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news you can trust I ** wednesDAY 29 january 2020 I vol. 19, no 487

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Prompted by BusinessDay report, Immigration opens investigation into alleged corruption at borders

Continues on page 38

Inside

Julius Berger’s Q4 profit hits N10.3bn on improved government spending P. 2

3M 0.00 3.35

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NGUS jan 27 2021 367.48

L-R: Nnamdi Okonkwo, managing director/CEO, Fidelity Bank plc; Mohammed Balarabe, former deputy managing director, Fidelity Bank plc, and Gbolahan Joshua, executive director, operations and information, Fidelity Bank plc, at the Fidelity Bank Year End/Customer Appreciation Party themed ‘Give Them Wings’ held in Lagos.

INNOCENT ODOH, Abuja bout three weeks after BusinessDay published an investigative report exposing widespread corruption at the country’s land borders, the Nigerian Immigration Service (NIS) has commenced investigation into the matter. Sunday James, a deputy comptroller and public relations officer of the Service in charge of the Seme Border, told BusinessDay that the report prompted the comptroller general of immigration, Mohammed Babandede, to order an intensive investigation into the matter and report back to him. BusinessDay’s investigation, published on January 9, 2020 and entitled ‘With just N200 bribe per immigration checkpoint, illegal migrants are infiltrating Nigeria through Sokoto’, had documented how officers of the Immigration Service and other security agencies conspire with mischievous commercial drivers to extort illegal immigrants and permit them entry into Nigeria in a strict bribe-andpass pattern – at the expense of national security. In an accompanying video

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Treasury bills

Business leaders expect next decade to bring growth or stagnation LOLADE AKINMURELE, MICHEAL ANI, ENDURANCE OKAFOR & SEGUN ADAMS

igerian business leaders and top corporate executives expect two possible outcomes for Africa’s most populous nation in the next decade through 2030. In the next 10 years, Nigeria could host a fourth of the

Speed of reforms to determine which outcome

world’s poorest or it could be in the league of the top 20 global economies, an expectation that had failed to materialise in the last decade, according to corporates at the BusinessDay Nigeria economic outlook. The experts who spoke on the theme ‘Nigeria’s Prosperity Ahead 2030: Population, Data,

Productivity’, said although Africa’s largest economy might have missed the shot in the last decade, it has an opportunity of getting its economic prosperity right by rolling out the appropriate reforms that would retain and attract private capital and control rising poverty. “Depending on whether or

not reforms are embarked on, Nigeria could end up with the continuity of a broken middleclass,” said Olu Akanmu, executive director, FCMB Retail. “Or it can rebuild its middle-class population and lift people out of poverty.” Segun Omosehin, managing Continues on page 38

Wednesday 29 January 2020

BUSINESS DAY

news MTN proposes $1.6bn investment to strengthen operation in Nigeria

L-R: Tokunbo Talabi, secretary to the Ogun State Government; Claire Pierangelo, United States consul-general; Dapo Abiodun, Ogun State governor, and Jillian Itharat, political officer of the United States Consulate in Lagos, during their visit to the governor’s office in Abeokuta.

...as Buhari promises conducive business environment Tony Ailemen, Abuja

Brewers, local communities adopt independent power sources as DisCos choke STEPHEN ONYEKWELU

number of brewers and some local communities in Nigeria are resorting to selfhelp to meet their electricity needs, a trend that shows how much the sector struggles to generate, transmit and distribute power to customers. BusinessDay’s check shows that the $250 million International Breweries plant in Sagamu, Ogun State, for instance, is powered by six independent generators of 2,000 kilo-voltampere (kVA) each, totalling 12,000 kVA, powered by liquefied natural gas (LNG). This is despite the fact that LNG has to be brought in trucks from Port Harcourt, Rivers State, as there are no supply pipelines. The LNG comes in liquid form and the company converts it into the gaseous state before it can be used in the generators. Nigerian Breweries is also introducing a solar panel innovation in its Ibadan, Oyo State factory expected to provide 1 megawatt (MW) of power. The

Ibadan factory is also off-grid. Since it was established in 1982, it has run on diesel and compressed natural gas and progressively with solar. Solar will provide about 30 percent of the electricity. “We are delighted to be a pioneer in the adoption of solar energy in Nigeria,” Jordi Borrut Bel, managing director and chief executive of Nigerian Breweries plc, said in an earlier report. “The solar plant will help power our world-class brewery in Ibadan, enabling us to deliver on commitments under our ‘Brewing a Better World’ initiativesandsupportingHeineken’s global ‘Drop the C’ programme for renewable energy.” At the weekend, 47 community development associations (CDAs) in the Ibeshe Kingdom, Ikorodu, Lagos State, jointly signed a Memorandum of Understanding (MoU) with Wavelength Limited, providers of integrated power solutions, for an independent power plant (IPP) of 7MW which will be increased to 14MW and then 21MW.

“We are tired of paying outrageous amounts of money that come with estimated billing without light,” Oba Richard Abayomi Ogunsanya, the Olubeshe of Ibeshe Kingdom, said in an interview. “Sometimes we do not have light for weeks. Anytime the distribution company gives light for a day or two, next thing they invade the communities for indiscriminate disconnections. This is why we want an independent power plant.” Three of the Nigerian Electricity Regulatory Commission’s policy directives have provided the framework for these developments. These policy directives are the Captive Power Generation (REGULATION NO: NERCR-0108), the Embedded Power Generation and the Eligible Customer Regulation – all backed by Section 96(1) of the Electric Power Sector Reform Act 2005 (Act No.6 of 2005). Signs that the electricity distribution companies (DisCos) are choking abound. On October 9, 2019, BusinessDay

reported that NERC had served notice to eight DisCos of its intention to cancel their licences for failure to meet their obligated remittance to the market. “The Commission has reasonable cause to believe that the DisCos listed below have breached the provisions of the Electric Power Sector Reform Act, terms and conditions of their respective distribution licences and the 2016-2018 Minor Review of the Multi-Year Tariff Order (MYTO) and Minor Remittance Order for the year 2019,” the regulator said. The affected DisCos include the Abuja Electricity Distribution Company plc, Benin Electricity Distribution Company plc, Enugu Electricity Distribution Company plc, Ikeja Electric plc, Kaduna Electricity Distribution Company plc, Kano Electricity Distribution Company plc, Port Harcourt Electricity Distribution Company plc, and Yola Electricity Distribution Company plc.

he MTN Group on Tuesday said it is now set to invest $1.6 billion to strengthen its operation in Nigeria. Mcebisi Jonas, chairman, MTN Group, said the Group is utterly commited to investing in Nigeria and would commit the sum of $1.6 billion from its operations in the country to strengthen its network and systems. “We are fully aligned with the strategic agenda of government and are committed to strengthening the digital economy of the country,” Jonas said while being received by President Muhammadu Buhari at the State House,

… hint on a possible extension ENDURANCE OKAFOR

ithfewdaystoJanuary 31, the planned enddateforthefirst phaseofOperation ‘EX-SWIFT’Responseembarked on by the Nigeria Customs Service (NCS), the Nigerian Immigration Service (NIS), the Nigeria Police Force and the armed forces to check insecurity along thenation’sentrypoints,industry expertshaveoptedforreopening of the border. The recommendation of five analysts polled in a BusinessDay survey was based on the fragile state of the economy. They said the earnings of some companies may take a hit as a result of the closure. “I am in support of a re-

opening. When the closure was announced, I felt it was premature to do that given the fragile nature of the local industry,” Ayorinde Akinloye, a research analyst at Lagosbased CSL, said. Without any formal notice, President Muhammadu Buhari had on August 20, 2019, through the Office of the National Security Adviser, ordered the closure of Nigeria’s land borders aimed at curbing smuggling activities, especially of rice. It was initially planned to last for one month before its indefinite extension. Five months and counting, businesses in Nigeria and other neighbouring West African countries have raised expectations that the Federal

Government would finally agree with its neighbours to reopen the borders to genuine import and export trade. Since the closure, business owners in Nigeria, Benin Republic, and Niger that depend on the border to survive have been seriously affected following their inability to carry out their legitimate businesses. Ayodeji Ebo, managing director, Afrinvest Securities Limited, said the border closure shouldn’t last for a long time because there are a lot of consumer goods companies that dependheavilyonexportwhose earnings would be negatively affected as a result of the closure. “The border cannot remain permanently closed. What I will advocate is that some of

the inefficacies that led to the closure should have been resolved. The government should use the opportunity to resolve and review the agreement with neighbouring countries so it can be open as there is a lot of informal trade that is going on at the land borders,” Ebo said. Inflation in Nigeria soared 11-month high to 11.98 percent in December 2019, the fifth month since Nigeria shut its land borders, raising concerns on the state of local production to plug supply gaps. The fear of a further spike in inflation regime forced the Central Bank of Nigeria (CBN) to undertake a moderate tightening stance at the first Monetary

Continues on page 38

Union Bank Nigeria divests its UK subsidiary OLUFIKAYO OWOEYE

nion Bank of Nigeria plc on Tuesday announced that it has entered a share sale and purchase agreement to divest its 100 percent equity stake in Union Bank UK plc. Union Bank in a notice to the Nigerian Stock Exchange said the sale is in line with the bank’s strategy to geographically streamline its business operations to focus on growth opportunities in Nigeria. “Following a competitive bid process, MBU BidCo Limited, an acquisition vehicle wholly owned by MBU Capital

Limited, was selected as the preferred bidder,” the bank said in the release. The completion of the sale is subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the United Kingdom. Emeka Emuwa, chief executive officer, Union Bank, said as the banking landscape shifts towards digital and agency banking to drive financial inclusion, the Nigerian market presents robust long-term opportunities for the bank, noting that the di-

Continues on page 38

Julius Berger’s Q4 profit hits N10.3bn on improved government spending …shares surge 9.93% as investors take position OLUFIKAYO OWOEYE

S Analysts recommend border reopening as Jan 31 nears •Continues online at www.businessday.ng

Abuja. The MTN Group chairman said he was visiting along with top executives of the telecoms company to show appreciation to President Buhari “because most of the issues we raised during your visit to South Africa have been addressed, and there is progress on the remaining ones”. Buhari assured the group of the Federal Government’s commitments to providing an enabling environment for businesses to succeed in the country. “Partnerships between the public and private sectors remain the most viable means of bringing prosperity to the

hares of construction giant, Julius Berger, surged 9.93 percent to N22.15 after the company announced it recorded N10.3 billion as profit for the full-year ended 31st December 2019 on the back of an improved public sector spending. Shares of the company have gained 10.55 percent since the beginning of trading this year, while it gained in three days of trading. Its prices have remained largely unchanged for the rest of the trading days. After a recession-induced loss in 2016 when the company reported a loss of N2.39bn, Julius Berger has since found the path of profitability, thanks to capital expenditure spending from the government. In 2017, the company recorded a bottomline of N2.51bn, while in 2018, it ballooned to N6.1bn. In 2019 result, revenue increased to N264.55bn from N194.61bn. Breakdown of the revenue segments shows that civil works segment recorded N150.79bn from N110.15bn

in 2018, building works segment recorded N89.94bn from N65.70bn in 2018, and facility management services recorded N23.81bn from N17.39bn in 2018. Another high point from the result is the fact that revenue from Asia & Europe markets increased marginally to N4.55bn from N4.26bn. Following its vision for diversification, the construction giant in August announced that it would be participating in the bidding process for the Camalaniugan (Cagayan) Bridge in a consortium with Frey-Fil Corporation in the Philippines. It also announced the acquisition of 20 percent equity share capital in Petralon 54 Limited. There are signs the company might do far better in coming years considering Nigeria’s huge infrastructure deficit and Julius Berger’s dominance in the market with Federal Government’s plan to borrow N2trn from N10trn pension assets for infrastructural investment.

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Loss and recovery of Branson’s virginity inspire entrepreneurial risk-taking Small Business handbook

Emeka Osuji

f experience is still the best teacher, why are we afraid to make mistakes, preferring instead, to learn from the errors of others? Some events in the new year have provided me with a number of interactive engagement opportunities with young entrepreneurs, outside the lecture halls, with a lot of learning points. We can actually find knowledge anywhere, provided we are looking out for it. I have had occasion to interact with business people, young and old, especially those looking to be independent and selfemployed; what I may call budding or first-time entrepreneurs. Currently, I am having to chair a team of judges to select young entrepreneurs to be awarded some level of financing, as seed capital after a competitive engagement – a great privilege and opportunity to learn from people committing much energy to the sector. Evidently, the year promises to be quite active as we engage more and more with these energetic people driven primarily by their determination to be self-employed and to write their own pay cheques. One of the issues that keeps popping up in these interactive engagements with young entrepreneurs is the fear of the unknown. This feeling of fear cuts across and does not distinguish between the willing and unwilling entrepreneurs among them. Of course, the entrepreneurial space in Nigeria consists of two

kinds of players: those who personally, and without any prompting, probably after dumping a lucrative employment, elected to go into private business. The other group is made up of the unwilling or accidental entrepreneurs, who were forced into the space by unavoidable circumstances, like unemployment and such. They may not show it or even express fear in any way. However, below the surface of the bold and bullish youth, about to launch into the risky deep of the Nigerian business environment, is the fear of the unknown. Many would-be entrepreneurs have been held back by the fear of what could lie ahead. They may display considerable courage, energy and determination but the benign fear of what could happen if they make mistakes is ever present. And that is what we want to address today. Fear is an emotional reaction, which occurs when we are faced with anything we consider to be a source of danger or could bring harm to us. The problem with fear is that it creates a mental block that alters the conduct of the individual. The best way to deal with fear however is to confront it. This is more so in the case of entrepreneurs. It is impossible to predict how any event will turn out until we take the bold step of engaging with it. To confront our fears, we need to be properly equipped against the forces generating the fear. Those who teach or have speaking engagements would tell you that the biggest source of stage freight is perceive inadequacy of the speaker; a feeling that there is someone in the audience who is better qualified or schooled in the subject of discussion than the speaker is a killer. For as long as a speaker has the confidence that he is good in the subject of his speech, and probably better than everyone else in the audience, stage freight dies a natural death. Stage freight is a symptom of fear. Once we are able to attack the source of

fear, it fizzles out or at worst, becomes an ordinary feeling of uncertainty, which everyone experiences. Entrepreneurs should not be afraid of the unknown but instead, boldly confront it. Some of us have the wrong idea that we can go through this life and learn only from other peoples’ experiences. Truly, our prayer is not to learn the hard way, and so we try to see how we can mitigate our pain by avoiding the mistakes of others. However, it is impossible to grow a successful enterprise only on the experiences of others. However, every serious businessman must make his own mistakes and learn from them. There is no way you can make omelets without breaking eggs. So, go out there, break the eggs and let the frying begin! Richard Branson, the British billionaire; the only person on earth that lost his virginity and regained it – a biological impossibility - built an empire by taking risks and doing so fearlessly, starting with his Students’ Magazine, when he was only sixteen. Branson who described himself as an Adventure Capitalist, was not unaware of the consequences of conflict with tax authorities when he did the wholesale record-selling business that landed him in trouble with the Inland Revenue Service. He must have read about people went to jail because of tax evasion, but took his chances moving records across the English Channel and back to Virgin Stores for sale, for which he paid dearly. He also was not unaware of the unwritten business rule not to work with one’s friends - keep business strictly business. He filled his business with his friends and they kept falling out, with serious implications for the business. Again, not insuring an aircraft engine cost him close to a million pounds, when on its inaugural flight, birds flew into the uninsured engine and Virgin Atlantic

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Entrepreneurs should not be afraid of the unknown but instead, boldly confront it. Some of us have the wrong idea that we can go through this life and learn only from other peoples’ experiences

Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

Your legacy

ife is essentially about continuity. We continue to live through our children and they will continue to live through theirs. There are times when this is as a result of very intentional strategies or actions and at other times, it’s just a natural consequence of subconscious behaviour. This continuity can take the form of reproducing ourselves through our offspring, our employees, or others over whom we have influence. Most Nigerians have become experts at complaining and grumbling about all that’s wrong with our nation and I doubt I have an equal when it comes to this. I’m a “complainer extraordinaire” if I may say so myself. But there’s one thing I and many others do, and it’s to conveniently overlook our own daily contribution to the mess, through our behaviour and general conduct. If we don’t take the time to consciously sow the right seeds at the right time, it’s only logical that we’ll simply reproduce ourselves, which is more of the same. And so we’ll reap what we deserve rather than what we may actually earnestly desire. There are just no shortcuts, nor is there any substitute to doing the right thing. It’ll take time, discipline, consistency and sheer determination to leave this place in better hands than ours ever were. So I ask you, what sort of seed have you sown in your children and in those within your sphere of influence? Is it one of conceit, deceit, cheating, bribing your way through life, taking advantage of those weaker than yourself, winning at all cost, crass materialism, “chancing” your fellow man at every given opportunity to get ahead or have you deposited in them a sense of entitlement, instead of a spirit of hard and decent work? John Maxwell once said, “A leader is someone who knows the way, goes the way and shows the way” meaning he knows what needs to be done, does it and mentors

subordinates to do same. “This is Nigeria” is a refrain you either love or detest. One can hardly find himself in the middle. So on which side of the divide are you? The former love the corrupt tendency it implies and the euphemism that, “in this place, there are no absolutes; there is always a way if you’re willing to play ball”. It’s also taken to mean punishment should not necessarily be expected for wrong doing, as everyone knows this is a place where anything goes; and it’s generally understood that you’ll try your luck, if there’s even the slightest chance that you’ll get away with it. For such people, “this is Nigeria” is good enough excuse for wrong behaviour. I challenge you to ask ten people if they are people of integrity. Without hesitation, all will shout “yes”. Hold up. Don’t be quick to dismiss them, because in a way, they are being truthful. Why? Because that is what they actually believe. So in that sense, they’re not actually lying. You see, as human beings, our tendency is to judge others by their actions while we judge ourselves by our intentions, even when the actions are the same. This is one of the leading reasons for conflict. Someone doesn’t greet us, so we quickly conclude that he lacks manners or simply doesn’t reckon with us because he feels we’re beneath him. But when we fail to greet another, it’s understandable because we know it wasn’t deliberate. Our mind was elsewhere thinking about the school fees which falls due next week and still have no idea how we’re going to pay or we’re lost in thought about our sick aged parent; all very legitimate reasons for us to be totally oblivious to whatever may be going on around us at times. If the offended party challenges us, we might try to give an explanation for our apparently rude behaviour but if he refuses to listen, the next thing we’ll do will be to fight

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back, accuse him of being too sensitive or just spoiling for a fight for no reason. At least we’ve taken the time to explain and since it wasn’t intentional, he should be able to understand. This means that because it wasn’t our intention to offend, we’ll judge our action as okay and understandable while we judge others purely by the actions we see and not their intentions, which of course we can’t see. To make matters worse, we’re seldom willing to even give them the benefit of the doubt. Should they try to explain themselves, we quickly conclude that they’re not truthful and therefore lack integrity. “How can their intention be one thing and their action another?” We ask ourselves. There’s no gainsaying that if we were to judge ourselves by the same standard, we would all fail the integrity test too. So when you take a course of action as a leader and think it’s acceptable because you believe your intentions are noble, but fail to realize that by so doing, you’re in fact debasing a system and standard you expect everyone else to uphold, you’re just making nonsense of it all. In the last week or so Transparency International published their latest Global Corruption Index and our dear country dropped a few positions, signifying that the government’s fight against this hydra headed monster called corruption may not be producing the desired results quite yet. I’m not sure if it would reasonable for us to expect otherwise from a government which seems to speak from both sides of the mouth. It certainly doesn’t help that the President appears to exempt himself from the policy he initiated, banning government officials from taking overseas medical trips, while he does just that. Of course, the health of our number one citizen is of utmost importance to all of us but is it moral to exempt yourself from a standard

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Airways almost became history. Did he stop confronting risks and thereby his fears? Not in the least. Even when the push came to shove, Branson only “lost his virginity” – a uniquely Branson way of describing the fact that he had to sell his Virgin Music to save Virgin Atlantic Airways. This loss was rewarded with a whopping $1billion – money he described as being “beyond his wildest dreams”. Branson’s autobiography, “Losing my Virginity”, which Bill Gates describes as a “terrific read” is not a treatise in brilliance. It’s not a book on strategy; it’s a reading in adventure, courage and fearlessness. It is indeed, an essay in triumphs and failures, laced with a determination to try the unthinkable. Nothing actually was unthinkable, and no opportunity was too much to pursue. His story shows that the first weapon an entrepreneur needs is the courage to think big and take calculated risks. Of course, this implies setting very high goals that sometimes appear too ambitious or unattainable. An entrepreneur must therefore be unabashed of failure but prepared to learn from it. To this, must be added the capacity to try what everyone has concluded is impossible – uncharted paths hold the treasure and not the well-trodden path. Above all, an entrepreneur must top up these criteria with a good dose of an ever present “can do spirit”. Naturally, virginity once lost can never regained, unless one is a Richard Branson. This is evidenced by the fact that twenty years after “losing his virginity”, by selling Virgin Music to save Virgin Atlantic, Richard Branson found his virginity intact, having birthed scores of other great business in diverse fields. Be a Branson.

Character Matters with Daps

Dapo Akande you expect of everybody else? Integrity is not just about being truthful. It’s the demonstration of strong moral principles and consistency in moral character. There’s little more potent than living by example. The same Maxwell also quite correctly said, “You can only teach what you consistently model”. Meaning, no matter what you say, if your actions don’t routinely align with your utterances, you may as well be preaching abstinence to a newly released prisoner whom circumstances have denied the pleasure of “knowing” his wife for the last five years. You’ll be wasting your time. Your life must faithfully reflect what you claim you stand for at all times and if you’re in a position of power you must also ensure the enforcement of policies; rules or laws are consistent and not arbitrary. If you want to be known for something; if there’s something about you that should continue, let it be that. That should be your legacy. Changing the nation...one mind at a time. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

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What makes a country developed?

OLUSEUN ONIGBINDE

n the past one year, I have lived in the US and also hopped around 27 countries, from Guinea to Finland. These travels have left me with questions around development: what does it mean for a country to be developed? What have I seen in so-called “developed countries” that I struggle to see in Nigeria? I came up with six ideas – rule of law, infrastructure, social justice, national identification systems, robust credit mechanisms and equal opportunity – which I posted on Twitter. However, trust the intelligence that roams around that space, this was redefined into six new ideas that I gladly agree with. Let us start with the rule of law and order. Welcome to Nigeria, where laws are only obeyed when it suits a powerful person. A Nigerian minister can choose not to obey a court hearing; he knows that nothing will happen to him. If the court mandates the release of a citizen, powerful interests, apparently superior to the rule of law will act in their own way, ignoring the court order. The UK Prime Minister Boris Johnson was recently ruled out for not being able to prorogue a parliament session and he rightly complied. Nigeria is searching for order, but order and rule of law are

siblings; ignore one at the peril of the other. How can anyone think he or she is above the rule of law? What kind of society calls EFCC to settle a civil case or uses the military to intimidate a Nigerian over a disagreement? When a society is no longer governed by the rule of law, citizens use self-help to get justice. Rule of law first, administered by people with integrity, justice and also a sense of history. Who is a Nigerian? Is it anyone with black skin within the borders of the country called Nigeria? There have been half-measures to correct our lack of a unified national identification system. We are trying to use National Identification Number (NIN), Bank Verification Number (BVN), Tax Identification Number (TIN), Telcos’ data, and so on. This has led to duplication of citizens’ data in several hands. We have to do more to aggregate these data. And the first sincere step in the right direction is a census. We need to conduct a census and apply unique identification numbers to all citizens as reference numbers. It is hard to do anything in the United States as a citizen without a Social Security Number or in the UK without the National Insurance Number. Nigeria wants to apply NIN but the National Identity Management Commission, the agency in charge, complains it lacks funding. The current approach to data gathering is too incremental for a country that continues to grow dramatically, for a country that needs the data so urgently. How do we know who is poor? How do we properly assess demography and shifting movements within the country? How up-to-date is our revenue allocation sheet? Rather than gradualism, some systems need a total teardown before a build-up, and a unique identification is

one. Banking systems, Telco numbers, house address, vehicle registration, passport numbers, and all services for all Nigerians should be linked to individual single reference numbers. The absence of a functional national identity explains why Nigeria has not scaled consumer credit. It is cringe worthy to see how a Nigerian is likely to fully pay for land, a car or furniture. I believe this is one of the situations that incentivise corruption at the bureaucratic level. Nigeria needs a functional credit system to swell its middle class, expand spending wealth and reduce the idle wealth tied up in items that could have been paid for overtime. A situation where 70 percent of credit in a country is given to just a few individuals does not speak to a developed country. With credit scoring systems in developed countries, citizens are more mindful of their spending habits and it becomes simple to hear folks work for two years and already have 3-5 percent equity for home ownership. We need to talk about infrastructure. Whenever I am in the US and I drive through those clean roads of Virginia, I feel so relieved. Yet, the US does not lead in terms of global infrastructure. Nigerian governments need to invest in infrastructure or seek partnerships that enable rapid scale. Why are our roads so bad, port systems are underfunded and the big elephant, power, still epileptic? Nigeria has to find a creative approach to raise its funding for roads that would require at least N1.5 trillion annually to make a dent. Landing in Murtala Muhammed International Airport or just hovering towards landing with the thickset of darkness is enough to explain that something is wrong with the infrastructure. And it makes a bad first impression for first-time visitors.

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There is no pathway to a developed country without visionary leaders that combine all resources to deliver sound governance. Leaders with competence, courage, capacity and character are able to make the best decisions to take the country forward. Nigeria has been very unfortunate with leadership

My clear thinking is to empower new businesses with a guarantee to deliver infrastructure especially roads, put viable projects on public-private partnerships and toll them and seek foreign funds for infrastructure such as power and rail with current limited local expertise. While we might be tempted to say that the large bulk of the work is in government hands but developed countries place a lot of emphasis on tax collection that’s parsed with welfare mechanisms. Tax collection is a twoway street guided by trust. Nigerian leaders have not tried to protect that trust by shying away from accountability since oil rent has fuelled bogus lifestyles. Taxes are meant to redistribute opportunities in developed countries. That’s why the breakdown of most countries’ spending is mainly on social spending, health, education, and defence. Nigeria plays the opposite with a large component of spending on infrastructure with its shallow private sector base matched by extreme poverty numbers. A well taxed state has to be underpinned by a welfare mechanism to support the poor and less privileged. How do the poor rise up the social ladder? First, they must be alive. Second, they must have access to education. Not just any education but quality education that delivers results. Yet, the Nigerian government pays little attention to both sectors even though they are so important to national development. The Federal Government of Nigeria spends less than 12 percent of its entire budget on health and education. Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Seun Onigbinde is the co-Founder and Director of BudgIT.

If you torture the data long enough, it will confess to anything

he focal of today’s credit risk management awareness will centre on the importance to maintain data, uphold the accuracy of data, independent analysis of such data so as to ensure bias is non-existent and ensure results are confidently verified as valid so managerial decisions can be taken as a result of these data analysis. Ronald H. Coase, a renowned British Economist is the author of the quote- “if you torture the data long enough, it will confess to anything”. He is a noble laureate awardee widely recognized for his seminal work on transaction costs, which reflects on some of the most fundamental concerns of economists over the past two centuries. How do organisations/ CEOs/ Credit Risk Managers decide what questions to address and how to choose their theories? How do they tackle the problems of the external environment happenings and give advice on public policy? With these broad questions, we will consider the work (quote) of Ronald Coase to encourage organisations in the positives associated with accurate data analysis in the Credit Risk Management processes. According to Wikipedia, a theory is a group of linked ideas intended to explain something. They can be tested to provide support for, or challenge the theory. The word ‘theory’ has several meanings: a guess or speculation. A law about things which cannot be seen directly, such as electrons or evolution. Theories are based on general principles independent of the thing to be explained. Organizations have certain theories they uphold or beliefs in which by a large extent direct their processes, thoughts, mission and vision. The humans of organisations have their theories which in a bias way (if not intertwined with the company’s theory) interfere with their

work process. We are not interested simply in the accuracy of its predictions. A theory also serves as a base for thinking. It helps us to understand what is going on by enabling us to organize our thoughts. Faced with a choice between a theory which predicts well but gives us little insight into how the system works and one which gives us this insight but predicts badly, I would choose the latter, and I am inclined to think that most economists would do the same. For the sake of sound credit delivery, decision making is not based on organisation theories, educational theories or the theory of the Head of Credit of the organisation. This is so because we are interested in both insights and predictions accuracy. As such we have just one fallback- DATA Data analytics does not just give an accurate prediction into a matter but provides an insight into the problem in question. Data Analysis can be an extreme work for organisations with a lot of data and complex processes. An estimate of 75 percent of organisations in Nigeria lack the technology or strategy to effectively use their data (refer to the article on Risk Mgt and ICT). Modern risk management is near impossible without gathering, storing and analysing data. Data analysis can help predict the outcome of a situation or allow you to protect your organisation against risk. It also has other benefits including mitigating repetitive losses, lowering insurance premiums, and more. Analytics turn your data from useful to extremely effective information and allow you to make changes that will benefit your organisation as a whole. A survey by Deloitte found that 55% of organisations believe that analysis improves the organisation’s competitive position and 96%

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agree that it will continue to become more important over the next three years. Risk managers should utilize data analytics as they allow you to: Avert reoccurring losses- Analytics helps identify red flags and trends that could be an issue and result to money loss. Identification helps initiate strategies and implementations for mutations and you can also detect if a certain area, department, or season has a particularly high claim occurrence and run a root-cause analysis to understand what’s going wrong and how you can fix it in the future. Improve insurance pricing- Insurance companies are in business to make profits just as the insured company focuses on same. As such, they strive to do business with risk conscious organisations that are termed “good risk”: those that are likely to pay more in premiums than they require for loss coverage. A readied data analysis and mitigation strategies can be presented to insurance company. They will be ready to do business with you and offer a more competitive rate leading to lower premiums. Top-notch reporting- Accurate data analytics helps give an in-depth knowledge and communication of updates in your organisation and industry. With analytics, issues in your organisation are diagnosed and fixed. Data will become actionable, understandable and support any business idea or strategy for risk mitigations. Performance monitoring- Consistency in your analytics work will ensure you have actual picture/ patterns of how your credit book looks. Risk Managers will be able to hold units or departments accountable for exceeding or failing to meet goals, recognise red flags that may indicate something needs to be changed, or discover why a business strategy isn’t working out as well as planned. With this in-depth understanding,

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Timothy Akinyomi growth will be enabled while meeting goals and avoiding overly risky scenarios. An individual department will be more likely to work on issues if they are shown to be underperforming. Forecasting and decision making- Without analytics, it’s difficult for risk managers to learn from the past or prepare for the future. They make it simple to improve the efficiency and effectiveness of any business. Understanding what happened in the past prepares you for likely incident in the future. A thorough risk plan based on data analysis will have you ready for almost anything. With analytics you can track growth and performance which is key to subsequent decision making for achieving an organisation’s goal and objectives. In conclusion, it is not only necessary to keep and analyse data, it is required that data interferences is not applied in your processes. This is defined as “data- torturing” in the words of Ronald H. Coase. Let it measure what is required of it and provide the result therein and not the result you wish to see. “Numbers are like people, if you torture them long enough, they’ll say whatever you want them to.” Timothy Akinyomi an expert and well trained individual in the field of credit risk management. He is the CEO of Tatoni Consults

Char Matt with

Akande author o journey de25@g

Wednesday 29 January 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Consequence of CBN’s inconsistencies In the battle to curb inflation closure of borders is the elephant in the room

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

Bashir Ibrahim Hassan

ncreasing funds banks have to maintain with the Central Bank of Nigeria (CBN) contradicts asking them to give more loans. The decision of the CBN to increase the Cash Reserve Ratio (CRR) by 500 basis points to 27.5 percent from 22.5 percent contradicts what the apex bank is really trying to communicate. The CBN made clear the objective to encourage banks to direct the flow of credit to the private sector. However, the decision to increase CRR we believe is counterproductive to its intention to spur business activities through increased lending to the private sector; besides banks will struggle to comply. The CBN at Friday’s Monetary Policy Committee (MPC) meeting was faced with the headache of rising inflation. Inflation rose consecutively for months settling at 11.98 percent in December 2019, higher than the monetary authority’s target of 6-9 percent. This is largely attrib-

uted to the federal government’s move to close the land borders and its impact on food prices. This is also coupled with the CBN’s Open Market Operation (OMO) ban which resulted in a liquidity glut in the system. In 2016, Godwin Emefiele, the CBN Governor, stated among other things his pursuit to achieve price stability – a situation where price level in the economy does not change much over time, either too high (inflationary) or too low (deflationary). The inconsistencies of its policies together with the border closure have pushed inflation to its current level. While increase in CRR is expected to reduce liquidity in the system, the consequence on the banking sector is disturbing. This is because the current driver of rising in general prices is largely out of the control of the CBN. The spike we are currently experiencing is largely cost push – i.e. a type of inflation caused by substantial increases in the cost of important goods or services where

no suitable alternative is available – and can be corrected if the land borders are reopened instead of putting the banks in a despicable position, choked up with multiple risks created as a result of regulatory policies. The outcome of the MPC meeting last Friday confirms that the CBN supports the indefinite closure of the border and it is an indication that the federal government may further extend the closure of the land’s borders since the CBN is taking measures to ameliorate its effect. This is evident from the remarks of Godwin Emefiele while assessing the gains of the border protection few weeks after the government’s action. He encouraged the government not to be in a hurry to quash its decision until it was able to receive concrete commitment from her neighbours whose ports serves as landing pads for goods supposedly meant for local consumption but transhipped or smuggled into Nigeria. A 27.5 percent CRR – a percent

of a bank’s total deposit kept with the CBN that cannot be easily recalled or made available to the bank, 65 percent loan to deposit ratio (LDR) and a 30 percent liquidity ratio will leave banks with little room to be profitable; instead they risk dipping hands into shareholders fund to comply with CBN’s directives or source for fund elsewhere. Let’s not forget the risk of increasing non-performing loans that the initial increase in LDR exposed banks to in an economy growing at snail pace. In the fourth quarter of 2019, the CBN cut fees that banks can charge for various services rendered coupled with declining yields which has depressed interest income. This is bad for banking earnings and stocks. On Monday for example, investors’ immediately reacted negatively to the MPC outcome with most big banks shedding value. This is likely to linger till the companies begin to their results which should provide some respite.

