BusinessDay 29 Jan 2019 by BusinessDay

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

FOREIGN EXCHANGE

Biggest Gainer Total N223.3

Biggest Loser

Seplat 4.10pc N520

-3.70pc

31,344.24

Foreign Reserve - $43.11bn Cross Rates - GBP-$:1.32 YUANY-N53.74 Commodities Cocoa

Gold

Crude Oil

US$2,258.00

$1,308.70

$59.82

₦1,238,639.75

-2.91pc

NEWS YOU CAN TRUST I**TUESDAY 29 JANUARY 2019 I VOL. 15, NO 234 I N300

BUY

SELL

$-N 360.00 363.00 £-N 465.00 475.00 €-N 405.00 413.00

www.

NESG outlines five factors that will shape 2019 T DIPO OLADEHINDE & ENDURANCE OKAFOR

he 2019 general elections, delayed passage of the budget, review of minimum wage, relatively lower crude oil price, and actions of the US Federal

Nigeria must attract private capital, choose progrowth currency management approach, says Salami

Reserve are the key factors that would shape Nigeria’s economy in 2019, the Nigerian Economic Summit Group (NESG) said on

Monday. NESG, one of the most influential think-thank groups in Nigeria, noted that the outcome of the

elections will likely shape “investment policies, debt management, public sector spending, security and Continues on page 34

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

362.75 306.75

3M -0.02 12.89

NGUS MAR 27 2019 364.89

0.25 14.45

-0.03

14.96

NGUS JUN 26 2019 365.34

10 Y 20 Y -0.15 -0.08 15.09

15.31

NGUS DEC 24 2019 366.24

Atiku, NBA, NANS, others flay Buhari over Onnoghen

... as CCT suspends CJN’s trial indefinitely ... NJC meets today CHUKS OLUIGBO

arely a week after former President Olusegun Obasanjo likened President Muhammadu Buhari’s reign to the dark days of maximum dictator Sani Abacha, presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar, said Buhari breached the constitution by suspending the nation’s chief justice, Walter Onnoghen. Atiku joins a growing

list of prominent individuals and groups, both local and international, who have roundly criticised Buhari’s recent moves against the CJN, including the United States and the European Union which warned the president’s actions could undermine next month’s poll. Nigerians will to go to the poll on February 16 to elect a president and federal legislators for the next four years. Buhari, 76, is seeking a return to the Continues on page 34

Inside Oil workers wield strike against FG’s payroll reform plan

P. 2

2 BUSINESS DAY NEWS

www.

Tuesday 29 January 2019

PFAs increase stake in FG securities, cut equities over bear dominance MODESTUS ANAESORONYE

L-R: Funke AlomoOluwa, executive director, Chams plc; Patrick Atuanya, editor, BusinessDay Media; Olufemi Williams, group managing director/CEO, Chams plc; Adeola Ajewole, general manager, advert; Oludolapo Ashiru, special reports editor; Ijeoma Ude, advert manager, all of BusinessDay, and Kehinde Lapite, managing director, CardCentre Nigeria Limited, during a courtesy visit to Chams office by BusinessDay management team in Lagos, yesterday. Pic by Olawale Amoo

Oil workers wield strike against FG’s payroll reform plan ISAAC ANYAOGU

our years after President Muhammadu Buhari directed that all government workers be paid under the Integrated Payroll and Personnel Information System (IPPIS) platform, a payroll system designed to check abuse and the ghost worker syndrome by matching workers with their biometric details, oil workers continue to wield strike over the government to buy an exemption. The Accountant-General of the Federation, unwilling to be held responsible for strikes, has backtracked on each occasion thereby allowing the benefits of a transparent payroll system to elude the most critical sector of the economy. With the exception of the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA), Nigeria Nuclear Regulatory Authority (NNRA) and Petroleum Training Institute (PTI), all other government ministries, departments and agencies (MDAs) have fully complied or are in the process of complying with IPPIS. Last year, Ahmed Idris, Nigeria’s accountant-general, said that the salaries of over 685,000 government

workers in 480 MDAs have been moved to the IPPIS. In a communiqué issued by the executive members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), a union of white-collar oil and gas workers, the group said it “frowns at frequent threats by the office of the Accountant-General to stop salaries and allowances of staff of NNRA, PTI, PPPRA, DPR, over their inclusion on the IPPIS platform”. “NEC-in-Session resolves to resist any attempt to stop salaries to members under any guise by the Consultant to IPPIS,” PENGASSAN said in the communiqué published January 24. The union is rather demanding an explanation on why the Accountant-General cannot use the Government Integrated Financial Management Information System (GIFMIS), a platform that manages budget, which it claims “has been adjudged reliable and efficient”. But this is not really a fight about using the most efficient platform to remit salaries and allowances. Under the IPPIS platform, the AccountantGeneral pays salaries and wages directly to government employees’ bank accounts after deducting taxes, health insurance fees, and contribu-

tions to pension funds and cooperative societies using biometrics data submitted by workers and verified by government consultants. GIFMIS is a computer application that manages budgets preparation and execution; records purchase orders and general expenses. Under this system, the computer application captures the total expenditure including payroll which is administered differently from IPPIS. “These agencies clamouring for exemptions mostly fund part of their budgets and seek to maintain autonomy over their income,” said a source from the Ministry of Petroleum Resources. BusinessDay gathered that because these agencies are not on IPPIS platform, they are not remunerated the same way as other civil servants. The DPR, for example, gets significant funding from payment of signature bonus and they are allowed to fund their expenses as budgetary allocations fail to cover overhead costs. It does not release them from the obligation of transparency and accountability according to public sector rules.

•Continues online at www.businessday.ng

NIRSAL mulls govt intervention on seed sector’s huge debt to banks ONYINYE NWACHUKWU, ABUJA

he managing director of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Aliyu Abdulhammed, has signalled the possibility of pushing for government intervention on huge indebtedness by the seed sector to banks, working closely with other stakeholders in the industry. Abdulhammed gave the indication Monday at the Finance and Investment roundtable discussion on seed and grain primary processing technology for Nigeria organised by NIRSAL in Abuja. Abdulhammed was of the opinion that NIRSAL collaborating with the relevant stakeholderswouldhaveenough

weight to pull this through considering how important that sector is in the actualisation of the government’s overall objectives in the agriculture sector. He said NIRSAL was concerned because such negative factors, particularly poor funding, contribute significantly to Nigeria’s annual $9 billion postharvest losses, which have led to lower capacity to service the consumer, industrial and export grain markets, lower returns to the farmer, inability to fulfil financial obligations or repay loans, sustained poverty and impoverishment. “My thinking is that regarding seed sector indebtedness to banks, we would need to see whether the government can securitise that debt and issue a promissory note to get the debts off the books of the banks

and make them financeable again. It is a model we can take up, working with the seed council and make a solid case for it,” he said. He also suggested setting up an anchor borrower scheme specifically for the seed industry that supports primary production and small holder farmers. Meanwhile, NIRSAL is currently leading a diverse and high-level group of local and international experts to seek efficient and sustainable solutions that would help the country overcome the obstacles that are preventing the seeds and grains value chain from achieving full investment viability.

•Continues online at www.businessday.ng

ith bearish state of the Nigerian stock market since the last half of 2018 reflected in declining broad market index and capitalisation, pension fund investments have found more comfort in Federal Government securities increasing stake month on month. A breakdown of pension industry portfolio as at November 2018 indicates that the pension fund assets were mainly invested in Federal Government securities, with an allocation of 72.5 percent of the total pension assets standing at N8.499 trillion. The breakdown shows FGN bonds at 52.23 percent; treasury bills, 19.82 percent; agency bonds, 0.11 percent; Sukuk bonds, 0.28 percent; and green bonds, 0.05 percent. The analysis shows that pension investment in Federal Government securities rose from N5.77 trillion in August 2018, equal to 70.70 percent of total pension fund assets, to N6.16 trillion equal to 72.50 percent in November 2018, indicating an increase of N390 billion, equal to 6.76 percent. This is as investment in equities dropped from N630.25 billion in August 2018, equal to 7.56 percent of total pension fund assets, to N584.32 billion in November, equal to 6.87 percent, indicating a drop of N45 billion. As at the end of November 2018, total pension fund assets under management by the PFAs stood at N8.499 trillion. Out of this, Retirement Savings Account (RSA) Fund I contributed N7.32 trillion; RSA Fund II, N3.78 trillion; RSA Fund III, N2.03 trillion; and RSA Fund IV, N658.49 billion. According to the National Pension Commission (PenCom) in its third quarter 2018 analysis, the Nigerian Capital Market continued its bearish

run in the quarter under review from the second quarter 2018, with a negative return of 14.40 percent. The NSE All Share Index closed at 32,766.37, down from 38,278.55 in the previous quarter. Likewise, the market capitalisation dropped by 6.84 percent during the quarter to close at N22.35 trillion, from N23.99 trillion as at the end of the second quarter of 2018. The equity market capitalisation closed at N11.97 trillion in the quarter under review. This represented a 13.76 percent decline from N13.88 trillion recorded in the last quarter. In addition, the total volume of stock traded stood at 16.26 billion with a closing total trading value of N205.49 billion. Umar Sanda Mairam, managing director/CEO, Premium Pensions Limited, in an interview with BusinessDay, however, said no PFA has reduced investments in equities, stating that it will be counterintuitive to PenCom’s minimum requirements that set to distinguish between funds to reduce investments in equities. What happened, Mairam noted, was that most PFAs tried to meet the minimumexposuretovariableincome instruments through equities, only for the stock market to start falling off. “Essentially, foreign investors who were exiting kept selling till November 2018 even as the assets under the management of PFAs kept rising due to fresh inflows and gains through rising interest rates,” he said. He said these twin events made it appear as if pension funds investments in the equities market reduced. “Assuming that equity markets did not move at all, it would have still looked like the proportion of equities that PFAs held were dropping,” he said.

•Continues online at www.businessday.ng

Equities market resumes week on bearish note as criticism trails CJN’s suspension MICHEAL ANI & SEGUN ADAMS

he equities market on Monday dropped marginally by 0.26 percent, as domestic and international criticism continues to trail the suspension of the Chief Justice of Nigeria, Walter Onnoghen, by President Muhammadu Buhari last Friday. While analysts have expressed concerns over possible effects of the suspension on the economy and the equities market in particular, they however attributed today’s performance to factors not exclusive to the on-going developments around the Onnoghen case. ‘’The market has gained consecutively in the last two weeks and before the CJN’s suspension, so I anticipated profit taking activities would follow this week’’ Paul Aluko, analyst at MBC Capital Limited, told BusinessDay over the phone. He explained that the CJN’s case was still of much concern to investors especially with the elections around the corner. The market capitalisation closed at N11.69trn, from N11.719trn where it ended last Friday, according to figures from the Nigerian Stock Exchange. Gbolahan Ologunro, an equity research analyst at CSL stockbrokers, explained that intra-day trading oscillated between gains and losses, which supported the

market ahead of full-year results and dividend declaration, otherwise the market could have gone more bearish than what was seen. “The market lost mildly contrary to analysts’ expectation of the CJN news triggering a major selloff, although it remained highly volatile during the day,” Ologunro said. Market was swayed by profittaking in banking stocks especially, which gained significantly in previous week’s trading. Depreciations recorded in the share prices of FBN Holdings, Access Bank, Seplat, GT Bank and UBA were mainly responsible for the loss recorded in the Index. Shares of UBA fell (-4.55 percent), Seplat (-3.70 percent), Guaranty Trust Bank (-0.72 percent), Access Bank (-2.31 percent) and Fidelity Bank (-5.60 percent), exerting the most pressure on the All Share Index. These were enough to offset gains in Zenith, Oando and Total, among others. Across sectors, the market was bearish as only one out of five sectors covered closed in the green. The industrial goods sector gained 0.01 percent, as opposed to losses in banking (-0.50 percent), oil and gas (0.4 percent), consumer goods (-0.17 percent), and insurance sector which lost the most for the day (-1.14 percent).

•Continues online at www.businessday.ng

Tuesday 29 January 2019

BUSINESS DAY

Tuesday 29 January 2019

BUSINESS DAY

Tuesday 29 January 2019

BUSINESS DAY

Tuesday 29 January 2019

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

comment STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

he Bloomberg Innovation Index for 2019 has just been released. The Innovation Index examines dozens of criteria including research and development spending, manufacturing capability, productivity, hi-tech density, tertiary institution efficiency and patent activity, etcetera. In the 2019 ranking, South Korea is first and Germany occupies the second position, while South Africa is the only sub-Saharan African country to be ranked. It has been said repeatedly that innovation drives the economic prosperity of nations as reflected in the performance of most Asian economies. As observed by a participant at the 2019 World Economic Forum: “The battle for control of the global economy in the 21st Century will be won and lost over control of innovative technologies. Korea’s number one spot and China’s shift up the rankings in a reminder that the US trade war might slow but won’t stop Asia’s technological rise.”

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

comment is free

Send 800word comments to comment@businessday.ng

Innovation drives economic prosperity The battle‘for control Regrettably, Nigeria is missing in the list of 2019 world’s 60 most innovative countries. Many Nigerians who appreciate the role technology plays in the innovation endeavor aren’t expecting Nigeria’s name to be in the list of the world’s most innovative countries. Why, you may ask? The education system is of low quality, funds released for research is very low, capacity utilization of manufacturing companies is barely average, tertiary institutions are always on strike, among other challenges. Our level of illiteracy is very high. Those Nigerians who can neither read nor write are estimated to be more than forty percent of the population, according to the National Bureau of Statistics.Illiteracy gives rise to poverty, unemployment, crime, and infant mortality, among others. Any society with overwhelming number ofilliterates cannot innovate. It’s true that economists worldwide have accepted the primacy of technology in the innovation endeavor. Those in the government in Nigeria have only acknowledged the supremacy of technology in economic growth in speeches without any meaningful action to implement same in an enabling environment. The technology referred to is the systematic knowledge of the technique of production embodied in people such as skill, managerial techniques etc. Nigeria’s technological backwardness is in part responsible for the International Monetary Fund’s (IMF’s) decision to “neck shave” Nigeria’s growth projections from 2.3 percent to 2.0 percent for 2018. Instead of marshalling a plan with

of the global economy in the 21st Century will be won and lost over control of innovative technologies

’

which Nigeria can take a leap forward technologically, our political leaders dance round the country making promises they can’t fulfil. It’s almost 49 years ago, precisely in May 1970, that the highest level of government in Nigeria demonstrated awareness of the role of science and technology in national development. It was Yakubu Gowon, then Head of State, who first made a policy statement on Science and Technology (S&T) and its relevance to national development as follows: “It is my hope that today will similarly symbolize the beginning of a great future for the development of science and technology and their application to the constructive exploitation and utilization of our national resources.” In January 1980, almost 10 years after Yakubu Gowon’s policy declaration, Shehu Shagari, former President of Nigeria, also had this to say: “It is no accident that the Science and Technology Bill is the first bill my administration presented to the National Assembly.

It is a conscious act to give practical expression to our desire to promote science and technology without which rapid development of our country cannot be possible. We had already indicated the importance we attach to the promotion of science and technology by creating the first fully fledged Ministry of Science and Technology in Nigeria.” In 2011, the former President of Nigeria, Goodluck Ebele Jonathan, made a statement of commitment on S&T as follows:“We are going to run our economy based on science and technology…..because nowhere in this world now that you can move your economy without science and technology. For the next 4 years, we will emphasize so much on S&T because we have no choice, without that we are just dreaming…” In 2016, it was President Buhari’s turn to say: “The Federal Government’s desire to secure the country and grow its economy cannot be achieved without science and technology taking their rightful place.” The President saysfurther that “Nigeria’s vision of becoming one of the 20 largest economies in the world by 2020 is only attainable when Science,Technology and Innovation are fully integrated into our national socio-economic development process.” If Nigeria hasn’t benefitted from S&T in the last 49 years, it only means that something is either wrong with policies on S&T or there are challenges with implementation, hence the need for a rethink. Achieving innovation through S&T, requires working smart, not hard, because of the complex

interactions between the society, industry and research institutions. Since the establishment of the Ministry of Science and Technology in Nigeria in 1980 successive governments have formulated various policies. With only the University College, Ibadan, in 1960, governments have expended so much on S&T, such that in the year 2018, reports from National University Commission reveals that Nigeria has 165 universities- 43 federal universities, 47 state universities and 75 private universities.These universities offer various science and engineering courses.While the National Board for Technical Education (NBTE) reports show that the country has 112 polytechnics, 47monotechnics and 155 technical colleges. There are also 36 research institutes in the country. These institutions have not improved the quality of human resources especially in developing new skills, cultural values and behavioral patterns needed in industry. Without Nigeria in the list of 60 world’s most innovative economies, policy decision makers should know that there is a problem with the country’s educational system. It’s not the number of tertiary institutions but the quality of academic work embarked upon by these institutions of higher learning.As a result of falling standard of education and unfriendly business environment, Nigeria is not one of the 60 most innovative countries in the world in 2019. Although, the sale of crude oil is still very key to Nigeria’s economy, the world will not ignore her if she is technologically developed.

Send reactions to: comment@businessday.ng

Who can lead radical transformation: Insights from Xiaoping Deng

Olukunle A. Iyanda, Dr Iyanda is Founder/Chief Executive Officer, BROOT Consulting, Lagos Email: iyanda@brootc.com Tel: 08039788027

“Remember that your past successes may lead to your future failure. However, if you learn a lesson from every failure then you may ultimately succeed” – Jack Ma he need for radical transformation may sometimes seem obvious but how about the leadership ecosystem required to achieve it? Can every leader lead radical thinking that will achieve breakthrough transformation? A McKinsey report shows that 70% of all transformation initiatives fail. Why is this so? What distinguishes the unsuccessful 70% from the successful 30%?. What do these successful radical transformation leaders have in common? In my previous article, I examined how China achieved an amazing transformation. In this follow up article, we want to examine the type of leadership that could give an organisation, a radical transformation that leads to competitive advantage. China’s economic and political transformation began when Xiaoping Deng at the age of 74years became the

Preeminent Leader of China in 1978. Before that time, every attempt to achieve radical transformation only led more people to abject poverty and the continued isolation of China. Deng introduced a new thinking called “Reform and Opening up”. The concept was not just a mere sloganeering; it was backed with deliberate actions and personal commitment of the entire ecosystem of Chinese leadership. 1.1 Laying the foundation for radical transformation The actualisation of radical transformation is impossible in an organisation that lacks the capacity and ability to entrench the new radical thinking because such an organisation will experience a misalignment of its culture and with the mission. To achieve transformation in today’s global economy, organisations and society must develop the capability that promotes a new level of thinking. Leaders must articulate and demonstrate a clear understanding of what must be achieved; for Deng, it was Reforms and Opening Up! To accomplish this, he embarked on a well thought out plan that continuously challenged the status quo and re-orientated the citizens towards the new thinking. A new thinking is impossible to adopt in an old, outdated and narrow knowledge, it is for this reason that Chinese government chose to cross-breed knowledge by embarking on an aggressive development of her human resource capability across the globe. 1.2 What type of leaders achieve radical transformation? Transformation initiatives fail

because the leader’s ecosystem is poorly designed and resulted in misalignment. Not all leaders can achieve transformational growth. The kind of leadership team required in a situation where radical transformation is needed is a leadership system that is strong, committed, cohesive and smart. Deng provided leadership that conferred the right mindset on his people. He provided leadership that made the people of China believe in themselves and take pride in their achievements. The quality of leadership in an organisation or society determines its ability to achieve radical transformation. Deng was intelligent and brilliant; he was always on top of his class. His ingenuity is not in doubt; he learned to keep information in his mind, he was able to memorise and recite long passages of texts in order not to leave any paper trail. According to Ezra Vogel, the author of Deng Xiaoping and the Transformation of China, Deng was able to deliver a well-thought-through and well-organised hour-long lectures without notes. Chairman Mao once called him a walking encyclopedia. Such intellectual sagacity is required to lead any meaningful transformational projects. Any leader that intends to lead out in any transformation effort should exhibit the following: 1. Be able to articulate the aspiration carefully: Leaders must be able to convincingly articulate the vision, why it must be achieved and how it can be achieved and the expected attributes required for the achievement. 2. Adopt the global good concept: leadership must embrace the global good concept. This I define as the intention to make leadership work for the good of everyone. If the transfor-

mation agenda eliminate, suppress or unduly elevate some category of people, then such program is bound to fail. A human-centred and inclusive approach is required for a successful transformational program. A concept that places doing good for all, above serving the interest of the privileged minority will receive the buy-in of the implementors. Deng’s colleagues observed that he was determined to do what was good for the party and the country and not what was good for his cronies. Radical transformation is unachievable in a place where nepotism and undue favouritism thrives. 3. Show authenticity and pragmatism: to lead out in the work of transformation, the entire leadership team must be seen to be credible, pragmatic and show a strong sense of direction. Deng had a listening skill and was ever willing to learn. 4. Have strong personal commitment: the leadership team must exhibit an unquestionable personal commitment and discipline towards the set transformation agenda. There must be a willingness to execute the agenda in an unbiased way. Deng made it clear to all his lieutenants that he did not represent one locality, one faction, or one group of friends. His closest colleagues were those who stand for the common good of China. 5. Willingness to build strong capabilities: no organisation or nation can develop beyond the capacity of its people. China embarked on the aggressive capacity development of its human resource. It adopted a policy that allowed Chinese travel far and wide in search of knowledge, which they later applied to build every sector of their so-

ciety. Educational expansion played a prominent role in transforming China into a strong and prosperous country. 6. Be intently focused and committed to the big picture: leaders can easily be distracted and have their vision derailed by the tyranny of urgencies and issues that have no strategic bearing. Focusing on these minute issues will lead to micromanagement, and makes leaders lose focus of the big picture. Deng provided authentic leadership with a strong sense of direction and he is not one to micromanage. In 1984 when China economy began to witness an unprecedented growth, he said ”I am a layman in the field of economics, I proposed China’s economic policy of opening to the outside world, but as for the details or specifics of how to implement it, I know very little indeed. The type of leaders needed for radical transformation is such that assemble the right mix of subordinates who can implement the details. 7. Understand the inseparability of personal identity and organisational identity: the entire leadership must take up with pride the corporate identity and know that separation between their personal and organisational identity has no place in the transformation agenda. When personal identity is elevated and celebrated above the national or organisational identity, the transformation agenda will be impaired.

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

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

comment

@Businessdayng

BUSINESS DAY

comment is free

Send 800word comments to comment@businessday.ng

Nigeria: Assessing the Abubakar & Buhari policy documents

Rafiq Raji “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

t is election season in Nigeria. Elections for the presidency and federal legislature are slated for mid-February. In early March, those for the governorship of each of the country’s thirty-six states and others would follow. Naturally, the greatest focus is on the presidential race. And while there are more than fifty contestants for the job, including a few internationally recognised technocrats, all eyes are on the two leading presidential candidates. Muhammadu Buhari of the ruling All Progressives Congress (APC) is seeking a second four-year term. His main opponent is former vicepresident Atiku Abubakar of the Peoples Democratic Party (PDP). Both candidates hail from northern Nigeria, but from different parts. President Buhari is from the northwestern part of the country while Mr Abubakar is from the northeastern part. Whereas the northwestern geopolitical zone is quite peaceful, the northeastern part suffers from insecurity, with terrorists attacking key cities and towns now and then. Incidentally, the insecurity in that part of the country is why Mr Buhari beat former president Goodluck Jonathan some four years ago. It also helped his chances that Mr Jonathan was a southerner. Northern voters did not have a difficult choice to make. Things are not so straightforward this time around. That is even as

Mr Buhari still enjoys a cult following in the north. Inevitably, a significant portion of northern voters are likely to pitch their tents with Mr Abubakar; in the northeast especially. Mr Buhari is thus likely to secure most of the votes in Western Nigeria and Mr Abubakar the East. Understandably, most forecasts point to a likely close tally. To change the dynamics and perhaps win comfortably, each of the candidates must demonstrate the superiority of their ideas. And in this age of social media, the voting public is able to easily assess them very quickly. In view of this, the leading candidates have made a big show of their policy documents. Mr Buhari calls his the “Next Level” while Mr Abubakar’s is “Let’s Get Nigeria Working Again”. Nigerians are quite used to these well-packaged plans now. There have been many in the past. But since the problems they were meant to solve continue to endure, they would not be blamed if they are somewhat sceptical about these new ones. Still, what is probably uppermost on their minds is prosperity. Put simply: jobs. Both candidates promise as much. Of course, the incumbent is probably best judged by his administration’s policy document: the Economic Recovery and Growth Plan (ERGP). In doing so, it is realised some gains have been made. And quite a lot remains to be done. In any case, renewed terrorist attacks in the northeast have yet again put security on the front burner. Even so, it is widely believed poverty is the root cause of insecurity in different parts of the country. Clashes between cattle herders and farmers in the middle belt of the country have an economic rationale, for instance. Drought effects, like the drying of the Lake Chad, is believed to be one of the factors behind the relatively high poverty levels and consequent insecurity in the northeast. Thus, it is their economic

‘

Ultimately, both candidates’ promises are ambitious vis-a-vis current fiscal realities and their policy documents are conspicuously light on revenue generating strategies to create more fiscal space

’

visions that should matter the most. Does Mr Buhari plan to do anything differently to improve the economy? And what is Mr Abubakar proposing to do differently? New African asked three leading analysts for their views. Amaka Anku, Africa director & practice head, Eurasia Group “So I think what’s really at stake for Nigeria is revenue growth and infrastructure investments - so that’s the paradigm through which I’m analyzing their policy documents.” “My main criticism is that both documents are extremely ambitious (unrealistic perhaps) in their spending plans without much focus on generating revenue to implement those plans. Politically, I can understand why that is the case - talking about collecting or raising taxes isn’t exactly compelling for the general public.” “I was surprised that Buhari’s document is completely silent on the oil & gas sector - does this mean his administration will not push any reforms in this area? Quite strange to simply ignore such an important sector of the economy.” “For Atiku, I’m concerned about the grand plans for infrastructure spending ($90bn a year) with zero discussion of revenue growth or even foundational work that needs to be

done to formalize the economy and move Nigeria towards better tax collection (like the national ID scheme).” Omotola Abimbola, Fixed income and currency research specialist, Ecobank “We believe Nigeria could have its first presidential election campaign fought on ideological grounds in 2019, with the two major parties campaigning on ideologically opposed sets of policies and programmes.” “At first glance, President Muhammadu Buhari’s “Next Level” plan appears to be a continuation of his administration’s existing policies and programmes such as social investment schemes, welfare spending on the vulnerable, deficit-financed infrastructure investment and public sector job creation.” “On the other hand, candidate Atiku promises reforms and policies to increase private sector participation in the economy, particularly privatization of underperforming government assets in the oil & gas and transport sectors, liberalization of the downstream sector of the petroleum industry, reduction in corporate tax rates, lower regulation, PPP funded infrastructure investments and promotion of investment friendly policies.” “In American political parlance, the PDP appears to be more conservative – smaller state, big business and low corporate taxes while the APC’s plans bear close resemblance to the democraticparty agenda – big state and welfare spending to support the vulnerable. Ultimately, both candidates’ promises are ambitious vis-a-vis current fiscal realities and their policy documents are conspicuously light on revenue generating strategies to create more fiscal space.” “President Buhari wants to continue current approach to creating jobs using government subventions and direct employment, a position

at odds with increasing revenue pressures, already-high recurrent spending and a bloated CBN balance sheet. Candidate Atiku promised to create 3m jobs a year and double Nigeria’s GDP to USD900bn in four years, which is tall order with little consideration for age-long structural challenges limiting short term growth potential.” “On the ERGP, we think the implementation is still standing on its first pillar of reforms (restoring macroeconomic stability), and implementation of the other four strategic areas (Economic Diversification and Growth Drivers, Competitiveness, Social Inclusion and Jobs, Governance and Other Enablers) will be further out due to administrative inertia in pushing through important structural reforms.” Malte Liewerscheidt, Vice-president, Teneo “Atiku’s stated aim to double the size of the economy by 2025 would require annual GDP growth rates to jump to 12%. This is highly unrealistic as double-digit growth rates over longer periods are historically unprecedented. While the plan is almost guaranteed to fall short of target, the liberal reform measures suggested are still likely to inject desperately needed new momentum into the economy.” “Buhari’s re-election manifesto, on the other hand, essentially features more of the same. The state-centric approach to economic development has been preserved, while higher targets have been set. Yet given the weak economic performance, rising unemployment and a mounting debt pile over the past four years, there is nothing to suggest the old recipes would produce different results in a potential second Buhari term.” • An edited version was published by New African magazine in January 2019

Send reactions to: comment@businessday.ng

Politics trumps economics because economics is articulated through politics (Just look at Nigeria’s oil sector) Uyiosa Omoregie Dr Omoregie is a petroleum economist

atching part of the Vice-Presidential debate weeks ago, you would be left with the impression that ‘the economy’ and ‘governance’ and ‘politics’ were separate and distinct aspects of Nigeria (without any real connection to each other). This impression would mislead you to think that those who govern (and those who are governed) have to choose which of these aspects of the country to prioritize: the economy or politics or governance. I was amused at the Twitter highlights afterwards from supporters of each candidate. Some quoted Obi saying “you cannot close your shop and run after criminals”, and some emphasized Osinbanjo’s reply “if you keep criminals in your shop you will end up with no shop in the end.” Beyond the play on words in the

title of this write up is the message that the economics of a country is deeply embedded in its politics. Actually, ‘economics’ as a discipline of study was originally founded as ‘political economy’ out of moral philosophy by Adam Smith in the 18th century. The discipline was made more rigorous and methodical by David Ricardo and Karl Marx in the 19th century. It was in the early 20th century that the term ‘economics’ replaced ‘political economy’ when the discipline became more mathematical with aspirations to become ‘scientific’. But, economics works and is realized in a political context. In the words of Harvard University professor Danielle Allen: “Politics trumps economics, in other words, or at least sets the terms according to which the economic game is played.”Politics is defined in this article to mean power relationships and decision making. A political economy approach is most appropriate for analyzing Nigeria’s oil sector. The oil sector has underperformed in recent years. Many analysts would label this sector as dysfunctional. To focus on the ‘economics’ of the sector alone

will not provide enough illumination. There has been a steady decline of the oil sector’s share of Nigeria’s gross domestic product (GDP): The Oil sector’s GDP contribution grew at an average of 1.3 % from 1999to 2009 and contracted at an average of -4.5% between 2010-2015. From a peak of 49% of Nigeria’s GDP in 1999, the oil sector’s contribution was reduced to only 6.4% of GDP in 2015. Despite this, the oil sector’s contribution to Nigeria’s export earnings has been over 90% for all those years. The oil sector has also constituted about 70 % of the Federal Government’s revenue over those years. Zainab Usman, now at the World Bank, used the ‘political settlements framework’ to analyze Nigeria’s oil sector. Her analysis, done as a doctoral student at Oxford University, is the best I have encountered for many years. Usman reveals three political constraints on Nigeria’s oil sector that must be taken into consideration. First, the horizontal elite constraint, second is the vertical societal constraint and third is the external constraint. These are three constraints on successive ruling elites which “generate suboptimal policy choices for the oil sector.”

These three political constraints on the sector generate “competitive, distributional, and fiscal pressures from key stakeholders on Nigeria’s ruling elite towards suboptimal policy choices.” The horizontal elite constraint according to Usman, is determined by “the extent to which the ruling coalition is cohesive or fragmented”. The vertical non-elite constraint is defined by the interests of societal groups concerning welfare or economic redistribution. The external constraint has to do with the boom-and-bust cycle of the global oil industry which constraints the ruling elites. A political settlement is the distribution of power within institutions, political elites and other important or contending groups in a society. This approach to economic analysis highlights how the balance of power determines how economic resources are allocated for either productive or predatory uses for the survival of the ruling elite. There is always a delicate balance of power between political elites, government bureaucrats and the business class. Identifying these actors in the game, their resources, their interests and their scope of influence is absolutely

crucial. So, the problems plaguing the Nigerian oil sector could be understood as resulting from bad policy choices by ruling elites. These policy choices were constrained at the three levels: horizontal, vertical and external. The constraints combine in different ways to exert pressure and determine the kind of policies being put forward for the oil sector by the ruling elites. Despite its declining relevance to GDP, the oil sector is still Nigeria’s top foreign exchange provider (from exports) and this makes the sector crucial to horizontal-elite competition, vertical-societal redistribution demands and vulnerable to external shocks. Eventually the outcome of all this for Nigeria would be “growthenhancing or extractive-predatory economic restructuring, economic redistribution among elites for political pacification of and among wider societal groups or rising inequalities.” Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng

Send reactions to: comment@businessday.ng

BUSINESS DAY

www.businessday.ng

Editorial Publisher/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

Errors and wrong paths on the suspension of the Chief Justice of Nigeria

here is a multiplicity of wrongs in the matter of the suspension of the Chief Justice of Nigeria. All parties involved contributed wrong steps. Fundamentally, Nigeria should follow the path spelled out clearly in our constitution. The Federal Government should retrace its steps, withdraw the suspension of the Chief Justice of Nigeria Justice Walter Nkanu Samuel Onnoghen and end the illegal appointment of an Acting Chief Justice Ibrahim Tanko Mohammed. President Muhammadu Buhari on Friday, 25 January 2019 suspended the Chief Justice of Nigeria, Mr Justice Walter Nkanu Onnoghen citing an exparte order of the Code of Conduct Tribunal. He appointed and swore in the next judge in the hierarchy, Mr Justice Ibrahim Tanko Mohammed. The President claimed as further justification the alleged lack of support for his anti-corruption fight by the Supreme Court headed by Onnoghen. He claimed they set free persons guilty of corruption. The action of Mr President drew flaks nationally and internationally. The Nigerian Bar Association and individual lawyers described the action as illegal for failing to follow constitutional stipulations on the removal of a Chief Justice. The global community, including the United States, the United Kingdom and the European

Union, also raised queries both about due process and how close the action is to the upcoming General Elections. Suspension of the Chief Justice of Nigeria and his replacement failed to comply with the rule of law, due process, fair hearing and adherence to process and procedures. The president’s claim that the Supreme Court frees persons guilty of corruption smacks of an entitlement mentality that expects the Supreme Court to try cases not based on law but on the wishes of the President. There are too many wrong and disturbing turns in the narrative of the suspension of the Chief Justice of Nigeria, a very rare occurrence. First, the federal government worked to a predetermined end from the beginning. It committed errors in the process. It commenced with a petition against the CJN by a former associate of the president. It came on a Thursday and received the fastest treatment in the history of Nigerian bureaucracy as it was scheduled for hearing the next Monday. In-between, a media leak and trial commenced on Saturday with disclosures of the petition and the purported statement of the CJN in defence. The petitioner had access to all the confidential records of the CJN, implying a deliberate breach of professional ethics by bodies entrusted with safeguarding the information. These are the Code of Conduct Bureau and the Department of State Security. The CJN according to the leaks

admitted the infractions of failure to update his records with the Conduct Bureau upon becoming CJN and failure to declare other assets. He claimed forgetfulness. In another error, he also failed to enter a plea either way to the hearing but challenged the jurisdiction of the CCT. Nor did he recuse himself, on moral grounds, though it was the objective of his traducers. The gravamen of the presidential action is said to be compliance with the order of the Code of Conduct Tribunal. Unfortunately, the order of the CCT is defective in failing to comply even with practice direction. The CCT sat on 22 January 2019 and adjourned to 28 January 2019 to adjudicate on the matter of the CJN and the challenge to the jurisdiction of the court. Suddenly on Friday, January 25, the presidency disclosed that the CCT granted it an exparte order on Wednesday, January 23 based on which it suspended the CJN. The CCT’s orders were clear. It asked the CJN to step aside “over allegation of contravening the provisions of the code of conduct and Tribunal Act Cap 215 Laws of the Federation 2004”. It also asked the President to “take all necessary measures to swear in the most senior Justice of the Supreme Court of Nigeria as Acting Chief Justice of Nigeria and Chairman National Judicial Council in order to prevent a vacuum in the judicial arm of government pending the determination of the motion on notice.” The Federal Government read “all necessary measures” to mean

suspension of the Chief Justice of Nigeria. There was no fair hearing nor any clear urgency. No one is on record as moving the motion requesting the exparte order. The lacuna is evidence of either haste or incompetence. Justice Onnoghen could not “step aside” as he was unaware of this directive. Or could he not? The Chief Justice postponed a meeting of the National Judicial Council that would probably have discussed the matter of his case before the Code of Conduct Tribunal. Even so, there was no petition to the National Judicial Council necessitating a meeting which the next in line could have chaired. There is also the matter of the status of the Code of Conduct Tribunal. It is an administrative court under the office of the Secretary to the Government of the Federation. It means the Executive procured an order from an arm of the Executive to use against the Judiciary. It is not in line with the procedure for punitive action on judicial officers, not least the Head of that arm of Government. Despite the many errors on the path of this suspension, the fundamental one is that of failure of the FG to comply with due process, follow laid down procedures and thereby uphold the rule of law. Justice Walther Nkanu Onnoghen should and must answer to any illegalities he may have committed. He should do so once the Federal Government reverts to status quo and follows the right path to its destination.

