentiments that the CoA decision in Stanbic v. FRCN could still be revisited at the Supreme Court. The revocation of Rule 4 is indeed a welcome step in the right direction of correctly recognising legitimate corporate expenses. • Bidemi Olumide (bidemi. olumide@ao2law.com) and Ifure Udofa (ifureuwem.udofa@ ao2law.com) are of AO2 LAW

Should Nigeria Settle With P&ID Over $9billion Arbitration... Continued from page 29

20 years. Performance: P&ID explained that there was a failure of performance; that Nigeria failed to complete construction of necessary infrastructure, needed to transport the wet gas to their operation base in Calabar, Cross Rivers State (the Adanga gas pipeline). P&ID did not state whether it built the necessary processing facilities or not. London Arbitration Tribunal By reference to an arbitration clause in the contract, P&ID initiated arbitration proceedings against Nigeria in 2012 after attempts to reach a negotiated deal with the Nigerian Government failed. A tribunal was set up in London under the rules of the Arbitration and Conciliation Act, Cap A18, LFN, 2004.

Nigerian defence Representatives of Nigeria at the tribunal marshalled their defences; the strongest being that P&ID neither built any Gas Processing Facility (GPF), nor did it acquire ownership of the designated site for the project from the government of Cross Rivers State. The panel dismissed the defence by saying that the government’s obligation under the agreement was not conditional upon P&ID building the GPF; but did not state after its finding whether P&ID’s obligations were conditional upon the government of Nigeria performing its duties under the contract. The Award The three person panel tribunal, comprising of two foreigners and a Nigerian, gave three awards - 1st partial award on jurisdiction, 2nd partial award on liability, www.businessday.ng

and the final award on damages, awarding P&ID 6.6 billion dollars with interests, which is currently over 9 billion dollars; all in favour of P&ID. The tribunal found that indeed, P&ID did not build any GPF, but based its award on a feasibility study, assumptions and pre-contractual works done by P&ID. There was no argument to mitigate award of damages, no defence of force majeure and so damages were awarded based on the assumption that the failed contract went on for 20 years without any glitch, not even for operational downtime from maintenance - this did not even come in because there was no findings as to the profitability or otherwise of the whole project. Why is it alarming? The interest on the Arbitral award grows daily at 7% of the

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awarded monetary damages. This is about $1.2 million daily accrual; almost 2.5% of Nigeria’s annual gross domestic product. That is not all; P&ID has filed for leave to enforce, from courts in the United Kingdom and the United States. Current situation Nigeria has tried to nullify the award, saying it was not subject to international arbitration but British courts rejected the argument. P&ID is now asking the Commercial Court in London to convert the arbitration into a judgement, which would allow them to try to seize international assets. Conclusion There is a need for the Federal Government to reconsider renegotiating this deal. Since P&ID has expressed willingness to negotiate, this can be an opportunity for the Federal Government to @Businessdayng

show that Nigeria is a home for investors, whilst also avoiding severe fiscal haemorrhage that might accrue from interests on the accumulation of the Arbitral award. NICArb as an institute is positioned to support the Federal Government through the process of negotiation with a network of expert negotiators (and ADR practitioners). Going forward, there is an urgent need for the in-coming Attorney-General to revisit Arbitration clauses (and venue) on earlier treaties signed, including the current Africa Free Trade Area (AfCFTA). Nigeria needs to solidify its Arbitral position in the comity of nations. Opinion by the Nigerian Institute of Chartered Arbitrators (NICArb) Email: research@NICArb.org

Thursday 29 August 2019

BUSINESS DAY

PHOTOFILE

LegalBusiness

The Annual General Conference of the Nigerian Bar Association (NBA) was declared open by the Chief Justice of Nigeria (CJN), Ibrahim Tanko Muhammed on Monday August 26th, 2019 at the Eko Convention Centre in Lagos. In attendance were 12, 000 lawyers from across the world, including the President of the International Bar Association (IBA), Mr Horacio Bernardes Neto, President of the association, who launched the IBA report on bullying and sexual harassment at this event. See FULL REPORT IN BUSINESSDAY ON TUESDAY and WEDNESDAY, August 27th and 28th, 2019.

The CJN in an engaging converstion with the Attorney General of the Federation (AGF) Abubakar Malami

Pioneer chair of the NBA Section on Business Law, George Etomi, FRA Williams Partner, Efe Etomi, and conference co-chair, Olumide Akpata

Prof. Konyinsola Ajayi, SAN, Paul Usoro, SAN, Governor Obafemi Hamza and Gbenga Oyebode, SAN

L-R, L-R, Chair, Technical Committee on Conference Planning (TCCP), Gbenga Oyebode, MFR, deputy governor, Lagos state, Obafemi Hamza and the Chief Justice of Nigeria (CJN), Ibrahim Tanko Muhammed

A shot from Bolanle Austen-Peter’s stage production, ‘Fela and the Kalatuta Queens’ specially made for the NBA audience.

L-R, Chair, Technical Committee on Conference Planning (TCCP) Gbenga Oyebode, MFR, President of the IBA, Horacio Bernardes Neto, Chief Justice of Nigeria, Ibrahim Tanko Muhammed, deputy governor, Lagos state, Obafemi Hamza, Attorney General of the Federation (AGF) Abubakar Malami and President of the Nigerian Bar association (NBA), Paul Usoro, SAN www.businessday.ng

A cross section of lawyers at the 59th Annual General Conference (AGC) of the Nigerian Bar Association

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Thursday 29 August 2019

BUSINESS DAY

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Thursday 29 August 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

How Nigeria can attract investments in oil, gas and power sectors OLUSOLA BELLO

he panacea for investments to be attracted into the oil, gas and power sectors has been encapsulated by stakeholders in these sectors, as achievable only through; a globally competitive fiscal policy, robust legal frameworks and a healthy contract integrity culture. These they say, are the key drivers to profitability. Nigeria’s oil and gas industry faces numerous challenges such as high production cost, poor functional refineries, nonderegulation of the downstream subsector, transparency issues , crude theft, pipeline vandalism, pollution in the Niger delta, Petroleum Industry Governance Bill (PIGB), pricing, inadequate pipeline infrastructure, optimise the performance of industrial base assets and improvement of environmental footprint among others. Paul McGrath, who is the chairman of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industries (LCCI), and also chairman and managing director of the ExxonMobil said: “As at today Nigeria is the largest oil producer in Africa and Nigeria’s hydrocarbon prospects are amongst the brightest today, however, there are fixes we must but in place if we aspire

to maintain and expand the current investment profile in the Nigerian hydrocarbon industry.” Also, operating risks peculiar to Nigeria’s environment have continued to drive the costs of oil and gas projects in the country above the global benchmark. Nigeria ranks amongst the top 10 countries with highest cost of producing oil and gas equivalents per barrel. High coat is a major disincentive to invest, especially at this time of considerable global competitiveness. It could be recalled that a study conducted by the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI) identified these problems to include insecurity,overregulationand bureaucracy; and absence of

infrastructure. Indeed, insecurity, especially in the oil-producing Niger Delta region, posed the greatest threat to the survival of the oil and gas industry in Nigeria, inflating the costs of projects beyond global average. The non resolution of some of these issues has also affected the power sector which has depended so much on the oil and gas industry for gas supply to power generations. There is huge shortage of gas supply to the power sector hence the inability of the sector to provide stable electricity in the country. These recalcitrant challenges are seriously undermining Nigeria’s efforts to boost electricity supply through gas. The nation’s enormous gas reserves, estimated at 187 trillion standard cubic feet, are grossly under-utilized in the gas

Experts call for deregulation of downstream sector to accelerate growth JOSEPHINE OKOJIE

xperts have called for the total deregulation of the downstream subsector in the oil and gas industry to pave way for accelerated growth in the sector. They say that the current system is strangulating the sector, while charging the Federal Government to emulate other countries that have deregulated their downstream subsector if the country ever hopes to reposition the industry as a catalyst of growth and development. “A factor affecting the operators is that they do not have control of the pricing of their products, which shouldn’t be as they are at the mercy of others,” Bismarck Rewane, managing director of Financial Derivatives Company Ltd said during an interactive session Olusola Bello, Team lead,

with journalists on the challenges facing local oil companies listed on the Nigerian Stock Exchange - a statement states. Rewane said that the imposition of a price ceiling on petroleum products which affect the margins of the operators will not attract the volume of required investment to scale up their operations and explore the opportunities in the value chain. He admitted that subsidy as a social policy requires sensitive management, however, said the government must make up its mind to take the bull by the horn to free the industry of its current strangulation. The International Monetary Fund (IMF) had recently urged Nigeria and other countries subsidizing fossil fuel to put an end to it, noting that the policy benefits the rich more

Graphics: Joel Samson.

than the poor. Though the IMF, which stated this in a blog post titled: ‘Fuel for Thought: Ditch the Subsidies’ did not name any country, it is believed that the message was directed to countries like Nigeria whose fuel subsidy has become an avenue for siphoning public resources. A recent World Bank report said Nigeria spent N731 billion to subsidise petrol consumption in 2018. Tunji Oyebamiji, chairman of the Major Oil Marketers Association of Nigeria (MOMAN) has also called for the liberalization of the sector to make it attractive for investments. “Well, we are a competitive industry. We believe in competition. We believe that when you give players in the industry a free hand to go into the market and to compete effectively, it brings out the best in them,” Oyebamiji said.

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to power value chain. Industry analysts have said the nation’s power shortage could be resolved through optimal utilization of the nation’s huge gas deposits. But lack of appropriate synergy between policy makers and players in the energy sub-sector is a major factor for the nation’s epileptic electricity supply. Victor Okonkwo, group managing director (GMD), Aiteo Eastern E & P Company Ltd, said the nation’s power shortage and gas issues could be resolved through optimal utilization of the nation’s huge gas deposits. He said government should show greater commitment to power generation by providing a favourable environment in order to attract more investors. It is believed that without government showing greater commitment to power generation by providing a favourable environment in order to attract more investors. Similarly, Dolapo Kukoyi of Nigerian Gas Association (NGA), said there must be maximum co-operation among stakeholders because energy supply is for crucial economic growth. She also identified lack of infrastructure deficiencies in delivery of gas stockpile to power stations, regulated low prices, poor remittance and policy somersaults, as major challenges undermining their targets and operations.

IBEDC committed to human capacity development …as discos start certification process

lectricity Distribution Companies in Nigeria will soon start a Certification process for their work force to improve performance, productivity and ensure standardization of competency skills and check loses, the certification proposed to begin with the Line Workers and Customer Relations Officers is ranked in three stages of bronze, silver and gold for growth chart. To this end, the Association of Nigerian Electricity Distributors(ANED) and the Electricity Distribution Companies (DisCos) are collaborating with national and international partners like Association of Power Utility of Africa (APUA), African Network of Center of Excellency in Electricity (ANCEE) and National Power Training Institute of Nigeria (NAPTIN) to improve the capacities of the over 21,000 workforce in the power sector. Rotimi Adebari ANE D ’S Hu man Re source Project Coor-

dinator, who disclosed this at Ibadan Electricity Distribution Company’s (IBEDC) Head Office while presenting an Award of Recognition to the Chief Operating Officer (COO), John Ayodele for his support and commitment to human capital development in the power industry, gave IBEDC a thumbs-up for training over 1,723 of its personnels in two years. Ayodele applauded ANED for projecting the electricity Distribution Companies (DisCos) and government efforts on electricity in a good lightand said the award is “a wake-up call to do more and to ensure that IBEDC moves from 3rd to the 1st position on human capital development index.” Ayodele further said “the cost of ignorance is too steep a price to pay in anysociety” and urged the Federal Government and other stakeholders to better equip the National Power Training Institute of Nigeria (NAPTIN) to carter for the energy gap in the industry.

Shell, SAP offer free ICT training to graduates

en Nigerian graduates of business and information technology disciplines have completed a one-year specialised digital training and certification in financial accounting and project management while another set of 10 beneficiaries have commenced their training cycle in the programme sponsored by Shell Nigeria Exploration and Production Company (SNEPCo) in collaboration with SAP Nigeria. Speaking in Lagos last week at the closing ceremony for the exiting participants, SNEPCo’s Bayo Ojulari, managing director, described the training initiative as critical in preparing young Nigerian graduates for the evolving workplace technology and to give them industry exposure and certification in selected SAP modules. According to Ojulari, SNEPCo and other Shell companies are key players in digitalisation. “Shell’s strategy is to be a leading player in digitalisation. We are a pioneer in the

development and deployment of many digital technologies, and we use advanced IT infrastructure in innovative ways.” Represented by the Information Technology Manager for Shell Companies in Nigeria, Dave Osewemgie, Ojulari applauded the collaboration with SAP “especially for taking on our recommendations, which helped to improve the training curriculum.” Also speaking, the Nigerian Content Development Manager of Shell Petroleum Development Company, Olawuyi Olarenwaju, explained that the programme which began in 2018 was designed to improve the employability of young Nigerian IT and Business graduates. He said, “Shell Nigeria partnered with SAP to deploy the programme in Nigeria and the initial partnership featured 22 young Nigerians, 10 of which were deployed in Shell Nigeria companies. SAP affirms that globally, 99 percent of the trainees have

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been able to find employment after graduation. For the 10 graduates deployed this cycle, five are already at the recruitment stages of different organisations. These speaks to the quality of the training provided by SAP”. The certification training is worth US$ 25,000 per students and is provided by SAP Nigeria at their training facilities to the selected candidates as part of their SAP Skills for Africa programme. Initiated in 2018, SAP skills for Africa programme runs in 22 countries and has produced 22,700 participants so far. One of the graduates, Dafe Isodje said, “The programme is not only about technical skills but also about the soft skills. It was a pleasure to work in an environment where everybody is hungry to win, yet humble when they do. We just want to say a big thank you to SNEPCo for contributing greatly to our professional development through this programme.”

Thursday 29 August 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

How Uber is finding love in South Africa despite bleeding shareholders’ purse FRANK ELEANYA, JOHANNESBURG

“

hy did the metre drivers keep saying Uber drivers will not come to pick me up from the airport?” I asked the Uber driver my app identified as Patrick who picked me from Terminal B of the O.R Tambo International Airport - ORTIA for short - in Johannesburg, South Africa. I had spent over 40 minutes trying to explain to three metre-taxi drivers that the rates they planned to charge me to get from the airport to my hotel - almost three times the fare quoted on my Uber app - was going to snuff the life out of the cash in my wallet. Patrick, the driver was surprised at first, so he had to ask “Is that what they said?” “They said you usually have problems and don’t like coming to pick people from the terminal gates,” I said, recalling what each of the three drivers had told me. There are about three terminals at ORTIA. That made Patrick chuckle. He explained that it used to be true when Uber first came to South Africa. The union of the metre drivers at the airport had put up a resistance to the point of harassing drivers on Uber platform. It took police intervention to resolve the

problems. Now Uber drivers have a physical spot where they queue and wait for their turn to be called on the mobile app. It is a common problem many Uber drivers in Nigeria have reported as well. In the case of Nigeria, a tense truce now exists between airport taxis and Uber drivers. “Uber is the best thing that has happened to many of us in South Africa,” Patrick said with a fond look on his face, his eyes trained on the road. “Today, many of us have our freedom to be entrepreneurs and make more money than we would have made working in corporate organisations.” According to him, drivers

on Uber platform in South Africa make as much as R11,000 in a week. Patrick pointed out that most staff in corporate organisation take home less than R11,000 in a month. “Many South Africans love Uber to the extent that they are now willing to leave their car at home and take Uber to work every day because it is less expensive. Many of them only drive their cars at weekends. Even the metre drivers would love to come over to the platform but they can’t because a good number among them have criminal records and it has always come up whenever they want to register with their fingerprints,” he

said. Uber’s hype and adoption on the African continent - where millions live below the poverty line - belies its global troubles. Shares of the global ride hailing platform, Uber have continued to post disappointing returns, shedding 24 percent since the company went public in May. The initial public offering (IPO) had helped Uber raise $8.1 billion achieving an initial market capitalisation of roughly $70 billion. Nevertheless, many analysts had called the IPO a failure after its share price failed to pop on the first day of trading, opening at a conservative $42 apiece. Uber was previously valued at $72

billion by venture capitalists after raising billions of dollars in a 10-year period. The company posted its largest-ever quarterly loss, about $5.2 billion, in August as its revenue growth hit a record low. Many reports suggest Uber’s losses are due to well-financed competitors offering a substantially similar product. In Nigeria and South Africa for instance, the company is facing rates war with Bolt - former Taxify - which has seen many drivers who were previously on Uber move over to Bolt. For starters, Bolt has a 15 percent commission carrot which it uses to its advantage on drivers; Uber on the other hand has a global rate of 25 percent commission. Part of that advantage is that there are more drivers on Bolt than there are on Uber. The drivers’ advantage is also amplified by the fact that vehicle requirements are less stringent on Bolt than on Uber. In South Africa, Bolt requires a minimum of 2010 model or newer while Uber accepts nothing less than 2013 model or newer. Bolt has also adopted a base fare that is less than that of Uber in South Africa. While Bolt’s minimum fare charge is R20, Uber has a minimum fare of R25. Added to that is that Bolt now has a presence in 13 locales in South Africa, compared with Uber’s five. “Irrespective of the

cheaper base rates, many South Africans prefer Uber to Bolt because of their emphasis on customer service instead of the driver,” Patrick told me. Apparently most riders value safety and convenience that Uber guarantees. This has led to a surge in demand in regions like Cape Town and Johannesburg in particular and the number of drivers in these areas is also rising. Patrick says the peak periods for drivers is usually at the end of the month when workers have earned their salary and they are willing to spend money going to shopping malls and entertainment centers. Unlike Bolt, Uber has its hands in many other pies which has not only distracted it from establishing clear dominance in its core business, but has created new competitions for the company, especially with its UberEats. In a recent filing, Uber listed some 10 major competitors some of which are subsidising customers’ meals in a bid for market share, with profitability a secondary concern. For shareholders wearied by Uber’s crimson colored stocks, time may be running out, but for South Africans and other African countries who get to commute in convenience and still live within their meagre means, the Uber bliss is probably just beginning.