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

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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Wednesday 29 January 2020

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Connecting the strategy execution dots Brian Reuben

n his best-selling book Execution, Larry Bossidy described how he drove performance at AlliedSignal as a CEO. He achieved success by personally negotiating performance objectives with Managers levels way below him. The company outperformed the industry under his leadership but quickly gave up its gains shortly after he left the company. Why did that happen? Because effective execution is a shared responsibility delivered through distributed leadership. Effective execution in large complex organisations arise from several effective decisions and actions at all levels of the organisation. Such decisions sometimes involves making tough trade-offs. For example a sales person sticking to the company’s choice of customer segments might mean turning away lucrative business opportunity which could have enabled him to meet his target. It takes a sales person with shared leadership understanding to be able to quickly make such a decision in a way it supports rather than compromise the company strategy. While concentrating power at the top sure has some very powerful short term advantages, it robs the company of the ability to execute strategy in the long run. When top management insist on making the last calls, middle level managers lose the ability and opportunity to exercise their skills and own results which stalls execution. Organisations are frustrated in strategy execution because of misalignment between organisational design and strategy. A recent study conducted by Brian Reuben

Advisory interviewing senior executives from different industries in Nigeria revealed this frustration. Their responses indicate that while some organisations in Nigeria sure have clearly defined path to value creation, the way work is organised, assets are deployed and efforts rewarded defeats the strategy from the start. To be clear, execution is a designed system to get work done through questioning, analysis, and follow up. It is the operationalization of strategy by meshing it with reality, aligning people with goals, and delivering on expected results. This takes serious discipline, understanding and consistency. It requires everyone in the organisation not only having clarity of understanding about the strategy, it requires that they believe and are excited about it. This is where leading the strategy come in. This is where the C-Suite should understand that strategy execution is not just about them. The CEO of Google, Sunda Pichai summarized this understanding in his thought provoking speech at the Indian Institute of Technology-Kharagpur: When you’re trying to run something at the scale of Google, we have now over 60,000 people and…you rely on other strong leaders. A lot of what I do is… I have an outstanding leadership team. It’s learning to let go and really empowering people at all levels of the organisation, and trusting them to doing the right thing. As a leader, a lot of your job is to make those people successful. It’s less about trying to be successful (yourself), and more about making sure you have good people and your work is to remove that barrier, remove roadblocks for them so that they can be successful in what they do. This is the mentality that works. Execution also suffers as a result of the inability of the leadership to effectively communicate the strategy. Ask an average manager how he communicates their strategy and he will tell you about monthly review meetings, town hall meetings and emails. But that’s a lousy metric because it measures communication based on input. To be clear, communication does

‘

It is not many managers that understand the purpose and power of creating a communicating organisation but without it execution will suffer terribly

not equal understanding, feedback is. Now, understand that feedback is not just a mere repetition of the strategy. What you seek is the ability of your people to express your strategy in their own words. If your people cannot explain your strategy to a stranger in five minutes and ensure understanding, don’t expect execution. Communication is a skill a manager has to deliberately learn. And don’t let certifications confuse you. Knowledge is demonstrated not by activities or action but by results. Effective execution requires not just leaders that communicate, it requires a communicating organisation. A communicating organisation is the organisation that communicates. It’s not just about the tools; it’s more about the attitude. It’s about a culture of willingness to pass information is a timely, coherent and comprehensive way to ensure people have the ability and passion to make the right decisions in a timely manner. It is not many managers that understand the purpose and power of creating a communicating organisation but without it execution will suffer terribly. The CEO of a London based professional service firm invested lots of efforts and time in communicating her company strategy. The management team met once a week and she ensured they began by reciting their company strategy and their key priorities for the year. She was convinced her efforts paid off when an in-house survey showed 84 percent of her staff agreed that they have clarity on the company’s top priorities. She was however shocked when she engaged a consulting firm to carry out a survey, because fewer than one-third could name even two of the company’s top five priorities in their own words. This is why communication must go beyond emailing and reviews. Execution also suffers miserably in the hands of the executive who believes that execution means sticking to the strategic plan. Many managers have a hard time understanding that a plan could be a good guide for actions if everything can be static. Sadly that’s not the case with the business environment. Sticking to

Staying happy and competitive in a global world

n his bestselling book, “How Will You Measure Your Life?” Clay Christensen, a professor of Business Administration at the Harvard Business School, tried to answer the question why businesses including big corporations fail. He looked at why some high-achievers ended up unfulfilled; or how they found themselves in unfamiliar paths and ended up being unhappy. He argued that this is a result of what he termed resource allocation problem which happens when the way and manner we allocate resources to our needs undermines our intended strategy and eventually its outcome. Clay’s main interest in this book, was to help readers focus on what actually matters or will matter to them in the long term after succeeding in short-term, tangible achievements - business and career. The things that will eventually matter would be the quality of relationships we have with our family, close friends and associates. This is what our long-term happiness will depend on. While succeeding in business and career are important, he points out that we should be more conscious how we use our advancements in those areas to make an impact on the lives of people. This is a way that ultimately, many people will want to measure their lives. History has shown us this with many accomplished persons, especially in business, who during their twilight years, turn to philanthropy as a source of joy and happiness. I remember recently seeing a beautiful

photo of my retired secondary school economics teacher with one of his childhood friends who paid him a visit. The expressions on their faces particularly that of my teacher, was one of inexplicable joy – such that we never saw on his face throughout our years in school. At his age, what brought him happiness was not how many years he served as an economics teacher, or the positions he attained, or the money he accumulated. What mattered to him at that time and what brought him happiness was the relationships he had built up over the years with his family, friends, students and loved ones. The main resource that is key in achieving happiness is time, and how we invest it is what makes the difference in helping us create long-term happiness. This seems to be in direct conflict with other demands on this resource, especially time for our businesses and careers. How do we remain competitive and profitable and still be happy at the end of the day? This is the dilemma. I have tried to share a few thoughts on the two most important values that have helped me to pursue happiness and competitiveness at the same time over the years. Sincerity: This is about being truthful to other people and myself. In relation to people - in and out of business, I have tried as much as it is possible for me to be sincere about my intentions, and my purposes. I try as much as possible not to create a burden of expecting a second chance to be sincere because I was insincere the first

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time. Sometimes, being sincere can hurt, especially if it leads to us not profiting or to losing something. However, in the long run, when I sit back, I feel a great sense of happiness that I was able to be sincere in diverse situations. Our families, friends, loved ones and business associates should be able to count on and pride in us as honest people. Recently, I was discussing a UK university-led collaborative research opportunity with a company based there. During the discussion, the UK partner emphasized that the needed Nigerian partner must be a firm that already had years of proven/demonstrable competence in an area that is not my firm’s core. In an email response later on, I replied that we were not yet strong in the area that was required. The UK partner wrote back to thank me for my honesty and said he looked forward to working with my firm in the near future. Mere hours after the initial response, he wrote back, asking me for my views that may be useful for the same research I had turned down. After responding, he decided to have my firm join the consortium to provide expertise in an area we are strong in. By being sincere, I was able to be happy with myself, and win the trust of a business partner, which increased my competitiveness. Emotional intelligence We are always surrounded by people, and will always be. Our ability to identify and manage our emotions and that of people around us, especially our loved ones and the people we work and do business with, is important.

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strategic planning defeats the very need for strategy. A plan is something to hold in hand while being willing and able to respond to changes in a timely way. Effective execution means your organisation supports and reward people who do things differently and willing to accommodate the mistake that result from failed decisions. This is a double edged sword and could defeat the very objective of management. But let’s face it, laws and policies are made for people, not the other way round. If someone understand a policy but can prove that a better result is at hand without hurting the values, culture or strategic direction of the organisation, then it should by all means be supported. Execution requires not just having a strategy and plan for its execution, it requires being a Strategic Organisation (ask for the article on this me@brianreuben.com) Organisations rise and fall based on their ability to execute their strategy. While this thought has occupied the mind of thought leaders and practitioners the general results clearly show that only a few organisations master the details. Managers therefore have to give more attention to execution. Truth remains you can’t help yourself beyond your understanding. Better execution requires therefore more understanding on the subject. More often than none, managers seek help when things are out of shape. That’s the pathway to mediocrity. If what you know hasn’t given you better results, what’s the point continuing on the same path? Dr Reuben is one of the most sought after thought leaders on the subject of Strategy in Nigeria. He speaks at business events globally. He has written over 150 articles and facilitated over 200 strategy training programs for senior executives in diverse industries. He has advised and mentored senior executives in several organisations including Africa-Reinsurance Corporation, Department of Petroleum Resources, Trident Energy United Kingdom, BusinessDay, and Dolphin Telecom among others.

AKACHUKWU OKAFOR With emotional intelligence I have been able to live and work with very difficult personalities that other people have not been successful in living and working with. Interestingly, being emotionally intelligent and responding to the emotional needs of other people is like observing the golden rule of doing unto others what you would like them to do unto you. It is about being genuinely open and available to others and to yourself which opens us up to deep understanding about other people and their ways. The way we communicate helps to highlight this, and if people around us know that we are sincere – they know that the empathy and concern we show are genuine and not aimed at mocking, belittling or exploiting. Applying emotional intelligence, I have been able to gain the trust, confidence and love of several people that I have come across and worked with. This has helped me build relationships that keep me happy in times when I am down. These are relationships I have also been able to tap into for competitiveness in my career and business. So, as we continue to build our careers and businesses and attain short-term tangible achievements, we must not forget the longterm intangible achievements of happiness, which involves building healthy relationships with family, close friends, loved ones, and even business partners. This is undoubtedly the most important way that we will measure ourselves in many years to come.

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Wednesday 29 January 2020

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

Manufacturing

Vitafoam shares soar on best Q1 in half-decade SEGUN ADAMS

hares of Vitafoam jumped past its five-year high after the foam maker on Monday reported its best start to a business year since 2015, at least. The company’s shares surged 6 percent to hit N5.3 a unit, the highest level since 2016 according to Bloomberg data. Meanwhile, the price gained the most since a 6.82 percent when Vitafoam first traded this year. Vitafoam has now gained 20.45 percent on year-to-date compared to broader gains of 10.10 percent in the Nigerian stock market. The day’s brilliant performance followed a 127 percent surge in the company’s profit announced for the first quarter ended December 2019. This is the fastest Vitafoam has grown in corresponding periods since 2015 at least. First-quarter profit crossed the half-a-billion mark for the first time in the period covered (2019 Q12014 Q1) at N819.67mn,

despite a 6.33 percent decline in Vitafoam sales to N5.98bn. Sales was dragged by the underperformance of the company’s main business segment involving sales of foams and other products while its supporting seg-

ment noted improvement. On the back of cost management Vitafoam was able to report a double-digit increase in gross income, company financials show. Cost of raw materials fell by nearly 3o percent to drag the overall cost of

sales by similar measure to N3.43bn. This resulted in a gross margin increase of 16 percent points meaning Vitafoam earned a gross profit of N43 from every N100 sales in made in the period compared to just N27

per hundred naira sales in the comparable period of 2018. Operating profit nearly doubled in the period to N1.36bn as the jump in gross profit to N2.55bn outweighed increase in selling, general and ad-

ministrative expenses as well as lower-income from other sources. Finance cost in the period declined significantly to N182.67m from N229.71m, which led to a 130 percent rise in profit before tax. Tax expenses rose 138 percent to N360m, bringing earnings per share to 62 kobo from 33 kobo year-on-year. In the quarter, the company’s total asset rose roughly N3.5bn to N17.219bn while total liability rose about N2.6bn to N10.411bn. The puts shareholders equity to N6.8107bn, 14 percent in the quarter. In the business year ended September 2019, Vitafoam grew profit by most in over 5yrs to outdo billion-naira mark Vitafoam posted an annual profit of N2.46bn for the business year; an increase of more than 309 percent from the previous year and the fastest bottom-line growth in at least five years. Vitafoam makes and sells mattresses, pillows, sponges, carpet underlays, mats, foam blocks, and other foam products.

Economy

Afrinvest expects currency pressure, devaluation this year ... says economy to expand 2.4% in 2020 Hope Moses-Ashike

he dark clouds are gathering, indicating further currency pressures and an imminent devaluation in 2020 according to Afrinvest West Africa Limited. Aside from weak oil prices and capital flows, which would be the fundamental drivers of currency movements, there has been an aggressive liquidity buildup in the economy. The latter is due to an expansion in credit and large amounts of Open Market Operation (OMO) maturities without high-yielding investment outlets. “In our view, this could lead to increased demand for imports, which would depress the current account balance,” Victor Ndukauba, depupy managing director, Afrinvest West Africa Limited said. The firm on Friday unveiled its Economic and Financial Market Outlook 2020 titled ‘Nigeria in the new decade: nothing ven-

tured, nothing gained’. Looking ahead, Afrinvest forecast real GDP growth to expand to 2.4 percent in 2020, driven by a moderate expansion in the oil and non-oil sectors. “We downgraded our 2019 growth forecast to 2.2 percent in August from the initial 2.5% due to weaker-than-expected performance in the non-oil sector in H1:2019,” Ndukauba said. In 2019, the company anticipated a faster pace of recovery but the economy struggled due to lack of support from fiscal and m o n e t a r y p o l i c i e s. In Q1:2019, growth moderated to 2.1 percent(vs. 2.4% in Q4:2018). This was sustained as growth was flat at 2.1 percent in Q2:2019 before rising faster at 2.3 percent in Q3:2019. The oil sector supported growth in 2019 through a slower contraction of 1.5 in Q1 (vs. -1.6% in Q4:2018) and a significant improvement of 7.2 percent and 6.5 percent in Q2 and Q3:2019 respectively. The non-oil sector

could not sustain its positive momentum from 2018 as broad-based performance remained weak. Non-oil sector growth slowed to 2.5 percent in Q1 (vs. 2.7% in Q4:2018), 1.6 percent in Q2 but slightly recovered to 1.8 percent in Q3:2019. On inflation, the firm said in 2020, new and familiar headwinds to consu m e r p r i c e s ab ou n d . The proposed increase in Value Added Tax (VAT) to 7.5 percent from 5.0 percent, which it expects to be implemented in Q1:2020, would result in rising prices. The likely adoption of a new electricity tariff as well as continued insecurity in the food-planting MiddleBelt also poses downside risks to consumer prices. The expansion in money supply following aggressive credit growth in the banking system and the new minimum wage could incite price pressures. In our base case, we assume the adoption of new electricity tariff in April 2020, new VAT of 7.5 percent, sustained land bor-

der closure and insecurity in the Middle-Belt. In this instance, “we project inflation to rise to 12.7 percent”. Ola Belgore, managing director, Afrinvest Asset Management Limited said investment strategy for 2020 is premised on expectations of yield volatility in the local

and Eurobonds markets as well as the SSA Eurobonds market. Since yields in these markets are likely to remain relatively higher than global levels and hence attractive, we expect significant trading activities in these markets in 2020 as investors – local and foreign – explore

profitable opportunities by riding the yield curve. “In the equities market, we expect a bullish equities market performance in 2020 and we see room for alpha return given low valuation levels after two consecutive years of negative performances,” he said.

Julian Flosbach (m), GM, FairMoney, Nigeria, in a warm handshake with Animashaun Samuel Perry (Broda Shaggi), FairMoney Ambassador, at the unveiling of Animashaun Samuel Perry as FairMoney Ambassador in Lagos, with them is Olufemi Oguntamu (l), the comedian’s manager.

Wednesday 29 January 2020

COMPANIES&MARKETS

BUSINESS DAY

interview

We are creating talent pipeline for Nigeria’s automotive industry - Ologunoye Timi Tope Ologunoye is the Director, Corporate Services at Cars45. He is a seasoned senior HR professional, industry thought-leader and Council Member of the Chartered Institute of Personnel Management, CIPM. In this interview, he speaks to BusinessDay’s Fikayo Owoeye on how to tackle the unemployment challenge in Nigeria, the future of work, amongst other issues.

to always remember that a job is a solution to a company’s problem through a desk. They must remember to use appropriate language and be emotionally intelligent - telling the interviewer that “you smell nice” may not work. Thirdly, be authentic. Be confident and remember to maintain eye contact with the interviewer. If you have done your research, answering the question – “do you have any question for us?” would not be a challenge. However, it isn’t compulsory to answer that question, but if you must ask, please ask only intelligent questions. If I might add a fourth, pray and trust God for the favour factor.

nemployment is one of the biggest challenges that confronts Ni-

geria. In 2020, can you provide practical steps that organizations can take to reduce it? While I think the unemployment challenge in Nigeria is one which the Government needs to tackle headlong through appropriate policies that will stimulate the economy for jobs to be created, I also believe that each one of us, including organizations have our different parts to play. Firstly, organizations must find ways to collaborate with education and training providers to help people develop the skills they really need in the world of work and promote lifelong learning. We have often heard the parlance that “Nigerian graduates are unemployable”, “Nigerian graduates are not good for the industry”. It’s high time organizations did something about it. When organizations create partnerships with academic institutions for their own talent needs, they are able to increase the quality of the talent pool available to everyone, often in a more cost-efficient way and with greater societal benefits. The organization’s leadership should commit to initiatives that help connect employees as lecturers or mentors to undergraduates in the universities or local entrepreneurial hubs. This is where the influence of the HR departments come in. Training students for skills needed in the industry is crucial for the employability problem to be solved. Another way to fix the unemployment puzzle is for companies to connect talent to markets by closing the gap between jobseekers and employers. The NYSC program is one among many of such pipelines. Utilizing the NYSC program can be a great way to get a lot of fresh graduates ready for the real world of work. The transition from education to employment is often a make-or-break juncture in the lives of young people and a core determinant of the talent pipeline for many industries. Before designing an intervention, it is important to have a clear understanding of the full talent value chain and the impact a business wants to achieve. Thirdly, organizations can promote entrepreneurship by supporting start-ups and smaller enterprises. We must deliberately create internships for new high

growth occupations. It is pointless to engage a large number of young people in internships for jobs that will disappear in a few years. It will only add to the unemployment challenge. How is Cars45 building the talent and innovation pipeline for the nation’s automotive industry? For us, we believe that the longterm success of the automotive industry depends on the strength and quality of our current and future talents. As market makers, we really do not have anyone to learn from and therefore we continue to ensure that our talent management initiatives are geared towards developing our people for today’s needs as well as future possibilities. While we are not yet 100% there, we continue to work at ensuring there is a clear succession plan for all our critical roles. We have developed leadership and functional competencies that will help drive our growth ambitions and this forms the basis for our recruitment efforts as well as learning and development interventions. Our in-house employer branding initiatives are expected to help our employees refer their friends to join our workforce. The third layer of our recruitment process is a company immersion session where we allow prospective candidates to visit our select business locations, to mystery shop the employee experience by asking our employees questions while they do their job. The outcome is that the prospective candidate would either fall in love with our employer value proposition or otherwise before the last stage of their interviews.

We also partner with the NYSC to ensure that we are continuously helping to absorb young graduates transiting from education to employment and training them to be ready for our kind of industry. From the time an employee joins us, we have special programs such as the management trainee program, the middle manager fast-track program, the emerging leaders’ program and the senior managers program to cater for each of our five leadership passages. This is in addition to the very rigorous on-the job training that our people are exposed to daily. We understand that after training employees, you must also ensure you see them in the light of the new knowledge they now possess; otherwise, they will leave for a higher bargain. So, our reward systems and other employee engagement initiatives are targeted at ensuring that we retain our high potential employees. What are the 3 things especially young people should know about acing interviews? Firstly, young people need to always “Be prepared”, like the timeless motto of the Boys Scout says. I know that in this age where attention span is short, some of our young people want it easy breezy. However, nothing can replace the traditions of excellence and hard work, as such they must strive to do the following - research the company and its brand persona; be at the interview location on time and dress well for the interview. Secondly, they need to know the answer to fundamental interview questions. It is important

How would you describe your organization’s philosophy for hiring, nurturing and retaining talents? We hire the best and retain the best. We have an environment that allows everyone to thrive both on the job and by way of personal development. We have an inside joke that 3 months with us could be like a lifetime in some other places because we are a fast-paced and innovation driven business. We consistently invest heavily in our high potential talents. We have noticed a strong relationship between your organization and the NYSC. What’s driving this engagement? We are an intentional organization. We want to be part of the solution to our nation’s unemployment problem. Nigeria’s automotive industry is a big one that has remained fragmented and unstructured till now and as we have taken the lead in putting a structure to the industry by creating a platform that allows sellers and buyers of cars to exchange value quickly, transparently and with unhindered access to independent relevant information required for decision making, we know the only thing that can limit our ambition is the quality of our people. We have found a good collaborator in NYSC as they have given us a ready pipeline for harvesting fresh minds that we can easily develop to join us in solving Africa’s problems within the auto industry value chain. We are also happy that NYSC is appreciative of our efforts in this direction. The nomenclature has changed from personnel management to Human Resources and now people operations in many organizations. What is the one thing that hasn’t changed?

The people are at the front and centre and rightly so, the most critical element of any organization. HR has evolved radically and will continue to change in nomenclature as technology continues to deepen and the needs of the workforce continues to change. No matter the change in name, the need to efficiently manage the ‘people’ usually referred to as the ‘employees’ will remain constant. Every organization is unique in its requirement, culture, policies and procedures but the value of the human beings in it called the ‘people’ remains constant and unchanging. While your strategies for sourcing top talent and building a talent pool to fill future vacancies, managing staff retention through employee engagement, improving employee wellness, compensation and benefits, delivering learning and development or complying with labour laws will continue to change as time and nomenclature changes, the quality of your people will remain a principal determinant of your organizational success. What is the future of work in Nigeria and how can employers brace up for it? Technology is already changing the way we work and the work we do. This will likely continue until technology and work operate in a borderless and seamless environment. Automation, including robotics and AI, is advancing quickly and will change the types of jobs we do, how many jobs there are and how we value them. Preparing to share space with robots as colleagues or learning new skills as robots take over the most repetitive or dangerous tasks should be on the front burner in the new decade. HR Managers must have the experience and skills necessary to communicate effectively with employees, while also providing a strong direction over the implementat i o n o f au t o mat i o n w i t h i n their organisations. Functional leaders will need to build competencies to manage a hybrid workforce to ensure a harmonious existence of human and robot workers. While this new technology offers plenty of advantages in terms of saving time, increasing efficienc y, eliminating biases, and more, it can also take the ‘human’ out of human resources. I foresee there will be a lot of pressure on organizations as they risk losing sight of their company’s most valuable resource: its people, if they become too focused on the numbers or data points.

Wednesday 29 January 2020

BUSINESS DAY

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Wednesday 29 January 2020

BUSINESS DAY

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Wednesday 29 January 2020

BUSINESS DAY

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Nigeria’s rice industry booms on border closure, Anchor Borrowers …stakeholders want policies sustained Josephine Okojie

igeria’s rice farmers and millers who have struggled in the past to sell their products are now smiling to the banks as demand for the crop continues to rise owing to the on-going border closure and Anchor Borrowers Programme. The border closure and Anchor Borrowers initiative have made farmers and millers ramp up their production to meet the ever-increasing demand for rice- a key staple in the Nigerian diets. As a result, Nigeria’s rice production has risen to an average of four metric tons per hectare and this made it possible for farmers to meet up with the market rice needs during the 2019 festive season. “Lots of rice farmers are increasing their production areas because there is a huge market for paddy since the border closure,” said Aminu Goronyo, national president, Rice Farmers Association of Nigeria told BusinessDay. “This is because millers are patronising rice farmers now and off-taking all that they produce immediately,” Goronyo said.

Kunle Dabiri, general manager, Origin Automobile Works presenting the OAW corporate souvenirs to Isiaka Adegboyega Oyetola, Executive Governor, State of Osun at the office of the Governor recently in Osun State.

He stated that before the border closure, farmers had over 20,000 tons of paddy lying fallow because millers were not off-taking from them. In an attempt to tackle issues of smuggling, the Federal Government had since August 2019 shutdown the Nigerian borders. The move compelled Nigerians who generally have a high preference for foreign varieties to shift to local brands. Also, it spurred demand i n c ro p a n d l i v e s t o c k products across the country

and created investment opportunities for potential investors in rice and poultry production value chain, among others. The United States Department of Agriculture (USDA) put Nigeria’s milled rice 2018/2019 production at 4.78 MMT, up over 2.5 percent from 2017/18 figure of 4.66 MMT. The Food and Agricultural Organisation (FAO) had in 2017 attributed the continuous growth recorded in the country’s rice production to high local prices and input assistance

programmes such as the Anchor Borrowers Program. However, the 4.7 million MT milled rice in 2018 is still 2.3 million MT below Nigeria’s 7 million MT annual demand as stated by the country’s Agricultural Ministry. This shows a huge opportunity for investors across the rice value chain. “We are making so much profit in the sale of rice right now. I am buying paddy and milling it in the north to supply markets in the south,” a trader who is currently taking advantage

of the border closure and does not want his name mentioned on print told BusinessDay. “This is the best time to invest in the rice value chain,” he advised. BusinessDay’s recent survey at Daleko market – the largest rice market in Lagos metropolitan shows that local brands now dominate traders’ shelves with prices declining when compared to a month ago. The average price of a 50kg bag of local brands from integrated rice millers such as Mama Pride, Umza Classic, Mama Choice, Lake Rice, Three Brothers, and AlHamsad among others now sells for N19,500 as against N24,000 sold a month ago, indicating a 19percent drop in prices. While a 50kg bag of rice from semi-integrated millers and manual millers sells for between N14,000 and N15,000. These varieties are regarde d as lower quality because there are stones mixed with the rice grains. The country currently has a milling capacity of about 5.1 million metric tons, the Rice Processors Association of Nigeria says. The milling capacity figure is expected to increase as Dangote Group looks to commence rice production.

Similarly, the Anchor Borrower Programme (ABP) which started since 2016 to provide credits to farmers has impacted rice production tremendously in the country. The government has since been lauded for the initiative but loan repayment by farmers has remained a constant issue, as farmers see it as their own part of the national cake. Experts say the country can only sustain the progress made thus far when there is policy consistency and pr ices of local brands become price competitive as well as improvement in the quality of local rice varieties. They urged the government to continue with the on-going border closure policy to drive more investments in the country’s agricultural sector. The experts also called on the government to address lingering structural problems such a s i n s u f f i c i e nt s u p p l y chain integration, lack of capacity for farmers and infrastructural deficit which remains a threat to local production. The Federal Government last year says it will extend t h e b o rd e r c l o s u re t o January 31st, 2020, which is just four days from now.

DEHS sensitises food vendors, water manufacturers on food safety Josephine Okojie

he Directorate of Environmental Health Service (DEHS) under the Lagos State Ministry of Health has sensitised food vendors, water manufacturers and food handlers on food safety management in the state. The sensitisation program was conducted to ensure that food vendors and water manufacturers in the state produce safe and wholesome food and water for Lagosians. Food vendors and water manufacturers were sensitised on food procedures, preservation, and sanitary and hygiene practice when preparing food by various experts in the country’s food and safety

organisations. “We discovered during our monitoring that food vendor and water manufacturers are not doing what they are supposed to do. If you look at the statistics in the hospital, there has been increase in the rate of food poisoning and the number of people having cancer is on the rise,” said Ajayi Theophilus Folarin, director, Directorate of E n v i ro n m e n t a l He a l t h Service said. “This is because most of the foods coming into the country are not safe for consumption. They are carcinogenic,” Folarin said. “We need more collaboration and active participation of food and vendors and water manufactures to ensure that food consume in Lagos and www.businessday.ng

the country at large are safe and wholesome,” he added. He noted that based on that DEHS is sensitising food vendors and water manufacturers on food safety procedures while calling them for active participation so as not to come short of

the laws. He stated that DEHS i s g i v i ng f o c u s o n t h e re q u i re m e nt s f o r f o o d preparation and ensuring that food vendors adopt the laid down procedures in preparation of food. Folarin added that there

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are laid down food safety procedures that most food vendors do not follow and the key of them all is the Hazard Analysis Critical Control Point (HACCP) plan. He says food safety can only be ensured in the state when there is compliance from food vendors, water manufactures and food handlers to safety laws. “If we must ensure that we consume safe food and water in the state, then there must be compliance and commitment by food vendor and water manufacturers across the state,” he said. He stressed that the main cardinal approach to food safety is sanitisation which involves proper waste disposal. Speaking also during the sensitisation programme, @Businessdayng

James Marsh, president of the International HACCP Association of Nigeria said that HACCP is a food safety requirement that looks at the entire food chain holistically. Answering questions on what it entails in getting HACCP certification and the affordability to the food vendors, he said that it varies from one establishment to the other. “The price varies from one establishment from another, it is not one price fits all, so you look at the time; you look at the procedure you are going to write and the issues on the ground,” Marsh said. “The HACCP plan has been embraced by the World Health Organisation and Nigeria just embraced it in 2018. It is now embedded in the country’s national food safety policy,” he added.

Wednesday 29 January 2020

BUSINESS DAY

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Hastom Food Farms creates investment window for cashew farming Josephine Okojie

o support the current diversification drive and mitigate the impact of oil price, Hastom Food Farms Limited is creating wealth for investors through the establishment of cashew plantations. Hastom Farms through its online platform bring investors’ funds together to invest in procuring the land and seedlings for the production of cashew. Unlike other agric-tech organisations that connects investors to farmers, Hastom invest investors funds in planting and maintaining plantations on their behalf, thereby, ser ving as the farmers. “Through our Hastom Farms platform people can invest in cashew trees and we sell a minimum of 10 trees per investor,” Debo Thomas, chief

executive officer, Hastom Food and Farms Limited said during a farm tour. “We use investors fund to pay for land lease, land clearing and seedlings as well as other inputs to farm cashew nuts.” “For as low as N125,000 for a unit, investors can plug into our Cashew Investment Plan and keep getting paid for the next 40 years,” Thomas said. According to him, investors are guaranteed at least 20 percent return on investments in the first 3 years, when the farm is intercropped with other crops. Between 10 and 11 percent is paid to investors from the 5th year till the 40th year when the investment is terminated. He encourages interested investors who are willing to invest to visit http://www. cashewbiz.com/welcome to invest. He noted that the

Debo Thomas

organisation has continued to build trust among investors with persistence.