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08023165438 08169609331 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union

Mission Statement To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR Core Values

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Nigeria, others urged to advance inclusive, equitable quality education KELECHI EWUZIE

s the world marks the maiden edition of international education day, Nigeria and indeed other developing countries have been urged to commit funds to ensure inclusive, equitable quality education and promote lifelong learning opportunities for all which is what Sustainable Development Goal 4 is about. António Guterres, United Nations Secretary-General in his massage at the maiden celebration of International education day recently said there is need to prioritise education as a public good; support it with cooperation, partnerships and funding; and recognise that leaving no one behind starts with education. He observe that at least 262 million children, adolescents and youth are out of school, most of them girls, adding that Millions more who attend school are not mastering the basics.

According to him, “This is a violation of their human right to education. The world cannot afford a generation of children and young people who lack the skills they need to compete in the 21st century economy, nor can we

afford to leave behind half of humanity”. Audrey Azoulay, directorGeneral of UNESCO on the occasion of International Day of Education said that this significant decision recognises the capital role of education in

ASUU accuses FG of spreading fake news over N163bn funds Akinremi Feyisipo, Ibadan.

he Academic Staff Union of Universities (ASUU) has denied receiving the sum of N163billion from government so as to suspend the threemonth old strike. In a release entitled “Re: N163billion released to ASUU: Putting the record straight”, signed by Ade Adejumo, Ibadan Zonal coordinator of the Union, asked government to concentrate efforts at finding a quick resolution of the impasse rather than dissipate energy on fake news and cheap propaganda aimed at tarnishing the image of the Union. It described the Federal Government as mischievous in misinforming the public when it knows that ASUU as patriotic union of intellectuals only fight for better education while university administration and Governing Council receive the funds.

The union noted government knows that it is Governing Councils and University administrations that receive and spend all the money coming to the university. According to the release, contracts and all capital projects are awarded by the councils that are appointed by the federal government and not ASUU. ASUU asked Vice chancellors and councils to stop behaving like vultures but should come out and openly put the record straight each time government comes out with deliberate falsehood that money has been released to ASUU. “Once again, the attention of our union has been drawn to another piece of misinformation which gives the impression that ASUU collects money from government” For umpteenth time, let it be known that our union is a patriotic organisation whose activities are driven by principled conviction that the

resources of the country can better be managed for the ultimate benefit of the Nigerian society, especially the education sector which is our immediate constituency”. The government and all civilized individuals are aware of how the university is managed, so also the resources available to it. The government knows that it is the council and the university administration that receives and spends all the money coming into the university. ASUU doesn’t receive money from government and doesn’t spend it. Even money meant for our salaries and other allowances come directly to the university administration which prepares the budget and manages it. ASUU members collect only their salaries as paid by the university. Contracts and all the capital projects are awarded by the councils that are appointed by the government, not ASUU.

“Transforming our world: the 2030 Agenda for Sustainable Development”. Azoulay opines that without inclusive and equitable quality education and lifelong opportunities for all, countries will not succeed

in breaking the cycle of poverty that is leaving millions of children, youth and adults behind. She stated that Nigeria and other developing countries will not succeed in mitigating climate change, adapting to

the technological revolution, let alone achieve gender equality, without ambitious political commitment to universal education. “This day is the occasion to reaffirm fundamental principles. Firstly, education is a human right, a public good and a public responsibility”. She further opines that education is the most powerful force in our hands to ensure significant improvements in health, to stimulate economic growth, to unlock the potential and innovation we need to build more resilient and sustainable societies. She called for collective action for education at global level. “This calls for special attention to girls, to migrants, displaced persons and refugees; to support teachers and make education and training more gender responsive. It urgently requires scaled up domestic resources and international aid, because the cost of not investing will dig divides, inequalities and exclusion across societies” Azoulay said.

Educationists score Buhari’s education policy low

resident Muhammadu Buhari education policy was seen differently by educationists; some considered the education policy in the last 365 days as being fairly good, while some totally rubbished some steps taken by President Buhari on education. Joel Ezenwa, an education analyst considered the present administration policy on education as imperfect and ineffective going by the incapacity of the policy to proffer practical solutions to the encumbering developmental malaise. Ezenwa believed that the proliferation of universities is nothing if they could not positively impact on the socio-economic development of the country. He faulted the Federal Government on the creation of additional universities, saying that the country, at this time, did not need additional universities, but expansion, upgrading and effectiveness of the existing ones should be the compulsory consideration of the

Federal Government. The educationist, rather called for adequate autonomy in tertiary institutions instead of creation of more tertiary institutions that would starved of funds, enabling environment and adequately effective academic staff, saying that the existing universities could favourably expand to accommodate more students than the newly established ones. He also urged Federal Government and National Universities Commission (NUC) to enforce standards on the Private Universities operating in the country to ensure that consumers of tertiary education are protected from sub-standard quality, adding that their curricula should be made to support developmental initiatives and skills that are capable of reforming the country. Another educationalist, Motunrayo Olutayo, proprietor, Ebun International school, Lagos believed that Federal Government had not

done much in Secondary School Education which she referred to as the bedrock of tertiary education. Olutayo declared that examination malpractices were rampant these days because the Federal Government lacked in its functions to adequately and effectively regulate Senior Secondary School Certificate Examinations such as WAEC, NECO and JAMB, saying that Secondary School Curricula should be restructured in such a way that everything needed for effective education and training students would encompassed. She also advocated the training and retraining of teaching staff in all the secondary schools across the country to equip them with modern teaching skills and technology, saying that the rate at which Nigeria is moving in terms of education and training in secondary schools is too slow and ineffective compared to other institutions that are WAEC members in West African Sub-region.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

EDUCATION Learning from children

OYIN EGBEYEMI

he beautiful thing about children (especially before their teenage years) is that they are not yet fully formed. They are pure, innocent and just beginning to learn the ropes of life. Those who are exposed to relatively normal upbringing (i.e. not in adverse conditions such as abusive homes or war-torn countries) have certain attitudes and behaviours that I think adults could learn from. Some of these are described below:

“I can do anything and everything” Children are not very aware of their limits…and as dangerous as it sounds, this is actually an attitude that many adults lack. It’s very interesting to see infants attempt to walk, talk and do many of the things that they watch their older ones or even adults do. They make many attempts, fail many times, but pick themselves up and continue to try again. Even when they make demands for certain items they desire, they nag and nag and nag until they get them. They persevere until they succeed; or they may hurt themselves and fail, but they quickly pick themselves up and move on. This skill of persistence and perseverance is something that many adults lack today; but if we applied these more to some of our own challenges, we would probably yield better results in our

endeavours. “What grudge?” It is almost impossible to hold a grudge with children. One minute, they are having a heated argument over one fickle subject or the other, and the next minute, they are best friends. They do not hold on to the wrongdoings of others and use them as weapons against them even after the argument has been resolved, unlike adults who could hold grudges that may last lifetimes. They also do not exhibit passiveaggressiveness that adults are so familiar with (the “I forgive you, but do not really forgive you attitude). What happened to “forgive and forget?” “We are all different but equal” The current state of the world and many recent activities are beginning to make it clear that adult human beings might be more divisive than we thought. This even questions the

concept of globalisation. With racism, anti-Semitism and neo-Nazi demonstrations gaining some form of momentum in the West; and of course our cultural barriers in Nigeria and many other African countries; and even intellectual and social differences, you would wonder what the actual underlying reasons for such discrimination other than human beings merely just deciding that one group is more or less superior to the other (again, for no concrete reason other than an irrational opinion). When children are young, they do not have these issues; they see one another as different and equal and accept it. After all, we cannot all be the same, and are each a product of our environments or our makeup. I found it absolutely beautiful when one of the children at the school I work at was asked who his best

friend is, and he said that is was one of his intellectually challenged classmates. It could be because the classroom environment and teaching methods at this school are deliberately planned to ensure equality; however, for a child to make that conscious decision to select that one person amongst about fifteen others in his class. It goes to show that children have the ability not to judge other people for their differences. This is something that adults have a great deal to learn from, so that we get along a little better. “I love you, and I’m not afraid to say or show it”: Children are probably the most expressive form of human begins. They are not afraid to show affection to one another and to others around them. I have received numerous unsolicited hugs and “I love you’s” from some of these young

people whom I have known for less than a year. For them, love is not as complicated as we as adults seem to make it. Because of the fear of vulnerability (which is usually linked to weakness), adults seem to hide their true feelings and fail to express them effectively, whereas they are fully aware of the way they feel. Why can’t we take a note from children and express more love to each other in whatever way we can, rather than fronting and hiding our true feelings from each other? Children are absolutely wonderful creatures. If we took a few lessons from them, there would probably be more peace and love in our communities and in the world that we live in today. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Underfunding, incessant industrial action Stakeholders advocate timely implementation short changes Nigerian university system of policies to drive growth in education sector KELECHI EWUZIE

olu Odugbemi, the former vice chancellor, University of Lagos has decried incessant industrial action continually embarked upon by both Academic and Nonacademic staff of the universities and meagre budgetary allocations to the Nigerian universities as serious impediments to Nigerian university system, saying it had contributed to the abysmally low-ranking in the comity of African and world universities. Odugbemi in a chat with BusinessDay observed that none of the Nigerian universities would be ranked among top ten universities in African

and in the world, except cogent and effective solutions were found to addressing the challenges. The educationist stated that though the Federal Government was trying its best on in terms of accreditation and quality assurance, yet it still needed to take a pragmatic and effective approach to the issue of incessant strike ravaging Nigerian institutions as well as increasing the budgetary allocations given the university as that would enhance effective learning and researches across the universities in the country. He declared that Nigerian universities would favourably compete with their counterparts in the world if the anomalies bedeviling the

education system, especially university education, which had been identified as inadequate funding and incessant industrial action; were effectively addressed, just as this would boost the university education system and make the certificates issued compared favourably with any university in the world. “Government should increase the funding; we are like Oliver Twist. You remember I said the quantum has increased and so much our problem too. So government, apart from continuing through the National Universities Commission (NUC), accreditation of programmes, institutional accreditation, all the workshops they are doing, should fund universities more”, Odugbemi said.

L-R: Ron Burton, manager, social work, UK, Hector Ortiz, director, Centre for Biblical Leadership, (CBL), Tennessee, USA, James Kolawole, National Overseas, Church of God of Prophecy, Nigeria/Ghana, and Theophilus A. McCalla, MBE, pioneer national overseas at a programme recently

KELECHI EWUZIE

t is a known fact that nations that want to be reckoned with in terms of technological advancement and academic success strive to position education as a cardinal point of interest in its march towards development. While forward looking countries across the globe makes concerted efforts in pursuit of such laudable policies decision, the same however, cannot be said of the institution of government in Nigeria and by extension its policy makers. Furthermore one key pointer to measure the responsiveness or otherwise of any government in the world today, is in its quick implementation of key policy agreement or decisions that will boost the advancement of any sector such policy is formulated for. It is in the face of this steady decline in the overall standard of education across all tiers in the nation therefore, that concerned education stakeholders and experts have continued to clamour for initiatives that would promote massive development of the sector that is daily experiencing backwardness. While many have made a case for substantial funding without the desired result, there are some that consider the idea of proper implementation of educational policies and framework as a viable option for boosting develop-

ment. Such consideration in their summation will engineer a transformation in the way things are usually done in this country. In report carried out by recently, it was established, that the non implementation of policy has contributed in no small way to the decay that education have become today, as experts who bared their minds on the issues were emphatics in their stance that the sooner those in authority begin to implement all the documented policies as it concerns education, the nation may as well forget about becoming an emerging economy model that will deliver sound education policy and management for schools to be relevant in the comity of nation in this twenty first century. In his own assessment of the current situation, Uzodinma Egbebu, a research fellow , highlights that the treatment Nigerian education sector constantly receive in term of budgetary allocation, have most often times been closely linked to the poor policy implementation. Egbebu is further pained that the constant neglect of education by government agency saddled with the responsibility to monitor standards across all sub-sectors of education, to take effective action to maintain and enhance standards have failed, a situation, he asserted have lead to tertiary institutions in the country churning out on a yearly basis poorly trained graduates, who cannot compete favourably in

the global market. On the issue of brain-drain and its concomitant effect on the overall academic environment, the don expressed his fears over the situation adding that it is a well known fact in the country that Nigerian professionals in education migrate to other country around the world in search of better living conditions and job satisfaction no thanks to the shabby implementation of policies. He believes the only solution to check the worrying trend will be to address the fundamental issues through proper implementation of policies that can attract the best Nigerian brains abroad and also retain the ones we have currently to engender growth and development of the country. On his part, Isaac Obieje, an education consultant in absolute consideration of this fact noted that over the years, subsequent government have at one time or the other introduce a national framework which outlines policies, strategies and targets designed to respond to the urgent needs of the education system, but that have lack the will power to implement them. In his words, “This National Framework, formulated through consultation with a wide range of stakeholders from the three tiers of government have key responsibilities, intended to ensure consistency of direction in line with the national education, but it is ad that such have not been backed up with any action plan”.

Tuesday 29 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

COMPANIES & MARKETS

@Businessdayng

BUSINESS DAY

In tax credit for infrastructure investment, Buhari lures private capital with new executive order Pg. 16

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

COMPANIES

Vitafoam may be ready for a rebound OLUFIKAYO OWOEYE

itafoam Nigeria Plc has announced the introduction of eight new products into the market. According to the management of Vitafoam, the new offerings will help it expand its revenue base, enhance customers’ healthy living and boost shareholder value. The new products include Vita Pearl, a pillow that regulates temperature and draws moisture from the body, assorted customised beds, Sofas, Trifold mat for leisure, Reading chairs, three specialised mattresses including orthopedic and classic and various polyurethane sandwich panel steels. The Group had consistently made losses in the last three years. Vitafoam made a loss after tax of N71.9 million in 2015, N32 million in 2016 and N127 million in 2017. However, results for the 9 months ended June 2018 show the group is on the path of profitability once again as its profit after tax stood at N515 million in 2018 compared to N133 million made in the prior year. The group consists of Vitafoam Plc (the company), as well as subsidiaries controlled by the company, including Vono Products Plc which it merged with in 2015. While Vitafoam (the company) has consistently made a profit, its subsidiaries have struggled.

Last year’s results show most of them made losses. Despite the impressive results, a look at the financial statement of the company shows that the finance costs are still on the high side, though they dropped year on year. Results for the 9 months ending June 2018 show that finance costs amounting to N885 million took up 52.1% of the company’s operating profit of N1.1 billion, as against 79% for the corresponding period of 2017. Full year results for the period ended September 2017, show that finance costs hit N1.3 billion, indicating that the firm may have lower finance costs this full year. Interestingly, the company, perhaps in a bid to win more customers, has doubled down on advertising. Advert expenses surged from N76.5 million in 2017 to N126 million in its 9-month period ended 30th June 2018. Advert expenses for the full year ended September 2017 show that the group spent N134 million. The group has been consistent in paying dividends, despite the fluctuating profitability. The company paid a dividend of N0.15 per share for the 2017 financial year, the board has also recommended a dividend of 260 million representing N0.25 for the for the financial year ended 30th September 2018 also approved the bonus issue of 1 new share for every 5 existing ordinary shares to shareholders. Its share price

hit a year high of N4.99 per share early this year, though the stock has dipped in inter-day trading and it is currently trading at N4.49 with a one-year return of 60.04%. Its shares also gained by 46.7% in 2018. According to the Group Managing Director/Chief Executive Officer, Vitafoam Nigeria Plc, Mr. Taiwo Adeniy the company will continue to leverage on research and development in order to keep abreast of changing dynamics of customers’ demand. ‘As soon as we have introduced a Product into the market, we are also working on

some other ones. It is difficult to fake our products because as for us product differentiation is our strategy,’-He said. Vitafoam was established in 1962 by two giants: British Vita and Unilever. The Nigerian Promoter Decree No. 3 of 1977, mandated companies to sell sixty percent of their share to the Nigerian public, thus in compli-

Businesses to become active as economy bounces back in Q4 2019 … Naira seen trading between N375 – N385 to dollar

Globacom beats Airtel to 2nd B place in telecoms market share JUMOKE AKIYODE-LAWANSON

lobacom ended 2018 and started 2019 as the second largest telecommunications operator in Nigeria with 26.24 percent of the market, behind MTN which remains market leader with 38.92 percent share. According to updated statistics from the Nigerian Communications Commission (NCC) website, in the month of December 2018, Globacom made 1,982,109 new customers, moving up its subscriber base from 43,273,188 to 45,255,297. This development has strengthened the position of Globacom as the second largest network while the latest publication shows that Airtel remains in third place after

increasing by 1,061,330 subscribers to arrive at 44,180,484 subscribers in December 2018. This has pushed Airtel to 25.61 percent of cumulative industry subscriber base. The report further indicates that 9mobile added 555,344 subscribers, as the third largest gainer, to move up to 15,917,015 in December, from 15,361,671 in November while MTN stands at 67,133,009, having added 158,017 in December 2018. Globacom says its stronger performance in the last few months is consequent upon its constant improvements of its services across the country with massive infrastructural overhauls and optimizations. The company had, in a press release issued from its Lagos head office on Friday,

said that it was working assiduously to further enhance the network experience of its subscribers in 2019. “We are ramping up our network backbone with new critical infrastructure equipment and new avant-garde software solutions that will improve quality of service, quicken problem resolution and deepen customer care operations,” the statement said. In its determination to delight its customers, Globacom introduced new products which include Oga SIM, which offers 125 percent data bonuses to all new data customers, and Glo Yakata, which rewards customers with data and voice benefits every time they recharge their Glo lines. These products seem to have become increasingly popular with subscribers.

Products and established two sister companies: Vitapur Nigeria (an insulation products manufacturing company) and Vitablom (fibre processing and soft furnishing company). In 2012, Vitafoam established its youngest inclusion; Vitavisco for production and sales of Viscoelastic foam and Latex products.

ECONOMY

HOPE MOSES-ASHIKE

TELECOMS

ance with the decree, Vitafoam became a public company in 1978 and listed on the floor of the Nigerian Stock Exchange in 1978. In 2008 and 2009, Vitafoam Ghana Limited and Vitafoam Sierra Leone Limited respectively were established. In 2010, Vitafoam became a major shareholder of Vono

usiness activity will likely be muted in the first half of 2019 amid elections in Nigeria, but things would take a turn for better once that is over. The general elections are scheduled for February 16, 2019 and could be coloured by a smooth transition or disruption, either of which will impact businesses. Major factors constraining business activities currently include insufficient power supply, which stood at 64.0 index points, high interest rate 57.5 points, unfavourable economic climate 54.3 points, financial problems 53.4 points, unclear economic laws 52.0 points, unfavourable political climate 47.5 points and insufficient demand 42.9 points, the CBN’s business expectation survey for December 2018 indicated. Nigerian economy in 2019 is projected to grow by 2% by the International Monetary Fund (IMF); 2.2% by the World Bank; and 2.28 percent by The Central Bank of Nigeria (CBN). All economic indicators as analysed by Nigerian economists are expected to bounce back in the fourth quarter of 2019. Doyin Salami, a renowned economist and former member

of Central Bank of Nigeria’s monetary policy committee, said businesses should keep close eye to oil production and prices in 2019. He gave a baseline projection for oil price in 2019 to stand at US$61.0 per barrel (NYMEX Futures 12 average), optimistic of increase in oil price to US$65.0 per barrel and pessimistic of a decline to US$56.0/bbl. His baseline projection for oil production in 2019 is 2.0mbpd, optimistic 2.1ombpd and pessimistic 1.8mbpd. Speaking with BusinessDay after moderating a panel session at the Nigeria-British Chamber of Commerce in Lagos on Thursday, Abiola Adekoya, CEO, RMBN stockbrokers Limited, “. I think it is very good to hear actionable strategies that businesses could adopt and also from economic point of view what the key traders or pressure points they must look out for and in order to manage their businesses effectively to hedge the impact of those triggers on their businesses”. In his analysis, Marcel Okeke, former Chief Economist/group head, research and Economic Intelligence Group, Zenith Bank Plc. and Current lead consultant, Mascot Consult Limited said there would be renewed focus

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

on policies to drive growth in the fourth quarter of 2019. On foreign exchange, Okeke projects the naira to trade between at N375/$ - N380/$ in the fourth quarter of 2019 from between N360 and N364 trading currently. FBNQuest said its outlook report that the CBN will maintain the preferential rate for priority transactions, and that the NAFEX rate will weaken to a range of N375 to N385 per US dollar. “On the naira exchange rate, we are in the minority position of seeing no substantive change this year. We know that the CBN governor’s five-year term ends in June. It is unclear at this stage whether or not his term will be extended, whatever the election result”, analysts at the FBNQuest said. According to the analysts a change at the top does not necessarily translate into change across the bank. Its officials favour management of the exchange rate, however discreet, and have no experience of a rate genuinely driven by market forces. The CBN’s survey report show that majority of the respondent firms expect the naira to appreciate in the current and next months as the confidence indices stood at 22.3 and 35.4 points, respectively.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

COMPANIES & MARKETS

@Businessdayng

Tuesday 29 January 2019

Business Event

BANKING

In tax credit for infrastructure investment, Buhari lures private capital with new executive order LOLADE AKINMURELE

re s i d e nt Mu ha m ma d u Bu ha r i ha s signed an executive order allowing private companies build federal roads in the country, as Abuja gradually comes around to an urgent need to leverage private capital for infrastructure development at a time when government revenue has slumped. The new order will allow private companies such as the Dangote Group, Unilever and Lafarge Africa construct major roads across the country and be paid in the form of tax credit. “Today in Abuja I signed into law Executive Order 7 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme,” Buhari said

via his twitter handle, Friday. In his three and a half yearold administration, Buhari has forged a reputation for his socialist principles. The 76-year old’s government has preferred to go it alone in terms of infrastructure investment despite opportunities for Public Private Partnerships (PPP)s. That has meant piling pressure on thin public revenues to invest in infrastructure, the result of which has opened the door to increased borrowings yet infrastructure development has made little progress. In four years, it’s Nigeria’s debt stock that has doubled to N24 trillion, not the country’s stock of infrastructure. Buhari’s change of tack to allow companies invest in federal roads holds benefits from freeing up government revenue for other purposes to addressing a yawning infra-

structure deficit that has rendered Abuja uncompetitive. The Executive Order 007 2019, signed by the president, is on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme. The president signed the order on Friday inside the council chamber of State House, Abuja. Nigeria is the 11th country with the world’s worst road quality and network, according go the Global Competitive Index of 2018. Between 2017 and 2018 Nigeria scored 2.5, worse than neighbouring Cameroon which scored 2.6. Under federal laws, public roads are constructed and maintained by the government, but poor funding has seen key roads left unattended to for years, causing car accidents.

L-R: Muyiwa Matuluko, Editor In Chief, Techpoint Africa; Richard Ikiebe, Director/Senior Fellow, Centre for Leadershop in Journalism school of media and communication, Pan -Atlantic University; Aderemi Atanda, executive director, SystemSpecs, and Adewale Yusuf, founder, TechPoint Africa, at the tech point build west Africa 2019, Sponsored by systemspecs in Lagos.

BANKING

First Bank harps on skills acquisition, capacity building in banking sector …As 44 graduates from retail banking certification BALA AUGIE

nvesting in human capital and capacity development raises productivity of workers due to upgraded skills and better education, as it empowers the work force with capacity for new ideas and innovations to deliver on their mandate. This was the key take away of the inaugural graduation ceremony of First Bank’s Retail Banking Certification Programme held in Lagos recently, where 44 candidates that cut across various segment of the bank were certified. Adesola Adeduntan, MD/CEO of First Bank Plc, said certification without the acquisition of the necessary skills and capability is meaningless; stating it is the bulk of the problem plaguing Africa as a continent. “Because you also work in a service industry, skills and capability acquisition without the necessary attitude is useless because at the end of the day, when our customers and stakeholders

encounter us – how do they experience us,” said Adeduntan. However, it is imperative to note that human capital development and skills acquisition are the two key determinant of growth in transition economies, as emerging markets across the globe, such as Nigeria aspire to boost and grow its economy of scale. “Certification is very important; skills and capacity acquisition is even more important, but on top of that it is our attitude to service weather we are dealing with internal customers but more importantly when we are dealing with personal customers because without our customers we will not exist,” Adeduntan said. According to the First Bank CEO, the certification programme also underscores the importance of personal development over time spent on the job. Adeduntan further said that certification in the banking and financial industry is about bankers’ performance and input. The First Bank retail banking

certification underscores how human resource can be transformed into human capital through education, training, and improved health care delivery. It is so because human capital provides the resources for the development and deepening of other areas of intellectual assets such as research and development, and training. “The certification reinforces and enhances all the necessary tools that they need to have to excel in their chosen career. So, certification just ensures that they have the requisite knowledge to make sure they function effectively,” Ini Ebong of First Academy. According to him, in ensuring standardized sales delivery across all branches of the bank; First Bank is going the certification route for better performance especially in areas of retail banking, as it deals directly with customers’ relationship management. “We will give them the right kind of training and certify them to ensure they deliver well on their mandate,” said Ebong.

BRANDS

Star Lager unveils Burna Boy as new brand ambassador

ational premium beer brand, Star Lager has revealed that Afro-pop sensation Burna Boy is now an ambassador for the brand. The unveiling was made on Sunday, 27 January during a press event at CIRCA, Lekki, Lagos. Leading up to the announcement, a series of visual cues were syndicated across social media, generating massive mainstream media attention ahead of the official announcement. The announcement of Burna Boy as brand ambassador comes after a remarkable year for the music star in 2018, which featured various highlights such as headlining his own sold out concert, as well as being listed as one of only two African acts to perform at the prestigious Coachella Festival. Emmanuel Oriakhi, the mar-

keting director, Nigerian Breweries Plc, while speaking on the unveil expressed his delight at bringing on Burna Boy to the brighter side with Star, “We have always had strong interests in Nigerian music. The talent and the potential for greatness that our music industry possesses is truly immense. Burna Boy is, without a doubt, one of the biggest music exports from the shores of West Africa. With this new brand association, I believe we have the opportunity to use this relationship to tell the Star story and position Star as the leading brand for the aspiration Nigerian who believes he can take on the world. We are excited about this collaboration and we look forward to a very productive 2019 with Burna Boy,” said Oriakhi. Over the years Star Lager has been one of the leading brand

supporters of Nigerian music, hence the decision to forge this association with Burna Boy further cementing the brand’s position as key players in the Nigerian entertainment scene. The brand’s effort in the music industry includes hosting one of the first music talent shows in Nigeria, Star Quest. Following up this landmark achievement, Star also put together some of the biggest music shows Nigeria has ever seen, through its Star Mega Jam and Star Music Trek platforms. Prior to the unveiling of Burna Boy as Brand Ambassador, Star Lager had previously sponsored the Burna Live concert, in which over 4,000 fans were thrilled by the Afro-pop sensation. The sponsorship of the Burna live concert was part of a series of Alist musical concerts which Star Lager sponsored in December 2018.

L-R: Uzoma Nwagba, chief operating officer, Government Enterprise and Empowerment Program, GEEP; Toyin Adeniji, executive director, micro enterprise, bank of industry, Bank of Industry (BoI), and Uloma Ike, group head, micro credit, BoI, during a press conference on the operational activities of GEEP in Abuja

L-R: Austin Ogu, chairman, Oil and Gas Trainers Association of Nigeria (OGTAN), University Liaison, OGTAN; Mazi Sam Azoka Onyechi, vice president, OGTAN; Mayowa Afe, president, OGTAN; Caroline Egejuru, general manager, and Olaleye Marhew, national financial secretary, at the media briefing on the OGTAN 2nd annual international conference and exhibition in Lagos

L-R: Funbi Emiola, RnB/Soul musician; Chinwe Greg-Egu, brand manager international brands, and Emmanuel Oriakhi, marketing director NB Plc., at The Uncage Series In Lagos.

Tuesday 29 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

LegalPerspectives

With

@Businessdayng

BUSINESS DAY

Odunayo Oyasiji

The legal issues surrounding the suspension of the Chief Justice of Nigeria

he Chief Justice of Nigeria is the number one judicial officer and he also heads an arm of Government-Judiciary. The position is created by the constitution and same is protected by the constitution. The reason for this is obvious i.e. to ensure the independence of the judiciary which is the last hope of the common man. It is also meant to protect the doctrine of separation of power between the three arms of government- Judiciary, Legislature and the Executive. Each arm is to serve as checks and balances on each other. The legality of the recent arraignment of the Chief Justice of Nigeria before the Code of Conduct Tribunal has generated and is still generating a lot of comments/issues in the country. His recent suspension by President Buhari on the basis of an order from the Code of Conduct Tribunal is the latest issue that the whole country is talking about. It must be noted that the constitution is supreme and if the provision of any other law is inconsistent with the provision of the constitution, such other law shall be void to the extent of its inconsistency. Section 1(1) -(3) of the 1999 constitution of Nigeria (as amended) states that “1. (1) This Constitution is supreme and its provisions shall have binding force on the authorities and persons throughout the Federal Republic of Nigeria. (2) The Federal Republic of Nigeria shall not be governed, nor shall any persons or group of persons take control of the Government of Nigeria or any part thereof, except in accordance with the provisions of this Constitution. (3) If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void.” The above suggests that the constitution has a binding force over everybody and authorities in Nigeria- not excluding the president of the country. The appointment to the position of the Chief Justice of Nigeria is provided for under section 231(1) -(5) of the 1999 Constitution of Nigeria. The section states that- “231. (1) The appointment of a person to the office of Chief Justice

of Nigeria shall be made by the President on the recommendation of the National Judicial Council subject to confirmation of such appointment by the Senate.(2) The appointment of a person to the office of a Justice of the Supreme Court shall be made by the President on the National Judicial Council subject to confirmation of such appointment by the senate.(3) A person shall not be qualified to hold the office of Chief Justice of Nigeria or a Justice of the Supreme Court, unless he is qualified to practice as a legal practitioner in Nigeria and has been so qualified for a period of not less than fifteen years. (4) If the office of Chief Justice of Nigeria is vacant or if the person holding the office is for any reason unable to perform the functions of the office, then until a person has been appointed to and has assumed the functions of that office, or until the person holding has resumed those functions, the President shall appoint the most senior Justice of the Supreme Court to perform those functions.(5) Except on the recommendation of the National Judicial Council, an

appointment pursuant to the provisions of subsection (4) of this section shall cease to have effect after the expiration of three months from the date of such appointment, and the President shall not reappointment a person whose appointment has lapsed.” Just as the appointment to the position of the Chief Justice is provided for under the constitution, the removal of the person occupying the position is also provided for under section 292 (1) of the constitution. The section recommends that the Chief Justice is to be removed by the president on the recommendation of the National Judicial Council and subject to the confirmation by the two-third of the senate. This position was affirmed by the Court of Appeal in the case of Hon. Justice Hyeladzira Ajita Nganjiwan V Federal Republic of Nigeria(2017) LPELR-43391(CA). Therefore, his arraignment at the Code of Conduct Tribunal without first being investigated and a recommendation sent to the President for his removal (subject to the confirmation by two-third majority of the senate) runs contrary to the

provision of the law. On the basis of the failure of the Federal Government to follow the above laid down procedure, the counsel to the embattled Chief Justice of Nigeria filed an application challenging the jurisdiction of the court i.e. that the Code of Conduct Tribunal has no jurisdiction since the proper procedure hasn’t been followed. It is an established principle of law that where the jurisdiction of a court is being challenged the court must first take steps to resolve the issue of jurisdiction first before doing any other thing- the Supreme Court of Nigeria affirmed this in the case of NDIC V CBN (2002) 7 NWLR (PT.766) 272 AT 292,300 where the court stated that “but first it has to be plain to everyone , not least the court, that the court has jurisdiction to entertain the suit. The court must not give an order in the suit affecting the defendants until the issue of jurisdiction is settled when it has been raised”. The court further stated in the same case that “the matter of jurisdiction is very crucial in any matter before the court that it must be addressed first

by the court before proceeding further in the matter”. From the above, it is crystal clear that the Code of Conduct Tribunal ought to have addressed the issue of jurisdiction first before proceeding to grant an order for the suspension of the Chief justice of Nigeria. Also, there is a principle of law that once a motion on notice concerning an issue is pending such should not be heard exparte again. The application for the suspension of the Chief Justice had been made on notice and same was served on the counsel to the Chief justice of Nigeria. Same application was made exparte (exparte means only one side to be heard) and an order was granted for the suspension of CJN without honouring his right to be heard. This can be said to be a clear violation of the principle of natural justice as the CJN has the right to reply to the motion on notice already filed- for same to be determined on merit. The tribunal adjourned the hearing of the motion on notice for the suspension of CJN and went behind to grant an order against the CJN based on an exparte application. Furthermore, the exparte application that was granted was sated January 9, 2019. This was even before the CJN was investigated and a charge brought against him. This shows that there is more to the case. The constitution in section 36(5) states that an accused person is presumed innocent until he is proved to be guilty. By filing an application for his suspension before investigation shows that he has been considered as guilty and the matter is more of persecution than prosecution. It must be noted that history is only repeating itself, the same was done by former President Goodluck Jonathan with regards to Justice Ayo Salami (former President of the Court of Appeal. The Chairman of the Code of Conduct Tribunal was once investigated for corruption, why didn’t he resign on the basis of the allegation? The cry for the government to follow the right procedure in the removal/suspension of the CJN is not as a sign of respect for the CJN but for the office. If the number one man in the judiciary is not safe then the common man is rendered totally hopeless.

BUSINESS DAY

www.businessday.

AVIATION

GUIDE

www.facebook.com/business-

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

in association with

NCAT reels out plans to sustain status as Regional Training Centre of Excellence …as FG approves acquisition of 20 Diamond aircraft Stories by IFEOMA OKEKE

he Nigeria College of Aviation Technology (NCAT), Zaria has disclosed plans to sustain its status as the Regional Training Centre of Excellence (RTCE) given to it by the International Civil Aviation Organisation, (ICAO). This is as the federal government has given approval for the acquisition of 20 Diamond aircraft; five of which are the two engines DA42 and 15 assembly engine DA40 aircraft to boost training capacity in the college. Speaking during the just concluded training programme for the journalists from the League of Airports and Aviation Correspondents ( LAAC), Abdulsalami Mohammed, the Rector of the college, said ICAO that gives the RTCE

status has a lot of expectations from NCAT. “There are a lot of things you have to do to retain the status and if you don’t do them, they will yank it off from you. One of such is that you have to develop ICAO Training Package (ITP). You have to be able to train people from outside the country since it is for region. You are not a local organisation, but now a regional organisation. “During the certification process, you are required to develop a certain number of other training packages. The minimum requirement to qualify as an RTCE is three, it used to be one and we were the first to go to three when it was changed from one to three. At the time NCAT became an RTCE, we have developed six standard training packages and we hope to develop additional three packages before the end of this year. “Right now, we are about

one of the institutions with the highest number of packages developed, which is what has been acknowledged by ICAO in their reports to the President of the Council. There are lots of things that we are doing and we are up to the task of sustaining this RTCE status, he disclosed.” On the issue of aircraft acquisition, Mohammed assured

that the federal government has given approval for acquisition of 20 Diamond aircraft. He said that when he assumed office in 2017, the college took delivery of one DA 42 aircraft in the April of 2017 and placed orders for additional aircraft, but they were informed by the contractors that the Diamond Aircraft Company was bought over by

another company and that the new owner decided to relocate the production place from Austria to Canada. As a result of this development, he said the college was informed that that they won’t be able to produce another aircraft until nine to 10 months, which is when the assembly line would have been completely relocated. The rector further explained that this is what affected the delivery of the additional aircraft because the college asked for additional four DA 40 aircraft, which is what it has on order now. “That company is up and running in Canada now and we expect to take delivery of those four DA40 aircraft before the end of this year. We also have additional DA40 aircraft that was given to the college by an insurance company as part from an insurance settlement. So, by the time we have the four aircraft delivered, we will

have one DA42 and five DA40. “As at today, we have eight aircraft that are serviceable. These aircraft are not the same. We have the basic, advance and two engines ones. So, depending on the stage of training of students, some of the aircraft that are serviceable may not be useful to students for instance who are starting afresh that need the basic and less complex aircraft and then they advance to more complex aircraft, with more instrument flying, before they now go into the multi-engine aircraft. “Sometimes, when you start with the new students, the multi-engine aircraft is actually parked and not doing anything until the students reach that time where they can now start multi-engine training. During that period, we use that for our instructors to maintain their proficiency. We encourage them to fly such aircraft.