health concerns. 3. Search lyrics to your favourite songs Nigerians love entertainment, and music plays a big role in this. The top Google searches in Nigeria last year, had millions of queries from Nigerians seeking to know either about artistes, songs, or their lyrics. Google displays music lyrics at the top of its search results pages when you search for “song name” plus “lyrics”. 4. Google the weather Checking the weather may not be a ‘Nigerian thing’ but it could also be very helpful when planning one’s day, week or some weekend getaway. Asking Google what the weather will be wherever you are heading to lets you know

if you will be needing an umbrella or a pair of sunglasses and guide you in your choice of clothing. If you’re travelling and want to know what to pack, simply ask Google, “What is the weather at Enugu like”, or type in “weather at Enugu”, and right there on your search results page, you’ll get the current forecast, extending to the next week. 5. Search by voice Did you know you could also search Google by speaking? Simply click on the microphone icon, say what you want to search for, and watch Google reveal the results. You can find the microphone icon on the right-hand side of the Google Search bar. Go ahead, click and speak.

5 ways you didn’t know Google search could be used CALEB OJEWALE

hen arguing with a friend, resolving this could be quicker when one person says; let’s Google it! However, there are many ways to use Google search and if you did not know them, you are about to learn five new ways of using the search engine. According to Google, its Search service processes more than 40,000 search quer ies ever y second. Google’s search engine is the most used across all platforms, with more than 5.4 billion searches each day and 1.9 trillion searches per year. Here are five ways you probably did not know you could use Google Search.

1. Find jobs faster using Google search With Nigeria’s unemployment rate at 23 percent, millions of both unemployed and even underemployed Nigerians will sure be delighted to have an easier way to help with their job search. Searching for a job can take time, and keeping up with new jobs that are posted throughout the day can be challenging. Whether you are a graduate seeking a job or an employee looking for the next opportunity, Google offers a quick and easy way to find suitable vacant positions. Job seekers can search for, and apply to, open positions directly from the Google search bar. Just type the job query into Google Search and it will

give you a list of jobs that match that query. Details of the job posting, such as job title, location, whether the job is full-time, parttime or an internship will be included. If you use Google Maps integration, you can also search for jobs in any place that you can find on the map, and if you are signed in, you can even see how long it will take to commute from home. Google has also made keeping up with new vacancies easy - simply push the “get alerts” button to get email notifications when new jobs matching your search appear. 2. Search health conditions Search for a health condition and the relevant health knowledge panel

results appear, providing a snapshot of the condition, its symptoms and possible treatment. Health knowledge panels are available on both mobile and desktop, covering over 800 health conditions. Google collaborated with a team of medical experts from institutions such as the University of Ibadan and the Mayo Clinic to ensure that all the gathered facts represent real-life clinical knowledge from health institutions and experts around the world. The company however indicates a caveat; the health card feature is intended for informational purposes only, users are advised to consult a medical professional regarding actual

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

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news Private Equity firms bet big ... Continued from page 1

and drive revenue above $100,000. Money is flowing into so lving Nigeria’s health

problems, with a new set of genuine start-ups positioning themselves and re-calibrating their business models to grab the opportunity. “Investments, especially Foreign Direct Investments (FDIs), have impacted the Nigerian health sector,” said Doyin Odubanjo, chairman, Association of Public Health Physicians of Nigeria, Lagos chapter. “Some hospitals and diagnostic centres with expensive high-tech equipment that are existing today were made possible by such investments,” Odubanjo said. 54gene, a genomics company focused on African DNA, raised $4.5 million from a group of investors, including Y Combinator, Fifty Years, Better Ventures, KdT Ventures, Hack VC and Techammer. The money will be used to create the first African biobank. In February this year, the Nigeria Sovereign Investment Authority (NSIA) provided $11 million (N3.96 billion) worth of sophisticated equipment and renova-

tion cancer treatment centres for the Oncology Department of Lagos University Teaching Hospital (LUTH), Idi-Araba. Similarly, in June this year, MDaas Global, a start-up focused on providing diagnostics services, raised $1 million in a seed round led by Consonance Investment Managers with participation from Techstars, FINCA Ventures, the Fund for Africa’s Future and Greentree Investment Company. Oluwasoga Oni, MDaaS Global’s CEO and co-founder, said the funding round fuels the company’s next phase of growth, allowing it to continue providing modern, connected healthcare for Africa’s next billion. “With diagnostics as the bedrock of modern medicine and key to the treatment of diseases like cancer, heart disease, and diabetes – which are on the rise within the continent – unbridled access to quality healthcare is crucial,” Oni said. “We are immensely proud of our brick-and-mortar presence. Merging physical patient care with state-of-the-art technology enables us to reach more patients with the care that they deserve,” he said.

•Continues online at www.businessday.ng

Adeduntan: FirstBank is reducing... Continued from page 1

we are already doing a lot,” Adeduntan said.

With over 125 years of unbroken existence in Nigeria, the lender has the largest branch network in Nigeria with over 750 branches spread across the country. Nigeria has an exclusion rate of 36.8 percent as at December 2018; this translates to about 36.6 million Nigerian adults who are not included in the formal financial net. The Central Bank of Nigeria plans to ensure it drive that number to 20 percent by the year 2020. But with less than five months to the deadline, the regulator has about 16.8 percent exclusion gap. “So with over 31,000 agents and 750 branches spread across all the LGAs in Nigeria, FirstBank is indeed a frontrunner at not just providing banking to all Nigerians but importantly improving their respective businesses and developing the Nigerian economy,” Adeduntan noted. According to Emeka Onwuka, CEO, Parkway Project, a Lagos-based Fintech company known for its popular ReadyCash product, when it comes to financial inclusion, the distribution is really “where we have the problem.” “It is not about wallet rather it is about the touch point where people can actually go and have access,” Onwuka added. In January 2019, the central bank unveiled a revised version of the National

Financial Inclusion Strategy (NFIS) in which it projected that it will enrol about 500,000 mobile money/bank agents available to serve about 105 million adult Nigerians by the year 2020. The figure translates to about 476 agents per 100,000 adults. Less than five months to the projected deadline, Nigeria’s financial institutions have however enrolled a joint 65,753 mobile agents, data obtained from the Nigeria Interbank Settlement System (NIBSS) showed. This is 86.85 percent less than the 500,000 mobile agents which are going to serve about 105 million adult Nigerians. If the industry regulator is to meet the target by 2020, it would have to enrol about 434,247 agents in five months. According to data by EFInA, a huge population of Nigerian adult still lack access to financial products and services. The number is however highest in the northern part of the country. Compared to other regions of Africa’s most populous nation, the northern part of the country reported more unbanked people owing to high illiteracy level, insurgency in some parts of the region coupled with high poverty rate, as compiled from BusinessDay survey. “Currently we have up to 9,000 agents specifically in the northern part of the country and the same thing goes for the statistics of our ATM,” Adeduntan said. www.businessday.ng

L-R: Bisi Fayemi, wife of Ekiti State governor; Halima Dangote, group executive director, Dangote Industries Limited; Abiola Akiyode Afolabi, executive director, Women Advocate Research and Documentation Centre, and Victor Etuokwu, executive director, Access Bank plc, at the 59th Nigerian Bar Association Annual General Conference, which was sponsored by Dangote Industries Limited, yesterday.

Inside opaque oil contracts keeping Nigerians hooked... Continued from page 1

million a day at current oil prices with a selected group of international and local traders which, in turn, supplies NNPC with refined petroleum products. The latest set of winners announced for the crude oil lifting contracts had the names of ‘who is who’ in the oil and gas sector in the country as well as top players in the international oil and gas industry who are compelled to partner with the local players. Sources in the petroleum sector are querying the modalities employed by NNPC in selecting those companies that are qualified to participate in the DSDP programme. Some of the companies that won the bid, according to sources, are “briefcase investors” that suddenly became oil companies and crony capitalists. They lamented that many of the companies that have made investment in the country but are currently struggling to survive because of the government’s policy were completely edged out of the exercise despite having the basic qualification of foreign partnership, local presence, access to local refinery, access to local financing and guarantee system. Some of the participants in the programme who were not successful wondered why the NNPC had to pick companies that have no stake in the Nigerian economy. They specifically wanted to know the rationale behind the choice of Total SA, a trading arm of Total Group which has no base in Nigeria, as against Total Nigeria plc which employs thousands of Nigerians. Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), said nobody knows the

board of trustees, governance process or real owners of some of the companies because some of them are politically affiliated to the president and are being rewarded for any favour they might have rendered. “Let the free market determine who can bring in petrol, get rid of the whole subsidy initiative,” Henry said. Sources told BusinessDay that some of the local companies were paired with foreign companies in order not to give a false impression that foreign companies are the only ones benefiting from the deal. Responding to allegations of shady dealings, Ndu Ughamadu, group general manager, Group Public Affairs Division of NNPC told BusinessDay that the corporation stuck to the rules and regulations during the selection process of the companies. “We are not aware of these complaints, we stick to the guidelines,” Ughamadu said. NNPC guidelines stipulates that an indigenous company engaged in Nigerian oil and gas downstream activities with trading of petroleum product expertise is qualified to participate in the programme. “Indigenous companies applying under category (c) of Section 3 shall meet the minimum turnover of US$400 million (or the Naira equivalent) and net worth of US$200 million (or the Naira equivalent),” the guidelines seen by BusinessDay stated. The deal, which involved 445,000 bpd of Nigeria’s crude oil originally meant for domestic refining, is worth an estimated $9.4 billion every year based on the current prices of crude oil in the international market. Winning an oil lifting deal is seen as winning the Nigerian lottery. Only the po-

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litically-connected often do. Among those that benefitted from the contracts was Casiva Limited, whose chairman, Nasiru Danu, was director of logistics for the Buhari Campaign Organisation in the 2019 presidential election. Eterna plc has Lamis Dikko as its chairman and Mahmud Tukur as managing director/ CEO. Tukur is the son of a former national chairman of the People’s Democratic Party (PDP), Bamanga Tukur. Arkleen Oil & Gas Ltd was founded by Gregory Ero who worked with Federal Ministry of Petroleum Resources as head of the Department of Petroleum Resources (DPR), Warri, 1974-1977. Between 1977 and 1988, he was branch superintendent, NNPC, Warri, and head, NNPC Central Purchasing and Supply Department. Rainoil Limited was founded by Gabriel Ogbechie, a graduate of Production Engineering from the University of Benin with almost three decades’ experience in Nigeria’s oil and gas industry. Amazon Energy has Trevor Akindele, a consultant with over 20 years’ experience in crude oil and petroleum products trading and operations in Nigeria, as its chairman, while Matrix Energy’s MD/CEO is Abdulkabir Aliu. Aliu is the pioneer Group CEO and a founding member, according to the company’s website. Levene Energy Development Limited is a subsidiary of Levene Energy Group whose group chairman, Asue Ighodalo, is also the founding and managing partner of Banwo & Ighodalo, one of Nigeria’s reputable law firms. UTM Offshore Ltd has as its GMD/CEO Julius Rone, a Warri man who is also an alumnus of the Obafemi @Businessdayng

Awolowo University and University of Calabar, while Masters Energy Oil & Gas has Nigeria’s current minister of state for mines and steel development, Uchechukwu Ogah, as its president, although Vincent Ajala serves as executive vice chairman. MRS Oil & Gas Company is a subsidiary of MRS Holdings Limited, founded by Sayyu Dantata. Patrice Alberti was appointed as the chairman of the company following the resignation of Dantata in July 2017. Further findings revealed Yakubu Maishanu is the chairman/CEO of AYM Shafa Ltd; Adamu Maikifi, chairman of AY Maikifi Oil & Gas Co. Ltd; Auwalu Rano, chairman/ CEO of A.A. Rano Nigeria Ltd; Wale Tinubu, group managing director at Oando plc, and Uju Ifejika, chairman/CEO of Brittania-U Nigeria Ltd. Meanwhile, five of the indigenous companies, Barbedos Oil & Gas Services Ltd, Petrogas Energy, Bono Energy Limited, Petratlantic Energy Limited and Eyrie Energy Ltd, failed to disclose their board of directors and management team on their websites. BusinessDay sent an email to five of the companies to get necessary information about their board members but none responded. In the current administration, Mele Kyari is the group managing director of NNPC while President Muhammadu Buhari is the minister of petroleum resources. Between them, they wield a powerful capacity to dish out political patronage in the oil and gas sector because of the control they have on who gets to participate in these oil-lifting contracts deals. Full list of those shortlisted for the contracts include BP Oil International Ltd/AYM

•Continues online at www.businessday.ng

Thursday 29 August 2019

BUSINESS DAY

news

BoI intervenes with $7m to restore businesses in North East HARRISON EDEH, ABUJA

Emeka Ihedioha (centre), Imo State governor; flanked on his left, A.B.C. Orjiako, chairman, Seplat Petroleum Development Company plc; on his right, Austin Avuru, chief executive officer, Seplat; Gerald Irona (1st l), deputy governor of Imo State, and Chioma Nwachuku (1st r), general manager, external affairs and communications, Seplat, during a courtesy visit by a Seplat team to the governor at the Government House in Owerri.

Nigeria Investment Gateway targets $50bn investment inflow via matchmaking HARRISON EDEH, Abuja

… records $4bn investment facilitation in 9 months

igeriaInvestmentGateway, a London-based investment platform, has set a target of $50 billion investment push into the Nigerian economy by match making companies with bankable project with credible funders, Femi Omotuyi, the group executive director, says. OmotuyispokewithBusinessDayWednesdayonthesidelinesof the annual “Investment destinationNigeria”programmeinAbuja, facilitatedbyhisfirm.Heexplained that companies seeking to access credible funders with their bankable projects would enjoy such access only when they met risk acceptance criteria set by the platform, which it tagged “Project documentation alignment.”

He said the company had facilitated about $4 billion investment inflow into Nigeria from November 2018 to July 2019 in agriculture, oil and gas, and mining. On key investment targets of the firm, he disclosed that annually his company targeted foreign direct investment portfolio of about $50 billion into the Nigerian economy. In agriculture, he said Nigeria Investment Gateway had a fertilizer manufacturing plant coming up in the country, and a $1.5 billion solar power plant coming up, also through investment facilitation. The company is also involved in facilitating investments in six modular refineries in the country, one with a capacity of 5000 barrels per day to be sited in Sapele, and

another at the cost of $50 million with a 6000 barrel-per-day refining capacity, also to be located in Delta State. Another refinery, with 120,000 barrel per day capacity, will be located in Lekki, Lagos State, he said. Speaking further on the project documentation alignment, Omotuyi said the funders expect to get back their money since it was not a grant. As such, he said the investment gateway would conduct credibility test, and explained that a project must show some credibility before the company decides to bankroll it. “The only way we decide the credibility of a project is the credibility of the business owners, and we have the criteria for that test,” he said.