Livestock farmers want Miyetti Allah to withdraw case against Oyo

k e - O g u n Livestock Farmers A s s o c i at i o n ha s called on the Oyo State chapter of Miyetti Allah to urgently withdraw their legal suit against the State government over the signing of the State’s Anti-grazing bill into law. Oyo State has recently signed the bill to law after the State’s House of Assembly passed the bill which opposed open grazing by herders, due to incessant clashes between farmers and cattle herders and loss of lives and farm products. The bill has made it illegal for herders to graze on farmlands but sought the need for them to secure lands where cattle could be fed and bred without the herd entering farms to destroy crops. Rasaq Ashirudeen, chairman, Oke-Ogun Livestock Farmers Association, said the law was in line with the state’s responsibility to protect its citizens, majority who were farmers. He said this while paying a courtesy visit to the Sole Administrator of Iseyin S ou t h L o ca l Co m mu n i t y

Development Area (LCDA), Ajibola Raheem in Iseyin over the weekend. Ashirudeen called on Miyetti Allah to avoid confrontation with the State government with its resolve to approach the court, but rather sit with the government and work on the areas that would affect them in the law. “We are farmers as well as partners with the cattle herders and owners of livestock, which make people call us ‘Oniso’, we buy from them (Fulani cattle owners) and also plant crops that get destroyed whenever the cows pass through our farms. “It is imperative that the Miyetti Allah do the needful and immediately withdraw the case they took to court against the State, it is not going to bring about the needed peace, they are Nigerians that can live anywhere in the countr y but even the constitution of Nigeria does not allow for destruction of others’ property, especially their own means of living. “We plead with the two parties to reach a truce without either being at the receiving end but Miyetti Allah should firstly withdraw their case from the court so that amicable www.businessday.ng

Data from the National Bureau of Statistics shows that Nigeria exported N35.7 billion ($116million) worth of cashew in the first nine months of 2019. It was exported to the United States, Vietnam, Russia, Germany, Italy and many parts of Europe. Currently, Saviour Daniels an investor with Hastom Farms described his experience with the farm as satisfying owing to their ontime payment of a return on investment. “I saw the advert one afternoon in 2017 and decided to trust them with my tiny investment on 3 acres of cashew- cassava project and I have not regretted the decision,” Daniel said. “I also love the detailed investment dashboard and farm updates. It gives me peace of mind because I know what is happening with my farm at every point in time,” he added.

How to invest in moringa tea bag processing factory Olumakinde Oni

...call for peaceful resolution REMI FEYISIPO, Ibadan

Hastom Food and Farms Limited is currently investing massively in the cultivation

of the crop and with plans to start adding value. The company has cultivated cashew trees o n a b o u t 5 5 0 a c re s i n Ogbomosho, Oyo state and making investments across the value chain. Nigeria is rated as the fourth-largest producer of cashew nuts in Africa and sixth in the world, with a 275,000 metric per annum in 2019 and is expected to reach 500,000 metric tons by 2025, according to the National Cashew Association of Nigeria. Cashew has become a topnotch cash crop in Nigeria and it is one of the focused commodities by the Buhari led government to revamp the Nigerian economy. It is eaten and also serves as industrial raw materials in firms producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil among others.

solutions can be found. Th e g rou p, t h e re f o re, called on the governor to engage stakeholders’ on the content of the bill and its implications and provide room where adjustments could be made to secure continued survival of the herders in the State. The farmers hailed the governor for his interest i n b o o s t i n g a g r i c u l t u ra l revolution through far m settlement programs. He said the group believed the true empowerment of farmers would foster economic diversity and engender mass employment and financial freedom for the people of the State. In h i s w o rd s, Aj i b o l a Raheem, the sole administrator, Iseyin South LC DA , Ho n . sa l u t e d t h e courage and what he called an uncommon resolve of the group to say the truth for the sake of peaceful coexistence of the Fulani and farmers in Oyo State. He assured the group that the State government was ever ready to accommodate all tribes and nationalities and was willing to do all require for them to thrive in their businesses.

oringa is a food, medicine, and forage crop. Mor inga cultivation is gaining popularity in Nigeria in recent times. Many Nigerians are now establishing Moringa plantations and consuming a lot of the products. The health benefits of moringa are limitless. Moringa has a strong antioxidant effective against prostate and skin cancers. It is an anti-tumor and an anti-aging substance. It modulates anemia, high blood pressure, diabetes, high serum or blood cholesterol, thyroid, liver and kidney problems. It also has strong antiinflammator y proper ties ameliorating rheumatism, joint pains, arthritis, edema, and lupus. It is effective against digestive disorders including colitis, diarrhea, flatulence ( gas, ulcer or gastritis. It is an anti-bacterial, antimicrobial and anti-viral agent, it is effective against urinary t ra c t i n f e c t i o n , t y p h o i d , Syphilis, dental carries and toothaches, fungus, thrush, common cold, Epstein-Barr vir us, Herpes – simplex , HIV AIDS, warts parasites, worms, schistosomes, and

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trypanosomes. It is a detoxifying agent, it is effective against snake and scorpion bites. With all the health benefits of Moringa listed above, a Moringa tea produced in Nigeria, well packaged with aggressive marketing strategies will sell like hot cake. A moringa-tea production factory is nothing but a goldmine that will turn around the fortunes of the promoters. Technical Information Mor inga plantations are springing up in Nigeria and it has been well established that Nigeria has the potentials to grow millions of hectares of Moringa, hence the raw materials supply can never pose any problem. Not only this, the awareness of the usefulness of moringa is gaining ground every day. Moringa leaves are plucked, washed, sterilized and well dried. The dried leaves are later milled into powdery form and now flavoured. There are different flavours such as strawberry, vanilla, ginger, and others. The next step is to package in permeable tea bags. Tea bags are now stuffed in small packs. Attractive and good packaging is a pre-requisite to market @Businessdayng

acceptability. Seriousminded investors can be put through the technicality. Financial Implication A sum of N8.75 million will be required to set up this project. The breakdown is given below: • Pre-Investments - N250, 000 • Accommodation - N2, 500,000 • Plant and Machinery - N3, 000,000 - N 2,000,000 • Utilities • Take-off Working Capital N1,000,000 Total N8, 750,000 =========== A well-packaged feasibility report/Business plan is a prerequisite to project take-off and finance sourcing. This can be provided for serious-minded investors. Profitability The project has the potential to generate a turnover of N300 million on annual bases with a minimum pre-tax profit of N130 million already computed. This is another income and job-generating opportunity that has far-reaching positive e f f e c t s o n t h e Ni g e r i a n Economy. Serious-minded investors can be assisted i n t h e e s t a b l i s h m e nt o f this project. Contact author on 08023058045 or olumakindeoni2@yahoo.com and nucleusventuresnigltd@ yahoo.com

Wednesday 29 January 2020

BUSINESS DAY

Wednesday 29 January 2020

BUSINESS DAY

Interview

‘We are unhappy about receiving cases general hospitals should look after’ As the problem of bed space shortage clogs the wheel of swift emergency response in Lagos tertiary hospitals, ADETOKUNBO FABAMWO the chief medical director at the Lagos State University Teaching Hospital (LASUTH) in this interview in response to BusinessDay’s Investigation tells TEMITAYO AYETOTO it’s time conversations shifted to how emergency reception in secondary health facilities can be strengthened to serve cases within their purview. He says apart from considering expansion of both medical and surgical emergency units in tackling the issue, LASUTH has installed solar systems in its emergency unit theatres to guarantee electricity supply and has revived its oxygen plant to manufacture about 60 cylinders daily among other initiatives to improve health delivery.

n the course of the investigation, there were slight differences in the triage time of LASUTH compared to LUTH but a common problem was lack of bed spaces. Why is this challenge persisting? It is true that we have an emergency response protocol that is on ground. Any emergency that comes must be seen by a doctor. The state of the patient must be determined immediately. If there is bed they will admit. If there is no bed, they must start some form of treatment like intravenous drip or oxygen before they transfer. And the protocol goes further to say that before transferring, we phone to our sister general hospitals to find out where there is bed. It is interesting the issue of bed space came up. On New Year’s Day, a friend of mine, a private practitioner called me and asked me if I had seen the stuff been written in BusinessDay. And then he picked me up on the issue of bed space. Why should we not be able to admit more patients than we are admitting? And I explained to him that I believe the mentality of the average Lagosian is that the teaching hospital is the best place to go in case of an emergency because that is where you have the best hands, the best equipment etc. But I told him that the peculiarity of Lagos state is that it has upgraded almost all its secondary facilities. There is no secondary facility in Lagos State that does not have a surgeon, obstetrician, gynaecologist, paediatrician and specialist, equipment. Gbagada, Orile, Agege, Randle, Onikan, Alimosho General are well set up to handle emergencies. They have consultants and equipment but people don’t go there. The only areas where we have an advantage in LASUTH are two: neurosurgery and cardiothoracic. So, people who have gunshot wound to the chest, head injuries, even if they go to any of those secondary facilities, they will still end up with us. People will not go to any of those secondary hospitals. They prefer to come to LASUTH. So, we are overs-subscribed. As we speak, we have over 37 medical emergency beds. Right now, we have a system whereby on daily basis, I can tell you how many vacant beds are available in LASUTH. As at 11am, 2nd January, medical emergency had no vacant space. Surgical emergency had 30 beds with one vacant space; the critical unit: 21 vacant spaces. But you need half a million-naira deposit to be admitted because it is a private entity. So, if you have your money, you can go there and find bed space. But how many people can come up with such a deposit? Even though we have the discretion of reducing or waiving it depending on the severity of the case, we do that. But cases that needs to be transferred from private hospitals for instance to our critical care unit will have been well advised in advance the deposit needed. So, in CCU, female cardio-neuro has four vacant beds while male cardio-neuro has four vacant and so on. The emergency unit are the critical places. Why are people clogging beds not moved to the wards? A lot of them in the surgical unit, for instance, are neurosurgical cases. They are long-stay patients. What we really need is a spill-over ward where we can keep these kinds of cases which will be in for a prolonged time but we don’t have that. So, they clog up our emergency rooms and block the ways for new cases to come. But we can’t throw them out on the street because they still need some form of intensive care. I think the way forward is to expand our emergency units and my own prescription is that the spaces should be doubled. Our current surgical

operational. So, they come to LASUTH. But there might be some genuine cases, like neurosurgical cases, cardiothoracic and sometimes urology cases. I can categorically tell you that all the big secondary health facilities in Lagos state have good complements of specialists. But they may not have sub-specialities like we have. For instance, in LASUTH if you take the department of medicine, we have dermatologists, cardiologists, nephrologists, neurologists, gastroenterologists, respiratory physicians, and others. In a general hospital, you may just find one or two specialists. But never the less, they will be able to offer the immediate primary care to patients before referring. And we are not unhappy about getting cases that others cannot look after. We are unhappy about getting cases that secondary facilities are in a position to look after. I will go back to this discussion with my friend. He said to me that we are not doing enough to educate the public to let them know that secondary facilities are well equipped. I agree. Who is to educate? He said it should be the ministry of health. I know that the ministry is doing its best to educate but I told him in very strong terms that I believe that the populace themselves should seek information. If you need healthcare, you must ask questions. Don’t just assume that it has to be LASUTH. You over-clog LASUTH and we are not equipped to take care of everybody. Some years back, governor Fashola pronounced that anybody that will come to a tertiary hospital, specifically LASUTH should come with a proper referral letter. Unfortunately, it was not enacted into law and so nobody is complying with that. And as doctors, if they bring a patient who is dying to us, needs acute help, we cannot ask for a letter or police report. We don’t do that in LASUTH. If you are a gun-shot victim, we treat you. But we are pained when we get cases that we know can be treated elsewhere. And so eventually, we are the ones that end up sending them to those places.

emergency unit should go up one floor with an equal number of beds so that we have a total of 60 beds. Our current medical emergency will go up another floor and double the number of beds. That may help for a while but we will still come back to the same issues. It will throw up staff challenges. As we speak, we are undergoing the effect of the brain-drain both internal and external on the system. There is an acute staff shortage in the system. On a daily basis, I sign so many resignation letters. The recruiting agencies have made it so easy now for nurses especially to relocate to Canada. According to the newspapers, Canada still needs a lot of foreign professionals. They do not have enough. How huge is this impact on health system? Let me put it graphically to you. A typical ward 30-bed ward that should have five nurses, according to the recommendation of the world health organisation, has a maximum of two during the day. At night, it is only one. That is how bad the shortage is. For doctors, about 5 months ago, we recruited 10 resident doctors in the department of surgery anew. Five weeks ago nine of them resigned en masse. Some travelled abroad, some went to LUTH, and others went to Federal medical Centre (FMC) Ebute-Metta because the federal institutions pay higher than the state. So, there is this internal brain drain in which our doctors move to federal institutions when they get the opportunity. So, there is a staff shortage. But that can be tackled and the Lagos state government has a system in place in which at the end of every quarter we are able to replace all staff that left. But as a manager of a hospital, I have had the course to tell the authorities that that quarterly replacement would no longer work for us. If nine doctors left at once to go, I have to wait until three months’ time before replacement. It doesn’t work for me. So, I have had to request that we should be able to do an automatic replacement. The governor in a televised programme said he has approved the immediate replacement of staff for the health sector. How does that help? Before the governor came in, even that quarterly replacement we doing needed the approval of the governor to effect it and that sometimes took time. And so, it hampered the system. What this governor has said is that he no longer wants to know anything about your automatic replacement. We can do it. He has given approval. So that’s going to help and make it seamless. Have you begun to leverage that? We are just starting. The quarter will be the end of December. We are going to experiment that this January and know how fast it will be. However, I was happy that the governor said immediate and that tallies with my proposition. That will help us. I will no longer have any headache when anybody leaves. There are workers on the street whether you like it or not. When we want to interview for junior doctors, this place is jampacked. There are many doctors. Some of them are in private hospitals. But there is now a little bit of a downturn in private hospitals. Many years back they were the place to work because they paid much higher, now the reverse is the case. A lot of young doctors are just managing there and they move at any opportunity. It is a paradox of some sort. People are resigning and yet there is unemployment. How do you reconcile the reconciliation is that just as people will leave, others will come in. But the regret we have about that these are people we have trained and have acquired skills and knowledge. So, we lose them. When we employ, these people have to start afresh.

Apart from the clogging of beds by long term patients, what are other critical issues that fuel bed space problem? Another one is a systemic factor which we have now addressed. Sometimes there is no duediligence done to find out available bed spaces on the ward so that patients in emergency spaces can be moved. Sometimes people are a bit too lazy to do that. So, they just keep these patients whereas, there are beds on the ward but we have addressed that. Now, we have appointed an officer who does a round three times a day, morning, afternoon and evening to go through the ward and check bed spaces and then comes back to emergency unit to advise them to move patients. Things are getting better now. As a teaching hospital, we have multiple specialties. Let’s take the example of surgery. There are about nine sub-specialities in surgery: paediatric, orthopaedic, urological, general, neurosurgery which have their allocated beds on the wards. These wards were marked territories that didn’t allow non-speciality patients to use beds. So, you may have vacant neurosurgery beds on the ward but because the patient you want to transfer to the ward is neurology, they will say no. But we have scrapped all that and say any available bed, put patient. Later, we would rearrange and everyone will go to its own tents. When was that scrapped? It’s about a few months ago. In a teaching hospital, you have three core functions. The number one core function is service, followed by training and research. In a medical school it is different, the first core function is training followed by research. The last thing is service. The other problem that led to clogging was the unavailability of piped oxygen on the wards. There are some patients that are oxygen-dependent and the only place they can continue to get the oxygen is the emergency ward. But if there was piped oxygen on the wall,

you could remove them from the emergency unit to the ward. But then they got spoilt. We have now fixed that. There were also issues about patients who were fit to go but owed the hospital money, huge money sometimes. How fast do consultant specialists see emergency patients? Since I resumed here as the CMD, one of my preoccupations has been to put in place protocols, processes and procedures. And one of the solid protocols has been that of referral to specialists. We have a protocol that if an emergency case is referred to a particular sub-specialty, it must be seen within an hour by the team. We don’t joke with that proto. Our emergency units have table telephones that are capable of sending text messages and of course, we can phone with it. So, if there is a referral, we phone the junior doctors in that place and we send a message to the consultant. So even if the junior doctor doesn’t come on time, the consultant has received a text message and he will then impress it on the doctors on-ground to go and see first and revert to him. We don’t have that problem at all. It is one of the issues that we have tackled headlong because we realise that the critical window of one hour which cases must be reviewed can lead to unnecessary death. We have gone further to the wards. We were particular more about emergency cases but then we also felt that there might be cases on the wards that requires a subspecialty to come and see. So, the same protocol is in place on the wards as well. Do you completely dismiss the public’s fear that they may not get proper care at secondary hospitals? There are two categories of cases. Cases that are referred from secondary facilities to tertiary, again divided into two, half or maybe 60 percent are due to the fact that genuinely they cannot deal with it. Another 30 to 40 percent may be due to the fact that they don’t just want to bother; maybe they have not put their own system in place, their theatre is not ready or the person to run the theatre is not available. These are human factors not that the system is not there. They have just not made it

You talked about expanding the emergency facilities, but what long term solution can be adopted to tackle this problem? I think that the long-term measure is to expand emergency reception facilities in all Lagos state secondary facilities. Gbagada must be able to take in a lot. For instance, we have an annex in Gbagada but a lot of people don’t know that. So sometimes when we get burns and our burns unit is filled up, we don’t have a headache. We have a purpose-built multi-bedded burns unit in Gbagada. So, Gbagada is just as big as LASU in terms of staff. We need to expand the facilities and then make the populace aware through various means. Let the people know that LASUTH is for specialised cases of head injuries, chest, kidney and liver issues. It is not for general cases. So that we will be free to hone our skills in all these specialised services. We have strength in critical care which is one of the best in the world. We have strength in cardiothoracic open-heart surgery, minimal access surgery, assisted conception and eye care. But we want to increase our areas of strength but we cannot concentrate when we are clogged down by general cases that distract us from doing our core functions. So, we really hope that if we expand emergency reception in secondary facilities in Lagos, they will take a lot of load off us. What magnitude of help do you need to achieve this expansion, both internally and externally? We need commitment of the state government to do it and I know that the current government is committed to making LASUTH a highly rated tertiary centre. We are in the process of enlisting the stakeholders including the commissioner for health to buy into this idea of expanding the emergency in all the big secondary facilities in Lagos and educating the public and enforce the no-referral-letter, no-admission in LASUTH. If we can do all that we will have a lot of progress. You have recently clocked a year in the office. What has been your experience, juxtaposing with where you picked things up? Let me start by saying that I’ve been part of this pro-

ject from the beginning and the beginning was 2001. I was the pioneer director of clinical service and training. So the four us, you can call us the architect of the modern LASUTH and that was the former commissioner for health, Dr. Leke Pitan; another former commission for health, Jide Idris and Dr. Femi Olugbile and me. So, a lot of the things that we have in place were conceptualised by that team and put in place. Over the years, people improved on it. So that’s the historical background. But I must say that I was out of the administrative system of LASUTH for about 12 years in which I concentrated on my academic career and clinical work until the position of chief medical director became vacant last year and I applied because I felt that there is still a lot of work to be done. It’s no longer news that we needed to do a lot of things to put the hospital back on a glorious path. So, as per what and what we have done in 12 months, we have done a lot. When we took over, the psychiatry unit which is a very important unit, considering the incidence of mental health disorders in the country was not admitting patients because the facilities for admission had dilapidated. So, we set about fixing that and as we speak, we now have an ultra-modern psychiatry unit in LASUTH. We now admit. We found that there were security issues. One of the problems was that the CCTV system had broken down. As we speak, we have restored the system and from my seat, I can monitor what’s going on in every part of the hospital. Also, we found that our oxygen plant had collapsed for about 8 years. We used to be able to produce oxygen here for the use of patients. So, we have signed an agreement with a private company and by February we are going to get a new oxygen plant in this place which is going to be giving us 60 cylinders of oxygen every day. It is a zero option for us. We have no kobo in it but there will be sharing of profit with the entrepreneur.

We have been able to install solar systems in our emergency unit theatres so that even if all fails, like if the IPP take power and our generators don’t work, at least there will be light to treat emergency cases. We are hoping to expand to other areas but we have started with the emergency unit. And at this point I must acknowledge the kind assistance of the former deputy governor of Lagos state who donated these solar systems to us through our personal relationship with her. We have resuscitated our central sterilization unit. When we took over, all the autoclaves were bad but we have bought and they are now running. Also, when we took over, there was only a four-bedded intensive care unit. Now we have expanded to 8 beds intensive care unit. This one is different from the critical care unit. So, we don’t charge much so that the low-income persons can easily access intensive care. We also realized that there a lot of stroke cases when we came into office. We have set up a dedicated 10-bedded stroke unit that is ultra-modern where our neurology doctor, a professor, and his team are there 24 hours a day looking after stroke cases. We met an Ear, Nose and Throat (ENT) ward that was in a shed but we have been able to move them to a new area where they have a dedicated ward. We have also been able to expand our family medicine department which is the most critical department. It is where cases go first to be triaged. We found that they were choked and we have been able to provide space for them. Still talking about ENT, there was no equipment to do audiometry, the most important test to check the function of the ears. So, we have been able to put in place now a full-fledge audiometry unit and we have been able to employ a permanent audiologist who runs that test. In LASUTH, we are now producing artificial eyes. When we took over, there was nothing like that. We sought the assistance of some Australians who came in for three months and trained

our staff. People who lose their eyes from an accident can now have prosthetics which we produce here. In terms of medical equipment, we have been able to buy about 20 million worth of equipment for our eye department. In our urology unit, we bought another 20 million worth of equipment so that now they don’t necessarily have to open up to do their cases. They can do that using endoscopes, we have been able to buy all that. We have upgraded the theatre. We bought new operating tables and overhead lamps that don’t cast shadows. Most lamps used in most places cast shadows and you will see your hands when operating. So we went further into technology and bought lamps that don’t. We have now a new dental machine which was a donation from the rotary club. Our theatres in medical emergency and surgical and ophthalmology were not functional. We have resuscitated them. In the area of ICT, we have started the computerization of our processes in LASUTH. We have started with six pilot departments. So, as we speak now, a doctor using his laptop will be able to trace the progress of his patients from the consultation to pharmacy, lab and more. But this year we will do everything. Then we have entered into an agreement with a hospital in Sweden to give us some drug analysis equipment. So, we are like in the middle of this year to have a drug analysis laboratory. So, for forensic cases, drug overdose and more, we can easily test the blood for drugs. There are still many things in the pipeline. We want to renovate the house officers’ quarters where our young doctors live. As we speak it is not in good condition. Two, we want to provide more office space for our consultants. A number of our consultants don’t have where to stay when on duty. We want to complete the digitalization process of the hospital and we want to look actively for somebody to sponsor and give us a radiotherapy machine. Cancer cases are common and there are three ways to treat cancer. You can operate on them, give them drugs and do radiotherapy on them. As we speak, we can only do two out of the three modalities of treatment. We can do surgery. We have competent surgeons. We have an oncology unit where we administer chemotherapy. The final part when it comes to radiotherapy is done either by sending to the Lagos University Teaching Hospital (LUTH) or to Abuja. We are not happy with that. We want to have our own radiotherapy facility but it is very expensive. We are talking of billions of naira. We want to by the grace of God achieve that this year. Governor Babatunde Sanwo-Olu spoke about doubling the health budget for 2020. How will this impact your work? When we went for our budget preparation and defense, I am happy to say we got substantial increases in our allocation and I’m happy to say also that our capital budget has now been domiciled with us. It was domiciled in the ministry of health before, which meant that we didn’t have direct control over it. Our board of management is the one now to control our capital budget and the strategy is that within the first two or three months of this year, we are going to quickly prepare all that we need to do in the capital budget and front-load it. What’s your central message to that average Lagosian whose case qualifies to be here? I’m saying that our only aspiration is to ensure that whoever finds himself in LASUTH will be saved.

Wednesday 29 January 2020

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Here’s stakeholders view on new drive for disbursement of $200m CVFF …it’ll be unconstitutional, illegal to use fund for Maritime Bank – Igbokwe amaka Anagor-Ewuzie

ollowing the Federal Government’s renewed drive to apply the fund accumulated in the much awaited Cabotage Vessel Financing Fund (CVFF), into the acquisition of vessels, industry stakeholders have given their views on how best to manage the fund for the benefit of the nation’s shipping sector. The CVFF was established 17 years ago alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to take control of the nation’s coastal and inland shipping business, otherwise known as Cabotage trade. It is also generated from the 2 percent contribution made by all indigenous ship owners from each Cabotage trade carried out on Nigerian waters. Re ca l l t hat C h i bu i ke Amaechi, minister of transportation recently set up a committee that would be chaired by the director general of NIMASA, and com-

prised of other stakeholders, to come up with guidelines for disbursement of the CVFF fund. Speaking to newsmen in an interview recently after an engagement with Cabotage Operators in Nigeria over the disbursement of CVFF, Mike Igbokwe, maritime lawyer, who stated that ship owners started contributing the money in CVFF since 2003, said that its long overdue and time for government to use the funds for the purpose for which it was established.

“We need to follow the provisions of the constitution and the Cabotage Act in the disbursement of the fund. According to the section 80 of the constitution, public funds that were for specific purposes are not paid into the Consolidated Revenue Fund, and the CVFF is one of the special purpose funds. The government must use it for that purpose,” he said. According to Igbokwe, many people have been calling for the establishment of Maritime Bank using the

CVFF Fund. To achieve that, it means that NIMASA must go back to the National Assembly to amend the Cabotage Act because Maritime Bank was not one of the purposes for establishing the CVFF. “Government must not divert the CVFF because it would be invalid, unconstitutional; and illegal to use CVFF for maritime bank,” he stated. Margret Orakwusi, a member of the CVFF guideline Drafting Committee, pointed out the need for the commit-

APM Terminals Apapa wins Most ISPS Code Compliant Terminal award amaka Anagor-Ewuzie

PM Terminals Apapa has been named the Most Compliant to the provisions of the International Ships and Ports Facility Security (ISPS) Code onshore facility in Nigeria by the Nigerian Maritime Administration and Safety Agency (NIMASA). The award was presented

recently to APM Terminals at the NIMASA Corporate Dinner and Merit Awards chaired by Boss Mustapha, the Secretary to the Government of the Federation (SGF) in Lagos. The ISPS Code, which is a set of measures instituted by the International Maritime Organisation (IMO) to enhance the security of ships and port facilities, was developed in response to the perceived threats to ships and port fa-

cilities in the wake of the 9/11 attacks in the United States. According to NIMASA’s independent assessment and screening panel, APM Terminals’ maintained the highest compliance level with the implementation of maritime security protocols in its onshore facilities, and maintains adequate access control and port facility security assessment as well as plans on a consistent basis in 2019 in line

L-R: Abubakar Sanni Bello, Governor of Niger State presenting the Most Compliant ISPS Code Onshore Facility award to Olatunbosun Ayodele, security manager, APM Terminals Apapa, at the NIMASA 2019 Corporate Dinner and Merit Awards held in Lagos recently. www.businessday.ng

with the Code. Commenting on the award, Martin Jacob, managing director of APM Terminals Apapa, expressed appreciation to NIMASA for the award. He said APM Terminals Apapa remains committed to the safety and security of lives and property at its facility. In addition to meeting international security requirements outlined by the ISPS Code, and APM Terminals’ global safety requirements, he said, the terminal operates a truck safety programme that ensures all designated, physically protected areas are provided for drivers conducting operational activities outside of their truck cabs, as well as safety instructions specific to the facility’s layout and traffic flow. “APM Terminals Apapa uses the most advanced crane simulator in West Africa for the training of its crane operators to ensure safe use of equipment at the terminal,” Jacob stated. Speaking at the award ceremony, Dakuku Peterside, director-general of NIMASA, said the award was organised to recognise excellence in the Nigerian maritime industry.

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tee in drafting the guideline, to be specific on the interest rate, duration of the loan and the category of vessels to be acquired using the fund in order not to misuse the funds. “We need to be specific on the interest rate, duration of the loan by determining if it’s going to be two, five or seven years. We also need to specify the category of vessels that would be acquired because it would be abnormal that when the fund is released, it would be used to buy something that was irrelevant. These were the things that would be looked for to ensure that we have enough coverage and protection in the guideline,” she explained. Orakwusi, who stated that she had always advocated for setting up of maritime bank with CVFF monies because as a specialised area, borrowing from the commercial bank with the commercial interest rate, makes it difficult for ship owners to survive. “Shipping is an international business and we are competing with people whose funds are highly subsidised. Foreign ship owners get loans with interest rate

that is as low as 2 percent, and can take a very long period to pay back,” she said. Chidi Ilogu, another maritime lawyer, who described the decision by the minister to set up the committee as a positive step, said it was a clear indication that the Federal Government was committed to disbursing the fund to qualified ship owners. Noting that the government has to be proactive in developing the nation’s shipping industry, Ilogu said the fund accrued under the CVFF cannot continue to remain in the bank but should be used to enhance indigenous capacity to aid economic growth. According to him, Nigeria cannot continue to keep the CVFF money in the bank, adding that it should be used to buy even if it is three or four vessels on a recurring basis to enable the industry benefit from the funds. Ilogu, however, predicted that ship owners may have to wait for another six months before the commencement of the disbursement of the fund as against the earlier scheduled date in January.

CSR: NPA trains maritime reporters on challenges of new media

s part of its Corporate Social Responsibility (CSR) to its stakeholders, the Nigerian Ports Authority (NPA) has concluded a 3-day training workshop for Maritime Reporters as well as its in-house staff. The training, which held at the Nigerian Army School of Public Relations and Information (NASPRI), Bonny Camp, Victoria Island in Lagos, was organised as part of NPA’s drive to build and upscale the capacity of employees, Maritime Reporters and other stakeholders in the sector in a bid to forge mutual understanding. Tagged, “Challenges and Opportunities for Maritime News Reportage in an Increasingly Digital Mobile and Social Media Environment,” the training drew experts and resource persons from academia, private sector and the Army. Speaking at the opening session last Monday January 20, Hadiza Bala Usman, managing director, urged participants to take advantage of the opportunity, which the course provides to learn @Businessdayng

how to continually project the corporate image of the organisation in a positive way. Usman, who was represented by Olusola Akosile, head of Graphics in the Corporate and Strategic Communication department, described maritime sector as a N9 trillion industry that has heavy investment in port infrastructure by the Federal Government and the private sector. She said the social media had become a phenomenon in the hands of users and only those with the requisite professional knowledge and skills could meet the rapidly changing digital atmosphere and benefit from its vast opportunities. She urged Maritime Reporters to ensure ethical reporting and use their acquired knowledge to further consolidate on the cordial relationship with maritime agencies. Abubakar Anka, acting commandant of NASPRI, disclosed that the training was the second in the series to be handled by his unit, and expressed hope that participates’ capacity for writing objective reports, would be enhanced.

Wednesday 29 January 2020

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IMO 2020 sulphur cap: Maersk raises fuel surcharges to cushion cost amaka Anagor-Ewuzie

ollowing the implementation of the International Maritime Organisation (IMO) 2020 sulphur cap, Maersk, the Danish shipping operator has imposed bunker surcharges on freight to cushion the effect of high cost of fuel. Maersk, which is the latest company to implement surcharges, attributed the development to the increased costs associated with very low sulphur fuel oil (VLSFO). The cost for blended fuel has decreased over the last few days, as seen in the MABUX Index, but the trigger for a bunker and environmental charge is calculated over three months period. Maersk also notified customers, in an advisory note, that it will raise bunker prices, as their operational costs have significantly increased. It further says that it had

already informed customers during the course of 2019 that the new IMO 2020 regulation would bring a substantial cost increase for ocean shipping. “Fuel costs would account for larger portion of the total freight rate. At the same time, we also anticipated increased volatility in fuel prices,” says Maersk. On their parts, shippers have rejected the policy of imposing fuel surcharges on freight. Jordi Espin, maritime policy manager of European Shippers’ Council (ESC), explained to Container News, “European shippers don’t agree to the standardisation of imposed formulas and costs with any transparency or debate with customers. “IMO 2020 is a regulation to make the shipping industry cleaner, which we fully endorse. We do not support that it has been taken as a business opportunity and as a tool to decouple service and costs. Service keeps deteriorating with no sign of improvement and costs run

wild far ahead with no reference to service,” Espin said. “Maersk’s Environmental Fuel Fee (EFF) and the Quarterly Bunker Adjustment Factor (BAF) levels are subject to a monthly review and exceptional trigger if the price of compliant fuel

(VLSFO – 0.5 percent sulphur fuel oil) moves up or down significantly during the quarter,” according to Maersk. Maersk explained that “The trigger to activate the exceptional review in both cases is defined as a change

of more than US$50/ton (up or down) on bunker prices compared to the last time both surcharges were adjusted.” In recent months, VLSFO prices increased substantially. In particular, VLSFO prices in Asia (Singapore)

L-R: Harmen Tiddens, general manager, Mammoet West Africa and Jide Jadesimi, executive director, Business Development, LADOL during the official signing of the partnership agreement between Mammoet and LADOL.

exceeded US$700/ton for a period, a more than 20 percent increase compared to the previous bunker prices used for the BAF and EFF calculation. The average increase in January is expected to exceed US$50/ metric ton. Accordingly, Maersk will apply the additional monthly trigger defined in its BAF and EFF formulas and the new tariffs will be effective 1 March 2020. It was said that Maersk uses Bunker world’s fuel price index 0.5 percent Sulphur fuel oil (VLSFO) for the BAF and EFF calculation. The period used for the calculation will be 26 December 19 to 25 January 2020. Also, the tariff increase will be seen across all trades with an increase range between US$50-200/40-foot equivalent unit, reflecting the increased fuel costs associated, seen during recent weeks. According to Maersk, the actual increase per trade will be communicated to shippers by end of January.