SAA partners AWA offer Nigeria travellers NAHCO to partner ICAN on capacity development flight connection to Washington

outh African Airways has signed an interline e-ticket agreement with Africa World Airlines to offer Nigeria travellers seamless connection to Washington DC, USA via Accra. The South African Airways and Africa World Airlines partnership will result in one flight ticket issue to intending passengers flying to Washington from either Lagos or Abuja in Nigeria. With 37 frequencies weekly flights from Lagos and Abuja to Accra, Africa World Airlines provides veritable connection service to feed the four weekly South African Airways Accra Washington flight. According to Ohis Ehimiaghe, South African Airways regional manager, North, West and Central Africa, “The South

African Airways and Africa World Airlines partnership is the shortest gateway to travel to Washington providing about 11 hours trip from West Africa to Washington. And with the core values of reliability and exceptional service, both airlines are poised to give passengers wonderful flying experience.” South African Airways through the interline agreement with Africa World Airlines is permitted to issue the direct ticket from either Lagos or Abuja to Washington via Accra. The South African Airways Accra Washington flight is serviced with state-of-the-art Airbus A330 aircraft fitted with High quality on-demand inflight system. The Business Class seat have a flat-bed

design that is almost two metres long when fully extended alongside exquisite dining while the slim-line economy seats have generous leg-room for travelling comfort. This interline agreement is the beginning of a stronger relationship with Africa World Airlines as South African Airways is in continuous discussion with the airline for a full codeshare agreement soon,” Kemi Leke-Bamtefa, South African Airways national sales manager Nigeria stated. Kingsley Chima, Africa World Airlines Country Manager Nigeria described the interline agreement as a “win-win development for both airlines and most importantly, the passengers now have a seamless connection from West Africa to Washington, USA.”

he Nigerian Aviation Handling Company Plc. (nahco aviance), is set to partner the Institute of Chartered Accountants of Nigeria (ICAN) on human capacity development. Speaking with a delegation of the Ikeja District of the Institute who paid her a courtesy visit at the Ikeja Head Office of the Company, Olatokunbo Fagbemi, the group managing director, said the group will partner with ICAN in organising in-house training for staff who are accountants and others who are non - accounting staff of the company for capacity development and financial literacy. Commending the role its chartered accountants play in the development of the Com-

pany, Fagbemi said nahco aviance boasts of a sizeable number of chartered accountants and that the Company had always supported their participation in ICAN programmes. “At NAHCO, we believe in training and retraining of staff. That is why we have a semi-autonomous unit called Learning & Development enabled with global affiliations which handles aviation related training for the Company. Our staff are some of the best trained in the industry.” She pointed out that the Company will leave no stone unturned in giving the best training to its staff. Explaining why the Company had to run a harmonised group structure, the GMD

said since the company is a group with a number of subsidiary companies, it has to be properly run as a group in a way that bring value to shareholders. In his response, Oni Olalere, the Chairman, Ikeja District of ICAN, FCA, commended the management of the Company stating that ICAN was happy with the level of support NAHCO had been giving to its members working in the Company and also the Ikeja District of the Institute. He said, “We are happy with the support NAHCO gives to the members working in the organization.” He called for more cooperation between NAHCO and the Institute in areas of training and sponsorship of the Institute’s events.

Tuesday 29 January 2018

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

ENERGY INTELLIGENCE Investments

Market Insight

Companies

Commodity Tracker

BUSINESS DAY

Policy

Petrochemicals

Saudi Aramco diverts 3m bpd to petrochemicals, Nigeria should too Stories by ISAAC ANYAOGU

audi Arabia the world’s second biggest crude p ro d u c e r i s s h i f t i ng between 2m and three million barrels per day hydrocarbon production into chemicals as one way to take a leading position in the sector. Africa’s biggest producer needs to think in this direction too. According to the last oil market report by Paris-based International Energy Association (IEA), global oil market rises and falls with production from the United States, emphasising that there is added uncertainty about oil demand due to rising production from the United States. The report also explained that refiners will face a challenging year as processing capacity will increase by 2.6 million bpd, the biggest growth for four decades, while margins are already pressured by low gasoline cracks due to oversupply and weak demand. “The well-trailed changes to the International Maritime Organisation’s marine fuel regulations due in 2020 are another big issue for some refiners as they seek to find outlets for unwanted high sulphur fuel oil,” IEA said in its report.

Saudi Arabia does not want to be caught on the wrong end of a bearish oil market so it is opening discussions over investments in natural gas in several countries. Amin Nasser, Saudi Aramco CEO told Bloomberg that the company wants to be a major gas player globally as it sees lots of potential deals in different parts of the world. It is also willing to partner with large companies.

Aramco is discussing acquiring a 70% stake in chemical company Sabic from the kingdom’s Public Investment Fund. “Organic growth is not going to allow us to meet our aspiration of being a leading chemical company,” Nasser said. This is why it is wants to shift 2m-3m b/d of its hydrocarbon production into chemicals. Nigeria’s petrochemical in-

dustry has been hampered by the poor state of the refineries leading to loss of billions of naira in revenue. Shipping off 445,000 barrels of crude oil a day to refineries in Europe and Asia outsources jobs and investments to these countries. Chuks Nwani, energy lawyer suggests that Nigeria needs to think outside the box and use a tolling arrangement whereby it

pays refiners abroad to refine the products for it in the short term while looking at driving investments into the refining sector at home. However, since 2017 a rash of investments into the sector reveals its potentials. Nigeria’s biggest fertilizer producer Indorama Eleme Petrochemical Ltd commissioned an expanded plant in July 2017 pushing capacity to 1.5million metric tonnes of urea and 4,000 metric tonnes of NPK fertiliser. The plant is designed to produce 360,00 metric tonnes of Polyethylene and 120,000 metric tonnes of Polypropylene per year. Notore is said it was expanding its facilities and plans to ramp up production by 1.75 million metric tonnes of urea and 1 million metric tonnes of NPK. Dangote Fertilizer plant, the biggest planned capacity in the world, is set to come on stream in April this year with 3.0 million metric tonnes of urea yearly. It will also produce about 780,000 metric tonnes of polypropylene and 500,000 metric tonnes of polyethylene. These plants will raise Nigeria’s fertilizer capacity to 7.2 million tonnes and at an average cost of N150,000 per metric tonnes, puts the value at N1.088 trillion ($3.5billion).

Gas

Investors falling over Qatar’s LNG tender scorned Nigeria’s overtures

atar is courting foreign investors to buy a stake in its gas expansion project and the energy companies falling over themselves are the same ones that turned their noses against Nigeria’s invitation to invest in its Liquefied Natural Gas plants. The Middle East country’s tender is drawing interest from long-standing partners as well as newcomers Chevron, Norway’s Equinor and Italy’s Eni, says a report by Reuters. Meanwhile, Nigeria’s has not had a significant investment into its LNG in over two decades. Already, Qatar is the world’s highest LNG producer at 77 million tonnes per annum (mtpa) but countries like Russia, Australia, and the United States are racing to catch up. So at home, it developed an elaborate plan to ramp up liquefaction capacity to 110 mtpa within five years while abroad it is investing in the LNG capacities of its rivals. Contrast this with Nigeria where

investors have largely been unimpressed with overtures to build new liquefaction plants. NLNG Train 7 still sputters after nearly a decade. Since the development of the NLNG, new projects have been too few and far between. Three LNG projects in Nigeria: Olokola LNG,

Brass LNG and the NLNG’s Train 7 have been unable to reach final decision by the stakeholders as investors have pulled out. The OK LNG project was stalled because all the international oil companies (BG, Shell and Chevron) withdrew from the project, with only

the Nigerian National Petroleum Corporation (NNPC) left. The Brass LNG project, which was designed to produce 10 million metric tonnes per annum, was to be built by the NNPC, Total, ConocoPhillips and Eni Group. But ConocoPhillips withdrew from the project in 2013 and has stalled since then. The difference is an uncertain investment climate worsened by regressive policies. Two years ago, politicians were seeking to amend the NLNG Act without recourse to investors thereby violating the sanctity of contract it signed with investors. Investors have left the downstream sector of the oil industry in Nigeria because politicians prefer campaigning on cheap petrol than a thriving economy. Qatar refines its own petrol and sells it to its people at N195 per litre. Nigeria buys imported petrol and sells it at N145 per litre. It spend over N1.6trillion last year in subsidies. Like Nigeria, Qatar has a state-

run oil company, Qatar Petroleum (QP) who is preparing to issue tender seeking partners to invest in the construction of a fourth LNG train. Nigeria’s NNPC rolled out the drums two weeks ago to celebrate a fuel-scarcity free holidays. “Qatar’s pivot from mostly selffinancing its gas sector to offering ownership to foreign firms is also a cleverly orchestrated geopolitical move, considering its still terse tensions with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. It’s a hedge that in case relations with the four major Arab countries continue to sour, it has the protection of foreign oil companies vested in its energy sector - a pure energy play with brilliant geopolitical overtones” writes Tim Daiss, an oil markets analyst for Oil Price. It is this kind of critical thinking and rigor that is absent in Nigeria’s policy formulation and execution which is scaring away investors.

20 BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 29 January 2018

ENERGY INTELLIGENCE Electricity

Can NERC’s raft of metering policies unlock over N138bn investment opportunity? STEPHEN ONYEKWELU

en months after the Meter Asset Providers regulation was supposed to have kicked off, the Nigerian Electricity Regulatory Commission (NERC), electricity sector regulator appears to be running out of ideas on how to unlock over N138 billion investment opportunities in the sector. There are conservatively, an estimated 4.60 million unmetered registered electricity customers, according to third quarter 2018 report of the Nigerian Electricity Regulatory Commission. At an average of N30, 000 per meter, the metering gap sums up to N138 billion. However, analysis in a PricewaterhouseCooper (PwC) report “Bridging the Metering Gap” shows that this figure is underestimated, which represents an even bigger investment opportunity. It contends that about 50 percent of installed meters are either obsolete or faulty, hence due for replacement. Another factor that swells the metering gap is Nigeria’s population growth and rising number of households. In 2017, Nigeria’s population was put at 190.80 million and projected number of households in the same year was 40.60 million. “This implies only 18.40 percent of Nigeria’s households are on the distribution network” the report stated. An unstated yet logical deduction from PwC’s report is that 81.60 percent of Nigerian households were yet to be metered. Therein lurks investment

opportunities, if the Commission is able to efficiently and effectively implement pro-market policies. The MAPs regulation was designed to bridge end-user metering gap in order to eliminate estimated billing and open up the meter market to investors who are supposed to play in the sector as third-party financers of metering assets. This would have taken the financial burden of providing pre-paid meters to customers off the books of electricity distribution companies (DisCos), which persistently complain about their inability to charge cost reflective tariffs and poor collection rate. There are already 115 companies approved on the Commissions “no objection” list under the MAPs regulation, ready to enter into agreement with Discos. This has not happened yet. “We do not expect the delay to last more than one month, counting down from January 2019” a source at NERC, who does not want to be identified, told BusinessDay. The Commission, however, does not have an impressive record for delivering on policy. Since 2013, ineffective regulation has been the blight of the power sector. So far, NERC has been unable to enforce sanctions. Tariff is not cost reflective and Discos tend to abuse market rules. Comprehensive metering was part of the performance agreements, which the Discos signed with the Bureau of Public Enterprises (BPE) during the privatisation exercise, but six years after, they have hardly followed the plan, resulting in widening metering gap. Regulatory constraints On acquisition of the electricity dis-

tribution assets, the 11 Discos committed to metering 1.75 million customers annually but the metering capacity of the Discos is constrained by the limited allowable capital expenditure (“CAPEX”) in the Multi-Year Tariff Order (“MYTO”). The total annual CAPEX provision of N46.30 billion in the MYTO, if utilised wholly for metering is insufficient to meet the Discos’ annual metering commitment which is estimated at N52.50 billion annually – 1.75 customers at N30, 000 per meter. Communication gap between Discos and the Com-

mission Over 50 percent of the Discos did not understand the terms and conditions of the MAP regulation. They supposed contracts with the MAPs were merely for procurement and did not understand the potential impact on tariffs and their books. “Only four or five Discos have provided impressive progress report to the Commission” the source at NERC said on phone. The electricity industry is a value chain comprising generating companies, transmission compa-

nies and distribution companies. Electricity distribution companies interface with end-users and collect tariffs. Low tariff collection rate by Discos hurts the value chain. This makes an urgent investment case for metering. In this light, metering represents the foundation for sustainable revenue generation and commercial viability of the electricity sector. This means that Discos need to accurately account for inflows of electricity into their network and outflows of electricity delivered to customers.

Renewables

2019 is year of electric vehicles, not sure Nigerians know ISAAC ANYAOGU

ince Ben Murray-Bruce, the senator representing Bayelsa East senatorial district and chairman of Silverbird Group drove his swanky electric Kia car to the company’s Man of the Year Awards in Lagos in 2015, very little has been heard of the car said to be capable of going 8 hours on a single charge. But that is to be expected. If you live in Lagos with its legendary traffic where you drop off someone at the airport and he gets to London before your car crawls from Ikeja to Lekki, an electric vehicle does not seem practical, unless there is a charging station right after every Babajide Sanwo-Olu’s campaign poster. The rest of the world though seems to be getting along with the electric vehicle (EV) revolution just fine, pretty much like Nigeria lags behind the world in most everything – well, except poverty rate. We’re the country to beat. A new research by Wood Mac-

kenzie, a global energy consultancy, finds that people around the world bought over 2 million units of electric vehicles in 2018, half of the sales came from China. “This is despite [the fact] total Chinese vehicle sales in 2018 declined for the first time since China became a major force in automotive

production,” Wood Mac said. China buys more cars than any other country in the world, which is logical since they also have the most humans - and roads, and bridges and ego. The Chinese bought over 28 million new cars which is even 3 percent lower than they bought in 2017. Ni-

gerians bought less than 10,000 new cars in the same year. Every year car makers produce about 80 million new units but even though more electric cars were sold in 2018 than any other year, it only came about 2.6% or 2.08million cars. Competition for lead batteries could be blamed. Electric cars use lead batteries and the world now consumes more lead that it produces. Recycled lead in many African countries fall short of global standards, this could slow the growth of electric vehicles. “Lithium-ion (or sometimes nickel-metal hydride) batteries provide the energy to power the EV, but the lead battery provides the energy to control the EV. This is analogous to the Li-ion battery doing the job of the fuel tank in a regular car, and the lead battery doing essentially the same job in both types of vehicle: controlling computer and vehicle management systems, electric power for navigation and infotainment systems, the lights, electric windows, safety sensors, wipers, etc.,” Wood Mac said.

The key difference is that EVs use smaller lead batteries than \regular internal combustion engine vehicles. “Our research shows that lead batteries for battery-only EVs are typically 60% smaller than for an equivalent ICE vehicle and 35% smaller for a hybrid EV. Thus, lead consumption for batteries is reduced, but not eliminated, by EVs,” Wood Mac said. Another factor that can slow mass roll-out of new electric cars, include the price of lithium-ion battery raw materials - crucially lithium, cobalt and nickel, Wood Mac said. “Changes in the oil price and any additional legislation curtailing the use of ICE vehicles, such as some proposed total bans of ICE cars in certain cities around the world [will also determine the speed of EV adoption]. Many of these will be subject to unpredictable geopolitical influences in the coming year.” Yet the organisation said the industry could turn the corner in 2019 as governments focus on promoting green technology.

Tuesday 29 January 2018

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Market

How to unlock N2.8 trillion annual revenue opportunity DIPO OLADEHINDE

ith approximately 55 percent of Nigeria’s population lacking access to electricity, a rate that has not improved over the last five years, there is a huge opportunity for the country’s policy maker to unlock a N2.8 trillion ($8 billion) annual revenue opportunity which will also have a spill over effect on policymakers, business community, investors, and development partners. This was disclosed in a report by Nigeria’s Mini Grid Investment report 2018, which revealed that there are vast but underdeveloped mini-grid market potentials in Nigeria due to its large population and strong economy making it an attractive place to build the mini-grid sector. “Scaling the Nigerian mini-grid market to ten thousand 100 kW sites by 2023 would power 14percent of the population with capacity up to 3,000 MW and create a N7 trillion (US$20 billion) investment opportunity generating over N1.05 trillion (US$3 billion) in annual revenue,” the report said. Authored and published by the Nigerian Economic Summit Group (NESG) and Rocky Mountain Institute (RMI), the report admitted in total, the mini-grid market in Nigeria offers potential annual revenue of N2.8 trillion (US$8 billion). However, “in order to realize this potential for market growth and investment; government, development partners, and the private sector

must work together to accelerate minigrid development.” “The business community can play a crucial role in achieving cost reductions throughout the mini-grid value chain, particularly during procurement, installation, and system maintenance,” NESG and RMI said. The report noted that the business community can create a mini-grid business community consortium made up of experts with an interest in participating in the mini-grid value chain, including manufacturers, hardware suppliers, vendors, and developers, can work collaboratively to accomplish bulk procurement and lower overall mini-grid costs. “The business community can also design standardized, modular mini-grid systems as hardware manufacturers can work with developers to design modular mini-grid systems that are adaptable to demand growth which will decrease the need for developers to initially oversize

systems, lowering up-front costs and increasing capacity utilization,” the report noted. Additionally, Nigeria’s Mini Grid Investment report noted that if telecom companies are able to develop Telco-led business models that allow customer payment through mobile platforms, mini-grid developers can partner with them to implement mobile payments for electricity service. For investors and development partners, the report added that the unavailability of affordable project financing is a significant barrier to accelerating mini-grid deployment in Nigeria today. “Local Nigerian financial institutions are reluctant to invest in mini-grids. When they do invest, they often offer loans at high interest rates to match the perceived market risk of mini-grid projects.” “Developers need access to affordable debt as well as equity to be able to scale-up their operations. Facilities are

now available through DFI support from Sterling Bank, Access Bank, and United Bank for Africa (UBA), as well as through the African Development Bank’s Facility for Energy Inclusion (FEI) that mini-grid developers will be able to tap for affordable financing.” Nigeria’s Mini Grid Investment report acknowledged that investors and development partners can advance investments by creating a finance consortium in which different investors are responsible for funding specific project stages in the mini-grid value chain. “A consortium could provide funding access to developers in the form of grants, subsidies, technical assistance, or concessional loans throughout the project life cycle.” Also, due to the need to coordinate cross- sectoral implementation demand, development partners, along with NGOs and government, can coordinate efforts with related sectors while developers should continue to hone their business models and take advantage of cost-reduction opportunities to make mini-grid systems viable in rural communities. In terms of implementing costreduction strategies, developers can implement site clustering, demand stimulation, and the education or financing of energy-efficient appliances to lower costs and improve capacity utilization. The report published by NESG and RMI explained that policymakers are vital to the mini-grid scaling process, as they are responsible for making and enforcing regulations that enable market growth by allowing tax and duty exemptions and reduce import delays, clarify current regulations and imple-

ment additional enabling policies and also increase state and local government Involvement. The report noted that Nigeria’s Power Sector Recovery Programme (PSRP) estimated that the erratic supply of power results in an annual economic loss in excess of $25 billion as unreliable power supply creates social challenges such as lack of access to food, potable water, lighting, healthcare, education, information, and other basic amenities. However, the Mini Grid Investment report 2018 recommended Mini-grids offer as an alternative to costly grid extension and an emerging solution to rural electrification challenges in Nigeria that can rapidly become cost-effective, presenting an opportune for investment and economic development. The report noted that Nigeria’s Power Sector Recovery Programme (PSRP) estimated that the erratic supply of power results in an annual economic loss in excess of $25 billion as unreliable power supply creates social challenges such as lack of access to food, potable water, lighting, healthcare, education, information, and other basic amenities. “One GIZ assessment of the minigrid opportunity suggests that over 26 million Nigerians can be most effectively provided with electricity via nearly 8,000 isolated mini-grid systems providing 4.4 GWh per year,” the report said. The report explained that Mini-grids are often deployed in remote rural areas as a more cost-effective means of electrification than traditional extension of the main grid as they offer more reliable power than the main grid in many settings, including much of rural Nigeria.

Investment

We are looking at Solar more aggressively –Sahara energy CEO DIPO OLADEHINDE

Contrast this with Nigeria where investors have largely been unimpressed with overtures to build new liquefaction plants. NLNG Train 7 still sputters after nearly a decade.

Since the development of the NLNG, new projects have been too few and far between. Three LNG projects in Nigeria: Olokola LNG, Brass LNG and the NLNG’s Train 7 have been unable to reach final

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

decision by the stakeholders as investors have pulled out. The OK LNG project was stalled because all the international oil companies (BG, Shell and Chevron) withdrew from the project, with only the Nigerian National Petroleum Corporation (NNPC) left. The Brass LNG project, which was designed to produce 10 million metric tonnes per annum, was to be built by the NNPC, Total, ConocoPhillips and Eni Group. But ConocoPhillips withdrew from the project in 2013 and has stalled since then. The difference is an uncertain investment climate worsened by regressive policies. Two years ago, politicians were seeking to amend the NLNG Act without recourse to investors thereby violating the sanctity of contract it signed with investors. Investors have left the downstream sector of the oil industry in Nigeria because politicians prefer campaigning on cheap petrol than a thriving economy. Qatar refines its own petrol and sells it to its people at N195 per litre. Nigeria buys

imported petrol and sells it at N145 per litre. Nigeria spent over N1.6trillion last year in subsidies. Like Nigeria, Qatar has a state-run oil company, Qatar Petroleum (QP) who is preparing to issue tender seeking partners to invest in the construction of a fourth LNG train. Nigeria’s NNPC rolled out the drums two weeks ago to celebrate a fuelscarcity free holidays. “Qatar’s pivot from mostly self-financing its gas sector to offering ownership to foreign firms is also a cleverly orchestrated geopolitical move, considering its still terse tensions with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. It’s a hedge that in case relations with the four major Arab countries continue to sour, it has the protection of foreign oil companies vested in its energy sector - a pure energy play with brilliant geopolitical overtones” writes Tim Daiss, an oil markets analyst for Oil Price. It is this kind of critical thinking and rigor that is absent in Nigeria’s policy formulation and execution which is scaring away investors.

Feedback: 07037817378, 08137433034, 08135447789

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

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

Competition, economic pressures behind NBC’s operational adjustments …Closes Enugu plant, lays off staff Stories by Daniel Obi Media Business Editor

eightened competition, declining spending power of consumers and challenging operating environment are having their toll on the Nigerian beverage industry as big players are either losing grounds or adjusting operations. The latest in this trend is Nigerian Bottling Company Limited (NBC), the non-alcoholic beverage manufacturing company and a member of the Coca-Cola Hellenic Group, which has just stopped production activity in its Enugu plant. It also laid off a number of staff which has implications on income tax for the state government, indirect jobs and its effect on the commercial activity at 9th Mile Corner, Ngwo, near Enugu where the plant is located. The business decision by the multinational company to stop production in its Enugu plant that has operated for 44 years is a concern but analysts linked it to increasing and unsustainable operational cost largely informed by competition, unfavourable operating environment and decreasing spending power of Nigerians, a situation that has forced consumers to seek alter-

natives. The arrival of other players such as Big Cola and Bigi Cola has caused change in dynamics of Nigeria’s multibillion Naira carbonated soft drink market. The new entrants had one goal, to challenge the status quo. The challengers started with low price offer and high volume for consumers, two strategy points that began to pay off as Nigerians began to embrace the new brands. When the giants, Coca Cola and Pepsi realized the business impact of the ‘small players’ marketing strategy, they responded in order to stay in competition. Pepsi created ‘Long Throat’, a bigger size

and Coke created smaller product ‘Solo’. But the challengers had already gone deep with below- theline strategy. Recession that hit Nigeria from 2015 to 2017 was another factor that compelled Nigerians to give product volume and price serious consideration and this further encouraged the deeper penetration of the new products. An analyst said “although the recession that hit Nigeria towards the end of 2015 has been said to have abated, its impact, especially in the alteration of consumption patterns will linger for much longer and when such a serious economic challenge occurs in any economy, the most affected are lifestyle products and pre-

mium brands” NBC is not alone on the effect of competition. Nigerian Breweries and Guinness Nigeria are also affected with entry of other giants such as International Breweries, the local subsidiary of AB Inbev. In its 3rd quarter 2018 financial report for nine-month period ending September 2018, Nigerian Breweries results showed that sales went down by 11 percent. According to a BusinessDay report, the company also plunged into a pre-tax quarterly loss of N5.1 billion. Analysts blamed the performance decline on increased competition and increase in taxes, following a change in the excise duty regime which took effect in June last year that adversely affected the company’s operations. Similarly, Guinness Nigeria, according to is results showed that its sales declined by -6 percent year on year to N28.1 billion within the same period. NBC said it has instead transformed the Enugu Plant into a hub for material handling and logistics for the region. The company explained in a statement that the decision to transform the Enugu Plant from a production facility to a logistics and distribution hub was largely informed by the desire to deliver better value

Dufil Prima Foods acquires land in Edo for palm oil plantation

he management of Dufil Prima Foods led by its Chairman Haresh Aswani and Edo State Governor, , Godwin Obaseki met last week to finalize the takeoff of a palm plantation project following the acquisition by Dufil of 17,954 hectares of land in Edo State for the purpose of establishing an Oil Palm Plantation. This project initiated by Dufil aims to boost the Nigerian economy while fulfilling the raw material requirement for the Company’s backward integration programme. Aswani, in a statement said that the project will provide raw materials for the production of Indomie Noodles, Power Oil (Vegetable Oil) and other products manufactured by the Dufil Group as well as creating employment opportunities for Nigerians. He stated that Dufil has helped to transform the manufacturing of Instant Noodles in Nigeria from the product of one Company to a Nigerian Industry creating over 100,000 direct and indirect jobs. Aswani further stated that Nigeria has a great potential to increase production in the agro allied sector through the application of im-

proved processing methods, creation of incentives for manufacturers in the Agro allied industry sector to embark on backward integration by investing in palm plantation and

thereby sourcing their vegetable oil requirements locally. The Governor, Obaseki in same statement commended the Company for expressing interest in establishing

palm oil plantation and sourcing of other raw materials in the Edo state.

L-R: Joe Okojie, special assistant, Edo State Governor on Food Security, Agriculture & Forestry Programme; Adhi Narto, executive director/chief operating officer (COO) Dufil Prima Foods Plc; Stella Amachree, Agricultural Consultant to Dufil Prima Foods Plc; Godwin Obaseki, Governor of Edo State; Haresh Aswani, chairman, Dufil Prima Foods Plc, and Madhukar Khetan, COO officer commercial, Dufil Prima Foods Plc, during the finalization process of the 17,954 Hectares of land acquired for Palm Oil Plantation from Edo State Government by Dufil Prima Foods Plc in Edo State.

to its esteemed consumers and trade partners not only in Enugu State but in the entire South-East region. The Acting Director, Public Affairs & Communications, Ekuma Eze in the statement stated that the development was in line with the holistic strategy to reposition the company’s operation for better efficiency and accelerate the business transformation plan. Eze said ‘’the repurposing of some NBC facilities across Nigeria, Enugu inclusive, is in line with our sustainable business strategy with the overarching goal of improving efficiency and boosting production capacity to meet the ever growing demand of our discerning consumers. While production activities have stopped at the Enugu facility, the company would continue to carry out logistics and commercial operations from the location’’ Speaking on the employees whose roles were rendered redundant by the transformation, Eze said ‘’As a result of business optimization, some roles became redundant. However, the whole process was conducted with utmost respect and consideration for our employees and engagement with the Unions. The company provided robust and generous severance packages way above statutory requirements and industry average’’.

BHM’s Ayeni Adekunle named as Social Media Week Lagos panelist

ublic Relations Consultant, Pop Culture Enthusiast and Founder/CEO of BHM Group, Ayeni Adekunle, is set to join other notable names as they explore issues relating to how entertainment and consumer experiences have helped shaped the African narrative from a positive perspective at the forthcoming Social Media Week Lagos this February. Ayeni will be joined on the panel by Advertising guru, Steve Babaeko; Comedian, Basketmouth; Channel Manager, MTVbase, Solafunmi Oyeneye and Talent Manager, Ernest Audu. They will be discussing “Music, Content & Consumer Experiences Changing The African Narrative” during the session that will be hosted by MTVBase presenter, Folu Storms. The panel discussion, sponsored by Viacom International Media Networks Africa, the parent company of MTVBase, popularly known for promoting African music and entertainment, is expected to explore how the Nigerian entertainment industry is expanding on the global stage.

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Consulting firms must be innovative to work in adverse environment - Phido Marie-Therese Phido, a strategy, innovative, sales and marketing expert is the CEO of Elevato, a consulting firm. In this interview with BusinessDay, she bares her mind on challenging and prospects facing consulting firms in Nigeria but said that innovation is the key to success. She also said that if government does not work optimally, by providing an enabling framework it affects everybody’s ability to succeed. Excerpts Congratulations on the second anniversary of Elevato, in retrospect how has it been running a business? hank you, prior to setting up Elevato in 2017, my career was shaped in the furnace of 2 of the 4 big consulting firms KPMG and Deloitte. In both firms I worked with the Chief Executive Officers to develop, drive and implement the strategies of the firms as well as led the Sales & Marketing functions in Nigeria and the West Africa sub-region. Setting up the company in a period of economic recession came with its challenges. As a young firm, we were not immune to the challenges young firms face. But, we set out early to differentiate our solutions and institute clear customer orientation processes, where we could add value to our clients businesses by helping them with value adding strategic initiatives and creating more attractive selling propositions. We have been able to retain our clients locally and in the West African region. We plan to expand and deepen our service initiatives across various sectors of the economy, especially in the areas of innovation and sales & marketing. We notice that a major problem we have in the country is innovation, many of us copy, are not original and even when we copy, we do not glocalize our offerings. In the last two years, we have added two products to our stable. Holler!, a consumer review market platform and Boundless a thematic business magazine. Elevato is a company with competences in strategy, innovation, sales & marketing, business coaching, brand and communication and human resources. What is your DNA? Our DNA is working with our clients every step of the way and being committed to their success. Our unique

value proposition is handholding our clients to work through and achieve results in business frameworks and models we advise them on. We are keen to help our clients answer “what problem are you solving?”, and helping them develop creative and innovative solutions to meeting these needs and achieve their strategic plans and growth aspirations. For example, we understand the fact that digitization is at the heart of most business processes. We are at the forefront to working with our clients to ensure that they weave technology into their offerings to ensure that they continue to remain relevant to their customers as well as achieve efficiencies in their businesses. Looking back, how will you say the business of consulting faired in the last one year? It’s been tough. As I said earlier, we started our business in the recession and are still hoping for the economy to recover, to enable everybody succeed. What we have found out, is that many organizations have put a lot of their consulting needs on hold. Despite the fact that they realize the importance of having these services to improve their businesses they just cannot seem to afford paying consulting fees. This situation cuts across the big and the small. They have all decided to optimize and restructure their spending. A good consulting firm, can work in adverse economic environment, what it needs do is focus on the needs of its clients at each point in time and proffer the solutions that will solve the problems within each organization’s life cycle and add value despite the challenging environment. In a nutshell, we aim to provide value at all times. Would you blame government for the poor performance in business? This is a tough question. So let me answer by giving

Marie-Therese Phido

an analogy. I attended the International Real Estate Conference recently, where key stakeholders in the industry and government gathered to discuss the challenges in ease of doing business, regulation and financing in the sector. In every panel, government was put on the spot. The issue is, if government does not work optimally, by providing an enabling framework it affects everybody’s ability to succeed. It is an ecosystem that cascades down to everybody. This can clearly be seen in America, where the government appears to have gotten its policies right and it is having a booming effect on all aspects of business and employment in the country. In essence yes, if businesses are deemed not to be performing as well as they can, especially since the situation is pervasive. I will say, government has a strong part to play in ensuring businesses succeed by providing an enabling environment and easing business conditions. What Sales & Marketing challenges do you see organisations facing in Nigeria and

West Africa? Many businesses in Nigeria have a myriad of challenges both from a sales point of view and marketing. From a sales point of view, many do not have the fundamental understanding of ‘’what problem am I solving or what are my buyer’s needs’’. Many do not understand their customers, because they are not doing enough research to first ascertain the viability of a business or product before hitting the market. Research is the core of sales and marketing. This is one area that determines the success of any business or product. If you do not get it right, all of your sales and marketing channels will not work. I will advise all business, to ensure they do their research well and not be in a hurry to launch. This advice is for both big and small organisations. It is a perennial problem, that if we can spend time conducting a well done market entry or product research, we would be a lot more successful and achieve maximum results on our investments. Today, you are celebrat-

ing 2 years of being in business. What are your milestones? God has been faithful to Elevato. We have been able to achieve heights that similar organisations who have been in business have not been able to reach. We have had the opportunity of working across five African countries, helping organisations there to define their strategies and providing business coaching services for them. We have provided strategy services to the foremost hotel in Nigeria, Transcorp Hilton. We work for the richest man in Africa, several banks, multinationals and companies in Nigeria. We have also brought in two additional partners to beef up our specialization in strategy, innovation and human resources. These partners are experienced senior executives with experience from KPMG and Accenture. We are also in the process of becoming a sub-agent to a top 10 global sales and marketing organization, where we will be given the franchise to provide sales and marketing consulting and training services in about 10 West African countries. Where do you see Elevato in the next 3 years? Our objective is to continue to work for the best organizations in Nigeria as well as contribute to the development of SMEs, with our developmental projects and services as well as expand to other countries in Africa and globally. We do not see ourselves as a local Nigerian organization. Our aspiration is to be global and we are taking great strides to ensuring that this happens either organically or by collaborating or partnering. We also want to be the best in the areas we have chosen. We will do this, focusing on human capital development within the organization and being abreast of ground breaking solutions for our clients.

Hollandia Evap introduces “Pere” pack

ollandia Evap Milk is now available in a 120g pack for only N100 lovely referred to as “Pere”. The term “Pere” which translates as “no more, no less” is intended to symbolize the product’s high quality, satisfactory quantity and affordability, thereby resonating with consumers across the country. With offer of the same premium quality, which is tasty, creamy and nourishing, and at an affordable price, the new Hollandia Evap Milk 120g pack, according to the brand owners comes in a convenient portion size and a brand new pack format in the evaporated milk category that will make it irresistible to consumers. “Value adding and rich in vitamins and minerals, Hollandia Evap Milk can be consumed with or without complements, offers convenient packaging ideal for

individual consumption and is a great addition to a breakfast cup of tea, coffee, a bowl of cereal, pap or custard” According to Chi Limited’s Marketing Director, Probal Bhattacharya in a statement, the decision to provide consumers with the creamy, great tasting, highly nutritious Hollandia Evaporated Milk in a 120g pack was driven by the brand’s desire to consistently deliver novel solution to consumer needs.