Glo, Huawei present ICT solutions to Adekunle Ajasin varsity

dekunle Ajasin University in Akungba Akoko, Ondo State, on Wednesday joined the list of schools that have benefited from the Globacom-Huawei ICT empowerment package for higher institutions across the country. The national telecom operator, Globacom, which is executing the project in alliance with global ICT solutions provider, Huawei, presented Glo 4G routers and android phones to the school and five of its best performing students. The institutions that have so far benefitted from the educational empowerment programme include Babcock University, Ilishan Remo, Ogun State; University of Ibadan, University of Ilorin, University of Benin; University of Port Harcourt, Obafemi Awolowo University and the University of Nigeria, Enugu Campus. At the presentation of the items at Adekunle Ajasin University, Ajomale Olamide Christianah of the Department of Agric

Economics; Patrick Oluwafemi Success of the Department of Linguistics; Oshin Joshua Inioluwa of Linguistics and Yoruba Studies; Omotunde Samuel Segun of the Department of Science Education (Physics), and Oguntimehin Taiwo Samuel of Department of Animal and Environmental Biology received Android phones loaded with Glo data to help them in their studies. Patrick Success who spoke on behalf of the beneficiaries expressed gratitude to Globacom and Huawei for the ICT gift pack and pledged to redouble their efforts to continue to achieve excellence. Globacom’s state manager in Ondo State, Olusegun Oguntuase, stated during the presentation of the ICT solutions that the company was committed to helping promote research and learning in higher institutions across Nigeria through the use of technology. “Every country that must grow needs the help of its academic populace to conduct www.businessday.ng

researches for social development and enhancement of technological know-how. This is only possible where students and their teachers have access to seamless internet and good phones. There is a vast body of knowledge available on the internet for solutions to human problems”, he said. Oguntuase urged staff and students of the university to utilise Globacom’s on-going weeklong data clinic in the school to upgrade to Glo 4G in order to experience very fast and efficient internet services, adding that Globacom had the widest 4G LTE coverage in the country. He noted that the company’s unique communication solutions would also give them a pleasant experience on the network. Vice Chancellor of the university, Igbekele Amos Ajibefun, thanked Globacom for the ICT packages which he said would not only assist the school in research projects but would also inspire the students to strive for excellence.

“We also focus on the bankability of the project, which is that it must have the capacity to repay itself. It is a loan that is expected to be viable as such it must have the capacity to repay itself,” he noted. Additionally, he said a project must pass infrastructural test by demonstrating its capacity to have visible results and generate employment. ”Once the projects have passed these test, we initiate them into what really the funders want since we are working closely with them. The funders want to ply in the international market and as such the business must meet global standards and the business must be seen as one that has credibility globally,” he said.

n its bid to restore businesses ravaged by insurgency in North East, the Bank of Industry (BoI) has intervened with $7 million to bring back to life small and medium scale businesses in the region. Toyin Adeniji, executive director, BoI, gave the information on Wednesday in Abuja at the BoI roundtable discussion on ‘Investing in communities affected by conflict and crisis.’ “Our interventions is focused on restoring micro-enterprise investments and financial inclusion in the region and gradually bring back economic life to the region in addition to the effort of the Federal Government and other intervention agencies,” Adeniji said. She informed that the BoI partnered emergency communication centre in the North East to visit the ravaged communities, while having on the spot assessment of the region to determine specific areas of intervention. “In the last two to three

months, we have been able to enlist about 100,000 beneficiaries and they have qualified to receive micro loans of the N10,000 each, while 3,500 had received their credits alerts as the work continues,” she said. Speaking earlier on the concerns of insurgency ravaged North East, Aliyu Abdulrahman Dikko, chairman, BoI, noted, “Since 2009, nearly 15 million people have been affected by Boko Haram.” Quoting the United Nations Humanitarian Affairs, Dikko noted, “About 1.8 million persons has been displaced in the region mostly children, women and youths.” He stated that the bank would support Federal Government’s intervention efforts toward investing in states where there was need for economic revival. Also, executive secretary, North East Development Commission, Alhaji Alkali, lauded the initiative of the BoI towards revitalising North East and small and medium scale enterprises loans geared towards reviving the region.

Zenith Bank offers ZECA education loan for children Solomon Attah, Lafia

enith Bank plc has introducedtheZenithChildren’s Account(ZECA)Education Loan to assist parents pay their children/wards school fees as the new school session begins. The loan offering, which is disbursed directly to the account of the beneficiary’s school, comes at a very competitive interest rate and flexible repayment tenors. To access the loan, parents are required to open a ZECA account for their children/wards at any of the bank’s branches. Commentingonthenewloan product, Ebenezer Onyeagwu, group managing director/CEO of

Zenith Bank plc, said, “The bank remains focused on providing premium financial solutions that create value for its customers and meet their lifestyle needs.” ZECA is a specialised savings product for children between the ages of 0-17 years. The account enables parents/guardians save towards securing the financial future of their children/wards. Zenith Bank is recognised as one of the most innovative financial institutions in Nigeria and was voted the most customerfocused bank in Nigeria for the retail and SME segments in the 2018 KPMG Annual Banking Industry Customer Satisfaction Survey (BICSS).

NAICOM urges insurance directors to give prompt claims payment priority Modestus Anaesoronye

nsurance regulator, the National Insurance Commission (NAICOM), has urged board of directors of insurance companies to give prompt claims settlement a priority in their policy decisions. Besides, it also want the board to ensure the financial soundness and general wellbeing of their organisation by monitoring the management, to guarantee efficient deployment of human and capital resources in the overall benefit of all stakeholders. Sunday Thomas, acting commissioner for Insurance, NAICOM, who gave the advice during a day Insurance Director’s Conference held in Lagos, reminded the directors that their companies were in the business of insurance primarily to settle genuine claims made by policyholders. In all policy formulations of the board, I am appealing

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that the prompt settlement of claims be given a high priority, Thomas said The event with the theme ‘Corporate Governance: The Panacea for Sustainable Growth and Development of Insurance Business in Nigeria’ was organised by the College of Insurance and Financial Management (CIFM) in collaboration with NAICOM. He further noted that the position of the Board of Directors was key in achieving a high level of efficiency in an institution’s corporate governance structure, stating that the low level of effectiveness of corporate governance oversights in the insurance sector remained one of the major regulatory concerns of the Commission. Let me state here for emphasis that the primary role of the Board either in a private or public entity remains the oversight of management to ensure the corporate goals, vision, mission and values of the @Businessdayng

entity are strictly upheld at all time, he said. “The observance of this role has been lacking in some of our companies and which has contributed in no small measure to the challenges facing these companies today,” he noted. Nigeria’s insurance contribution to the nation’s GDP at less than 1 percent has underperformed its potential, especially when compared with other sectors in the financial services industry, he said. “I believe that once we can successfully navigate this corner, we could be on our way to entrenching a financially solid, vibrant, viable and active insurance market that would bring about not only an increase in penetration but a substantial increase in the industry’s contribution to GDP. This will also simulate accumulation of longterm funds for infrastructural financing, job creation, and an improved Return on Investment,” he said.

40 BUSINESS DAY

Thursday 29 August 2019

news LAPO optimistic of meeting N152bn loan target HOPE MOSES-ASHIKE

L-R: Ezekiel Oni, chief financial officer, First Registrars; Oluwato Abayomi, deputy registrar, First Registrars; Bayo Olugbemi, registrar/MD, First Registrars; Magnus Nnoka, president, Risk Management Association of Nigeria (RIMAN), and Victor Olannye, executive secretary, RIMAN, during a courtesy visit by executive council of RIMAN to the management of First Registrars & Investment Services Limited in Lagos.

Corruption allegation haunts Buhari’s new defence minister OLUFIKAYO OWOEYE

he newly appointed Nigeria’s defence minister, Bashir Magashi, will have to spend some time to clear his name as allegation of his misdeeds during his tenure as the commander, Brigade of Guards, under the late military dictator Sani Abacha has come to haunt him. Magashi was a member of the inner caucus who had access to the public purse and inconsistent oil bloc allocation to cronies while the despotic

leader reigned, Premium Times reported on Wednesday. He was later appointed commandant, Nigerian Defence Academy. After the widely celebrated demise of the dictator in 1999, the Olusegun Obasanjo administration hired a Swiss lawyer, Enrico Monfrini, to help recover the nation’s stolen funds during the Abacha regime which later discovered a nominee account held for Magashi at the Jessey, UK branch of Bank PNP Paribus had $550,000. The Presidency, however, directed Abdullahi Mukhtar, the

then National Security Adviser, to ensure the stashed funds are returned to the nation’s treasury. Mukhtar, in a memo number NSA/A/225/I/C, revealed that Magashi admitted wrongdoing, saying the money was a proceed of illegal crude oil allocation by the late military head of state made to members of the Provisional Ruling Council (PRC) under his government. At the time, Magashi was not a registered oil trader and being a public servant, it was illegal for him to directly engage in private businesses.

“The account held for Mr. Magashi has a total deposit of $550,000 and it remained intact until it was frozen in 2001,” Mukhtar said in the memo. Mukhtar, however, added in the memo, “General Magashi pleaded for a concession and Mr. President left for him $150,000 from the said sum and to remit $400,000 to FGN which he has complied with as evidenced at Annex A, hereby attached.” Magashi was allegedly granted that concession, and no charges pressed against him.

Ogun signs security trust fund, Sustainable Cycling Foundation unveils ‘Kit and Kin’ initiative in Lagos OGROMA bills into law Iniobong Iwok

gun State Governor Dapo Abiodun has signed into law the State Security Trust Fund Bill, passed by the Ogun State House of Assembly. A statement by Kunle Somorin, the chief press secretary to the governor, stated that the governor signed the bill after it was presented to him by Olakunle Oluomo, speaker of the House, at the Governor’s Office, Oke-Mosan, Abeokuta. Similarly, the governor has also signed into law the Ogun State Road Maintenance Agency (OGROMA) (Amendment) 2019, passed by the state assembly. Abiodun, the statement added, had last weekend inaugurated the committee of the Trust Fund, headed by Bolaji Balogun to source for money for the acquisition and deployment of security equipment and such human materials and financial resources that would be necessary to prevent crime and preserve public peace. The statement said the

committee was to hold gifts property and money for the purpose of crime prevention, mobilise funding and resources in cash or kind from the public, private, corporate or institutional or all other sources and manage those resources in a transparent and accountable manner for the purpose of Public security. It added that the Committee is also to reserve part of the fund for the training and retraining of security personnel, as well as perform other functions for the purpose of public security as contained in the State Security Law 2011as amended by the State Security Trust Fund Law, 2019. The statement further stated that with the passing of the bill and signing into law of OGROMA, deplorable township and rural roads in the state would soon begin to wear new looks as the agency swings into action. According to the statement, Abiodun’s administration resuscitated the agency to serve as a quick fix mechanism to address the deplorable condition of township and rural roads. www.businessday.ng

BUNMI BAILEY

ustainable Cycling Foundation (SCF), a non-profit organisation committed to the growth and development of cycling in the continent, has unveiled its ‘Kit and Kin’ initiative. The initiative in partnership with Access Bank, Cocoon Homes, Kingston Wheelers and Craneburg Construction was unveiled during a press event at its head office in Lagos on Saturday, August 24, 2019. Addressing the press, Iboroma Akpana, a trustee of the Foundation, explained that the future of every country depended on the youth and given the demographic bulge in this segment in Nigeria, the Foundation had decided to massively invest in the talents of young cyclists and create opportunities through the sport for them to actualise their potentials both as athletes and as citizens that will be useful to self and society. “We are focused on building a solid foundation for future leaders to maximise their potentials. Working with our partners, including Specialised UK and Sigma sports, the SCF realised

that we can further empower young Africans to create better lives for themselves, improve their communities, and build global recognition,” he said. “Our mission is to connect African youths through cycling, provide opportunities for competition, promote healthy living, and empower generations,” Akpana added. The mission of SCF is to use the sport of cycling to empower young people on the continent and build the next generation of leaders, the initiative is envisioned to support the launch of the Pro-Continental cycling outfit, Team Access-Cocoon, Nigeria’s first professional cycling team while also serving as a boost to the cycling ecosystem on the continent. Andy Edwards, a representative of Kingston Wheelers said, “This is our second year working with the Sustainable Cycling Foundation and we have stepped up our involvement. The images of last year’s Lagos Crit made a big impact in the UK, with my club and through a feature in the UK’s bestselling cycling magazine Cycling Weekly, on a national level also.

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APO Microfinance Bank Limited is optimistic of meeting the N152 billion loan target for this year, its managing director/CEO, Godwin Ehigiamusoe, said in Lagos. This comes as the bank has already disbursed about N90 billion to low-income earners in the Micro, Small and Medium Enterprises (MSMEs) sub-sector of the economy. Meanwhile, the Non-Performing Loan (NPL) ratio of the bank is put at between 5 and 11 percent, which is above 5 percent regulatory threshold. However, Ehigiamusoe said the bank would improve on this subsequently. This, according to the managing director, was as a result of harsh operating environment and the prevailing economic downturn. The bank has championed several initiatives in the sector that would help maintain its dominant position in the industry, such as in energy lending, the affordable housing, and sustainable finance, among others. LAPO provides a range of unique financial and social

empowerment services to lowincome earners in the country and across the African region. The bank has developed critical mass and physical structures in terms of service outlets that help drive its growth in a sustainable manner. “If you combine all we do in the microfinance sector, it may not be up to what the big banks will do but in terms of spread and touching the lives of the people, we are there. The sector has potential for growth, this is a country of close to 200 million and this is a country of exceptionally enterprising people and when you have such a thing like this, microfinance is also very useful. “We have reached millions of Nigerians with a range of financial services and many have moved on. We current provide loans and savings opportunities to over 4 million. There is also an unintended impact or benefit, that is impact on youth unemployment, because at the beginning it was not on our list of objectives. But today, we have 7, 012 largely young people on our full time staff list. And over 8,000 in the LAPO System,” he said.

FilmoRealty partners Microsoft in move into Proptech

ilmoRealty, a real estate services company in Nigeria with a focus on facilities and project management, has partnered Microsoft to transform the real estate services industry in Nigeria. With a 25-year track record of delivering real estate services to high-profile companies and individuals spanning 12 states, FilmoRealty is accelerating and investing in the development of technology-driven solutions necessary to better serve its clients and drive forward the evolution of real estate services. Through its partnership with Microsoft, FilmoRealty is now uniquely positioned to execute its new tech-driven business strategy, which will optimise real estate service delivery and also place it at the forefront of proptech

(property technology) in Africa. Representatives from Microsoft’s US headquarters recently paid a visit to FilmoRealty’s Lagos office to spotlight its tech-focused strategies and processes as an innovative company. The visit resulted in a spotlight feature video, which highlights FilmoRealty’s adoption of Microsoft’s cloud-based, highly secure workplace tools to optimise its services and build its growing portfolio of proptech products. One such tool includes Microsoft’s Power BI, which supports FilmoRealty’s operations with big data analysis and insights that equips clients with the information needed to make powerful strategic business decisions related to the management of their real estate portfolio.

Obaseki, Congo Brazzaville mull partnership with Stem Cell Transplant Centre

do State government and the Congolese Government have revealed plans to partner Cellteck Medical Centre, a private hospital in Benin City, on Stem Cell Transplant for sickle cell patients. The state governor, Godwin Obaseki, said this when he received the Congolese Ambassador to Nigeria, Jacques Obindza, who led the delegation from Congo Brazzaville, to the Government House in Benin City, the state capital. He commended Bazuaye Nosakhare, a professor and an indigene of the state, for providing a solution to the sickle cell @Businessdayng

challenge, assuring that the state government would collaborate with the Medical Centre on its cutting-edge technology. Obaseki described Sickle Cell anaemia as a serious health challenge in the country, noting that his administration would continue to support the welfare of sickle cell patients in the state. He also commended the first lady of Congo Brazzaville for sponsoring the delegation to Edo State to understudy the breakthrough in sickle cell treatment. According to the Congolese Ambassador, the collaboration is in the area of knowledge and experience sharing on Stem Cell Transplant.