With Mammoet’s deal, LADOL expands capacity to handle project cargo amaka Anagor-Ewuzie

etermined to expand its capacity for handling project cargo and logistics for West African industrial sector, the Lagos Deep Offshore Logistic Base (LADOL), said it has signed a strategic partnership deal with Mammoet, a global leader in engineered

heavy lifting and transport. BusinessDay understands that the partnership will also enable LADOL to utilise Mammoet’s crane fleet and project management services to provide clients with comprehensive and cost-effective solutions. According to the agreement, Mammoet will supply LADOL with its heavy lift terminal crane (MTC),

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which turns any quay into a heavy lift terminal, and with a load moment matching a 1,200 ton crawler crane or a large floating sheer leg, the crane enables the lifting of loads up to 600 tons in the quay from non-geared cargo vessels. Research has it that such lifting capacity is ideal for loading and offloading heavy items such as columns, vessels, reels, engines

and any other project cargo. Given the agreement, the crane will be installed at the LADOL quayside in January 2020 and will be the biggest installed shore crane of its kind in the region. In addition to the MTC 15, Mammoet will mobilise a 250-ton crawler crane to support LADOL’s quayside operations. Harmen Tiddens, general manager of Mammoet

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West Africa, said the company is honoured and excited to partner with LADOL, because both can bring greater value to their customers. “Any company with a project that requires shipping or handling of project cargo in, to or from Nigeria, now has a new, fast, reliable and cost-effective option in Lagos,” he said. Jide Jadesimi, executive director, Business Devel-

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opment of LADOL, said the long term relationship between Mammoet and LADOL is an extremely exciting and significant development in terms of increasing local capacity. “This will attract to Nigeria, the general fabrication and complex construction jobs that were increasing in demand not just in Nigeria, but across the sub-region,” he stated.

Wednesday 29 January 2020

BUSINESS DAY

cityfile Police arrest wife for killing husband in Katsina

T People protesting in Jos on Sunday evening, over the alleged killing of Ropvil Daciya by suspected insurgents in Maiduguri.

Female drug trafficker bags 8 years

n Abuja Federal High Court has sentenced one Oluwaseyi Anifowoshe to eight years imprisonment for involvement in drug trafficking. Anifowoshe who was charged on a two-count chrge, was sentenced to four years for the first count and four years for the second. The presiding judge, Okon Abang said that both terms of imprisonment were to run concurrently from the date of arrest which was October 25, 2017. Abang ordered the convict to submit her International passport to the Federal Government alongside her E-ticket to the prosecution. He also ordered that the 500 rand found in her possession and all other exhibits be sold and remitted to the Federal Government. Anifowoshe was before the court in an amended two counts charge dated January 11 and filed January 15.

Count one charge was against section 21 (e) of the NDLEA Act and was punishable under section 22 (a) of same Act, while count two was contrary to section 11 (b) and was punishable under the same Act. Count one of the charge attracts a minimum of 15 years and a maximum of 25 years in prison while count two attracts life imprisonment on conviction. Anifowoshe was sometime in 2017 arrested at the Nnamdi Azikwe Airport, Abuja by the National Drug Law Enforcement Agency (NDLEA) in possession of 1.9kg of cocaine and 3kg of Ephedrine. She was arrested during an outward clearance of Ethiopia Airline to Johannesburg, South Africa through Addis Ababa. The convict initially pleaded not guilty to the charge leveled against her by the NDLEA, but later pleaded

guilty on January 22. She said that she was a victim of circumstance who was given two boxes with different things in it to deliver to someone in South Africa by her boyfriend. She said her boyfriend; Isaac Agoro did not disclose to her that he concealed illicit drugs in the boxes. Abang cautioned Anifowoshe for making herself available to a fraudster. “What made you not to check the bags given to you and you agreed to carry them with you to a country you had never been to. You cannot just have a university degree and not be intelligible because much is expected of you. “If you were a drop-out, it would be understandable. “She allowed someone she met on Facebook to influence her instead of her to look for gainful employment; self employment, privately or publicly employed,” he said. According to him, the

court owes the society a duty to make drastic decisions against people who search for quick virtue or money without legitimately working for it. “Cocaine has ruined the lives of young people at home and abroad and has likewise tarnished the image of the country. “We should be careful with whatever we do and this should serve as a strong warning to others with such negative intention,” he said. The judge said that he was inclined although reluctant to give the convict the opportunity to turn a new leaf. “I will show compassion and give her the opportunity to be a useful person. “I hope she will take advantage of the lenient position of the court to have a second chance,” he said. During the judgment, Anifowoshe wept uncontrollably, but jubilated when the judge made his judgment pronouncement.

Siblings charged for faking EFCC agents in Abeokuta REMI FEYISIPO, Ibadan

final year student of Business Administration in a private university located in Ondo State, Fisayo Adetoro has been found guilty of impersonation, forgery and money laundering, and sentenced to cumulative 13 years in prison and N1 million fine. Adetoro, who was said to be a first class candidate on 4.5 Cumulative Grade Point Aggregate (CGPA), was convicted by Justice Folashade Olubanjo of the Federal High Court 1, Akure, in a criminal

case filed against him by the Economic and Financial Crimes Commission (EFCC), Ibadan zonal office. He had earlier been arraigned on January 18, 2017 on a six-count charge, but pleaded not guilty to all the charges. The allegations, according to the charge sheet, include falsely representing himself to be Bawa Mohammed Sanni to defraud his victims of thousands of US dollars. He was also accused of using the fake name to register for a Nigerian Driver’s Licence bearing his photograph, as well as www.businessday.ng

laundering sums running to millions of naira. The EFCC, represented by Ben Ubi and Sanusi Galadanchi, called five witnesses, including two victims of his money laundering activities, to prove its case, while the accused called three witnesses. After evaluating the arguments on both sides, the presiding judge found Adetoro guilty in four of the six charges. He was sentenced to two years for falsification of documents (count 2) and three years for altering official document (counts 3 and 4). The court sentenced

him to five years imprisonment with a fine of N1 million for money laundering (count 6). The jail terms are to run concurrently. Olubanjo, however, considered the convict for suspended sentence of six months community service. The judge yielded to his counsel’s pleads which were premised on his health, academic standing and the fact that he had refunded all the money he fraudulently collected. The suspended sentence, according to the court, would only stand if he observes the days without breaking.

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he police in Katsina State have arrested a housewife, Rabi Shamsudden,19, for allegedly stabbing her husband to death in Malumfashi local government area of the state. Spokesman of the police in Katsina, Gambo Isah, told newsmen that the incident occurred at Danjanku-Tasha village on Monday at about 4a.m. “We received report on January 27, 2020 that one Rabi Shamsuddeen, 19, of Danjanku-Tasha in Malumfashi local government, allegedly stabbed her husband, Shamsuddeen Salisu, 25, with knife to death. “The shout for help by Salisu attracted neighbours. When the people

went to offer assistance, they discovered that the door to the compound was locked. “Some people jumped into the compound and found the victim in the pool of his blood, crawling out from his room with a wound in his stomach. The neighbours also told the police that the wife (Rabi) was seen holding a knife with blood stains,” he said. The police spokesman said that Salisu was immediately rushed to Malumfashi General Hospital, where the doctors confirmed him dead on arrival. He said that investigation was ongoing while the suspect was in police custody, and would be prosecuted after investigation.

Agency, NMA apprehend quack doctor in Kano

ano State Private Health Institution Management Agency, in a joint operation with the Nigerian Medical Association, has apprehended a quack doctor, Ibrahim Adamu, who has been operating as a medical doctor for many years. In a statement signed by the public relations officer, state ministry of health, Ismail Gwammaja, and made available to newsmen in Kano, it said the agency has been on the trail of the suspect for a long time, but unable to arrest him, as he moved

regularly from one hospital to the other within and outside the state. The statement said that the fake doctor had been handed over to the police for further investigation and prosecution. It recalled that Adamu was apprehended by the agenc y in 2014, prosecuted and convicted, but later set free. The agency’s executive secretary, Tijjani Usman, urged residents to be vigilant in their dealings with health practitioners and report any abnormal action to the agency for quick intervention. NAN

Lagos begins repair works at Ojota Interchange, Ikeja JOSHUA BASSEY

he perennial traffic on Ikorodu road occasioned by the failed portions between Ojota Interchange and Kudirat Abiola Junction will soon be history as the Lagos State has mobilised the construction giant, Julius Berger to put a more enduring solution in place. Sp e c i a l a d v i s e r t o Governor Sanwo-Olu, on works and infrastructure Aramide Adeyoye, made this known, said the stretch of that road both inward and outward Lagos had defied palliative measures over time. Thus, the

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time was ripe to address all the challenges once and for all to bring succor to the motoring public. She appealed to the motoring public to please bear with government as traffic was bound to be slow in the affected corridor, adding that effective traffic management measures have been put in place to reduce traffic congestion to the barest minimum. Adeyoye explained that enough traffic signs and traffic officers have been deployed to the stretch of the affected area. She appealed for cooperation of all forms of road users and the general public.

Wednesday 29 January 2020

BUSINESS DAY

PENSION today

In Association With

How a company suffered setback for not getting life insurance cover for employees …now that PenCom is set to enforce it

insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee. Under the policy, total annual emolument is defined as the basic salary, transport and housing allowances and shall not include bonuses, overtime, directors’ fees or other fluctuating emoluments. According to the guidelines for life insurance policy for employees jointly issued by the National Insurance Commission (NAICOM) and National Pension Commission (PenCom), the employer is required to fully bear all costs in relation to procurement of this policy, and this shall be in addition to the contributions to be made by the employer to each employee’s Retirement Savings Account. The policy provides cover to the insured against death and the insurance cover is mandatory for all employees as long as they are in employment. This means that the policy provides for the payment of the sum assured in the event of the death of a member of the scheme from any cause, natural and accidental. Given the importance of complying with this policy, employers are expected to pay their premium before commencement of the cover, as there is a law guiding payment of premium and effective death of cover. What this implies is that “No Premium No Cover’, meaning that the payment of premium is a precondition for policy to be effective and where there is no premium it’s assumed that there is no cover in effect.

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As an employer having at least three people or more in your employment as provided in the Pension Reform Act 2014, it becomes an obligation under the law that you must get a group life insurance for your staff, otherwise you would be carrying the burden to pay such compensation from the company’s purse, should death of staff occur or worse still if there is mass death may be as result of accident

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once vibrant young company that was profitable and breathing life, eventually started to have challenges in her operations after it paid out a large sum of money on staff death benefits, when one of its staff bus got involved in a major crash killing 10 people. Today the company is managing to keep operations going having spent major part of its working capital on staff compensation, so would be relying on bank loan to keep pace with its five-years growth plan, which has run for only two years. The company, which had ignored complying with a provision group life insurance for employees has regretted not transferring the risk it carried to insurance professionals, whom it is their responsibility to pay death benefits (claims) when they arise. Though, a senior executive in the company’s human resources department claimed the organisation was complying before it stopped payment of premium a few months before the incident occurred. “We have notified our insurance company of the development but they told us we did not qualify for compensation as our policy had elapsed before the incident and so we cannot be indemnified”. As an employer having at least three people or more in your employment as provided in the Pension Reform Act 2014, it becomes an obligation under the law that you must get a group life insurance for your staff, otherwise you would be carrying the burden to pay such compensation from the company’s purse, should death of staff occur or worse still if there is mass death may be as result of accident. Again, you will be seen to have breached the law if as an employer you fail to comply. This is the reason for last week circular requesting employers to take life insurance cover before the end of March 2020. PenCom on Thursday gave employers of labour at the Federal, State and the private sector up to 31 March 2020 to comply with the Pension Reform Act 2014 on provision of life insurance cover for employees, or assume to have breach the law. Besides that, PenCom also gave employees the mandate to report any employer that fails to comply with this provision, as well as other provisions of the PRA 2014 including pension remittances to the Pension Fund Custodians|(PFCs) The Act stipulates that every employer, to which this applies, must maintain a life

This is a provision of section 50 (1) of the insurance Act 2003, which states that the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect

of the insurance risk unless the premium is paid in advance.” The whole idea in promoting the policy is that insurance companies having received premium from the insured as and when due have the obligation to pay claims when it arises without excuses. While this policy does not only give the insurance companies the opportunity to build capacity by investing premiums on time and generating good returns that would enable them pay future claims when they arise, it becomes a moral burden not to pay the consumer when there is a loss Here again, the consumer’s right to ask for claims becomes further enhanced having paid premium to purchase cover. Having taken insurance for staff, each employer is required to obtain an insurance certificate from the insurance company as an evidence of having arranged the insurance contract. Such certificate is expected to be accompanied by a schedule which shall indicate amongst other things, the period of coverage, the number and details of staff at inception/ renewal date, their total emoluments, the benefit payable and the annual premium/date of full payment. The insurance certificate is usually issued to employers by the insurer within a month from the policy inception/renewal date. Employers are also mandated to display a copy of the insurance certificate in a conspicuous place within the premises, for the information of the employees, as evidence of having taken such policies. Besides, the employer is required to send a copy of the insurance certificate with the schedule of benefits to the National Pension Commission and the Pension Fund Administrators (PFAs) where the employees maintain their Retirement Savings Accounts (RSAs), not later than 31st March every year. Employers are required to commence renewal negotiations in writing, within two months to the expiration of the current insurance coverage. Such negotiation must be concluded before the last day of the current cover. Full payment of the insurance premium shall be made, at the latest, on the first day of insurance cover. Where an employer fails to effect full payment of premium at the stipulated time, the insurer is expected to report such failure to the National Pension Commission within 14 days of non receipt of premium.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme. If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

Wednesday 29 January 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

2020 renewals taking place quietly, but recapitalisation major concern of clients Modestus Anaesoronye

he 2020 renewal season is taking place quietly, with most companies trying to retain their clients, but what is not being taken for granted by clients is wanting to know how the underwriters approaching them will remain in business post recapitalisation. So, companies that are marketing themselves for business in the new year have with them readymade answers for questions that they may expect from clients including recapitalisation, giving assurance on what they are doing to remain in business at the end of the exercise. The tension however became reduced when the National Insurance Commission (NAICOM) announced extension of deadline which moved from 30th June 2020 to 31December 2020. Insurance companies at the beginning of a new business year embark on policy renewals for their clients to cover the current year.

Renewal, in the context of insurance, refers the continuation of coverage. The policyholder extends their contract with the insurance company to continue their current coverage for a specified period. The insurance company typically invites the policyholder to renew the policy near the end its term.

The National Insurance Commission (NAICOM) had in a circular issued on Monday May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance compa-

nies from N10 billion to N20 billion. According to the Commission, the minimum paid-up share capital requirement shall take effect from the commencement date of the circular (May 20, 2019) for new applications, while existing insurance and reinsurance companies shall be required to fully comply not

later than 30th June 2020, before the recent extension in date to December 31 2020. Currently, insurance companies are engaging their clients and broker partners for the 20120 renewal, with different value propositions for retention and signing of new businesses. Underwriting compa-

nies are busy now lobbing brokers on new accounts and renewal of existing business, and also signing of reinsurance treaties with major reinsurance companies locally and internationally. But the unfortunate thing is that the rate war that has eaten deep in the industry over time is yet to be over, and analysts fear it may impact negatively on the industry growth since claims have been on the rise in recent times. Chief Executive Officer of one the life insurance companies said “Renewal is going on but the biggest challenge we have is rate war. Our people are killing the business, accepting anything they see while claims are rising.” Another CEO also said “We have not had a serious problem with our renewals. But where broker’s brought rates that are not within our acceptable limit, we have asked them to take it back to their clients for increase or we turn our back”. The CEO further stated that, pricing is a big challenge for the market, but we must define our direction.

NSIA Group approaches new decade with confidence Modestus Anaesoronye

SIA Group, one of the leaders in the bancassurance sector in West and Central Africa has celebrated its 25th anniversary, approaching the new decade with confidence and new perspectives. The anniversary celebrations held at the Group Head office at Abidjan and across Africa on this month. Jean Kacou Diagou, president, NSIA Group, in a statement stated that the Group which was founded in 1995 as Nouvelle Société Interafricaine d’Assurance (the New Inter-African Insurance Company) - renamed NSIA - has experienced a tremendous rise in recent decades. According to him, from a family company of 10 employees, with a capital of 300 million FCFA and operat-

ing in the insurance sector in Côte d’Ivoire, the NSIA Group has today become a major player in bancassurance with 2,800 employees spread across 12 countries. He said: “NSIA’s gradual and continuous growth has been driven by strategic acquisitions, first in Côte d’Ivoire and then in the subregion. Assurances Généraux de France (AGF), International Bank of West Africa (BIAO) and more recently Diamond Bank (in African countries like Togo, Cameroun, etc. with the exception of Nigeria) are among the most notable transactions. “I am happy and proud of what has become of the NSIA Group today; the leader in the Banking and Insurance sector. I thank our customers and investors who have accompanied and trusted us to this day. NSIA is also the fruit of the implication of each of the collaborators www.businessday.ng

whom I would also like to salute”, he expressed. Kacou Diagou, director general of the NSIA Group, said committed to a winning strategy, the Group targets Top 5 position in each of its businesses, in each of its countries of presence. This

strategy revolves around innovation and internal growth. The NSIA Banking offer is now well established in Côte d’Ivoire. The next step for NSIA Bank will be to strengthen its positions in the 5 countries of presence and to expand its presence in

Kacou Diagou, director general, NSIA Group https://www.facebook.com/businessdayng

the countries covered by the insurance arm. We intend to actively participate in the banking of the West and Central African populations through financial inclusion programmes”. Dominique Diagou Ehile, group deputy managing director, Insurance of the NSIA Group, on his part noted that the Group’s insurance division intends to respond to the major challenges of transformation of the African society. On the personal market, he said the rise of the middle class will require supporting the needs of populations in terms of protection and provident insurance while providing innovative solutions. The digitalization of our offers represents a tremendous growth driver. The NSIA Group intends to play a major role in the development of the African economy and @Businessdayng

provide lasting responses to the socio-economic challenges of the next decade, he added. NSIA is a financial services group that integrates banking and insurance products and services. NSIA Group acquired ADIC Insurance Nigeria in Year 2011 to further increase operations around Africa, as Nigeria is a major market. The Group operates in the Insurance sector in Nigeria and Ghana while operating in the Banking, Insurance and other sectors in 10 other African countries. The NSIA Group is made up of 3 Banks, 3 banking subsidiaries, 20 Insurance Companies, 1 Management and Intermediation Company (SGI), 1 OPCVM Management Company, 1 Technology company, 1 Real estate company, 1 Reinsurance Brokerage Company, and 1 Foundation. It has more than 2,800 employees.

Wednesday 29 January 2020

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Women becoming increasingly important in insurers product plan Modestus Anaesoronye

ustomer centricity isn’t a new idea, but it is increasingly important for insurance companies seeking to take advantage of emerging markets. The CGAP customer-centric guide makes this clear: “Customer-focused organisations gain competitive advantage over the long term by remaining agile and giving customers what they need. In return, customers remain loyal, actively use products and services, and provide referrals.” As participants at last year’s JMM learned, design thinking puts people at the centre by constantly trying to understand the users’ needs and behaviours and this increasingly includes gender sensitivity. A recent article from the Swiss Re Institute noted that “insurers need to recognise gender differences in preferences, and understand what solutions to offer how and where… insurers can help more female consumers improve their understanding of the benefit of insurance and the specifics of risk protection products.” “A good starting point would be to target insurance products at women in ways that resonate with their preferences and behaviours, and that reflect women’s ever-expanding role in financial decision making around the world,” says Swiss Re’s Marianne Gilchrist. “By focusing on solutions to achieve gender parity, insurers and

reinsurers can address a key driver of the widening protection gaps facing individuals, families and societies.” For example, Madji Sock, co-founder and president of the Women’s Investment Club in Senegal, told a conference in Luxembourg last year that the rise of mobile money in remote rural areas is helping women to access inclusive finance. However, significant barriers which can exclude women still remain and there are marked gender differences between men and women on smartphone ownership, financial literacy, having a bank or mobile money account. This, in turn, means women are less able access insurance which could mitigate risk. In a joint report with GIZ and the IFC, Women’s World Banking ( WWB) noted the clear business and social case for main-

streaming gender and targeting women in inclusive insurance. Women’s and men’s insurance needs are different, and tailored inclusive insurance for women can meet their gender-specific needs whilst still being commercially viable. Despite this, women-centric insurance - designed by women for women - remains the exception. According to the ILO’s Impact Insurance Facility, the women’s insurance sector could be worth up to $1.7 trillion by 2030, with half that coming from emerging markets. Insurance can help women better protect themselves and their families and expand their businesses, but they have gender specific risks, needs, and behaviours. However, the gender work group at the 2019 JMM concluded that microfinance institutions tend to focus on women only

as potential clients, rather than understanding their needs. Gender-sensitive product design could help convince women about the need for insurance, but in many markets where women make up a low percentage of the formal labour force, awareness of insurance is low, women don’t have financial independence, and tend to put the health needs of their husbands and children first. Health is perhaps the most obvious area where gender-specific insurance products are essential. WWB are pioneers in developing health insurance products specifically for women, including a recently-announced new technology platform to accelerate scaling up of their leading health microinsurance product, ‘Caregiver’. It is hoped the new platform will enable simple, affordable cover

providing life protection and a cash benefit after hospitalization (including for maternal health), to massively scale up reach to uninsured and underinsured women in emerging markets. “Decreasing the financial burden of catastrophic health expenditure problems, for example, in cases of hospitalisation and in-patient care, can help decrease gender disparity in health-care utilisation,” writes Nandita Saikia, a PhD Scholar at Jawaharlal Nehru University, New Delhi. “To reduce the gender gap in health care access and expenditure, there is a need to introduce gender-inclusive social health security and micro-insurance schemes in India.” However, Daryl Collins, author of Portfolios of the Poor, says providing health microinsurance for women is probably the most difficult financial service to get right. “Women don’t know how long their health issue might go on for and what impact it will have on their lives,” said Collins during a 2019 Expert Forum. “Most women on the lower income spectrum are in the vulnerable space, because women will forego medical diagnoses or treatment compared to prioritising others in the household, especially children.” Health is not the only area where insurers need to offer women-centric products. Climate risk insurance (CRI) could help them manage disasters and build resilience - a report from ActionAid finds women and girls are more

vulnerable to the effects of climate change because they are more dependent for their food and income on the land, are less likely to be in positions of power or decision-making roles, and they are more responsible for securing water, food and fuel for cooking and heating. It is often women and girls, for example, who have to walk long distances to find water when local sources dry up. According to InsuResilience Global Partnership, “gender-sensitive CRI acknowledges the gender differential vulnerabilities to climate change between men and women due to the dynamics of socially constructed behaviours, norms and relationships.” Gender-responsive CRI schemes can provide risk protection that addresses differences in women and men’s vulnerability to climate shocks and disasterinduced loss of wellbeing. Helen Greatrex of the International Research Institute for Climate and Society at Columbia University believes that access to inclusive insurance is essential to realise the Sustainable Development Goals (SDGs). Financial inclusion, social inclusion and gender equality will only happen if insurance companies get serious about making a social impact. That means asking how customers can access products, how they can participate in product design and marketing, and how they can have their knowledge and values taken into account. Source: Micro insurance network.

Allianz Global appoints Henning Haagen as new chief underwriting officer specialty Modestus Anaesoronye

llianz Global Corporate & SpecialtySE (AGCS), the corporate insurance carrier of Allianz Group, appoints Henning Haagen as Chief Underwriting Officer Specialty and member of the Board

of Management, subject to regulatory approval. Effective March 1, 2020, Haagen will succeed Paul O’Neill, who left AGCS in 2019. As Chief Underwriting Officer Specialty, Haagen will take over responsibility for AGCS’ Aviation, Entertainment, Marine and Mid Corporate Lines of Business. He will also oversee the www.businessday.ng

AGCS Global Underwriting Integrity and Solutions function, which establishes common underwriting practices across all AGCS lines of business and in line with Allianz Group Property & Casualty standards, and the AGCS Underwriting Academy, which offers expert trainings to AGCS staff. Haagen is currently

AGCS’Regional Head of Specialty and also Northeast Zone Executive for North America, a role he has held since January 2017. An announcement will be made at a later date on a successor to his current roles. Haagen is a German citizenand will relocate from New York to Munich in 2020. Prior to his current role

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in the United States, Haagen was AGCS Global Head of Aviation, and since joining in 2008, he has held several senior underwriting positions within the organization in Munich and London, including Chief Aviation Underwriting Officer for the EMEA and Asia Pacific regions, Global Head of Reinsurance and Head of @Businessdayng

Aviation Reinsurance Underwriting. He has over 20 years’ underwriting experience, and before joining AGCS, Henning worked as a Senior Underwriter for both GE Frankona Reinsurance AG and Augsburg Re, a Managing General Agent. He began his insurance career at Gerling Insurance and Reinsurance.

Wednesday 29 January 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

What 1,000 CEOs really think about climate change and social inequality Andrew Winston

o solve the world’s biggest challenges, such as climate change and persistent economic inequality, the business community will have to play a critical role. And we need chief executives who understand the challenges and want to drive deep change in the way businesses operate. Last month, nearly 200 CEOs declared, through the Business Roundtable, that the purpose of business is no longer just maximizing shareholder profit. But are they ready to follow through? Recently a new and important study on CEO attitudes came out, and it sheds light on how chief executives think about sustainability and other global challenges. Written by Accenture and the United Nations Global Compact, “The Decade to Deliver: A Call to Business Action” collects insights from more than 1,000 global executives. Published every three years, this report provides a deep dive on how CEOs view sustainability. The underlying context for this year’s report is the fact that the world is running out of time on climate change. Last year’s study from the Intergovernmental Panel on Climate Change gave us all until 2030 to cut emissions in half to avoid some of the worst outcomes. The new report revolves around a single idea: we’re not moving fast enough. As one of the lead authors, Jessica Long, Accenture’s Managing Director for Strategy and Sustainability, told me, “The study is meant to be a call to action. Lots of good work is going on, and companies are making more commitments. But current activity and statements without action just won’t get us to 2030.” As I read through the report, I found myself moving key insights and data into four categories: NOT TOO SURPRISING: Business leaders feel pressure to build more sustainable enterprises from key stakeholders. Customers and employees were the top two vote-getters when the CEO’s were asked which stakeholders would most influence the way they

manage sustainability. Within those stakeholder groups, Millennials and Gen Z in particular want the companies they work for and buy from to stand for something. And these demands increasingly seem nonnegotiable. Mark Hunter, President and CEO of Molson Coors, says, “Our consumers and our customers are looking for assurances that we are doing business the right way. It’s becoming table stakes.” The other area that was no surprise to me was the tension CEOs feel about the perceived trade-offs between sustainability and traditional financial metrics. While I feel that this tension has always been overstated — sustainability creates business value in multiple ways — there is a real tension between short-term profit and long-term value. And in fact, more than half the CEOs say “they face a key trade-off in the pressure to operate under extreme cost-consciousness while seeking to invest in longer-term strategic objectives.” SURPRISING: An amazing 88% of the CEOs “believe our global economic systems need to refocus on equitable growth.” Concerns about economic inequality have moved from the “Occupy Wall Street” protests a decade ago into the mainstream. As one CEO said, www.businessday.ng

“Unleashed capitalism has created extreme poverty, terrible social conditions and a difficult situation for our planet. If we cannot manage a better social transition of the wealth, we will be in trouble.” In addition, some of the results on how sustainability creates value sounded a bit odd. As the authors say, “CEOs recognize that sustainability can drive competitive advantage,” but fairly low numbers of respondents cited specific value creation: 40% see revenue growth and just 25% cost reduction (which might simply reflect the fact that the easy wins are all gone). That revenue number doesn’t completely gibe with another statistic; when talking about barriers to implementing sustainability, only 28% of CEOs cite the “absence of market pull.” That’s a pleasant surprise after years of complaints that the demand for sustainable products is weak. PROMISING AND REASSURING: Sustainability is firmly on the agenda now, and that’s a victory many years in the making (trust me). All of the large company CEOs (O.K./ 99%), agree that “sustainability issues are important to the future success of their businesses.” And fully 94% feel a personal responsi-

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bility for laying out their company’s core purpose and role in society. Only a quarter of the CEOs cited “no clear link to business value” and merely 8% said “lack of knowledge” was a problem. One other clear theme emerged around trust and the expectations of society. Threequarters of CEOs said citizen trust would be critical to competitiveness. STILL WORRYING: Four key findings concern me. First, for all the silver linings, the report’s overall theme is that we’re not doing enough fast enough to achieve the Global Goals (formerly the Sustainable Development Goals, or SDGs), the UN’s guidelines on the targets we need to hit to build a thriving world. Second, business and the world are not doing enough on climate change. While 59% say they’re deploying low-carbon and renewable energy sources, only 44% see a net-zero future for their company in the next decade. And just 41% are decarbonizing their supply chains. Third, the survey showed limited belief in investors. No matter what the BRT statement says, most companies won’t act aggressively unless they believe investors value their sustainability efforts. Only 12% @Businessdayng

of the CEOs cite pressure from shareholders as a motivation. Finally, the CEOs cite political and economic uncertainty as big distractions. For me this highlights the long-standing disconnect on sustainability; the implicit assumption that it’s a distraction from “real” business rather than the path to profit and building thriving businesses. And, to be blunt, if leaders are waiting for less volatile times to act on climate change, they’ll wait forever. This study paints a mixed picture, much like the real world these companies are operating in. We’ve seen progress, but we have serious gaps and a lot remains to be done. I do take comfort in the fact that leaders now recognize that we’re falling short, that these issues are incredibly complex, and that we need more real action. To buy into a new vision of business, CEOs need to connect to it as people and write it into their own interior narrative explaining how their work fits into the world. They need to ask: What’s my legacy? And that’s a good question for all of us.

Andrew Winston advises some of the world’s leading companies on how they can navigate and profit from environmental and social challenges.