Bureau Veritas awards Crown Flour Mill ISO Certification in food safety, quality management

rown Flour Mill has been awarded the ISO certification for food safety and quality management, ISO TS 22002-1:2009; FSSC 22000; ISO 9001:2015 by Bureau Veritas, says a statement. It said the company has become the first flour milling company in Sub-

Saharan Africa to be certified to ISO TS 22002-1:2009; FSSC 22000 The ISO certification specifies the eight quality management principles which defines the way an organization operates to meet the requirements of its customers and stakeholders. These include

customer focus, leadership, involvement of people, process approach, organizational context, continual improvement, fact-based decision making and risk-based decision making. Speaking on the achievement, the Head of Operations/Senior Vice President

of Crown Flour Mill, Sanjeev Goel, noted in the statement that the certification has created a robust system in place, taking the company a step further on its continuous journey towards excellence in quality. “In our quest to improve quality, we have created an integrated global

approach that recognizes the interaction of every function and activity in our organization. This certification has enhanced our quality and food safety management system” Goel said. Also commenting on the development, the Managing Director/Senior Vice Presi-

dent, Crown Flour Mill Anurag Shukla, further added that customer satisfaction is top priority for the organization and the only way to achieve that is by continuously improving the cost effectiveness and performance of all products and processes, as well as focusing on new innovations.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

How First Bank is leveraging partnerships for building sustainable and impactful SMEs In living up to its 125 years of business know-how in Nigeria and a better understanding of retail banking after winning the ‘Retail Bank of the Year’ consecutively in the last seven years; First Bank has shown that it is not just about rendering financial solutions for the growth and sustainable economy, as it enters into partnership with Microsoft on technology adoption and integration for SMEs. The First Bank and Microsoft partnership as an initiative to drive sustainable development among SMEs, owing to the fact that government alone cannot bring about lasting and holistic development; writes BALA AUGIE.

ny nation that wants to develop in an era of knowledge driven economy would understand that nothing absolutely equals spending on human capital. In sourcing the necessary resources for human capital development required for sustainability of the human development index (HDI), short or long term measures are usually taken to strategically position the small and medium scale enterprises (SMEs) sector of the economy as catalyst for sustainability on the path of growth. It was in view of this that First Bank of Nigeria Limited, Nigeria’s oldest banking institution that will be celebrating its 125th existence this year entered into a partnership with Microsoft 4Afrika, a global brand in Information Technology (IT) sector to support SMEs in Nigeria, in a bid to build capacity and help the SMEs accelerate digital transformation in their businesses. The collaboration will therefore enable First Bank and Microsoft 4Afrika, host a free-to-attend event for SMEs in Nigeria, designed to promote technology adoption and skills development. The partnership seeks to build the capacity of local SMEs and accelerate their digital transformation, by providing them with exclusive and tailored non-financial solutions hence participants will be exposed to skills development resources, access to business networks and an educational platform. Just like a Corporate Social Responsibility (CSR) initiatives that are adopted by corporate organizations in giving back to its host community as a business entity towards creating inclusiveness that engender sustainable development of the larger society. The partnership initiative is designed for direct/indirect impact that allows the bank to deliver a portfolio of non-financial solutions to its SME customers.These contributions are intended to promote synergy and ensure collaborative working relationship within the society – the essence of which is a long lasting impact on the SME sub-sector of the economy. This partnership is aimed at creating a more enabling environment for SMEs in Nigeria and as you may be aware, First Bank is poised to always seek creative and innovative ways to serve its customers better and aim

at providing capacity building opportunities for Small and Medium Enterprises. “We are engaging partners with the same vision to grow the real sector of the Nigerian economy by using industry knowledge to build holistic approaches, combine advisory support with conventional banking products and create platforms to build stronger bonds with SMEs,” said Adesola Adeduntan, the Chief Executive Officer (CEO) of First Bank of Nigeria Limited. According to Adeduntan, First Bank thrives on partnerships that is one major reason for its 125 years existence these 125. “We have a track record of developing propositions as well as partnering with individuals and institutions to meet our customers’ needs and grow the economies in which we operate. “Our partnerships cut across Economic Empowerment, Arts, Sports, Education and SMEs. It may interest you to know that our Bank actually started its business 125 years ago mostly providing financial and advisory services to agricultural SMEs,” Adeduntan posited. Adeduntan said that First Bank role in the Nigerian economy goes beyond financial services, stating that coincidentally this year also marks the 100thanniversary of First Bank’s sponsorship of the Kaduna Polo Tournament, which is arguably the longest running sports sponsorship in the world. Therefore, the First Bank Microsoft 4Afrika partnership will entail access to Microsoft productivity tools, like Office, PowerPoint, Excel, Outlook, Skype for business, among others, at discounted rates; hence offering users the ability to purchase in Naira instead of USD, flexibility in subscription that allows for either monthly or yearly subscription. The partnership also offers SMEs a flexible payment method to allow payment with account number or with card; capacity building initiatives involving training on basic accounting practices, financial modelling, budget preparations, business pitches/ marketing; and free support on the purchase of MS productivity tools. Speaking on the partnership and what it entails for Microsoft in the Nigerian market, Amrote Abdella, regional director of the Microsoft 4Afrika initiative said Microsoft 4Afrika is forging partnerships across the

Adesola Adeduntan, managing director, First Bank of Nigeria Limited

continent, with several players in the SME ecosystem, from banks to telcos, to enhance SME offerings and reach a broader audience. “For SMEs, integrating technology into their operations is no longer an option, but a necessity for future growth and success. We’re looking forward to engaging in discussions that explore how technology can extend reach to new markets and improve productivity, which results in better customer service, more competitive offerings and the ability to act with agility. “Technology and the relevant digital skills today play such an integral role in business success. We’re working with organisations to extend this support to as many SMEs as possible, ensuring not only their success, but the growth and competiveness of our continent in an increasingly digital world,” said Abdella. First Bank, Microsoft 4Afrika partnership is seen by many as a business enabler that ensures First Bank can offer and deliver a portfolio of non-financial solutions to its SME customers across Nigeria.

“We have over the last 125 years supported SMEs in building their business, whilst contributing to the national economy. This partnership is a landmark step in our quest to leverage the influence of technology in businesses, especially in today’s digital age,” said Taiwo Shonekan, the head customer experience and value management, First Bank of Nigeria Limited. According to Shonekan, with the partnership, First Bank customers can buy Microsoft products at discounted rates in local currency (Naira), as this seamlessly aids technology adoption, skills and capacity development among SMEs in Nigeria. Other partnership initiatives driven by First Bank in the past First Bank, CFA partnership: First Bank of Nigeria in partnership with the Certified Financial Analyst (CFA) Society of Nigeria’s Universities Ethics Challenge to deepen professionalism and capacity building in financial sector. It was a Corporate Social Responsibility (CSR) drive aimed at deepening professionalism and capacity building in financial sector in

BD MARKETS + FINANCE Analysts: BALA AUGIE

Nigeria, especially among university students. The Universities Ethics Challenge is one of the educational outreach programs designed by CFA Society Nigeria for universities students. The challenge leverages on First Bank’s commitment to ethics, professional excellence, capacity building and inclusive growth that underpins the core values of Entrepreneurship, Professionalism, Integrity and Customer Service. First Bank, SME offering: the special SME campaign which is designed to help SMEs grow their business with diverse product and service offerings was based on the premise that the bank started small and having grown through various stages, the bank understands the business journey for SMEs and is passionate about supporting them to ensure continuous business growth. Over the years, First Bank has displayed an unwavering commitment to the business success of SMEs in Nigeria with its cocktail of products and bespoke solutions, specifically designed to help grow and sustain SMEs. Given that SMEs are pivotal to national development, First Bank is committed to ensure sustained business growth as well as provide the necessary services to grow businesses and Nigeria’s economy at large. First Bank, NCF partnership: First Bank’s partnership with the Nigeria Conservation Foundation (NCF) was based on its responsible approach to protecting the environment alongside NCF, Nigeria’s non-governmental environment conservation foundation dedicated to nature conservation and sustainable development. First Bank has an on-going partnership with NCF and actively supports its activities annually in its conservation and preservation of wildlife and bio-diversity. According to the bank, preserving the environment for the present and future generation is a strategic aspect of the First Bank’s Corporate Responsibility and Sustainability activity and initiatives. The bank therefore recognises that human sustenance and survival are greatly dependent on the sustainability of the environment and communities it operate in. Hence, the bank has thus adopted effective means of minimizing its direct and indirect impact on the environment while conducting its businesses.

BDTECH

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

In association with

‘Positive policies towards technology advancement will transform Nigeria’s Fintech space’ Michael Simeon is the chief executive officer of VoguePay, a prime financial technology company that provides digital payment services to big corporations and small and medium enterprises. In this interview with Jumoke Lawanson, he speaks about VoguePay’s plans to create borderless digital banking, the prospects of Fintech in Nigeria, and other industry issues. Excerpt. What is the history of VoguePay, and how did it grow to become a highly recognized digital payment service provider? e started off in 2012 with a mission to enable any business owner in Nigeria accept payment online. With the launch of our free integration in 2012, over 17,000 SMEs were able to take their business online for the first time as they previously could not afford the $1,000 fee the incumbent was charging those days. Fast forward to today, we process over one million dollars a day and all these was not by my own strength alone, it was teamwork with our partners, supporters and people who have been following our journey over the years. Today, we have offices in Bahrain, Estonia, UK, Nigeria, and we provide service support to our clients/partners in Ghana, Uganda and other countries. Our customer base cuts across all continents as we are an international company with focus to provide solution that will link this continent to the rest of the world.

can categorically say that in fintech space today, we are arguably the only fintech company that never raised money, but also profitable with monthly transactions in millions of dollars. Of course, at some point when the right partner comes we would recognize that. Raising money is good if you can do a lot of good things with the war-chest and it will also help with public relations.

VoguePay, says it’s coming up with a digital-only bank, what will set this apart form other digital banks that are already operating in Nigeria? We are turning banking into a borderless banking, centralized around harmonizing KYC (Know Your Customer) and creating a banking experience without borders. VoguePay believes that the future of banking will be as easy as being able to roam with your bank account, just as you can with your GSM number. For instance, if you have a mobile phone and you travel to another country like Ghana or UK, your mobile phone will still work without you getting in touch with the network operator in those locality. The digital bank capabilities that we created would be given to a lot of banks and some banks have already started taking advantage of it. We would be deploying those capabilities this

Michael Simeon

year. The difference between what we do is the unique experience and the services provided. I am very glad that we would be starting it out from Nigeria, although some countries in the Gulf region want to quickly take advantage of it to be the first mover in the market. But we are proud Nigerians and we want to give it to certain banks and let Nigeria experience and enjoy the benefits. It would change how we Nigerians save today and by that, I mean it would change how you invest today. It would change how you travel in terms of how you source your money to travel, how you move; your relationship with your transaction will change. We just can’t wait to really go live with some of these things. We have been working on this solution for about 14 months and it will be launched to more than 6 million users. VoguePay is a thriving Fintech company with global recognition, how would you rate Nigeria’s Fintech and e-payment sector and what do you project for 2019? A lot is happening in FinTech space generally. This is visible from the amount of activities happening in InsurTech, e-payments, lending and so on. One major trend I notice is

that more fintech companies will be rolling out banking-like services. I think the convergence happening in the market would really be on an upward trend this year, as more and more fintechs will consolidate and we would start seeing companies that have substance rather than companies that make noises. From our own perspective at VoguePay, we have already developed all the banking suite even more now. But the way we deployed, we would be working with various banking institutions across microfinance, retail and investment banking to provide efficiency to increase customer capabilities, analytics and transactions. How has VoguePay been able to sustain operations without gaining access to foreign funding as in the case of so many startups in 2018? I have been asked this question a lot of times and I always say that getting funding is not a badge of success. It means someone believes in you enough and decides to bet their money on you with the hope that you will provide return on that investment. We have taken a totally different route. As a business, our growth philosophy is to build partnerships that generate revenue. I

How can emerging and aspiring entrepreneurs raise capital for their businesses? Entrepreneurs will survive without raising funding, but they cannot make it without paying customers. Therefore, it is more profitable to devote more energy to growing the business through revenues than to chase for funding. The energy of building customer is highly valuable than VC funding. What I would say is, entrepreneurs should always look at strategy that will take them to the top and not to the bottom and they should never think that because someone gave you money that means that you are already successful. What are some of your recommendations on growing business and the regulations affecting SMEs and fintechs in Nigeria? What I will always say to people is, identify your market and master those market. Understand the psychographic of who you’re serving, and the market you are trying to capture. Secondly, never underestimate the local know-how of doing things. Thirdly, always seek to abide by regulations and where none exists innovate first ahead of regulations. A classic example is crowdfunding and ride hailing services. Would you say that the regulations in Nigeria encourage Fintech business growth and sustainability? I believe there is room for improvement for the regulators. As fintechs, one expects to see regulations that foster innovations. One of such laudable innovation will be to cre-

ate a sandbox environment for fintech startups to launch their innovation in controlled environment. Startups need to always know that they should never stop creating products that is fit-for-purpose but within regulatory parameters. These responsibilities lie with the Central Bank of Nigeria. In fact, some of the Central Banks we work with outside Nigeria are engaging us more than our own apex bank. They create very attractive proposition for fintechs and other startups to develop advanced solutions that would attract international players to come and reside in their own territory, thereby creating employment. What are the challenges VoguePay is faced with in terms of its operations in Nigeria? On one side, the local pricing mechanism is not sustainable for local transactions such that even if you have a lot of customers transacting, those transactions might not be profitable for you as a business. Thankfully, we have been able to create additional value proposition that goes beyond payment. Based on this insight, one of the mantras that drive our value proposition is understanding that payment itself is no longer consumers’ appetite. Secondly, the pattern we are seeing is, people want to have more control of the payment experience from their own side. So, rather than us building a platform that is for everyone, we are now looking at individual unique experience. Another challenge we had when we started getting a lot of French speaking customers was to rely on Google to interpret what they’re saying. But we noticed that with the level of French speaking customers we were getting, we couldn’t just rely on Google translator, so we had to set up a team to address that. Now, VoguePay in French is in development, we have French speaking customer service. So these are the small tedious things that really matter to our business but overall, 2018 has been our best year so far.

BUSINESS DAY

www.businessday.ng

BDTECH

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

E-mail: jumoke.akiyode@businessdayonline.com

Nigerian students meet criteria to represent nation at international robotics competitions Jumoke Akiyode-Lawanson

inning teams at the First Lego League Ni g e r i a Championship have been selected to represent the nation at different international technology and robotics fora. After six hundred (600) contestants, ages 9 to 16, demoed their robotic ideas at a two-day annual event hosted at Baze University, Abuja, recently, teams from different secondary schools across Nigeria where chosen to represent the country on a global stage. Team AI Squad for hillside school where the champions while Kings college Lagos won for its outstanding project and Ikot Obio Itong, Akwa Ibom State won for core values. Federal government college Odogbolu and Team Kids Mechanics from Hide school emerged as winners for robot design while Deeper Life school won for robot performance. The judges award went to Command School Lagos and the Federal Science and Technical College, Michika, won the “Against all odds” award. Coach Enoch was awarded for being an outstanding mentor. The AI Squad will represent Nigeria and the World Festival, USA, FGC Odogbolu

will also represent the country at the International Championship, USA. Others representing Nigeria in international competitions are; Glisten International Academy which will be at the International Tournament, Turkey, FGGC - Ikot Obio Itong, Akwa Ibom State, Astro Bliss - a team of 4 neighborhood friends, Kings College Lagos and Oginigba Community Secondary School, Port Harcourt, Rivers State. According to the organizers, of the First Lego League championship event, the top

teams won by embodying the program’s Core values of teamwork and mutual respect while achieving excellence and innovation in both a robot game and innovative project. First Lego League is an international program for 9to 16-year-old children created in a partnership between FIRST and the LEGO Group in 1998 to get children excited about science and technology – and teach them valuable career and life skills. Children work alongside adult mentors to design, build, and program autonomous

robots using LEGO® MINDSTORMS® and create an innovative solution to a problem as part of their research project. This year’s challenge – INTO ORBIT season – called for teams to research and present their own creative solutions to the real-world inspiring expanse - the space. The competition is judged in three areas: project; robot design, and Core Values, which embody aspects of teamwork and good sportsmanship. Top robot game scores are also honored. Speaking on the Initiative, Mallam Adamu Adamu, the

minister of education, said Nigeria has come of age, to participate at the world stage in any competition. “Coderina has taken the lead by partnering with the Federal Ministry of Education in contributing immensely to the development of Artificial Intelligence and Robotics.” “The contribution is well acknowledged and the results of this effort will surely enhance the study of Science, Technology, Engineering, Arts and Mathematics (STEAM) in Nigeria”, Adamu said. The minister also said that Nigerian youths have shown in many life endeavours that they have all it takes to compete on global stage. Olajide Ademola Ajayi, the program coordinator advised the students to embrace innovation and critical thinking while pursuing skills relevant in the future work place. Ajayi said that the future of work has changed hence “FLL is a powerful experiential learning program through which students learn grit and perseverance in preparation for overcoming future challenges and making wise decisions in life outside robotics. “It instills and fuels passion for learning new skills and gaining new knowledge in readiness for the future of work”. On her part, Elizabeth Adedigba, the director, technology and science education

department, Federal Ministry of Education, said that Science, Technology, Engineering, Arts and Mathematics (STEAM) are very crucial in the development of any nation. “I want to use this opportunity to appeal to wellmeaning Nigerian and other well-wishers of the education to support this initiative of setting the pace for our future generation”, Adedigba said. The top three teams will represent Nigeria at various international tournaments including the World Festival at Houston, Texas and International Open Championships in Turkey, Lebanon, Australia and Uruguay. The international competitions provide teams with an opportunity to test their mettle against other teams from around the world and also help them realize great learning outcomes. The Tournament is being supported by SAP, Irish Aid, NAPPS and was organized in partnership with the Federal Ministry of Education (Nigeria). The program is organized annually by Coderina; a not for profit organization that leverages technology tools and computing pedagogy to foster an ecosystem of students and teachers well-grounded in applicability of computing, coding and problem solving techniques.

China’s digital TV in 1,000 Nigerian villages: The StarTimes connection ODINAKA ANUDU

ometime ago, Chinese president Xi Jinping promised that China would implement access to satellite TV for 10,000 villages across Africa. This was to be one of the major programmes to boost cooperation between China and Africa. Out of the 10,000 villages, Nigeria was given 1,000 and StarTimes has been handed the contract for this project, not just for Nigeria but also across the continent. Early signs of fulfillment of this promise were seen before the launch of the project in Abuja, the nation’s capital. Chinese technicians and their local partners had visited Kpaduma project, an underdeveloped rural community at the edge of Abuja. The community is one of the 1,000 villages carefully

selected to benefit from a China-aid programme. StarTimes, a Chinese firm which offers directto-home pay TV services, introduced its digital television service to Kpaduma, to flag off the enormous project across Nigeria. The project acts on one of the resolutions of the Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC) in 2015, in which the Chinese government pledged to provide satellite television for 10,000 African villages. Under the project, each of the 1,000 chosen villages in Nigeria, Africa’s most populous country, will receive two sets of solar-powered projector television systems and one set of solar 32-inch digital television integrated terminal system. Altogether, 20,000 households in rural Nigeria will benefit from the project. In each village, 20

recipient families with television will be provided with 20 sets of direct broadcast satellite terminal system free of charge. A projector television system will also be provided to each of the 1,000 villages, for viewers to publicly watch at least 21 satellite channels free of charge. “For us at StarTimes, it makes us truly happy as a company and a people to be able to work together successfully with both the Chinese and Nigerian government, and to put long lasting smiles on the faces the children and adults that would benefit from the exposure they get from the access to satellite TV,” saidJustin Zhang, CEO, StarTimes Nigeria. Zhang said the implementation of the project will create more jobs, as Nigerians across the 1,000 selected villages have been trained on how to

install, recharge and operate the satellite television system. For decades, residents of Kpaduma have only been familiar with analogue TV, lacking the opportunity to watch some of the exciting satellite television channels enjoyed by people in the towns and cities across Nigeria. When the innovative project came to their community with Chinese and Nigerian officials in attendance, ecstatic locals in Kpaduma thronged the village square. Yusuf Dio, prince of Kpaduma and a beneficiary of the direct broadcast satellite terminal system, described the innovative project as “the talk of the town.” The satellite television provides the opportunity for locals to watch digital television programs with both local and international contents. Every evening, up to 20

locals with no television electricity gather at Dio’s house to watch the digital television programs together with his family. “We are very happy to have this (digital television) in our household. It has brought so much joy and pleasure to my family,” Dio said. As a pioneer digital terrestrial television provider in Nigeria, StarTimes has been able to disseminate digital terrestrial television in at least 80 cities across the West African country in nine years. Speaking at the flag-off ceremony for the project in Kpaduma, Lai Mohammed, Nigeria’s minister of information and culture, said the implementation complements the efforts of the Nigerian government to “democratise access to information and entertainment through the Digital Switch Over (DSO) for tele-

vision which has now been rolled out in several states and the Federal Capital Territory.” The minister commended the Chinese government for the project which, he said, will strengthen the already cordial China-Nigeria relations. In his remarks, Chinese ambassador to Nigeria, Zhou Pingjian, reaffirmed the commitment of China to implementing the outcome of FOCAC, saying China would work closely with Nigeria to ensure people’s access to information through television and satellite technology. He said the implementation of the digital television project would also go a long way in delivering the ChinaAfrica cooperation’s goal of connectivity, especially people-to-people connectivity, one of the core objectives of the China-proposed Belt and Road Initiative.

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessday.com

Harnessing mobile payment to boost economic growth that instil confidence among users in mobile banking and payments.

Niyi Ogunfowoke, guest writer

ot only in Nigeria but across the continent of Africa, mobile penetration has significantly increased. The Jumia Mobile Report 2018 found that Nigeria remains Africa’s largest mobile market, with about 162 million subscribers and a penetration rate of 84%. This has been complemented by the fact that mobile phones are now affordable. In 2014, phones sold on Jumia were priced an average of $216 and by 2017 this price had gone down to $100. In Africa, the price dipped from $165 to $96 in the same period. The laudable rise means that more and more Africans will utilise their mobile or smartphone for all kinds of activities or functions including communication, shopping and importantly payment. Today, mobile payment has grown compared to 10 years ago. Thanks to increased usage of mobile phones to transact business. The Nigeria Bureau of Statistics reported that the volume and value of mobile payment transactions in the first quarter of 2018 grew by 7.0 per cent to N329 billion from N307 billion in Q4’17. These figures show that mobile payment can contrib-

Delivering superior user experiences End-users today expect websites to deliver the same experience on mobile as they do on personal computers.

ute abundantly to the growth of the Nigerian economy with the help of the Central Bank of Nigeria and Fintechs. Role of banks The Nigerian banking system has been completely revolutionised by technology. It has forced banks-new or old generation to become creative and innovative. Some of the innovations that have disrupted the banking sector are mobile apps and

Unstructured Supplementary Service Data USSD (quick code). With these two, you can perform any transaction whether you have an internet enabled phone or not. Fintechs Fintechs are no longer new in Nigeria. They serve as payment gateways for businesses and they have made mobile or web transaction seamless. For the millions of shoppers who buy items, book hotels and order food

with their mobile app, there should be a mobile payment gateway. With mobile payment platforms, refunds are easily processed and orders are easily paid for. An uncomplicated synergy between banks and Fintechs with the regulation of the CBN (as well as shielding the financial sector from fraudsters) will definitely lead to economic development for Nigeria. Harnessing mobile pay-

ments for economic growth The phenomenal growth of fintech is helping organisations in Nigeria deliver a new generation of innovative products and services. To achieve this and successfully harness the power of mobile, organisations in Nigeria’s mobile banking and payments ecosystem must deliver compelling and responsive end-user experiences. They must also implement strong and secure authentication methods

Ensuring security For mobile commerce and electronic banking to deliver its benefits across Nigeria, delivering a secure mobile experience, regardless of device and network, is compulsory. As more and more business-critical applications and financial services adopt the public or private cloud, it has become essential to protect organisations and users from criminal efforts to steal data or conduct financial malfeasance. Mobile devices are now being targeted because they may serve as a back-channel into a network, thus making a network-centric security approach inadequate for an increasingly mobile-based economy. Security within a mobile commerce ecosystem needs to be intelligence-driven and provide the flexibility and scalability to adapt to dynamic requirements. Adeniyi Ogunfowoke is a public relations associate at Jumia Nigeria.

Stanbic IBTC unveils plans for Social Media Week Lagos Jumoke Akiyode-Lawanson

n consolidating its ongoing focus on the youth and in delivering on its strategic objectives as a digitized customer-centric universal financial services organization, Stanbic IBTC Bank says it will join other thought leaders, innovators, business practitioners, entrepreneurs, and pop culture enthusiasts from Nigeria and around the world to participate at the Social Media Week Lagos 2019 with a reloaded package. The company says it will rise above and beyond its core financial services specialization as this is in line with its value commitment to meaningfully contribut-

ing to the development of the nation and uplifting the socio-economic living conditions of its citizenry through strategic focus and investment in initiatives that fall under three key pillars of Social, Economic and Environment (SEE). Stating that rather than leveraging on the annual Social Media Week Lagos platform to sell, it will be highlighting tools and basics of formal career development, entrepreneurship drive and business management aimed at wealth creation and securing a promising future the Nigerian youths. The annual weeklong conference and exhibition will hold this year from February 4 to February 8 with

the theme “With Great Influence Comes Great Responsibility”. The event, renowned for eliciting interesting conversations and bringing together diverse perspectives, has gained popularity as a platform to discuss the most productive ways to harness social platforms to drive thought and innovation, improve consumer experiences and foster collaborations. According to the organizers, SMW Lagos will focus on ideas, trends, insights, inspiration to help both individuals and businesses across the creative, technology and financial industries understand how to achieve more in a hyper-connected world and engender good business practices and policies that

leverage technology to transform industries and communities across Africa. The event also features a mixture of keynotes, panels, workshops, masterclasses and presentations on a wide range of topics, including business, entertainment, education, technology and politics, all aimed at advancing the use of social media, and an area dedicated to co-working and interactive installations. Yinka Sanni, chief executive, Stanbic IBTC Holdings PLC, says the organization’s participation and sponsorship of this year’s Lagos Social Media Week is a clear expression of its determination and commitment towards availing young, vibrant Nigerian youths, irrespective of

background and current position in life, requisite mentorship and guidance to help them achieve their goals and aspirations. He added that this essential career management, wealth creation and preservation tools, principles and basics, undoubtedly transcends financial knowledge and status. Sanni disclosed that Stanbic IBTC will be showcasing a number of renowned resource persons including career counselling and employability training specialist, Dipo Awojide – a Lecturer in Strategy at the Nottingham Business School, United Kingdom and founder of the BeenThereDoneThat Hub (BTDT Hub) whom has built a

global reputation for career coaching and counselling. Also featuring are genuine success case studies to reinforce and underpin the importance of key career growth attributes like dedication, consistency, proactivity, resilience, adaptability, positivity, hard work, etc. and wealth generation experts amongst other keynote speakers. “I hereby seize this opportunity to invite members of the general public especially the young, vibrant and enterprising and the larger social community to join us at Social Media Week Lagos 2019, as we promise all our guests a very enriching interaction and engagement,” Sanni said.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 29 January 2019

How government can make mortgages cheaper without reducing price Chuka Uroko

lobally, houses are expensive products and, in Nigeria, Africa’s largest economy, houses are luxury items which are affordable and accessible by the rich. A major part of the reason is lack of housing finance, a problem that a functional mortgage system can solve. In this part of the world, in practical terms, there are no mortgages because what passes as mortgage in this country is neither affordable nor accessible to those who truly need it. It seems a helpless situation, but Tayo Odunsi, CEO, Northcourt Real Estate, says there is a way out. He says there are ways government can make mortgages available to a greater number of people without increasing the price. It has to do with tax and mortgage interest refund by government. Odunsi affirms that “houses are expensive capital goods. The median and average price of a US flat and detached house is $313,500 and $377,700 respectively (US Census, September 2016). That is a lot of money, and it is relatively the same story in most parts of the world”. Consequently, the average Joe doesn’t pay cash down for a home. Since houses ordinarily come with title deeds, this is mortgaged to secure a loan, which typically the buyer cannot really afford. With an average paying job and many foreseeable working years to go, a working class man should be able to afford a mortgage on a commensurately priced house by simply spreading the payments over a long enough period of time. In most developed countries, this

is the case, but in developing or underdeveloped nations, it’s not quite so. The World Bank computes mortgage depth of countries as a percentage of the mortgage loans availed in comparison to the country’s GDP. The US has a mortgage depth of 75 percent; the UK, 83 percent; Switzerland, 98 percent; and Denmark a whopping 110 percent. On the flip side of the spectrum, Ghana, Nigeria, Egypt and Tanzania all have a less than 1 percent mortgage penetration. This is not surprising, as Nigeria for example has an average mortgage-lending rate of 24 percent per annum. Again, the interest charged is not surprising, as banks have to compete for funds with “riskfree” Federal Government bonds – which pay as high as 18 percent,

as against their European counterparts whose Eurobonds have a negative yield. But irrespective of price, in the Netherlands, which has a mortgage depth of 83 percent, mortgage loans for first-time home buyers are fully tax deductible for up to 30 years. This means that as long as the house you are buying is your first and primary residence, the government will refund your mortgage interest payments from your personal income tax that is deducted from source and paid by your employer. This immediately makes mortgages cheaper, irrespective of the price (interest) charged by the bank. So assuming a Dutch homebuyer pays 40 percent of his or her income as tax, and earns 1,000 Euros pre-tax, meaning 600 Euros post-tax. If his bank charges the conventional maximum of

30 percent of disposable income (post-tax income) as mortgage repayment, this would mean he pays 200 Euros in mortgage repayment. This means the 200 Euros paid as a monthly mortgage repayment would be sufficiently fully refunded from his tax. It is therefore “free” to take a mortgage, and it would be ridiculous not to do so, all other requirements being met. Should this law be enacted in Nigeria, where the income tax is about 25 percent of personal income, these would be the statistics: A homebuyer with a posttax income of N150,000 will pay N50,000 in tax. If he is also charged a maximum of 30 percent of his income in mortgage repayment, he will be paying 45,000 monthly. Consequently, a fully deductible mortgage policy will just adequately refund his mortgage payment. This immediately makes

mortgages affordable, if not free, to home buyers who can fulfill other conditions such as showing a steady source of income for loan repayment. Now, before you jump to the government’s defence on the tax loss it will have to bear, note that such loss will be on a steady decline after an initial period of policy hype and then stabilization. As people begin to joyfully take up mortgages for first home purchases, this will create significant competition amongst mortgage providers, thus setting in motion the basic laws of economics. Mortgage prices would have to fall to stay competitive, consequently reducing tax refund obligations of the government over time. In all, as mortgage prices and tax deductions reduce, mortgage penetration of the adopting country would increase.

Traction for multifunctional pieces to expand in demand for luxury furniture Temitayo Ayetoto

xquisite royal sofas, bedroom, dinning, modular kitchen sets have remained dominant in the thirst for luxury home furniture but multifunctional and readyto-assemble (RTA) pieces of furniture will also be competing to expand its share of that demand in the next four years, Technavio, a market research firm reveals in a recent report. The living room and bedroom furniture segment governed the home furniture segment last year, followed by the kitchen furniture category. However, the choice of variety among these segments significantly fell on multifunctional cabinets, indicating a growing wave of appetite for mixed comfort packaged in simple compartments. “From 2019 to 2023, the market is expected to receive some traction from the de-

mand for luxury furniture. In 2018, APAC, particularly countries such as China, India and Japan were the fastest-growing home furniture market,” the firm noted under segments of global home décor retail market of the report. “Multifunctional furniture and ready-to-assemble furniture are among the most used variants of furniture in this segment.” While sticking to the preference for tasteful and ingeniously crafted home designs, consumers are increasingly finding multipurpose pieces endearing on the one hand for their ability to adapt to different situations and on the other hand, the liberty it gives to home reconfigurations without needing an expansive space. Convertible chair beds, for instance, are not only suitable for enjoying a restful time seating but also nice for a peaceful nap in a well-manicured gar-

den around the home during weekends. Multifunctional model such as Modos, a customizable modular shelving system of which the elements can be used to create a tabouret or standing desk are great for on-

the-go occasions. Their larger sized elements allow users to create life size desks, tables, chairs and other items all without the use of tools. Other furniture works like couch arm-rest table, chairs housing shelving system and

book case that hides a whole dinning set are addressing simple yet sophisticated lifestyles and creating a viable market within the broader furniture market. The trend opens opportunities for local players in home interior designs to grab early enough before the market is saturated by imports. Local furniture landscape is still largely engrossed in a struggle to be at par with finished imported products, widening opportunities for suppliers to the industry. Furniture imports, clothing and accessory imports have continued to stay high at $250 million and $763.3 million per annum retrospectively, with $153.8 million worth of furniture imports from between 2014 and 2016 coming from China alone, according to International Trade Statistics and worldstopexports.com.

Tuesday 29 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Explainer

Understanding importance of available data in Nigeria real estate sector at about 3 percent per annum. Sectorial information and data compiled by NRE-DCMP as proposed by real estate analysts will be helpful in strengthening the housing industry that has remained in contraction mode for 11th consecutive time through to Q3 2018. Chime told BusinessDay that “there is need to monitor the real estate sector through the use of data in order to solve the challenges in the industry.”

Endurance Okafor

n February 2018, Real Estate Developers’ Association of Nigeria (REDAN), in collaboration with the Central Bank of Nigeria, the Federal Ministry of Power, Works and Housing, and other stakeholders established the National Real Estate Data Collation and Management Programme (NRE-DCMP) to make available data about the sector. Ugochukwu Chime, REDAN president and chairman of NREDCMP told BusinessDay recently that the maiden real estate report for 2018 will be released in a few weeks. What is NRE-DCMP NRE-DCMP is an institution set up to generate data on the real estate sector of Africa’s largest economy, with special focus on land administration, the housing condition, affordability of properties and business survey data. The less than one year old body was established with the aim of monitoring the country’s property sector and providing information that can help industry stakeholders in decision making. Nigeria real estate sector With the highest population in Africa, Nigeria has more than 20 million housing deficit and, according to the Association of Housing Corporation of Nigeria (AHCN), “underdevelopment of Nigeria mortgage sector in

driving home ownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction.” Typical mortgage interest rates in Nigeria range between 7-10 percent for FMBN and between 15-25 percent for commercial mortgage institutions. This makes the rate one of the highest in the world. Africa’s highest exporter of crude oil therefors has one of the lowest mortgage to Gross Domestic Product (GDP) rate at about 0.6

percent, which obviously lags Ghana’s 2 percent, South Africa’s 30 percent, the U.S and UK rate at 60 percent and 70 percent respectively. The property industry which lacks data and readily available information contracted by -2.68 percent in the third quarter of 2018. This was despite the 1.81 percent (year-on-year) GDP growth reported for the country. Why NRE-DCMP One of the constraints of Nigeria’s property industry is the little

or no data about the various sub sectors and, according to industry players, this makes it difficult for foreign investors to easily access the market despite its viability. The sector is very opaque and so records a lot of informal transactions, making it difficult for the government to keep track of the sector’s performance. For example, the often quoted 17 million housing units deficit has remained unchanged for over a decade despite the fact that the average population growth rate of the country stands

What the real estate sector stands to benefit from NRE-DCMP Nigeria is yet to realize its real estate sector’s potential, considering it was only able to contribute 6.50 percent to the country’s GDP in Q3 2018 as against 6.83 percent it contributed in the second quarter of last year, and the 5.63 percent contribution it reported in the preceding quarter. Whereas in South Africa, the region’s most industrialised and second largest economy after Nigeria, real estate sector contributes about 30 percent to GDP, and in the UK, the property industry contributes about 70 percent. What both countries share in common is a monitored and information driven real estate sector. With the establishment of NRE-DCMP, industry players see Nigeria’s real estate sector following suit in spurring the sector’s contribution to the growth of the nation’s economy

What Apha Mead’s inclusion in ‘Companies to Inspire Africa 2019’ means for RE industry CHUKA UROKO

ecently, the London Stock Exchange Group (LSEG) released a report tagged ‘Companies to Inspire Africa 2019’ which contained the names of 360 companies selected from about 4,000 companies in about 32 African countries. Expectedly, because of their resilience, innovativeness, entrepre-

neurial capabilities and impactful operations, many Nigerian companies were recognized. Alpha Mead Group was one of them. The inclusion of Alpha Mead in this report is particularly of very strategic importance to the real estate (RE) industry in Nigeria. Alpha Mead is a total real estate solutions company which prides itself as the leading light in its chosen field in Africa.

L-R: Flavio Nunes, former president, FIABCI International; Farook Manhood, immediate past president, FIABCI International; Adeniji Adele, current FIABCI-Nigeria president; R C O Okafor, past president, FIABCI- Nigeria; Assen Makedonov, World president, FIABCI International; Oba Otudeko, chairman, Honeywell Group; Charles OKoye, past president, FIABCI Africa Region, and Kola Akomolede, past president, FIABCI-Nigeria.