Thursday 29 August 2019

BUSINESS DAY

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Thursday 29 August 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 28 August 2019

Top Gainers/Losers as at Wednesday 28 August 2019 LOSERS

GAINERS Company MTNN

Opening

Closing

Change

N140.05

N140.95

0.9

Company

Opening

Closing

Change

N19

N18.5

-0.5

ZENITHBANK

N14.6

N15.4

0.8

N6.25

N5.9

-0.35

DANGCEM

N165

N165.5

0.5

ACCESS

N6.8

N6.45

-0.35

CCNN

N14.5

N15

0.5

FBNH

N4.95

N4.8

-0.15

ETI

N6.95

N7.2

0.25

N27.15

N27

-0.15

GUARANTY

Stanbic IBTC proposes 100kobo interim dividend despite weakened H1 profit …PBT prints lower by 11.99% to N44.65billion Stories by Iheanyi Nwachukwu

tanbic IBTC Holdings Plc has released its financial results for halfyear (H1) ended June 30, 2019. The consolidated and separate interim financial statements were released to the investing public at the Nigerian Stock Exchange (NSE) on Wednesday August 28, 2019. It shows the group’s gross earnings increase by 2.77percent to N117.37billion in H1’19 as against N114.207billion it recorded in H1’2018. Its Net Interest Income (NII) decreased to N39.31billion in H1’19 from N40.16billion in the corresponding first-half period of 2018. Profit before tax (PBT) decreased by 11.99percent to N44.650billion for the period ended June 30, 2019 as against N50.730billion in H1’18. Likewise, its profit after tax (PAT) stood lower at N36.245billion in H1’19 from a high of N43.084billion in H1’18. Despite this dismal bottom-line figures, the management recommended the approval of an interim

dividend of 100 kobo per share, which is the same amount paid as interim dividend in the half-year period ended June 30 2018. The proposed interim dividend amounts to N10.241billion. Its basic earnings per ordinary share (EPS) was down to 342kobo as against 416kobo reported in H1’18. Stanbic IBTC Holdings Plc share price was unchanged at N35 at the sound of closing gong for stocks trading on the NSE. Stanbic IBTC Holdings Plc (the company), and its subsidiaries (the group), as a member of Standard Bank Group, operate under a governance framework which enables the board to balance its role of providing oversight and strategic

counsel with its responsibility to ensure conformance with regulatory requirements, group standards and acceptable risk tolerance parameters. The direct subsidiaries of the company are: Stanbic IBTC Bank, Stanbic IBTC Asset Management Limited, Stanbic IBTC Pension Managers Limited, Stanbic IBTC Insurance Brokers Limited, Stanbic IBTC Trustees Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Investments Limited and Stanbic IBTC Capital Limited. These subsidiaries have their own distinct boards and take account of the particular statutory and regulatory requirements of the businesses they operate.

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,607.02 2,866.00 130,372,442.00 3.006

Global market indicators FTSE 100 Index 7,114.71GBP +25.13+0.35%

Nikkei 225 20,479.42JPY +23.34+0.11%

Generic 1st ‘DM’ Future 25,950.00USD +206.00+0.80%

Deutsche Boerse AG German Stock Index DAX 11,701.02EUR -29.00-0.25%

S&P 500 Index 2,886.42USD +17.26+0.60%

Shanghai Stock Exchange Composite Index 2,893.76CNY -8.44-0.29%

13.430

Arise B.V. acquires IFC’s 14.1% equity stake in ETI

cobank Transnational Incorporated (ETI) said that IFC and the funds managed by the IFC Asset Management Company (AMC) have completed the sale of their about 14.1 percent stake in ETI to Arise B.V. (Arise). Accordingly, Arise has become a shareholder of reference in ETI with a c.14.1 percent stake. J. P. Morgan Securities Plc acted as Sole Placement Agent and Sole Financial Advisor to IFC and the funds managed by AMC in the transaction. Following the completion of the transaction, Paolo Martelli, Senior Advisor at IFC said: “As part of its ordinary asset portfolio rotation, IFC has divested its shareholding in ETI to Arise B.V, a highly reputable Investment House with a strong developmental mandate for Africa. IFC invested in Ecobank for

more than ten years and our investment has helped to increase access to credit for entrepreneurs and SMEs in Sub Saharan African Countries (including in IDA countries) in which the bank operates, achieving the development impact we sought when we made the investment. IFC maintains its strong commitment to the development of the Sub Saharan African Region and is continuing to invest in other projects in these countries.” Deepak Malik, Chief Executive Officer of Arise said: “In line with our core business mandate of investing in Africa’s local prosperity we are excited to have acquired circa 14.1 percent shareholding in Ecobank Transnational Incorporated (ETI). Arise aims to collaborate with local Financial Service Providers (FSPs) in Sub - Saharan Africa to boost

economic growth through strengthening the local banking sector. This transaction with ETI will see Arise collaborate with Ecobank to advance financial inclusion on the continent”. Ade Ayeyemi, Chief Executive Officer of ETI said: “We welcome Arise as a shareholder of ETI and believe that there would be a strong synergy in our core objectives especially in ensuring and enshrining financial inclusion and the potential for the development of our continent. We must also take the opportunity to extend our deep appreciation to IFC for its commitment to and support for Ecobank in the last 10 years. We made meaningful progress with the strong collaboration and look forward to continuing to work with IFC in other areas in the future”.

CSCS celebrates Special Olympics Nigeria medalists

entral Securities Clearing System (CSCS) Plc recently celebrated representatives of Special Olympics (SO) Nigeria following their sterling performance at the 2019 Special Olympics World Games which took place in Abu Dhabi earlier this year. The SO Nigeria athletes, who represented the country in eight sports, won a total of sixty-three (63) medals. The event, which took place at CSCS’ Corporate Head Office, started with a Knowledge Sharing Session, where the representatives of SO Nigeria enlightened the staff of CSCS on the Inclusion Revolution for People

With Intellectual Disabilities (PWIDs) and the need for every Nigerian, especially the private sector, to support SO Nigeria. The Managing Director/ Chief Executive Officer of CSCS Plc, Haruna Jalo-Waziri, commended the athletes for making Nigeria proud at this year’s World Games and expressed his excitement about hosting the leadership of SO Nigeria and representatives of the medallists. He also commended the coaches, caregivers, medics and leadership of Special Olympics for their commitment to this laudable cause. According to Jalo-Waziri “We intend to fully partner

with SO Nigeria by holding fundraising events and encourage our stakeholders to be active participants in the Inclusion Revolution”. Commenting on their visit, Victor Osibodu, Chairman Special Olympics said, “Today’s event will remain memorable for our athletes through their life, as it fulfils their dream of being celebrated in spite of the challenges they face”. Osibodu lauded the individual and collective achievements of the sponsors and partners of SO Nigeria noting that the Corporate Governance model of SO Nigeria has become a benchmark for peer organizations in other countries.

Nigerian Bourse sets to host 4th edition of market data workshop

n a related development, the Nigerian Stock Exchange said it is set to host the 4th edition of the NSE Market Data Workshop. The event is scheduled to hold on Wednesday September 11, 2019 in Lagos. With the theme, “Partnerships, Products and the Customer”, the 2019 NSE Market Data Workshop will bring together investors, market data ag-

gregators, exchanges, market regulators, government agencies, broker dealers, media and other capital market stakeholders to discuss market data products and partnerships opportunitiesavailable to launch customer-centric products, while leveraging on strategic synergies and technologies to drive market participation. The one-day event which is an exhibitionwww.businessday.ng

styled workshop will feature presentations and panel discussions from thought leaders within the industry. Commenting on the event, Jude Chiemeka, Divisional Head, Trading Business, NSE, stated that “we launched this event four years ago to create awareness on the critical application of market data in making sound investment decisions whilst

highlighting the various data products available in the Nigerian marketplace. “As technology evolves, what can be considered useful data is changing. It is for this reason we instituted the NSE Market Data Workshop to inspire market participants and the wider ecosystem to become more innovative in the use of market data as they strive to leapfrog performance through the

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use of the many market data solutions offered by NSE,” he said. “This event which presents a high-profile business networking opportunity for market stakeholders has become a signature industry event due to the quality of its content, speakers, participants and publicity received since its maiden edition in 2016. “For this year, we have received sponsorship @Businessdayng

boost from Infoware Limited and HP Nigeria. Sponsorship of the event provides an excellent opportunity to increase your company’s presence and take advantage of networking opportunities. Our standard sponsorship packages can be found on the event registration page and we welcome potential sponsors/partners”, added Chiemeka”

Thursday 29 August 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 28 August 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. 229,266.71 6.45 -5.15 140 5,390,535 UNITED BANK FOR AFRICA PLC 201,776.59 5.90 -0.85 165 6,294,953 ZENITH BANK PLC 580,835.14 18.50 -2.63 303 7,567,465 608 19,252,953 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 172,297.41 4.80 -3.03 191 6,731,632 191 6,731,632 799 25,984,585 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,868,968.61 140.95 0.64 144 15,265,337 144 15,265,337 144 15,265,337 BUILDING MATERIALS DANGOTE CEMENT PLC 2,811,683.72 165.50 0.30 37 211,472 227,925.31 14.15 1.07 40 10,439,674 LAFARGE AFRICA PLC. 77 10,651,146 77 10,651,146 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 234,024.40 397.70 - 8 921 8 921 8 921 1,028 51,901,989 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. 38,299.49 40.15 - 6 10,050 PRESCO PLC 44,800.00 44.80 - 4 1,302 10 11,352 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,200.00 0.40 - 10 204,568 10 204,568 20 215,920 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 7 6,780 JOHN HOLT PLC. 214.03 0.55 10.00 10 1,259,602 S C O A NIG. PLC. 1,903.99 2.93 - 4 22 TRANSNATIONAL CORPORATION OF NIGERIA PLC 42,273.91 1.04 -0.95 80 39,088,773 U A C N PLC. 14,406.48 5.00 - 41 2,845,950 142 43,201,127 142 43,201,127 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 6 37,645 ROADS NIG PLC. 165.00 6.60 - 0 0 6 37,645 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,416.51 0.93 - 6 44,837 6 44,837 12 82,482 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 11,979.13 1.53 - 1 50 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 7 3,657 GUINNESS NIG PLC 90,681.85 41.40 - 32 151,974 INTERNATIONAL BREWERIES PLC. 83,809.65 9.75 - 3 1,561 NIGERIAN BREW. PLC. 405,442.93 50.70 - 66 228,002 109 385,244 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 104,000.00 20.80 - 85 795,930 DANGOTE SUGAR REFINERY PLC 114,000.00 9.50 - 40 150,761 FLOUR MILLS NIG. PLC. 58,635.43 14.30 - 74 1,166,000 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 -7.41 17 827,957 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 33,117.98 12.50 - 8 46,020 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 224 2,986,668 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,467.28 9.30 - 25 83,578 NESTLE NIGERIA PLC. 982,893.75 1,240.00 - 43 81,970 68 165,548 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,366.12 4.29 - 10 171,250 10 171,250 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,425.81 5.90 -5.60 30 535,476 UNILEVER NIGERIA PLC. 166,605.16 29.00 - 19 102,507 49 637,983 460 4,346,693 BANKING ECOBANK TRANSNATIONAL INCORPORATED 132,116.77 7.20 3.60 48 440,150 FIDELITY BANK PLC 46,649.42 1.61 -4.73 46 2,413,286 GUARANTY TRUST BANK PLC. 794,641.84 27.00 -0.55 209 3,204,584 JAIZ BANK PLC 11,785.70 0.40 - 4 83,777 STERLING BANK PLC. 65,930.06 2.29 - 17 741,407 UNION BANK NIG.PLC. 199,477.16 6.85 - 52 860,099 UNITY BANK PLC 7,598.07 0.65 8.33 11 201,842 WEMA BANK PLC. 22,373.19 0.58 -3.33 26 479,050 413 8,424,195 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,712.54 0.68 - 23 151,355 AXAMANSARD INSURANCE PLC 19,530.00 1.86 - 2 800 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 1 6,500 CONTINENTAL REINSURANCE PLC 14,833.02 1.43 10.00 9 397,973 CORNERSTONE INSURANCE PLC 3,240.49 0.22 10.00 1 415,450 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 3.57 3 450,100 LAW UNION AND ROCK INS. PLC. 1,675.57 0.39 - 3 21,384 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 10,191.37 1.93 - 7 82,570 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,583.62 0.48 - 2 100 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 100 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 2 90,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 5,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 100,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,219.27 0.39 5.41 19 793,893 75 2,515,725

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,583.90 1.13 -0.88 12 722,805 12 722,805 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 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 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,000.00 3.50 - 15 41,975 35,879.37 6.10 - 6 52,175 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 31,882.36 1.61 - 46 2,119,593 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 STANBIC IBTC HOLDINGS PLC 358,419.35 35.00 - 19 55,255 12,000.00 2.00 -2.44 48 711,216 UNITED CAPITAL PLC 134 2,980,214 634 14,642,939 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 5 1,315 817.22 0.23 - 5 92,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 10 93,315 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 2 31,920 2 31,920 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 9,388.62 4.50 - 0 0 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 9,925.77 8.30 - 12 80,911 MAY & BAKER NIGERIA PLC. 3,622.99 2.10 - 9 183,125 892.60 0.47 - 9 274,100 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 30 538,136 42 663,371 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 - 3 53,592 3 53,592 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 534.60 4.95 - 1 1,495 TRIPPLE GEE AND COMPANY PLC. 336.57 0.68 - 5 22,507 6 24,002 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 -3.45 23 2,195,529 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 2 4,000 25 2,199,529 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,215,762.01 323.50 - 20 16,712 20 16,712 54 2,293,835 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 5 3,200 CAP PLC 17,325.00 24.75 - 7 13,857 CEMENT CO. OF NORTH.NIG. PLC 197,152.51 15.00 3.45 30 153,070 MEYER PLC. 313.43 0.59 - 1 69,727 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 1,156.20 9.40 - 2 25 PREMIER PAINTS PLC. 45 239,879 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,730.05 1.55 - 11 154,715 11 154,715 PACKAGING/CONTAINERS BETA GLASS PLC. 29,873.33 59.75 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 56 394,594 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 2 25,100 2 25,100 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 3 62 3 62 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 0 0 0 0 5 25,162 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 19 3,141,004 19 3,141,004 INTEGRATED OIL AND GAS SERVICES OANDO PLC 48,482.51 3.90 4.00 31 310,345 31 310,345 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 - 2 5,047 CONOIL PLC 11,658.40 16.80 - 21 142,324 ETERNA PLC. 3,651.61 2.80 - 16 108,863 FORTE OIL PLC. 20,058.21 15.40 5.48 178 5,420,740 MRS OIL NIGERIA PLC. 5,729.98 18.80 - 5 6,348 TOTAL NIGERIA PLC. 32,763.86 96.50 - 40 34,286 262 5,717,608 312 9,168,957 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 4 40 4 40 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,499.47 4.24 - 3 520 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 1 100 4 620 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,972.68 1.43 - 2 1,100 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 300 41,042.18 5.40 - 1 1,000 TRANSCORP HOTELS PLC 4 2,400 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 3 10,010 3 10,010 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 0 0 LEARN AFRICA PLC 1,072.32 1.39 - 8 71,805 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 625.54 1.45 - 12 353,310 20 425,115 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 513.89 0.31 -3.12 2 1,493,019

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Thursday 29 August 2019

BUSINESS DAY

ECONOMIC MONITOR

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

briu@businessday.ng

08098710024

Appraising the relationship between Nigeria’s population and public debt ADEMOLA ASUNLOYE

igeria ranks seventh by population in the world with a current population of circa 201.78 million people as of Wednesday August 28 2019, based on the latest United Nations estimates: this estimate is equivalent to 2.61 per cent of the total world population. The median age in Nigeria is 17.9 years albeit 51.2 per cent of the population is urban (103,311,360 people) while the remaining 48.8 per cent live in the rural areas. The split between the number of males and females in Nigeria are quite even. Men take the edge in numbers, but not by much. There are, according to estimates, about 1.04 males to every 1 female in the country. It should be noted that while women are slightly outnumbered by men, after the age of 65, women outnumber men. According to the data from the National Bureau of Statistics (NSB), from the largest to the smallest, we have the North West (NW) region, South West (SW), South-South (SS), North East (NE), North Central (NC) and the South East (SE) region has the least populated region in the coun-