Wednesday 29 January 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Corolla undergoes major revamp for 2020 …Fresh, technology-laden interior

MIKE OCHONMA

MIKE OCHONMA Transport Editor

he Toyota Corolla has been an integral part of many global markets for several decades, but never before has the Japanese compact sedan been this striking, smart and say aesthetically appealing. Will that be enough to ensure that the venerable Corolla 4-door, which is due to be launched into the African market space in the second quarter of 2020, remains relevant in a vehicle market obsessed with crossovers and SUVs. In Nigeria described as the most preferred market for automobiles where Toyota Nigeria Limited is the franchisee, the Corolla sedan has been a huge part of the Japanese brand’s success story. This model has been built locally since the mid-’70s (in excess of a million units have been produced) and, although the Hilux and its Fortuner sibling deserve much of the credit for Toyota’s current strong position in the new vehicle market, the Corolla once established its maker as a powerhouse in the passenger-car segment. And to many local industry analysts, this car is a Nigerian institution. Upon its launch, this new-generation model will also be built in the company’s Prospecton plant in Durban. But first, early in 2020, the current Corolla sedan which was launched in 2014 will be unveiled as the new Corolla Quest with a drastically reduced lineup, while this new-generation model will be pitched above it as a modern up-

market and modern and therefore, more expensive offering. It may well appeal to some private buyers, but as is the case in many markets around the world, the all-new 12th-generation Corolla sedan will also appeal to fleet buyers especially in its simpler configurations. The front-end design is characterised by shapely all-LED lamp clusters with integral daytime running lights. More aggressively styled and conventionally attractive or even curvaceous and appreciably more characterful than the model that precedes it, the new-generation Corolla sedan carries on the design theme of the Corolla hatch that debuted last year. Yet, the newcomer’s still instantly identifiable as a Corolla and that will please the brandloyal-but-tradition-bound folks in the sedan’s heartland. It’s built upon Toyota’s New Generation Architecture (TNGA), the same platform that underpins the likes

of the C-HR compact family car, Prius hybrid and RAV4 family car and that means it has a lower centre of gravity and looks comparatively sleeker and streamlined as a result. The new Corolla has a longer rear overhang than its predecessor, but slimline tail-light clusters make its rear-end appear well. Comparatively, the dimensions of the new-generation Corolla sedan are incrementally larger than those of the previous model. It measures 4 630 mm in length (10mm longer) and 1780 mm in width (5 mm broader), but sits 25 mm lower to the ground (height: 1 435 mm). Toyota makes a bit of a big deal about the fact that the front overhang is shorter and the rear overhangs longer – the design change, according to the automaker “delivers an entirely new dynamic appearance”. Inside, it does have the typically Toyota approach to cabin practicality, though. There are cup holders between the front seats,

good storage options including a covered centre console, and big door pockets with bottle holders. The newcomer looks relatively low-slung; proportion-wise, it’s a more balanced/elegant car than the current Corolla sedan. In summary, the new-generation Corolla sedan remains a practically-packaged, well-made and sufficiently-refined sedan. However, it is appreciably more technology-oriented than its predecessor and quite attractively styled. While there is no doubt it will once again appeal to fleet customers, private buyers could also be rewarded if they’re willing to think outside the box. In fact, the new 2020 Corolla sedan is a more convincing and complete offering than the previous model by some margin, and while this 12th-generation small sedan may not prove to be the panacea to the crossover/SUV craze, it certainly offers plenty for family-car customers to consider.

CFAO displays JCB Equipment, flaunts quality MIKE OCHONMA

FAO Equipment, a subsidiary of the CFAO Group and authorized distributor of JCB Construction Equipment in Nigeria, organized a machine demonstration day in collaboration with JCB officials recently at the Federal Palace Hotel, Victoria Island; Lagos was a gathering of industry stakeholders, customers and representatives of the two companies. JCB district sales manager, West, and Central Africa, Ilas Chater, revealed that “we selected CFAO as our partner because they can represent us well and provide quality after-sales service, and we thank our customers for their continuous patronage’’. He added that JCB has launched new models of construction equipment suitable for

JAC-Elizade scoops auto industry-leading Awards

the African Market with minimal electronics, fuel efficiency, adaptable to different sulphuric fuel levels, and easy to maintain. After the keynote speech, the guests were ushered to witness a thrilling demonstration experience as different features of the JCB machines were showcased. Sales manager for JCB Niwww.businessday.ng

geria, Victor Ogbeide-Igiebor emphasized the role CFAO plays in ensuring that customers are offered high-quality maintenance services with genuine spare parts. Some of the JCB products distributed by CFAO in Nigeria include; Backhoe loaders, Tracked and wheeled Excavators, Teletrucks, Wheel Loaders, Vibromax, and

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Telehandler. CFAO presented a cheque of N150,000 to a young Nigerian, Idorenyin Francis Emmanuel who constructed a prototype of an Excavator labeled with the JCB logo. The country delegate/managing director of CFAO Nigeria, Thomas Pelletier, said CFAO’s gesture was “ a way of encouraging Emmanuel in his education and innovation”. JCB was founded in 1945 by Joseph Cyril Bamford in the United Kingdom with a reputation for quality, efficiency and innovative products, serving the construction, logistics, agriculture, mining industries in different parts of the world. For the CFAO group, the conglomerate has been in Nigeria for over 117 years and is well-known for its distribution of globally renowned brands with technical expertise in the area of aftersales service delivery. @Businessdayng

ue to its soaring profile and acceptability in the Nigerian market, famous JAC Motors, being promoted by Elizade Autoland, in 2019 bagged three awards. Thes e automotive brand clinched the prestigious accolades at Nigeria Auto Journalists Association (NAJA) Awards and another automotive industry awards held in Lagos on the respectively. The two industr y bodies honoured JAC Motors with the Most Improved Brand of the Year awards. The award in this category celebrates outstanding automobile initiatives that have had the most positive impact in the industry. In addition, JAC received another automotive industry awards’ as the “Truck brand of the Year”. It would be recalled that in 2019, JAC Motors launched its Mech Fest initiative where it offered automobile technicians trainings, tool boxes and overalls.

This initiative is to further empower and drive professionalism amongst technicians in Nigeria starting with Lagos. It is no doubt JAC Motors was recognized for its outstanding products and noticeable deed in the industry. Commenting on the Awards, Demola Ade-Ojo, manaing directro/CEO, Elizade Autoland JAC Limited, authorized JAC vehicles distributor in Nigeria, applauded the organizers of both events for their consistency in identifying deserving brands and companies across Nigeria and according them the recognition, commendation and celebration that are due to them. He added that : “For us at Elizade Autoland JAC, we strive to be better year on year and as a forward thinking organization that we are, we will always be innovative in our approach to doing business. We are known to our existing customers to sell value beyond products and for coming years, we look forward to breaking the glass ceiling in the automobile industry with the way we do business.” JAC Motors is the only Chinese brand with full range of vehicles across all segments in Nigeria. Some of the models include the J4 sedan, S2, S3, S5, S7 (SUVs) as well as T6 pickup, Sunray bus X5 pickup, L40 Truck and the NSeries-3tons, 4tons, 5tons, 7tons and 10tons which can be adopted to various applications.

Wednesday 29 January 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Freight haulage resumptiom from Apapa port stalls …transport minister insists Lagos-Kano project must be ready 2023

on rails. It travels about 10 centimeters up in the air with electromagnetic propulsion. In the Maglev line, magnetic coils lie on the side walls. These push the integrated magnets of the train, keeping the train in the air. The friction in conventional high-speed trains limits the speed as the wheels travel on the rails. In Maglev, speed increases easily with the disappearance of friction force. Magnetic levitation system keeps the train in balance, preventing it from skidding. “There is a certain limit they can reach utilizing the wheels and railways since there is friction resistance. But according to the new system, they elevate lifting the train itself utilizing magnetic power. Making use of magnetic power to elevate it and use the same power in order to draw trains forward. This way they can reduce the resistance power so they can let the train move in a very fast speed,” a Japanese official

ing the land for the installment and construction work. JR Central already decided to fund, they have settled budget enough they will carry on the construction work without any monetary assistance,” the official stated. The JR Central plans to commission the first line between Tokyo and Nagoya in 2027. The second line will extend from Nagoya to Osaka by 2037. Similar to airplanes, the train starts to move on wheels, and after reaching a certain speed, it takes off and the wheels enter the body of the train. Without a slight vibration, it flies in such a way that one cannot even understand that the train is running. Vibration decreases as the speed of the train increases. The Japanese official said SCMaglev saw 603 km speed in tests, but the maximum speed would be 500 km during commercial use, emphasizing their priority is safety, not speed.

Oche, the Lagos rail districy manager (RDM) confirmed that as at the time of filing this report, no passenger or freight train services is operating from Apapa as project work is still inprogress on the new standard gauge track, even as the old decrepit narrow gauge is to underway complete refurbishment. ‘’According to the RDM, ‘’When we start, we will try to increase both the passenger and cargo service frequencies. We are also hopeful that, the standard gauge will soon be ready and that will also help in decongesting Apapa’’. Meanwhile, properties said to be belonging to the Nigerian Railway Corporation (NRC) including the old railway yard inside the Apapa seaport complex and buildings located the rail compound near the Ebute Metta Junction (EBJ) occupying the identified right of way (RoW) has been pulled down to pave the way for

the standard gauge rail line formation by the CCECC. The proposed demolition of some parts of Floor Mills located on the railway properties is yet to commence as at last week when our reporter visited as a result because of the slow pace of demolition exercise. No exact date will given either by the minister, the NRC authorities of the contractors on when the project will be completed. As result of the snail speed, Amaechi held several stakeholders meeting at different times between the chairman of CCECC, the management of the Nigerian Ports Authority (NPA) and TEAM Nigeria which is the technical advisers of the Lagos-Ibadan standard gauge to address some of the challenges sbetween Ebutte Metta and inside the port complex. The minister explained that, the slow pace of work currently is between EbutteMetta and Apapa port com-

plex where he regretted that the contractors has ben giving all sorts of excuses and that a result a meeting will take place between him and management of CCECC. Containers upsurge inside the Apapa port complex, worsened by the shut down in containerised train services from the Apapa port and other contributory factors may not be unconnected to the recent directive ordering vessels which could not secure berthing space at Apapa and Tin-Canports to go and discharge at the Eastern ports. The new directive if followed by the shipping compnies will boost business activities at the eartern ports and reduce the waiting time of vessels calling at the Lagos port complex. The new directive as contained in a statement signed by Jatto Adams, general manager, corpoaret and strategic vommunications, Nigerian Ports Authority started this week Monday.

Lagos governor walking the talk on Lagos-Badagry highway MIKE OCHONMA

ehicular traffic and journey along the Lagos-Badagry expressway from the National Theatre end Iganmu to Lagos International Trade Fair through Mile 2 middle lane has greatly improved and this has greatly reduced the frustrations and anguish previously being experienced commuter during the administration of former governor Akinwunmi Ambode. Between the Igboelerin junction leading to Agbara, work is progressing very faston the resurfacing and

apan has been using high-speed train technology for nearly 60 years and is now preparing to switch to airborne Maglev trains, which is seen as the future railway technology. Japan is the first country in the world that used high speed train technology. Having started in 1964, the Shinkansen line is the world’s busiest high-speed train line. Maglev train, which can reach speeds of up to 603 kilometers per hour in tests, does not use conventional wheels to drive

told Hürriyet Daily News. SCMaglev is the final prototype of the Maglev magnetic levitation train technology and the research and development stage, started in 2014, is completed, Shikama Koji, chief of the International Cooperation Office, International Policy and Project Division Railway Bureau of Japanese Land, Infrastructure, Transport and Tourism Ministry said. “They have already completed the technology phases, including the operation capacity. They are now talking about phase of acquir-

MIKE OCHONMA

MIKE OCHONMA Transport Editor

ovement of containers by rail out of the Apapa port complex with high stockpile of containers awaiting collection which will linger more than next February cargo and passenger movement resumption date as a result of the slow pace of work by the the Chinese Civil Engineering & Construction Corporation (CCECC) contractors handling the five kilometre standard gauge rail link extension between Ebutte-Metta and the Apapa seaport complex. The slow pace of work has remained a major concern to Rotimi Amaechi, Nigeria’s transport minister who had on many occasions during his recent inspection tours queried the CCECC on why no substantial progress has been made. Amaechi noted that, the snail pace of work started shortly after the federal executive council was dissolved before the 2019 general elections. This is raising concerns as to the completion of the remaining final segments of the project with the second segment beginning from Ibadan to Kano. Nigeria Railway Corporation had September 30, 2019 shut down passenger and cargo movement services from the Apapa port to Ebute Metta as result of the ongoing formation and alignment ongoing project work being carried out by CCECC. In a chat with BusinessDay transport reporter, Jerry

Japan produces next generation of train technology

grading of the dual carriage expressway by Wizchino Engineering Limited on behalf of the Federal Roads Maintenance Agency, (FERMA). BusinessDay transport reporter can confirm from personal his daily traveling experience along the corwww.businessday.ng

ridor that journey time all the way from Agbara has significantly improved with economic and other social activities thriving along the corridor. This for many road users is big relief following the apthy shown by Governor Babajide Sanwo-Olu predecessor.

Some of the road users like Kellie Franklin who spoke to our reporter however said more still needs to be done by the state government on the service lane from Iganmu to Mile 2 interchange which on daily basis record gridlocks due to the menace. Driving through Mile 2 interchange from Iganmu to connect Olodi Apapa, Kirikiri town, Tin Can Island port, Amuwo Odofin and Jakande estates and Festac Town respectively remains a nightmare on daily basis as vehicles engines are shut down completely for hours in a short that would take maximum of 10 minutes.

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Wednesday 29 January 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Financial inclusion, Fintech centre of attention at Davos 2020

… key to meeting UN SDGs Endurance Okafor

ccess to financial services and the use of financial technology (Fintech) was topic of discussion at the just concluded 2020 World Economic Forum in Davos as industry players expressed optimism in financial inclusion as a key to meeting the UN’s Sustainable Development Goals by 2030. Highlighting the recent formation of the Digital Financing Task Force by the UN Secretary-General, as well as the need to ensure the financing of the SDGs which has a $2.5 trillion annual financing gap – industry players said it was time to actively question how to ca-

talyse the Fintech ecosystem globally, build coalitions, and strategic partnerships that can come up with practical solutions to ensure financial inclusion prosperity is widely shared on a local and international level. According to Misha Rao, Haus of Fintech founder digital finance initiatives could add $3.7 trillion to the GDP of emerging economies and organisations including the United Nations, the World Bank, and the World Economic Forum have invested in Fintech, believing that it has the potential to create a better world. “We believe that core areas like the need for resilient financial market infrastructures, enhanced distribution of foreign aid, eradicating poverty, economic

and individual rights, and remittances are areas where Fintech can contribute most meaningfully,” Rao said. D e l i v e r i ng f i na n c i a l services through the use of technology has led to increase in financial inclusion for emerging economies. Fintech companies are innovating through new value propositions, including flexible products and better ways to address the financial challenges faced by low-income customers. The decision by countries like Kenya and Ghana to adopt a Telco led financial inclusion model catalyzed inclusive access for their excluded population. Kenya improved to 81.6 percent financial inclusion rate in 2017 from 74.7 percent in 2014, Ivory Coast also climbed to 41.3 percent from

34.3 percent and Ghana reported 58 percent in 2017, 17 percentage points increase from its 2014 figures. The case is different in Nigeria which has an excluded population of 36.6 million, thanks to its bankled financial inclusion model. Even though telecom operators and other Fintech companies indicated interests to operate in the market, the CBN policy would not allow them. The regulator eventually shifted in October 2018 because of the increasing rate of financially excluded people in Nigeria and the lack of progress in getting banks to provide financial services to people living in areas that lack access. Telecommunication operators’ push to offer mobile

money services in Nigeria received the official nod of the regulator, the Central Bank with the issuance of guidelines for players to apply for the licence. The CBN had in a circular on July 2018, lamented that Nigeria was not meeting any of the financial inclusion targets agreed and contained in the 2012 Financial Inclusion Strategy. Not only was the country not meeting its targets, but it was also declining in growth. For instance, while Nigeria achieved 60.3 percent in 2012, it declined to 58.4 percent in 2016 against a target of 69.5 percent translating to financial exclusion of about 41.6 percent. In a bid to grow the number of financially included people, the CBN released an exposure draft 14 months

ago in which it proposed the PSB aimed at deepening financial inclusion in Nigeria. The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent of adults still lack access. The digital identity verification, alternative lending platforms, data sharing, and new payment systems delivered by Fintech companies according to Rao has resulted in a set of new financial services. Charlotte Crosswell, CEO of Innovate Finance and speaker at Davos 2020, said that the Fintech industry is only starting to realise the potential of ‘doing good’ and “we need to continue to help those who believe financial wellness and stability is an unattainable goal.”

financing. At the risk-free rates that make our commercial banks, pension funds, etc. happy, financing these critical components of economic development for the country become utterly impossible, leaving us in the rot we have become accustomed to. However, with Emefiele’s silver bullet, projects that will reduce the cost of production in Nigeria to ensure we can morph into a country that can produce competitively rather than continuously import, begins to actualize.

Why do we call it a silver bullet? – The lower interest rates you see today is a matter of basic economic supply & demand, induced by removing domestic investors from CBN’s Open Market Operations (OMO). Henceforth, domestic investors have been directed by the CBN to buy domestic securities issued by the Federal Republic of Nigeria, namely Treasury Bills and FGN Bonds. The result is that the demand for treasury bills and FGN bonds now far exceeds its supply and as such the yields have been adjusted to their normal economic equilibrium, dictated by investor appetite. OMO securities are now the preserve of a bilateral financing agreement between the CBN and foreign portfolio investors. In other words, Foreign Portfolio Investors (FPIs) will be willing to buy Nigerian OMO bills at a negotiated yield that does not distort the Nigerian domestic yield curve, fostering a credit market in the country and allowing Nigeria fund its infrastructure with long term economically viable Naira. I recently read an article from an international rating agency criticizing this move by the CBN, sighting illiquidity in the OMO securities due to a much smaller investor base. If a window was opened to foreign investors to sell to the CBN whenever necessary, then this totally makes the

bills liquid and defeats that theory from the rating agency. With regards to the fear of Naira devaluation, again this is an inaccurate conclusion. To the extent that the negotiable rates between the CBN and FPIs remain attractive, the probability of a run on the Naira remains mute. This coupled with the Import & Export FX window and CBN’s timely interventions, we can look forward to having a relatively stable currency and low economically viable interest rates that will help grow the economy into a stronger future. So, should we like Emefiele’s silver bullet? – This answer is a resounding yes. Nigerians lets support this crucial initiative from the CBN for a brighter tomorrow and let’s help ourselves breakout from our history of round tripping banking. Congratulations to Governor Godwin Emefiele and his team at the CBN for a job well done. Sonnie Babatunde Ayere – is a trained financial economist and investment banker. Ayere currently runs the investment banking outfit of DLM Capital Group, prior to that, he ran UBA Global Markets now United Capital Plc. He had spent many years working for the International Finance Corporation (IFC) and various international commercial and investment banks in the UK and US.

Emefiele’s silver bullet Sonnie Babatunde Ayere, CEO - DLM Group

n ancient mythology and folklore, silver is seen to have magical powers, used to conquer and combat monsters and used to ultimately overcome challenges faced by Knights and heroes of old. In Nigeria, one of the monsters that has needed to be faced head-on is a regime of high-interest rates and its impeding effects on the growth of the country. Most recently, the Central Bank of Nigeria (CBN), led by Governor Godwin Emefiele, decided to take on the challenge of addressing this deterrent to domestic economic growth in Nigeria. Historically in Nigeria, interest rates have always been high, and this can be directly attributed to the monetary system in vogue since 2009 which sought to use FGN bonds/T-bills and OMO bills as a means of attracting US$ into Nigeria to help stabilize the Naira. Following this long unnecessary spell of extremely high interest rates in Nigeria from 2009 to 2019, it is gratifying to see that once again, it is possible to experience the rebirth of a sustainable credit economy in Nigeria; one that can support ordinary citizens as well as infrastructure growth. Yes, many commercial

bankers, pension fund managers, asset managers and traditional buyside investors do not like these lower rates. Some use old archaic economic theories that question how inflation (at 11%) can be higher than the treasury risk free rate (at 3%). Even where you look at inflation against yields on fixed income securities, it would be inflationary expectations that an economist will analyse and not the spot inflation per se. Why so? If I were to purchase a 10year bond, with a coupon rate of 10 percent and spot inflation is 11percent today, you could argue that you are getting a negative return today but, that is only for the first year as inflation the next year could be 9percent, or could even have dropped to 7percent in year 5 and so on. Therefore, over the duration of the bond, my coupon rate begins to exceed future spot inflation rates as described above and therefore I’m in the money (bond price in premium). If, however, I did not buy that bond and inflation falls as described above, the new bonds will have increasingly lower coupons and my profit as an investor is much less. Who also says that the shortterm risk-free rate (T-Bills) must be above inflation? Where an investor wants above inflation returns, then such investor takes the appropriate risk/reward op-

Sonnie Babatunde Ayere

portunities. That is what all other institutional investors, worldwide do. Why the glamour for low interest rates? – The answer is simple. No economy can expect sustainable real growth when long term rates are above single digit. In order to attack inflation in Nigeria, we need to combat the high cost of the factors of production i.e. power, infrastructure (hard & soft), logistics, transportation, and a host of others. Long-term funding therefore becomes critical, most importantly the cost of

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Wednesday 29 January 2020

BUSINESS DAY

BANKING Banking system liquidity worth N834bn to be sterilised by CBN Stories by HOPE MOSES-ASHIKE

he banking system will in the short term see a whopping N834.0 billion being sterilised by the Central Bank of Nigeria (CBN) following the implementation of the new policy on Cash Reserve Ratio (CRR). In trying to manage inflation and liquidity overhang in the banking industry, occasioned by the fiscal spending and the re-jigged Open Market Operation (OMO) policy which saw the exclusion of some actors from the market, CBN last week Friday raised CRR by 500 basis points to 27.5 percent. The banking system liquidity is expected to be boosted by an additional inflow of N495.0bn from OMO maturities and Analysts at Afrinvest Securities Limited expect to see increased activities in the secondary market. “Depending on how the

Godwin Emefiele, CBN governor

CBN aims to implement the CRR increase in the short term, we expect the policy to alter the demand witnessed over the previous weeks as an additional c. N834.0bn worth of liquidity is likely to be sterilized from the financial system,” the analysts

said. One of the implications of this new development on the sector is that banks earnings will definitely be threatened with its high volumes and low margins. Also, on implementa-

tion of this new policy that is when the CBN begins to debit banks on the new CRR, banks will be in a situation where they would be scrambling over the place for money. “I think that the cost of funds could be the real issue because they have to cover this position,” Bismarck Rewane, managing director of Financial Derivatives Company Limited said. Razia Khan, managing director, Chief Economist, Africa and Middle East Global Research, Standard Chartered Bank, expects market interest rates to adjust to, most likely at the very front-end of the curve. However, continued OMO maturities will still prove to be an offsetting influence, but the floor in yields should now adjust higher, sending a message on the CBN’s intention to preserve currency stability and its ongoing concern over the price level, said Khan. Johnson Chukwu, managing director, Cowry Asset Management Limited sees

Baobab Microfinance Bank ready to commence agency banking

s part of its plans to support its branches nationwide to reach out to more Nigerians, Baobab Microfinance Bank has concluded arrangements to commence agency banking nationwide. Kazeem Olanrewaju, managing director and Chief Executive Officer of the bank who stated this while briefing newsmen in Lagos said the move in addition to its digitalization process will help drive its growth plans and support more Nigerian businesses. “As part of our strategy, what we have done over the years is to open branches everywhere we operate and we have 20 branches. Now, what we want to gradually do is also to be able to render services where we don’t have branches. These services would include payment, collections, insurance products, and been able to give loans. And that is why we are looking at other platforms. “So we have been talking about digital platform; this is a human platform. We have existing agents in Nigeria and the new loans we want to create. So, it’s going to be a com-

bination of the two. There are new agents that we would appoint, brand their shops, and give them all the technology to be able to render services to our customers. They can collect cash, make payments, customers can withdraw even cash in their accounts from those agents, “he said. “That is one of the ways, and then, these agents too can also look at customers who probably need some supports in form of loan, and then the request can be made with these agents. And we will have a system in place that would be able to profile, process, and assess the loans, and make a proper decision to be able to extend this loan or not. Hence, we are going to be partnering with some existing agents, some Institutions who have agents, and at the same time, we would be creating new agents that we think are capable of doing every kind of services that we are looking at.” The bank, he added, has plans to have about 200 agents across the country this year alone. “It is also very important because, prior to this time, we have been testing the brand, www.businessday.ng

and today we are so liquid that we feel that we can easily double our loan book. We need to spread these goodies around the country. Hence it’s not just going to be something that is happening around the five states that we operate at the moment. And it’s going to be bit per time. “So, months after months, we would be taking certain number to certain places till we cover-up. We have done this in so many other African countries; in Senegal, in Madagascar, in Ivory Coast, and its a huge success. So, we don’t have any doubt about the model that we have. It’s going to run very well also in Nigeria, “he said. He also disclosed that Baobab Microfinance Bank in line with the directive of the Central Bank of Nigeria (CBN) that all Microfinance banks operating in the country shore up their capital to N3.5 billion by April this year, has met and surpassed the threshold. Olanrewaju said the capital came via retained earnings as against its initial plans to raise the money via rights issue. “The central bank expects that by April this year, our

shareholders funds should be hitting N3.5 billion, and a minimum of N5 billion by 2021. I am happy to say that at this point, our shareholders fund is over N3. 9 billion, coming from retained earnings. The initial plan was for our shareholders to contribute by rights issue, but giving the level of profitability and growth that we have had in the last few months, it’s looking like we may be able to just have enough from our retained earnings. “So, if we have major capital projects, then the shareholders would still have to join the equity. Other than that, it would not be for the purpose of meeting recapitalization. In a nutshell, we are fully capitalized to the level that CBN wants us to be by April 2020. We reached that level as far back as October last year, so it’s not an issue today. And then we expect that by the end of this year, we should be at about N5.5 billion or at most, N6 billion, which is above what the CBN is asking, “he stated. Olanrewaju stated that the bank is well prepared to support SMEs and the economy with several products and its digital transformation.

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the banks suffering from multiple regulatory headwinds. One is that the CBN on one hand wants them to lend 65 percent of their deposits and also keep 27.5 pecrcent of their deposit to CBN and 30 percent liquidity, but the CRR does not count as liquid assets. So it is almost impossible for the banks to comply will all these regulatory requirements and still make profits. The amount in cash reserve is completely sterilize, and does not attract interest to the banks, so the banks are going to have 27.5 percent of their deposit with the CBN at no interest, no benefit and they can only lend 65 percent of their money and expected to keep liquidity ratio of 30 percent. “So if you sum all these, it is clearly above the 100 percent of the deposit. So in effect, the CBN is expecting banks to lend from their shareholders’ fund,” Chukwu said. Godwin Emefiele, CBN, governor assured that the raised CRR will not in any

way impede lending but will rather help strengthen growth which the International Monetary Fund (IMF) projects will come through at 2.5 percent in 2020. The CBN’s economic report for the quarter revealed that total deposits at the CBN amounted to N14.35 trillion at the end the November 2019, indicating an increase of 3.6 per cent above the level at end of third quarter 2019. The rise was attributed to 14.3 per cent and 3.1 per cent increase in the deposits of the Federal Government and the commercial banks, respectively. Of the total deposits at the CBN, the shares of the Federal Government, banks and private sector deposits were 47.4 per cent, 35.9 per cent and 16.7 per cent, respectively. Reserve money grew by 5.0 per cent to N7.35 trillion at the end of November 2019, in contrast to the decrease of 13.5 per cent at the end of third quarter of 2019. The development reflected the increase in federal government and banks’ deposits with the CBN.

Access Bank’s marathon support to boost tourism, GDP

ith the 2020 Access Bank Lagos City Marathon fast approaching, the headline sponsor and Africa’s largest Bank in terms of retail size, Access Bank Plc has reiterated that its sponsorship of the race is geared towards improving the economic and social outlook of the state. While speaking about the marathon, Herbert Wigwe, group managing director/ CEO of Access Bank said, “As one of the leading banks in Nigeria and indeed Africa, it is imperative for us to support the economic and social development of the communities in which we operate. “Hence, we have sponsored the Access Bank Lagos City Marathon for five years to make Lagos State more attractive to tourists and foreign investors alike. We have also used this platform as an avenue to create more jobs and opportunities to thousands in the state,” he said. He went further to say that, “to ensure that the impact of the marathon, as felt in Lagos State, is duplicated and sustained, we have also begun sponsoring marathons and @Businessdayng

Herbert Wigwe, CEO, Access Bank, plc

other sporting events across different states in Nigeria as highlighted by our sponsorship of the Abeokuta marathon.” With over 100,000 participants recorded across the last two editions of the Access Bank Lagos City Marathon, Wigwe said he expects the trend to continue as the marathon which has moved up from a Bronze Label marathon to a Silver Label, less than five years after its maiden edition, continues to garner the respect of top international and local athletes alike. This year’s edition of the marathon billed for February 8 offers a cumulative prize of 500,000 USD to be won by contestants.

Wednesday 29 January 2020

BUSINESS DAY

tax issues Paying Taxes 2020: Implementing online filing, payment systems still challenge in Africa Iheanyi Nwachukwu

mplementing online filing and payment systems continues to be a challenge for the African region, resulting in it having the highest number of payments and the second highest time to comply. This is noted in the recently released “Paying Taxes 2020” report titled “The changing landscape of tax policy and administration across 190 economies”. Paying Taxes is a report jointly published by PwC and World Bank Group. In Africa, it takes 285 hours to comply with tax payment, the Total Tax and Contribution Rate (TTCR) is 47.3percent, post-filing Index (PFI) is 56.2, while number of payments is 34.7. Preparing and filing tax returns is only part of the tax compliance burden faced by businesses. Some of the most complex processes arise after returns have been filed. The introduction of electronic systems for filing and paying taxes has cut tax compliance times globally. Electronic filing (e-filing) and electronic payment (e-payment) are the processes of submitting tax returns and payments over the Internet. E-filing and e-payment have various benefits that have made the tax preparation process easier for businesses, including the ability to file a tax return from one’s office at a convenient time and the ability to prepopulate tax returns with data already held by the tax administration. The United States was the first economy to introduce e-filing, in 1986, followed by Australia in 1987. “Tax reform can be one of the toughest political challenges governments face. Any reform will inevitably create winners and losers, and the backlash is sometimes enough to sap the reformers’ resolve. Although the process is rarely without controversy, certain risks of tax reform can be mitigated by ensuring reforms are driven with four key principles in mind – stress certainty for business, consider the future, keep it simple, and establish principles”, said Amal Larhlid, partner, global fiscal policy, PwC UK. According to her, “We will continue to see more tax reforms internationally as we move into a more globalised, technology-enabled world. Considering the key principles above when embarking on tax reform will assist with creating a tax system that operates and serves society as intended”. Julian Sansum, partner, employment and equity, PwC UK said, “Considering the pace and scale of the changes we are witnessing in labour markets, it is clear that reforms to labour taxes and laws will continue to be press-

ing issues for governments all over the world.” Having a robust tax system that promotes a sustainable taxpaying culture is an important element in any economy. A culture of voluntary compliance can be seen as a measure of taxpayer morale. The Organisation for Economic Co-operation and Development’s (OECD’s) 2019 report on tax morale underscored the fact that transparency and communication with the public on the use of tax revenues are cornerstones of a sustainable tax system. How governments reform tax systems can significantly affect the profile of taxes borne by businesses. In Paying Taxes, the Total Tax and Contribution Rate (TTCR) is used to measure how much tax businesses pay. This is defined as the sum of all the taxes and mandatory social contributions paid, expressed as a percentage of the company’s commercial profit. Since 2014, the post-filing score has increased in 31 economies and has dropped in 10, the report noted. When it comes to implementing online payments, tax authorities need to work with other organisations to ensure that payment systems are widely accepted and are available in a format that www.businessday.ng

is convenient to the taxpayer, the report noted. “The move to real-time systems can provide significant benefits for tax administrations, including greater control over taxpayer data and enhanced fraud prevention”, said Christoph Zenner, Partner, EMEA Indirect Tax Leader, PwC Belgium. “If tax administrations and taxpayers are to reap the full benefits of online systems, proper implementation and administration is critical. The Paying Taxes data shows examples in which the full benefits of online systems have not been realised because, although they may have existed for some time, they are not used by the majority of taxpayers”, he added. This will almost certainly require the involvement of banks and potentially telecommunications companies to ensure that Internet connections are reliable and that payments can also be made from mobile devices. “Although governments always have the option of making online payments mandatory, if they do this before the necessary systems are in place and working reliably, they run the risk of increasing discontent with the tax system and potentially lowering the chances

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of people complying with their tax obligations in a timely manner”, the report stated. Even though many of the topline indicators that measure the ease of paying taxes have remained relatively stable over time, where economies have been unable to implement technology successfully, they continue to risk missing opportunities to make it easier and quicker for entities to comply with tax obligations and for governments to monitor that compliance. There are two main reasons for increases in the number of payments: the introduction of new taxes and the increasing frequency of filing and paying existing taxes. For all governments, the administration of tax is a priority. Paying tax is one of the most universal, frequent and potentially contentious interactions that citizens have with their government. It can affect, and be affected by, an individual’s broader perception of government. “Over the 15 years that Paying Taxes has been comparing tax systems globally, we have seen substantial improvements in the ease of paying taxes, driven largely by advances in technology. “As with many other areas of society, progress has not been @Businessdayng

universal or uniform, and this is reflected in the results. Even though many of the top-line indicators that measure the ease of paying taxes have remained relatively stable over time, where economies have been unable to implement technology successfully, they continue to risk missing opportunities to make it easier and quicker for entities to comply with tax obligations and for governments to monitor that compliance. As before, we have used a medium-sized case study company as the basis for these comparisons and findings”, according to Rita Ramalho, Senior Manager, Global Indicators Group, World Bank Group, and Andrew Packman Leader, Tax Transparency and Total Tax Contribution, PwC UK. Ease of filing and paying tax. This year, at a global level, there are modest improvements in the administrative ease of paying taxes. In certain economies, however, digital technologies have led to more substantial improvements. Total Tax and Contribution Rate. Globally, the Total Tax and Contribution Rate (TTCR) has also remained relatively stable for a decade, with only small changes in most economies. This suggests that there isn’t a ‘race to the bottom’ as governments compete for investment.