The real estate industry in the country is passing through challenges but Alpha Mead has been able, through innovative operations, huge investment in technology and strict compliance to global best practice, to rise above mundane limitations to attract both local and international recognitions. The selection of the group as one of the Companies to Inspire Africa is, therefore, a huge plus to it in particular and the industry at large. It sends the message that, despite the challenges, there are a lot to take away for investors who understand economic cycles and market dynamics. “This recognition is another attestation to our capacity for growth, transparency and strong corporate governance regime”, an elated Femi Akintunde, the Group Managing Director, noted in a statement obtained by BusinessDay. Continuing, he said, “it is fulfilling to see a prestigious report like the ‘Companies to Inspire Africa’ attesting to the standard we have designed for our customers”, he said, adding, “for us, sustainable business operations goes beyond meeting the varying needs of our customers across Africa”. Akintunde believes that these operations are also about assuring

new international brands planning to come into Africa that the continent is no longer a black box. “So, for us, this insignia of LSEG also re-affirms that the capacities, opportunities and possibilities we are creating are recognised and accepted globally”. The GMD says the recognition is not just about an African company being recognised on the global stage, it is about an Africa real estate business showcasing the potentials of the market through success stories and the opportunities such recognitions create for the African real estate industry in the global scheme of things. He disclosed that one of the things that has always driven the company over the years was the need to expand across Africa and provide an all-encompassing service that makes the real difference in the businesses and operations of their customers. David Schwimmer, the CEO of LSEG, had explained that ‘Companies to Inspire Africa’ report identifies Africa’s most inspirational and dynamic private, high-growth companies to a global market. The implication of this report is that the companies so selected demonstrably outperform their sector and market peers. The LSEG’s Companies to Inspire Africa report, which was produced in partnership with African Develop-

ment Bank Group, CDC Group, PWC and Asoko Insight who contributed insight and expertise to select the featured companiea, is aimed at improving awareness on the region’s most dynamic companies. The report showcases outstanding stories of innovation, growth and entrepreneurship in African business to a global audience. To be included in the list, companies need to be privately held, and show an excellent rate of growth and potential to power African development. Alpha Mead is not new to recognitions. This is the third time in seven years that the group is featured in rankings or recognitions as one of Africa’s promising companies. In 2012, it was ranked 16th in Fast Growth 50 Companies in Nigeria by the Allworld Network Inc. (co-founded by Professor Michael Porter of Harvard Business School) and The Tony Elumelu Foundation. Also, in 2013, Akintunde won the emerging category of the Ernst & Young Entrepreneur of the Year, West Africa. These are among several international and local awards like the European CEO awards in 2014, Middle East and Africa Award 2017, Africa Real Estate Conference Award 2018, among others.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

INTERVIEW ‘FG must stop looking to raise revenue in isolation to reducing cost’ Dayo Babatunde, CEO, DB Professional Services Limited and DEB and Co-Chattered Firm, an accounting firm that specialises in consulting, auditing and providing advisory services. In this interview with Micheal Ani, he gives suggestion on how the government can raise revenue, reduce cost and grow the economy. Excerpt. How can you describe the ease of doing business in Nigeria? es, our country is experiencing a fragile growth with many companies closing down operations. A major concern that needs to be looked into is the rising cost of doing business in Nigeria, which has been the central of them all. Revenue growth for most business has remained virtually at the same level in the wake of inflationary pressure on cost. Every business is now looking for ways to cut down cost to improve bottom line and liquidity position. From my own experience, my advice to what companies can do to withstand this tide is by carefully planning and sourcing in identifying the scope and the specific needs of each of its clients, by using IT to drive key business services.

taxation. However, it should be noted that I am not talking about cutting taxes, but in making sure that they pay exactly what they are supposed to pay to the government. Also, with the economy growing, you will have businesses that are merging, acquiring and all these are some of the services that will be expected from us which I am going to be rendering at global best practices.

What are some of the challenges facing the sector? The challenges that are being faced by players in professional services industry in Nigeria includes: Shortages of top talents - like I said earlier, we have moved to the era of digital analytics and robotics and to source for these talents, it will not come cheap in terms of money and availability as such, there are shortages of talents. As a result of this, attracting and retaining talents with the right knowledge and skills is a big challenge and we cannot run away from it. Another thing is on the issue of pricing, clients will want to cut down on their prices compared to the value of the services that you render, which may generally lead to a fall in the demand for services given that clients are cutting down on their pricing. In most cases, you need to discount because if you don’t discount, you may see yourself edging out of competition. Also, competitions arising from firms are becoming stiffer and stiffer this is because you do not have very small firms participating now because of the mergers and acquisitions that are coming with big players, and with big players, the competition will be very tough for the new entrants. Information technology is another area because the pace of Innovation is very fast and the challenges are there. Client expectation: This is because clients are becoming more sophisticated and they are demanding for sophisticated services. Another major challenge is with the issue of multiplicity of taxes, which to me is a disincentive to business and investors, and it is not something that is healthy for the operators in our economy. Revenue shortfall has been a problem in this country. How can government roll out strategies to raise revenue?

Dayo Babatunde

The first point of call is to block and seal up all leakages within the system. As I said before, they must not be looking only at revenue aspect. If you are raising revenue and cost profile is there to mop it up, then you can imagine. From my experience, you don’t look at revenue in isolation from cost. I will advise them to manage the cost end. So, the first step I will suggest is for them to block and seal up all leakages within the system. Also, in as much as I believe in the efficiency of the private sector, I will not advocate a full move of the Nigerian states to a pure capitalism economic system, rather, I will advocate a balance between the two of them. Another measure to point out that many people have been talking about but can’t see much achieved by the government in that area. That is, you avoid what I will call key sector risk. Key sector risk is a position where you rely heavily on a particular sector and so your fortune depends squarely on that sector, and if that sector crashes, then the whole economy crashes, which is what we are experiencing here. Everything is on oil and gas, even power sector depends on petroleum. Meanwhile, we have revenue generating activities residing in each of the 36 states of this Federation. State governments are even owing workers salary because they rely mostly on one channel of revenue. Give us a brief insight into this new firm? DB Professional Service Limited was set up to warehouse every consulting, advisory, due diligence, bankruptcy, and so on. We also have the DEB and Co-chattered Accountant that will be coming on board soon, which is a public accounting practicing firm specialising in assurance. And when you are talking of assurance, you are talking about auditing and fees

including fraud, investigation and dispute resolution services. DB Professional Services will also cover every other consulting engagement like advisory, taxation and due diligence. By due diligence, we mean the totality of due diligence, including HR due diligence; Fiscal due diligence, which has to do with taxation; financial due diligence; IT due diligence and many more, these are some of the areas that will be covered. Were there any flaws that you noticed in the system that motivated your drive towards establishing DB Professional Services? It is really not a response or inadequacies to any handicap in the sector, but I feel the ultimate of a professional is to create its own input. If you are a professional, and you are yet to create your own input, then you are not yet fulfilling. In EY, I was a partner practicing in a large practice that has over 5000 partners globally. However, having retired from that, I still have the energy and the skills. It will be criminal on my part to just go and be sleeping with my years of experience. So, I believe that I still have a lot to offer to the economy, that is why I now opened my new firm at least to contribute my quota to the development of the economy and the development of the sector. Having spent 25 years with EY before starting up your own, what new things will you be bringing into the sector? I have a robust experience with EY spanning over 25 years, and as I had mentioned to you earlier, I will like to equally contribute my quota to the economy in assisting the government and giving them suggestions as it affect the economy. Also, to help businessmen in managing their business affairs, by assisting them in coming up with a very well structured and reasonable

What will DB Professional Services be doing differently in servicing its clients? Part of the things I will be bringing to bare is integrity and courage. That will take us to what is called exceptional client services, which means being insightful and resourceful to your clients in managing their affairs, you want to be connected so that you are not too far from your clients. Anything that will make them not to sleep, you will want to assist them and then you want to be responsive. It is like online real-time resource and I want to bring to bear what I call exceptional client services. Also, in DB Professional Services, we will be rendering professional opinions so that our clients and even the government can take position. Others may have done it in the past failing, but that will not discourage us from proffering solutions to the government. Who are your target customers/ clients? They are companies and individuals. We have the corporate clients and the individual clients. Corporate clients for companies looking for auditors or that want to change their auditors. I hope you are aware that the corporate code is that once an auditor stays for 10 years or as the case may be depending on the industry, they will need another auditor and we are available as a professional auditing firm to render services, which are the professional accounting practices wings of the business. Also, if a company is looking for how best to manage their tax in line with applicable laws of the country, we are there to help them render taxation services. Like I said earlier, this is a great country with one company merging and acquiring one another, we are there to help them in finalizing this arrangement to enable them be on the right track. We would do legal due diligence, IT due diligence, HR due diligence, financial due diligence, to let them know the kind of company that they are taking over. We will also be doing things in the Private Equities space but that will be in the later time because we want to stabilize first at infancy. In carrying out these services, you need a strong and reliable team, you need the technological knowhow and also the finances, how do you intend to raise finances to put up this team to deliver these

services? It is very true that we need highly skilled people since we are talking about a professional accounting firm and a consulting firm. We need people who are very skilled in research and they do not come cheap. However, before we embarked on this, we have done feasibility studies, market survey, market intelligence to make sure that once we start operations, we will not lack resources and yes we need money, but it is not such a volume hat will drive us out of operations. Before I embarked on this, I have done all things that have to do with my planning financially and budgeting, as this will help me a lot not to run into a financial trap. What is your advice on the nation’s huge debt profile? What the federal government don’t know is that you don’t expand revenue for the fun of the expansion of revenue, but the utility of expansion. i.e., if you keep expanding your revenue and your cost profile keeps increasing, its better you don’t do anything because it is like in and out and it takes you nowhere. All what the government is doing is that they are increasing their revenue but they are not watching their cost. There is need to marry the expenditure profile with the income profile and when there is a perfect match, you will be able to say that yes, you have achieved a lot but most of them are just looking at the income angle. Even the local investors are crying, you have a company, you pay tax to this level of government, that level of government comes also to collect taxes for the same service. The government both at the state and federal level should look at this, working with all their relevant agencies. Is it a coincidence that you are opening business at a time people say they are halting because they are scared due to the build-up to the 2019 elections? I said it before, you should not because of temporary dislocation delay or abandon your long-term projection. I know the issue of election is temporary indices, it is not something that will stay there for long, and it’s the impact. So my strategy is what I will tag prosperity in adversity. I don’t want to allow the short-term threat to scare me of the long-term benefit for the nation, for my company, my staff, my colleagues, and myself. So, I will not say because of the elections, delay my coming to the business. What I have done is to calculate my steps so that as the election is having its own tour on businesses and economy, I have my strategies to withstand that so that after the pressure, we will all live to enjoy the benefit. I am a hardened believer of the prosperity potentials of this country.

Tuesday 29 January 2019

www.businessday.ng

You’ve Got Mail 28%: A McKinsey study found that workers, on average, spend about 28% of office hours reading and answering emails. + Mind the Gap 2.2%: In 2017, female founders leading all-women teams received 2.2% of venture capital dollars, compared to the 79% raised by all-male teams. + The Tenure Track 282: In the past five years, 282 CEOs working at S&P 500 companies have stepped down from their positions, according to research from U.S. firm Equilar. + World of AI 37%: Deloitte found that 37% of large American companies have created competence centers to oversee their artificial intelligence technologies. + Powering Through $12 billion: The African Development Bank has established a campaign to help close the power gap in the continent, pledging $12 billion to energy projects between 2017 and 2022.

ometimes the perfect job is thousands of miles away. How do you know if it’s worth relocating for a new opportunity? You might be tempted to weigh the pros and cons in an Excel spreadsheet, but it’s better to think holistically about your personal and professional goals. For example, consider the lifestyle you’ll have in the new location. Do you want a small-town life, or do you prefer a big city? Do you want to spend your weekends traveling, or do you want to feel

Managers, be thoughtful about the weight your words carry

rooted in a community? Think about the repercussions of taking the job, especially for your partner and kids. Will your spouse be able to find meaningful work after the move? Be realistic about what the move will mean for your family, and talk it through — a lot. If you’re still not sure what to do, you may want to try a short-term stint or job swap to test out the new location before committing.

(Adapted from “How to Decide Whether to Relocate for a Job,” by Rebecca Knight.)

ometimes you have to work with a colleague you don’t particularly like. They may not be toxic or difficult — they might just get on your nerves. To work with them productively, remind yourself that while you won’t get along with everyone, there is potential value in every interaction. Think about the other person’s point of view: Why do they do the things that annoy you? What might be motivating them? And how do you seem to them? It also helps to ap-

proach conversations with a problem-solving mindset: “I don’t feel like we are working together as effectively as we could. What do you think? Do you have any ideas for how we can work together better?” If that doesn’t work, try asking for their help: “You’ve been around here longer than I have. What should I be doing more or less of?” This can ease tensions and reboot a difficult relationship because it shows that you value the person’s experience.

t’s not always clear how you should think about growing in your career. One thing to try is writing a “from/to” statement that articulates where you are today and where you want to go. For example: I want to progress from an individual contributor who adds value through technical expertise and closely follows others’ directions, to a people leader who creates a clear strategy and delivers results through a small team. To write a from/to, ask trusted superiors and colleagues for their candid view of your current role

(Adapted from “How to Col(Adapted from “To Get More laborate With People You Done, Focus on EnvironDon’t Like,” by Mark Nevins.) ment, Expectations and Examples,” by John Zeratsky.) c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

It’s in our DNA FirstBankofNigeria

Want to be more open-Minded?

pen-mindedness at work — about new products, strategies, business models — is one key to success. But how do you develop it? Research has found there are several things you can do. For one, travel, whether it’s to another country or somewhere closer to home. As you encounter ways of living that differ from the ones you know best, your brain will get better at accepting new approaches and ideas. For a cheaper option, read fiction. Books can train your brain to be curious about others’ experiences and opinions. Another low-cost option is mindfulness meditation, which has been shown to help people be willing to revise their ideas. And if you’re someone who tends to get stuck in their ways, there’s a simple trick you can try: Start sentences with “I could be wrong, but ... “ This conveys your openness to others and forces you to start conversations with a willingness to change your mind.

(Adapted from “A New Way to Become More Open-Minded,” by Shane Snow.)

How to work with someone who bugs you Where are you in your career? Where do you want to go?

you’re giving the team a clear, unified picture of projects and strategies; if you aren’t ready to do that in a certain situation, hold off on saying anything until you are. And don’t ask for updates unless you really need them. That kind of message appears urgent, even when it’s not. Always specify what information you need, why and when, so you don’t create an unnecessary fire drill.

Expertise www.ﬁrstbanknigeria.com

BUSINESS DAY

Should you move for a new job?

TALKING POINTS

@Businessdayng

Tips & Talking Points

Harvard Business Review

osses have a lot of influence on how employees spend their time. That’s why it’s so important for them to consider the ripple effects their input can have. Think of your comments, suggestions and questions as pebbles you’re throwing into a stream: Each one can have an impact far larger than you may intend. So always recognize the weight your words carry, and speak with intention. During meetings with your team, try not to “think out loud,” and avoid lobbing ideas at everyone. Be sure

https://www.facebook.com/businessdayng

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent. You can be conﬁdent that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

Visit www.ﬁrstbanknigeria.com to learn more about us.

@FirstBankngr

Firstbankngr

FirstBankofNigeriaLtd

@ﬁrstbanknigeria

+FirstBankNigeria

and your goals. Tell them to be brutally honest, because their transparency will help you figure out how you need to grow. Reflect on their answers and incorporate them into your from/to statement — and then have your colleagues read it. Sometimes people think they’re far ahead of where they are, or choose a destination that is unrealistic. Your advisers can provide a reality check.

(Adapted from “A Simple Way to Map Out Your Career Ambitions,” by Marc Effron.)

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Tuesday 29 January 2019

@Businessdayng

2019 poll: Group says 90% of candidates not campaigning in Edo IDRIS UMAR MOMOH and CHURCHILLOKORO, Benin

he Coordinator-General of Edo Civil Society Organisation (EDOSCO), Omobude Agho has said that 90 percent of candidates vying for the 2019 general election in the state were not campaigning for votes but saving money to buy votes from the electorate. Omobude, who made the remarks at a stakeholders’ meeting organised by Network for Good Governance (NGG) on peaceful conduct of 2019 general election in the country, noted that vote buying has become a major challenge to the nation’s electoral system. “Vote buying has become a major challenge to our electoral system in recent times. Ninety (90) percent of all candidates running for various positions are not campaigning for votes from the electorate because they want to buy votes. This is because they have kept the money which ordinarily they would have used for campaigning to buy votes from the electorate. “They are not campaigning at all. They want to buy vote but we are

Presidential candidate of the Peoples Democratic Party and former Vice President of Nigeria, Atiku Abubakar with National Chairman of the PDP, Uche Secondus waving at the mammoth crowd at the party’s presidential campaign in Uyo, Akwa Ibom State on Monday.

saying that vote buying must stop and on Election Day, we shall be vigilant,” he said. He however, berated the National Orientation Agency (NOA) for not being alive to their responsibilities in the state. “We want to see NOA on live programmes on Television and Radio,

in town hall meetings, in market places among others, sanitising the public on elections and other government policies; that is their job,” he added. Eddy Eragbe, a professor of History and International Relations, University of Benin (UNIBEN), in his remarks also urged stakeholders

Oke, S/West Buhari/Osinbajo Campaign DG, clarifies issue on 2023 presidency Akinremi Feyisipo, Ibadan

he South West DirectorGeneral of the Buhari/ Osinbajo Campaign Organisation, Olusola Oke has said that the Yoruba nation is presently positioning itself to take over from President Muhammadu Buhari come 2023 in the broom party. He said once the Presidency will move to the South after eight years of President Muhammadu Buhari, from the North, Oke explained that the Igbo nation also has the right to aspire for the Presidency in 2023. According to him, the presidency is always between the North and South, then after eight years of President Buhari, it will move

to the south which includes the Igbo people, so they also have the right to bid or ascend the position. Vice President, Yemi Osinbajo and Minister of Power, Works and Housing, Babatunde Fashola earlier at different fora said that victory of President Muhammadu Buhari in the 2019 presidential election would guarantee a return of power to the South West in 2023. Oke, a lawyer however, said that the Igbo should mobilise and work very hard for the re-election of the President. He pointed out that South West played a major role in the emergence of the present administration and still mobilising for the re-election of President Buhari, saying it wouldn’t be out of place to grab the Presidency after the second term of

the present administration. “I can see that the Igbos too are mobilising for the re-election of President Buhari for second term, this is evident in our campaign rallies in the east, they too want to take over come 2023,” he said. Oke while addressing journalists in Ibadan, the Oyo State capital at the South West zonal campaign office of the ruling All Progressives Congress (APC), said that the Yorubas should be proud of Buhari for several reasons. Flanked by the South West zonal secretary of APC, Ayo Afolabi at the briefing, he maintained that Buhari has done well for the region hence, people of the region should reciprocate by re-electing him in the February 16th Presidential election.

to carry out more enlightenment campaigns on the need for people to shun violence during the elections. Eragbe, who commended members of the Network for Good Governance (NGG) for the stakeholders’ meeting, opined that it is a “poor commentary to say that when elections are coming, we are scared. It

makes the only essence of governance lost.” In his remarks, Vincent Omuedi, an assistant director, National Orientation Agency (NOA), who represented the Acting State Director of the agency, Grace Eseka said NOA had carried out an enlightenment campaigns and town hall meetings in all the 774 local government areas in the country on how to avoid invalid votes. He disclosed that the NOA has concluded plans to embark on a road show on February 6, to create awareness on the need to ensure peaceful conduct of the elections. On his part, Wilfred Ifowga who represented the Resident Electoral Commissioner of the Independent National Electoral commission INEC, Emmanuel Alex-Hart said the commission has placed partial ban on the use of mobile phones at voting centres. “From the point of accreditation to where you cast your vote, you are not expected to carry your mobile devices. This is to discourage those who want to snap their ballot papers and show to vote buyers. Security personnel will be on ground to enforce compliance,” he said.

Controversy greets Ekere’s resignation as NDDC boss he resignation of Nsima Ekere as the managing director of the Niger Delta Development Commission (NDDC) last weekend has generated furore from both sides of the political divides in Akwa Ibom State. While the All Progressives Congress (APC) says Ekere, who is the standard bearer of the party in the forthcoming governorship election in Akwa Ibom State, resigned to focus his attention on the electioneering campaigns, the People’s Democratic Party (PDP) says he could not have resigned same day the entire board of the commission was sacked. A statement signed by Utibe Ukim, special assistant on communication to the former NDDC managing director, said Ekere resigned on 25th January, 2019, adding that

the presidency has already appointed Nelson Briambriafa as the acting managing director. The statement added that Ekere had earlier held a valedictory management meeting where he thanked the President for the opportunity given him to serve the region and also thanked the management and staff for the support and cooperation extended to him during his tenure. “There is a time for everything and today is a time for my departure. I urge you to continue with the single-minded commitment to transforming the Niger Delta region and bringing development to the people and communities across the nine states,” Ukim quoted Ekere as saying. However, observers have pointed to the coincidence of the resignation with the sacking of the board taking place same date.

ask is where were they in 2016, where were they in 2017?” The Senate President equally informed the Olofa and his chiefs that President Muhammadu Buhari’s government has nothing to offer Kwara, citing as example the alleged refusal of the President to effect a rotation of the chairmanship of the Federal Civil Service Commission to the state when the time was due. “APC leaders in Kwara can’t access President Buhari for anything. They will first have to go and submit their request to Lagos and it is only

when Lagos is satisfied with the request that it will be forwarded to Buhari who may or not do it. “Anybody who loves Kwara will not follow Buhari. The Federal Civil Service Commission that was supposed to rotate to Kwara, he has refused and given it to another state,” Saraki said. In his response, Olofa of Offa, Oba Muftau Gbadamosi, asked his subjects to vote en masse for the PDP, pointing out that the party’s leadership in the state has been faithful to his community in the last eight years.

ANIEFIOK UDONQUAK, Uyo

We need to teach seasonal politicians a lesson - Saraki SIKIRAT SHEHU, Ilorin

enate President and national leader of the Peoples Democratic Party (PDP), Bukola Saraki has stressed the need to teach the seasonal politicians a lesson in the 2019 general election. Saraki, who led members of his party to a campaign rally in Offa Local Government Area of Kwara State on Sunday, pointed out that his boldness to confront the federal might was because he has clean hands, saying if otherwise he would

have been dealt with seriously. Speaking at the palace, Saraki said: “Our campaign has a definite plan for Kwara State and Nigeria. Since we joined the PDP, the party has honored Kwara State, they gave us DG of Campaign, National Leader of the party and have agreed that if the party wins, Senate President is our slot in Kwara. But what has the other party to offer? If I have skeleton in my cupboard, this government would have silenced me and forced me to drop the campaign. “But for God and the support of

the people I would not be standing today. They didn’t want to honour our agreement. We all laboured and what they couldn’t get in three times they got it and we demanded that they give to Kwara what we deserve. “We need to teach our seasonal politicians a lesson on the poll date. We want community development, let everybody come and contribute their quota to our communities; when Saraki does his own and let them too do their own. I heard that some politicians have been buying JAMB forms in 2019. The question to

Tuesday 29 January 2019

NATIONAL DISCOURSE

www.

BUSINESS DAY

Daily, Obasanjo gets justified ... as Buhari suspends Onneghen appoints Tanko Mohammed as acting CJN

DANIEL OBI

hat an old man sees while sitting down, a young man will not see even when standing. This is a popular Nigerian adage. Olusegun Obasanjo is many things to many people, but his fearless character and his interest in nation building and cohesiveness are factors that set him apart. The recent outbursts on national issues by the former President of Nigeria deserve deep thinking, reconsideration and revaluation instead of the attacks on his person by managers of the Nigerian economy who want to adopt such strategies to avoid the real issues he raised. Within three years of this administration, Obasanjo has chosen the month of January to draw the attention of the government and Nigerians to economic management and the need to redirect it in the interest of all citizens. In January 2018 and 2019 respectively, Obasanjo raised fundamental issues about the Nigerian state and its future but in line with Nigerian character, government officials instead of addressing the issues, de-

MUDA YUSUF

ive years after, the automotive policy has not only failed to achieve the desired outcomes, it has adversely impacted the cost of doing business, welfare of the people, government revenue and the capacity of the economy to create jobs. The policy has also penalised stakeholders in the sector that are compliant with extant rules, taxes and tariffs applicable to the automobile sector. The costs of vehicles have risen beyond the reach of most citizens and corporate bodies. The impact has been largely negative with far-reaching consequences. The automobile sector was hit by the double shock of over 100 percent currency depreciation over the last five years and an import levy of 50 percent on new cars and 25 percent on used vehicles and commercial vehicles. This is in addition to the import duty of 20 percent on new cars and 10 percent on used vehicles and commercial vehicles. The auto policy was an importsubstitution industrialisation strategy to reduce importation of vehicles and incentivise domestic vehicle assembly. However, import-substitution strategy thrives in the context of high domestic value-addition. It is within such a framework that the economy could benefit from the inherent values of import-substitution which includes backward integra-

cided to descend on the personality of Obasanjo. This obviously justifies the former president’s claim that the present administration does not have anything to offer to lift majority of Nigerians out of poverty. Nigerians are today impoverished more than ever before and this is written all over their faces and what Nigerians expect President Buhari’s officials to do is to offer concrete steps on how the government is lifting the citizens out of this situation instead of the ‘alaye’ approach of berating the issues. In January, 2018 Obasanjo drew attention to pervading poverty, insecurity, nepotism and poor economic management. He said he was constrained to issue the special statement, considering the situation of the country. Nigerians are now more impoverished than ever before. Presumably, Obasanjo’s statement in 2018 which was seemingly in good faith was for the government to act before it would be too late. But about five months to the end of the present administration, more Nigerians are seriously complaining of economic hardship on their lives and businesses. The average Nigerian is yet to point to the economic direction expected to lift the economy. Yes, this government may have concentrated its efforts on anti-corruption, but according to economic managers, fighting corruption alone without building the economic buffers will lead Nigeria nowhere. Today, Nigerians, including the low and high members of the business community and the common man are grumbling but the fear of the gun and arrest have

made them to complain quietly and in hidden corners. Obasanjo belled the cat as he represented the voice of many Nigerians. Due to many factors, including bad policies and external shocks, the economy is simply not growing as expected. GDP growth hit 6.31 percent in 2014, slowed to 2.70 percent in 2015, -1.6 percent in 2016, 0.8 percent in 2017. In his article in the Vanguard newspaper of 19,2018, Dele Sobowale listed four reasons that rapid economic growth will continue to elude Nigeria under Buhari and his economic advisers – led by Vice President Osinbajo. “They are ignorance, inability to learn from past mistakes, embrace of falsehood and lack of ideas”. The first six months of the Buhari presidency was spent without cabinet members in a country that needs quick push to economic recovery. The next two years of the presidency was employed for blame game against the past administration, perhaps with the thinking that this communication approach will elicit sympathy. It did actually, but it was short-lived as the presidency never changed communication tactics to its planned goals. From the first year of Buhari’s presidency, he showed himself as a sectional president with appointments that did not represent national spread. Refusal to appoint cabinet members early enough to drive the economy that is in need of attention and parochial appointments assisted to tarnish his image. At the beginning of this parochial appointment, Punch Newspaper on April 1, 2016 in its editorial warned that “While Buhari received massive

support from across the country to become President, he was by his appointments, presenting himself as a parochial, sectional leader. For the sake of the country’s corporate survival, he should rise above primordial instincts and become a father to all Nigerians.” In addition to several appointments he has made in favour of the northern region or his relatives, the latest is the appointment of Mohammad Adamu as new IGP, alienating other Nigerians. Sad. Obasanjo does not like this. In his letter in 2018, Obasanjo said “there are three other areas where President Buhari has come out more glaringly than most of us thought we knew about him. One is nepotic deployment bordering on clannishness and inability to bring discipline to bear on errant members of his nepotic court. This has grave consequences on performance of his government to the detriment of the nation.” Obviously, Buhari’s appointments contradict his initial statement that “I belong to everybody and I belong to nobody.” Obasanjo reminded those who cared to know that the socio-economic situation now is not totally different in 1999 when people were confused and lost hope but one of the factors that saved the situation was a near government of national unity that was put in place to navigate us through the dark cloud. “We had almost all hands on deck. We used people at home and from the diaspora and we navigated through the dark clouds of those days”. Obasanjo’s statement in January 2019 was not totally different from the statement in 2018. His concern was entirely for the secure future of

Need for urgent review of auto policy tion, multiplier effects, conservation of foreign exchange, job creation and reduction of import bills. The automotive policy, in its current form, is not sustainable. It is also not in consonance with the Nigeria Industrial Revolution Plan (NIRP), which is the main industrial policy document of the current administration. The NIRP espouses the strategy of resource-based industrialisation. Five years into the implementation of the auto policy, not much progress has been made, even though over 50 vehicle assembly plants licenses have been issued. Total annual sales of new cars in 2017 and 2018 were estimated at less than 10,000 units. The truth is that high cost of vehicles has taken a toll on the economy, from a logistics point of view. Practically, all aspects of our economic and social lives have been negatively impacted by the situation. This is because over 90 percent of the country’s freight and human movements are done by road, which implies heavy dependence on cars, commercial buses and trucks. Manufacturers and other real sector investors suffer from high cost of delivery vehicles, sharp increases in haulage cost because of the high cost of trucks. School buses have become unaffordable by many

AUTO POLICY institutions; many hospitals cannot afford ambulances; many corporate organisations have drastically cut down on their fleet. Car ownership is now completely beyond most of the middle class. These unintended consequences and collateral harmful effects on the economy and welfare of citizens are incalculable. We have witnessed an increase in the price of vehicles by between 200 to 400 percent over the last five years Not many investors and the citizens have the capacity to pay these outrageous prices. Even prosperous corporate organisations are now buying used vehicles for official use. The implication of the scenario for operational costs of organisations is worrisome. The auto policy in its present form is most inappropriate for an economy that is heavily dependent on road transportation. Other implications of the Auto Policy for the economy include the following: • High transportation cost resulting from prohibitive cost of vehicles largely because of the high import tariff and levy. • Increase in smuggling resulting from the high import duty and levy as

well as the huge duty differential with our neighbouring countries. • Huge loss of customs revenue as vehicle imports from official channels drop and smuggling increases. • Huge loss of revenue by the Nigerian Ports Authority. • Considerable loss of maritime sector business to neighbouring countries as more vehicle imports are diverted to neighboring countries. • Severe adverse effect on automobile dealers in Nigeria as high cost of vehicles creates affordability problems, low sales and massive erosion of profit margins. • Loss of jobs in the nation’s maritime and allied sector following the sharp drop in vehicle imports • Creation of opportunities for corruption and extortion by agencies of government because of compliance issues and the massive incentives for smuggling. • High cost of transportation resulting from high cost of passenger cars and buses. • High road safety risk because of the high vehicle replacement cost and affordability issues. There are too many rickety vehicles on the roads. Recommendation • The auto policy should be immediately reviewed in the light of its copious shortcomings.

Nigeria. Obasanjo believes that Nigeria can get over most of its political problems and move steadfastly and surefootedly on the course of stability, unity of purpose, socio-economic growth and progress for all if free and fair elections are conducted, nepotism is erased and good managers appointed to position of authority. In his statement this year, he concentrated on seeing a free and fair election but was worried on some actions and appointments and the harassment of the judiciary, a few weeks to the election which underscore rumours of plans to rig the elections. Chief Justice of Nigeria, Onneghen was arraigned without due process, but the presidency said president Buhari was not aware of such an act by his lieutenants. But whether constitutional or not, Buhari has finally suspended the CJN by fiat. There are other issues that the president said he was not aware of, including the deployment of former IGP and his refusal to move to Benue. Obasanjo noted that if he was not aware of certain things, then what is he aware in the governance process? The doling out of N10,000 by Yemi Osinbajo to some market women was grossly questioned by Obasanjo who asked the intention of such ‘ unbudgeted ‘ gift and to some select women in only Abuja and Lagos. What of women in other cities? What stakeholders like Obasanjo are advocating is positive direction of the economy and its good management. Attacking personalities will not produce result; what will produce result is good governance with all hands being on deck. • Import levy of 50 percent on new vehicles should be reduced to 15 percent. This will be in addition to the 20 percent import duty. • Import levy of 25 percent on commercial vehicles should be reviewed downwards to 15 percent, in addition to the 10 percent import duty. • Import levy on used cars should be reviewed from current 25 percent to 15 percent. • Government should give further tax concessions and waivers to the assembly plants in the spirit of the auto policy. Semi knocked-downs should all attract five percent duty to incentivize domestic vehicle assembly. • Other incentives for assembly plants and tyre industries for acquisition of machineries and equipment should be retained as contained in the automotive policy. • Similar incentives should be extended to the local production of vehicle spare parts. • Patronage of locally assembled vehicles by the government and its agencies should be more rigorously encouraged and enforced. •Vehicle purchase finance facility at single digit should be put in place to boost demand for automobiles. • Age limit of used vehicles should be reduced gradually over time to lessen road safety risks.

Muda Yusuf, DG, Lagos Chamber of Commerce and Industry (edited by Odinaka Anudu)

34 BUSINESS DAY NEWS NESG outlines five factors that will shape... Continued from page 1 governance reforms, etc”.

Delayed passage of the proposed 2019 budget of N8.73 trillion, which is a reduction from 2018’s N9.12 trillion and an indication of fiscal tightening measures by the government, was also stated as one of the events that will impact the country’s performance in 2019. “It is expected, however, that this budget would not be passed until the second or third quarter of the year, after the general elections,” NESG said. The independent, Lagos-based NESG acknowledged that the review of the minimum wage from N18,000 to N30,000 will result in higher government spending at both federal and state level, adding, “Some state governments might experience difficulty in meeting salary obligations in the year.” With Organisation of Petroleum Exporting Countries (OPEC) projecting growth in world oil demand by 1.36mbpdtoreach100.15mbpdin2019 andseveralprojectionsexpectingcrude oil price to likely hover around $60 per barrel, NESG noted that “this development, coupled with slow growth in Nigeria’s oil output, might trigger some fiscal challenges in the year”. Concerning the US Federal Reserves, it said, “There are indications

that the Federal Reserve would hike the interest rate, which could cause further negative effects on Nigeria’s foreign portfolio investment.” Doyin Salami, NESG’s research director, said the Nigerian government must focus on choosing pro-growth currency management approach and also decide what it wants to do with the private sector or private capital if it wants to drive growth. Stakeholders have long called for Nigeria to liberalise its currency regime, mostly multiple exchange rate system, which not only promotes currency speculation and trafficking at the expense of real production domestically but also provides avenue for milking government revenue. The main opposition candidate for next month’s presidential election, Atiku Abubakar, a businessman who served as vice president between 1999 and 2007, said he would scrap multiple exchange rates to attract foreign investors. Salami, while buttressing the points in the report, explained that the way the government has run the economy so far, including its rising debt burden, has showed the need and importance of private capital. Salami, who is associate professor and member of the faculty at the Lagos Business School, said that private sec-

C002D5556

tor does not necessarily mean foreign capital but also includes local capital because foreign capital can’t come in when local capital is leaving. Therefore, he said, the government put up deliberate strategies to retain local capital and attract foreign capital inflows. Members of NESG were bothered that Nigeria is suddenly thinking small and unambitious, unlike before when the economy was growing within 6 percent to 7 percent, which economists say could further grow to 13 percent if the country could fix the power sector. NESG said it is not really more about what Nigeria is doing right or wrong but what other countries are doing. For example, the group raised concerns about other African countries like South Africa, Rwanda, Kenya, Ethiopia and Mozambique intensifying reforms and positioning themselves to attract FDI. Also, if US Fed hikes its rate and emerging markets are affected, it said, the remaining capital in emerging market would elude Nigeria and go to other countries that are doing a lot to attract investors. NESG was disturbed about the lack of coordination among various agencies and ministries. For example, it said, Ngozi Okonjo-Iweala, a former finance minister, was actively controlling and influencing decisions in other government agencies

L-R: Peter Dauke, deputy commandant, National Defence College (NDC); Aliko Dangote, president, Dangote Group; Adeniyi Osinowo, commandant, NDC, and Abidemi Marquis, director, National and Military Strategy, NDC, during the visit of Dangote to deliver lecture to Course 27 participants of NDC in Abuja, yesterday. NAN

Atiku, NBA, NANS, others flay Buhari over... Continued from page 1

nation’s seat of power.