Source: Economic Associates, BRIU

try—the estimated population includes all the states except the Federal Capital Territory (FCT). Lagos is by far the largest city in the country, with a population of around 17.5 million, according to World Population Review. The other 4 cities ranked by population are Kano, Ibadan, Benin City, and Port Harcourt. P ro j e c t i o n s w e re m a d e from the population growth rate according to the 2006 p o pu l at i o n c e n su s by t h e National Population Commis-

sion (NPC). Analysts opine t hat S ou t hw e st s h ou l d b e the region with the largest population considering Lagos alone which has the largest population (about 17 million) contrary to the 9 million re c o rd e d d u r i ng t h e 2 0 0 6 national population census. Again, Ogun State boasts of a larger population size than recorded in the same year, not to mention the artificial population it has due to religious c e nt re s a n d ca mp s w h i ch continue to mount pressure on

Source: Economic Associates, BRIU www.businessday.ng

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Ogun State’s economy. Others states also have similar disparity with the census figure— hence, the need to carry out another national population census which is long overdue. The United Nations projects that the overall population of Nigeria will reach about 398 million by the end of 2050. By 2100, if current figures continue, the population of Nigeria will be over 746 million. The projection of the Census Bureau of the United States is similar to the United Nations, as it states that the population of Nigeria will reach 402 million people by 2050. With those numbers, Nigeria will become the third most populated country in the entire world, surpassing the United States, according to various projections. Meanwhile, based on the latest WHO data published in 2018, the average life expectancy in Nigeria is unfortunately, the lowest in all of West Africa— an average life expectancy of 55.2 years. Men are expected to live an average of 54.7 years and women, an average of 55.7 years. This gives Nigeria a world life expectancy ranking of 178th among other countries. This very low number of years can be attributed to the fact that the country has a lot @Businessdayng

of health issues. The top 10 causes of deaths are influenza and pneumonia with 305,460 deaths (15 per cent of total deaths), diarrhoeal diseases causing 186,218 deaths (9.16 per cent), tuberculosis, 175,124 deaths (8.62 per cent); HIV/ AIDS, 168,900 deaths (8.31 per cent); Malaria, 112,371 deaths (5.53 per cent); Low Birth Weight,87,318 death s (4.3 p e r c e n t ) ; S t ro k e, 8 3 , 3 7 9 deaths (4.1 per cent); Birth Trauma, 81,448 4 deaths (4.01 per cent) and Coronary Heart Disease caused about 76,410 deaths which represents 3.76 per cent of total deaths. The basic factor of population changes are: O n e b i r t h e v e r y 4 s e conds One death every 14 seconds One net migrant every 9 minutes Net gain of one person every 6 seconds As the population increases, debts also continue to increase—see the link to an article https://businessday. ng/news/article/the-consolidated-debts-status-of-the36-states/ titled: ‘The consolidated debts status of the 36 states’. National debts are highest in the South West region with N1.63 trillion debts owed by the states within the region. The region is followed by South South region with N1.26 trillion. The North West region, which has the highest population, accumulated N588 billion in debts. Whereas South East owed the least debts of N450.38 billion, the North East and North Central (excluding FCT) trails with N507.28 billion and N551.53 billion in public debts respectively. Although the North West is the third most indebted region, its debt per capita of about N11,000 is the least due to the high population in the region. On the contrary, the region with the least debt shows a debt per head of N18,792 which is the 4th largest among the 6 regions.

Thursday 29 August 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

TOMMY STUBBINGTON IN LONDON AND HANNAH ROBERTS IN ROME

talian bond yields have plunged to a record low as signs of progress towards a new coalition government gave yieldhungry investors the green light to snap up the country’s debt. Italy’s bonds have surged since the country’s governing coalition collapsed last week, with investors calculating that any successor is likely to be more market-friendly than the populist alliance of the rightwing League and leftwing Five Star Movement. The rally accelerate d on Wednesday as talks between Five Star and the centre-left Democratic party appeared to progress, lessening the prospect of a snap election. The yield on Italy’s 10-year bond — which falls as prices rise — sank to 0.985 per cent, breaking the previous all-time low from 2015. The 30-year yield sank to just above 2 per cent. Longerterm Italian bonds are among the few in the eurozone that offer yields above zero. The two-year yield, which is highly sensitive to political developments, fell to minus 0.15 per cent. “If we can kick the prospect of elections into next year, that brings some peace to the mar-

Italian government bond yields hit record lows on political hopes Ten-year yield falls below 1% on rising expectations for investor-friendly government

Luigi Di Maio’s Five Star Movement has held talks with the centre-left Democratic party about forming a coalition government, though disagreements about top government posts remain © EPA

ket,” said TD Securities strategist Pooja Kumra. “If things are relatively stable, Italy will attract big foreign investors, particularly from Japan, back to its bonds.” The Democratic party accepted on Wednesday that Gi-

useppe Conte, the prime minister who resigned last week as the League-Five Star coalition fractured, could return as the head of a new government, removing a major barrier to a deal. Ho w e v e r, d i s a g re e m e n t s

about top government posts remain, with the PD rejecting the possibility of Five Star leader Luigi Di Maio staying on as deputy prime minister. Italian president Sergio Mattarella is holding a second round

of talks with political leaders on Wednesday to try to reach a deal. Yields have plunged across the eurozone in recent months as investors anticipate a fresh round of bond-buying from the European Central Bank when it outlines its stimulus package next month. Italy’s borrowing costs have lagged behind the rally amid the latest bout of political instability and fears of a rerun of last year’s confrontation with the EU over the size of Italy’s budget deficit, leaving yields looking relatively attractive to investors. “This move is the culmination of the positive news on Italian politics but also the grab for yield that’s going on,” said Mohammed Kazmi, a Londonbased por tfolio manager at Union Bancaire Privée. “Italy does stand out for offer ing investors a positive yield, and more QE (quantitative easing) should provide a backstop to the bonds.”

Apple apologises for listening Outlook for US corporate profits to Siri conversations dims as trade war bites

iPhone maker says it failed to live up to its own privacy ideals PATRICK MCGEE IN SAN FRANCISCO

pple apologised to users of its voice assistant Siri on Wednesday, acknowledging it had failed to live up to its own privacy ideals when it hired contractors to listen to customers’ audio recordings. The iPhone maker said it issued new policies to protect user privacy, after conducting a review in the wake of media reports critical of how Apple used Siri recordings to improve voice recognition. According to the Guardian, third party contractors occasionally heard confidential information and even “recordings of couples having sex”. Rival voice recognition systems such as Amazon’s Alexa also listen to audio recordings to improve their service, but Apple had not disclosed the practise to users. “Many commentators have seized on the irony of Apple having the worst privacy practices for voice recordings given their rhetoric around being a privacy champion,” wrote Ben Thompson at Stratechery on Tuesday. Apple acknowledged the lapse, said “privacy is a fundamental hu-

man right,” and issued policy changes meant to regain user trust. “As a result of our review, we realise we haven’t been fully living up to our high ideals, and for that we apologise,” the company said. Apple explained its earlier actions, saying less than 0.2 per cent of all Siri requests were reviewed using audio samples to improve its reliability. But from now on — by default — Apple will “no longer retain audio recordings of Siri interactions, it said. Written transcripts will still be used, as machine learning relies on such data to improve. Users will be allowed to opt in and help Siri improve, but no thirdparty contractors will be part of the process, only Apple employees. Inadvertent recordings will be deleted, the company said. Apologies from Apple are rare, underscoring the seriousness of the issue. In 2012, CEO Tim Cook publicly apologised for the botched rollout of Maps, its rival to Google Maps, saying he was “extremely sorry for the frustration” it caused. The acknowledgment was taken to be a sign of how his leadership differed from Steve Jobs. www.businessday.ng

Expectations for earnings at S&P 500 companies fall by most in three years RICHARD HENDERSON IN NEW YORK

nalysts have pared profit expectations for US companies by the most in three years as the trade war with China and a dimming economic outlook weigh on earnings and expansion plans. Companies in the S&P 500 index will increase profits 2.4 per cent on a per-share basis this year, down from the 7.7 per cent growth expected at the start of the year, according to FactSet data. The 5.3 percentagepoint drop in full-year earnings expectations marks the largest decline on a year-to-date basis since 2016. “The corporate sector is displaying worrisome symptoms,” Lydia Boussour, senior economist for Oxford Economics, wrote in a note to clients last week. “With global growth slowing sharply, and domestic activity cooling, further profit weakness represents a risk for business investment and hiring — a key support to consumer spending.” Second-quarter profits for companies in the S&P 500 are down 0.4 per cent on a per-share basis with 96 per cent of companies having

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reported. A contraction would mark an “earnings recession” of two consecutive quarters of negative earnings growth after profits slipped 0.2 per cent in the first quarter, according to FactSet data. Companies that have scaled back profit guidance in the second quarter include Macy’s, Home Depot, Caterpillar and, on Tuesday, pet food company JM Smucker. Trade tensions between the US and China escalated last week when Beijing said it was preparing to slap tariffs on $75bn of US imports, and President Donald Trump responded with a plan to increase levies on Chinese goods and what he called an order for US companies to “immediately” find alternatives to China. Shifting US operations out of China would increase costs for companies, said Alicia Levine, chief market strategist for BNY Mellon Investment Management. “Changing supply chains will impact margins,” she said. “Given where the global economy is and the pain points, I expect [corporate profit estimates] will come down.” The lower profit outlook fol@Businessdayng

lows anaemic growth in US capital spending this year after a surge in 2018 when lower corporate taxes came into force. Last month, the US Bureau of Economic Analysis reduced its 2018 corporate profit calculations by 8.3 per cent, wiping $188bn from the prior tally. This included small and medium-sized companies that are seen as more vulnerable to the trade dispute because changing supply chains will be more costly for them. “The BEA change was a massive downward revision,” said Liz Ann Sonders, chief investment strategist for Charles Schwab. “The news on that got lost in the shuffle with the headlines on trade and the currency wars,” she said, referring to China’s currency weakening past Rmb7 per dollar early this month. “I don’t remember the last time someone asked me about corporate earnings,” said Candice Bangsund, a portfolio manager with Fiera Capital, who added that investors were preoccupied with the tariff dispute. “The recent downgrade in US corporate earnings reflects the pessimism about growth in the global economy.”

Thursday 29 August 2019

BUSINESS DAY

NATIONAL NEWS

Why US energy investors are experiencing a crisis of faith Shale glut, growth fears and tougher ESG standards weigh on crude producers HARRY DEMPSEY IN LONDON

It is a tough time to be an investor in oil and gas stocks. il prices might be more than double the levels of 2016, when they sank below $30 a barrel, but the US exploration and production (E&P) sector, as measured by an index tracked by S&P Dow Jones, is trading at a 15-year low. The reasons for investor apathy are multiple, from long-term fears about the future of the fossil fuel industry to short-term concerns about the new breed of shale-focused drillers’ ability to generate cash. But the bearishness is unmistakable. Amid the broad sell-off, energy’s share of the market capitalisation of the S&P 500 has fallen to less than 4.5 per cent, down from about 15 per cent a decade ago. Today’s share is even lower than during the late 1990s dotcom boom, when tech stocks were rampant and oil prices collapsed below $10 a barrel. Some fund managers see an opportunity to pick up oversold shares cheaply, but many see much better opportunities to make money elsewhere. “I used to put my money on oil and gas and go to sleep,” said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, and a former manager of the New York State pension fund. “Apple looks a lot better than spending time on this dying industry.” Jennifer Rowland, senior equity analyst at Edward Jones, said energy stocks were stuck in a vicious cycle in which investors have turned away from the sector, leading to underperformance and then further neglect. She noted that some of the smaller US E&P stocks had been “absolutely crushed” over the past few months, and that investors were “winning if [they’re] down only 10 per cent.” A $1m investment in S&P’s US E&P index at the start of 2016 would have lost about $240,000 since then, with dividend payouts unable to compensate for the loss in equity value. A leading factor has been bearish oil and gas markets, said analysts. This year crude prices have rallied from fourth-quarter lows, but the market has been volatile and the days of $100-a-barrel crude are broadly believed to be long gone, given the huge growth in output from the US shale sector. Oil stocks have also been hit by the apparently rising probability of an extended trade war between the US and China. Meanwhile, fears of a global economic downturn have swept aside concerns of tighter supplies, as US sanctions have cut Iranian exports and weighed heavily on Venezuela’s output. The volatility means that investors cannot rule out a price collapse that would make a deep impres-

sion on companies’ revenues. Stewart Glickman, energy equity analyst at CFRA Research, said hydrocarbon producers had lost the faith of investors for two fundamental reasons, besides unpredictable oil prices. For one, he said, the sector failed to show discipline on cost cuts even when oil prices were in better shape. “Exploration and production companies have a track record of not producing cash flow,” he said. “They didn’t help themselves when oil prices were high.” Many investors also refuse to touch even high-growth oil producers because of their perceived failure to fully embrace stricter environmental, social and governance (ESG) standards. Mr Glickman described the sector, in general, as “dancing between the raindrops”. However, some say the selling has gone on so long that valuations have now reached levels at which further big falls are unlikely. The recent slump in the shares of Cimarex Energy, for example, a mid-cap explorer based in Denver, has opened up a huge 10-point discount, in terms of its forward price/earnings ratio, to the S&P 500. Darren Sissons, Toronto-based partner at investment manager Campbell, Lee & Ross, said oil and gas was “massively underweighted” in investors’ portfolios and exposures should ultimately rise, given that the world remains highly dependent on fossil fuels for power generation. Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. Other sector bulls agree that the integrated supermajors look increasingly compelling, since they produce high and consistent cash flows and, with their strong balance sheets, are well positioned to make a transition to a lower-carbon economy. Chevron and ExxonMobil, for example, offer dividend yields of over 4 and 5 per cent respectively, while those of BP and Royal Dutch Shell exceed 6 per cent. Plus, investors note, each company has vowed to continue to provide a reliable, growing dividend. But even with dividend yields on highly rated supermajors in many cases paying out more than highly risky junk bonds, the prevailing mood is still cautious. Some analysts are starting to think that the current environment — low share prices and bleak sentiment — could well be the new normal. “The market is just not responding [to oil price increases] how it used to,” said Mr Sanzillo. www.businessday.ng

Former top Uber engineer charged with stealing trade secrets

Anthony Levandowski had been at the centre of Uber-Alphabet battle over self-driving vehicles PATRICK MCGEE AND CAMILLA HODGSON IN SAN FRANCISCO

S prosecutors have charged Anthony Levandowski, one of the most prominent developers of self-driving car technology, on 33 counts of theft and attempted theft of trade secrets from Google, it was announced Tuesday. Mr Levandowski, 39, was one of the founders of the Google self-driving project — now called Waymo — where he led the engineering team for lidar, a lightdetection system similar to radar used for detecting objects. The federal indictment alleges that Mr Levandowski downloaded from Google “numerous engineering, manufacturing, and business files” related to lidar and self-driving car technology, and then used them in his future ventures. Mr Levandowski left Waymo in January 2016 to co-found Otto, an autonomous trucking company later acquired by Uber. Uber appointed him head of autonomy, but later fired him

in May 2017 after allegations emerged that he had absconded Waymo with proprietary information. “All of us have the right to change jobs,” said US attorney David L. Anderson. “None of us has the right to fill our pockets on the way out the door. Theft is not innovation.” The US attorney’s office of the northern district of California said Mr Levandowski had been charged on August 15, but the documents were only unsealed on Monday. He faces up to 10 years in prison and a $250,000 fine for each count. Waymo and Uber settled their trade secrets case last year, with Uber agreeing to pay Waymo $245m. Waymo originally demanded $1.85bn in damages. The deal did not affect the other legal cases relating to the issue. A Waymo spokesperson said: “We have always believed competition should be fuelled by innovation, and we appreciate the work of the US Attorney’s Office and the FBI on this case.” A spokesperson for Uber said: “We’ve co-operated with the government throughout their

investigation and will continue to do so.” Mr Levandowski is an entrepreneurial engineer known for pushing technological boundaries but upsetting colleagues in the process. Before Google was fully committed to its selfdriving car project, he lit up the imagination of founders Larry Page and Sergey Brin when he outfitted a Toyota Prius with self-driving technology, then recorded it successfully delivering a pizza in San Francisco. Last December Mr Levandowski unveiled a new venture, Pronto. AI, another self-driving truck start-up launched because of the industry’s “inability to deliver on its promises”, he said at the time. He has often criticised the self-driving industry for being slow-moving. In a piece for Medium in December 2018, he wrote: “Despite the vast sums of money and time dedicated to developing and rolling out autonomous vehicles, there are no real autonomous vehicles today. There are only increasingly complex and expensive demonstrations.”