Wednesday 29 January 2020

BUSINESS DAY

POLITICS & POLICY

Enthronement of justice will stem violence, killings - Atiku

...Condoles with victims of Plateau, Taraba, other attacks

eports of renewed attacks at places in Plateau and Taraba states and elsewhere across the countr y are disturbing just as they remind us of how much work we still have ahead of us to tidy the country’s internal security apparatus. Atiku Abubakar, a former vice president, has said. In a statement signed by Paul Ibe, Atiku’s Media spokesperson, the former VP said: “While it is fair to appreciate the military and other security outfits for their spirited efforts to clear all trenches

of bandits’ hideouts, it is expedient that we reevaluate and recalibrate the country’s security architecture through qcommunity policing and any other of such mechanisms that allows for a more farreaching inclusive security networking. “While it is desireable to have a razor edge security system, it is also important that we ensure that the justice system in the county works, so as to ensure that criminals who are caught in this kind of heinous crime are meted with adequate punishments.” He noted that a soci-

ety with a derelict justice system is a fertile land for misconduct, according to a popular Africa adage. “To be sure that we are one step ahead of criminals who pose existential threats to our internal security, it is important that we empower our justice system with the belief that when stiff punishments are handed down on these criminals, there will be a deterrence for a repeat of this nature of crime. “These kinds of crime and killings have continued unabated because assailants are hardly brought to justice. So, there is no deterrence to such crimes.

Atiku Abubakar

My comment on ‘Amotekun’ done in good faith - Balarabe Musa Iniobong Iwok

alarabe Musa, has said that the criticism that trailed his comment on the setting up of the Southwest security outfit, ‘Amotekun’, was unnecessary because it was done in the overall interest of the nation. Musa had last week alleged that the Southwest establishment of ‘Amotekun’ was a ploy by the Yorubas to create Oduduwa Republic. The comment had at-

tracted criticism among section of Nigerians, including some leaders in the Southwest. Nobel Laureate, Wole Soyinka had equally condemned Musa’s remarks, saying that he was wrong about his assertion on the reason for the establishment of the security outfit. Soyinka had said Amotekun had come to stay, saying such an outfit was needed in a Southwest zone ravaged by insecurity. National leader of the All Progressives Congress (APC) Bola Tinubu, while

backing the establishment of the security outfit, had called for dialogue to resolve the difference. However, last week, the Federal Government despite initial opposition toward the setting up of the security outfit reached an agreement with the six state governors of the region on the operation of ‘Amotekun’. The government agreed that necessary legal instruments should be put in place by each of the states to give legal backing to the initiative and address all issues concerning the regulation of

the security structure. But speaking in an interview with BusinessDay, Tuesday, Musa, who was a Second Republic governor of old Kaduna State, urged Nigerians to judge him with his comment, stressing that he was ready to join issues with anyone about his comment. “Yes, I read Soyinka’s comment ; I chose not to respond to him, but what I said was in good faith. It was done for national interest; Nigerians should judge, I don’t want to join issues with anyone,” Musa said.

Oyo APC alleges disruption of smooth running of democracy at the local government level REMI FEYISIPO, Ibadan

yo State chapter of All Progressives Congress(APC) has decried what it called “unprovoked and needless disruption of smooth running of democracy at the local government level of the state by the new PDP administration on account of bad politicking and pursuit of selfish agenda.” The broom party described the reinstatement of the elected local government council officials as a manifestation of the reality of constitutional democracy which must be accepted by all stakeholders including Governor Seyi Makinde and the ruling People’s Democratic Party in the state. In a statement issued on

Tuesday and made available to journalists in Ibadan by its Assistant Publicity Secretary, Ayobami Adejumo, Oyo APC, the party said: “As normalcy is gradually returning to all the 33 LGAs and 35 LCDAs with the return of validly elected officials to their respective offices, we urge the state government to desist from further action capable of putting the Pacesetter State in the news for the negative reasons. No amount of bad politicking would change the dictates of the nation’s Constitution as well as the rule of law. “Except in places like Ibadan North and Ibadan North East where a group of miscreants mobilized by the PDP stopped the elected officials from gaining access to their offices, as www.businessday.ng

they also chased away Policemen deployed to do their duties, feelers from across the state indicated that the reinstatement directives were well carried out. “Across Ogbomoso, OkeOgun, Oyo, Ibarapa and most parts of Ibadan geopolitical zones of the state, those elected those administer the affairs of local government councils and local council development areas have resumed work and we expect them to hit the ground running since much is expected from them by those who elected and handed them a three-year mandate on May 12, 2018.” According to him, “We are aware of the agitation for a redress on the eight months of their mandate taken away by

the PDP government with its sack order and illegal appointment of caretaker chairmen in their place but we can assure them that this would be addressed in due course by the Judiciary which we believe, as a Progressive Party, remains the last hope of the common man. “Therefore, we are using this opportunity to appeal for calm as we call for dialogue with Gov. Makinde on how he could work with the reinstated officials for the overall benefits of the good people of the state. We urge security agencies to forestall further attacks against our party faithful across the state by the PDP thugs while efforts are being made to prosecute those behind maiming of innocent people in parts of Ibadan on Monday and Tuesday.”

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Justice is thus key to promoting peace in our communities. “If you give people the confidence that anyone who breaks the law will be found and made to face the full wrath of the law, then people will be less inclined to promote violence and the killings that come with it.” “We condole with the families who have been bereaved owing to these crimes and pray that the souls of their departed d e a r o n e s w i l l re s t i n peace. Lastly, we pray that our country will overc o m e t h i s c o nu n d r u m very soon,” he said.

Edo APC: Emergence of governorship candidate will resolve crisis - Ize-Iyamu IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

sagie Ize-Iyamu, a chieftain of the All Progressives Congress (APC) Tuesday said that the crisis rocking the party in Edo State will permanently come to an end immediately after the nomination of a candidate for the governorship election. Ize-Iyamu, who is also a governorship aspirant for the election, made the remarks while speaking with newsmen in Benin City. The party had in the past months enmeshed in leadership crisis thereby polarising it into Adams Oshiomhole and Governor Godwin Obaseki camps. The former secretary to the Edo State government who refused to believe that there are factions in the party noted that there were only little misunderstandings. “The problem in Edo APC will expire and immediately settle itself when nomination is over because the party is not going to postpone the nomination because people are quarrelling. “So, when tickets are bought, people will recognise authority. People will go and buy tickets. And if you think there is a faction and you boycott, that is your problem. “It is only one name that will go to INEC. So, the problem in APC will soon expire when the nomination is done. @Businessdayng

“Every problem has expiration date. But when committees are set up for the purpose of reconciliation and some persons rejected the committees, they are just but creating unnecessary crisis”, he said. Ize-Iyamu, who opined that crises are being resolved in a round table conference, noted that the perceived crisis in the party is being blown out of proportion. According to him, “I refused to believe that there are factions in the party. I see just little misunderstandings and our people are playing it out of proportion.” While noting that contesting for governorship election was not the main purpose of his defection to the party, he however promised to support and work for the victory of any of the aspirants that got the nomination ticket. “The fact that am offering myself for services does not mean that am the only person that can do the job or that am most qualified. “Somebody has to do the job. We said that we were coming to add value to the party. If at the primary election I get the ticket, I will want all others to close ranks and support me; likewise; if other aspirants get the ticket, I will close rank I support the person,” he added. It was gathered that political parties will between next April and May conduct primary elections to nominate governorship candidates for the election.

Wednesday 29 January 2020

BUSINESS DAY

news

Buhari sacks NNDC board three months after confirmation by Senate ...seeks approval of NCC chair, member Solomon Ayado, Abuja

hree months after the Senate confirmed the nomination of the management board of Niger Delta Development Commission (NNDC), President Muhammadu Buhari on Tuesday sacked the board and said a new board would soon be constituted. This is coming as Buhari has asked the Senate to confirm the appointments of Adeolu Akande and Uche Owude as chairman and member of the Nigeria Communications Commission (NCC), respectively. The request was contained in an official letter. The sack of NNDC board was contained in an executive communication sent to the Senate by Buhari, which was read before senators in plenary on Tuesday. The sacked NNDC board was chaired by Peter Odubu from Edo State, South South region of the country. It would be recalled that the Senate had refused to approve the statutory annual budget of NDDC from the Interim Management Committee, reason it further confirmed a substan-

tive board that was now suspended. Buhari said the sack of the 15-man board was necessitated by a forensic audit of the NDDC, which was carried out while the process of appointment of board members was ongoing. The president however directed that the interim management committee of the board should proceed with managing affairs of the agency before the release of the forensic audit report. “The Senate is invited to note that while the composition of the board of NDDC was ongoing, I have’ directed that the forensic audit of NDDC be carried out. The exercise should be overseen by the Interim Management Committee (IMC). ‘’Based on this and in order to allow unhindered interference of the exercise by the board appointment, as was confirmed by the Senate, it should be put on hold for now. ‘’With this development, the way has been paved for the IMC to continue, thereby putting to rest the leadership controversy of the agency,” the letter read.

Atiat Leasing appoints Eni-Ikeh new MD/CEO

he Board of Directors of Atiat Leasing Limited is pleased to announce the appointment of Kanayo Eni-Ikeh as the managing director/CEO of Atiat Leasing Limited. Kanayo comes on board with over 14 years’ professional experience, a wealth of knowledge and technical know-how. He has built his career in finance managing strategic positions in Banking and Financial services. His vast experience has positioned him as a leader and prudent manager of resources. He has an exceptional track record of growing businesses and delivering transformation. Until his appointment, he was the general manager, Business Development of VFD Microfinance Bank, where he successfully promoted the bank’s products and services to institutional, commercial and retail clients. Kanayo has held management positions in key financial institutions including Process Flow Outsourcing, Diamond Bank (now Access bank),

Fidelity Bank, and VFD Group. Kanayo has attended various executive programmes at the Lagos Business School; is an alumnus of the Indian School of Business and holds a B.Sc. in Geological Sciences from Nnamdi Azikiwe University, Awka. The management and board of Atiat L easing Limited heartily welcome Kanayo to the team even as they look forward to continuous growth and advancement of the company.

Kanayo Eni Ikeh www.businessday.ng

Isa Ali Ibrahim (l), minister for communications and digital economy, and Segun Ogunsanya, MD/ CEO, Airtel Nigeria, during a courtesy visit to the minister in Abuja.

FG to begin development of 10-year National Development Plan Cynthia Egboboh, Abuja

he Federal Government has disclosed plans to develop a new National Development Plan (NDP) intended to succeed the Economic Recovery and Growth Plan (ERGP), many say, did not achieve most of its targets. Minister of state, budget and national planning, Clem Ikanade Agba, disclosed this while receiving Japanese Ambassador Extraordinary and Plenipotentiary to Nigeria, Yutaka Kikuta, in Abuja. The 10-year NDP, according to Agba, will be broken down into two five-year medium-term plans, from which the annual budgets henceforth would be drawn.

… as ERGP fades out this year The government is ready to make the process of the NDP very inclusive, he said. Speaking further, the minister said the most recent success recorded by the government was the return to the January - December budget cycle, adding that the government had made progress in effort to reposition the nation’s economy. “The return of the budget cycle to January was deliberate and in line with the current administration’s economic recovery plan, which is culminating in the development of another National Development Plan,” he stated. “We want to sustain what happened last year in terms

USAID to invest $60m to deepen trade, investment in Nigeria Cynthia Egboboh, Abuja

he United States Agency for International Development (USAID) has announced plans to invest $60 million to boost trade and investment activities across the West Africa region, with major focus on Nigeria. Mary Beth Leonard, US ambassador to Nigeria, speaking at the launch of the West Africa Trade and Investment hub in Abuja, said the project was aimed at improving the overall business operations and enhance capacity to tap into export markets to expand business with the US and other international companies. She said, “The trade hub will increase economic growth across West Africa with more focus on Nigeria through a market based approach that will improve companies to expand business operations and create jobs that build on the talents of the growing youth population. “Nigeria represents a land opportunity for private sector investment, hence the trade hub

will unlock this potential and improve was of doing business in the agriculture sector as well as facilitate access to private capital.” She explained that the trade hub over five years would administer $60 million in co-investment funds to attract private sector investment of $300 million in the region. Speaking further, Beth said the project would complement the efforts of the government by co-investing with established private sector entities and other partners by expanding programme targeting the creation of 40,000 new jobs in Nigeria and West Africa by 2025. Cheryl Anderson, senior deputy assistant administrator, USAID Africa Bureau, in his remark said that the project is at empowering the private sector to play a more robust role in maximizing opportunities for Nigerian and American businesses. Anderson further said Nigeria, especially among other Africa nations, had the potential to mobilise private sector development as a strategy for sustained economic growth.

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of early budget passage; we will continue to work with the National Assembly to repeat the feat. If we fail to repeat it, it means that what happened was just a chance or a fluke but if we do it means that we have a process and a plan that we intend to build on,” he said. He commended the Government of Japan for the development assistance and the cordial relationship existing between the two countries since the past 60 years, and promised to do everything in his power to ensure the plans were actualised. Earlier, the Japanese Ambassador Extraordinary and Plenipotentiary, commended the President Muhammadu

Buhari’s administration on its economic policies and priorities, saying the administration was on the right track to economic recovery and sustainability. The Ambassador said he was in the ministry to discuss ways of crystallising Prime Minister Shinzo Abe’s promise of assisting to strengthen the National Centre for Disease Control (NCDC) with a grant of 2 billion Japenese Yen, as well as support to the National Defence College. “We support President Buhari’s second term because we deeply believe in his priority areas and we feel the Federal Government is on the right track,” Yutaka said.

How ICT will increase Nigeria’s GDP faster than oil, gas Solomon Attah, Lafia

irector-general, National Information Technology Development Agency (NITDA), Abdulullahi Inuwa Kashifu, says the implementation of the Digital Transformation Strategy (DTS), as directed by President Muhammadu Buhari, will retain economic growth and increase the country’s Gross Domestic Product (GDP) faster than the oil and gas sector. According to Kashifu, the determination of the Federal Government to key into ICT is basically to diversify the country’s economy, as an enabler to achieve Nigeria development goal. The NITDA DG disclosed this during an ICT empowerment training and provision of tools to 100womendrawnfromsixstatesof the North Central geopolitical zone in Lafia, the Nasarawa State capital. Kashifu, who underscores the important of ICT to nation building, said Nigeria cannot attain it development goal, if she fails to sustain the current reform of President Muhammadu Buhari @Businessdayng

on ICT. He revealed that in order to achieve this, the President had directed the Ministry of Communication and Digital Economy to implement the DTS, which the ministry had identified eight pillars that would help the country in it journey to digital Nigeria. He enumerated some of the pillars to include, digital infrastructure, digital platforms, services and digital skills, hence the training of the women in the zone. The DG, who took participants through the rudiments of ICT and how it will enhance the economic wellbeing and uplift their social status, said, “President Muhammadu Buhari has started a lot of reforms in that direction to prepare Nigeria to be digital economy. “One among the reforms is the economic growth and recovery plan, which is a government initiative with three broad objectives; to retain growth, build globally competitive economic and inclusive goal by investing in our own people, because the people are the greatest resources.

Wednesday 29 January 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 28 January 2020

Top Gainers/Losers as at Tuesday 28 January 2020 LOSERS

GAINERS Company

Opening

Closing

Change

N20.15

N22.15

NAHCO

N2.69

N2.95

0.26

NEM

N2.2

N2.4

VITAFOAM

N5.3

AFRIPRUD

N4.6

JBERGER

Company

ASI (Points)

Opening

Closing

Change

N117

N107

-10

DEALS (Numbers)

FLOURMILL

N22.45

N21.15

-1.3

0.2

GUARANTY

N32.1

N31

-1.1

VOLUME (Numbers)

N5.5

0.2

STANBIC

N42.5

N41.5

-1

N4.67

0.07

GLAXOSMITH

N5.45

-0.55

OTAL

VALUE (N billion) MARKET CAP (N Trn)

29,378.63 4,561.00 250,931,616.00 4.829 15.132

Stock market continues downward movement, lose N90bn …Zenith Bank board approves full year result, dividend payment Stories by Iheanyi Nwachukwu

he Nigerian stock market remains on the downward path following a record 0.59percent decline in the NSE All Share Index (ASI). At the close of trading on Tuesday, the record positive returns seen this year decreased to +9.45percent. NSE ASI decreased to 29,378.63 points from a high of 29, 552. 99 points while the value of listed stocks dropped further to N15.132trillion from N15.222trillion, representing N90billion loss. In 4,561 deals, equity dealers exchanged 250,931,616 units valued at N4.829billion. Stanbic, Zenith, UBA, Fidelity and GTBank were actively traded stocks. The market which saw negative return of 0.84 percent week-to-date (WtD) was aided by record losses in equities like Total Nigeria Plc, Flourmills, GTBank, Stanbic, and GlaxoSmithKline. Total led the loser table after its share price dropped

from N117 to N107, losing N10 or 8.55percent. Flour Mills also decreased from N22.45 to N21.15, losing N1.3 or 5.79percent and, GTBank Plc which dipped from N32.1 to N31, losing N1.1 or 3.43percent. With market breadth seen deep in the red zone and all major sub-sectors closing south, market watchers expect no deviation from

this path on Wednesday except for unexpected positive movements in some large cap counters. Julius Berger Nigeria Plc recorded the highest gain after its share price rose from N20.15 to N22.15, adding N2 or 9.93percent. NAHCO followed after its share price advanced from N2.69 to N2.95, adding 26kobo or 9.67percent, and

Vitafoam which moved from N5.3 to N5.5, adding 20kobo or 3.77percent. In a related market development, the board of directors of Zenith Bank at its meeting on Tuesday January 28, 2020 approved among other things the audited accounts of the bank for the year ended December 31, 2019 and the payment of a final dividend.

Global market indicators FTSE 100 Index 7,490.80GBP +78.75+1.06% S&P 500 Index 3,276.20USD +32.57+1.00% Generic 1st ‘DM’ Future 28,693.00USD +212.00+0.74%

Deutsche Boerse AG German Stock Index DAX 13,321.78EUR +117.01+0.89% Nikkei 225 23,215.71JPY -127.80-0.55% Shanghai Stock Exchange Composite Index 2,976.53CNY -84.23-2.75%

NSE set to launch growth board for high-growth companies

he Nigerian Stock Exchange (NSE) will on Wednesday launch its Growth Board at The Exchange. The launch of the Growth Board provides issuers with the opportunity to leverage on the Exchange for listing, raising long term capital and facilitating liquidity in the trading of their shares. With a total of 41.5 million Micro, Small and Medium Enterprises operating in Nigeria, the launch of the Growth Board is designed to encourage the listing of growth companies and provide them with a cost-effective platform to raise the capital needed to scale, attract investors, enhance corporate visibility and put in place a regulatory structure that fosters growth. The Growth Board is established as part of the NSE’s initiative to elevate the Nigerian capital market and meet the needs of businesses at every phase of their lifecycle. Up until 2015, NSE maintained two boards – the Main Board and Alternative Securities Market (ASeM). The Main Board targets well-established companies with a demonstrable track record of commitment to high standards of disclosure and corporate governance, while the ASeM Board is a platform with an additional focus on small to mid-sized companies. On August 25, 2015, the Exchange launched the Premium Board for companies that meet the Exchange’s most stringent

listing criteria of capitalization, corporate governance and liquidity. It aims to provide a platform for greater global visibility for eligible African corporates to make it easier for them to attract global capital flows and reduce the cost of funding. Commenting on the Growth Board, Olumide Bolumole, Head, Listings Business Division said, “The launch of the NSE Growth Board further re-affirms NSE’s long standing tradition of supporting the development of SMEs in Nigeria by offering entrepreneurs opportunities to access finance and scale their businesses. The Growth Board is expected to attract small to medium-sized companies that exhibit the potential for fast growth in their corporate earnings and are in the growth phase of their business cycle. It will also offer investors the opportunity to invest in such companies with potential for high returns/capital gains.” In line with its efforts to deliver value to listed companies, the Exchange will present companies aspiring to list or are listed on the Growth Board with access to its Value Added Services program that are designed to; create competitive edge for listed companies, facilitate new listings, stimulate investors’ interest through enhanced information delivery and assist companies in complying with post listing obligations to retain their listing status.

and international SMEs and entrepreneurs. “Many of these customers are seeking a bank which truly understands the needs of entrepreneurial, fast-growing businesses. We believe that our acquisition and vision for UBUK offers the potential for significant growth for the bank. We look forward to working with our new colleagues at UBUK to continue to service the needs of its clients. We also look forward to sustaining and deepening relationships

with UBUK’s existing trading partners.” Chapel Hill Denham Advisory Limited acted as Financial Advisers while White & Case LLP and Udo Udoma & Belo-Osagie acted as UK Legal Advisers and Nigeria Legal Advisers respectively to Union Bank. Syndeo Capital Limited (led by Mandeep Ahluwalia) acted as Advisers to MBU Capital with Akin Gump LLP as Legal Advisers and PwC as Financial and Tax Advisers.

Union Bank plans to divest 100% of its UK subsidiary

nion Bank of Nigeria Plc has said that it has entered a share sale and purchase agreement to divest of its 100percent equity stake in Union Bank UK Plc. This sale is aligned with Union Bank’s strategy to geographically streamline its business operations to focus on growth opportunities in Nigeria. Following a competitive bid process, MBU BidCo Limited, an acquisition vehicle wholly owned by MBU Capital Limited

was selected as the preferred bidder. The completion of the sale is subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the United Kingdom. Commenting on the planned divestment, Emeka Emuwa, Chief Executive Officer of Union Bank, said: “As the banking landscape shifts towards digital and agency banking to drive financial inclusion, the Nigerian market presents robust long-term opportunities for Union www.businessday.ng

Bank. This divestment allows us channel our focus and capital towards mining those opportunities fully. “Through the sale, we are better positioned to deliver greater value to the organization and its stakeholders as well as continue to build the future of banking in Nigeria. The terms of the sale of UBUK delivers substantial value to our shareholders, while also entrusting its customers and trading partners to a high-

quality financial services institution who will work with existing management to deliver a stronger and more profitable entity,” he said. Mohammed Iqbal, Founder and CEO of MBU Capital commented: “We are delighted to announce the acquisition of Union Bank UK, subject to regulatory approval. We see a huge opportunity to build on UBUK’s strengths in international markets to create a new-style bank which is focused on the needs of UK

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Wednesday 29 January 2020

BUSINESS DAY

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Wednesday 29 January 2020

BUSINESS DAY

news Prompted by BusinessDay report, Immigration... Continued from page 1

L-R: Cecilia Dada, Lagos State commissioner for women affairs and poverty alleviation; Lansana Wonneh, deputy country representative, United Nations (UN Women Nigeria), and Tokunbo Abiru, managing director/CEO, Polaris Bank, at the official launch of HeForShe, a UN Women Gender Equality Campaign in Lagos where the Polaris Bank CEO was appointed a UN Gender Equality Champion (GEC).

Business leaders expect next decade to... Continued from page 1

director, Old Mutual Life

Assurance, said Nigeria must ensure it addresses the country’s gaping infrastructure deficit and security challenges as well as reform and diversify the economy to ensure it is able to record appreciable growth in the next decade. “For a nation struggling to finance its annual budget, the government doesn’t have the finance to plug the infrastructure gap and so there is need to tap private capital,” Omosehin said. Global consulting firm, McKinsey, estimates Nigeria’s infrastructure deficit requires $31 billion in annual investments over a 10-year period to fix. The Federal Government made about $13.3 billion in the whole of 2019, according to Central Bank data published this week. Still reeling from an oil price downturn that halved government revenue and plunged the economy into recession, the Federal Government resorted to borrowing to plug an annual budget deficit that has become mainstay in recent years. That borrowing has not translated to economic growth which has remained below 2.5 percent since 2015 and lower than population growth rate. In the next years, however, Nigeria has a chance to rewrite its future, the experts said. Ogho Okiti, an economist and managing director of BusinessDay, projects that if Nigeria’s growth rate continued to languish at 2 percent per annum, it would remain a $400 billion economy by 2030. In another scenario, should the economy grow at 5 percent, Okiti said the country would have a GDP of $500 billion by 2030. This would, however, still not be enough to drive inclusive growth. Okiti said Nigeria could boost its economy to $800 billion at a growth rate of 7 percent, while it could have

While this is above the subSaharan Africa (SSA) average (lower than 10 percent), the gap between Nigeria and SSA is narrowing owing to Nigeria’s decline. Meanwhile, non-SSA developing countries which had similar productivity with Nigeria in the early 1960s are now heading towards 30 percent (as of 2017) with advanced economies seeing a sharp increase to around 80 percent of the average US worker. The implication of this is that Nigeria’s population, which is growing at 2.6 percent according to World Bank and 3.2 percent according to the National Population Commission (NPC), would tilt from a blessing to a curse given that it is projected to hit 263 million by 2030 with Nigeria becoming the fourth largest country in the world. In the new decade, CEOs say ‘data’ would shape Nigeria’s prosperity. Business heads and chief executive officers said for Nigeria to achieve inclusive growth that would usher it into a new decade of prosperity, it must focus on generating reliable data that would facilitate informed decision making both in the public and private sectors. The need for this, they say, stems from the fact that most data available are largely estimated and fail to capture the informal sector which accounts for about 60 percent of economic activities.

The experts also stressed on the need for Nigeria to use technology to drive economic growth through business and informal sector. “The efficiency that technology brings, even though it’s also a disruption, is a thing that can automatically improve productivity. Also just by using data, business and government can take decisions that are precise and that are relevant for productivity,” said Ebehijie Momoh, senior vice president, Mastercard West Africa. Mastercard estimates that 1 percent increase in usage of electronic payment on an average would lead to a $104bn increase in GDP. “If the informal sector is really as large as the numbers are saying, we then need to look at how we can use technology to drive productivity in that space,” Patrick Nwakogo, country director/ CEO, Dale Carnegie Nigeria, said. Giving a keynote address at the BusinessDay’s economic outlook, Andrew Nevin, chief economist at PwC, said going into the next decade, Nigeria would need to bring more people from the informal economy to the formal economy. He also said Africa’s largest economy would need to unlock its dead capital, the country’s underutilised asset that can’t be used productively. “The biggest source of debt capital in this country is real estate,” he said, estimating it to be around $900 billion.

Analysts recommend border reopening...

would be extended and the border would remain closed. Hameed Ali, comptrollergeneral of the Nigerian Customs Service (NCS), recently told the National Assembly that the agency had been raking in between N4.7 billion and N5.8 billion since the Federal Government closed the borders. “When we closed the border, I feared that our revenue was going to drop. To be honest, our revenue kept increasing. There was a day in September that we collected N9.2 billion in one day. It has never happened before,”

a $1 trillion economy and emerge among world’s top 20 economies if it grew at 10 percent. This is also the growth rate (10 percent) targeted by Rwanda, Africa’s fastest growing economy. Business leaders at the economic outlook event told BusinessDay that a 7 percent and 10 percent growth rate that is independent of a sharp upward swing in oil prices could attract the needed investment which can change the dynamics of the country in the new decade. Nigeria started the last decade with growth around 8 percent but fortunes quickly changed with the downturn in global oil prices. Oil prices have recovered since then but remain volatile amid disruptions in the Middle East, geo/political tensions between Iran and the US, and the latest threat, the deadly Coronavirus disease spreading from China. Brent oil was trading lower at $59 per barrel at 4pm Tuesday, according to Bloomberg data, as the swift spread of the Coronavirus disease rattles global markets. In the last decade also, aggregate labour productivity for Nigeria fell to around 10 percent of the average US worker in 2017, according to latest World Bank estimates. The figure extended a downward trend seen since Nigeria’s productivity stood as high as 26 percent in the 1970s.

Continued from page 2

Policy Committee meeting of 2020, leading to the raising of banks’ Cash Reserve Ratio (CRR) by 500 basis points, from 22.5 percent to 27.5 percent. The move by the CBN is to mop up what it described as liquidity surfeit in the Nigerian economy,responsiblefordriving theinflationsinceAugustof2019. “The border closure is a chicken and egg situation, depending on who’s talking. The manufacturing sector is benwww.businessday.ng

efitting while the consumer goods industry is negatively affected,” said Yinka Ademuwagun, research analyst, FMCGs, United Capital plc. He said the smuggling at Nigeria’s land borders is a challenge and as urged that measures be put in place before opening the border. Ademuwagun said there had not been any detailed document from the committee looking into the border closure and as such it was very likely that the January 31 deadline

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that went viral on the internet, the BusinessDay report captured officers of the Service as well as the police and army collecting bribes to facilitate illegal movements of aliens in and out of Nigeria. Thesecorruptioncasesatthe borders, the report said, appear more rampant in the northern parts especially Sokoto and Yobe States amidst widespread perception of the porous nature of Nigerian borders. James said that officers of the service indentified in the video would be sanctioned according to the law if they are found culpable. “The officers that were identified were brought to the headquarters and they are going to go through the due process of both administrative and professional procedures that have to do with our standard operation. So the public are enjoined to keep their eyes on the operatives and report back to us,” he said. Rising to the defence of the Immigration Service, James

said the Service has made tremendous achievements in the area of border control by the introduction of e-border, where it has deployed technology to monitor movements across the borders. He noted also that the nation has embarked on effective visa and passport system that is helping the Service to control the borders, including e-registration. He said the Nigerian borders are not porous as being insinuated, stressing, however, that there are unmanned spaces. “It is because of the unmanned spaces that the Federal Government introduced the Operation Quick Response that brought the military, the immigration, and Customs together so that when we have a full force on ground, we will be able to make sure that these places are covered,” James said. “Beyond that, the NIS is going into e-border solution where we are deploying advanced technology to help us monitor our borders even from the headquarters here,” he said.

MTN proposes $1.6bn investment to... Continued from page 2

masses,” he said. President Buhari also applauded MTN Group’s proposed rural telephony project, which he said “will surely complement our economic diversification and financial inclusion programmes by connecting the producers based in rural areas to consumers located in our major towns and cities”. “I am pleased to hear of the progress you are making in Nigeria, especially in sup-

porting our digital inclusion programmes,” he said. Buhari said his government was looking at ways to increase the level of security across critical national infrastructure, noting that it would guarantee seamless service delivery and also facilitate investments across the country. “Our hope is for operators like MTN to continue to focus on delivering quality service at reasonable prices. If we put our minds together, such winwin positions are achievable,” he said.

Union Bank Nigeria divests its UK... Continued from page 2

vestment would allow the bank to channel its focus and capital towards mining those opportunities fully. “Through the sale, we are better positioned to deliver greater value to the organisation and its stakeholders as well as continue to build the future of banking in Nigeria, the terms of the sale of UBUK delivers substantial value to our shareholders, while also entrusting its customers and trading partners to a high-quality financial serAli said when he appeared before the Senate and House of Representatives Joint Committees on Finance and National Planning working on the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper. “Let’s hold on and see what the numbers are saying to know the impact of the border closure on local productivity but at the moment, we haven’t seen figures except for a rising inflation rate,” Paul Uzuma, MD of Halo Nigeria Capital Ltd, said. The Federal Government had insisted that it would only @Businessdayng

vices institution who will work with existing management to deliver a stronger and more profitable entity,” he said. Chapel Hill Denham Advisory Limited acted as financial advisers while White & Case LLP and Udo Udoma & BeloOsagie acted as UK legal advisers and Nigeria legal advisers, respectively, to Union Bank. Syndeo Capital Limited (led by Mandeep Ahluwalia) acted as advisers to MBU Capital with Akin Gump LLP as legal advisers and PwC as financial and tax advisers. reopen the borders if neighbouring West African countries comply strictly with the regional trade agreements of the Economic Community of West Africa States (ECOWAS). “We had a strategic meeting with the three countries, and what we agreed with our neighbours is to activate a joint border patrol, and the border patrol comprises the Customs, all the security agencies and to follow the actual protocol laid by ECOWAS,” Mariam Katagum, minister of state for industry, trade, and investment, said.