Even though Buhari’s party, the ruling All Progressives Congress (APC), has said the strident opposition to Onnoghen’s suspension by the PDP was a pointer to the opposition’s penchant for corruption and criminality, accusing the Nigerian media of taking sides against Buhari over the Onnoghen matter, condemnations continue to trail the CJN’s suspension. This is as the meeting of the National Judicial Council (NJC), earlier scheduled to hold at 10 am on Monday to deliberate on the allegations against Onnoghen as well as his suspension, is now expected to hold today. Meanwhile, the Code of Conduct Tribunal (CCT) on Monday adjourned indefinitely the trial Onnoghen. The tribunal adjourned the proceedings at the resumed sitting on Monday in Abuja, pending the determination of the application filed at the Court of Appeal. Protests yesterday erupted in many parts of the country over the suspension of Onnoghen, with many of the protesters asking President Buhari to reinstate the CJN.

The Nigerian Bar Association (NBA), rising from its NEC meeting, Monday, said it would embark on a two-day warning boycott of courts all over the country, beginning from today, over Onnoghen’s suspension. The National Association of Nigeria Students (NANS), on its part, protested the CJN’s suspension, which it described as illegal and unconstitutional, urging Buhari to reverse his decision. In Abeokuta, NANS spokesman, Adeyemi Azeez, accused the Buhariled administration of embarking “on judicial coup through the suspension of Onnoghen without following the constitutional procedure”. In Yenagoa, Occupy Nigeria, which is a coalition of Civil Society Organisations in Nigeria, embarked on a protest in the Bayelsa State capital, and gave the President 48 hours to reinstate the suspended CJN. The group threatened to embark on more protests should the president fail to meet its demand, accusing Buhari of being selective in deciding which court order to obey. In Cross River State, the courts also closed their doors in protest of Onnoghen’s suspension.

In Calabar, the state capital, protesting youths expressed their displeasure over what they described as an assault on the sacred temple of justice. The group, led by Portrait Peterson, called for the immediate reinstatement of the CJN with all his rights and privileges as the Chief Justice of Nigeria, adding that the rule of law must abide to restore the nation’s lost integrity. In Enugu, a group under the aegis of Coalition of South East Voters Voice took to the streets to protest the suspension of the CJN, describing it as a midnight order of the court. In his state of the nation address, Atiku, 72, said the country was yet again passing through a difficult moment and the reaction to the new challenge would determine the fate of the nation’s democracy already imperilled “by this needless crisis engineered by a government that is unwilling to subject its conducts to the requirements of our constitution”. He said Onnoghen’s “unlawful removal” constitutes “a flagrant breach of our constitution and a frontal assault on our democracy”. “I need to state that this latest action by General Muhammadu Buhari falls squarely within the pattern of executive lawlessness that has now

Tuesday 29 January 2019

as the controlling minister. It noted that the attitude in government today is that the ministers work in silos, unlike Okonjo-Iweala’s days when she had mandate to get things done. Responding to the report, Rafiq Raji, chief economist at Macroafricaintel, said, “I agree with the NESG.” Omotola Abimbola, fixed income and currency researcher at Ecobank Research, said the policies and happenings are all very key to the economy and financial markets outlook for 2019. “However, if the Fed maintains the dovish narrative seen since the start of the year and oil prices stay above USD60/barrel, that could provide a favourable backdrop for financial market performance post- elections,” Abimbola told BusinessDay. NESG further had macroeconomic projection for 2019 listed in three scenarios that could play out. Best case scenario Under this scenario, the planned 1.2mbpd oil production cut by OPEC and its allies is implemented as scheduled while oil producers maintain production cuts to keep oil price at $75 per barrel, which is above Nigeria’s US$60 2019 budget benchmark price. In addition, improved USChina trade negotiations as well as the slow and gradual pace of implementing the rate increase by the US Fed will have a favourable outlook on the global economy in the year. Implication According to NESG, the expiration of the supply cut exemption means that Nigeria will have to comply with the scheduled OPEC cuts in 2019. Crude oil production will, therefore, hover around 1.8mbpd. “In terms of government spending, we assume actual disbursement of N1.4 trillion for capital projects in the calendar year, based on improved government revenue,” it said. This implies a budget implementation rate of 70 percent which will lead to real GDP growth of 3.2 percent in 2019 driven by Information, Communication and Technology (ICT) and agriculture sectors, while inflation moderates at 11 percent in the year, largely as a result of increased agriculture outputs and a stable official exchange rate at N302/$. Also, unemployment and underemployment rates are projected to decline marginally by 21.5 percent and 20.5 percent, respectively, while government revenue improves by 20 percent in the year.

Business-as-usual scenario This scenario assumes the continuation of the US-China trade war and a lack of tangible progress in the negotiations between both countries. In addition, several estimates show that China’s economy will record a slow growth in 2019, which could adversely affect global oil demand and weaken oil price in the year. However, agreements between OPEC and non-OPEC producers will likely intervene to keep oil price around US$60 per barrel. On the domestic front, uncertainties persist in the oil and gas industry due to non-passage of the Petroleum Industry Bill (PIB). Domestic oil production averages 1.7 mbpd in the year. In addition, the government implements 60 percent of its proposed capital expenditure budget in 2019. Implication Real GDP grows by 2.1 percent in 2019. Government revenue increases slightly by 5 percent. Exchange rate and external reserves face moderate pressure due to FX outflows arising from uncertainties from the 2019 general elections. Inflation rate hovers around 10.5 percent while unemployment and underemployment rate rises to 22 percent and 23 percent, respectively. Worst case scenario Global GDP growth weakens in the year, occasioned by rising interest rates in developed markets and huge capital outflows in emerging and developing markets. China’s GDP growth slows in the year as the US-China trade war worsens. These factors, along with increased production and supply on crude oil from North America in the second half of 2019, threaten crude oil price, which averages $45 per barrel in the year. In Nigeria, post-election uncertainties and agitation in the Niger Delta force production down to 1.4 mbpd in 2019. The Federal Government injects N700 billion into capital projects in the year. Implication Nigerian economy falls into a recession as real GDP grows by -1.1 percent, triggered by fall in oil price and output. Inflation rate rises to 14 percent while government revenue declines by 16 percent. The CBN is forced to devalue the official exchange rate to N350/US$, while the parallel market experiences supply shortage and severe depreciation. Unemployment and underemployment rate increases to 24 percent each in the year.

been firmly turned into statecraft by the APC government,” Atiku said in Abuja, Monday. “The serial disregard of court orders, and consequent violation of constitutionally guaranteed human rights of our citizens confirm beyond all doubt that General Buhari and his government would rather obey their own whims and operate by separate rules outside the well-established constitutional order and the rule of law. It scarcely requires emphasis that this behaviour is alien to democratic rule and more in line with that of a military dictator,” he said. Atiku said the issue at stake was not whether the Chief Justice is guiltyor not, but whether his removal from office has been done in accordance with the process specified in the constitution. He alluded to the government’s serial assault on the National Assembly and the judiciary, warning the APC government to “desist from taking actions that may push us further down the slippery slope towards a major constitutional crisis that could derail the electoral process”. Buhari had on January 25 suspended Justice Onnoghen, from the country’s south-south region, and replaced him with Ibrahim Tanko Mohammed, a Muslim from the country’s

northeast, sparking political crisis in Africa’s largest economy barely three weeks to a crucial general election. With the ensuing crisis, analysts say, Africa’s top oil producer continues to demonstrate its challenges with entrenching democratic norms. The crisis is expected to deepen the tensions between the executive arm of government and the judiciary. The swiftness with which the Buhari government, notorious for its legendary slowness on key issues of national development, has approached the Onnoghen case in total disregard for the rule of law and constitutionalism, analysts say, smacks of clear desperation to achieve certain outcomes ahead of the February poll. Coming just before the swearingin of chairmen and members of Election Petition Tribunal and the hearing of election-related cases, Onnoghen’s suspension leaves room for suspicion of foul play as the results of the February 16 presidential and parliamentary elections may be contested in the Supreme Court, in a country with a history of vote rigging and results being disputed in the courts.

•Continues online at www.businessday.ng

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

FRANK UZUEBUNAM & HARRISON EDEH

Nigerian government accuses media of bias in Onnoghen’s case coverage ONYINYE NWACHUKWU

… says media avoid their agenda-setting role

igerian government has accused the local media of bias in the coverage of the case of the suspended Chief Justice of Nigeria, Justice Walter Onnoghen. Minister of information and culture, Lai Mohammed, said at press conference in Abuja Monday that the media had taken sides against the administration of President Muhammadu Buhari. Onnoghen is being tried at the Code of Conduct Tribunal (CCT) over his alleged failure to declare his domiciliary account details. Last Friday, President Buhari suspended him from office, citing an order from the CCT, and announced his replacement with Justice Tanko Mohammed as acting CJN. Both Onnoghen’s trial at

the CCT and his subsequent suspension by the President have been condemned by members of the legal profession, human rights activists and part of the local media, for not following the constitutional provision for dealing with an erring judicial officer. The information minister said it was regrettable that the media, which according to him, ought to have led the discourse, had not done so, choosing rather to take sides. “Several newspapers have written editorials on this issue. Some newspapers have employed rather crude and obnoxious language to push forth their opinions, while others have been more tempered. But curiously, none has written from a perspective that shows that they understand the big picture,” he said.

Mohammed said such a widely held public opinion on the matter encouraged by the media “amounts to irresponsible extrapolation to say that the suspension of Justice Onnoghen is the onset of dictatorship; his suspension is not about the forthcoming elections, nor a signal to the beginning of dictatorship,” he said. Onneghen’s suspension came barely 20 days to the presidential election in Africa’s most populous nation and a day before he was scheduled to inaugurate members of Election Tribunals, which will hear appeal cases arising from the elections scheduled to hold between February and March. Inauguration of the Tribunals was performed by the acting CJN Mohammed, a day after he was sworn in. The nearness of the suspension to the elections fuelled

speculations of possible connection between the two in a nation noted for recurring electoral violence. The minister said he called the press conference in the nation’s capital “to set the records straight and redirect the discourse.” He said that contrary to what the “opposition and their ilk have been saying, this is not about the forthcoming elections, neither does the suspension of the CJN signal the beginning of dictatorship.” He pointed out that President Buhari was an avowed democrat, a quality, which he said the Nigerian leader “has proven time and time again.” “This Administration stands firm on the rule of law,” he claimed, and of course in obvious disagreement with his media audience present.

FG blacklists AMCON obligors, to recover over N5trn debt ONYNYE NWACHUKWU, Abuja

ederal Government at the weekend raised concerns on the over N5 trillion owed the Assets Management Corporation of Nigeria (AMCON) and has vowed to deal with those debtors. Finance minister, Zainab Ahmed, who raised the concerns, said the government would not right off those debts of AMCON obligors, but would withhold any payments due them and as well ensure not to have any more dealings with them until they repay those monies. Ahmed said the hard decision “is because AMCON’s debts sit on the government’s balance sheet with Central

35 NEWS

BUSINESS DAY

Kachikwu says APPO considering $2bn fund to interlink African petroleum markets

L-R: Joe Orokpo, representing Chief of Defence Staff; Theophilus Danjuma, special guest, his wife, Daisy Danjuma, and Ituah Olajide Ighodalo, senior pastor, Trinity House, at the Nigeria Armed Forces thanks giving service in Lagos.

@Businessdayng

Bank of Nigeria (CBN). “It must be emphasised that government would not deal with debtors that have failed to honour their obligations with AMCON. Payments due to some of these obligors will be put under lien until they enter into a resolution agreement with AMCON,” she said in Abuja while inaugurating the newly re-constituted AMCON board. AMCON has only been able to repay just over N1 trillion out of its total debt obligation to the CBN currently in excess of N5 trillion since its creation in 2010. “It is evident that the Federal Government cannot afford to write off this debt in the short term, hence, our moral obligation to pursue obligors

and recover the debts owed,” the minister said. The minister said she had “been briefed on some of the challenges facing the Corporation, which include obligors resorting to all manner of tactics to avoid honouring their obligations. While some are still enjoying government patronage, others are using the judiciary and adopting legal technicalities to stall recovery.” AMCON has been able to recover only over N1 trillion since inception to 2018 yearend, out of the recovered sum, cash accounted for 60 percent while non-cash assets such as properties and equity securities accounted for the balance of 40 percent. The Corporation has acquired over 12,000 non-

performing loans worth approximately N3.7 trillion from 22 commercial banks; injected N22 trillion as Financial Accommodation to 10 banks. As a result, about N3.66 trillion of depositors’ funds were protected and approximately 14,000 jobs were saved. Created with a 10-year lifespan, AMCON’s two major roles are to bail out banks through purchase of non-performing loans, and then recover the loans from the obligors. “It has successfully bailed out the banks, it is now at a stage where it must recover the debts. Failure to recover may result to serious consequences including recourse to tax payers’ money, which must be avoided,” she said.

igeria’s deputy minister of petroleum resources, Emmanuel Ibeh Kachikwu, on Monday revealed plans of the African Petroleum Producers Organisation’s (APPO) plans to pull together about $2 billion investment fund that would drive collaborative operations by the organisation in achieving maximum growth in the oil and gas sector in the continent. Kachikwu, who also doubles as the president, APPO, said the fund that would be pulled together by African Energy Investment Corporation was geared towards ensuring African countries manage huge opportunities associated with oil discoveries while also protecting the African oil and gas market. He spoke on the theme “Africa on the Global Stage: International Collaboration, Opportunities and the Future.” APPO is made up of 18-member oil producing countries, accounting for nearly 95 percent of Africa’s oil production and at least 13 percent of world production. ”We are presently looking at expanding the role of a particular financing body we are going to be calling the African Energy Investment Corporation. The whole idea is to mobilise between

$1 billion and $2 billion of resources to fund all the essentials necessary for us to properly collaborate,” the minister said in his opening remarks at the ongoing International Petroleum Summit in Abuja. The minister, who decried the inability of African countries to advance efficiently their oil and gas market for economic prosperity, said there was urgent need for African countries to collaborate and protect their own oil market through innovative driven researches and technology. “Today, most African countries are silos, everybody does their own thing; you build your own refineries, plants, gas turbines, etc. “If we could just cross the Rubicon and be able to extend hands of infrastructural relationship across Africa; build joint pipeline, plants and refineries; begin to protect the African market, we would have taken a huge step, not only in the development of Africa, but to the stabilisation of independent countries,” he said. According to Kachikwu, “Unless you get your policies right, unless you get your marketplace right; unless you get your collaborative mechanisms right and get your infrastructure right, you would face a huge amount of challenge in the competition for the very scarce resources and scarce capital.

Onnoghen’s suspension: Senate heads to court

enate has approached the Supreme Court to challenge the recent suspension of the Chief Justice of Nigeria (CJN), Justice Walter Onnoghen, by President Muhammadu Buhari. Yusuph Olaniyonu, special adviser on media and publicity to the President of the Senate, disclosed this in a statement in Abuja on Monday. The upper legislative chamber, according to Olaniyonu, is seeking interpretation of the apex court on whether Buhari’s action is within the ambit of the Nigerian Constitution. Reports had earlier indicated that the senators were planning to hold an emergency session over the suspension of the CJN on Tuesday. Consequently, the session had been called off having been rendered subjudice following the filing of the case, he said. The statement read: “Earlier today, the Senate filed a case in the highest

court of the land, the Supreme Court, seeking its interpretation on whether President Buhari acted within the provision of the constitution in his suspension of the Chief Justice of Nigeria (CJN), Hon. Justice Walter Nkannu Onnoghen. “Or whether the action of the President does amount to usurpation of the powers of the Senate as provided for in Section 292 of the constitution. “Following the filing of the case, the matter of the suspension of the CJN, which is the main issue for which the Senate had planned to reconvene tomorrow, has become subjudiced. “Therefore, in line with the standing rules of the Senate not to debate issues that are already pending before the court, the reconvening of the Senate tomorrow has been put off. “The previous adjournment of the Senate till February 19, 2019 stays,” he said.

36 BUSINESS DAY NEWS

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Incessant system collapse, cause of general blackout OLUSOLA BELLO

he current power outages experienced across Nigeria have been attributed to increasing waves of Power System Collapses and System Disturbances across the transmission value chain. The country’s National Transmission Grid, which has been experiencing challenges, was said to have collapsed completely last weekend with no allocation to the distribution companies for supply to customers. Officials of some of the distribution companies confirmed this when they said they could not supply electricity to their customers in any of their franchise areas. The grid had earlier collapsed on Friday at about 2pm leaving cities across the country including Yola, the capital of Adamawa State without supply. From Lagos, to Abuja, Yola, Ilorin,

Kaduna, Enugu, Owerri, Lokoja, to Port Harcourt, Benin, Zamfara, and others, it has been from one tale of woes of blackout and several hours of power outages, to another. The Transmission Company of Nigeria (TCN) however did not provide information on the development, although supply is gradually being restored across the country. The first collapse of the Grid in 2019 occurred on January 2 at about 10.20pm. A statement by the Federal Ministry of Power, Works and Housing, which supervises the TCN blamed the outage on a fire incident on the Escravos Lagos Pipeline System of the Nigerian Gas Processing and Transportation Company Limited. The fire incident was reported near Okada in Edo State with widespread blackout across the country as the pipeline, which supplies gas to six thermal pow-

er plants was shutdown. The Grid had also collapsed on December 21, 2018. The incident, which was captured in data from the Federal Ministry of Power, Works and Housing, showed that it was the first incident on the Grid in about three months. There were a total of 12 incidents of Grid collapse in 2018. These were the five incidents in January of that year, one each in February, June, July and December. Two were reported in September while the only partial collapse was recorded in April. When BusinessDay called on the TCN, the spokesperson, Ndidi Mba, said the problems could be a local one and not nationwide. But some of the Discos that spoke with BusinessDay blamed the situation on current load shedding they embarked on. Some of the industry operators that spoke to

BusinessDay identified the challenges bedevilling the Nigerian power sector value chain to include exchange rate volatility, investors fatigue, tariff shortfall, market shortfalls, and fiscal in discipline. Others are weak governance structure, huge settlement crises resulting in dearth of market liquidity, huge metering gaps and a ratio of 5% Universal Access to power base on a global benchmark of 1,000 megawatts/one million population. They said that’s the Aggregate of Technical, Commercial And Collections loses in the year 2011 & 2012 was less than 40% compared to what is obtained in January, 2019. “The market return on Investment in the Nigerian power sector is 25% Profit and 75% loses. This is based ATC&C LOSSES of 75% or less than 30%, percent market settlement”.

@Businessdayng

Tuesday 29 January 2019

FG begins refund of N1.3trn to NDDC as new CEO makes case for Buhari IGNATIUS CHUKWU

ederal Government is said to have started refund of the shortfalls owed to the Niger Delta Development Commission (NDDC) over the years amounting to about N1.3 trillion. The amount had pitched the youths and traditional fathers of the oil region against the FG since the days of Olusegun Obasanjo as president. Obasanjo had sparred the National Assembly over signing of the NDDC Act 2000 until it was passed by overriding votes of the National Assembly. Obasanjo however seemed to hit back by making the Federal Government remit whatever pleased him and other statutory contributors were short-paying too. By 2014, it amounted to about N900 billion and shot to N1.3 trillion later. Now, the acting managing director of the NDDC, Nelson Brambaifa, says refund has started under President Muhammadu Buhari, who

he says loves the Niger Delta people. The acting MD reiterated that President Buhari had for the first time since the establishment of the NDDC, ensured that the Federal Government started to meet its statutory financial obligations to the Commission in full. He said President Buhari also ensured that all other statutory contributors to the funding of NDDC met their obligations, noting that the President also worked to restore peace and security in the region by tackling all grievances of the people. He commended President Buhari for demonstrating an enduring love for the people of the Niger Delta region. The acting MD, who spoke during the inaugural meeting of the new management, the directors and staff of the NDDC, at the Commission’s headquarters in Port Harcourt, noted that the Federal Government had “indeed begun refunding over N1.3 Trillion owed the Commission since inception.”

Emotan Gardens: Edo set to handover first set of housing units to occupants

T L-R: Sunday Gbenjo, president, Entrepreneurs’ Organisation (EO), Lagos; Catherine Buckingham, manager, global membership development, EO; Safa Shareef, regional director, Middle East, Pakistan and Africa (MEPA), EO, and Lere Baale, president-elect, EO, Lagos, at the reception for EO global executives in Lagos.

he Edo State government says all is set for the handover of the first set of housing units at Emotan Gardens to the beneficiaries as promised by the governor, Godwin Obaseki. Executive chairman, Edo Development and Property Development Agency (EDPA), Isoken Omo, disclosed this in an interview with journalists, noting that the agency and its joint-venture partner, Mixta Nigeria, were working round the clock to deliver on the project. Governor Obaseki will

soon hand over the first set of housing units to some civil servants, including the Head Teacher of Emotan Primary School, Noragbon Osaru, in redemption of his pledge to them, and as a demonstration of the fact that the houses are indeed for the people, Omo said. “We are excited that the governor will be handing over the first set of houses to some of the people he has promised housing units in the estate. With this, those who are up-todate on their subscription are good to move in,” she said.

Ondo records 50 Lassa fever cases, seeks aids to curb epidemic UBA, Japan Trade Office collaborate to promote MSMEs in Africa YOMI AYELESO, Akure

oing by increasing cases of deadly hemorrhagic fever, popularly known as Lassa fever, in Ondo State and its environs, the Ondo State government has urged relevant stakeholders within and outside the country to join hands with the government in tackling the deadly fever in the state. Reports have it that about 50 cases of the disease had been recorded in the last few weeks in the state, which have caused the residents to be living in fear. BusinessDay gathers that the cases were re-

corded in Owo and Akoko areas of the state, while many health personnel are currently having tough time at the Federal Medical Centre in Owo where larger cases of Lassa fever were recorded. Wahab Adegbenro, commissioner for health, who sought this assistance at an emergency stakeholders meeting held in Akure on Monday, was of the opinion that Lassa fever was now endemic in the state and this called for serious combined effort of stakeholders as the state cannot bear the burden alone. According to Adegbenro, the treatment of a Lassa fever patient costs at least N1.2 million, which is be-

yond what the state government alone could handle, considering the number of people infected. He called on chairmen of affected local government areas, Security Agencies, Development Partners and other stakeholders to brainstorm and come up with strategies to tackle it and put it permanently at bay. The health commissioner, who disclosed that the Emergency Operating Centre (EOC) had been inaugurated and an Epidemiologist appointed, just as he commended the National Centre for Disease Control and other development partners for their efforts at putting the outbreak under control.

SEYI JOHN SALAU

nited Bank for Africa (UBA) plc has indicated its readiness to support the Japanese government in its drive to promote Small and Medium Scale Enterprises (SMEs) across Africa. Chairman, UBA Group, Tony Elumelu, indicated this on Monday, when the members of the Japan External Trade Organisation (JETRO), led by its CEO, Hiroyuki Ishige, were hosted at a cocktail at the UBA House, in Lagos, Nigeria. Elumelu, who welcomed the guests, noted that the deliberations had earlier begun in Davos, Switzerland, adding that like UBA,

JETRO shared the passion for transforming lives and helping to build businesses and trade across the world. According to Elumelu, “When global leaders visit a country, they bring global attention. These investors who came from Davos have seen Nigeria as a business destination and have come to the country for the first time to visit us and see how things work here. The fact is that we all share the same passion to help transform lives and businesses around the world.” Continuing, he said to the Japanese delegation, “We are aware of the various investments you have made recently to develop Africa and African businesses and this is what we also stand

for at UBA, developing enterprises across the African continent. We believe that this visit will mark significant milestones and progress as we work towards empowering the youths and small and medium scale businesses.” He stated that collaborations and partnerships such as these will help towards employment creation, poverty alleviation and building sustainable businesses that contribute towards economic growth. Ishige, who was full of praises for the bank’s management, noted that he found Nigeria very interesting with many wonderful opportunities for investment.

Tuesday 29 January 2019

BUSINESS DAY

38 BUSINESS DAY NEWS

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Onnoghen: Agbakoba petitions NJC, calls for immediate removal of acting CJN INIOBONG IWOK

… as NBA boycotts courts for 2 days

uman rights lawyer, Olisa Agbakoba, a senior advocate of Nigeria (SAN), has petitioned the National Judiciary Commission (NJC) over the suspension of Justice Walter Onnoghen as the Chief Justice of Nigeria (CJN) and the subsequent appointment of Justice Tanko Muhammed as acting CJN by President Muhammadu Buhari. Onnoghen is accused of not fully declaring his assets after becoming the CJN, but President Buhari last Friday announced his suspension from office and the appointment of Justice Muhammed, citing orders from the Code of Conduct Tribunal (CCT), where Onnoghen was facing trial. The suspension was how-

ever against an order by the Court of Appeal, which asked for a suspension of the trial at the CCT, to enable it decide on a suit by Onnoghen challenging the case. The suspension by Buhari, deemed unconstitutional by many lawyers, has generated criticism and widespread outcry from Nigerians who have called for Onnoghen’s immediate reinstatement. Agbakoba, in a petition, a copy sent to journalists on Monday, described the appointment of Muhammed as a violation of relevant sections of the Nigerian Constitution. He further berated Justice Muhammed for presenting himself for swearing-in for the position of CJN, in spite of being aware of the law and having been a member of NJC panel that removed Jus-

tice Obisike Orji of the Abia State High Court. He urged the NJC to act swiftly and remove Justice Mohammed from office as the Chief Justice of the Supreme Court on grounds of gross misconduct. According to Agbakoba, “On 25th of January 2019 President Mohammadu Buhari, pursuant to an exparte order of the Code of the Conduct Tribunal purportedly suspended the Chief Justice of Nigeria, Honourable Justice Walter Samuel Nkanu Onnoghen and purportedly swore in Hon. Justice Tanko Mohammed as the Acting Chief Justice of Nigeria. “The Constitution is clear about the procedure for suspending or removing the Chief Justice of Nigeria. The Chief Justice of Nigeria can only be removed on the recommendation of the NJC.

Section 153 (1), Paragraph 21 (a) of the 3rd Schedule and Section 292 (1) (a) (i) of the Constitution of the Federal Republic of Nigeria 1999and the Supreme Court decision in Elelu-Habeeb v AGF (2012) 40 WRN 1.” He argued, “Justice Tanko Mohammed is fully aware of the state of law, yet presented himself to be sworn in by the President. Incidentally, Justice Tanko Mohammed was a member of the NJC panel that removed Justice Obisike Orji of the Abia state High Court for accepting to be sworn in as Chief Judge by the Governor of Abia state without the recommendation of the NJC.” The SAN noted that: “It is a matter of regret that Justice Tanko Mohammed who participated in this process will lend himself to this constitutional infraction.”

L-R: Olusegun Omosakin, head of research, Nigerian Economic Summit Group (NESG); Onyeche Tifase, CEO, Siemens/board member, NESG; Asue Ighodalo, chairman, NESG; Wonu Adetayo, board member, NESG, and Doyin Salami, head, board committee on research, NESG, during the presentation of the NESG Macroeconomic Outlook Report 2019 in Lagos, yesterday.

@Businessdayng

Tuesday 29 January 2019

Budget: Lagos lawmakers threaten Ambode with impeachment … give him one-week to appear before House JOSHUA BASSEY

he fate of Governor Akinwunmi Ambode of Lagos State seems to hang in the balance as the Lagos State House of Assembly on Monday issued an impeachment threat on him over allegation of ‘misconduct,’ part of which concerns the state 2019 budget. The lawmakers at its plenary on Monday evening accused the governor of committing atrocities bordering on spending budget that had not been laid before the House of Assembly. Out of the 34 lawmakers who spoke at the plenary, 28 of them called for the impeachment of the governor, while six others called on the governor to resign. Also, the lawmakers, through a voice vote, stood for the impeachment of the governor. Mudashiru Obasa, speaker of Assembly, said there was need for the House to give Ambode the last chance to appear before the lawmakers and explain the allegations and infractions levelled against him. He said the Assembly would give the governor one week to appear before it to explain his own side of the story, or face impeachment. Obasa, therefore, asked the lawmaker who still wanted the governor to be impeached to start gathering signatures. The lawmakers, therefore, agreed to summon the governor, the commissioners for finance, economic planning and budget, and the attorney

general of the state to appear at their meeting next Monday. There has been no love lust between Ambode and the lawmakers since the October 2, 2018, APC governorship primaries Ambode lost to Babajide Sanwo-Olu. The party leadership in Lagos had been angry with Ambode for contesting the primaries in the first place against all entreaties to step down for Sanwo-Olu. The frosty relation had been aggravated by the non-presentation of 2019 appropriation, leading to accusation and counteraccusation between the two arms of government. Recall that an attempt by Ambode to present the N852.317 billion 2019 budget last week was frustrated by the lawmakers who said they were not ready yet. The executive said last week Monday it was ready for the budget presentation while the legislature on the other hand turned back State House journalists who had gone to the House of Assembly to cover the proposed budget presentation, saying they were holding a private meeting and not ready yet. The executive had also four weeks ago said the contents of the 2019 budget had been sent to the House since December 2018. The lawmakers had responded swiftly, saying the governor sent the budget at a time they were on recess and demanded that Governor Ambode come personally to lay the budget before the House as required by law.

Lagos, NIWA in talks to end rivalry on inland waterways Protest rocks NDDC over handover, tenure elongation JOSHUA BASSEY

agos State government and the National Inland Waterways Authority (NIWA) on Monday expressed readiness to go into talks to facilitate amicable resolution of the age-long tussle between the federal agency and the Lagos State Inland Waterways Authority (LASWA) over regulation and control of the inland waterways. The state governor, Akinwunmi Ambode, who said this while receiving NIWA’s managing director, Olorunnimbe Mamora, and top management staff of the agency on a courtesy visit at Lagos House in Alausa, Ikeja, said putting the perennial conflict between NIWA

and LASWA was the most patriotic thing to do, and that it was also in the best interest of all, especially the economic prosperity of the people. He said without prejudice to the matter currently before the Supreme Court on the issue, the state government nonetheless was ready to implement strategies to engender peaceful resolution of the grey areas and points of conflict in the overall interest of the people. The governor said it was particularly instructive and beneficial that NIWA was being headed at this particular point in time by Mamora, just as he expressed optimism that the development would translate to the end of hostilities that had been

going on for decades between the federal agency and LASWA. According to Ambode, “We are doing this not just for ourselves; we are doing it for Nigeria and Lagos. I believe strongly that the appointment of Senator Mamora is divine and even prior to his assumption as MD of NIWA and ever since he has taken over, there has not been any major complaints from the controversy between the state government and NIWA, and we are very happy for this. “Let me reiterate here that I give my total support for the amicable resolution of the issue irrespective of the legal tussle that we have been having over the decades and we also respect the rule of law.”

MIKE ABANG, Calabar

assive protest rocked the Niger Delta Development Commission (NDDC) last weekend as protesters took to the streets with placards, dancing and singing solidarity songs. They are protesting the transfer of power to the executive director, finance and administration, Mene Derek, by Nsima Udo Ekere, the All Progressives Congress (APC) governorship candidate for Akwa Ibom State and the managing director/CEO. The protest was organised by a coalition of groups, including Niger Delta Front, South-South Youths and other organisations. They expressed disappointment that Ekere and

his backers only seem to be interested in perpetuating themselves in power rather than the development of the region. “The action is capable of jeopardising development of the region,” according to them. Leader of the Niger Delta Front, John Harry, who addressed journalists in Port Harcourt, said the leaders and youths decided on the protest to stop the handing over and plan to extend the tenure of the current board and abuse of office. He called on the National Assembly to wield the big stick to stop the crisis in the commission by dissolving the NDDC board. He also urged President Muhammadu Buhari to use his position to maintain peace in the region by urgently ap-

pointing a sole administrator to oversee the management of the commission. “The handing over is unacceptable. It is illegal. Cross River and Akwa Ibom states have completed there four years term each as chairman and managing director of the commission,” he said. He pointed out that the present board was officially appointed on November 4, 2016, to complete the remainder of term of the previous board in line with the provisions of the NDDC Act. The present NDDC board tenure of Ndoma Egba and others elapsed on October 31, 2018, in line with the terms of their appointment and the law establishing NDDC, which clearly stated that they were to complete their respective state’s tenures.

Tuesday 29 January 2019

www.businessday.ng

Alleged $3m bribe: Money offered Lawan was given to me by DSS - Otedola FELIX OMOHOMHION, Abuja

emi Otedola, a prosecution witness in the trial of former member, House of Representatives, Farouk Lawan, over bribery allegations, told an FCT High Court sitting in Apo, that the $500,000 he offered Lawan was from the coffers of the Department of State Service (DSS). Otedola, responding to a question by the defence’s counsel, Mike Ozekhome, said the money was given to him by the DSS after he wrote a petition against Lawan that he demanded a $3 million bribe from him to exonerate his oil company from the subsidy scam. Otedola, under cross examination, explained that the $500,000 formed part payment of the $3 million Lawan demanded, saying the money was given under the supervision

of the DSS. Explaining further, the CEO of Zenon Oil said he petitioned the DSS immediately Lawan demanded the bribe. “Lawan said he was going to exonerate my company after giving him the money,” Otedola told the court. After informing the DSS, according to Otedola, security cameras were mounted in his living room to capture the exchange of money between him and the defendant. Asked if he had the video of the meeting, he said it was in the possession of the DSS, as he gave Lawan the $500,000 in two tranches of $250,000 each. When reminded by Ozekhome that the best time “to catch a thief is when the operation is ongoing,” Otedola said he did not know why the DSS failed to arrest Lawal at that moment.

www.facebook.com/businessdayng

oalition of civil society for peaceful election in Kwara State has expressed delight at a recent statement issued by both the UK and US missions in Abuja. In a statement issued to journalists in Ilorin by Musa Aliyu, team leader of the coalition, gave a strong warning to politicians and their supporters on the need to maintain peace before, during and after the forthcoming elections, saying, “Sanctions await any politician that instigate violence in their domain.” The statement read: “We want to align with the above positions. But, we will like to add that violence is a single destroyer of democratic processes and ethos. And that above sanctions should also be extended as thus: Any politician with links to political violence should be investigated and prosecuted according to the law of the land. “If there are cases of death and murder, such politician should be taken to international court of justice for crime against humanity. Special Court should be set up to fast track trial of people linked with political violence. “A part from travel ban, assets and investment of politician involved in political violence should be confiscated, sold and proceeds used to compensate victims of such violence.

has commenced capacity building for Ministries, Department and Agencies (MDAs) to provide investors with a seamless access to government data to further improve the ease of doing business in the state. Senior special assistant to the Governor on Investment Promotion, Kelvin Uwaibi, says the initiative is part of the state government’s vision to improve the ease of doing business by providing a one-stop portal for investors to access government information relating to their investment. He says Edo will host the Nigeria Investment Certification Programme for State (NICPS) on Tuesday, January 29, to galvanise stakeholders in various MDAs to respond effectively to enquiries on investment. In an interview with journalists in Benin City, Uwaibi notes that the stakeholders’ meeting between the MDAs and the Investment Promotion Office will focus on certification to en-

@Businessdayng

39 NEWS

BUSINESS DAY

‘Emergence of PSBs threatens Nigeria’s banking industry’ … increasing competition from FinTechs, non-bank companies BUNMI BAILEY

he recently introduced Payment Service Banks (PSBs) by the Central Bank of Nigeria (CBN) to facilitate transactions in remittance services, micro savings and withdrawal services in rural areas could disrupt the local banking industry, according to GTBank in newly released report. The report titled “Nigeria: Macro-economic and Banking sector Themes for 2019,” says the PSBs are prohibited from providing lending services and participating in the Foreign Exchange market, but points out that they will be able to offer other services, “thus competing with commercial banks for the pool of earnings and also ensure that the battle for retail is won using digital and mobile strategy and this could negatively impact on

Civil society lauds US, Ease of Doing Business: Edo streamlines UK submission, warns policies, initiatives on open data politicians against violence do State government sure that civil servants are SIKIRAT SHEHU, Ilorin

@businessDayNG

able to respond to enquiries from local and foreign investors, and get them to invest in the state. According to Uwaibi, “For example, what are the opportunities available in the state? We want civil servants to be able to sell the state in a structured manner to investors and show that we are ready for investment. They should also show that we have opportunities in terms of buildings and sites that the investors can also leverage on in the state.” He says the process of providing investors with access to data on their investments “started few months ago with the MDAs. We want the MDAs to be able to provide answers to investors’ enquiries accurately when they are approached and there should be that synergy between the Investment Promotion Office and the MDAs so that there is no miscommunication in terms of what we as a state are offering to investors.”

the banking industry.” Ayodeji Ebo, MD, Afrinvest Securities Limited, agrees with the report, pointing out that the introduction of PSBs licence will further pressure the deposits of the banks in addition to the continued pressure from public awareness to Treasury Bills investments. The CBN on October 5, 2018, released an exposure draft guideline in which it proposed the licensing of PSBs with the aim of deepening financial inclusion in a country where only half of its total adult population has access to the financial sector. PSBs is a payment service initiative proposed by CBN in which Banking agents, Mobile Money Operators (MMOs), Retail chains (Supermarkets), telecoms companies who are able to present an initial capital of N5 billion will

be given licence to operate under the structures and guideline specified by the apex bank, with the motive but not limited to ensuring access to financial services for the unbanked rural segments of the society. On the positive side, the report stated that it will be beneficial for customers of the banks as it will improve customer service, increase product and service offerings, enhance financial inclusion, and drive the adoption of digitisation of banking services. According to the World Bank Fintech Database 2017, financial inclusion in Nigeria declined in the last four years to 39.4 percent in 2017 from 44.2 percent in 2014 while sub-Saharan countries on average gained across the region as the number of bankable people increased to 42.6 percent in 2017 from 34.2 percent in

2014. Additionally, there is an expectation that there will be an increase in competition amongst banks to capture market share in the retail and micro or small business space over the course of 2019. “Financial Technology companies and other nonbank companies offering a wide range of financial services to the retail and Micro, Small and Medium Enterprises segments leveraging on technology will continue to create competition amongst the banks,” the report stated. In order to avoid this threat to the banking sector, Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, advised that collaboration with the Fintech companies will likely preserve and expand the market share of banks.