South Korea’s birth rate falls to new developed world low Fertility rate well below neighbours such as Japan despite campaign for more babies SONG JUNG-A IN SEOUL

outh Korea may be known for its high levels of productivity when it comes to manufacturing televisions, smartphones and ships but there is one crucial area in which the country is struggling to keep up with its competitors: babies. South Korea’s birth rate, already the lowest in the developed world, has fallen to a new low on factors such as the high cost of private education despite various government initiatives to prop it up, raising concerns about the

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country’s bleak demographic outlook. The country’s fertility rate — the number of expected babies per woman — fell to 0.98 in 2018, according to the latest government data released on Wednesday. It was already the lowest at 1.05 in 2017 among members of the OECD, far lower than Israel, which was the highest in the organisation with 3.11 expected babies in 2017, the US at 1.77 and Japan’s 1.43. The replacement level — the total fertility rate for developed countries needed to keep the population constant — is 2.1 per cent. @Businessdayng

Given its falling birth rate, Asia’s fourth-largest economy is expected to grow older more quickly over the next four decades than any other country, including Japan and China, despite the latter’s former one-child policy. “This is really bad news for our long-term growth outlook. The lower birth rate shows how pessimistic people are about our future economy,” said Park Chong-hoon, an economist at Standard Chartered. “There is no short-term fix for this problem, which is linked to [the high cost of ] education, welfare and property issues.”

Thursday 29 August 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Investor doubt puts $200bn Philip Morris-Altria merger at risk Shares in the two tobacco groups drop sharply after revelation of talks ERIC PLATT AND JAMES FONTANELLA-KHAN IN NEW YORK

nvestors wiped $13bn off the combined market value of Altria and Philip Morris International on Tuesday after the revelation of merger talks, threatening to derail the recombination of the two tobacco giants. PMI investors are worried about US regulatory and litigation issues, which were the main reason the two companies split more than a decade ago, according to analysts and people familiar with investor feedback to the companies. Altria investors are upset that the contemplated deal does not pay them a premium for their shares, they said. The combined group would have a market value of about $200bn. Both companies are listed on the New York Stock Exchange but PMI sells Marlboro and other brands outside the country while Altria sells inside the US. A deal would require shareholder approval at both companies. PMI said on Tuesday it was discussing an all-stock merger with Altria but “no assurance” could be made that an agreement would ultimately be clinched. According to one person briefed on the potential deal structure, PMI shareholders are likely to own between 57 per cent and 59 per cent of the combined group. Altria stockholders would hold the remainder. “The potential to reunite the companies has been often discussed, but we did not believe this would occur given the heavy regulatory burden in the US market and its weakening growth profile,” said Christopher Growe, an analyst at Stifel. Callum Elliott, an analyst with Bernstein Research, said there were

“significant risks” for PMI shareholders and that the combined group was unlikely to trade at the same premium PMI previously enjoyed. PMI shares suffered their largest one-day drop in 16 months on Tuesday, declining 7.8 per cent to $71.70. The slide was so intense at one point during the trading day that a US securities rule restricting short sales of PMI stock went into effect. Altria shares also slid after initially rallying as much as 11.3 per cent, ending the day 4 per cent lower at $45.25. A deal two years ago in which British American Tobacco bought Reynolds American for $49.4bn sparked expectations of further consolidation in the industry. The market has changed dramatically in recent years, as cigarette sales shrink and consumers shift to vaping and e-cigarettes. One sticking point is Altria’s 35 per cent stake in Juul, the popular ecigarette company. As part of its agreement with Juul, which last year was valued at about $38bn, Altria agreed not to distribute any other e-vapour products. PMI owns IQOS, a cigarette-like device that heats, rather than burns, tobacco. It is marketed as an alternative to cigarettes but it is unclear whether Juul would consider it an alternative or direct rival to vaping. Some analysts said that it would make little sense for PMI to pay Altria shareholders a premium since the international maker of Marlboro is widely seen as having a stronger portfolio of brands. “We struggle to see why PMI would want to pay a big premium, because PMI owns the strongest portfolio of NextGen products and [Altria] does not directly own any,” said Adam Spielman, analyst at Citigroup. “But stranger things have happened before.”

De Beers says diamond sales fell 44 per cent on weaker demand Economic uncertainty and a slowdown in jewellery manufacturing has led to slump in gem buying HENRY SANDERSON IN LONDON

e Beers, the world’s largest diamond miner, said sales of its diamonds fell by 44 per cent in its most recent auction in Botswana, in the latest sign of weaker demand in the sector. The Anglo American-owned company said it sold $280m worth of rough diamonds in its seventh “cycle” of the year, down from $503m from a year earlier. Diamond buyers, who polish and cut diamonds for retailers, are struggling to make money due to lower prices and tighter credit, prompting them to hold off from purchases. At $2.9bn, De Beers’ diamond sales this year are 26 per cent lower than the $3.9bn recorded at the same time last year, according to SP Angel brokerage.

“De Beers diamond sales remain well below the levels seen at this time last year in the face of continuing macroeconomic uncertainty and a slowdown in jewellery manufacturing,” analysts at SP Angel said. De Beers allowed its customers to opt not to buy some of the stones they were allocated in this sales auction, according to people familiar with the matter. “With midstream participants continuing to work down polished diamond inventory levels and reduced levels of manufacturing in the key cutting centres, De Beers Group provided customers with further supply flexibility during the seventh cycle of 2019,” Bruce Cleaver, chief executive of De Beers, said. De Beers sells most of its diamonds to approved customers at 10 “sights” a year in Africa. www.businessday.ng

Bond yields across the eurozone look vulnerable to policy setback Expectations of further European Central Bank support may have run ahead of reality LAURENCE FLETCHER IN LONDON

ugust has proved to be anything but a summer lull for financial markets. Stocks have bounced up and down at the mercy of the latest news on the health of the global economy or, judging by President Donald Trump’s comments this week, a possible truce in the US-China trade war. Meanwhile, yields on German Bunds and other major government bonds have been moving steadily lower, as prices rise. That has burnished their credentials not just as a safe haven in uncertain times but also as a way of making money for investors who have bought and held them. There are, of course, good reasons for Bund yields to be so low,

such as the shortage of supply from a country rapidly shrinking its debtto-GDP ratio and the vast quantities of bonds that have already been bought by the European Central Bank. There is also the belief that Europe is heading for an apparently permanent state of low rates and low inflation, like Japan. But investors should be wary of the sheer weight of expectation of further central-bank stimulus already priced into Bunds and across the eurozone. Those hopes have hardly been damped by the ECB itself. From president Mario Draghi’s dovish speech in Portugal in June, to comments by governing council member Olli Rehn this month that stimulus could exceed investors’ expectations, it is hard to believe that anything but a huge stimulus package is now baked into eurozone yields.

But that leaves plenty of room for disappointment at the ECB’s September meeting. Policymakers are, after all, aware of the damage that such a flattened yield curve is doing to commercial banks, which borrow short and lend long. Increasing demand for longer-dated government bonds — which, in Germany’s case, are already scarce — through further quantitative easing would only worsen that problem. “I just don’t see them [the ECB] doing QE in sovereigns,” said Anna Raytcheva, founder and chief investment officer at New Yorkbased hedge fund Sonya Capital Management, citing the lack of compensation that investors are receiving for holding longer-term bonds. The shape of the curve is “impairing the banks’ ability to lend and make money, and puts a lid on growth”, she said.

Novarick Homes launches Real Estate Project to drive call for smart community development

ovarick Homes, a real estate development company that is championing the drive for the development of greener and smarter communities across Lagos has recently added a new development, Wazobia Court to its pool of budget friendly real estate projects. Having successfully sold out two phases of it’s maiden project, Earl’s Court, positioned to be first renewable powered community in the Ibeju Lekki Community, the company is going one step further in it’s drive for technology adoption in the Nigerian Real Estate Industry in launching Wazobia Court, a smart community development that will feature state of the art Technology like Smart Energy Metering, Adaptive street lighting, Estate Wide Wifi Connectivity, CCTV surveillance system, Access controlled entry, Automated gate en-

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trance and number plate recognition system and many more. Wazobia Court is located at Bolorunpelu community in Ibeju Lekki, the estate is less than 5 minutes’ drive from Lekki international airport, Pan African University and Eleganza Industries and 20 minutes’ drive from Novare Shopping mall in Sangotedo, Ajah. The Estate comes with a verifiable certificate of occupancy title. Speaking on the development, Mr Noah Ibrahim, Chief Executive Officer, Novarick Homes & Properties Limited, said that the company is positioning its project to attract single and upwardly mobile, first time home buyers, couples, second home seekers, smart property investors and retirees looking for quality developments and attractive returns on their investments through rental yield and capital growth. @Businessdayng

In his statement, he communicated Wazobia Court as being open to all people of all tribes in Nigeria as Wazobia Court will serve as a monument to unite Nigerians irrespective of their cultural or tribal differences. The estate will also be designed to illustrate a perfect blend of Science and Art as it will feature Art by renowned Nigerian artistes across the Country. Plots are currently available at Wazobia Courts for as low as 2 million Naira for 300sqm plot size and 4 million naira for 600 sqm plot size. The company has created flexible payment plans for investors, allowing them to spread payment for up to 12 months. The investment is a buy & build plan which gives every investor the full access to get an instant allocation and verified documents to commence activity on their project.

Thursday 29 August 2019

BUSINESS DAY

ANALYSIS

This is a dangerous time to deregulate banks These days, examiners are much less inclined to put lenders in a ‘penalty box’ to prevent them from growing BROOKE MASTERS

ince US regulators loosened the Volcker rule that bans banks from engaging in proprietary trading, reactions have been starkly different. Banking lobbyists downplay last week’s changes to regulations designed to prevent banks from using insured deposits to make risky short-term bets. They say the changes reduce fiendishly complex compliance rules that make it hard for bankers to do their main jobs of making markets and providing services to clients. As a result, they say, the rule change should boost liquidity in the debt markets, which would make them more resilient in case of a downturn. The industry argues that higher capital requirements for trading in general — more than three times pre-2008 levels — will prevent a repeat of the financial crisis. “The largest US banks are not prop trading now, and they will not be prop trading tomorrow,” says Kevin Fromer, who heads the Financial Services Forum, which represents the biggest US banks. Consumer groups and some regulators see the Volcker rule change quite differently. The new version cuts the pool of financial instruments covered by the rule by at least one-quarter, according to a regulator who voted against the change. It not only frees banks up to take more short-term bets but also reduces the documentation requirements, opening the door to more risky trading. Critics also point out that if banks find ways to trade on their own account, rather than for clients, it could reawaken the poisonous conflicts of interest that flourished ahead of the 2008 crisis. “Banks didn’t spend nine and a half years and tens of millions lobbying to get these rules changed if they didn’t want to do prop trading and it wasn’t going to return

them many multiples on what they spent,” says Dennis Kelleher of the advocacy group Better Markets. The Volcker rule rewrite is part of a much larger shift under US president Donald Trump, who came into office promising to kill two regulations for every new rule he put in place. Supporters and opponents agree that he has far exceeded that ratio. Acting budget director Russell Vought boasted this summer that “we’ve hit 13 to one”, adding that the eliminated rules had saved taxpayers $33bn. Liberal groups keep running lists of the rules and regulations Mr Trump’s administration has watered down or scrapped. This month alone, according to the Brookings Institution, there are seven entries and the Volcker rule hasn’t been included yet. They include weakening the Endangered Species Act, reducing penalties on automakers who fail to meet fuel efficiency standards and rejecting a ban on chlorpyrifos, a pesticide linked to developmental and autoimmune disorders. In the financial sector, this change in attitude has led the US Federal Reserve to scrap one prong of its annual stress tests and ease the requirements for midsized banks to write “living wills” that lay out how they could be wound down in a crisis. A new rule requiring brokers to act in the “best interest” of their clients is seen as much less strict than a scrapped Barack Obama administration proposal that would have imposed a “fiduciary duty” on advisers. Industry insiders also say that the tenor of their interaction with government supervisors has changed. These days, examiners are much less inclined to put banks in a “penalty box” that prevents them from growing over anti-money laundering issues and other “matters requiring attention” (supervisor speak for “you need to fix this”).

Facebook given deadline to share data for research Working group says social network has failed to deliver promised figures CAMILLA HODGSON IN SAN FRANCISCO

group working with Facebook to examine how the social media platform affects elections said its researchers have not been given the data promised, as the company faces mounting obligations to deal with concerns about fake news and privacy. In a strongly-worded letter on Tuesday, funders of a project intended to shed light on how the Facebook platform could be misused said the company had failed to open up the full trove of data needed by the academics, and threatened to pull out of the initiative. They said the social media network had been “unable to deliver all the data initially anticipated” and that some researchers had only been granted access to “a portion of what they were told they could expect”. This has made it difficult or impossible for them to complete their work,

the letter said. The news comes only months after Facebook opened up its cache of data to independent researchers for the first time, as part of an effort to appease critics in the wake of the Cambridge Analytica scandal. As part of this research initiative, Facebook said the academics would be able to see how advertisers use the information on its site and how content spreads. Since the 2016 US election Facebook has been dogged by concerns about the ways in which its platform has been used to influence national elections and its broader impact on democracy. Critics have accused it of being opaque about how it has enabled the spread of fake news and of behaving irresponsibly with user data. This year Facebook was hit with a$5bn fine from the US Federal Trade Commission for leaking data to Cambridge Analytica and ordered to establish an independent committee to scrutinise its privacy practices. www.businessday.ng

Remittances: the hidden engine of globalisation With 270m migrants around the world, the money they send home now exceeds FEDERICA COCCO, JONATHAN WHEATLEY, JANE PONG, DAVID BLOOD AND ÆNDREW RININSLAND

very month Joy Kyakwita presses a button on her phone and does something in common with millions of other people across the globe: she sends money home. Ms Kyakwita, a London-based lawyer, gives a third of her salary to her family back home in Uganda, including paying money for school fees for her brothers and nephews. “I believe that when you pay for them to go on a good course, then there is a good chance of them becoming employable,” she says. “And if they are employed then they will be able to help their siblings as well.” Ms Kyakwita is just one of an estimated 270m migrants around the world who will send a combined $689bn back home this year, the World Bank estimates. That figure marks a landmark moment: this year remittances will overtake foreign direct investment as the biggest inflow of foreign capital to developing countries. Remittances were once viewed by many economists as a secondary issue for developing economies behind FDI and equity investments. Yet because of their sheer volume and consistent and resilient nature, these flows are now “the most important game in town when it comes to financing development”, says Dilip Ratha, head of the World Bank’s global knowledge partnership on migration and development. The number of people in the world who live outside the country of their birth has risen from 153m in 1990 to 270m last year according to the World Bank, swelling global remittance payments from a trickle to a flood. As migration has increased, these financial snail-trails have become one of the defining trends of the

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past quarter-century of globalisation - the private, informal, personal face of global capital flows. For many developing economies, it is a lifeline. “In times of economic downturn, natural disaster or political crisis, private capital tends to leave and even official aid is hard to administer,” says Mr Ratha. “Remittances are the first form of help to arrive, and they keep rising.” Remittance inflows help boost countries’ balance of payments and therefore their credit ratings, lowering the borrowing costs of governments, companies and households. In the Philippines, for example, this year’s remittances inflows of $34bn will help reduce what would otherwise be a current account deficit of more than 10 per cent of gross domestic product to a deficit of just 1.5 per cent of GDP. Remittances are “a relatively stable source of foreign currency in the current account, and that feeds directly into our sovereign ratings”, says James McCormack of Fitch Ratings. “In the case of a country like the Philippines, Egypt or Nigeria, their current account positions would be much weaker in the absence of remittance flows.” A heatmap matrix showing bilateral remittance flow between countries, categorised by region. Cells in each column represent a country receiving remittances, while cells in each row represent a country sending remittances. Darker coloured cells means higher share of receiving country’s GDP in percent. The graphic shows that countries in EU (pre-2004 expansion) and North America are the biggest senders of global remittances. Other notes include South Asian workers in the Middle East sending lots of remittances back home, and flows within sub-Saharan Africa are increasingly significant. Some governments have sought to channel remittances @Businessdayng

into development efforts; Indonesia is the latest country to consider a “diaspora bond” in a bid to tap the savings of its wealthier overseas residents. But remittances have economic downsides too. By helping to subsidise low incomes at home they provide a cushion against the impact of slow growth, which eases pressure on governments to reform their policies. And, by channelling capital into consumer spending, remittances boost imports - which, some economists say, holds back the development of domestic manufacturing. “No country is ever going to get rich from remittances,” says Gareth Leather of Capital Economics, a consultancy. “I don’t think any government would want to get rid of them, but many would like to get to the point where they are no longer needed.” Mr Ratha at the World Bank argues, however, that this understates the importance of remittances. “Is consumption bad?” he asks. “Not really. Without it we’d be dead. Investment can wait, consumption can’t.” As incomes rise, he added, people put money into housing, health and education. “This is human capital formation. That’s a great investment in any economy.” Remittances are also one of the key transmission mechanisms of global economic stress. People move in search of opportunities, so emigration rises when an economy is doing badly. When their host country is doing well and migrants prosper, they send more money home - a countercyclical boost to the struggling economy at home. But when host countries hit hard times, the shock is transmitted back to migrants’ families in the form of lower remittances. This can export the slowdown to the recipient country, fuelling economic instability on a global scale.