Wednesday 29 January 2020

BUSINESS DAY

news

IGP Adamu to appear before Senate over failure to implement community policing Solomon Ayado, Abuja

L-R: Kikuta Yutaka, Japanese ambassador Extraordinary and Plenipotentiary to Nigeria; Elizabeth Egharevba, director of international cooperation, ministry of finance, and Clem Ikanade Agba, minister of state for budget and national planning, during a visit to the minister in furtherance of Japan-Nigeria Development/Business facilitation in Abuja. Pic by Tunde Adeniyi

N37bn NASS renovation, $29.9bn loan, others await debate as Senate finally resumes today … as Reps have no motion, bill, report to consider at first plenary Solomon Ayado & James Kwen

he ninth National Assembly will final resume today, after an adjournment yesterday due to the death of a lawmaker, and top on its agenda for debate are N37 billion appropriated for National Assembly renovation, which has attracted criticisms from individuals and groups, approval of $29.9 billion loan request sent by President Muhammadu Buhari, amendment of the nation’s Constitution and review of the country’s security system. This is as the Petroleum Industry Bill (PIB), hate speech and anti-social media bills, among others, may be considered and passed by the lawmakers. The Senate had on December 20, 2019, adjourned till January 28, 2020. The adjournment was to enable the lawmakers proceed on their annual recess. On the other hand, after

five weeks of Christmas and New Year break, the House of Representatives has not slated any motion, bill or report for consideration at its first plenary since vacation on December 20. This is as the order paper for Tuesday plenary sighted by BusinessDay has no provision for these items that usually spell out the legislative business of day, as the House considered adjourn over the death of the member representing Garki/Babura Federal constituency of Jigawa State, Muhammadu Adamu during the break. However, before National Assembly embarked on the recess, some issues bothering on national unity, insecurity, poverty and welfare of Nigerians, as well as critical and controversial bills were left by the Senate, untreated. Considerably, while about 185 bills have passed through first reading, 32 other bills have gone through second reading

in Senate. Senate President Ahmad Lawan had assured that the National Assembly was committed to working harmoniously with the executive to foster unity and national development. Lawan pointed out the revert of budget to January-December cycle, and passage of six bills as major achievements the lawmakers recorded before proceeding on recess. These achievements were sequel to a four-year legislative agenda both the Upper and Lower Chambers rolled out in September and October 2019, respectively. The essence of the agenda was to chart a framework to guide and direct lawmakers on the right path of coordinated operations. Specifically, the Senate itemised in the agenda eradication of unemployment, abject poverty reduction, evolving proactive measures for proper healthcare delivery and infra-

structure, constitutional and electoral reforms, as well as putting stop to revenue leakages, among others. Lawan, while holding end of the year briefing with journalists in December 2019, said the ninth NASS was committed to providing support and guidance for the development agenda of government. This commitment, he said, was being pursued through quality legislation and prompt consideration of public petitions and requests from the President for confirmation of appointments into important offices. “In doing these, we placed a premium on internal harmony of the Senate and indeed of the entire National Assembly as an institution, through a bipartisan approach to legislation. We allow the expression of every view in true parliamentary tradition, but we always try to build consensus on issues, no matter how critical they are.

We’re grooming Edo youths to take up active roles in politics – Obaseki

have to strengthen their faith that politics is a service to humanity and to God; that politics is about providing for the people.” He said his administration through several reforms was supporting youths to succeed, adding, “We have learnt that it is not about today, but tomorrow. We have to support the youth because Nigeria will be built by the young people we see today. “If we don’t support and encourage them, how would we secure our future? That is why I am committed to nurturing youths like Hon. Marcus.” Obaseki noted that God www.businessday.ng

brought his administration to being for a purpose, noting that if God wanted Edo to remain stagnant, he wouldn’t have brought him to power. The governor also promised to provide N5 million empowerment fund for women in the church to improve their wellbeing. In his remark, Marcus Onobun, while commending Governor Obaseki for giving youths the platform to succeed in their various careers, described the governor as his mentor. “The governor has given young people like me the opportunity to serve in his government, that is why I am in government today,” he said,

CHANGE OF NAME

I, formerly known and addressed as Mr Orishamoluwa Misrael Awolowo now wish to be known and addressed as Mr Orisamoluwa Misrael Awolowo. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Ogugua Adaobi now wish to be known and addressed as Ogugua Keziah Adaobi. All former documents remain valid. General public please take note.

CHANGE OF NAME

… orders probe of controversial Benin Specialist Hospital contracts do State governor, Godwin Obaseki, says his administration is grooming youths to take up active roles in politics, so they can positively contribute to the development of society. The governor said this at a thanksgiving service held at St Paul’s Anglican Church, Iruekpen, Esan West Local Government, to celebrate the electoral victory of the member representing Esan West Local Government Area in the Edo State House of Assembly, Marcus Onobun. Obaseki said, “We cannot continue to allow young people to believe that politics is about deception. We

nspector General of Police (IGP) is to appear before the Senate to proffer explanations on why community policing is not implemented to ensure adequate security of lives and property in Nigeria. Senate President Ahmad Lawan announced this on Tuesday while welcoming lawmakers from a six-week recess, but however did not reveal the exact date the IGP would appear. Lawan is concerned that the security situation in the country has deteriorated and security agencies seems inefficient to properly tackle it. Consequently, Lawan has revealed that the nation has no choice than to reform the security architecture by urgently implementing community policing. “For a long time, major stakeholders in the security of our nation and police authorities appear to achieve consensus on the necessity of introduction of Community Policing in the country. “The Senate is going to pursue the implementation of community policing vigorously. To this end, the police authorities will be invited to brief and update the Senate on the progress made so far,” Lawan stated. According to Lawan, the Federal Government launched the National Security Strategy (NSS) in 2019 but since then, no tangible security breakthrough has been recorded. He said apart from scores of

and pledged his continued loyalty to the governor and promised to live up to the confidence reposed in him by his constituents. Meanwhile, the governor has ordered the probe of contracts for the construction of the Benin Specialist Hospital and supply of hospital equipment. The state government consequently constituted a Commission of Inquiry to conduct a detailed inquiry into the process leading to the conceptualisation, design, construction and equipping of the hospital and determine if there was a breach of the Edo State Procurement Law and other extant laws and procedures.

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I, formerly known and addressed as Ojelabi Ololade Mariam now wish to be known and addressed as Ololade Olorunobadunsin Obatayo. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Akorede Shukurah Opeyemi now wish to be known and addressed as Azeez Shuqroh Akorede. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Onyebuchi Ukamaka Makua now wish to be known and addressed as Ezeani Ukamaka Makua. All former documents remain valid. General public please take note. @Businessdayng

persons being killed by bandits, the nation’s economy is grossly affected, and required serious measures to fix it. “My distinguished colleagues, the security situation in our country requires serious attention and due consideration by the Senate and indeed the National Assembly. Recently, the security in the country had deteriorated and the attendant loss of lives is not acceptable. “We need to secure the lives and property of our citizens, as enshrined in our constitution. We all are witnesses to how our economy is also affected by the inclement security situation. Therefore, we need to speedily seek for solutions to fix the security problem bedevilling our dear country. “There is urgent need for paradigm shift and reform of the architecture and structure of our security systems. Equally important is the citizen participation, and collaboration in providing security. “In this regard, the Senate will engage the Executive arm of government to discuss the implementation of the recently launched National Security Strategy (NSS) 2019,” he insisted.

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I, formerly known and addressed as Miss Taiwo Opeoluwa Dorcas now wish to be known and addressed as Mrs. Oyesomi Opeoluwa Dorcas. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Omopelola Enitan Awoyemi now wish to be known and addressed as Omopelola Enitan Owah. All former documents remain valid. General public please take note.

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I, formerly known and addressed as Emmanuel Micheal Nwachukwu now wish to be known and addressed as Nwachukwu Chidindu Emmanuel. All former documents remain valid. General public please take note.

DECLARATION OF AGE

I, Uche Augustina Nkeiru was born September 25th, 1979 and not February 14, 1977. General public please take note.

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I, formerly known and addressed as Otubu Kehinde Ibironke now wish to be known and addressed as Otubu-Afilaka Kehinde Ibironke. All former documents remain valid. Polaris, First Bank and general public please take note.

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I, formerly known and addressed as Precious Nneka Egbuikwem now wish to be known and addressed as Precious Nneka Amori. All former documents remain valid. University of Surrey, South East of England, United Kingdom; Imo Polytechnic Umuagwo, Owerri, Imo State, Nigeria; and General Public should please take note..

Wednesday 29 January 2020

BUSINESS DAY

news

We will begin to export local rice in 2 years - agric minister … as production soars to 350 tons per day

Cynthia Egboboh, Abuja

inister of agriculture and rural development, Muhammad Sabo Nanono, on Tuesday said Nigeria in the next two years would begin to export Nigeria’s brand of rice to other parts of the world. The minister said this after a working visit to Nestle Nigeria plc office in Lagos, saying the country’s land border closure had resulted in increased outputs by many rice milling plants operating below capacities before the closure. He said, “With the improved production rate, Nigeria rice will soon be exported. Before the closure of our land border, most of these rice milling plants were partially operating, but now, they not only operate in full capacities but are also expanding. “If we maintain the momentum in the next two years, we may begin the exportation of rice to other countries.” The minister in a statement signed by Ezeaja Ikemefuna, director of information for the ministry, expressed optimism over the local production rate as most rice producers had stocked rice for the next six months. He said,”This means that before the stock is finished, dry

season rice will be harvested, and before that finishes, rainy season will come back. “It is only in three months from November to January that rice is not being grown in our country. We cultivate rice in a nine- month cycle; probably as we move on the cycle will widen, so we do not have a problem with rice processing.” He also said there had been expansion of local rice value chain as well as the creation of more jobs due to increase in rice production. “As at today, we have 11 rice milling plants with the capacity to produce from 180 tons to 350 tons of rice per day. “In a few months, another mill with a capacity to produce 400 tonnes of rice per day is going to be opened, with another upcoming 34 smaller mills; then, we have clusters in different areas.” He said the local rice farmers were fully engaged and used between 200 farm lands and 300 farm lands directly, and lauded Nestle Nigeria for its role in assisting local farmers and creating jobs for Nigerians. Earlier in his welcome remarks, Mauricio Alarcon, managing director/CEO, Nestle Nigeria, commended the minister and his delegation for the visit and called for stronger and robust working relationship with the ministry.

Experts advocate workplace safety for improved productivity Gbemi Faminu

ealth and safety experts have urged all business organisations and government agencies to actively encourage safe environment and healthy employees in order to boost productivity and the gross domestic product (GDP). Andrew Sharman, president, Institution of Occupational Safety and Health (IOSH), said in Lagos that to sustain growth, productivity and profitability, investors and business owners worldwide needed to look after people at work and their work environment. “Healthy environment will drive growth and build investors’ confidence, and will also boost productivity. IOSH supports the development of

strong workplace safety culture promoted by businesses and government agencies,” Sharman said at the maiden edition of the West African Health Conference themed ‘Shaping the Future of Occupational Safety and Health in West Africa,’ hosted by the IOSH. Sharman said as part of its advocacy for improved workplace safety and employee health, the IOSH, a chartered body for health and safety professionals, was launching a campaign themed ‘No Time to Lose’ in Nigeria targeted at tackling cancer diseases caused by work-related activities. A statement on the campaign said exposure at work to carcinogenic substances was one of the biggest causes of avoidable cancer in adults. “Over 46,000 people die

each year in Africa as a result of their occupational exposure to carcinogens such as asbestos and diesel engine exhaust emissions,” the statement read. Babajide Olusola SanwoOlu, governor of Lagos State, in his address, commended the IOSH for promotion and maintenance of a healthy working population through advocacy of a safe workplace environment and safety standards. He said a lot of people shied away from reporting workrelated accidents or illnesses, leading to the underreporting of such occurrences and causing dilemma in keeping records and proffering solutions. Sanwo-Olu, who was represented by Layemi-Adeyemo Kuburat, director, Occupational Health, Ministry of Health, said statistics revealed that 160 million people had work-relat-

ed disease leading to reduced productivity in organisations, many of which could be prevented. “Furthermore, the average cost of populated injuries and Nigerians with ill-health is 4.3 percent, which is definitely underreported,” he said. He called for appropriate reporting and investigation of workplace incidents while urging companies and agencies to have a comprehensive work plan and clearly defined roles and responsibilities. Bev Messinger, CEO, IOSH, said in her address that good health would improve productivity and increase organisational success, saying achieving a safe workplace in all organisations was possible, adding that accidents, hazards, and ill health were preventable in organisations.

Federal Mortgage Bank woos states to build affordable homes for workers AMAKA ANAGOR-EWUZIE

etermined to deepen the impact of its affordable housing delivery programmes to a greater number of Nigerian workers within the low- and mediumincome bracket, the Federal Mortgage Bank of Nigeria (FMBN) has open talks with state governments in order to build robust collaboration. To achieve this, the FMBN solicited for stronger support and participation of states in the National Housing Fund (NHF) Scheme, provision of unencumbered land for the execution of strategic affordable housing schemes as well as support for the elimination of high cost and systemic bottlenecks to title perfection and Governor’s consent to mortgage transactions. Speaking in Abuja recently, Ahmed Dangiwa, managing director/CEO of FMBN, made case for improved affordable housing partnership with state governments during his briefing with the Nigerian Governors’ Forum (NGF) on the activities, programmes of the bank, in a statement signed by Ahmed Abubakar, group head, corporate communications, FMBN. He asked state governments to reduce title perfection fees, which currently range from 5 percent to 10 percent to a flat rate of 0.5 percent for mortgage affordability and expeditious treatment of consent to mortgage transactions by Governors to improve

turnaround time. Dangiwa said the bank was strategically positioned to energise state governments’ efforts to deliver affordable housing to their citizens in a sustainable and cost-effective manner. He listed FMBN products to include NHF housing loan of up to N15 million payable over a 30-year period at interest rate of 6 percent per annum, and NHF individual construction loan at 9 percent interest rate per annum with a 15-year tenor. “Others include rent-toown scheme which allows beneficiaries to move into FMBN owned houses and payback in monthly instalments over a 15-year period at single-digit interest rate with no equity requirement and the home renovation loans where up to N1 million is given to NHF contributors who already own their homes, to carry out necessary improvements and payback over five years,” he stated. According to Dangiwa, the provision for zero equity contributions for housing loans below N5 million and a maximum of 10 percent for loans from N5 million to N15 million, is an additional unique FMBN partnership advantages. “The partnership will enable State Governments to take advantage of its strategic financing windows for real estate construction and decades-old institutional experience in social housing provisioning,” he said. www.businessday.ng

L-R: Enase Okonedo, dean, Lagos Business School; Yomi Olugbenro, partner and West Africa tax leader, Deloitte; Fatai Folarin, West Africa CEO, Deloitte; Zainab Ahmed, minister of finance, budget and national planning; Babajide Sanwo-Olu, governor, Lagos State, and Juliet Anammah, chairwoman, Jumia Nigeria, and head of institutional affairs , Jumia Group, at the Deloitte in Dialogue Nigeria Economic Outlook 2010 in Lagos, yesterday.. Pic by Pius Okeosisi

Lassa fever kills 4 in Taraba; medical DOAM Foundation prepares for 10th doctor being treated for virus edition of Charity Golf Tournament Nathaniel Gbaoron, Jalingo

assa fever has claimed the lives of four persons in Taraba, while a medical doctor is among those being treated for the virus in the State, the government said Tuesday. InnocentVakkai,theCommissioner for Health, told newsmen in Jalingo that out of suspected cases that turned out positive, four have died. According to the commissioner, the state government had activated its surveillance system formorecasedetectionandproper treatment. He noted that efforts were ongoing to create awareness among residentsofthestate,andenlighten them about the symptoms of the disease. Vakkai regretted that challenges such as late reporting of patients to hospitals and difficult terrains of the state were major obstacles to the management of the disease in Taraba. He revealed that the Federal

Ministry of Health had promised toprovidetestingmachines,which would be distribute regionally, with Taraba as the test place for the North-East. Vakkai said the state government may acquire its set of equipment to reduce waiting time betweensuspicionandconfirmation. Meanwhile, the acting head, Clinical Services of the Federal Medical Centre, Jalingo, Ahmed Jatau, has revealed that a medical doctor tested positive for Lassa fever. He noted that the affected medical doctor, a house officer, was receiving treatment at Irrua Specialist Hospital in Edo state. “Wesent10suspectedcasesfor test and six tested positive and out ofthesixconfirmedcases,fourdied before their results came in. “Out of the remaining two, one has been discharged while the other, who is our own staff, has been transferred to Irrua Specialist Hospital for further treatment because we don’t have a dialysis unit here.

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aniel Ogechi Akujobi Memorial (DOAM) Foundation’s annual Charity Golf Tournament enters its tenth year and preparations are ongoing to make the 2020 event a milestone edition. AccordingtoDOAMF,thisyear’s edition will showcase in retrospect, all the projects (in health and education) that the Foundation has executedwithproceedsofitscharity golf tournaments in the last nine years. Pat Bassey, who has been the coordinator of the organising committee of the event since inception, said over 80,000 lives had been touched, adding that a significant part of the funding for the various life-changing projects have come from the annual charity golf tournament. “It has been a memorable journey for all of us involved in this project. For a decade, we have volunteered to support this project which gives hope to the hopeless andmakestheweakstrong,”hesaid. “The Foundation has sup@Businessdayng

ported less privileged and underserved people and communities facing challenges particularly in the areas of health and education. It has awarded scholarships, built e-libraries, sickbays, organised free medical outreach programs and, more importantly, educated and mentored Nigerian children and youths,” he said. He further explained that the achievementswouldnothavebeen possible, were it not for the magnanimity and support shown to the Foundationbycorporateorganizations and kind-hearted individuals during the yearly Charity Golf Tournaments. Hence, as a mark of gratitude, this year’s 10th edition would be devoted to showcasing the various intervention projects that have been made possible with the support received from donors. He also confirmed that the Golf Section of Ikoyi Club 1938, and the Ikoyi Golf Community, in Lagos, had been very supportive, having adopted the Foundation as a key ally in deploying corporate social responsibility (CSR) activities.

Wednesday 29 January 2020

BUSINESS DAY

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Wednesday 29 January 2020

BUSINESS DAY

Wednesday 29 January 2020

BUSINESS DAY

BusinessDay 2020 Nigeria Economic Outlook Conference in Lagos

L-R: joseph Nnanna, chief economist, Development Bank of Nigeria; Segun Omosehin, managing director, Old Mutual Life Assurance; Nonso Obikili, chief economist, BusinessDay Media Limited; Bimbola Salu-Hundeyin, acting chairman, National Population Commission, and Lola Talabi-Oni, technical adviser to Statistician-General.

Frank Aigbogun, publisher, BusinessDay Media Limited, giving his welcome address.

Andrew Nevin, chief economist, PwC West Africa, delivering his keynote address.

Segun Omosehin, managing director, Old Mutual Life Assurance, presenting his paper.

Val Ozigbo (l), president/CEO, Transcorp, with Ogho Okiti, managing director, BusinessDay Media Limited.

L-R: Olu Akanmu, executive director, FCMB; Fola Fagbule, senior vice president, African Finance Corporation; Tayo Fagbule, BusinessDay editorial board chairman, and Egie Akpata, director, Union Capital Markets Limited.

L-R: Niyi Toluwalope, MD/CEO, eTranzact International Plc; Nonso Obikili, chief economist, BusinessDay Media Limited; Ebehijie Momoh, senior vice president, mastercard West Africa, and Patrick Nwakogo, country director/CEO, Dale Carnegie Nigeria

L-R: Ayotunde Coker, MD/CEO, Rack Centre; Sonia Fajusigbe, economic and trade advisor, Consulate General of the kingdom of Nertherland, and Afolabi Lawal, chief financial officer, Old Mutual Nigeria.

L-R: Pradipta Mitra, lead, market research, Greenville LNG Limited, and Raji Abisola Abisoye, manager, Dunika Travels.

Grace Agada, MD, Create Solid Health, with M.A Johnson

R-L: Ada Oti, client relations officer, Transcorp plc; Grace Akerele of Wapic Insurance plc, and Nonso Obikili, chief economist, BusinessDay

L-R: Olu Tikolo, VP, business development, Kia Motors Limited; Tunji Oyebanji, MD/ CEO, 11plc, and Amina Oyagbola, managing consultant, AKMS Consulting Limited

L-R: Afolabi Oni, director, Viteo Limited; Oluwakemi Adeyemo, CEO, Future Perfect Limited, and Ezinne Nwazulu, managing partner, 234Finance

L-R: Peace Obi, editor, Orient Energy Review Magazine; Adebunmi Oduyoye-Ejumedia, lecturer, Lead City University, and Saka Abdulkadir, group head, retail banking, North East, First Bank of Nigeria Limited

L-R: Chinonye Nnewuihe, associate, Meristem Capital; Mowale Ajose-Adeogun, Meristem Capital, Ayo Shote, CEO, Etihad Oilfield Services Limited

Akinbolajo Olanrewaju, manager, Andersen Tax; Olaniyi Olufunmilayo, manager, Andersen Tax, and Wimi Olutayo, relationship officer, GTBank

L-R: Khadijah Oropo, CEO, Drapes and Apparels; Fidelis Omachonu, MD/CEO, Integrated Cash Management Services (ICMS) Limited, and Chuks Okoriekwe, associate, LeLaw (Barristers and Solicitors)

L-R: Uchechi Ezenyirioha; Adewunmi Adesina both of Elvira Salleras and Associates, and Joe Mbulu of Union Bank

L-R: Abiona Babarinde, GM, marketing and corporate communication, Coscharis Group; Vwede Edah, analyst, Afrinvest Securities Limited; Ayodeji Ebo, MD, Afrinvest Securities Limited, and Nsima Udeme Eyo, manager, research and development, The Daily Energy Communications

R-L: Yinka Dawodu, human resources, MPN; Folayinka Animasaun, group head, GTBank, and Olusoji Asaolu, investment NLPC PFA Limited

L-R: Idoko Sunny, MD, Experience Company; Seun Campbell and Raji Jerry, both of D207 Designs and Projects

L-R: Wiebe Boer, CEO, All On; Sonia Fajusigbe, economic and trade advisor, Consulate General of the kingdom of Nertherland, and Frank Aigbogun, publisher, BusinessDay Media Limited.

L-R: Franklin Ngwu, faculty, strategy, corporate governance and risk management, Lagos Business School, and Ayo Shote, CEO, Etihad Oilfield Services Limited

L-R:Hector Okposo, coverage and origination, Rand Merchant Bank Nigeria, and Richard Ojumah, corporate sales, Old Mutual Nigeria

R-L: Shola Oshodi-John, registrar/CEO, Nigerian Institute of Chartered Arbitrators; Samuel Ahanor, Energy Consultant, and Olowojobe Emmanuel of AETI Pictures by Pius Okeosisi, Olawale Amoo, and David Apara

Wednesday 29 January 2020

BUSINESS DAY

news

Replicate Lekki Corridor across Nigeria, Verraki urges FG IFEOMA OKEKE

erraki Partners, a business solutions company focused on accelerating the development and transformation of Africa, has called on the Federal and State governments, working in partnership with private sector stakeholders, to replicate the Lekki Corridor also known as ‘New Lagos’ across other parts of Nigeria. With deliberate government policies to attract private capital leading to huge construction projects and fast-developing real estate market, the Lekki Corridor is believed to be the fastest growing region in Africa, attracting huge individual and institutional investments such as the Lekki Free Trade Zone (LFTZ), the Dangote Oil Refinery, the Lekki Deep Seaport, International Cargo Airport, chemical and fertilizer plants, among other projects. Speaking during his presentation, themed ‘The Drivers of Private investment and Outlook 2020’ at an Economic and Business Outlook 2020 seminar organised by the Lagos Chamber of Commerce and Industry (LCCI), Niyi Yusuf, Verraki’s Managing Partner, said the Lekki Corridor has already attracted over $50 billion in investments, with more investments still expected.

In his opinion, this would attract local and foreign manufacturers and businesses, boost the country’s exports significantly, raise employment rate and the nation’s industrial output. He called for increased support for Nigerian small and medium enterprises, considering their significant contribution to the country’s Gross Domestic Product (GDP). In a comparison of private investment indicators across Africa, a benchmark of Nigeria, Egypt, South Africa and Kenya showed that SMEs in Nigeria had the largest GDP contribution in Africa at 49 percent, trailed by South Africa at 34 percent, Kenya at 30 percent and Egypt at 25 percent. However, he stressed, Nigeria needed an improved enabling environment for SMEs and urged for better government patronage for SMEs. He explained that 16 percent of South Africa’s Federal Government procurement goes to SMEs while the United States of America spends 22.5 percent of all Federal procurement on SMEs via the Small Business Administration and urged for a deliberate policy that would channel at least 20 percent of the Federal Government’s procurement towards indigenous SMEs. He said this would create access to markets for indigenous businesses and foster expansion.

Banks, firms urged to position for opportunities in growth sectors HOPE MOSES-ASHIKE

hartered Institute of Bankers of Nigeria (CIBN) Centre for Financial Studies in collaboration with B. Adedipe Associates Limited, on Tuesday challenged the banking community and other organisations to seek business opportunities in dominant sectors of the economy this year. Such sectors include agriculture, trade, information and communication technology (ICT), mining and quarrying, manufacturing, and real estate. These sectors of the economy together accounted for 80.7 percent of third quarter (Q3) of 2019 Gross Domestic Product (GDP). The CIBN/CFS on Tuesday unveiled its sixth national economic outlook where Biodun Adedipe, chief consultant, projecteda2.45percent–2.55percent growth rate for Nigeria in 2020. “I see 2020 as a year of opportunities but based on understanding of the terrain, based also on the changes happening there and the changes we expect to happen. When all of these are put in context, companies whether they are for profit seeking or nonfor- profit make inform choices of strategies, it is a year also they can grow along with the economy,” Adedipe said. Speaking at the event, Joseph Okwu Nnanna, deputy governor (Economic Policy), Central Bank of Nigeria (CBN,) said economic growth remained stable and positive, notwithstanding the slower pace of growth. The outlook, he said, is anchored on higher oil prices and

production, continuing reforms in the foreign exchange market, improvements in critical ancillary infrastructure and prospects for improved agricultural performance. “Achieving the growth projections require effective implementation of the ERGP, diversifying government revenue sources, sustaining the current foreign exchange stability by the Bank, addressing insecurity in the country and increasing the contribution of the non-oil sector,” who was represented by Emmanuel Adamgbe, special adviser to the deputy governor, economic policy directorate, CBN, said. According to him, this outlook is predicated on the following tailwinds: deploying funds to critical infrastructure projects to stimulate growth; sustenance of peace in the Niger-Delta and North-East regions, to improve oil production; eradicate Boko Haram menace to enhance growth-stimulating sectors, like manufacturing and agriculture; de-risking the economy to ramp up construction, mining and job creation through unfettered access to credit. Giving a welcome address, UcheOlowu,president/chairman ofcouncil,CIBN,calledonleaders and the banking community to jointly avail further support to the manufacturing sector. He said support should come in terms of greater financial investment, improved infrastructure such as improved power supply, road networks, capacity building (staff training) as well as special policies to encourage indigenous operators like granting tax relief.

Buhari asks Senate to confirm Obiora as NDIC establishes new unit on CBN deputy governor, Nuhu as NCAA DG FinTech, innovation Solomon Ayado, Abuja

resident Muhammadu Buhari has asked the Senate to approve the confirmation of Kingsley Isitua Obiora as deputy governor of the Central Bank of Nigeria. Also, the President requested the Senate to approve appointment of Musa Nuhu as director-general, Nigerian Civil Aviation Authority (NCAA). The requests were both contained in a letter addressed to the Senate president, Ahmad Lawan, which were read in plenary on Tuesday. The letters were dated January 16, 2020, and December 24, 2019, respectively. Buhari said the request for confirmation of Obiora was in accordance with the provisions of Section 8(1)(2) of the CBN (Establishment) Act 2007. “I have the pleasure to present Dr. Kingsley Isitua Obiora for confirmation as Deputy Governor of the Central Bank of Nigeria,” Buhari stated.

In another letter dated January 7, 2020 and read on the floor during plenary by Lawan, Buhari said the appointment of Nuhu was “Pursuant to Section 8, Part IV of the Nigerian Civil Aviation Authority (Establishment) Act. “I hereby write to request for a confirmation by the Senate, the appointment of Captain Musa Shuaibu Nuhu as the Director-General of the Nigerian Civil Aviation Authority. “Captain Musa Shuaibu Nuhu is a reputable airline Pilot and Aviation Safety Expert with well over 30 years of cognate working experience in the Aviation Industry. A copy of his curriculum vitae is attached herewith. “In view of the strategic importance of the NCAA as the regulator of the Civil Aviation Industry. I wish to request for the expeditious consideration and confirmation of Captain Musa Shuaibu Nuhu as the substantive Director-General of NCAA,” Buhari stated.

HOPE MOSES-ASHIKE

he Nigeria Deposit Insurance Corporation (NDIC) has responded to technological innovations and applications in financial services with the establishment of a new “Fintech and Innovations Unit” to align with contemporary trends in advanced economies. In a statement signed by Mohammed Kudu Ibrahim, for director, communications and public affairs, the development is also in consonance with the Corporation’s Strategic Vision, which is to become one of the best Deposit Insurers by the year 2020. The new unit, which is domiciled in the Insurance and Surveillance Department of the Corporation, is expected to en-

gage and collaborate with innovators in the financial and non-financial sectors of the economy to identify, develop and promote technology-driven solutions that would protect depositors and improve the safety and soundness of Insured Financial Institutions. The Unit is expected to enable the Corporation identify disruptions and associated risks of Fintech and Innovations on deposit insurance; articulate the use of Fintech for Early Warning Signals (EWS) and Prompt Corrective Action (PAC); Identify other digital currency deposits for the purpose of insurance coverage; evolve supervisory measures for digital banks; and enhance existing consumer protection measures as they relate to digital deposits in collaboration with other safety net players.

10 years impact: Elumelu Foundation enhances flagship entrepreneurship to benefit more across Africa

ntheheelsofthetenthanniversary of the Tony Elumelu Foundation (TEF), the private-sector-led philanthropy focused on empowering African entrepreneurs has enhanced its flagship entrepreneurship programme to empower more entrepreneurs across the continent. These enhancements, which took effect from January 1, 2020— the launch of the 6th cycle of the Programme—will achieve the Foundation’s mandate to transform the African continent through entrepreneurship. Most prominent among the enhancements are the new dates in the Programme cycle, its emphasis on providing thousands of entrepreneurs with business training, and its focus on leveragingtechnologytooptimisetheapplication and selection process as well as personalise the journey of each applicant in the Programme tailored to their knowledge and business stage. The Programme cycle has been updated to place more emphasis on getting more entrepreneurs through the business training. Hence, the announcement of the finalists, who will ultimately be inducted into the TEF Alumni network, will no longer be held on March 22 but will be made at the TEF Forum – the largest entrepreneurship conference in Africa. Maximising the value derived from the Programme, applicants will now receive instant feedback on their progress to the next stage of the Programme, following their applications. Shortlisted applicants will receive business training tailored to their business stage and for those who move to the next stage mentorship and finally the top performing entrepreneurs from each country will proceed to the business pitching competition, which will determine the finalists to receive

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seed capital and an induction intotheFoundation’sfast-growing alumni network across 54 African countries. The TEF Entrepreneurship Programme is the $100 million commitment by investor and philanthropist, Tony Elumelu, throughhisinvestmentcompany, Heirs Holdings. The Programme

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has become a beacon of hope for African entrepreneurs, currently empowering 9,631 beneficiaries across 54 African countries with training, mentorship, seed funding and exclusive access to global opportunities as well as a strong entrepreneurial community. TEF Alumni such as Ugandan Kwabena Danso who manufac-

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tures bicycles and its accessories from bamboo is one of the thousandsofbeneficiarieswhosebusiness has expanded beyond the shores of Africa to a global market, and is one of the success stories and impact recorded by the Programme’s innovative approach to the sustainable development of Africa.