BUSINESS DAY

Tuesday 29 January 2019

BUSINESS DAY

Tuesday 29 January 2019

BUSINESS DAY

Tuesday 29 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Is there method to Giuliani’s mad defence of Trump? Bewildering statements by US president’s lawyer stir speculation even among his friends Joshua Chaffin

riends and foes of Rudy Giuliani ponder a similar question these days: is there method to the seeming madness of his defence of Donald Trump? The debate has been raging since Mr Giuliani joined Mr Trump’s legal team last April and then embarked on a series of bewildering public appearances that, in legal terms, can charitably be described as unconventional. One-time admirers wince each time he takes to cable television. Even longtime opponents express a kind of sadness at Mr Giuliani — the fearless prosecutor who took down the mafia, the commanding mayor who cleaned up a crime-ridden New York and the hero of 9/11 — becoming an object of ridicule in some quarters. “I take no joy,” said Hank Sheinkopf, a Democratic political strategist who advised former president Bill Clinton, among others. “This is a guy who broke up the mafia! You’re talking about a serious, serious person . . . What he looks like now is a shell of himself talking gibberish.” The president’s legal troubles appear to have entered a critical phase with the arrest on Friday of his longtime confidant Roger Stone for allegedly lying to congressional investigators probing Russia’s meddling in the US election. Mr Stone has denied wrongdoing and dismissed the investigation as a witch hunt. As the pressure has intensified, Mr Giuliani’s response has startled veteran defence lawyers. Earlier this month he opened the door to possible collusion between the Trump campaign

and Russia, telling CNN in a tetchy exchange: “I never said there was no collusion!” — denying only that the president was involved. Then a few days later, he claimed Mr Trump had told him that negotiations to develop a Trump Tower in Moscow continued “from the day I announced [my campaign] to the day I won”. That contradicted the Trump team’s longstanding insistence the talks had ended months earlier, drawing a clear a line between candidate Trump and the business ties to Russia that are a central focus of special counsel Robert Mueller. As jaws dropped, Mr Giuliani the next day tried to backtrack, calling his comments “hypothetical”. Months earlier, he appeared to implicate his client in a campaign finance violation when he volunteered to Fox News’ Sean Hannity that Mr Trump had reimbursed his personal lawyer, Michael Cohen, for a $130,000 payment to adult film actress Stormy Daniels that, prosecutors say, was meant to buy her silence during the campaign. Mr Giuliani even called the pay-off “a very regular thing for lawyers to do” — to the chagrin of Greenberg Traurig, the law firm that employed him until he joined the Trump defence. He has also spoken, tantalisingly, of the existence of “tapes” that might prove Mr Trump’s innocence — before rowing back — and blasted FBI agents he once championed as “stormtroopers”. “I just don’t see how what he’s doing is helping,” said Roland Riopelle, a New York criminal defence lawyer. The standard operating procedure for defence attorneys in such matters, he and others agreed, is to stick to the facts, avoid speculation and refrain from any statements that might antagonise

Hedge fund premier league fared better than rivals in 2018 The top 20 managers have delivered nearly half the sector’s long-term gains

Lindsay Fortado

he all-time top 20 best-performing hedge fund managers made $23.2bn for their investors last year, while the rest of the industry lost $64.2bn in a tumultuous period for financial markets. Those top managers have made nearly half of the industry’s gains, after fees have been deducted, since it began, according to new research by LCH Investments, the fund of hedge funds run by the Edmond de Rothschild group. They estimate the industry has made $1.1tn since inception, of which $500.3bn was made by the top 20, despite them only managing 17.9 per cent of the assets. The figures were compiled as part of LCH’s annual list of the all-time best performers. Hedge funds suffered one of their worst years since the financial crisis last year as market volatility in the fourth quarter wrongfooted many managers. Hedge funds ended the year down 3.42 per cent, the worst performance since 2008, with over half posting negative returns, according to the data provider Preqin. “In contrast to the losses made by hedge funds overall, the top 20 managers actually made some money for their investors in 2018,” said Rick Sopher, chairman of LCH Investments. “This is an impressive performance. Most managers in the top 20 either managed to stay

out of trouble when equity markets fell sharply toward year end, or had an investment approach that was not linked to the direction of equity markets.” One of the biggest changes to the annual list was the first-time appearance of Renaissance Technologies, which came in at number 17 after making $4.7bn for its investors after fees in 2018 — second only in annual return to Bridgewater, the topranked fund, which made $8.1bn. Chart showing strong performance of top 20 hedgefunds in 2018; biggest gain posted by Bridgewater with gains of $8.1bn Two Sigma, which, like Renaissance Technologies, trades using computer algorithms, re-joined the list in 19th spot. They took the place of Egerton Capital, run by John Armitage, and Sir Chris Hohn’s TCI, both of which invest in equities and were newcomers to the list last year. The top three managers — Bridgewater, Soros Fund Management and Citadel — held steady from last year. Lone Pine, Steve Mandel’s fund, was one of the biggest movers, dropping from fourth to seventh place. Not all of the top 20 made money last year. Lone Pine, Andreas Halvorsen’s Viking, David Tepper’s Appaloosa, Louis Moore Bacon’s Moore Capital, John Paulson’s Paulson & Co and King Street Capital all lost money in 2018, according to LCH.

Rudy Giuliani speaks at the Republican National Convention in 2016. He joined Donald Trump’s legal team last April © Getty

prosecutors. One school of thought is that Mr Giuliani is trying to soften the blow for any eventual legal findings against Mr Trump by first airing them on television — either to lessen their sting or purposefully muddy the waters. Having concluded that a sitting president cannot be indicted, this thinking goes, Mr Giuliani is not mounting a classic legal defence but instead putting up a political one — rallying Mr Trump’s supporters in the hope that their electoral support will help head off a possible impeachment. Speaking to The New Yorker magazine, Mr Giuliani hinted at such a strategy, saying of Mr Trump’s case: “I thought legally it was getting defended very well. I thought publicly it was not getting defended very well.”

Even so, Mr Riopelle argued, Mr Giuliani had bungled the job by making so many conflicting statements that his own credibility was now shredded. A long-serving city official quipped that a cunning Mr Giuliani was either trying to “make [Trump] look like the sane one” or “tie up the news cycle so they don’t report on other things”. As Mr Giuliani, now in the midst of his third divorce, has appeared more erratic, whispers about his sessions at New York cigar bars have grown more insistent. Speaking to Politico last year, he denied imbibing before his media appearances or being anything more than a social drinker. “It’s extremely insulting,” he said. “There’s no proof at all that I take too much alcohol.” Mr Giuliani did not return a call for comment.

Some dismiss claims over his drinking as reckless speculation. They focus instead on the possibility that Mr Trump, who is known to keep his own counsel, is hindering his lawyer by refusing to share all the details of his case. “I always tell my clients: the last thing you need is a lawyer who doesn’t know all the facts. It can cause a lot of trouble,” said Michael Bachner, a New York defence lawyer and former prosecutor, adding: “I don’t believe he’s losing it . . . He’s a brilliant guy, a brilliant lawyer.” But others disagree. One former colleague pointed to Mr Giuliani’s age — he is 74 — and suggested that after growing wealthy in the private sector he no longer had the same hunger and discipline. “He’s less sharp than he was,” this person said.

China envoy to EU hits out at Huawei security ‘slander’

Ambassador warns that attacks on Chinese€tech group could hamper€new 5G mobile networks Michael Peel and Alex Barker

eijing’s envoy to the EU has launched a blistering attack on the “slander” and “discrimination” faced by Huawei and other Chinese companies in Europe, warning that efforts to exclude China from 5G mobile projects would be self-defeating. Ambassador Zhang Ming warned that any attempts to curb the involvement of Chinese technology in upcoming European projects for high-speed 5G mobile networks would risk “serious consequences” for global economic and scientific co-operation. The senior diplomat’s remarks came in an interview in Brussels that highlighted growing tensions between Europe and China, but also areas of possible joint action in the face of rising US unilateralism. “It is not helpful to make slander, discrimination, pressure, coercion or speculation against anyone else,” Mr Zhang said of the cyber security concerns about Chinese companies that have deepened in Europe as the US has pressed for an increasingly tough line. “Now someone is sparing no effort to fabricate a security story about Huawei,” he said. “I do not think that this story has anything to do with

security.” Technology security is one of several areas of increasing friction between the EU and China as European countries push back against Beijing on aspects of trade, investment and competition policy. The EU is looking to toughen scrutiny and safeguards for Chinese technology companies amid fears of security risks because 5G could become deeply embedded in societies, through its use for applications ranging from road and rail management to controlling household devices. Concern has been stoked by warnings from countries such as the US, Japan and Australia, as well as cases in the EU, such as the spying charges levelled this month by Poland at a Huawei executive — whom the company then sacked for bringing it into disrepute. Vodafone said last week it would “pause” purchasing Huawei equipment for the core of its new 5G networks in Europe, and that it would hold talks with governments to “get the facts on the table”. Mr Zhang warned that global industrial, supply and value chains were “highly intertwined” in the 5G market — in which Huawei is a leading equipment maker— and so could not be “artificially and deliberately cut” by anyone.

To do so would be “very irresponsible”, he said, and might bring “serious consequences to the global economic and scientific co-operation.” Asked how China would react if EU countries went down a path it considered discriminatory, Mr Zhang said Beijing would seek dialogue and to appeal to the European commitment to the “rules-based global order”. He added: “But anyway, I don’t think that protectionism is a good way out. Co-operation is.” Even as tensions between Brussels and Beijing over security have risen, the nationalist policies of Donald Trump, the US president, are pushing the EU and China closer together in other areas, encouraging them to seek common cause in defence of multilateral institutions and accords, such as the Iran nuclear deal. Stressing that China’s interests were in a “united and strong Europe”, Mr Zhang called for Britain and the EU to handle Brexit in “a prudent way” with an orderly process that “minimised the impact on the global economy”. Mr Zhang denied that a hack of European diplomatic cables publicised in December had been perpetrated by a group linked to the People’s Liberation Army, as alleged by the cyber security company that exposed the breach. He said: “As our great friend said: fake news.”

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

NATIONAL NEWS

FT Caterpillar earnings hit by China slowdown

Nissan questioned by SEC after Carlos Ghosn charges in Japan Japanese carmaker says it is ‘cooperating fully’ with US regulator

Shares in machinery maker tumble as it projects disappointing earnings for 2019

Kana Inagaki

Peter Wells and Ed Crooks

aterpillar provided evidence on Monday of how the economic slowdown in China is hitting industrial companies with the bellwether equipment maker warning it expected no growth in sales in the country this year. With only a “modest” increase in worldwide sales now expected by the company, Caterpillar projected disappointing earnings for 2019, sending its shares sharply lower. The company also reported earnings that were at the bottom end of the company’s forecast for 2018 and fell short of Wall Street expectations for the fourth quarter. Shares in the company opened about 8 per cent lower at $125.98 on Monday. Although China represents only 5 to 10 per cent of Caterpillar’s revenues, the slowdown in sales there is very sharp after two years of rapid growth. It also highlights mounting concerns about the health of the country’s economy and particularly its industrial sector. Jim Umpleby, Caterpillar’s chief executive, said in statement: “Our outlook assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment.” Full-year profit in 2019 is expected to come in the range of $11.75 to $12.75 a share, which compares with a median forecast of $12.73, according to a survey of analysts by Thomson Reuters. The reduction in guidance for earnings for this year in part reflects higher expectations for the tax rate, as well as the slowdown in sales growth. In a presentation for investors, Caterpillar said it expected sales in China to be roughly flat this year compared to 2018. That would represent a sharp slowdown in a market that doubled in 2017 and grew 40 per cent last year. Andrew Bonfield, the company’s chief financial officer, said it was a “slowdown from a very rapid acceleration”. After customers bought a lot of equipment in the past two years, he said, it was to be expected that they would not need to replace it immediately. He said that demand in the North American market from the construction industry was still very strong, helped by a healthy economy and new pipelines being built by the oil and gas industry. Mr Bonfield added that the impact of US import tariffs on steel had been at the lower end of the company’s expectations, adding about $100m to its costs. Last year the company announced price increases of 1 to 4 per cent for its machinery, although Mr Bonfield acknowledged that posted price rises were not always realised in full. Total revenue rose 11 per cent from a year ago to $14.3bn in the three months ended December 31, with the company pointing to higher sales volumes for construction equipment as a key driver. This was the highest since the fourth quarter of 2013, but barely matched the median forecast among analysts.

Tuesday 29 January 2019

Facebook to make EU political parties register as advertisers Nick Clegg reveals plans to protect against electoral ‘fake news’ in first public appearance Mehreen Khan

acebook will force European political parties to register as advertisers in all EU member states as part of the technology group’s latest attempts to protect voters against disinformation campaigns ahead of pan-EU elections in May. In his first public appearance in his new role at the social media group, Nick Clegg announced Facebook’s plans to step up its attempts to fight against disinformation campaigns by setting up an electoral hub in Dublin and introducing new EU rules for political advertising. From March, Facebook will set up a European database of who places and pays for political advertising on the platform as part of its transparency efforts. The company has so far only set up the database for parties and other campaigners in the UK but will expand across the EU’s 27 member states. “We will require those wanting to run political and issue ads to be

authorised; and we will display a ‘paid for by’ disclaimer on those ads,” said Mr Clegg, who was hired as Facebook’s vice-president for communications late last year. These rules mean that pan-European political parties would need to register as advertisers in order to campaign across all 27 member states — and campaign by national electoral rules — in forthcoming elections. The database will cover political groups and also “issue” ads on topics such as immigration amid concerns that Eurosceptic forces will hijack May’s vote to spread “fake news”. Brussels policymakers have made protecting the EU’s elections against foreign interference and disinformation a key priority but has so far avoided regulating against “fake news”. Facebook has been working with Emmanuel Macron’s government about how to combat online hate speech as part of France’s attempt to draw up laws against the practice. Addressing a range of recent

controversies, including data privacy, regulation and elections, Mr Clegg said it was time for “humility from a very large company like Facebook” but also “honesty” from policymakers about the challenges posed to society by technology. “Facebook may be the poster child for data-driven businesses, but the questions that have been raised go far beyond one company”, said Mr Clegg. Mr Clegg, a former MEP and EU technocrat, warned European policymakers concerned about privacy rights not to put it at odds with “prosperity”. “We must avoid legitimate questions about data-driven businesses evolving into an outright rejection of data sharing and innovation.” He also criticised regulators’ focus on US tech groups. China, he said, “combines astonishing ingenuity with the ability to process data on a vast scale without the legal and regulatory constraints on privacy and data protection that we require on both sides of the Atlantic”.

Demand for business education rises in Africa Local and overseas schools are seizing growth — but the hurdles of cost and regional relevance remain Andrew Jack

hen Ilerioluwa Akinkugbe decided early in his career he wanted to specialise in marketing communications, he researched MBA courses in Africa and Europe as the most rapid way to advance. “I was based in Lagos and looking for an MBA closely tied to the industry there,” he says, explaining his decision to study at Lagos Business School. “I looked at Insead and Iese, but I was drawn to training in the market I wanted to play in: Nigeria and Africa.” If relevant expertise and local networks were important reasons for his final choice, funding was another: tuition fees at home in Nigeria, let alone living and other costs, were a fraction of those he would have incurred by going abroad. Akinkugbe’s experience is typical of a rising demand for business education from Africans, but also of constraints such as the cost and structure of courses at a growing number of local and international institutions. There is little doubt about the appetite for MBAs. Alongside established business schools in South Africa, the Maghreb, Nigeria and Kenya, there are newer providers such as the African Leadership University in Rwanda.

Leading business schools from outside Africa have been keen to capitalise on the interest. Duke Fuqua School of Business in the US has forged events, partnerships and executive education programmes, for instance. France’s HEC has established a regional office in Ivory Coast. China Europe International Business School (Ceibs) has been recruiting Africans to its programmes in Shanghai but has also set up an operation in Ghana. “The middle class is growing and is interested in international exposure,” says Mathew Tsamenyi, Ceibs’ executive director for Africa. Richard Higgs, a South African now working at German engineering group Siemens, attended Ceibs in Shanghai. Previously, he had studied accounting at the University of Stellenbosch in South Africa, and was inspired to develop expertise on China after being impressed with the country while backpacking on a career break. He also observed its companies expanding their presence in Africa. “There is so much Chinese influence in Johannesburg, so my goal in going to Ceibs was to build connections,” he says. “I’m still figuring out my longer-term career, but there’s definitely going to be some sort of links between China and Africa.” Higgs was able to cover his costs with a mixture of savings, Ceibs scholar-

ships and low-interest loans. For many others on the continent, costs remain prohibitively high. “There are two strata in Africa,” says Alejandro Lago, head of The Africa Initiative at Spanish business school Iese, which has supported the development of Lagos Business School, Strathmore Business School in Nairobi and MDE Business School in Abidjan, Ivory Coast. “The elite can afford education abroad and has done so since independence, but that is a small group,” he says. “Now we are seeing an uptake by the middle class who would like to go abroad but often lack the funds to do so.” Rose Wanjiku Muturi, a Kenyan, preferred to remain in her own country and study part-time at Strathmore both because it would be more affordable and she wished to continue working and earning while learning. She looked for an institution that offered efficient, high-quality training with motivated colleagues. “I wasn’t interested in a public university,” she says. “They get disrupted when the students or lecturers go on strike.” George Njenga, the founding dean of Strathmore, says: “Most of our students come from poor families. They have to juggle money, and find it hard to work, go abroad and leave their families behind unless they have scholarships to bring them along.”

issan said it had received an inquiry from the US Securities and Exchange Commission after the carmaker was charged in Japan for falsifying financial documents over executive pay. Sha re s i n Ni s s a n b r i e f l y dropped 2.7 per cent on the news as investors worried about the expanding scope of the investigations that have so far revolved around compensation that Nissan paid to its former chairman Carlos Ghosn. “We have received an inquiry from the SEC, and are co-operating fully,” the company said a in a brief statement on Monday, adding that it could not disclose any other details. The disclosure came after Bloomberg reported that the SEC was investigating whether Nissan accurately disclosed its executive pay in the US. The SEC was not immediately available for comment. The SEC inquiry came after Tokyo prosecutors charged Mr Ghosn earlier this month for understating his pay in company documents and abusing his position to transfer his trading losses to Nissan. The carmaker was also indicted on charges of falsifying executive pay. The investigation in Japan has focused on deferred compensation that Mr Ghosn was set to receive after retirement, totalling more than $80m from fiscal 2010 to fiscal 2017. Nissan and its alliance partner Mitsubishi Motors have also accused Mr Ghosn of receiving €7.8m in improper payments from a joint venture the two carmakers established in the Netherlands. Mr Ghosn, who remains behind bars since he was arrested on November 19, has denied all charges of financial misconduct. On his deferred compensation, Mr Ghosn has said there was no binding contract with Nissan to be paid a fixed amount that was not disclosed. Nissan has issued American Depositary Receipts, which trade in the US over-the-counter market regulated by the SEC. It shifted its ADRs to OTC in 2009, which removed certain requirements to file with the SEC. As a result, it stopped filing its annual report in the US from the fiscal year ending in March 2007. The investigation by Tokyo prosecutors has focused on Mr Ghosn’s pay from 2010 since that was the year when Japan introduced a new obligation that companies disclose the salaries of executives earning more than ¥100m ($915,000). Mr Ghosn resigned as chief executive and chairman of Nissan’s French partner Renault last week after his bail request was twice rejected by a Tokyo court. Renault’s own investigation has so far failed to find any wrongdoing but the French state, which owns 15 per cent of the carmaker, pushed for new management once it became clear that Mr Ghosn would be behind bars for the coming months.

Tuesday 29 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Margarita Louis-Dreyfus completes buyout of family members Billionaire’s trust now controls more than 95 per cent of agricultural commodity trader Emiko Terazono

argarita Louis-Dreyfus, the Russian billionaire who controls the agricultural commodity trader Louis Dreyfus Company, has completed a buyout of family members, bringing more than 95 per cent of the holding company under the ownership of her family trust. The move, which takes the family trust Akira’s stake of Louis Dreyfus Company Holdings up from 80 per cent to 96.2 per cent, will cement her control over the international trader founded in 1851 by Léopold Louis-Dreyfus.

“The buyout turns a page in the group’s history to a new and exciting chapter,” commented Ms Louis-Dreyfus. LDC is one of the leading crop traders in the world, buying and selling raw materials including grains, soyabeans, coffee and cotton. Ms Louis-Dreyfus had previously been at loggerheads with other members of the family who held minority shareholdings in the group. In November, after several years of legal wrangling, the two sides finally agreed on a value for the shares with Ms Louis-Dreyfus revealing that she had secured a loan to finance the buyout.

US stocks retreat as cautious investors await Fed Caterpillar slides after flagging ‘modest’ sales outlook for 2019 Hudson Lockett and Dave Shellock Overview all Street followed European bourses lower on Monday, as investors braced for a series of events including the Federal Reserve’s first policy meeting since the December turmoil in markets. Investors will be looking for signs that the US central bank is prepared to be patient in assessing the state of the US economy and whether to lift interest rates again. The S&P 500 was down 1 per cent at 2,637 in early trade, with the Dow Jones Industrial Average off 1.2 per cent and the Nasdaq Composite 1.3 per cent lower. Caterpillar shares were down 7.7 per cent after the industrial equipment group said it expected no growth in sales in China this year and only a “modest” increase worldwide. Apple, meanwhile, was down 2.8 per cent as caution set in ahead of its results, due out on Tuesday, while chipmaker Nvidia tumbled 17 per cent after it unexpectedly cut its fourth-quarter revenue forecast by half a billion dollars Across the Atlantic, the pan-European Stoxx 600 index was down 0.8 per cent, with the Xetra Dax in Frankfurt 0.5 per cent lower and London’s FTSE 100 down 0.9 per cent. Elsewhere in Asian equities, Tokyo’s Topix closed down 0.7 per cent, with utilities and financials both weakening. Japan Display’s shares finished down 4.8 per cent after the Apple supplier

responded to a Japanese media report on its yearly earnings expectations, acknowledging that the outlook for its current financial year was “harsh”. Hot topic Political developments drove some notable moves in the trading day, with shares of Hong Kong-listed Russian aluminium producer Rusal closing up 9.4 per cent after the US Treasury lifted sanctions on the company previously controlled by oligarch Oleg Deripaska. The oil market kept one eye on developments in Venezuela, a producer whose output has shrunk drastically over the past year as the country’s political and economic crisis takes its toll. Brent crude was off 2.5 per cent at $60.09 a barrel, while US marker West Texas Intermediate shed 3.1 per cent to $52.03. Australia became the latest country to join the US in backing Venezuelan opposition leader Juan Guaidó as the major oil-producing country’s interim president. Forex and fixed income It was a muted start to the week in the foreign exchange market, with the dollar index, which measures the greenback against a basket of peers, marginally higher at 95.86. Although softer, sterling held above the $1.31 mark as traders and investors await the UK parliament’s vote on Theresa May’s latest Brexit deal on Tuesday. There was little drama in the sovereign bond market, either. The yield on the 10-year Treasury was down 1 basis point at 2.74 per cent.

Margarita Louis-Dreyfus

China’s exporters are not waiting for a Trump trade deal

Firms taking countermeasures even as most expect Washington and Beijing to resolve dispute scoutAsia Research

inancial markets may be on tenterhooks as they await the outcome of US-China talks aimed at ratcheting down their trade dispute, but Chinese exporters are not waiting around for the result. Our survey of Chinese exporters reflects optimism that agreement can be reached, with 63 per cent of 204 respondents saying they expect the dispute to be resolved in the first half of this year. However, 9 per cent said the spat was here to stay, while followup interviews with companies that sell mostly to the US found widespread unease about the trajectory of bilateral relations, despite their confidence in a deal being done in the short term. “It’s getting harder to sell to Americans,” said the owner of a steel forging factory based in Jiangsu province, on the east coast. “This is going to be with us for a long time.” Liu He, President Xi Jinping’s chief economic adviser, is scheduled to visit Washington this week to add momentum to get a deal signed before the March 1 deadline when US tariffs are set to rise again. But recent reports suggest the two sides are struggling to find agreement on fundamental issues and the risk of failure is real. Although Chinese exports have been surprisingly resilient since the trade war began last year, companies

have begun to feel the pinch. Fourfifths of respondents who said the US was their biggest customer said the trade dispute was having a negative impact on their business, while 70 per cent said sales were flat or down on a year ago. Small firms, with revenues of Rmb400m ($59m) or less year, have been the hardest hit — none said their business had increased over the past year. In Yiwu, an export hub in Zhejiang province near Shanghai, Jiayin Sports Equipment reported a 35 per cent drop in US orders after tariffs rose to 25 per cent last November from just 3.8 per cent previously. The company relies on the US market for half of its sales. “We need a plan B if this trade war continues,” said a Jiayin official who asked not to be identified. Back from the brink After months without contact between the two sides, Presidents Donald Trump and Xi Jinping agreed a 90-day ceasefire in early December. Mr Trump has reportedly been alarmed at the impact the intensifying dispute has had on US stock markets, while Chinese household and corporate sentiment have proven vulnerable to threats of ever-higher US tariffs. Mr Trump last year threatened to impose tariffs on all Chinese goods entering the US if China does

not accept his demands for a more equitable trading relationship. If the two sides are unable to agree by the March 1 deadline, 10 per cent tariffs on $200bn of US imports from China are set to rise to 25 per cent, almost certainly triggering serious volatility for the global economy and financial markets. Wei Yanxin, who owns a factory making LED lights in Zhejiang, said his firm was able to shrug off the imposition of 10 per cent tariffs because of the huge cost advantage Chinese LED-manufacturers enjoy over their competitors. But a rise to 25 per cent would push his company into losses. “It would have a devastating impact on the whole industry,” he said. Even before the deadline, most respondents said their companies were taking steps to counter the impact of the dispute. More than 30 per cent of all respondents, and nearly 60 per cent of those who said the US was their biggest customer, said they were trying to sell into new markets. Jiayin is aiming to reduce its reliance on the US to 20 per cent of sales from 50 per cent and is looking to expand into Europe and south-east Asia. However, the US accounts for such a large chunk of Chinese business that there is concern that other markets will not be big enough to offset the impact of higher tariffs.

China sees 100 tech groups reach $1bn valuation in 2018 US stock futures lower as investors turn focus to earnings Sharp slowdown recorded in final quarter as investor sentiment turned Peter Wells

S futures were down on Monday as mounting concerns about Apple’s outlook and weak quarterly earnings today from global growth proxy Caterpillar set a dour tone heading into one of reporting season’s busiest weeks. Futures for the S&P 500 were down 0.5 per cent, while those for the Dow Jones Industrial Average and Nasdaq 100 were down 0.7 per cent. Concerns about Apple and peak demand for the iPhone were stoked after a supplier of its mobile displays, Japan Display, warned of a “harsh” earnings impact from the US-China trade war and a slowdown in the Chinese economy. That comes as investors brace for bad news in Apple’s latest quarterly results on Tuesday afternoon. Meanwhile, Caterpillar’s shares were knocked nearly 6 per cent in

pre-market trade after the earthmoving equipment maker flagged a “modest sales” outlook for 2019 and reported “lower demand” from China during its fourthquarter. The early setback for futures on Monday comes ahead of a bumper week for the market, with some of the biggest names in tech set to report, as well as the Federal Reserve’s first policy meeting of the year and, with some luck, the release of key US data including GDP and December jobs figures. Although stocks looked set to start the week on the back foot, US Treasuries were also weaker, with yields sitting slightly higher. The yield on the benchmark 10-year Treasury was up 0.6 basis points to 2.7566 per cent, while that on the policy-sensitive two-year was up 1.3 bps to 2.6128 per cent. The dollar was flat, with the DXY index was steady at 95.803.

Louise Lucas

lmost 100 tech companies reached a valuation of more than $1bn in China last year, led by ecommerce and videostreaming services, according to an annual ranking of the country’s top tech businesses by Hurun. Hurun, which is best known for compiling an annual rich list, said China now had 186 tech start-ups worth more than $1bn, led by the fintech Ant Financial, which is worth Rmb1,000bn ($148bn). The fastest growing start-ups include ByteDance, whose offerings include the Toutiao news feed and short video-streaming Douyin; Tencent-backed shortvideo app Kuaishou; and Meicai, an online platform for farmers selling vegetables. All three saw their valuations rise by 400 per cent in the past year. The fastest growing sectors, in terms of valuation, were internet

services, medical and health companies, and education. But Hurun’s data showed a sharp slowdown in the final quarter of last year, when just 11 companies saw their valuations hit the $1bn mark. That compared with 86 over the previous three quarters. Last year saw 24 Chinese tech initial public offerings, according to Hurun, but the weak performance of many of these companies on the public markets has soured investor sentiment. All but a handful of the listings in 2018 ended the year below their IPO price. Allied with deflated valuations and a reduction in financing, many start-ups are braced for a capital winter. “Valuations have to come down to a level which is more sensible,” said one capital markets lawyer, pointing to a number of “down rounds” valuing start-ups below their previous fundraising. “We’ve had a remarkable boom

in unicorns [companies worth more than $1bn] over the past year, no question,” said Rupert Hoogewerf, founder of Hurun. “But clearly, to find a new unicorn every four days is just unsustainable. No country in the world is doing that.” In the final quarter, he said, Hurun marked down valuations or eliminated six to eight companies that had been on the list, including ofo, the bike-sharing group that is facing bankruptcy. Sequoia led the ranks of backers, investing in 49 start-ups last year, up from 27 in 2017. Tencent and Alibaba, China’s acquisitive tech giants, also played a key role. Tencent invested in 30 this year, while Alibaba backed 17. The duo are favoured by startups, in large part because they are able to send traffic from their platforms, such as Tencent’s WeChat, which has more than 1bn users, to their apps.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 28 January 2019

ANALYSIS Saudi Arabia slashes exposure to Tesla amid share volatility

Move comes months after chief Elon Musk settled fraud charge over buyout claim mediately respond to a request Arash Massoudi and Richard Waters for comment. Tesla’s stock is a battleground audi Arabia has slashed for short-sellers and those who its exposure to Tesla, less than four months after the believe in Mr Musk’s vision for carmaker’s chief executive Elon the company, which means that Musk settled fraud charges over every piece of news or even tweet his claim that the kingdom was from the company or its founder ready to back a management has the potential to send shares moving wildly. Mr Musk’s claim buyout. The country’s Public Invest- last August that he had full backment Fund hedged most of its ing for a buyout produced a spike 4.9 per cent stake in Tesla with in Tesla’s shares, dealing out big the help of bankers at JPMorgan losses to investors who had bet Chase after the market closed against the company. Saudi Arabia had been seen on January 17, according to four as an unlikely Tesla backer given people with direct knowledge of its own economy’s dependence the matter. The arrangement meant that, on oil but under Prince Mohamalthough it still holds the shares, med the kingdom has been lookthe PIF was left with little expo- ing to diversify its economy and sure if the stock price falls. Its holdings away from oil. The FT previously reported potential gains are also capped if the stock rises, freezing its that the PIF initially approached Mr Musk about acquiring newly $2.9bn bet on the company. The move, through a hedg- issued shares in the business but ing programme put in place this was rebuffed. Instead, it bought the shares month, marks the latest twist in the relationship between PIF, the in the open market in April and state fund overseen by the pow- May when Tesla shares traded erful crown prince Mohammed below $300. That means the PIF is probably sitting on a gain from bin Salman, and Mr Musk. On August 7, the FT first reits investment. Mr Musk went on to claim

Rail privatisation: the UK looks for secrets of Japan’s success

Unlike in Britain, fares and subsidies have been tightly controlled under private ownership

Robin Harding

irmingham, Takeshi Omori realised, is not so very far from Tokyo. In 2017 his employer JR East, Japan’s biggest railway, took a 15 per cent stake in the West Midlands Railway. The Victorian tracks in Britain’s second city that cut through a dense urban landscape felt eerily familiar. “Railways were first brought to Japan 150 years ago by a British engineer, Edmund Morel. They’ve been upgraded while in use,” Mr Omori explains. The modern JR East runs the route that Mr Morel built. “I felt a huge sense of familiarity.” The two railways have something else in common: both JR East and the West Midlands were once stateowned, then privatised in 1987 and 1994, respectively. There the similarities end. In Britain, railway privatisation is deeply controversial, bringing high prices for an unreliable service on a chaotic, patchwork network that sucks in public subsidies even as some operators make tidy profits. Britain’s trains are so unpopular that, according to a YouGov poll, the public supports nationalisation by a majority of 56 per cent to 15 per cent. Nationalisation is a flagship policy for Jeremy Corbyn, the leftwing leader of the UK’s opposition Labour party. Anger at the state of the railways, which were sold off under a Conservative government, has come to symbolise broader discontent with privatisation and “neoliberal” economics. Yet in Japan, the sale of JR East and its regional siblings is regarded as a triumph. The bulk of Japan’s ultra-reliable railway network operates without a single yen of public subsidy. Pricing is straightforward, and apart from consumption tax hikes, JR East has never raised fares once in 31 years as a private operator. “Of course we regard the privatisation of JR as a success,” says Shohei Ishii, deputy directorgeneral in charge of railways at the transport ministry. “I think there’s no chance of a return to nationalisation in Japan.” The divergent fortunes of these two systems raises an obvious question: is private ownership really the problem with Britain’s railways? If not, can nationalisation cure their ills? For every excellent public railway, such as Switzerland’s SBB, there is a shabby and decayed public equivalent, such as Amtrak in the US. Ownership, per se, has little correlation with results. For transport secretary Chris Grayling, a true believer in privatisation who even contracted out Britain’s probation service when he was justice secretary, Japan’s success offers the appealing prospect of fixing the railways in the private sector. He has launched a review that will specifically look at Japan as a model

for the UK. What Mr Grayling will find is not just a triumph of private enterprise, but a robust system of regulation, indirect but ferocious competition and a healthy dose of real estate speculation. It will not be easy to replicate. “The basis of railway companies in Japan is they think they will contribute forever. They feel they have a responsibility to local societies,” says Hironori Kato, a professor of civil engineering at the University of Tokyo. “This kind of mindset is quite important to make a successful railway business.” The most basic, fundamental difference between the British and Japanese railways is how they were privatised. In Britain, the tracks were split from the trains, and the rolling stock was split from railway operations. Today, the tracks are publicly owned by Network Rail. Companies regularly compete for franchise areas such as the West Midlands, leasing their rolling stock from another company. In Japan, however, the former Japan National Railways was split up along regional lines and then everything was sold together. JR East, centred on the city of Tokyo, owns its tracks, its trains and its stations outright. A private JR Central operates from Nagoya and JR West from Osaka, but the unprofitable JR Hokkaido, which operates many rural lines on Japan’s northernmost island, is still 100 per cent publicly owned. These contrasting methods of privatisation reflected specific local circumstances but also a difference in philosophy. Japan already had many private railways in 1987, such as the Tokyu, Keio and Odakyu companies in Tokyo, so it had an existing model to follow. Britain, meanwhile, had an ideological goal in mind: competition. The vision of those who privatised the service was not just to introduce a profit motive, but for different companies to run trains on the same tracks, competing for customers. It was hoped that the regular fight for franchises would drive down costs. The downside of splitting up tracks and trains, as Britain did, is now well understood. Railways are complicated. “One thing I’ve realised is how many things are outside the control of a train operating company [in the UK],” says Mr Omori. “If a signal’s broken, or a train’s late — as a TOC we can’t do anything to make sure the signal doesn’t break. At JR East, if it’s within our operating area, we can change it.” Perhaps even more important than the difficulty of managing operations, however, are the effects this system has on investment. Network Rail, as a publicly-owned infrastructure company, does not gain directly if passenger revenue goes up. Nor does it face direct commercial pressure to keep down costs.