Thursday 29 August 2019

BUSINESS DAY

POLITICS & POLICY Lagos moves to prevent constant crisis in land matters as Assembly begins survey law review INIOBONG IWOK

h e L a g o s St at e House of Assembly has set-up a committee to review the State’s Survey Law and advise the House on how to prevent constant crisis in land matters arising from issues involving surveying in the state. The House submitted that the process would bring the Survey Law of the state to emerging realities. This followed a motion moved by some lawmakers in the Assembly led by the Majority Leader of the House, Sanai Agunbiade during plenary on Monday. The Speaker of the House, Mudashiru Obasa, who announced the committee members, revealed that it would be headed by Abiodun Tobun. Members of the committee included, Victor Akande, Noheem Adams, Rasheed Makinde, Tunde Braimoh, AbdulSobur Olayiwola, Fatai Oluwa and others. According to him, “To curb the nefarious activities of surveyors in the state the state has the smallest land in the country, yet the ownership and control of land usually leads to crisis the level of impunity is becoming so high based on the activities of some

Governor Sowolu

surveyors in the state. “We have laws that regulate the activities of surveyors in the state. Section 16 (1) of the state’s survey law in the state gives the house powers to control the activities of surveyors in the state,” he said. The Majority Leader added that non-composition of disciplinary committee on survey matters, as provided by the law, has led to a lot of issues in the survey. “This House has dealt with some crises on issues concerning lands and these arose from improper information in the survey plan.

“We have seen cases where surveyors collect money from people and say the land is not under acquisition whereas it is under acquisition. They give wrong information to land owners and cause disputes among people. “Many people who own land lose the land due to misinformation in the area of survey. That was why we searched for the law so that this could be corrected. The House is concerned with the Land Protection Bill.” In supporting the motion, Rasheed Makinde (Ifako-Ijaiye 2) said that the issue of land

was very important, adding that it has been a recurrent one. Makinde stated that they had not been doing digital survey in the Surveyor General’s Office, and that some of the instruments they are using for survey in the state were obsolete. “Incompetence of the technicians is another issue; the surveyors use intuitions to determine the land that is free. We need to overhaul the Office of the Surveyor General,” he said. In his contribution, the Deputy Majority Leader of the House, Olumuyiwa Jimoh (Apapa 2) stated that the Surveyor Registration Council should be up and doing in disciplining their erring members. He added that surveyors should stop the habit of sitting in the office and sending draftsmen to the field. This was corroborated by Abiodun Tobun (Epe 2), who said that land is to Lagos State what crude oil is to some other states of the federation. Rotimi Olowo (Shomolu 1) said that there was a law passed by the House to deal with erring surveyors. Olowo advised that the state should look at the issue of equipment for surveyors, adding that the state had been having problem with allocation of lands and that there was no good record keeping in the Office of the Surveyor General of the state.

Ogun governor pledges to reposition public service for effectiveness

gun State governm e nt say s i t i s working towards repositioning the civil and public service for efficient service delivery for the people. Dapo Abiodun, the state governor, stated this while inaugurating the Committee on the Review of Appointmentd and Promotions in the State Civil Service and Enterprises between February 1 and May 29, 2019, in his office at Oke-Mosan, Abeokuta. The governor noted that the State Public Service, renowned for its professionalism, commitment and dedication, be provided with the right type of leadership to enable it perform optimally. “Ogun State public service is renowned for its professionalism, commitment and dedication and it occupies an important position in the comity of state in the nation. “This is the state of Simeon Adebo and A. K. Degun.

Dapo Abiodun

The state has produced giants who laid the foundation of public service in Nigeria,” he said. According to him, the feedback received by his administration on the appointment of some people into positions of responsibility was unsatisfactory, hence, the setting up of the committee. The governor, who said his administration was determined to build a solid manpower base, made up of qualified people, added www.businessday.ng

that the committee was to examine and review all appointments and employments into the public service, MDAs and other related matters connected between February 1 and May 29, 2019. He also noted that the committee was to ascertain whether there are establishment vacancies for all posts and grade levels, to review and establish the procedures for appointment in line with Public Service Regulations and Extant Rules

The committee, according to him, is to recommend to government appropriate course of action on the appointments. The governor also said that the committee was to make any recommendation that may forestall recurrence of such appointments, and that it had four weeks to submit its report. Responding, Dipo Odulate, chairman of the committee and former Head of Service, lauded the governor for being meticulous and not rushing to take action on any issue. He said the committee would leave no stone unturned in discharging its assignment as it was poised to work assiduously, transparently and be fair to all. Other members of the committee are Sola Adeyemi, Kehinde Ogunfowodu, Jide Oyeti, Ambali Isola, Moyosore Olowonmi, Olufunmilayo Stanley, and Nurudeen Oyedele, who serves as the secretary.

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2023: ADP seeks more inclusion of youths in governance …Lauds Makinde’s appointment of youth as commissioner INIOBONG LWOK

he Action Democratic Party (ADP) has called for the appointment of more youths into leadership positions across the country, saying that it was capable of solving the leadership crisis which has plagued Nigeria in recent years. The party equally commended Oyo State Governor, Seyi Makinde for appointing a 27-year-old as commissioner in his cabinet, while seeking for more opportunity for youths to vie for elective positions in the 2023 general election. Yabagi Sani, national chairman of the party, stated this in a message to journalists, Thursday, noting that the party plans to hold a Youth Summit, with the theme: ‘Building bridges amongst youth across Continents’ in Lagos State. He said the high number of elective positions won by youths in the 2019 general

election was an indication that the Nigerian youths, if given the chance, were ready for governance. He added that the ADP cherish young people and was ready to empower, mentor and nurture them, which informed the party’s decision to allot 25percent of party executive positions to youths, women and persons with disabilities at all levels. According to him, “We have to encourage many young people to not only run but win elective positions in Nigeria. We want to use this opportunity to also commend the Executive Governor of Oyo State, Seyi Makinde who recently appointed a 27-year-old, Seun Fakorede as commissioner for Youth and Sports Development. “This is a good example of what our party is advocating. Leadership by youth is possible as demonstrated in the 2019 general election where more youths won elections in various elective positions.”

Governorship election petition tribunal adjourns till September 10 for adoption of briefs ANIEFIOK UDONQUAK, Uyo

he Governorship Election Petition Tribunal sitting in Uyo has fixed September 10 for adoption of written addresses in the petition brought by Nsima Ekere of the All Progressives Congress (APC). After calling 11 witnesses, Counsel to the People’s Democratic Party, Tayo Oyetibo (SAN) announced that he had closed his case for the 2nd respondent. Similarly, the third respondent, Independent National Electoral Commission (INEC) informed the tribunal that having examined the case before the tribunal from the beginning; they no longer saw a need for an additional witness. “Based on the facts before tribunal, we have come to conclusion that there is nothing whatsoever to prove again by calling additional witnesses. “We have decided to align with the evidences made by the first and second respondents in this @Businessdayng

tribunal.” Sylva Ogwemoh (SAN) said their decision was also taken in view of the lifespan of the tribunal which has its deadline for September 25, 2019. A total of 20 witnesses were called upon by the 1st respondent, while the 2nd respondent called 11 witnesses. The Tribunal Chairman, A. M. Yakubu noted that the three-man Panel enjoyed the cooperation of Counsel, adding that the Tribunal is not surprised by the cooperation because of the capacity of the senior counsel involved. Yakubu noted that the position taken by the counsel on final written address is good but for lack of time, he announced five days for filing of written addresses for both Petitioners and Respondents. He also said they have three days to file reply on point of law. The Tribunal adjourned to September 10, 2019 for adoption of written address.

Thursday 29 August 2019

BUSINESS DAY

Garden City Business Digest

Mathematics revolution in ABEC:

College in PH where 37 students scored ‘A1’ in WAEC •Impaired student scores 100%, scales JAMB huddle • Ibim reveals secrets of new Math craze as all 8 made ‘A1’ in Further Math Ignatius Chukwu

hirty-seven students of Arch-Deacon Brown Educational Centre (ABEC) in Port Harcourt, have shocked the academic community in Rivers State as 37 of them scored ‘A1’ in Mathematics. This is in addition to all eight students that sat for Further Mathematics making ‘A1”. As if that is not enough, one of the impaired students recorded 100 per cent in all subjects she sat for and smashed through the Joint Admission and Matriculation Board (JAMB) examination cut off point into the Federal University for Special Education in Oyo. ABEC is owned by Christie Toby (PhD), wife of one-time deputy governor of Rivers State (under Peter Odili), Gabriel Toby. She is also the mother of the former commissioner of information in Rivers State, Ibim Semenitari. The school is one of the ‘Cradle-to-Career’ education centres in Port Harcourt. The selected schools experiment a scheme of picking ordinary children from indigent homes at primary six and train them up to the university level and even beyond and to a career. ABEC premises stand out on ABEC Avenue in YKC area of Woji with colourful walls and exceedingly neat environment from outside to inside. It has just launched a football academy to groom talents, too. ABEC has a full boarding school, a day school and the Christie Toby Inclusive Secondary School (that admits impaired students). The star school (ABEC Boarding) boasts of students that post some of the best results in the world, helping Port Harcourt to create very high reputation in education admired by the likes of British Council, Cambridge, WAEC and JAMB. The school produced Christopher Uzoma, the 2017 best in Cambridge Mathematics with 96

Christie Toby, CEO, ABEC Group

ABEC’s gift to the world: Edmund, now First Class student of Texas A&M University and United States Army Officer

per cent, now student at Covenant University. There is also Nnanna Edwin making waves with 4.0 CPA in Texas. He has been snapped by the US Army and he is set to do his doctorate degree in California. He had a perfect result and was best in his masters’ degree programme and is now in the US Army. He won many awards. Giving the highlight of the performances, Ibim (as she is popularly called), said: “We had very exceptional results and Mathematics had very high performances. Out of the 42 students including Arts and Social Sciences, 37 got A1 and five got B2. We also had a situation of 100 per cent credit in 14 out of 17 subjects they sat for. Nobody got below C6, and the three that got below C are

in less fancied subjects.” She said the performance was not new, saying Mathematics has been consistent in ABEC. “The other year, our student had the highest result in Cambridge A/L Math. We also had a bumper result in Math that year.” On why Math is enjoying a revolution in ABEC, Ibim said it could have to do with the initiatives of the Math Depart such as ‘Drop Everything and Read’ scheme. “It is an initiative to boost reading. We have noticed a big change since it started. It goes with prizes for the week, month, term and the year.” The scheme requires every child to read for one hour before start of classes every day, other the reading hours of the day. This is said to serve as additional reading time. “It has boosted reading culture which had dropped in Nigeria. Now, you discover you must read every morning; and if you are not reading you feel strange. The other is Math Quiz. It is a form of competition.

This way, we create and celebrate brilliance and excellence. It has a huge impact. We say, celebrate a child to do more. Winners come out during assembly and are celebrated. The Math Department in ABEC deserves special commendation. They have taken Math to another level in Port Harcourt.” As outcome, she said, students from Math/ Sciences, Social Sciences, and Arts all passed. The ABEC experiment is being looked into as a model in Rivers State as the former commissioner said: “You can enjoy Math. The aim is to make education fun for the kids. Yes, it is obvious that if attention can be paid to teaching of Math with creativity, it would be good.” She said ABEC operates the philosophy that “No child is ineducable. Some started poorly but left as class toppers. They go to the universities across the world to top their classes. The fact that these children are able to hold their heads high even outside here is most satisfying.” The blistering results are however secured within an environment of zero-tolerance to exam fraud. “We are a Christian school and value is key to us. Our belief is that children must not pass at all costs or by all means. We do not give them support to pass, rather, we prepare them well. Build-up to excellence is the way to go. “Also, we train our teachers at important centres including the British Council and the WAEC Examiners training so as to impact the children. So, there is regular grooming of teachers and even non-teaching staff members. We line up strategic seminars to look inward.” The key at ABEC is: “Keep your eye on the ball. If you drop your eye on the ball, the standard drops. We start the grooming from the Crèche because we run Cradle-to-Career system of education. Our objective is; that child you dropped with us at crèche level will come back to you an amazing adult, ready to take on the world.”

The burden of responsibility: Did Gov Wike demolish a mosque? Port Harcourt by Boat

IGNATIUS CHUKWU

he trending issue of whether or not Gov Nyesom Wike of Rivers State demolished a mosque in has raised a burden of responsibility on journalists in Port Harcourt. Social media, as usual, broke the news and commentators did not bother with clarification or authentication. This was coming on the heels of the statement asserting (there was no legal backing) that Rivers is a Christian state. Now, some went ahead on facebook to claim that the demolition was to rid the state of traces of Islam on the road to making the state truly a Christian State. Thus, for one week, the social media space ran with the story. At least one newspaper joined. One version said the mosque was burnt down, and many began to say Kaduna State has become more tolerant. The burden on journalists here came when some persons in Lagos and Abuja began to accuse the PH press of ‘conspiracy of silence’ for not break-

ing the story in the national dailies. This raised another issue on media content analysis and how far citizens can lean on postings. There is a return of the concept of ‘medium as news’, that is, when the credibility of the medium becomes everything in the news chain. These days, anyway, some persons create the source and attribution for you, meaning that they do not bother to get the statement from the speaker but they put words into the mouth of their target. The masses seem to like it that way, until it hurts their friend. This method has been used to defame President Buhari million times and the populace has come to accept. The defamed targets keep mum. Pity! On Monday, the faking took a new dimension. They showed Gov Wike accepting he demolished a mosque and defiantly refusing any apologies. The national audience became furious. This was when the PH authentic media took over. They began a search for any demolished mosque, and began to engage the state government, and other sources. The Governor now took a section of the press to the venue, Biambo Street, Off School Road by Mami Market Junction, near Rainbow Estate. He asked anyone to come show him the demolished mosque. He agonised thus: “I received calls from several prominent Nigerians on the fake news being circulated online. I have come here with Reporters and you can see there was no Mosque here. It is most unfortunate that fickle-minded persons will claim that a mosque was demolished at this place, when none existed here. The story was concocted by mischief makers to score

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cheap points”. Insight: Gov Wike tried to give insight into the origin of the mosque controversy thus: “Some persons started erecting illegal foundation at the disputed land, even though they had no approval to embark on any construction work. They came here to erect illegal structure. There was no approval from the State Government for any structure to be erected here. “The persons who started the foundation had already dragged the State Government to court on the disputed land. The Rivers State Government won the case. What they attempted to do was to start the illegal construction to tie the hands of the State Government”. He stated that several mosques constructed on the approval of the State Government exist across Port Harcourt and other major towns of Rivers State without the State Government demolishing them. “The government gave them notice not to do anything on the land, but they went ahead with the illegal foundation and the relevant agency stopped them.” More insight: Journalists are already digging to get to the root of the matter. Did the governor give all the insight? It was gathered that the spot has been under controversy for over 20 years. It was called Slaughter and a Mammy market grew around the area occupied by retiring soldiers those days. The occupanst promised to vote for Dr Peter Odili if he would agree to let them be. They claimed he agreed. But, soon after 100 days in office, a PH court ruled against

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the occupants and in few hours later, government bulldozers went to work. A woman lost her grandchild and many were destabilized. The place has been under one litigation or the other. The state government continued to warn the occupants not to bulld structured there because it has become Government property. But, sources said some natives or land speculators kept selling parcels of land out there. At a point, some buyers decided to erect what would look like a mosque around there probably to scare away Urban people. Government said it kept warning developers off. Now, when one structure that was yet to take shape started, the Urben went and crushed it. It could be likened to an aborted baby whose gender could not have been known. Journalists are still digging, especially to know how the builders came about the land and if there are other religious buildings around there that were not demolished. There is more work ahead, more findings to be made. What is important is that an era where verification is no longer the bedrock of reporting; or where both senders and receivers do no longer give a hoot about the time-tested rule of verification and confirmation, such an era is doomed; such an era seems to be here. A lecturer in PH is just emerging from attacks from his in-laws over social media posts that he killed his wife, only for his attackers to realize it was the wife’s own mother whose mistake killed the daughter. But, the did had already been done by a social media-influenced generation that strikes before asking.