Wednesday 29 January 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper Brendan Greeley and Colby Smith

nvestors are seeking more clarity from the US Federal Reserve this week on how much it may expand its balance sheet following the central bank’s efforts to restore order to short-term funding markets. The Fed has been buying US Treasury bills at a rate of $60bn a month since a big jump in overnight borrowing costs last September and chairman Jay Powell is set to face sharp questions about how its actions are affecting markets on Wednesday. Mr Powell will speak at a regular press conference after the Federal Open Market Committee’s two-day meeting, which is expected to result in a tweak to a key tool it uses to implement monetary policy with US interest rates close to the bottom of the Fed’s target range. He is likely to have to address criticism from some market participants that the Fed’s actions have been pushing up asset prices. “What the market really wants is to know what the medium-term game is,” said Mark Cabana, head of US rates strategy at Bank of America. After September’s leap in the overnight “repo” rate, policymakers concluded that they had gone too far in withdrawing their postcrisis stimulus, allowing banks’ excess reserves held at the Fed to fall too low. The Fed reversed course and began expanding its balance sheet again by buying short-dated Treasury bills, crediting banks with reserves and driving up the level of cash in the system. It said the bill buying would continue into

Investors seek clarity from Fed on balance sheet expansion Jay Powell set to address questions about market intervention at press conference

the second quarter of 2020 but declined to offer a level of bank reserves it would consider sufficient. The level had fallen as low as $1.4tn in September; it is now at $1.6tn. Since September, the Fed has also been intervening directly in the repo market. Originally it said those operations would continue until at least January, but Mr Powell and Richard Clarida, his vicechairman, have more recently indicated they could continue until at least April. “The Fed’s extremely aggres-

sive response to the repo blowout in September, as well as their timidity in pulling back from that response . . . could be signalling to markets that this is a Fed with a very low tolerance for market fluctuations,” noted Blake Gwinn, head of front-end rates strategy for the Americas at NatWest Markets. The turmoil in short-term funding markets reflects how the Fed, like other central banks, continues to wrestle with how to implement monetary policy in financial markets transformed by the financial crisis.

After almost two years of effort to keep the fed funds rate, its favoured policy interest rate, from bumping against the top of its target range, the Fed now finds it uncomfortably close to the bottom of the range — at 1.55 per cent, just 5 basis points above the low end. Having previously cut the interest the Fed pays on banks’ excess reserves — something which acts as a magnet for other short-term rates such as the fed funds rate — the FOMC is expected to raise it on Wednesday by 5 basis points, according to analysts at multiple

banks. “The Fed is worried right now about losing control of fed funds, but to the downside,” said Mr Cabana at Bank of America. Mr Powell has been at pains to say that none of its actions, in particular the decision to expand reserves held at the Fed, have added up to quantitative easing, the post-crisis stimulus programme in which the Fed expanded its balance sheet with longer-dated Treasuries. But as the equity markets in the US continued to rise over the past few months, analysts have become sceptical that there is a difference. “The market mythology has become the stock market can’t go down when the Fed is adding reserves,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. When it last met in December, the FOMC signalled that it did not intend to make any changes to interest rates in 2020. According to investor bets compiled by the CME Group, markets see a 90 per cent chance that the fed funds target range will be held at 1.5 to 1.75 per cent on Wednesday. The Fed will not be publishing a new set of economic projections at this week’s meeting and analysts do not expect a change to the committee’s monetary policy statement.

UK approves limited 5G role for China’s Huawei London gives green light in spite of US warnings about risk posed by Chinese company Helen Warrell, George Parker and Nic Fildes

oris Johnson’s government on Tuesday put itself on a collision course with the US by approving the limited use of Huawei equipment in the UK’s fifthgeneration mobile phone networks. The UK National Security Council gave the go-ahead to Huawei but has limited the Chinese telecoms equipment maker to a market share of 35 per cent in the 5G infrastructure and will exclude its kit from the sensitive “core” of the networks. The decision came despite repeated warnings from the US that allowing Huawei equipment in the UK’s 5G networks would put Britain at risk from spying by the Chinese state. However, in a concession to White House concerns, UK ministers have agreed to work with partners in the “five eyes” alliance of the US, Australia, Canada and New Zealand — and other allies — to develop alternative telecoms suppliers. The ultimate aim is to have “no high-risk vendors in the system”,

according to UK officials briefed on the plans, although ministers accept that it could take three years before new entrants come into the market. Those assurances are unlikely to satisfy the Trump administration and Mr Johnson is expected to have an awkward meeting with US secretary of state Mike Pompeo in Downing Street on Thursday. High-risk vendors never have been, and never will be, in our most sensitive networks Nicky Morgan, culture secretary UK security officials told the National Security Council that any risk around Huawei could be contained. Nicky Morgan, culture secretary, said that world-class connectivity “must not be at the expense of our national security” and the government’s aim was to quickly reduce the role of Huawei. “High-risk vendors never have been, and never will be, in our most sensitive networks,” said Lady Morgan. “This decision not only paves the way for secure and resilient networks, with our sovereignty over data protected, but it also builds on our strategy to develop a diversity of suppliers.” www.businessday.ng

The government’s decision on Huawei came after warnings that banning the Chinese company could delay the rollout of ultrafast mobile and fixed line telecoms networks in the UK by two to three years and cost the economy tens of billions of pounds. Huawei will be able to supply “non-core” parts of Britain’s 5G networks, such as base stations, but not core elements, such as servers. The 35 per cent market share cap on “high-risk vendors” will apply to Huawei’s kit for the 5G infrastructure and its equipment for full fibre fixed line networks. The company currently has a 34 per cent share, according to officials. The National Security Council has also stipulated that Huawei — whose role as a high-risk vendor will be stated in new legislation — will be banned from sensitive sites including nuclear power stations and military bases. In a statement, the government said its planned measures for a “tough new telecoms security framework” would enable the UK to combat a range of threats, “whether cyber criminals, or state sponsored

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attacks”. Ciaran Martin, head of the UK National Cyber Security Centre, a branch of the communications agency GCHQ, said he had issued advice to telecoms companies “to help with the industry rollout of 5G and full fibre networks”. Over time, ministers hope that companies such as Samsung and NEC will enter the UK market, providing additional competition to Huawei and its two main rivals supplying telecoms kit in Britain: Ericsson and Nokia. But the Huawei decision sets up a confrontation with Washington, which has consistently warned that allowing the Chinese company to play a role in 5G would compromise British sovereignty. US officials have said that Huawei equipment could be used by Beijing as a “back door” to spy on UK communications. They have also said that allowing Huawei to supply 5G kit in the UK could compromise a post-Brexit trade deal and jeopardise intelligence sharing with Britain’s partners in the five eyes alliance. Australia has already bowed to @Businessdayng

US pressure by banning Huawei from its 5G networks but Canada and New Zealand are yet to reach decisions. It is thought they may follow Britain’s lead. Huawei welcomed the UK government’s decision, saying it would keep the rollout of 5G infrastructure on track. “This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future,” said Victor Zhang, Huawei vice-president. “It gives the UK access to world-leading technology and ensures a competitive market.” The 35 per cent market share cap means some mobile phone operators are likely to have to increase their use of 5G kit supplied by Ericsson and Nokia, notably in urban areas. The four operators — EE, O2, Three and Vodafone — have all launched 5G services during the past six months, all using Huawei kit. The use of the 35 per cent market share cap in relation to full fibre networks could also have an impact on broadband companies such as BT and Virgin Media.

Wednesday 29 January 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Barrick Gold chief looks to next deal after first year at helm A merger, a buyout, a restructuring: what is next for Mark Bristow? Neil Hume

tough-talking South African on a mission to shake up the mining industry. For years the name that would have sprung to mind was Glencore boss Ivan Glasenberg, but not any more. The sector has another swashbuckling executive to watch: Mark Bristow, head of Barrick Gold. Since the Natal-born geologist took control of the world’s secondbiggest gold miner just over a year ago he has been a whirlwind of activity. Highlights of the past 12 months include a hostile bid for its arch rival — now a partner in a joint venture — a buyout of struggling subsidiary Acacia Mining and more than $1bn of asset sales. But this is just the beginning for 61-year-old Mr Bristow, an adrenalin junkie who enjoys big game hunting and flying planes. “It has been an amazing year,” he said during a wide-ranging interview. “We now have a solid foundation to build on and probably the strongest balance sheet in the gold industry.” The market is buzzing with speculation about Mr Bristow’s next move, with Freeport-McMoRan, owner of the giant Grasberg copper and gold mine in Indonesia, regarded as a potential takeover target. Mr Bristow recently described copper as a “strategic metal” because of the role it would play in the shift to a greener economy. “The new, big gold mines are going to come out of the young geologies of the world,” he said. “And in young rocks, gold comes in association with copper or vice versa.” Asked if he had discussed the

Mark Bristow: ‘As the leader of the most valuable gold company in the world, I should be looking at the world’s best gold mines’ © Simon Dawson/Bloomberg

merits of a deal with Freeport chief executive Richard Adkerson, Mr Bristow said there had been “conversations” but these had been more theoretical. “As the leader of the most valuable gold company in the world, I should be looking at the world’s best gold mines,” he said. “It makes sense for us to be interested in looking at Grasberg and asking ourselves whether Freeport is going to remain an independent company or not.” A workaholic who maintains a punishing travel schedule, Mr Bristow became chief of Barrick in early 2019 after the Toronto-listed company consummated a nil-premium merger with Randgold Resources, the Africa-focused miner he built into one of the world’s largest gold producers. The idea behind the deal was to create a gold company focused around five “tier one assets”, mines

capable producing more than 500,000oz of gold annually for at least a decade. The merged entity would be run the “Randgold Way” — the decentralised, hands-on management philosophy espoused by Mr Bristow. When the Randgold merger was announced in September 2018 there were worries about how Mr Bristow would work alongside Barrick’s executive chairman John Thornton, a no-nonsense ex-Goldman Sachs banker. However, Mr Bristow and his close-knit team of executives have been given their head to run the company. One of his first moves on taking the helm was to cut almost 100 jobs at Barrick’s head office in Toronto in an effort to shape what he calls a “lean, mean machine at the top”. He has also changed the management teams across nearly all of the Barrick assets. Analysts and investors say Mr

Bristow has delivered on the big promises he made at the time of the merger: balance sheet deleveraging, reducing head office costs and asset sales. “If the gold price stays around $1,500 an ounce and we generate the same sort of free cash flow as [2019 and] deliver on the rest of our promises as far as realising the sale of non-core assets we will have zero net debt [by the end of 2020],” Mr Bristow said. Barrick and arch rival Newmont Corporation’s deal to combine their mines in Nevada into a joint venture, after Barrick dropped its hostile bid for the latter, has also won plaudits. This has been reflected in Barrick’s share price, which has risen 76 per cent since the Randgold merger was announced — outperforming Newmont (46 per cent) and the gold price (31 per cent). Still, some investors lament the passing of Randgold. One top-20 shareholder said it would have delivered a better share price performance had it remained independent — a view backed up by recent results, which show the Randgold side of the portfolio continuing to sparkle while the Barrick portion struggles. Randgold also boasted a generous dividend policy, something Barrick has yet to match. Analysts estimate Barrick’s dividend would need to rise two to three times from where it is today to be comparable to Randgold’s payout. Mr Bristow said Barrick would look at a longterm dividend policy once its 10year strategic plan is put in place early this year. Barrick also remains a very complex business with assets in the Americas, Africa and Asia, leaving

Mr Bristow and his management team stretched. “There is a core of 10 Randgold executives who run the business. They used to fly around all the assets once a quarter,” said one analyst who used to follow Randgold but does not cover Barrick. “That is more difficult to do now given the size and scale of the business.” James Bell, an analyst at RBC Capital Markets, also said the integration of the two companies had become more complicated because some of the assets flagged as potentially noncore at the time of the Barrick deal were now seen as less disposable. “A good example is Porgera [a mine in Papua New Guinea]. This was an asset initially flagged as noncore but that’s an asset the company is now very excited about because management have seen the geological potential,” he added. Mr Bristow said Barrick would continue to divest assets where it makes “good, commercial sense”, citing the recent sale of its stake in the Massawa gold project in Senegal for an upfront payment of $380m. Mr Bristow, who had open heart surgery in 2017 after a doctor spotted a problem during a routine medical to renew his pilot’s licence, said he did not know when he would step down. “I don’t have a particular timeframe but I gave the market a [promise of at least a] full five years. I am certainly committed to that,” he said, adding that there was already a pool of executives that are qualified to lead the organisation. “And you can imagine how much better they are going to be with a bit of coaching in the next couple of years.”

Six eurozone banks fall short of ECB capital requirements Rise in lenders missing targets underlines continued fragility of European banking sector Martin Arnold

ix eurozone banks have fallen below the European Central Bank’s capital requirements and been told to take action to fix the shortfalls, underlining the continuing fragility of Europe’s banking sector. The number of banks falling short of their main capital requirements in the eurozone has increased from only one last year, illustrating how the sector remains under pressure from ultra-low interest rates, inefficient cost structures and fines for past misconduct. Andrea Enria, chair of the ECB’s supervisory board, said he was “broadly satisfied” with the results of its latest review of bank capital needs. But he

flagged up concerns over “the business models, internal governance and operational risks in banks”, adding: “This is where we will sharpen the focus of our supervisory work.” The ECB did not name the six banks, but Mr Enria said four of them had already remedied their capital shortfalls and the other two had been given “remedial actions” to do so. He said banks needed to “deploy more self-help measures” such as reducing costs, shedding unprofitable activities and considering mergers to achieve more scale and cost efficiencies. The ECB plans to clarify how it will treat capital requirements of merged banks to “dispel” the idea that it has an “unhelpful” approach, he said. One area it will address is how it treats www.businessday.ng

so-called “badwill” gains that result from buying a bank below its book value, an issue that complicated Deutsche Bank’s merger talks with Commerzbank last year. For the first time, the ECB published the capital requirements for the banks it supervises, except for a handful that refused to give their permission, including the financial services arm of Volkswagen, the German carmaker. “An assessment of business models showed that most significant institutions’ earnings are below their cost of capital,” the ECB said. “This hampers their capacity to organically generate capital and to issue new equity.” “Concerned by low profitability, supervisors are increasingly focusing on banks’ future

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resilience and the sustainability of their business models,” it said, adding that internal governance was also a worry after standards slipped in recent years. The supervisor, which works closely with national authorities to oversee the largest banks in the eurozone, said that “in a significant number of instances management bodies are not effective and internal controls are weak”. Mr Enria said he was “not very happy” at the lack of harmonisation of European regulations for who is considered fit and proper to join a bank’s board or become one of its shareholders. He said this had prevented the ECB from removing board members or investors it considered unsuitable. The ECB said its capital requirements were unchanged last @Businessdayng

year, requiring banks to have on average a 2 per cent “pillar two” buffer above their regulatory minimum, plus an extra 1.5 per cent for the non-binding “pillar two guidance”. However, it said that overall requirements for bank capital levels had increased from 11.5 per cent to 11.7 per cent last year after national regulators increased the “countercyclical buffer” to address overheating in the financial system and raised systemic buffers for the most important institutions. Non-performing loans at the main eurozone banks continued to fall to €543bn in September last year, down from over €1tn during the eurozone debt crisis five years ago, representing on average 3.4 per cent of the sector’s loan books.

Wednesday 29 January 2020

BUSINESS DAY

NATIONAL NEWS

Donald Trump’s defence tries to steer focus from John Bolton claims US president’s legal team responds as pressure grows on senators to call witnesses Courtney Weaver

o n a l d T r u m p’s lawyers tried to shift the focus of his S enate impeachment trial away from revelations from former national security adviser John Bolton, pledging to ignore “speculation” and only address evidence introduced to the proceeding. “We deal with transcript evidence, we deal with publicly available information,” Jay Sekulow told senators on Monday. “We do not deal with speculation, allegations that are not based on evidentiary standards at all.” Mr Sekulow’s comments came after reports that Mr Bolton, in his upcoming book, will accuse Mr Trump of saying that he was withholding aid to Ukraine until Kyiv complied with a demand to investigate former US vice-president Joe Biden. Alan Dershowitz, the constitutional law scholar who is part of Mr Trump’s defence team, later argued that even if Mr Bolton’s claims were true, they would not justify the president’s removal from office. “Nothing in the Bolton revelations, even if true, would rise to the level of an abuse of power or an impeachable offence,” Mr Dershowitz said. “That is clear from the history. That is clear from the language of the constitution.” The reports about Mr Bolton’s book caught Republican senators off-guard. At least two — Mitt Romney of Utah and Susan Collins of Maine — indicated on Monday that they would consider voting to call witnesses,

such as Mr Bolton, in the trial, where Mr Trump faces charges of abuse of power and obstruction of Congress. Mr Sekulow, the US president’s personal lawyer, opened Monday’s proceedings by noting that Volodymyr Zelensky, Ukrainian president, had stated he had felt “no pressure” from the White House over the Biden investigation, and argued that impeachment was rooted solely in partisan policy differences. “We live in a constitutional republic where you have deep policy concerns and deep differences that should not be the basis of an impeachment,” Mr Sekulow said. “Are we going to have every time there’s a policy difference of significance . . . we’re going to start an impeachment proceeding?” Mr Trump’s lawyers attempted on Monday afternoon to turn the attention of senators to accusations of corruption and nepotism surrounding Mr Biden’s son Hunter and his business activities in Ukraine. They argued Mr Trump was serving the US national interest when he urged Mr Zelensky to investigate whether the former vice-president forced out a top Ukrainian prosecutor who had responsibility for a probe into Burisma, the oil and gas company for which his son served as a director. Democrats argue the prosecutor, Viktor Shokin, was pushed out because he was not doing enough to tackle corruption. Jane Raskin, a member of Mr Trump’s legal team, also defended Rudy Giuliani, the president’s personal lawyer, who led the search for information on

Kenneth Starr, the former independent counsel who led the effort to impeach Bill Clinton, pointed to the former president’s impeachment as a cautionary tale © Reuters

Mr Biden in Ukraine. Ms Raskin denied Mr Giuliani was on a “political mission” in Ukraine. “He was doing what good defence attorneys do,” she said. “He was gathering evidence about Ukrainian election interference to defend his client against the false allegations being investigated by special counsel Robert Mueller” — who was tasked with investigating claims of Russian interference in the 2016 US election. Earlier, Kenneth Starr, the former independent counsel who led the effort to impeach Bill Clinton, pointed to the Clinton trial as an example of the dangers of impeachment. “We are living in what can aptly be described as the age of impeachment,” said Mr Starr, who became a bête noire on the

left for his role in Mr Clinton’s impeachment and the airing of the Monica Lewinsky affair. “ Those of us who lived through the Clinton impeachment, including members of this body, full well understand that a presidential impeachment is tantamount to domestic war, but thankfully protected by our beloved First Amendment, a war of words and a war of ideas,” said Mr Starr. “But it’s filled with acrimony and it divides the country like nothing else. Those of us who lived through the Clinton impeachment understand that in a deep and personal way.” The former independent counsel suggested that Democrats were attacking Mr Trump for being “controversial” — a character attribute that did not meet the standard for impeachment.

“Have there been controversial presidents? Think of John Adams and the early Sedition Act,” he said. Mr Starr’s statement — part of the 24 hours given to Mr Trump’s defence team for opening arguments at the outset of the impeachment trial — generated whiplash in Washington. “Right now even GOP senators are looking at Ken Starr and thinking ‘WTF?!’,” Michael Steele, former chairman of the Republican National Committee, tweeted. Mr Trump’s team spoke for just a few hours on Saturday, and was expected to speak for only part of the allotted time on Monday and Tuesday. House impeachment managers wrapped up their opening arguments last week.

Russia to go it alone on construction of Nord Stream 2 pipeline Gazprom will continue to build gas route under Baltic Sea without help of foreign companies Nastassia Astrasheuskaya

ussia has said it will complete construction of the controversial Nord Stream 2 gas pipeline under the Baltic Sea without the help of foreign companies, marking a victory for the US which imposed sanctions in an attempt to halt the project. Tuesday’s admission by Gazprom, the Kremlin-controlled gas monopoly, is the first official acknowledgment that Moscow will complete the pipeline, which runs from Russia to Germany, without foreign involvement. “The Nord Stream 2 project, which is already 94 per cent

complete, will be finished by the Russian side,” Gazprom’s deputy head Elena Burmistrova said at the European Gas Conference Vienna. Washington imposed sanctions last month against companies involved in the construction of the Nord Stream 2 as part of efforts to punish Moscow for alleged meddling in the 2016 US presidential elections. The Trump administration also voiced fears that the pipeline would increase Europe’s dependency on Russian energy. Gazprom and five EU energy companies are paying for the Nord Stream 2, which was being laid by international contractors, who suspended their www.businessday.ng

work on the project when the US sanctions were announced. Critics say the pipeline is designed to reroute gas supplies to Europe that are currently sent through Ukraine, depriving Kyiv of lucrative transit revenues. Russia says it is a purely commercial venture. “Half a century ago, when pipelines to Europe were being built, no one could think they would be torn by political disagreements,” Ms Burmistrova said on Tuesday, pointing out the approaching 50th anniversary on February 1 of the “legendary” deal between Germany and the Soviet Union to supply gas in return for pipelines. It is unclear how Gazprom

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intends to finish the project without international assistance. Various options are being discussed, including vessels owned by the gas company and other Russian pipe laying contractors, but none are as modern or advanced as those used by Allseas. Swiss group Allseas, the main contractor that had been laying the pipeline, immediately suspended operations in the face of US sanctions. Despite Ms Burmistrova’s comments, Nord Stream 2 AG, the fully Gazprom-owned pipeline operator based in Switzerland, on Tuesday insisted that together with the companies supporting the project — Engie, OMV, Royal @Businessdayng

Dutch Shell, Uniper and Wintershall, all of which have already given it substantial financial investment — it would work on finishing the pipeline. The 55bn cubic-metre pipeline was initially expected to be launched by the end of 2019, when the previous gas transit contract with Ukraine was set to expire. Construction work stretched into 2020, however, after a delay in receiving permission from Denmark to build in its waters. With a new Gazprom-Naftogaz transit contract now in place, Russian officials’ estimates for the completion of Nord Stream 2 now vary from the end of 2020 to early 2021.

Thebigread

BUSINESS DAY Wednesday 29 January 2020 www.businessday.ng

Brexit: Why fishing threatens to derail EU-UK trade talks Britain risks triggering a tough response from Brussels if it limits access to its waters Jim Brunsden, Mure Dickie, Victor Mallet & Laura Hughes

runo Margollé and his ancestors have fished for sole and cod in the English Channel since the 18th century, and like other EU fishermen who work in Britain’s waters today, he regards Brexit with trepidation. Based in Boulogne-sur-Mer near the narrowest point of the Channel with a 24m fishing boat, the Frenchman says any reduction in access beyond the median line separating the two countries’ territorial waters — a genuine risk if Britain and the EU cannot rapidly come to an agreement — would be a disaster for him and his three sons who share the business. “It’s death,” he says. “I have no Plan B. I have €1m of debt. What am I supposed to do? Put a bullet in my head?” If Brexit Britain were to close its waters to foreign vessels, the impact would be immediate and severe on fishing communities such as those in Boulogne, adding to the pressures from climate change and warmer seas that fishermen say have driven away the cod and brought in more squid and spider crabs. No one disputes that the fishing grounds are richer on the British side. French, Belgian and Dutch trawlers are usually out in force right up to the line six nautical miles from the English coast that is already reserved for British-flagged vessels. The majority of the EU catch is made in the North East Atlantic, of which British waters are a crucial part. Boris Johnson, the UK prime minister, fanned the flames last week by insisting that Britain will “take back control” and have full jurisdiction over its “spectacular maritime wealth”. For EU fishermen, this is the stuff of nightmares. Ensuring that fishing rights do not die with Brexit is a priority for the bloc’s coastal states, not least France, in future relationship negotiations with Britain that will begin in the weeks after the UK leaves the EU on Friday. EU diplomats fear that a postBrexit negotiation covering everything from trade in goods to financial services — which accounted for 6.9 per cent of UK gross domestic product in 2018 — could become snarled up on fish. It is a sector that employs fewer than 180,000 people throughout the bloc but is the economic lifeblood of coastal communities, giving the industry added political leverage. The EU has explicitly linked the City of London’s future market access to Britain giving ground on fish. Ireland’s prime minister Leo Varadkar told the BBC on Monday that “you may have to make concessions in areas like fishing in order to get concessions from us in areas like financial services. That’s why things tend to be all in the one package.” The price of fish and finance 0.04% Fishing and aquaculture’s gross value added contribution to UK

economic output (2018, provisional figure) 7.1% Financial services and insurance’s gross value added contribution to UK economic output (2018, provisional figure) A dragged out fight over fish would be in neither side’s interests. But it may be extremely difficult to avoid: the UK and the EU have opposing positions, little room for manoeuvre and even less time. Britain and Brussels will have only 11 months after Brexit day to negotiate a new relationship and avoid a hard exit when the country’s transition arrangements expire at the end of 2020. Emmanuel Macron, the French president, has vowed that fishing will be treated “as an essential economic interest for our country that must be defended” in the talks. It is a position that has been adopted by the entire EU, which insists that “existing reciprocal access to fishing waters and resources” should be maintained. Brussels insists that any move by Britain to reduce access to its fishing waters will be met with an overwhelming response: the loss of much needed market access rights for UK fishermen, and potentially even the breakdown of trade negotiations, creating the risk of a no-deal Brexit at the end of 2020. For the EU, “everything in the future relationship negotiations is linked”, says one senior European diplomat. “It’s not just the French, there are seven or eight member states highly interested in this. The UK is going to have to compromise [on access for EU fishing fleets].” For Britain, Brexit mean escaping from the Common Fisheries Policy, a system that UK fishermen argue has cost jobs and livelihoods. Many in the industry argue that their sector was sacrificed to secure Britain’s place in the European Economic Community in 1973. “We will make sure we don’t trade away Britain’s fishing rights as they were traded away . . . in the early 1970s,” Mr Johnson said on January 22. Britain’s fishing fleet consists of 6,000 vessels and close to 12,000 fishermen. It caught almost £1bn worth of fish in 2018 but makes a negligible contribution to the UK economy. It is, however, of vital importance to some coastal communities, notably in Scotland. Under the CFP, EU countries’ fishing fleets have full access to each other’s waters, with the exception of

the first 12 nautical miles out from the coast. Some special access arrangements exist for the six-12 mile band. The EU agrees annual limits, known as the total allowable catch, for the volume of fish that can be caught from each stock. National quotas for these are then divided up using a template based on historical fishing patterns. But after Britain leaves it will become an independent coastal state, with an “exclusive economic zone” or EEZ stretching out as far as 200 nautical miles. Where the EEZ bumps up against EU waters before reaching 200 miles, a new median line will be drawn between the UK and EU. British waters are rich in staples of the European diet: herring, mackerel and sole as well as shellfish such as langoustine. EU boats annually land more than 700,000 tonnes of fish caught in UK waters, according to Britain’s Marine Management Organisation. A political declaration on future relations, agreed by Mr Johnson and EU leaders last year, set a July deadline to negotiate and ratify an agreement on future fishing rights. Without a deal, EU boats will lose access to UK waters at the end of this year. But the British government is in the grip of competing pressures from its own fishing sector, parts of which depend on the tariff-free access to the EU market that Brussels is threatening to revoke if a deal is not reached. Brussels insists the two issues are linked. In Scotland, which accounts for 64 per cent of UK fish landings, hopes of a post-Brexit boost and an end to participation in the CFP are mixed with deep concerns about the potential loss of vital access to EU markets for some of the country’s highest-value catches. Elspeth Macdonald, chief executive of the Scottish Fishermen’s Federation, the main industry body, says market access must not be tied to the negotiations over fishing rights — a link the EU is determined to maintain to pressure Britain into doing a deal. “By the end of this year, we should be going into . . . negotiations as an independent coastal state, negotiating access and fishing opportunities on an annual basis,” she says, adding that any permanent concessions to the EU would be a “betrayal of the industry”.

The SFF is not demanding huge change overnight, but says there must be an immediate cut in the proportion of the UK quota taken by EU vessels and “year-on-year gains” for Scottish fishermen. And while access to EU markets is important, Ms Macdonald says, “the ability to determine access to our waters is the key goal for us”. That stance is bad news for fish exporters like Andrew Charles, who runs the processing business his grandfather established from modest premises near Aberdeen harbour. Mr Charles is sceptical that fishermen in France or Spain would tolerate continued British imports if they lost access to UK waters. And even if there are no blockades or protests, he says, the expected postBrexit burden of export and import documents, environmental health certificates and inspections could make it no longer viable to sell high quality monkfish to the continent, a niche business that accounts for a fifth of company sales. “I would have to close the export business unless I pay 25 per cent less for my raw material,” Mr Charles adds. Many other exporters share similar fears. The UK runs a trade surplus with the EU27 on fish and some of Britain’s most lucrative species, such as scallops and Norway lobster, are caught almost exclusively for the EU market. About half of all UK fish production — combining what is caught and farmed — is exported to the rest of the EU. Any retreat from his Brexit promises could be disastrous for Mr Johnson’s Conservative party, not least in Scotland. At the daily auction in Peterhead, the UK’s largest port for white and pelagic fish, Gary Mitchell, a wholesale merchant who makes most of his sales on the continent, says he “absolutely” trusts the prime minister to keep his word to liberate the sector from EU quotas and controls, and believes any disruption will be shortlived. “The French, the Spanish, the Italians, they all want our fish, they need our fish,” Mr Mitchell says. “In any change in any industry you always get teething problems, but after a while I’m sure it will settle down . . . I’m trying to be as optimistic as I can.” Hopes of a boon from Brexit are also high in the medieval English town of Rye, just across the Channel from Boulogne-sur-Mer. “On Monday mornings, boats turn up

from Belgium and they will be here on the six-mile limit for days,” says Mick Caister, who owns the last wooden trawler in Rye. “If they were pushed further out, it would make a difference to us.” Britain sees Norway as a model. A member of the European Free Trade Association, Oslo holds annual negotiations with the EU on access to waters, management of shared stocks and exchanges of quota rights. In theory, EU access to Norwegian waters would lapse if the annual talks collapsed. But such an approach would spell endless uncertainty for the EU, and Brussels is determined to lock in rights upfront. A core part of the negotiations will be how to share out fishing rights for the more than 70 types of fish that straddle the UK EEZ and EU waters. UK officials are adamant that Britain will seek a relatively larger quota compared with its allowance under the CFP. But one EU diplomat says Brussels must demand nothing less than the “material status quo”. Gerard van Balsfoort, chairman of the European Fisheries Alliance, says the EU industry is seeking “guaranteed access”. And it does not want “annual negotiations with the UK on relative quota shares and reciprocal access for shared stocks”, he adds. As a result the risks of internal division are extremely high for both sides. EU leaders have agreed to make the bloc’s future economic relationship with Britain dependent on solving an issue — fishing rights — that is only of real relevance to about eight coastal states. Diplomats quietly question how well EU unity will hold up under the strain. Michel Barnier, the EU’s chief Brexit negotiator, insisted in January that Britain had more to lose than the EU27 from the collapse of talks about future relations, but one of the immediate consequences of a no-deal scenario would be a loss of EU fishing rights in UK waters. Expectations will weigh on both sides as they fight to secure rights without creating a confrontation that would wreak havoc on a fragile, interconnected industry. “The market is important for the British,” said Frédéric Cuvillier, mayor of Boulogne and a former fisheries minister, when Brexit fever was at its peak last year and a no-deal exit seemed likely. “It’s all a bit stupid.” Icelandic, Scottish and English fish are often trucked to Boulogne’s busy fish plants — the industry employs more than 5,000 people — for processing and onward distribution. The Dover Strait is the point where France and the UK are closest in almost every sense. The English coast can be seen from the beach at Wissant between Calais and Boulogne, and the locals have a saying about the weather which translates as: “If you can see the cliffs at Dover, it’s going to rain. If you can’t, it’s raining already.” “We’ve had hundreds of years of sometimes tumultuous relations,” says Mr Cuvillier. “Geography brings us closer and Brexit pushes us apart.”

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