The rail franchises, meanwhile, have a declining incentive to invest as the period of their franchise runs out. “I do think with a 10-year franchise the incentives don’t work for investment that only pays off in the long term,” says Mr Omori. “The nearer the end of the franchise, the less the incentive becomes. That is one of the big differences between owning your infrastructure and borrowing it.” Japan’s famous shinkansen highspeed railways actually operate on something close to the UK system: the tracks are built and owned by a government fund. However, the government hands them over to the JR companies to operate on fixed-price, 30-year leases, so the companies treat them as their own. However, Britain split up its system for a reason, and that reason was competition. The obvious downside to the Japanese model is creating a local monopoly with all the risks that entails: extortionate fares, bloated costs, lazy service and refusal to co-operate with rivals. How Japan avoids those outcomes is the interesting part. The regulation of Japan’s railways starts with Mr Ishii at his desk in the transport ministry. The ministry collects detailed information on costs from all of Japan’s private railways. Based on that information, the ministry sets an upper limit on fares. “How do we determine the upper limit? It’s set based on an appropriate profit and appropriate costs under efficient management,” he says. If a company can cut costs and run itself more efficiently than rivals it can earn greater profits: this is known as yardstick competition. One important consequence is ruling out the complicated fare structures found in the UK. Since prices cannot go above the cap, even for last minute booking or at the height of the rush hour, companies instead operate a simple, distance-based fare. On the downside, since there is no way to ration scarce peak-time capacity by price, everybody tries to get the 8am train. Benchmark competition, which is often applied to utilities around the world, is only part of what makes Japan’s system work. “I don’t think it’s the case that we have no competition,” says Mr Ishii. “There is competition with the private railways and also among the JR railways.” Japan’s railways may be organised along geographical lines, but they are not a series of regional monopolies. Rather, many companies run lines in the same area, interlaced with each other, which sometimes offers a choice. For example, between Tokyo and Yokohama there are three competing routes, as there are between Osaka and Kobe. For an individual traveller, one operator is usually more convenient, but higher prices are noticed.

vealed that the PIF had built a 4.9 per cent stake, making it one of Tesla’s top-five shareholders. Minutes after that news was published, Mr Musk tweeted that he was close to arranging a buyout of Tesla, precipitating a crisis that resulted in a civil charges from US regulators. The Tesla CEO later claimed that Saudi Arabia had been ready to back his buyout plan, giving him the confidence to declare he had “funding secured”. However, the Securities and Exchange Commission charged Mr Musk with making “false and misleading statements”, leading to a settlement in which he paid a personal fine of $20m and agreed to step down as chairman of the company. The hedging arrangement has turned out to be well timed. A day after it was put in place, Mr Musk revealed Tesla was cutting 7 per cent of its workforce and warned that it was facing a “very difficult” period, and the stock fell. On the day of Saudi Arabia’s hedge, Tesla shares closed at $347.26, valuing its shares at $2.9bn. The stock price has since fallen more than 16 per cent. The PIF and JPMorgan declined to comment. Tesla did not im-

that the PIF had approached him multiple times about taking the company private. But the SEC concluded that he “did not have an adequate basis in fact” for claiming he was close to a buyout and that “investor support [was] confirmed”. More recently, the PIF’s highprofile bet on Tesla became a focal point in the fallout from the murder of journalist Jamal Khashoggi in October in the Saudi consulate in Istanbul. Asked in an interview a few weeks after the incident about whether the carmaker would take further investment from Saudi Arabia in the wake of the killing, Mr Musk said he “probably would not”. The derivative used to put on the hedge is known as an equity collar, which are bespoke instruments that are costly to finance and have become popular with Middle Eastern and Asian investors. PIF’s rationale for putting the collar in place is difficult to know for sure, beyond just a desire to protect its holdings in Tesla at a certain price. Another reason could be that it can continue to exert influence at the company without having to be entirely subject to its share price fluctuations.

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

BUSINESS DAY

@Businessdayng

Live @ the Stock exchange Prices for Securities Traded as of Monday 28 January 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. 183,692.62 6.35 -2.31 278 14,935,079 UNITED BANK FOR AFRICA PLC 251,365.75 7.35 -4.55 237 21,891,034 736,247.78 23.45 1.96 442 17,568,015 ZENITH BANK PLC 957 54,394,128 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 272,804.23 7.60 -0.65 156 4,241,176 156 4,241,176 1,113 58,635,304 BUILDING MATERIALS DANGOTE CEMENT PLC 3,305,858.44 194.00 - 28 33,183 108,417.85 12.50 -0.80 74 830,317 LAFARGE AFRICA PLC. 102 863,500 102 863,500 EXPLORATION AND PRODUCTION 305,991.17 520.00 -3.70 54 97,997 54 97,997 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 54 97,997 1,269 59,596,801 REAL ESTATE INVESTMENT TRUSTS (REITS) 1,900.00 95.00 - 0 0 SKYE SHELTER FUND PLC 11,300.89 45.20 - 1 7,000 15,876.20 5.95 - 1 1,500 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 2 8,500 2 8,500 OTHER FINANCIAL INSTITUTIONS 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 3,312.39 103.20 - 0 0 0 0 VALUEALLIANCE VALUE FUND 0 0 2 8,500 CROP PRODUCTION 440.00 0.20 - 1 50 FTN COCOA PROCESSORS PLC 78,220.62 82.00 - 37 510,732 60,000.00 60.00 - 6 12,992 OKOMU OIL PALM PLC. PRESCO PLC 44 523,774 FISHING/HUNTING/TRAPPING 511.20 4.26 - 0 0 ELLAH LAKES PLC. 0 0 LIVESTOCK/ANIMAL SPECIALTIES 1,590.00 0.53 - 16 195,483 16 195,483 LIVESTOCK FEEDS PLC. 60 719,257 DIVERSIFIED INDUSTRIES 767.71 0.29 -6.45 9 250,830 A.G. LEVENTIS NIGERIA PLC. 186.79 0.48 - 1 23,793 1,903.99 2.93 - 0 0 JOHN HOLT PLC. S C O A NIG. PLC. 50,809.99 1.25 -3.85 219 20,843,248 TRANSNATIONAL CORPORATION OF NIGERIA PLC 24,635.09 8.55 -1.16 27 391,534 256 21,509,405 U A C N PLC. 256 21,509,405 711.32 4.79 - 0 0 BUILDING CONSTRUCTION 0 0 ARBICO PLC. INFRASTRUCTURE/HEAVY CONSTRUCTION 36,960.00 28.00 - 6 125,325 JULIUS BERGER NIG. PLC. 165.00 6.60 - 0 0 6 125,325 ROADS NIG PLC. REAL ESTATE DEVELOPMENT 4,079.48 1.57 -1.26 22 1,450,090 22 1,450,090 UACN PROPERTY DEVELOPMENT COMPANY PLC 28 1,575,415 AUTOMOBILES/AUTO PARTS 954.53 0.20 - 0 0 DN TYRE & RUBBER PLC 0 0 BEVERAGES--BREWERS/DISTILLERS 13,310.14 1.70 - 11 119,893 CHAMPION BREW. PLC. 242.22 0.89 - 0 0 GOLDEN GUINEA BREW. PLC. 155,517.18 71.00 - 30 70,222 GUINNESS NIG PLC 260,024.82 30.25 - 4 21,105 INTERNATIONAL BREWERIES PLC. 638,952.47 79.90 - 43 94,885 NIGERIAN BREW. PLC. 88 306,105 FOOD PRODUCTS 31,000.00 6.20 -4.62 76 5,003,589 DANGOTE FLOUR MILLS PLC 171,600.00 14.30 -1.38 65 2,046,554 DANGOTE SUGAR REFINERY PLC 79,957.40 19.50 - 36 236,599 FLOUR MILLS NIG. PLC. 10,309.26 1.30 -1.52 40 1,616,819 HONEYWELL FLOUR MILL PLC 1,340.10 0.36 - 0 0 MULTI-TREX INTEGRATED FOODS PLC 703.89 3.95 - 1 3,999 N NIG. FLOUR MILLS PLC. 47,424.95 17.90 -0.56 21 94,207 NASCON ALLIED INDUSTRIES PLC 3,676.41 13.45 - 0 0 UNION DICON SALT PLC. 239 9,001,767 FOOD PRODUCTS--DIVERSIFIED 18,406.38 9.80 -2.00 14 143,378 CADBURY NIGERIA PLC. 1,149,351.57 1,450.00 1.38 34 107,637 NESTLE NIGERIA PLC. 48 251,015 HOUSEHOLD DURABLES 1,680.31 22.10 - 18 107,518 NIGERIAN ENAMELWARE PLC. 4,680.24 4.49 - 23 351,226 VITAFOAM NIG PLC. 41 458,744 PERSONAL/HOUSEHOLD PRODUCTS 44,866.39 11.30 - 34 375,492 P Z CUSSONS NIGERIA PLC. 209,979.95 36.55 - 25 70,467 UNILEVER NIGERIA PLC. 59 445,959 475 10,463,590 BANKING 52,805.69 2.28 -1.30 173 21,208,479 DIAMOND BANK PLC 275,243.27 15.00 - 29 276,607 ECOBANK TRANSNATIONAL INCORPORATED 68,380.52 2.36 -5.60 256 23,769,933 FIDELITY BANK PLC 1,008,017.89 34.25 -0.72 347 14,281,850 GUARANTY TRUST BANK PLC. 15,910.69 0.54 - 10 636,433 JAIZ BANK PLC 10,687.83 0.77 - 0 0 SKYE BANK PLC 64,490.54 2.24 -0.88 89 5,690,000 STERLING BANK PLC. 179,092.63 6.15 - 20 74,039 UNION BANK NIG.PLC. 10,987.98 0.94 1.08 14 331,800 UNITY BANK PLC 27,002.13 0.70 -1.43 49 3,157,829 WEMA BANK PLC. 987 69,426,970 INSURANCE CARRIERS, BROKERS AND SERVICES 4,117.00 0.20 - 0 0 AFRICAN ALLIANCE INSURANCE PLC 4,643.24 0.67 -5.63 35 3,830,263 AIICO INSURANCE PLC. 20,475.00 1.95 - 7 9,515 AXAMANSARD INSURANCE PLC 2,240.00 0.32 -8.57 1 200,000 CONSOLIDATED HALLMARK INSURANCE PLC 19,811.94 1.91 - 0 0 CONTINENTAL REINSURANCE PLC 3,093.20 0.21 - 6 84,500 CORNERSTONE INSURANCE PLC 2,411.47 0.53 - 0 0 GOLDLINK INSURANCE PLC 1,412.20 0.23 - 0 0 GUINEA INSURANCE PLC. 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 2,270.26 0.31 -3.23 18 1,466,020 2,191.13 0.51 2.00 9 464,843 LASACO ASSURANCE PLC. LAW UNION AND ROCK INS. PLC. 4,960.00 0.62 -1.59 3 390,679 LINKAGE ASSURANCE PLC 1,600.00 0.20 - 5 601,498 MUTUAL BENEFITS ASSURANCE PLC. 12,620.40 2.39 - 12 178,287 NEM INSURANCE PLC 2,012.26 0.26 - 1 4,500 2,798.93 0.52 - 4 22,022 NIGER INSURANCE PLC PRESTIGE ASSURANCE PLC 1,400.44 0.21 -4.55 6 849,100 REGENCY ASSURANCE PLC 1,668.16 0.20 -4.76 11 2,485,920 SOVEREIGN TRUST INSURANCE PLC 4,483.72 0.48 - 0 0 STACO INSURANCE PLC 2,582.21 0.20 - 0 0 2,800.00 0.20 - 0 0 STANDARD ALLIANCE INSURANCE PLC. SUNU ASSURANCES NIGERIA PLC. 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 3,200.00 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,328.00 0.24 - 1 300 VERITAS KAPITAL ASSURANCE PLC 5,219.27 0.39 -2.50 27 5,958,942 WAPIC INSURANCE PLC 146 16,546,389 MICRO-FINANCE BANKS 11,799.67 2.58 - 0 0 FORTIS MICROFINANCE BANK PLC 3,658.62 1.60 9.59 18 1,652,022 NPF MICROFINANCE BANK PLC 18 1,652,022 MORTGAGE CARRIERS, BROKERS AND SERVICES 4,116.00 0.98 - 0 0 ABBEY MORTGAGE BANK PLC 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC 5,922.05 1.42 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 2,265.95 0.20 - 4 442,853 RESORT SAVINGS & LOANS PLC 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 4 442,853

OTHER FINANCIAL INSTITUTIONS 8,200.00 4.10 -2.38 42 1,564,514 AFRICA PRUDENTIAL PLC 38,232.12 6.50 - 15 127,317 660.00 0.44 - 0 0 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 42,377.80 2.14 -0.47 231 20,119,113 1,492.16 0.29 -6.45 14 3,143,800 FCMB GROUP PLC. 481,305.99 47.00 - 15 61,152 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 19,680.00 3.28 0.61 75 2,747,844 392 27,763,740 UNITED CAPITAL PLC 1,547 115,831,974 1,680.29 3.37 - 0 0 HEALTHCARE PROVIDERS 1,030.41 0.29 7.41 6 823,040 EKOCORP PLC. UNION DIAGNOSTIC & CLINICAL SERVICES PLC 6 823,040 MEDICAL SUPPLIES 544.04 0.55 - 0 0 MORISON INDUSTRIES PLC. 0 0 PHARMACEUTICALS 366.17 0.50 - 0 0 7,050.00 4.70 - 5 53,740 EVANS MEDICAL PLC. FIDSON HEALTHCARE PLC 14,051.55 11.75 -2.08 15 233,672 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,226.83 2.45 - 11 30,317 1,329.41 0.70 - 20 886,380 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 556.71 3.62 - 0 0 325.23 1.50 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 51 1,204,109 57 2,027,149 COMPUTER BASED SYSTEMS 710.40 0.20 - 1 7,000 1 7,000 COURTEVILLE BUSINESS SOLUTIONS PLC COMPUTERS AND PERIPHERALS 1,470.89 0.50 - 0 0 0 0 OMATEK VENTURES PLC IT SERVICES 6,413.06 2.54 - 0 0 648.00 6.00 - 0 0 CWG PLC NCR (NIGERIA) PLC. 381.11 0.77 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS 939.21 0.20 - 2 4,900 13,650.00 3.25 - 0 0 CHAMS PLC E-TRANZACT INTERNATIONAL PLC 2 4,900 3 11,900 BUILDING MATERIALS 2,028.76 7.00 -9.68 20 420,750 22,050.00 31.50 - 6 24,080 BERGER PAINTS PLC 315,444.02 24.00 - 16 77,200 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 738.63 0.35 - 3 29,000 313.43 0.59 - 0 0 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 1,999.41 2.52 - 1 28,700 1,279.20 10.40 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 46 579,730 ELECTRONIC AND ELECTRICAL PRODUCTS 2,256.91 2.09 - 0 0 AUSTIN LAZ & COMPANY PLC 3,170.38 1.80 - 16 114,139 16 114,139 CUTIX PLC. PACKAGING/CONTAINERS 27,823.44 55.65 1.18 18 400,500 388.02 9.10 - 0 0 BETA GLASS PLC. GREIF NIGERIA PLC 18 400,500 AGRO-ALLIED & CHEMICALS 100,754.14 62.50 - 0 0 NOTORE CHEMICAL IND PLC 0 0 80 1,094,369 CHEMICALS 1,577.57 3.79 - 1 300 B.O.C. GASES PLC. 1 300 METALS 1,803.64 8.20 - 1 32 ALUMINIUM EXTRUSION IND. PLC. 1 32 MINING SERVICES 852.39 0.20 - 1 100,000 MULTIVERSE MINING AND EXPLORATION PLC 1 100,000 PAPER/FOREST PRODUCTS 50.60 0.23 - 0 0 THOMAS WYATT NIG. PLC. 0 0 3 100,332 ENERGY EQUIPMENT AND SERVICES 1,252.54 0.20 - 6 519,492 JAPAUL OIL & MARITIME SERVICES PLC 6 519,492 INTEGRATED OIL AND GAS SERVICES 63,400.20 5.10 5.15 105 2,393,228 OANDO PLC 105 2,393,228 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 64,907.15 180.00 - 31 22,125 11 PLC 16,134.39 23.25 - 18 8,411 CONOIL PLC 5,803.44 4.45 - 22 139,527 ETERNA PLC. 38,423.19 29.50 - 48 348,492 FORTE OIL PLC. 7,055.81 23.15 - 3 830 MRS OIL NIGERIA PLC. 75,815.23 223.30 4.10 32 28,298 TOTAL NIGERIA PLC. 154 547,683 265 3,460,403 ADVERTISING 2,219.52 0.50 - 0 0 AFROMEDIA PLC 0 0 AIRLINES 18,038.70 1.85 - 1 529 MEDVIEW AIRLINE PLC 1 529 AUTOMOBILE/AUTO PART RETAILERS 411.72 0.35 - 0 0 R T BRISCOE PLC. 0 0 COURIER/FREIGHT/DELIVERY 2,947.48 5.00 - 8 670,124 RED STAR EXPRESS PLC 328.19 0.70 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 8 670,124 HOSPITALITY 642.33 0.20 - 1 400 TANTALIZERS PLC 1 400 HOTELS/LODGING 4,801.22 3.10 - 0 0 CAPITAL HOTEL PLC 3,492.38 1.68 - 6 117,460 IKEJA HOTEL PLC 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 46,362.46 6.10 - 4 30,589 TRANSCORP HOTELS PLC 10 148,049 MEDIA/ENTERTAINMENT 4,800.00 0.40 - 3 64,500 DAAR COMMUNICATIONS PLC 3 64,500 PRINTING/PUBLISHING 302.40 0.50 - 0 0 ACADEMY PRESS PLC. 1,026.03 1.33 - 3 10,124 LEARN AFRICA PLC 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. 905.96 2.10 5.00 11 482,224 UNIVERSITY PRESS PLC. 14 492,348 ROAD TRANSPORTATION 480.73 0.29 - 2 73,000 ASSOCIATED BUS COMPANY PLC 2 73,000 SPECIALTY 852.12 3.60 - 0 0 INTERLINKED TECHNOLOGIES PLC 1,126.31 0.20 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 0 0 TRANSPORT-RELATED SERVICES 4,600.00 5.75 - 0 0 GLOBAL SPECTRUM ENERGY SERVICES PLC 4,533.10 7.15 - 3 25,139 NEWREST ASL NIGERIA PLC 5,603.55 3.45 - 30 493,120 NIGERIAN AVIATION HANDLING COMPANY PLC 33 518,259 SUPPORT AND LOGISTICS 3,654.44 9.04 - 3 226 C & I LEASING PLC. 7,371.12 2.20 -5.58 21 1,329,370 CAVERTON OFFSHORE SUPPORT GRP PLC 24 1,329,596

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Monday 28 January 2019 GAINERS Company TOTAL

Market Statistics as at Monday 28 January 2019

LOSERS Opening

Closing

Change

Company

Opening

Closing

Change

N214.5

N223.3

8.8

SEPLAT

N540

N520

-20

BETAGLAS

N55

N55.65

0.65

BERGER

N7.75

-0.75

ZENITHBANK

N23

N23.45

0.45

UBA

N7.7

N7.35

-0.35

OANDO

N4.85

N5.1

0.25

DANGFLOUR

N6.5

N6.2

-0.3

NPFMCRFBK

N1.46

N1.6

0.14

GLAXOSMITH

N12

N11.75

-0.25

ASI (Points)

30,732.72

DEALS (Numbers)

4,150.00

VOLUME (Numbers) VALUE (N billion)

1.843

MARKET CAP (N Trn

Stock market opens week on negative note …as Seplat, Berger Paints, UBA lead laggards Stories by Iheanyi Nwachukwu

igeria stock market opened this week on a negative note driven by investors’ decisions to sell stocks like Seplat Petroleum Development Company Plc, Berger Paints Plc, and United Bank for Africa Plc, among others. At the sound of closing gong on the Nigerian Stock Exchange (NSE) on Monday January 28, the AllShare Index (ASI) which opened at 31,426.63 points declined by 0.26percent to 31,344.24 points. The stock market’s year-to-date (ytd) return stood further negative at 0.27 percent. Investors lost about N31billion as evidenced in the value of listed equities which decreased from N11.719 trillion to N11.688 trillion at the close of trading. In 4,150 deals, stock dealers exchanged 222,687,900 units valued at N1.843billion. Fidelity Bank Plc, UBA Plc, Diamond Bank Plc, Transcorp Plc and FCMB Group were

L-R: Chris Dodwell, director, Climate Change & Sustainability team at Ricardo Energy & Environment; Israel igwe, representative of Minster Finance; Isyaku Tilde, acting executive commissioner operations SEC; Uzoamaka Egbuche, managing consultant,Cerase Environmental Services Ltd; and head of prosperity, British deputy high commission Lagos;Guy Harrison at the Closing of UK Nigeria climate Finance accelerator conference in Lagos.

actively traded stocks on the 9th floor of the Exchange. “We believe appetite for value stocks will remain upbeat in the near term. Nonetheless, we expect to see profit taking activities during the week. We recommend that investors take position in

cheap assets with sound fundamentals in order to take advantage”, research analysts at Lagos-based Afrinvest said in their January 28 note. The share price of Seplat Petroleum Company Plc which opened for trade on Monday at N540 lost N20 to close at N520, representing

Union Bank introduces TechVentures to support tech-based businesses

nion Bank has launched TechVentures, a unique banking proposition which provides tailored services to technology companies. The solution was unveiled at TechPoint Build, a leading technology conference for tech experts, investors, startups and owners of techenabled businesses, that held in Lagos recently. TechVentures supports tech-based businesses in various stages of their lifecycles, providing them services which include access to venture capital funding, business advisory and mentorship as well as accelerator partnerships. Union Bank’s Head of Commercial Banking,

Kunle Sonola, who was present at the event and unveil said that the Bank is focused on developing services that offer real value adding solutions for emerging and established sectors and ecosystems in Nigeria. According to Sonola: “We designed TechVentures in response to the emergence and accelerated growth we see in the tech space. Our goal is to capture these businesses from startup stage, when they are just nursing an idea, and support them until they build unicorns because we believe that these businesses will drive a new economy in Nigeria.” The bank launched an annual innovation challenge in 2017 to encour-

age budding entrepreneurs who are working on innovative solutions which address social and business challenges. Last year, in partnership with Co-Creation Hub, the Bank also launched a first-of-itskind business acceleration programme ‘Start up Connect’ which provides an opportunity for Nigerian businesses creating technologybased solutions for the emerging African market , to partner with the Bank and the social innovation center for rapid growth. Union Bank, Nigeria’s Most Improved Retail Bank, is committed to being Nigeria’s most reliable and trusted banking partner.

a decline of 3.70percent. It was followed by that of Berger Paints Plc which lost 75kobo or 9.68percent, from N7.75 to N7. In addition, United Bank for Africa Plc dipped from N7.7 to N7.35, losing 35kobo or 4.55percent. Dangote Flourmills Plc lost 30kobo or 4.62per-

cent, from N6.5 to N6.2; while GlaxoSmithKline Consumer Nigeria Plc lost 25kobo, from N12 to N11.75, losing 2.08percent. “This week, we expect the outcome of the US Fed meeting holding on Wednesday, as well as reactions to political events that have recently materialised, to guide market performance”, said United Capital research analysts in their January 28 investment views. Unfortunately, gains recorded in some stocks were not large enough to reverse the trend. Investors raised bets in Total Nigeria Plc making its share price to increase from N214.5 to N223.3, up by N8.8 or 4.10percent. Beta Glass Nigeria Plc increased from N55 to N55.65, adding 65kobo or 1.18percent. Zenith Bank Plc increased from N23 to N23.45, adding 45kobo or 1.96percent; Oando Plc gained 25kobo, from N4.85 to N5.1, up by 5.15percent; while NPF Microfinance Bank Plc gained 14kobo, from N1.46 to N1.6, adding 9.59percent.

ATOM Group selects LSEG Technology to power AAX Digital Asset Exchange

222,687,900.00

ondon Stock Exchange Group’s technology solutions provider said that Millennium Exchange has been selected by ATOM Group for its new digital asset exchange venue AAX. Millennium Exchange’s low latency, resilient, and scalable matching engine provides market-leading performance and reliability. AAX, expected to launch in H1 2019, will be the first digital asset exchange venue to use the Millennium Exchange matching engine. The implementation leverages the market leading technology, used across London Stock Exchange Group and other global client trading venues, as the basis for ATOM’s new

digital asset exchange. Peter Lin, CEO of ATOM Group said, “Trust is at the heart of ATOM’s philosophy and we are delighted to be working with LSEG Technology to deliver a core part of our new digital asset exchange. AAX will leverage LSEG’s Technology to deliver a world-class exchange that ensures safe, trusted and secure digital asset trading for all. The AAX exchange will allow investors to trade all major digital assets with greater levels of fairness, transparency, and performance.” Ann Neidenbach, CIO, LSEG Technology said, “We are delighted to have been selected by ATOM™ to provide a best-in-class technology solution to help power its new exchange.

11.688

FG to collaborate with UK, others on economic development

he Federal Government has assured of its readiness to partner with any group or stakeholders towards the transformation and economic development of the country. Zainab Ahmed, Minister of Finance stated this at the closing session of the UK-Nigeria Climate Finance Accelerator workshop (CFA) held at the Zonal office of the Securities and Exchange Commission, SEC, in Lagos, weekend. Ahmed, represented by Israel Igwe, Director, Economic Research and Policy, Ministry of Finance, said there was need for a coordinated green climate finance platform like the CFA in the economy. According to her, the CFA programme is an innovative concept that would aid government’s developing approach of the “Ease of Doing Business”. In his presentation, Chris Dodwell, Director, Climate Change and Clean Growth Ricardo Energy, called on stakeholders in the financial sector to collaborate towards financing developmental projects. Dodwell said that CFA was an innovative international initiative supported by the UK Government and other international donors including Nigeria, Colombia and Mexico. According to him, its aim is to accelerate the transformation of countries’ Nationally Determined Contributions (NDCs) into bankable projects to attract investment from the private sector. He added that CFA was a powerful example of creating a productive dialogue between financiers and policymakers, focused on scalable opportunities. “The CFA progresses financing proposals for identified projects while ensuring Technical Assistance is provided to policymakers across ministries so that planning for delivery of the NDC is better aligned with available capital from local and international markets.

BUSINESS DAY

NATIONAL DISCOURSE

www.

Tuesday 29 January 2019

Daily, Obasanjo gets justified ... as Buhari suspends Onneghen appoints Tanko Mohammed as acting CJN

DANIEL OBI

MUDA YUSUF

Muda Yusuf, DG, Lagos Chamber of Commerce and Industry (edited by Odinaka Anudu)

Tuesday 29 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

2019 poll: Group says 90% of candidates not campaigning in Edo IDRIS UMAR MOMOH and CHURCHILLOKORO, Benin

Oke, S/West Buhari/Osinbajo Campaign DG, clarifies issue on 2023 presidency Akinremi Feyisipo, Ibadan

ANIEFIOK UDONQUAK, Uyo

We need to teach seasonal politicians a lesson - Saraki SIKIRAT SHEHU, Ilorin

BUSINESS DAY

NEWS YOU CAN TRUST I TUESDAY 29 JANUARY 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

INSIGHT/INNOVATION

The irony of President Buhari’s slowness OGHO OKITI

ast week, the President suspended the Chief Justice of the Federation, Justice Walter Onnoghen. In a very elaborate and detailed piece, released by the Presidency, the President argued ferociously that the suspension was necessary, following the allegations of corruption, on the basis that the CJN did not disclose his full income and assets as required by the law. The suspension is a culmination of a very depressing two weeks for Nigerians and the rule of law. Before the suspension there were three dimensions to the story. The first is the allegation of non-disclosure of incomes against the CJN. The action of the Code of Conduct Bureau, according to press reports, followed the petition by Dennis Aghanya who is a former aide of the President. What followed was a battle of legal wits that was obviously fought on party lines. The second dimension is the response of the Presidency to the allegations. In suspending Justice Onnoghen, the President said he relied

on the Order of the Code of Conduct Tribunal directing the suspension of Judge pending final determination of the case. The president further appealed to the conscience of the nation when he argued that “the nation has been gripped by the tragic realities of no less a personality than the Chief Justice of Nigeria himself becoming the accused person in a corruption trial since details of the petition against him by a civil society organization first became public about a fortnight ago”. There is no doubt in my mind that the Presidency expected a backlash, but it would have been surprised at the scale of the backlash. The third dimension is the international angle to the story. I am not one of those that think, nor believe that the international community has a greater love for Nigeria than those in government. But the context in which the Presidency is arguing that the international community should not interfere in the affairs of the country is misplaced. There is something that has become very clear in international relations – it is that injury to a nation’s democracy, wealth, and longterm income dynamics also has consequences for other nations. It is the context in which the same international community actively supported the Presidency in 2015, for which they saw nothing wrong at the time. Now, there are many things that Nigerians can be accused of, but

you cannot successfully argue that Nigerians are fools. In this case, and in the response provided by the President, there are too many ironies that point to political calculations by the President. First is that the Presidency actually want foolish Nigerians to believe that it is an unknown, unfunded, and altruistic non- governmental organisation that filed the allegations against the CJN. Second, that the code of conduct bureau is so efficient that it had arraigned the CJN within two days of receiving the allegations. Third, as suggested by the President in his address, that the case would have been quickly concluded by the CCB. That would have been the first time that a case is swiftly dealt with in Nigeria. The Presidency also wants us to believe that it had not interfered in the code of conduct suddenly recommending the suspension of the CJN, and using the same basis for the suspension. Haba, even Nollywood does better story lines these days. We must not forget that this is a President that takes delight and joy in claims that he is slow. It is the same President that took six months to appoint Ministers that everyone could have predicted. Same president that loaded his cabinet with all sorts of nephews, nieces, in laws, brothers, and sisters. The same presidency that loaded the entire Nigerian security positions with those from the North, and swiftly followed, after the suspen-

‘

We must not forget that this is a President that takes delight and joy in claims that he is slow. It is the same President that took six months to appoint Ministers that everyone could have predicted

sion of the CJN, by another predictable appointment. Oh yes, is the CJN guilty as charged? Probably so, and many neutral Nigerians see a genuine case against the CJN. But the swiftness from the allegations by an unknown NGO, through the swifter arraignment by the CCB, and the swiftest suspension by the President smacks of the greatest hypocrisy of all generations. In conclusion, historical analysis of the corruption allegations leveled against the supporters of the President or those that support the APC show that it is either the President is deaf to those allegations, or only mutters the possibility of investigation after two or six months, just as Babachir’s case is only due now two weeks to election, or the Presidency simply ignores Nigerians. In the case of herdsmen, the Presidency ignored Nigerians too until too many thousands of Nigerians lost their lives. Just so it is on record, the record of the President on dealing with corruption does not fool Nigerians, no matter the English language and the Nollywood characters used. Nigerians know better and they have simply given up hope. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Chief Justice of Nigeria and the bigger picture PROPHYLAXIS

AYULI JEMIDE Dear Nigerians,

have tried to write a piece for this week, but it has been extremely difficult. I started, and I stopped then I started again. It was just so difficult to string any words together because I am numb and dumbfounded at the happenings in our dear country in relation to the suspension of our Chief Justice of Nigeria and the concomitant activities. My summary of some of the goings on since Friday last week when the President announced the suspension of the Chief Justice cannot be in any way coherent because there is no coherence in how this has happened and no coherence in how Nigerians have reacted to it. So, expect no coherence. We now live in a Nigeria where the judiciary is officially in disarray. We hear about a judge of a Code of Conduct Tribunal who disobeys the order of the Court of Appeal – a superior court which hears appeals from the Code of Conduct Tribunal. We see a judge make an exparte (without hearing the other side) order on a matter as far reaching as whether a Chief Justice should be suspended. We then hear a president latch onto that order which has flouted our constitution by not giving

the other side an opportunity to be heard as a ground for the removal of a Chief Justice of Nigeria. In case we have forgotten we are talking about the Chief Justice of Nigeria - the head of the third arm of government in a sovereign democratic state. We have witnessed a court hearing arguments from most senior lawyers and decide in public glare to adjourn to a later date to rule on whether the court has jurisdiction to hear the matter, only for that same judge to resume seating before the adjourned date either alone or with only one party to make a ruling by itself that a Chief Justice should step aside and proceed to grant the prayers in the pending motion without first making a formal ruling on if the court has jurisdiction. Today in Nigeria 4 courts have made the same order to stay the trial of the Chief Justice – as though one court order is not enough in Nigeria - yet none of those orders have been obeyed by the Code of Conduct Tribunal, including a court of Appeal order. How did we get here to a point where there is a dispute as to whether a Chief Justice of Nigeria has been duly suspended and another one duly appointed? This is not a chieftaincy dispute or a union leadership tussle? We are talking about the Chief Justice of Nigeria - the head of the third arm of government under a democratic government which practices separation of powers. As if that is not enough,we have lawyers pontificating and punching their weight in different directions on the suspension of a Chief Justice of

‘

Whilst we are pontificating, quibbling and engaging in intellectual suicide the Nigerian Stock Market has began to crash as at today as a consequence of the suspension of the Chief Justice of Nigeria

Nigeria. This leaves me wondering whether we have a written constitution in Nigeria or whether the Constitution is not clear on the matter or whether the lawyers have abdicated their sacred duties as custodians of our national conscience and adorned themselves with the garbs of hirelings. Is this one of those situations where lawyers can quip that the law is an ass which can be sent on any errand depending on who the master is? Moving away from the learned ones – both those garbed in silk and those in cotton or polyester, we can also see that even the National Assembly is polarized on this matter. Some legislators would say their powers have been trampled upon because the Executive needs twothirds majority of the senate to remove a Chief Justice and then some within the same legislative Chamber would disagree. Again, I ask them: Is the Constitution not clear on this matter? Is there not enough judicial interpretation on this issue? Today in Nigeria the National Judicial Council charged with the responsibility to discipline judges is not sure what powers they have or do not have. The National Judicial Council has never experienced a Chief Justice of Nigeria being suspended. They have ample experience dealing with Governors sacking State judges and have dealt with such decisively in a manner that protects their territory, but on this one they are still in a state of shock. It is made worse by the fact that even the powers of the National Judicial Council have

now been subjected to copious arguments regarding what they can or cannot do. Today in Nigeria we have three different arms of government at loggerheads as if the doctrine of separation of powers means every arm of government should arm themselves with weapons of warfare to battle each other. We will not forget to mention that the newly sworn in Acting Chief Justice has sworn in members of the Election Petition Tribunals and therein lies another debate whether those tribunals are properly constituted given that there is a question about the legality of his authority as Chief Justice. Whilst we are pontificating, quibbling and engaging in intellectual suicide the Nigerian Stock Market has began to crash as at today as a consequence of the suspension of the Chief Justice of Nigeria. I think that it is important to note that no matter what our views are on this matter and no matter our political leanings, it is important for ordinary citizens to realize that politicians will come and go but Nigeria as an entity is more important than politicians and their shenanigans. On certain matters and this being one of them we should toe the line that protects our institutions. If our institutions are weak it is us ordinary citizens that suffer ultimately. Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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