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Thursday 29 August 2019

BUSINESS DAY

Investing in Rivers State MTN goes beyond voice, trains PH media experts against fake news Ignatius Chukwu

ake news is eating deep into the fabrics of the society and any country nourished in false information dieting would be like building a castle on sand. Some corporations and high net worth individuals are alarmed, and some (such as the MTN and Polaris Bank) have take action. They have identified the media as a possible bulwark against the evil regime called fake news. The most harmful part, they believe, is that it does not only destroy the soul of inforconsumers but it creates confusion between what is true of false news. Also, it provides escape route to guilty parties who would simply dismiss indictment as ‘fake news’. This way, they create doubt and swim away in the flow of confusion. MTN seems to believe that if journalists can take back their right to drive news, fakes would take back the seat. They also seem to worry that the oil economy is huge and it sustains Nigeria; and that Port Harcourt is regarded as the real headquarters of the hydrocarbon industry. In their thinking, probably, if fake news attacks this sensitive region that props up this robust industry, Nigeria’s entire economy could crumble. The MTN thus decided to help shore up the ability of the PH media firmament to ward off fake news sourcing and drive the news industry. MTN contacted NECCI Consulting Limited to handle the training scheme around Nigeria and in PH particularly. On Wednesday, August 7, 2019, Nkechi Ali-Balogun, the principal consultant, led her team to Le Meridien, a top hotel in the Garden City to begin the training. After the overview, Nkechi introduced the newsmen to a new concept called Alternative Truth, which simply means lie. Truth has no alternative. It is either true or false. She talked about hate speech, etc. Innocent Entonu Before that, Innocent Entonu, the GM (Regional Operations), introduced MTN 18th birthday in Nigeria which was Aug 7, 2019. He said the training is to give back to the society because of the huge support he said

Nigeria has given to them. He particularly mentioned the MTN Foundation as a key ‘give-back’ scheme that works with a certain percentage of the company’s profit after tax. He gave a lot of insights on relativity-leverage principle as it concerns media practitioners. He revealed MTN’s heart of gold approach whereby the workers contributed funds and created a scheme called MTN 21 days to help humanity. He also mentioned what he called ‘MTN Season of Surprise’ which aims to surprise the customers. This seemed to pop eyes. Media men were brought closer to the 4G package which they said works faster. Entonu wants media men to take advantage of this because PH is well covered by it. His ringing message in the ears is that a world without the media would be like total blackout. If media is light, why then would fake news be allowed to distort it, he lamented. Nkechi Ali-Balogun That is why Nkechi latched on this and made it clear that fake news can even be worse than blackout. Under: ‘Fake News, Hate Speech and Alternative Truth as Threat to the Future of the Media’, it was made clear that the society surfs every morning to know what is happening around them. To do this, they turn to the media. In the past, it was through the dailies. Later radio and television came in. Now, it’s phone, online. This puts a burden on newsmen; and ethics becomes the pillar of the practice. A news purveyor must ask if the report he/she is doing will help or harm the society. Yes, organizational and personal interest may intervene but let there be overriding public

interest. Newsmen were told to put behind them their ethnic or religious biases. The resource persons pointed to a speech in Kenya which was open hate speech calling for violent change and annihilation. It was the type that sparked off violence in Rwanda. It was made clear that societies that allowed hate speech ended up in wars or ethnic cleansing. Samples of fake news were shown to drive home the message. The greatest harm of the fake news syndrome is that opponents use it to discredit a true story that threatened their interest. This becomes a tool for destroying real news. Also, politics has moved to the media space. Only ethics can guide media men. Those who rise above fake news practice would emerge as giants in the profession because when people believe in you, if they hear things, they revert to you. Fake news is no mistake. It is news fabricated to misinform. But, subtle interests of people pushing news can suck in the newsman. So, the media men were asked to be wary of ‘clickbait’, propaganda, sloppy journalism, misleading headlines, biased/ slanted news, etc. Crisis of communication and the new media Nkechi also treated the above topic in which she said crisis communication is to solve problem and know how to use journalism to solve problems. She tried to identify the role of journalists in managing crisis, though some of the participants felt it was not the duty of a journalist to manage crisis but to put the facts out there. Others can do the managing. She however harped on balance as a needed tool to create the atmosphere we need.

She went on: “Social media comes to disrupt the role of the media. Citizen-journalist has come to act like a rival.” She wanted to know if journalism can happen without the journalist, but said. “Content is no longer being provided by journalists. Journalism is about doing, not being. Gate keeping vs gate-watching (watching is playing down on a matter, not to write). Be ethical in reporting crisis”. Oluwa Seyi of MTN It was important to give insight into ICT that can help. This is to show that MTN is beyond voice. Telecom has caused growth and advancement. He said MTN wants to add a level of advancement to how we work, and show the technology enablers. Some of the products include cloud, intelligent work, mobile, IoT, Big data, Security and Smart Machines. For those in the print, it was made clear again how the newspaper can be online instead of relying on hard copies to reach millions. He said; MTN wants to be the choice IT-partner. MPLS can help you send file. You can host your data in MTN Data Centre as back up, in case of laptop being lost. Your data can be hosted in Nigeria now. MTN Leased Line is for hosting the company data for all to access. Data stored alone could be of high cost. So, use Dedicated Internet Access (DIA). Fixed Voice can handle 30 calls at same time; Closed User Group gives ability to energise several lines for a month without recharging. Group Data Share allows all lines to pick data from the bucket. Cloud & Data centre: High forex rates caused this innovation prompted by the CBN. So many banks, oil companies, etc, are being hosted by MTN in Nigeria. It has high profile equipment more than what they have in some countries. You cannot lose data, he said. Some top entities in PH have tested and joined it. There is Vehicle Tracking. There is Geofencing. Even if they break the geofencing, you can’t break the tracker. Beware of cheap products from some countries that can be easily broken. WiFi: Note that there is nothing as ‘unlimited’ data. MTN is highly innovative; so they look ahead, and partner. Data centres are three in Nigeria for backup. Costs are still seen to be high but this is because of high

cost of one mast, generators, solar, fuel, security, etc. Karibi George: Ethical issues of social media in journalism The Rivers-born expert says every pursuit aims at some good. Thus, good is that which all actions aim. Ethics is standard of conduct. Utilitarian theory sees ethics as aiming at greatest good for greatest number of people. It is about ‘Do onto others what you want done to you’, as captured by Rotary. Ethics vs law: Law makes stipulations and states punishment; ethics are voluntary to distinguish self to make a profession stand out. Entry qualification is the starting point for ethical conduct. Ethics helps to do self-regulation to avoid harsher laws by parliament. Journalism in Nigeria strives on self regulation instead of Act establishing it. Social media; News is now broken by amateurs. Wrong spelling dominates social media. Technology and equipment often are not available for practitioners. About reporters relying on social media, let a traditional media practitioner be a model to social media use. Social media is creating a siege mentality. The takeaway is that the professional media practitioner should show strength and take back the driver’s seat. During questions, he made it clear that social media may be regarded as group communication but that the impact is massive and that the law of libel does not spare it. Dare Ogunyombo: Journalist as leader From the foregoing, it was made clear that a journalist is not just a news writer but a leader with huge responsibilities that require decisionmaking that impacts the larger society. This high-level PR expert dwelt on ‘Transformational leadership versus and Transactional leadership’. This had huge impact on the participants. He showed the role of leadership in the newsroom and elsewhere. Little wonder good journalists stand out as better policy makers and leaders of thought. Conclusion: First, let the journalist fight and take back the leadership of the media space and defeat fake news. This way, social media people would be followers instead of news leaders. The society would enjoy media sanity driven by fact.

Child entrepreneurs emerge in Port Harcourt …As ‘Early Flight Academy’ organises business fair Sam Esogwa

he outcome of the Port Harcourt Children’s Business Fair held on Saturday at Elite Primary School, Woji, in Obio/Akpor Local Government Area of Rivers State, has shown that the possibility of Nigeria migrating from being a consuming to producing economy in the near future is not a mirage. At the event organized by Early Flight Academy, some young, upcoming manufacturers and entrepreneurs were revealed.

Child entrepreneurs emerge in PH , Akelachi Kejeh, second left www.businessday.ng

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These young kids, whose ages range from three to 15 years and who are mostly primary and secondary school students, presented different types of products they manufactured, ranging from fruit juice to nut juice, head bands, beads, sandwiches, biscuit cereals, cup cake, art works, T-Shirt designs and books. Earlier in her opening remark, the organizer of the programme, Akelachi Kejeh, said the exhibition was the culmination of intense two-week training. This was aimed at helping the children develop entrepreneurial skills. @Businessdayng

In a chat with Business Day, Kejeh, who is the Founder of Early Flight Academy, said she believes in raising the next generation of Africa’s entrepreneurs, leaders, innovators and change agents through her organization hence her decision to promote entrepreneurial education for young people between the ages of six and 18. Kejeh, who said she started Early Flight Academy in 2017, disclosed that they organize different programmes to achieve their goals. One of such programmes, according to her, includes the Kids Business Boot Camp.

industry Insight

BUSINESS DAY Thursday 29 August 2019 www.businessday.ng

Achieving economic prosperity through manufacturing value chain Odinaka Anudu & Gbemi Faminu

he value chain involves interlinked value-adding activities that convert inputs into outputs which, in turn, add to the bottom line and help create competitive advantage, according to the Business Dictionary. A manufacturing value chain is interested in establishing a harmonious link between input and output. It starts with the raw materials processes and ends when the output reaches the final consumer. In Nigeria today, there is a poor link between the input and the output processes. Many manufacturers struggle to acquire raw materials in the right quantity locally owing to issues around availability and quality. Due to lack of funds, low technology adaptability and absence of hi-tech machinery, farmers do not often meet the quantity and quality requirements of manufacturers, especially multinationals. For instance, Nigeria is the biggest producer of cassava in the world but manufacturers are making little use of the crop. Using cassava starch is often expensive and sometimes may not reach the acceptable quality. In fact, producing cassava starch is expensive for smallholder farmers and processors because equipment cost is high. Yet, cassava starch has alternatives that can be imported. Even when manufacturers embark on backward integration to get raw materials locally, issues around land disputes, insurgency, herdsmen onslaught and high cost of agricultural inputs ( seeds, and fertilizers, among others) make the entire exercise very expensive. This is one reason why manufacturers are among the biggest importers—theirs are, of course, raw materials. For cement, ceramics and glass makers whose inputs are solid minerals, inputs like limestone and gypsum, among others, are readily available, but

they are not always there in the right quantity and quality. It is true that no country gets all of its raw materials locally, but it is also true that in a country where local currency and purchasing power of consumers are getting weaker, manufacturers would do well to get its inputs locally. Constant scramble for foreign exchange further weakens the Naira and creates jobs in countries where raw materials are brought in from. Experts believe that many more manufacturers must fund and partner local farmers. Nigerian Breweries has done well by supporting Psaltry International to produce high quality sorghum and cassava. Nestlé Nigeria is also doing well in this area. By providing the necessary environment for farmers to thrive, companies can get their inputs cheaper while leveraging the expertise of local farmers. Moreover, experts say the Nigerian government needs to attract investors to explore the solid minerals still lying fallow. One key reason why raw materials have low quality is the seed type. Research institutes in Nigeria struggle to come up with good seeds and findings regularly owing to poor funding. Consequently, Nigeria’s smallholder farmers are yet to make significant increase on their yield per hectare as the nation still records the lowest in this area among its peers. For tomatoes, the average yield per hectare in Nigeria is 7 metric tons (MT); Kenya’s average yield for the crop is 20MT, tomato yield in Ghana is 8MT, and South Africa’s average yield for the crop is 76MT, according to the Food and Agricultural Organisation (FOA)’s 2017 data. Similarly, for maize – which is the most consumed grain on the continent— Nigeria’s yield per hectare is 1.6 MT on the average despite being the second largest producer of the crop in the world. Kenya and Ghana have same average yield of 2MT per hectare while South Africa’s average yield

is 6MT per hectare. For potato, which is the best rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7 metric tons (MT) per hectare. Kenya’s average is 15.5MT and South Africa’s average yield for the crop is 38.8MT. Nigeria’s average yield per hectare for rice paddy, which is the most consumed staple in the country, is 2MT, while Kenya, South Africa and Ghana have same average yield per hectare of 3MT. Analysts want improved funding of agric research institutes and exposure of farmers to modern best practices in crop planting. The country must also checkmate the type of seeds imported, especially from Asia, as they are often cheap but substandard, experts say. Logistics is also a critical issue in the value chain. Importing inputs and taking them to the factory is a big issue today. The state of Apapa and Tin Can ports in Lagos leaves much to be desired. Businesses lose billions every day in Apapa where the federal government makes over N10 billion each day. “Of particular concern and

importance to us (MAN) are the challenges we face in moving our raw materials and goods to and from the ports,” Seleem Adegunwa, chairman, Manufacturers Association of Nigeria (MAN), Ogun State chapter, said at a recent CEOs business luncheon at Agbara, Ogun State. He said that the resultant effect is that the production costs of members have increased tremendously. He added that if the trend is not checked by the relevant government agencies, it could result in collapse of more factories and businesses, noting that some factories and businesses have already shutdown their operations and relocated to neighbouring countries. Solving this is not a rocket science as Nigeria has the capacity to develop other ports across the country. The Lagos Chamber of Commerce (LCCI) said in a report that about 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day. The LCCI report noted that 25 percent of cashew nuts exported from Lagos to Vietnam in 2017 went bad or were downgraded owing to delays at Lagos ports. Similarly, only 10 percent of cargoes were cleared within the set timeline of 48 hours while the majority of cargoes taok between five and 14 days to clear. The report even noted that some cargoes took as many as 20 days to be cleared at the ports. “The concessioning of Onitsha seaport should be finalised, while government should improve the security situation along and within the Warri port in order to ward off militants and touts. Stakeholders request that government should approve and publicise a bouquet of incentives to importers and exports that patronise ports outside Lagos,” Babatunde Ruwase, president of LCCI, had said. Generally, Nigerian roads are bad and apart from Abuja-Kadu-

na track, railways are almost nonexistent at the moment. It is said that it is cheaper to move goods from Lagos to China (Nigeria to Asia) than move them from Adamawa to Lagos (both in Nigeria). At the factory, energy is provided by the manufacturers themselves at very high costs. Expenditure on alternative energy sources by members of MAN in 2018 was N93.1 billion, according to the association’s economic review. Manufacturers believe that the country will make headway only when energy is cheap and regular. Funding is also a crucial issue. Nigeria’s benchmark interest rate is among the highest in Africa at 13.5 percent. Ethiopia’s is 7 percent; Kenya is 9 percent; South Africa is 6.75 percent; Zambia is 10.25 percent, and Cameroon is 4.25 percent. Similarly, Rwanda is 5 percent; Mauritius, 3.5 percent; Algeria is 8 percent, and Senegal is 4.5 percent. Manufacturers are asking the Federal Government to recapitalise especially the Bank of Industry, which reliably provides single-digit funding to them. Doing this, they say, will increase lending to the real sector. Manufacturers’ production cost is also high, and they sell to a population that is majorly poor. Nigeria has almost 100 million people living in extreme poverty and purchasing power of even the middle-class has been on the downward slope since economic recession of 2016. Analysts believe Nigeria must begin to think less socialist by chanelling resources to areas that boost human development index while removing petrol subsidy and allowing the market mechanism to determine electricity charges. Resources must be channeled to infrastructure, education, and health. More so, Nigeria must harmonise multiple regulatory agencies and deregulate the foreign exchange market to attract foreign capital and boost employment.

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